Research notes

ACF’s trading update was encouraging. While FY26 revenue and underlying EBITDA guidance was reaffirmed, management commentary pointed to improving activity levels across Australia. This was particularly pleasing in the QLD formwork division, which has experienced softer conditions over the past two years. Momentum in QLD appears to be turning, with improvement evident heading into FY27. Initial FY27 guidance was a positive surprise. While broadly in line with consensus, we view the early guidance as conservative and achievable, reflecting management’s confidence in the outlook. Importantly, FY27 guidance also implies an improvement in EBITDA margins, suggesting a favourable shift in sales mix toward the higher margin Formwork segment. We make no changes to our FY26F estimates. However, we reduce FY27F and FY28F revenue by 3%, while leaving underlying EBITDA estimates unchanged. We maintain our positive view on ACF with a BUY rating and $1.28 target price. With formwork activity - particularly in QLD - now improving, momentum into FY27 continues to build. With Brisbane Olympics-related activity also expected to ramp up over the next 12-18 months, we see ACF’s outlook as strong. Trading on 8.6x FY27F PE with a 6.0% yield, we believe the valuation remains attractive.

The INPEX/Formentera Beetaloo JV terms imply US$3,059/acre at base earn-in, escalating to US$3,547-$5,480/acre on option exercise, a 20-37x uplift on the prior Tamboran/DWE benchmark in 2025. BTL trades at an implied ~A$140/acre, a 97% discount to the INPEX base deal. Even heavy discounting for acreage quality differences leaves material upside. INPEX has committed development-scale capital (up to US$619m) to the Beetaloo as an LNG-grade resource. Farm-out leverage for BTL has stepped up materially. We maintain our Spec Buy rating, with an upgraded A$0.90 TP.

IPART has released a methodology paper outlining its proposed approach to calculating an Initial Asset Base (IAB), which has direct implications for the pricing of Electronic Lodgment Network Operators (ELNOs). While this is just a discussion paper, it certainly points to a likely more rigid structure controlling PXA’s future pricing, while elements such as the potential exclusion of goodwill from IPART's proposed IAB calculation could present downside risk. We make nominal changes to our PXA earnings of -1%-2% on some post results earnings tweaks. While it is too early to factor in the full implications of the pricing review, we now apply a 15% discount to our valuation to account for potential regulatory risk, setting our price target at A$14.31. We maintain our ACCUMULATE recommendation with >10% upside to our PT.

Microsoft is an American multinational technology company that develops and markets software, services and hardware. The company is best known for its software products, including Microsoft Windows operating systems, the Microsoft Office suite and the Internet Explorer web browser. Its five main operating segments include: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.

Salesforce was founded in 1999 in San Francisco, California. It is the leading Customer Relationship Management (CRM) software provider and pioneered Software as a Service (SaaS). Salesforce’s pioneering SaaS model meant it was the first company to have all its software and customer data hosted on the internet and made available via monthly subscription.

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.

NVIDIA Corporation is an American semiconductor company and a global manufacturer of high-end graphics processing units (GPUs). The company is based in California and has five operating segments: (1) Data Center, (2) Gaming, (3) Professional Visualisation, (4) Automotive, and (5) Original Equipment Manufacturer (OEM). As the engine of Artificial Intelligence (AI), NVIDIA is committed to accelerating the growth of generative AI, by recognising it as a new computing platform, like the PC, internet and mobile-cloud.

NGI has acquired Georgian, a Toronto-based AI-focused growth equity firm. This deal appears to be a strategic fit for NGI, meeting its flagged acquisition criteria and being earnings accretive. We forecast NGI FY26F/FY27F/FY28F EPS to increase by ~1%-3% following the transaction. However, our target price reduces to A$2.98 (from A$3.35), reflecting a meaningful contraction in global peer trading multiples and our application of a more conservative valuation multiple to NGI (12.5x PE versus 15x previously). NGI's recent sell-off appears to be mainly tied to Private Credit concerns around its key strategic partner Blue Owl. We think NGI's fundamentals are largely unchanged, and current market volatility is arguably conducive to its stable of alternative asset fund managers. We rate NGI a Buy.

Global Business Travel Group (AMEX GBT) is the world’s leading B2B travel platform, providing software and services to manage travel, expenses, and meetings and events for companies of all sizes. It operates in more than 140 countries.