Research notes

PPE’s 1H26 result reflected its streamlined business, following the sale of its Health and Community operations in late CY25. Ongoing operating EBITDA of $10.5m declined 9.2% yoy, whilst increasing 46% hoh. Key P&L metrics improved hoh, while still falling short of the prior year, suggesting any earnings recovery is still unproven. To this end, we continue to believe that PPE is producing cyclically low earnings, with the improvement hoh still too early to be called a trend. Whilst tentative, we see some early signs of improvement and reiterate our Speculative Buy recommendation and $0.95/sh price target.

EGH reaffirmed FY26 guidance, which will see EBITDA growing 20%-25% (vs pcp) and Underlying EPS growing 7.5%-10%, a function of a) 5%-7% same-store rent growth and b) full earnings contributions from the $80m of assets acquired since CY25. In EGH we see sector leading earnings growth, Government backed revenues, and attractive valuation (trading at NTA). The return outlook, relative to risk, remains attractive as the secure income stream and valuation discount mitigates some of the risks, whilst the modest market cap means acquisitions can materially improve earnings. On this basis we reiterate our Buy recommendation with an $0.85/sh price target.

BETR Entertainment’s (BBT) interim result was impacted by an unusually unfavourable trading period for bookmakers, particularly across racing during the peak Spring Carnival. While 2Q26 margins were heavily affected by customer-friendly outcomes, trading has normalised since December, and the business enters 2H26 with improved operating leverage following the completion of its major brand and marketing investment phase. Notwithstanding recent earnings pressure, we believe the company’s 2H26 and FY27 guidance is achievable, supported by normalising gross margins, improved promotional efficiency and a more disciplined cost base. We reduce our earnings forecasts across FY26-27F. We maintain a Buy recommendation, however our target price reduces to 40c.

Light & Wonder (ASX: LNW) delivered an in-line result, with strong Gaming and iGaming performance offsetting continued softness in SciPlay. Grover continues to track ahead of expectations, while North American (NA) outright sales hit a record. We were encouraged by management’s articulation of AI as both an offensive growth lever and a defensive moat. Net/net, we view AI as enhancing LNW’s competitive edge rather than eroding it, and the recent share price weakness appears disconnected from the durability of its land-based earnings base. We revise our EPSA estimates by both -3% and -2% respectively across FY26-27F, reflecting slightly improved Gaming and iGaming momentum, offset by SciPlay and lower buyback assumptions. In our view, LNW trades on an undemanding valuation given: (1) supportive NA EGM demand; (2) litigation overhang behind it; (3) a balance sheet set to delever through 2026 (MorgansF: ~2.9x); and (4) Grover providing a high-return, recurring revenue vertical growing ahead of expectations. We upgrade to BUY, however lower our price target to A$195 (previously A$200).

1H26 result was broadly in line with expectations, with FY26 shaping as a foundation year ahead of a step-change in ounce growth from FY27 and beyond, underpinned by ~10 years of reserves. Key positive: Continued uplift in the price of gold has delivered a material uplift in revenue (+50% pcp) and underlying EBITDA (+92%) despite ounce production effectively being flat pcp. Key negative: legal settlement fees regarding Plutonic’s K2 prospect (A$49m) eroded NPAT which was not fully captured in our forecasts. We maintain our BUY rating and A$14.56ps price target.

KSL’s FY25 underlying NPAT (K120m) was +20% on the pcp, but -8% below MorgansF on a higher bad debt charge than we forecast. On the higher debt charge, this was based on a management decision to tidy up a small group of old loans at this result (a more one-off event). Outside of this, we saw this as another relatively solid performance by KSL, punctuated by +20% revenue and NPAT growth respectively on the pcp. We make relatively nominal changes to our KSL FY26F/FY27F EPS of -2%/+2%, based on a broad review of earnings assumptions. Our PT is lowered to A$1.57 (previously A$1.78) Trading on ~6x FY26 earnings and expected to deliver ~30% FY1 EPS growth at a ~20% ROE, we see KSL as too cheap. BUY maintained.

PXA’s 1H26 core NPAT (A$21m) was up +90% on the pcp and double Visible Alpha consensus (A$9.3m).  FY26 Core NPAT guidance was also lifted from A$5m to A$15m, to $15m to A$25m. We saw this as a robust result overall. Whilst PXA clearly benefited from an improved volume environment in both Australia and the UK in 1H26, the +3% improvement in the group EBITDA margin highlighted strong cost control, and benefits from efficiency improvements. In our view, revised FY26 guidance still appears conservative, whilst the key stock catalyst of the launch of the Natwest remortgage product, is tracking to schedule. We lift our PXA FY26F/FY27F cash EPS by >+10% on the stronger than expected 1H26 result, and re-modelling for PXA’s new divisional disclosures. Our PT rises to A$17.01 (previously A$16.09). ACCUMULATE maintained.

OCL's 1H26 result was broadly in line with our forecasts with NPAT of $18.7m +10% YoY (+7.4% ahead of MorgF $17.4m), whilst Underlying EBITDA increased +10.9% to $25.9m (+4% vs MorgF $24.9m). ARR grew +12% YoY to $120.0m however this was ~3.2% below expectations due to timing of customer conversions and currency headwinds ($121.4m on a CC basis). OCL's FY26 ARR guidance has been reset to 10-14% (CC basis). Our EBITDA forecasts reduce by -4% across FY26-FY28F, driven by adjustments for ARR guidance and our expectations around timing of investment/margins and currency movements. Our blended DCF/EV/EBITDA based price target revises to $16.70/sh (from $20.00/sh). We see tailwinds remaining supportive of OCL’s long-term growth momentum. Following the recent pullback in OCL’s share price we move to a Buy rating (from Accumulate).

AIM’s 1H26 revenue was broadly inline with expectations while higher expenses once again resulted in underlying EBITDA coming in materially below our and consensus expectations. Management have now retracted their FY29 aspirational revenue and EBITDA targets and have refocussing the priorities. We reduce our forecasts and price target on lower earnings. We move to a Hold recommendation as we await traction on revised strategic priorities going forward.

TPG’s FY25 result was in line with guidance and consensus expectations, as was its underlying EBITDA and capex guidance for FY26. The highlight was continued strong mobile subscriber growth. For many years TPG/Vodafone has struggled to grow mobile market share. However, over the course of 1HCY25 and 2HCY25 it has ignited growth and outpaced peers in terms of mobile subscriber growth. Its network quality and brands are resonating with consumers and medium-term mobile growth could soon become a trend. We make non-material underlying forecast changes. Our target price lifts to $4.40 from $4.20 and we retain our Accumulate recommendation.