** Morningstar says the market is reassessing the timing and extent of an improvement in Metcash's MTS.AX EBIT margins, after flat revenue and increasing operating costs, like labour and rents, weighed

** Conglomerate on Monday reported 0.1% increase in HY revenue to A$8.5 billion

** Investment research firm lowers EPS estimate by 8% and 4% for fiscals 2026 and 2027, respectively; maintains fair value estimate of A$4.1

** Morningstar says while current trading conditions are challenging, profits in the hardware and liquor segments are expected to improve with a cyclical recovery in their respective markets

** Citi lowers NPAT forecasts by around 5% over fiscals 2026-2028; cuts target price A$3.6 but retains "neutral" tag

** Adds earnings growth expectations driven by co's hardware segment is "overly optimistic", highlighting detached housing approvals are tracking flat YoY and no outlook for further rate cuts

** Stock up 8.4% so far this year, as of last close

(Reporting by Nikita Maria Jino in Bengaluru)

((Nikita.Jino@thomsonreuters.com;))