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

Macquarie rates ALX as Outperform

Macquarie anticipates the strategic review of Atlas Arteria with IFM as the new owner will concentrate on slimming the business with a focus on existing assets, and a targeted reduction in the cost base.

After a pick-up in the cost base in 2026, resulting from bid-related issues, a lowering in the head count is expected, moving to a sustainable cost base of $30m-$35m from $45m, currently.

Although DPS guidance for 2026 stands at 40c, post the new owners, Macquarie suggests the DPS is likely to be trimmed to correspond to free cash flow. The analyst forecasts a cut in the 2H2026 dividend to around 13.5c.

Earnings estimates are trimmed by -0.8% for 2026 and lifted by 9.9% for 2027 and 9.2% for 2028.

Outperform rated with an unchanged $5.02 target price.

Citi rates IAG as Neutral

Citi believes much of the insurance sector's valuation appeal has faded after a strong share price rally, with the average price-to-earnings multiple rising to around 16x from 11x in 2022.

Whilst nib Holdings is now the broker's only Buy-rated insurer, Citi sees limited risk of material earnings disappointment and notes the sector still trades well below the major banks on around 20x earnings.

Ahead of reporting season, Citi's preferred general insurers are Insurance Australia Group, followed by QBE Insurance and Suncorp Group.

In private health insurance, the broker favours nib Holdings over Medibank Private, citing nib's valuation discount.

The target for Insurance Australia Group is $9.00. Neutral rating.

Morgans rates NGI as Buy

The June update on assets under management from Navigator Global Investments showed a 6% increase despite the volatile markets, amid robust quarterly net flows into Lighthouse, Morgans observes.

The broker believes the business is well-placed to benefit from structural tailwinds in global alternative assets and the target to double EBITDA by FY30 appears achievable.

EPS estimates for FY26 and FY27 are revised up by 1% and down by -2%, respectively. Target is reduced to $3.13 from $3.39 and a Buy rating is retained.