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

Shaw and Partners rates BTR as Buy

Shaw and Partners expects gold prices to rise further from record levels on expectations of rate cuts by the Federal Reserve despite sticky, tariff-induced inflation.

The broker notes ASX-listed gold producers reported strong results on the back of sustained rally in gold prices, which offset rising production costs.

FY26 gold price forecast lifted to US$3,850 from US$3,325, FY27 to US$3,750 from US$3,104, and FY28 to US$3,400 from US$2,674.

As a result, the broker increased the target price for gold stocks using DCF valuation.

Target for Brightstar Resources lifted to $1.21 from $1.14. Buy retained.

Morgan Stanley rates IAG as Equal-weight

The ACCC has announced the proposed acquisition of RAC insurer raises concerns over decreasing competition in both motor and home insurance in the WA market.

Morgan Stanley believes the takeover is unlikely to proceed given the findings, and the ACCC has invited additional submissions by September 18. A final decision is due by November 27.

The analyst estimates RAC would have been around 7% EPS accretive, so the market will move back to focusing on organic growth. Top-line FY26 guidance currently sits below its peers. Morgan Stanley expects earnings growth to "moderate" with a slowdown in the pricing cycle.

Equal-weight. Target remains at $8.45. Industry View: In-Line.

Citi rates JBH as Buy

ABS retail sales rose 4.8% year-on-year in July, with food up 2.5% and alcohol and tobacco down -17.5% due to weakness in tobacco, explains Citi.

The broker highlights strong growth in discretionary categories, particularly household goods up 5.3%, department stores up 6.6% and eating-out up 7.4%.

Western Australia and Queensland remain the fastest growing states, while Victoria showed improvement. Citi points to household savings balances rising around $140bn year-on-year, but expects stabilisation and a possible unwind.

The broker believes rate cuts and continued income growth should support stronger consumer spending in FY26.

Citi’s preferred retail exposures are JB Hi-Fi, Harvey Norman, Super Retail and Coles Group.

For JB Hi-Fi, the Buy rating is retained with $120 target price.