The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1842 ET - Macquarie analysts move to an underweight position on Australian banks, citing earnings risks stemming from the Iran conflict. They see the inflationary impact of higher oil prices increasing the likelihood of interest-rate hikes, which would put further pressure on consumers and discretionary spending. This in turn could weigh on lenders' credit growth and contribute to higher rates of arrears, Macquarie says. "While the situation remains highly uncertain and fragile, we expect banks to take provision overlays in upcoming results, with impairment charges likely to rise vis-à-vis our current base case," Macquarie says. It downgrades fiscal 2026 bank earnings forecasts by 1-2%. (stuart.condie@wsj.com)
1839 ET - The impact of the conflict in Iran and disruption to energy supply is "primarily a timing and margin event, rather than a structural reset" for Australian industrial stocks, says Morgan Stanley. Earnings could come under pressure in the near term. Still, analyst Joseph Michael believes medium-term growth drivers are largely intact and investors will increasingly look through disruption in FY 2026. Its top picks are Orica, James Hardie, Qantas and Reece, assuming any disruption is short-lived. Prolonged disruption would like see most stocks trade lower. In that scenario, investors should rotate toward defensive stocks and companies with pricing power. "Qantas would drop in our order of preference in this scenario given higher fuel exposure and demand risk," MS says. (david.winning@wsj.com; @dwinningWSJ)
1838 ET - Premier Investments's 1H result supports conviction at Macquarie that its Peter Alexander sleepwear chain is undervalued. Macquarie says Peter Alexander is trading at 3.3 times estimated Ebit, which represents a 71% discount to its apparel peers' average. That's despite industry-leading margins. Macquarie highlights 4.9% sales growth in Australia and New Zealand in 1H, and strong trading at the start of 2H. It also observes that U.K. sales are growing, while Premier Investments' pivot to outlets should reduce its U.K. cost base. Macquarie lifts its target price by 4.3% to A$16.90/share and keeps an outperform rating on the stock, which is at A$11.98 ahead of the open. (stuart.condie@wsj.com)
1829 ET - Morgan Stanley expects Premier Investments to miss guidance for annual Ebit, given interest rates are rising again in Australia. Analyst Julia M. de Sterke forecasts Ebit of A$180 million in FY 2026. That compares to Premier's own projection of A$183 million. MS expects fuel and freight disruptions to put little dent in Premier's 2H performance. That's because the products it expects to sell in 2H have either been produced already or are in transit. Still, higher domestic freight costs could squeeze profit margins a tad. "On rates, we see risk that Peter Alexander sales momentum decelerates, despite the positive trading update," MS says. It expects Peter Alexander sales to rise by 4.5% in 2H, slowing slightly from 4.9% growth in 1H. MS has an overweight call on Premier. (david.winning@wsj.com; @dwinningWSJ)
1807 ET - Investors seeking to gain more exposure to the energy industry should consider buying stock in Duratec, says Shaw & Partners. Duratec is building a high-growth, high-margin energy services platform. It aims to capture structural demand across Australia's A$5 billion energy infrastructure maintenance, remediation, and decommissioning market, Shaw says. "The Energy segment is now one of Duratec's most profitable divisions, delivering FY25 revenue growth of 77% and sustaining 29% gross margins into 1H26," analyst Philip Pepe says. "Recent world events improve the outlook." Shaw has a A$2.40/share price target on Duratec, which ended last week at A$2.33. (david.winning@wsj.com; @dwinningWSJ)
1748 ET - Australian equities look set to tumble in early trade after President Trump and Iran traded threats to hit key infrastructure. Local stock futures are down by 1.8% ahead of Monday's session, suggesting the S&P/ASX 200 will add to the hefty losses compiled across three consecutive weekly declines. The benchmark index is 8.4% lower in March. It hasn't lost that much across a full month since June 2022. Ten of the ASX 200's 11 sectors are down so far this month, with the heavyweight materials sector 19% in the red. The outlier is the energy sector, which is up by 16% and could be poised for further gains on tight fuel supply and higher oil prices. (stuart.condie@wsj.com)
1721 ET - Jefferies's price targets on Ampol and Viva Energy rise after Australia's government resets the Fuel Security Services Payment. Payment now starts at A$0.10 per liter, equivalent to around US$11.10 a barrel. That's higher than 6.4 Australian cents per liter, or US$7.22 per barrel, on offer before. Analyst Michael Simotas says the change is positive but probably won't be needed, given a very strong refining backdrop. "More important, it reinforces crucial importance of Australia's last two refineries to fuel security and positions Viva and Ampol well to negotiate favorable long-term solution," Jefferies says. It sees a path to something like a regulated return on refinery capital, which would be positive for valuations. Jefferies's price target for Ampol rises 14% to A$36.50/share, and lifts 16% to A$2.20/share for Viva. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
March 22, 2026 18:42 ET (22:42 GMT)
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