ASX 200 Live: HMC downgrades FY25 earnings guidance, NextDC lifts capex outlook, Gold stocks bounce

Welcome to our live ASX coverage for Tuesday, May 6. We’re excited to be trialing this new format. Be sure to refresh manually for the latest updates — and let us know how we can make it even better.

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ASX 200 digests recent move

[4:15 pm] The S&P/ASX 200 finished slightly lower, down 0.08%, amid a relatively uneventful and rangebound session. The Index traded within a narrow range of +0.14% and -0.28%. Perhaps it needs some time to digest the recent win streak and ~12% rally from April 7 lows.

I crunched the numbers to see how the market performs after win streaks of seven days or more, and here's what I found.

• Since 2000, the ASX 200 has logged 40 instances of seven-day-or-longer winning streaks, delivering an average gain of 3.52%

• Post-streak performance is relatively weak after the first month, with average returns of -0.18% and positive only 51% of the time

• The forward performance improves towards the six and twelve month mark, however, % positive rates remain relatively mixed at 64% and 67% respectively

Source: Market Index

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Stocks moving on unusual volume

[1:40 pm] These are the S&P/ASX 200 stocks experiencing unusual volume, as a % of their 20-day average volumes.

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Top gainers and losers

[1:40 pm] Here are the S&P/ASX 200 stocks making the biggest gains and declines as at 1:40 pm.

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Chinese economy remains "on track" despite tariffs — Citi

[1:10 pm • By Carl Capolingua] Based on its analysis of recent Chinese economic data, Citi notes “the recovery of consumer activities remain on track” in April despite President Trump’s prohibitive tariffs coming into effect early in the month. The broker expects Beijing will pull both monetary and fiscal levers to offset the impact of a potentially protracted trade war between the two countries.

“Policy delivery is now the focus post the April Politburo, which was quite domestically oriented”, Citi notes. “Looking ahead, we are expecting a 50bps RRR cut as early as May and an 20bps policy rate cut in 25Q2”. RRR refers to the People's Bank of China’s (PBOC) Reserve Requirement Ratio (RRR) for Chinese financial institutions. A lower RRR facilitates greater lending.

According to Citi, the PBOC may also soon introduce “new structural policy tools and policy-bank-finance instruments” in an effort to further boost consumption and investment.

On the fiscal side of the ledger, Citi notes already announced stimulus measures appear to be “well on track so far”, but stopped short of predicting if added measures on the way. The broker tips the mid-year Politburo meeting in late July as the most likely time new fiscal stimulus measures will be announced.

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Brokers cut Westpac Banking Corp. targets after results

[12:40 pm • By Carl Capolingua] Based on the broker reports we have received so far, the big brokers are generally seeing less upside in the Westpac Banking Corp. (WBC) share price after its first half results were released yesterday — or more accurately put, greater downside.

Westpac Banking Corp. Broker Consensus vs H1 Results 12:30pm 6 May, 2025 (assumes WBC share price of $31.82).

WBC's Broker Consensus Target based on our survey of 10 brokers has declined by 1.4% to $28.95 from $29.35, with the largest target price reduction of -5.2% coming from UBS. Based on WBC's price at midday today of $31.82, this means the brokers believe WBC shares are 9.0% overvalued.

WBC's average Rating Value remains unchanged at -0.50, resulting in a Broker Consensus Rating of SELL. Note that WBC's Consensus Target and Consensus Rating may change as new broker reports are received over the coming hours and days. To stay up to date on all of the broker updates we receive, be sure to check out our Broker Consensus page

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A2 Milk poised for growth

[11:25 am] UBS analysts hiked their A2 Milk target price to NZ$9.95 (from NZ$8.68), with the view that the company could grow its net profit by 60% over the next three years.

This growth stems from rising infant formula sales, fueled by market share gains in English-label products like a2 Gentle Gold and a2 Genesis, and China-label products through expanded distribution.

Margin growth from operational efficiencies and reduced losses in the U.S. and Mataura Valley Milk (MVM) further supports this outlook.

Recent UBS Evidence Lab data highlights ATM’s strong brand health, with English-label sales showing high single-digit growth on Tmall and 30% of Tmall sales via Douyin/TikTok in the March quarter. China-label sales are recovering, with low double-digit growth expected in 2H25 as supply stabilises. However, a 13% rise in IF base powder costs may slightly pressure margins into 4Q FY25 and 1H26.

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Small caps making moves

[10:30 am] Here are the top small caps ($200m to $1bn market cap) winners and losers as at 10:35 am.

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Top gainers and losers at the open

[10:30 am] Here are the top S&P/ASX 200 gainers and losers as at 10:30 am.

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Platinum hit by ~$1 billion withdrawal

[10:10 am] Platinum Asset Management reported its funds under management for 30 April 2025 at A$9.65 billion, down from A$10.28 billion in March 2025. This represents a month-on-month drop of 6.13%, driven primarily by fund outflows of approximately A$243 million.

Additionally, Platinum received notice of an institutional mandate termination worth ~A$958 million, effective 9 May 2025. This amount is not yet reflected in the April FUM figures and will impact the 31 May 2025 numbers.

The company reassured the market that revenue loss from this mandate will be mitigated by accelerating planned cost-saving measures set for FY26.

Source: ASX Announcement | Company page: Platinum Asset Management

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Universal Store CEO selldown

[9:55 am] Universal Store's CEO Alice Barbery disclosed a sale of 350,000 shares ($2.73 million at $7.80 a piece) to "fund the building of a new home".

The selldown was approximately 16.3% of Barbery's holdings, she beneficially owns 1.8 million shares following the transaction.

Source: ASX Announcement | Company page: Universal Store

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Southern Cross Media to resume dividends

[9:50 am] Southern Cross Media plans to resume dividends with a final payout for FY25, marking its first dividend since March 2024. This decision is driven by sustained operational momentum, financial discipline, and improved performance, with the group’s leverage ratio expected to fall below 1.5x by 30 June 2025. The disposal of TV assets has removed earnings uncertainty, and the reset audio and capital base supports the board’s intent to reinstate dividends.

Key trading update highlights:

• Strong momentum in the first four months of 2025, with audio revenues up ~9%, surpassing prior guidance.

• Enhanced cost discipline and cost-reduction initiatives have lowered FY25 non-revenue-related costs to ~$265m, better than the previous forecast of below $270m

Plenty of positives, with a dividend potentially bringing income-oriented investors and funds back into the stock, as well as upbeat gearing and year-to-date numbers.

Source: ASX Announcement | Company page: Southern Cross Media

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ASX trades surged in April

[9:46 am] The exchange operator's monthly activity update is a non-event but highlights some interest numbers around trade volumes during times of extreme market volatility.

In April, the ASX reported:

• Total trades: 45.9 million, up 45% year-on-year

• Total cash market value: $165.8 billion, up 31%

• Total capital raised: $2.1 billion, down 51%

Source: ASX Announcement | Company page: ASX

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Citi's take: Westpac, Endeavour, Reliance and Siteminder

[9:35 am] Citi reviewed yesterday’s quarterly reporters, making the following key changes to ratings, target prices, and earnings forecasts:

• Westpac: Maintained Sell rating with an unchanged target price of $27.75. FY25-27 earnings forecasts were reduced by 3-5%, driven by lower revenue, though slightly higher costs were offset by reduced bad debts.

• Endeavour Group: Kept Neutral rating but raised target price from $4.50 to $4.59. Despite weaker-than-expected 1H25 results, Citi increased the target price due to higher peer multiples, noting that Endeavour’s undemanding multiple may persist until market confidence improves.

• Reliance Worldwide: Retained Buy rating but lowered target price from $5.90 to $5.25.

• Siteminder: Maintained Buy rating but reduced target price from $7.20 to $6.60. Revenue forecasts were cut by 1-4% due to softer US travel demand, impacting transaction revenue growth, as the US has the highest penetration of transaction products.

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NextDC utilisation and order book update

[9:27 am] NextDC reported a 30% surge in contracted utilisation since January 2025, driven by significant customer contract wins. Key highlights include:

• Victoria’s data centre ecosystem saw the largest gains, hosting NextDC’s biggest AI deployments to date, with pro forma contracted utilisation reaching 114MW (161% of built capacity of 70.5MW as of 31 December 2024).

• Group-wide pro forma contracted utilisation increased 30% to 228MW since 31 December 2024.

• The forward order book grew 54% to 127MW, up 45MW since 31 December 2024.

• Most new contract revenues are expected to commence in FY27.

• FY25 capex guidance was raised by $100 million to $1.4–$1.6 billion, from prior $1.3–$1.5 billion

To add some perspective, Goldman Sachs (Feb-25) expected contracted utilisation of 229.2MW in FY25 (so basically at full-year GSe with three months of the financial year to go). Overall, a very bullish set of numbers considering the recent concerns about oversupply in the data centre space (which caused NextDC to sell off as much as 45% from Oct-24 highs).

Source: ASX Announcement | Company page: NextDC

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Six stocks reaffirm guidance

[9:20 am] Several companies have reaffirmed their FY25 guidance this morning, including:

• Austal reaffirmed full-year EBIT guidance of no less than $80 million

• APA reaffirmed FY25 underlying EBITDA guidance of $1.96-2.02 billion and full-year dividend guidance of 57 cents per share

• Computershare reaffirms full-year management EPS of around 135 cents and EBIT (ex-MI) growth of 30% year-on-year

• Medibank expects to grow broadly in-line with the market in the March quarter, reaffirms full-year claims per policy unit guidance of 2.4-2.6%

• NHF reaffirms full-year underlying operating profit guidance of $235-250 million, notes conditions remain challenging for nib New Zealand

• Qualitas reaffirms full-year net profit before tax guidance of $49-55 million

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HMC cuts FY25 EPS guidance

[9:10 am] HMC Capital cut its full-year operating EPS guidance by 5.7% from 70 cents to 66 cents, reflecting fair value movement of carrying positions in HMCCP and financial assets.

The company said it remains well-placed to maintain strong operating EPS growth, supported by "scalable growth platforms and significant investment capacity," with $675 million of committed funding lines.

Despite the operating EPS cut, the company reaffirmed its FY25 dividend guidance of 12 cents per share and 3-5 year assets under management target of over $50 billion.

Source: ASX Announcement | Company page: HMC Capital

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Vicinity: 'Robust retailer and shopper confidence'

[9:04 am] Vicinity reported strong performance in the discretionary and retail REIT sector for the March quarter, with total portfolio retail sales rising 2.4%. Specialty stores and mini-majors led the growth, up 3.1%, driven by standout performances in Leisure, Jewelry, Retail and Homewares.

In terms of company specific numbers:

• Pro forma gearing at 27.5%, which remains at the lower end of its target range, enabling further growth investments

• FY25 FFO and adjusted FFO per share now expected to be at the top end of guidance ranges 14.5-14.8 cents and 12.3-12.6 cents respectively

• Macquarie analysts (Feb-25) already forecast FY25 FFO and adjusted FFO to be 14.8 cents and 12.6 cents respectively (so no surprises really)

• Full-year distribution payout to be at the lower end of the 95-100% of adjusted FFO range

Source: ASX Announcement | Company page: Vicinity Centres (VCX)

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Two interesting data points

[8:45 am] Goldman Sachs and Bank of America highlighted two interesting forward looking data points regarding S&P 500 returns and corporate earnings.

The S&P 500 averages the following returns after a 9-day win streak, which has only happened 14 times since 1970:

• 1 Month: +0.71%

• 3 Months: +2.02%

• 6 Months: +0.05%

• 9 Months+ 3.32%

• 12 Months: +3.62%

Of the 375 S&P 500 companies reporting Q1 earnings, 24% mentioned "recession" in their conference calls, a sharp rise from 2% last quarter. Bank of America notes that corporate sentiment often lags earnings by one quarter, signaling potential earnings risks ahead.

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What's driving stocks lower?

[8:40 am] It was a relatively quiet session, with limited macro catalysts, no high-profile earnings and low volumes.

• Overbought and Stretched: The S&P 500's nine-day winning streak, its first since 2004, signals overbought conditions.

• Sector Rotation: Growth-heavy sectors, such as Technology and Consumer Discretionary, pulled back overnight by 1.3% and 0.8%, respectively, after strong runs. Meanwhile, defensive sectors like Consumer Staples, Industrials, and Telecoms held steady, closing near breakeven.

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Good morning!

[8:40 am] The S&P/ASX 200 spent pretty much the entirety of yesterday trending lower, down 0.97%. The weakness is set to continue today after a relatively weak lead from Wall Street. Futures are pointing towards a 21 pt fall (-0.25%).

If you’re new to the blog – catch up quick via today’s Morning Wrap.