Research notes

CKF has announced what we see as a high-quality German KFC bolt-on at attractive economics. CKF is acquiring an eight-restaurant Bavarian portfolio at just under 6x restaurant-level EBITDA (pre-AASB 16) and expects the deal to be immediately EPS accretive. The Germany runway has been extended through the German Development Agreement (DA) to 45-90 new restaurants (from 40-70), materially extending the organic growth runway. We believe this was a sensible, returns-focused deal that adds weight to the Germany growth story; execution is still key, but with a refreshed team and strong operators at the helm, success in Germany should be the catalyst for a re-rate despite lingering Netherlands noise. We upgrade to a BUY with a $12.70 target (was $12.40).

MFG has entered into an arrangement to merge with Barrenjoey. We think the deal makes strategic sense and will reinvigorate the MFG story. Nevertheless, deal pricing appears tilted in Barrenjoey’s favour (in our view). We assume the merger closes at the end of FY26. Changes to our MFG FY26F/FY27F/FY28F EPS are -27%/+10%/~+25% reflecting the incorporation of the deal and upgrades to our assessment of Barrenjoey’s earnings profile (based on new disclosures). Our price target is set at A$12.43 (previously A$9.80). We think the Barrenjoey merger fundamentally changes MFG’s overall outlook, strengthening the business and providing additional pathways to growth. MFG also retains a strong balance sheet (~A$690m of liquidity, post deal). Move to a BUY.

DBI’s share price has declined c.14% since its high on its FY25 reporting day in February. We see no factor causing a material change to the fundamental value of the business. Our forecasts and valuation includes the higher interest rate environment and elevated short-term inflation. Hence no change to our $5.35 target price. Forecast changes are negligible. At current prices we estimate potential TSR of c.21% (including a forecast 6.2% cash yield). We view this as an attractive return (with significant margin of safety) for a defensive but growing infrastructure asset. Hence we upgrade from HOLD to BUY.

We upgrade RIO from TRIM to HOLD with a revised target price of A$147 (prior A$146). The recent share price pullback closes the valuation stretch, while a lift in our medium-term iron ore assumption from US$80/t to US$85/t provides a firmer earnings floor. RIO remains a top-tier diversified miner. Not cheap enough for a BUY, but the pullback removes the overshoot that justified TRIM. Iron ore earnings platform, copper and aluminium leverage, and lithium optionality, RIO represents an attractive mix with good execution in the Pilbara and Oyu Tolgoi.

The Spartan Resources team has joined Torque Metals, positioning the company to drive the next phase of high-grade growth at the 250koz Paris Gold Camp. The incoming team includes Simon Lawson (Non-Executive Chairman), Craig Jones (CEO and MD) and David Coyne (Non-Executive Director). This is the same group who discovered and grew the Never Never and Pepper deposits from 303koz to 2,372koz Au in less than two years, ultimately transacting to RMS for A$2.5bn. We maintain our SPECULATIVE BUY rating with a price target of A$0.90ps.

GQG has provided a February FUM update.  Whilst monthly net flows remained negative (-US$3.2bn), strong February investment performance (+US$10.5bn), which drove +4.5% FUM growth, made this a positive update in our view. We lift our GQG FY26F/FY27F EPS by +1%-+2%, driven by increased FUM forecasts based on better investment performance than we expected. Our PT rises to A$2.03 (previously A$1.89). We acknowledge it remains early, but the improved January and February investment performance for GQG might mark the start of a business turnaround. We continue to see the stock as undervalued trading on 8x FY1 PE and an ~11% dividend yield. With >20% TSR upside, we move to a BUY rating, previously Accumulate.

PNR reported its H1FY26 result, alongside a production downgrade. Updated production forecasts of 86–92koz Au (previously 100–110koz) are considerably lower than our previous forecasts. We now model the upper end of guidance at an AISC of A$2,609/oz. We maintain our BUY rating and price target of A$6.53ps (previously A$6.83ps), the downgrade a function of revised forecasts.

FDV’s FY25 EBIT result appeared comfortably above guidance (-A$4.6m vs -A$10m). We lift our FDV FY26F/FY27F EPS by >10% (off low bases), with reduced revenue forecasts offset by improved EBITDA margin expectations. Our valuation and PT are largely unchanged at A$0.56. We see long-term value in FDV given its unique assembled portfolio, and with significant upside to our PT (A$0.56) we maintain our BUY call.

The Donald Project resource update confirms strategic heavy rare earth exposure, with improved definition of Dy and Tb supporting the project’s importance to Western rare earth supply chains. Strong strategic backing from Energy Fuels (UUUU.NYS), with the Donald Project to supply REEC feedstock to its White Mesa Mill in the US, where rare earth prices are currently materially higher than in China. Valuation increases to A$373m (+10%) following model updates, while our target price reduces to A$0.90ps reflecting the rebasing of equity after ATR’s redomicile to Australia. This change was mechanical and non-dilutionary, as Hong Kong shareholders received 2 ASX shares for every 1 share previously held, with the share price adjusted accordingly. There was no change in the underlying equity value. Maintain SPECULATIVE BUY.

EPY’s recent 1H26 result saw the group deliver underlying NPATA of A$1.8m down from $2.6m in 1H25. No interim dividend was declared (due to retained earnings position). The group maintained capital flexibility with ~3.0cps of surplus capital earmarked for further Buybacks/ Dividends/ Growth initiatives. Funds-in-use in EPY’s core Invoice Finance division declined ~16% YoY as a result of client attrition in 2H25, which set a lower starting base into 1H26. This grew progressively in 1H26 with originations within management expectations, however utilisation was lower toward year-end. Trade Finance FIU also reduced as the group continued to rebalance away from large exposures. Equipment Finance FIU grew +37% YoY, with Origination momentum continuing to build. Prior FY26 guidance for NPATA growth of ~15-20% (i.e. $6m NPATA) was withdrawn in Nov’26 due to softer than expected customer utilisation of Invoice Finance, along with costs/timing of implementation of the group’s new Loan Management system. EPY however is now guiding 2H26 earnings to be likely consistent with 1H26 (i.e. FY26 Underlying EPS is expected to be ~1.4cps). The Board intends to pay all retained earnings as a fully franked dividend in FY26.