0358 GMT - Aristocrat Leisure's bull at Bell Potter thinks that the slots maker is well placed to deliver a strong second-half result despite a first-half revenue miss. Analyst Baxter Kirk acknowledges that the Australian company's first-half revenue of A$3.035 billion fell short of his forecast for A$3.18 billion, but thinks that most of the contributing factors are isolated to this period. The miss was largely driven by lower outright sales in Australia, New Zealand and international markets, as well as lower fees per day, he says in a note. BP lowers its target price 4.8% to A$79.00 and keeps a buy rating on the stock, which is down 1.2% at A$62.51. (stuart.condie@wsj.com)

0337 GMT - Xero's record organic subscriber growth in North America supports the cloud-accounting software provider's decision to increase its focus on the U.S. market, its bulls at Goldman Sachs say. They write in a note that the investment makes sense, pointing out that growth in the last fiscal year came despite a subdued performance in Canada. They see reason to be confident in Xero's fiscal 2026 revenue guidance, and like the acceleration in Xero's revenue from payments. GS lifts Ebit forecasts for the next two fiscal years to reflect stronger revenue trends, raising its target price 2% to A$205.00. GS keeps a buy rating on the stock, which is down 0.2% at A$181.69. (stuart.condie@wsj.com)

0326 GMT - Growth in the lifetime value of Xero's customers can drive material share-price gains in the next two or three years, say its bulls at Morgan Stanley. The MS analysts tell clients in a note that they see lifetime value rising from NZ$17.95 billion in the accounting software provider's last fiscal year, to NZ$21.5 billion in fiscal 2026, and to NZ$25.8 billion in fiscal 2027. They don't think that the market is fully appreciating the scale of this rise, which they see as driving equity value. Xero's rule-of-40 performance, free cash-flow, and average-revenue-per-user growth in its last fiscal year all support MS's continued overweight rating and A$220.00 target price. Shares are down 0.1% at A$181.935. (stuart.condie@wsj.com)

0153 GMT - Insurance Australia Group aims to pay for two deals with Australian motoring clubs using existing capital, but Morgan Stanley sees little margin for error. IAG yesterday unveiled a deal worth A$1.35 billion to acquire the insurance business of The Royal Automobile Club of Western Australia, or RAC, and license its brand. That follows IAG's A$855 million deal in November with motoring club RACQ to expand its general-insurance business in Queensland. Analyst Andrei Stadnik says IAG's funding plan carries risks to dividend expectations and could lead to an equity raising. "Our forecasts have IAG generating A$700 million of capital assuming 70% dividend payout, the middle of the 60-80% target range or a A$50 million buffer," MS says. (david.winning@wsj.com; @dwinningWSJ)

0000 GMT - Xero's bull at Barrenjoey stays positive on the cloud-accounting software provider after its cost outlook beat its expectations. Analyst Eric Choi expected fiscal 2026 expenses to be 72% of annual revenue, so Xero's guidance for a 71.5% expenses-to-revenue ratio supports improvements to his earnings forecasts. He expects Xero to exceed the so-called rule-of-40 metric in fiscal 2026 comfortably. Barrenjoey lifts its target price by 11% to A$200.00 and stays overweight on the stock. Shares are at A$182.05 ahead of the open. (stuart.condie@wsj.com)

2329 GMT -- Xero loses its bull at Jefferies on the cloud-accounting software provider's signal that it is placing an increased focus on revenue growth. Analyst Roger Samuel cuts his recommendation to hold from buy, telling clients in a note that Xero's introduction of the so-called rule-of-X into its performance metrics implies that it may sacrifice short-term free cash-flow margins. Samuel isn't concerned about Xero's investment discipline when it comes to driving growth, notably in the U.S., but he still sees downside risk to margins. Jefferies raises its target price 5.3% to A$194.80. Shares are at A$182.05 ahead of the open. (stuart.condie@wsj.com)

2251 GMT -- GrainCorp's strong 1H result keeps Ord Minnett among the bulls. GrainCorp's 1H revenue represented a 7% beat to Ord Minnett's forecasts, while adjusted net profit of A$68.8 million was 9% ahead of estimates. The beat was driven by a winter crop on Australia's east coast that was some 30% larger than a year ago. GrainCorp upgraded its FY 2025 underlying net profit guidance to A$65 million-A$95 million as a result. "Our investment thesis that GrainCorp's through-the-cycle earnings and port assets are undervalued remains current," analyst John Lawlor says. "GrainCorp's strong balance sheet and capacity for further capital management initiatives has us retaining a Buy recommendation with a A$9.75 target price." GrainCorp ended Thursday at A$7.78. (david.winning@wsj.com)

2238 GMT -- For investors in drinks-packaging company Orora, risks versus rewards look balanced to Barrenjoey. That's because of ongoing uncertainty about how demand conditions will evolve, analyst Brook Campbell-Crawford says. The bank points to Orora's latest trading update, which revealed a new setback for the Saverglass business. Tariff uncertainty for European producers has led to orders softening in March and April compared to the previous four months. "While pricing is holding on a like-for-like basis, there will be an adverse mix impact in 2H as higher-margin bottles in spirits are underperforming wine/champagne," Barrenjoey says. Its price target falls 4.2% to A$2.30/share. Orora ended Thursday at A$1.93. (david.winning@wsj.com)

2223 GMT - Lendlease is in advanced talks to sell a 50% interest in six UK development sites to The Crown Estate, and Barrenjoey thinks a deal would be a good result. That's because Lendlease will have exited most of its UK land management agreements while getting paid for capitalized costs, such as site works and below ground infrastructure. "It increases our forecast return on equity for Capital Release Unit $(CRU.UK)$ to 10% from 5%," analyst Ben Brayshaw says. "This sees us model a 1H26 sale of A$350 million of invested capital at an Ebitda margin on revenue of 5-10%." Barrenjoey retains an "underweight" call on Lendlease. (david.winning@wsj.com; @dwinningWSJ)

0506 GMT - Aristocrat Leisure's bulls at UBS stay positive on the stock despite the slots maker's first-half profit miss. Analysts Andre Fromyhr and Bradley Beckett tell clients in a note that Aristocrat's 1H profit was 7% lower than they had anticipated, but that they cut their full-year forecast by just 6% due to what they see as relative 2H tailwinds. The stock fell almost 9% on the 1H result announcement, which the UBS pair says is the market pricing in worries that 2H growth will be more challenged. They don't think that the fundamentals have changed and keep a buy rating on the stock. Target price falls by 2.8% to A$72.40. Shares are up 2.6% at A$63.71. (stuart.condie@wsj.com)

0502 GMT - Commonwealth Bank of Australia's steady 3Q revenue growth and discipline on costs does nothing to shift UBS analyst John Storey's view that the stock is significantly overpriced. Storey tells clients in a note that Australia's largest lender looks likely to hit consensus forecasts for its fiscal year. He thinks that retail profitability is probably supported by growth in proprietary channels, and points out that business banking is growing at a faster rate than the industry as a whole. However, the stock--which is trading at record levels despite cyclical and macro headwinds--offers a dividend yield of less than 2.9%. He keeps a sell rating on the stock and sees better value elsewhere. UBS has a A$115.00 target price on the stock. Shares are up 0.8% at A$168.80. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

May 16, 2025 00:50 ET (04:50 GMT)

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