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

Citi rates ANN as Neutral

Citi highlights Ansell faces potential raw material disruption after competitor Top Glove during 2Q results flagged the Middle East conflict has disrupted crude oil supply, affecting nitrile latex availability.

It’s noted this latex represents around 20%-25% of raw material costs.

The broker notes cost changes typically flow through with a delay, noting pricing power has recently allowed pass-through of higher input costs.

Risk to FY27 margins versus current estimates is anticipated, with consensus expecting a 20bps earnings margin improvement and around 9% earnings growth.

Bell Potter rates OCC as Initiation of coverage with Speculative Buy

Bell Potter initiates coverage on regenerative medicine company Orthocell with a $1.15 target and Speculative Buy rating.

Having achieved FDA approval last April for nerve repair product Remplir, the early US commercial rollout is targeting an underpenetrated market, the broker explains.

Remplir’s differentiated design and positioning support adoption, the analysts suggest, with growth driven by procedural demand rather than displacement of existing products.

Bell Potter believes the company is well funded with $49.4m cash and expects rising revenue to improve operating leverage, despite near-term elevated cash burn.

Execution across distribution, surgeon uptake and repeat procedures are seen as key near-term drivers, with broader expansion offering upside.

Macquarie rates QAN as Outperform

Macquarie adjusts its earnings forecasts for Qantas Airways to reflect a structurally higher crack spread to the rest of FY26 and the limited ability to pass through the higher cost.

With 90 days to run, most sales have already been made across international, domestic and Jetstar.

For FY27, it remains too early to assess, the broker adds, although higher oil prices and crack spreads are likely into the first half.

Macquarie anticipates Qantas will reduce costs with some flight consolidation, particularly for the US, where A380s are flying with lower load factors.

The broker adds the company has the flexibility to adapt. Qantas carries the advantage of structural leadership in the domestic market. Target is reduced to $11.60 from $12.00. Outperform.