Research notes

CAT’s FY26 result confirmed strong organic momentum, with revenue US$141m (+19% c/c) and closing ACV US$134m (+28% c/c) at the top of guidance, while Management EBITDA of US$25m (17.6% margin, +67% pcp) beat MorgansF. Operating leverage is now evident, with a 41% incremental margin (48% ex-acquisitions) in the period. ACV per pro team crossed US$30k for the first time whilst SaaS metrics improved. We trim FY27-FY29F Management EBITDA by 6-8% factoring in the result. Our price target is lowered to A$5.40 (from A$5.55) on these changes, offset to a degree by a valuation roll forward. BUY maintained.

VFY has released final Phase II in-vitro platelet results from USAISR, with all three cryopreservation protocols exceeding fresh-platelet quality benchmarks. The headline result was 94% post-thaw recovery using the 3% DMSO no-wash protocol, well ahead of the FDA/AABB (~75%) and European (~50%) thresholds. The study is independently authored by the US Army across 20 donors and 60+ samples at commercial volumes, delivering on a core IPO commitment made at listing in November 2024. No FDA-approved no-wash frozen platelet product exists commercially in the US, positioning Vitrafy to address a genuine category gap. Shares trading up strongly from the $1.20 YTD lows, and +27% on the 2024 IPO price.

Strong 1H26 results continue into 3Q26 which continued to deliver record sales contracts and revenue already exceeding FY25's full-year result, signaling strong near-term momentum. CNS market growth, expanding operating leverage with Medidata partnership and AI Investment underpin expectations for a multi-year growth outlook.

NEU delivered a strong first half, underpinned by continued growth in royalties to A$65m, a large cash position and continued operational momentum with record DAYBUE® patient uptake in the US and progress toward global expansion. NEU is recruiting for its Phase 3 clinical trial for Phelan-McDermid Syndrome (PMS) and expects recruitment to complete in late CY27. If there is clinical success, management expects this will be a major-value creation point. The consensus (Factset) target price is A$23.74 versus the current share price of A$12.42.

Water rights are a finite, physical store of value with little counterparty risk and supply that cannot be manufactured. Water rights also generate income through leasing the right to extract water (allocations) to agricultural producers, the underlying commodities of which are largely inflation-linked and should compound over time. The Murray-Darling Basin (MDB) represents the majority of traded water rights in Australia and best tells the supply/demand story: Sustainable Diversion Limits progressively constrain available entitlements, while Commonwealth environmental buybacks permanently retire productive allocations, meaning the pool of tradeable water is contracting. Against this, demand from permanent horticulture (e.g. almonds, citrus, winegrapes) continues to expand, with plantings that commit irrigators to water requirements for decades. To this end RIV’s diversified portfolio of long-duration, inflation-sensitive water entitlements should continue to exhibit a low correlation to listed equity markets.

FY26 result was in line with Consensus (and a slight beat vs prior guidance), while Consensus for FY27 was at the top end of guidance. To this end, the company is forecasting FY27 pro forma growth of 4-8%, with siding back to organic growth. Market conditions remain subdued, citing lower builder activity and affordability pressures - looking forward management assumes no market recovery in FY27. As such, FY26 can be chalked up as a transformational but financially dilutive year, while FY27 is about margin and cash-recovery driven by synergies rather than any improvement in the housing market. Buy retained, with a A$39.00/sh price target.

WJL’s FY26 result was weak but in line with guidance. FY26 was impacted by subdued trading conditions and material investment in the business. FY27 is going to be a particularly challenging year for WJL given the Middle East conflict, cost of living pressures, Virgin Australia materially reducing its commission and overrides and the RBA surcharging regulation changes. We have made significant revisions to our already well below consensus forecasts. In the absence of corporate activity, shareholders will need to be patient given the current challenges WJL needs to overcome while investing in its business for longer term success. We retain a Hold rating with a new price target of A$0.40.

Starbucks Corporation is the largest retailer of specialty coffee in the world. Starbucks was founded in 1971 as a retailer of coffee beans and ground coffee, operating from a single store in Seattle’s Pike Place Market. After it was acquired by Howard Schultz in 1987, the business grew exponentially. Its global footprint now comprises over 38,000 stores in more than 80 markets, with Starbucks Reserve ® Roastery locations in Chicago, Milan, New York, Seattle, Shanghai and Tokyo.

Rheinmetall AG is a leading German defence contractor best known for designing and manufacturing tanks, cannons, and advanced combat systems. Its crown jewel is the 120mm smoothbore cannon used on the Leopard 2 main battle tank, widely regarded as one of the most precise and powerful tank guns in service. Rheinmetall is also a core industrial partner in the Franco-German MGCS (Main Ground Combat System) programme, aimed at developing Europe’s next-generation main battle tank.