Research notes

Honeywell International is a world-wide diversified technology and manufacturing company. It consists of four key segments: (1) Aerospace, (2) Performance Materials & Technologies, (3) Building Technologies, and (4) Safety & Productivity Solutions. The company was founded in 1885 and is headquartered in Charlotte, North Carolina, United States.

MGH is to sell its Construction Materials (CM) division, pivoting the business to focus on digital, AI and electrification infrastructure. The pivot is cornerstoned by a $100m investment in Firmus, further aligning and supporting the recent JLE contract win. The sale of the quarries will deliver MGH a c.$550m net cash balance (post-Firmus investment), which management believe they can reinvest to deliver a 20% Return On Capital (ROC). To this end, we see lower EPS across FY27/28 as we model a more conservative deployment of capital. At the current share price ($4.11/sh), investors are attributing negative value to the Civil business. At a peer multiple of c.10x FY27 EBIT for the Civil business, plus Corp costs, the valuation offers ample margin of safety. It is on this basis we upgrade to a Buy with a $5.10/sh price target.

PNI’s 1H26 NPAT (~A$67m, -11% on the pcp) came in -4% below consensus, but it was more in line excluding one-offs (e.g. mark-to-market investment impacts). Overall, we saw the 1H26 result as compositionally stronger than the headline numbers suggested, and positively accompanied with a move-the-dial acquisition. We reduce FY26F EPS by -7% on a softer-than-expected 1H26 “reported” result, and dilution from the PAM equity issue. Conversely, FY27F EPS rises +8% on PAM earnings benefits and a broader review of our assumptions. Our price target falls to A$23.21 (from A$26.30). We move to a BUY recommendation (previously Accumulate) with >20% upside existing to our PT. With this note coverage transfers to Richard Coles.

With elevated gearing (42.5% Proforma D/A) and distributions arguably too high for a portfolio where new incentives average 35%, the prospect for distribution growth looks a challenge, especially when combined with the prospect for higher rates. Management rhetoric largely remains unchanged, with an expectation that FY26 will prove the trough in earnings, albeit FY27 will need to navigate the impact of the 9 Help Street (NSW) disposal. Portfolio vacancy remains dominated by Dockland (VIC) and St Leonards (NSW), two markets where leasing is particularly challenging – elevated vacancy, negative net absorption and nominal face rental growth. Despite the weak outlook, COF is trading at a 38% discount to NAV and a 63% discount replacement value, hence we retain our Hold rating with a $1.05/sh price target.

FND has come out of a trading halt post announcing a strategic investment in the company, and subsequently addressing some ASX queries. On face value, the strategic investment, which is needed to address a balance sheet crunch, appears more dilutive than hoped. Add to this negative perceptions from the trading halt and the company has some work to do to win back investor trust. We place our rating, target price, and forecasts under review pending finalisation of due diligence on the strategic investment. Our previous recommendation, target price and estimates should not be relied upon for investment decisions.

RTX Corporation is an aerospace and defence company that provides systems and services for commercial, military, and government customers worldwide.

We have updated our estimates following JIN’s preliminary release of headline numbers ahead of the 1H26 result. Group revenue increased 29% yoy to $85.3m, modestly below our expectations due to weaker Lottery Retailing TTV. Underlying group EBITDA of $37.5m rose 22% on the pcp and was in line with our forecasts. Overall, our topline and earnings assumptions remain broadly unchanged. Our FY26-27F NPAT and EPS forecasts increase by 4% and 2% respectively, driven primarily by lower amortisation of acquired intangibles. At its AGM, JIN revised its dividend payout ratio to 30-50% of statutory Group NPAT to support balance sheet deleveraging following recent acquisitions. The interim dividend will be determined at the 1H26 result (MorgansF: 28cps). We view the 5% share price decline today as an opportunity to build a position in a company capable of delivering >15% EPS CAGR over the next three years. JIN is trading on an undemanding forward EV/EBITDA multiple of ~6x. We maintain a Buy recommendation with a $14.90 price target (previously $15.60).

AMC’s 1H26 operating performance was slightly softer than expected. However, underlying EPS was largely in line with forecasts and fell within management’s guidance range. EPS benefited from a more favourable tax rate, which offset weaker results from the non-core portfolio. A key positive was the delivery of Berry synergy benefits of US$55m in 2Q26, which was at the top end of management’s guidance range of US$50-55m. Synergy targets for FY26-28 were reiterated. A key negative was the performance of the non-core businesses, with volumes down high-single digit percentages during 2Q26. However, following the renegotiation of several customer contracts on better terms, segment performance should improve in 2H26. AMC also noted that discussions around portfolio optimisation are progressing well, and we view any future announcement in this area as a potential positive catalyst for the stock. We adjust FY26/27/28F underlying EPS by -1%/-3%/-4%. Our target price declines to $75.80 (from $76.00) and we maintain our BUY rating.

The FDA has provided formal confirmation and alignment on Galidesivir’s Animal Rule development pathway, setting out a clear two-stage program and materially de-risking the asset. The update represents the strongest regulatory signal to date that Galidesivir is on a viable, accelerated path toward approval as a US biodefence countermeasure and supports multiple potential value levers including a Priority Review Voucher. ILA concurrently announced it has raised A$9m at A$0.35 which the company believes will be ample funding to see Galvesivir through to potential marketing approval, as well as sufficient excess to advance other opportunities in Ebola and Sudan Viruses.

VFY’s 1H26 update outlined continued operational progression with the first Guardion devices entering the US market, FDA registration activity starting and commercial programs advancing across animal health and human health. The outlook centres on executing near-term commercial pathways including IMV Technologies workstreams, Phase II platelet readouts in 2H26, expanded US customer engagement and scaling device supply in preparation for broader market adoption.