OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Morgan Stanley rates AGL as Underweight

EnergyAustralia's (EA) 1H26 wholesale energy earnings fell -9% year on year on lower prices and volatility and higher fuel costs.

Morgan Stanley notes electricity/account was down -3% and gas/account -6%, which the broker attributes to solar take-up and El Nino.

Customer accounts were down -69k half on half and -99k year on year, which could be a market share positive for AGL Energy and Origin Energy, Morgan Stanley suggests.

EA announced plans to convert the Yallourn W power station site into a low-emissions data centre precinct after the mid-2028 Yallourn closure. AGL and Origin sites could provide similar opportunities.

The update supports Morgan Stanley's Underweight ratings on both AGL and Origin.

Morgans rates REA as Buy

REA Group delivered FY26 results that were largely in line with expectations, with Morgans noting the core Australian residential business was underpinned by double-digit yield growth and a resilient listings environment. EBITDA growth was 12%.

Cost discipline was also evident to the broker and a key positive outcome. FY27-FY29 EPS estimates are increased by 1%-3.5%. Morgans adjusts assumptions, mainly by reclassifying India as a discontinued operation and integrating the company's FY27 guidance.

A -3% decline in listings and 10.5% yield growth is forecast for the Australian residential business. Buy rating retained. Target rises to $203 from $199.

Citi rates RMD as Neutral

At first glance, Citi found ResMed's fourth quarter sales were in line with expectations, with a stronger performance outside of the Americas.

Total sales of US$1.46bn were up 9%, with devices up 8% and masks up 11%. Gross margins, while slightly ahead of the broker's estimates, were -46 basis points below consensus and commentary states this may attract some scrutiny.

Citi suspects investors will focus on the performance in the Americas and expectations for gross margin, homing in on the collective effect of the acquisition of Noctrix, divestiture of MatrixCare and active Astral ventilator safety recall.

Neutral rating and $34 target.