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Morgans rates NCK as Initiation of coverage with Buy

Morgans has initiated coverage of Nick Scali with a Buy rating and $17.84 target price.

The analyst views the stock as a high-quality retailer which has achieved longer-term EPS growth for investors via store rollouts, organic growth, operating leverage and "best-in-class" margins.

The broker's FY26 net profit after tax forecast is around -3% below consensus, with FY27/FY28 estimates below consensus by -5% and -6%, respectively.

Historically, the stock has traded around 14x forecast earnings, which Morgans reckons under-rates the company's current platform, and a more apposite valuation is 17x FY26 earnings.

The analyst highlights that the A&NZ store rollout cadence may be slower than expected and online competition is lifting, but Nick Scali is considered to have a robust moat. The UK proposition offers longer-term upside.

Citi rates REA as Buy

Citi feels the market reaction to proposed changes to negative gearing and capital gains tax has been excessive, with REA Group's share price falling -15% since the Federal Budget.

The broker lowers its FY27 profit forecast by -6% to reflect weaker listings activity but expects management to offset some of the impact through tighter cost control. Forecast operating expense growth is reduced to around 3%.

The analyst views the housing policy changes as a largely one-off headwind and notes a pick up in investor selling could provide a partial offset.

Citi retains a Buy rating and lowers its target to $181.15 from $201.00.

Morgan Stanley rates WBC as Underweight

Morgan Stanley points out Westpac has described the current operating environment as "uncertain" and, regarding the proposed tax changes, the mood is characterised as "concern rather than crisis".

Since the Budget announcement, mortgage applications have fallen -23% compared with the December quarter and are down around -18% on the March quarter, the broker highlights.

Management noted loans for existing properties represented around 94% of new investor loans in April. The broker forecasts Westpac's housing loan growth to soften to circa 3.5% in FY27 from over 7.5% growth ex RAMS in FY26.

The Underweight rating and $31.50 target are unchanged. Industry view: Cautious.