Research notes

Solid 2H26 growth was as expected, but the mid-point of FY27 EBITDA and DPS guidance ranges was c.3% and c.5% below consensus expectations, respectively. Material EPS/DPS forecast downgrade for FY27F, mild upgrades FY28-29F. DCF-based target price set at $3.56/sh. Moderate from TRIM to HOLD given today’s material share price decline improves potential TSR to c.2%.

Quality contractor with a “Made Personal” approach. FDC combines a 36-year track record, disciplined project selection and a relationship-led model that drives repeat and non-tendered work, supporting project wins and margin outcomes. Attractive earnings growth, visibility and cash generation. We forecast ~12% revenue and NPAT CAGR from FY25-FY28, and note ~71% of FY27 revenue is already secured. A capital-light model, strong net cash position and free cash flow support a 70-90% dividend payout ratio. Valuation. We initiate coverage with an ACCUMULATE recommendation supported by a $3.97 target price and a >5% dividend yield forecast.

A2M’s FY26 result was broadly in line with recent guidance. China label IF was the key area of weakness, however the rest of the portfolio delivered solid growth. FY27 outlook comments were materially weaker than expected; however, we view them as conservative and would not be surprised if guidance is upgraded at the AGM. While the 1H27 result will be weak, double-digit earnings growth will resume in 2H27 and out to FY30, underpinned by new products, supply chain transformation, and the scaling of new and other geographies. We maintain our ACCUMULATE rating with a revised PT of A$7.62 (was A$8.30).

The Bowdens DFS confirms a materially larger and longer-life project, with reserves up 30% to 93.5Moz at 60.8g/t Ag, and total operational life extended to 26 years (previously 16 years). Project economics have improved materially, with DFS Stage 1 pre-tax NPV5 up 144% and IRR lifting to 31.5% (base case US$45/oz Ag, AUD/USD 0.70), despite notably higher upfront capital requirements. We maintain our SPECULATIVE BUY rating and lift our price target to A$0.43 per share (previously A$0.40 per share).

IMD delivered a robust FY26 result, with EBITDA +29% and NPATA +34%. All earnings metrics were broadly in line with our forecasts. The disappointment was below the operating lines. FY26 integration costs of $9m will continue into FY27, while new guidance below EBITDA implies a $12-13m impost to pre-result consensus NPBT(A). We leave our FY27 EBITDA forecast unchanged at $200m and continue to think the market underappreciates operating leverage in the core business. But with EPS(A) growth moderating from +34% in FY26 to +16% in FY27F, and FY26 net debt growing to $200m, a 30x forward PE multiple is difficult to justify. We reduce our valuation to ~28x FY27 EPS(A), which sees our target price fall to $4.30 (previously $5.00). We move to ACCUMULATE (from BUY).

IRE’s 1H26 result was softer than anticipated, with slower revenue momentum along with currency headwinds the main drivers. While Group revenue & underlying EBITDA fell short of MorgF by -2%/-4% respectively, earnings quality continued to improve as efficiency program cost improvements saw underlying EBITDA margins from continuing operations improve +330bps YoY. Revised FY26 guidance sees revenue & UPAT expectations lowered by ~4% at the midpoint, however Cash EBITDA guidance of A$119-124m (+19-24% YoY) was raised, supported by efficiency program delivery, more moderate Capex outlook, and a further A$6-9m of cost savings to be delivered over 2H26 (implying 2H26 Cash EBITDA of A$58-63m). We trim our underlying UPAT forecasts by -2 to -6%, which sees our price target reduce by ~7% to A$9.65. Although top line momentum has softened in the half, execution of IRE’s broader efficiency / modernisation story in our view remains on track (albeit early days). We therefore retain our BUY rating.

While interest rates continue to drive investor sentiment towards the A-REIT sector, GPT is controlling the controllables, as operational execution and treasury management combine to see HY26 FFO +5% (vs pcp), or 8.3% when trading profits are excluded. Fund management metrics remain on track, with AUM increasing +4.6% (hoh) to $41.6bn. With the stock trading on a 5% distribution yield and forecast FFO growth of c.4.0-4.5% (pa), sustainable returns should continue for investors. Combined with an 11% discount to NTA and little recognition of the funds management business (c.$90m of EBIT pa), we see downside protection at the current share price. On this basis, we reiterate our Accumulate recommendation with a $5.65/sh price target.

JBH reported a broadly in-line FY26 result, with NPAT up ~3%. However, sales growth slowed in the 4Q, including turning negative in JB Hi-Fi Australia. The July trading update was below market expectations, with 3 out of 4 divisions reporting negative comparable sales growth, and tracking below 1H27 consensus. This was impacted by price increases, supplier stock shortages, weaker consumer backdrop and cycling a strong pcp. We expect some of these headwinds to ease as the year progresses, although the macro trading environment remains choppy. We have downgraded our NPAT forecasts by ~5% in FY27 and FY28, respectively. Our valuation lowers to $82.00 driven by earnings downgrades, offset by rolling forward our model. We maintain our ACCUMULATE rating.

Constellation Software (CSU) acquires, manages and builds industry specific software businesses aka Vertical Market Software (VMS) companies. Uniquely they are perpetual owners of all their businesses. CSU has six operating groups: Volaris, Harris, Jonas, Vela Software, Perseus Group and Topicus, which service customers in over 100 markets worldwide. Each operating group serves as a holding company for dozens of underlying software companies. The company is headquartered in Toronto, Canada, and has offices in North America, Europe, Australia, South America and Africa.

Cash surprise strengthens the dividend outlook - NHC finished FY26 with A$485m of cash, materially ahead of both our forecasts and consensus expectations. The stronger cash position supports our decision to increase dividend assumptions for 2H26 and beyond. FY27 production growth remains intact - Bengalla and New Acland enter FY27 with positive momentum. Bengalla delivered a strong operational finish to FY26 and should benefit from more normal weather conditions versus the start of FY26, while New Acland continues progressing along its ramp-up trajectory towards nameplate production. We maintain a HOLD rating with an increased price target of A$5.45ps.