Research notes

Elementos delivered a Definitive Feasibility Study (DFS) on its wholly-owned Oropesa tin project, Spain, with a pre-production cost of US$156M, producing 3,400tpy of tin in concentrate over 12 years, and now with the approval for 8.1km of road infrastructure, is progressing the key permitting, financing and offtake milestones toward a Final Investment Decision (FID). >With a binding agreement to acquire up to 50% ownership of the Robledollano smelter, 220km from Oropesa, ELT has the potential to create the only primary mine-to-metal tin supply within Europe, and establish one of the few vertically integrated primary tin supply chains globally. >Using a long-term tin price of US$37,000/t (currently US$47k/t) and a discount rate of 15% for Oropesa, our ELT Valuation is A$0.65ps, and our Target Price, with the Oropesa NPV discounted by 10% ahead of the FID, is A$0.60ps.

GQG’s October update was very weak, with net outflows of US$6.7bn and negative investment performance of US$11bn taking FUM down 12% in the month to US$131.6bn. Year-to-date net outflows now total US$32.9bn, with no sign yet of stabilisation. >We downgrade FY26F/FY27F/FY28F EPS by 4%/27%/34% on lower FUM forecasts (weaker net flow and investment performance assumptions). To reflect higher risk, we cut our target PE from 8x to 5x and apply a 15% discount to our DCF. Our PT falls to A$0.82 (previously A$1.52). >The franchise retains inherent value if management can restore performance, but with momentum firmly to the downside, it is difficult to stay positive until we see signs of a turnaround. We move to HOLD.

MI6 has received credit approved commitments from ANZ, NAB and Societe Generale for A$410m in debt facilities (A$335m Project Finance Facility and A$75m Working Capital Facility), which, alongside FNV royalty funding and the recent Placement, fully fund the Bullabulling development to first production. >Terms are in line with expectations but nonetheless attractive, with a margin of less than 3% above BBSY, a 7-year PFF tenor and no mandatory hedging. Financial close is expected in 1Q CY27, in line with DFS completion and FID. >We maintain our BUY rating and A$1.57ps price target.

GLF’s share price has pulled back ~ 20% since reporting in August, as residential selling conditions in Queensland have softened considerably, creating a tougher operating environment for residential and LLC developers. Listed peer updates for 1Q FY27 and our own channel checks with private industry contacts confirm the slowdown. >We use this as an opportunity to revisit our forecasts and valuation. We touch down our FY27 earnings (EPS down 5%) and sit 6% below consensus at the NPAT level, primarily on lower settlements and our price target decreases to $4.75 (from $5.74). While we acknowledge the tougher near-term backdrop, our longer-term outlook is unchanged. We continue to forecast earnings growth and NTA accretion across our forecast period and maintain our ACCUMULATE rating.

Contrary to expectations, CTD did not provide FY27 earnings guidance at its AGM. Guidance is now more likely at its 1H27 result in February. CTD did provide its 1Q27 result, which was unsurprisingly weak, with underlying EBITDA down 37.5% on lower revenue, a lower revenue margin (6.2%), higher UK and Group costs and adverse FX. Given usual seasonal trends plus all the added distraction associated with the overcharging episode, we think 1Q27 will prove to be the low point. >Pleasingly, client retention is >97% and there have been A$258m of new wins and A$684m of re-signed TTV YTD. Remediation is progressing (A$66m paid in 1Q27) and the IATA release (~A$30m working capital) strengthens liquidity. >We have upgraded NPAT by 24%/16%/13% over FY27/28/29 due to lower interest and tax. Following the share price’s strong rerating, we move to a HOLD rating (from BUY) with an increased price target of A$3.90 (was A$3.06).

Continuing the trend during major bank’s reporting season, CBA's trading update showed flat 1Q27 earnings, with growth tracking below 1H27 expectations. Markets revenue weakness and higher credit losses were the key headwinds. >Forecast downgrades of 0-5% across FY27-29F. Target price $119.27/sh (-1%). >SELL retained, given potential TSR of c.-26% at current prices. Valuation remains stretched given the growth outlook and required risk-adjusted returns.

As expected, FDC upgraded FY27 revenue and EBIT guidance by 5-10%. We upgrade our forecasts to the top end of guidance and move to a BUY recommendation. Work in hand has grown 14% since the FY26 result to $2.85b and remains well spread across sectors. We see this as an attractive opportunity to enter a business that should be a steady earnings compounder with an attractive dividend yield (6.1%).

FLT’s initial FY27 NPBT guidance is in line with our previous forecast and consensus. The A$307.5m midpoint implies 11% growth on FY26. However, the 2H skew is larger than expected with ~31%/69% 1H/2H, implying a weak 1H27 followed by strong growth in the 2H27 (cycling a weak 4Q26). >Leisure continued its strong start to the year following the Middle East disruption in the 4Q26, while Corporate’s 1H27 is weaker given the timing of new wins, costs moving above the line and investment, before returning to growth in the 2H27. >We have downgraded our FY27-29 NPBT forecasts by ~4% and move to the bottom end of FLT’s guidance range. Given recent share price appreciation, we lower our recommendation to ACCUMULATE with a new price target of A$13.91.

ADH reported group sales for the first 19 weeks of FY27 down (0.6)%, an improvement from the (4.5)% decline in the first 8 weeks. However, sales in the last 6 weeks (2Q to date) have softened to (1.5)% decline, reflecting a more challenging consumer environment. >Group gross margins are ahead of the pcp, with Adairs and Mocka up year-on-year, offsetting a 300-400bps decline in Focus. >We have lowered our EBIT by 9%/5% in FY27/28 largely driven by weaker gross margins in Focus. Our target price lowers to $1.70 (from $1.80). BUY maintained.

PEXA’s 1Q27 update cut FY27 guidance on weaker property volumes: revenue to A$355–380m (~8% lower at the midpoint) and Core NPAT to –A$6m to +A$6m (from A$5–20m). 1Q27 Exchange volumes fell ~11%, with transfers down 15%, and October transfers were down 26%. The next catalyst is IPART’s final report (due by 18 November), which will show whether the draft’s proposed price cuts, worth ~A$70m (~20%) of year-one revenue, go ahead. >Overall this is a softer update than expected, albeit one driven by a difficult property market backdrop. >We downgrade our PXA FY27F/FY28F EPS by -20%/-13% on softer volume forecasts and reduced margin assumptions. Our target price is set at A$7.03 (previously A$7.12), with our earnings changes offset by a valuation roll-forward. HOLD maintained.