Research notes

We initiate coverage of Atomic Eagle (AEU) with a SPECULATIVE BUY recommendation and A$0.80ps target price. AEU offers exposure to Muntanga, a simple, low-capex heap leach uranium project in Zambia, plus a 60% interest in the high-grade Madaouela project in Niger. Buy Muntanga, get Madaouela for free. AEU trades on just A$2.1/lb EV/resource versus the peer average of A$4.8/lb. In our view, the market is largely valuing Muntanga alone, with Madaouela's 116.5Mlb U3O8 foreign resource estimate contributing little to the current share price despite its scale, grade and strategic importance. Near-term catalysts include Madaouela JORC conversion (end-2026), Muntanga North drilling results (Q4 2026) and a Muntanga resource upgrade as AEU works toward its 100Mlb+ target.

Pivotal’s Horden Lake scoping study evaluated an A$428M pre-production capital cost project processing 3.5Mtpy of open pit ore, a life above 8 years, average production of 19,100tpy of copper concentrate with significant precious metal credits, delivering 83% of revenue and 2,200t of nickel in concentrate with cobalt credits for 17% at modelled prices, or 29,100t copper equivalent (CuEq). >The study projected a high margin, with an all-in sustaining cost (AISC) of US$2.58/lb copper equivalent - nickel concentrate revenue and precious metal credit revenue converted to revenue to pounds of copper. With that revenue deducted from costs, the projected AISC is US$1.00/lb copper. >Quebec is an attractive exploration and mining jurisdiction. Hydroelectric power dominates the Quebec grid, with electricity amongst the lowest cost in the world around C$0.05/kWh. Generating value for Horden Lake is subject to a successful feasibility study, subsequent financing, development and successful operation.

We view GYG's 1Q27 trading update as evidence that its sales are resilient. Backing out the high-single digit first seven weeks already disclosed (we estimate ~8.5%, supported by the Uber Eats deal), comps ran at ~5.5% in weeks 8-13, transaction-led and in line with the mid-single digit FY27 guidance. >GYG remains our key pick in the QSR sector and the highest-quality operator in our coverage. We lift our FY27 same-store sales (SSS) growth forecast by 50bps to 5.5% and refine our margin mix, which raises FY27 underlying EPS by 1.9% and our price target to A$31.30 (from A$31.00). We move to ACCUMULATE (from BUY) given recent share price appreciation and would be buyers on any weakness.

MTO’s investor day reinforced a business transformed in scale and mix, with wholesale driving earnings in a challenging market, retail and data offering the next leg of improvement, and FY31 targets giving clarity on the growth trajectory ahead. >The group set FY31 targets (A$1.2bn+ revenue, ~6% implied ROS) pointing to ~8% pa sales growth and ~11-15% pa PBT growth over the 5 year period. >We’re encouraged by MTO’s clear strategy ahead. We think the market overlooks MTO’s wholesale business, which has meaningful growth levers across product, categories and partnerships. We see scope for Retail upside from Harley-Davidson scale, ongoing brand rationalisation and data and systems integration. Double-digit earnings growth and a net cash balance sheet look compelling on ~7x PE.

Site visits to Cowal and Northparkes reinforced EVN’s return to gold and copper growth. Cowal’s expansion potential could lift group gold production to >850koz post-FY30, while Northparkes and Ernest Henry could see group copper production >90ktpa after FY32. >Maintain HOLD with A$14.30ps target price.

We have long argued that investing material capital in near-term loss-making projects (magnetite and new energy) has not diversified Fortescue, and has instead left group earnings more exposed to the iron ore price. Magnetite adds more iron ore exposure but at a higher cost, while new energy investment, and US$0.9-1.3bn of FY27 decarbonisation spend, are funded from hematite cash flow. >This dynamic is starting to show in the numbers. Fortescue flagged that net debt rose US$1.9bn in 1Q27, equal to the final dividend (US$1.0bn) plus quarterly capex (US$0.9bn), implying negative FCF for the quarter. >We attribute this mainly to weaker hematite cash flow after the central buying group China Mineral Resources Group (CMRG) reportedly halted purchases of two of Fortescue’s products during the quarter, leaving shipments 6% and actual sales 14% below Visible Alpha (VA) consensus in 1Q27. >On updated estimates we lower our rating to TRIM (from HOLD) with an A$15.40 target price (was A$18.70).

MP1 recently raised its FY27 EBITDA guidance by 25%. The compute and network businesses continue to deliver above expectations and MP1 announced three new AI infrastructure contracts with a Total Contract Value of ~A$1bn. >Collectively these set a glide path for annualised EBITDA in excess of $850m. >We upgrade our EPS forecasts materially. Our Target Price lifts to A$27 per share and we retain our BUY recommendation.

We expect a mid-single digit decline in 2H26 earnings (ex notable costs). >Target price reduced to $6.40/sh, as the outlook for ROTE improvement moderates. At current prices, total potential TSR is c.4.6% (including c.6.3% cash yield). Hence, we moderate our BOQ rating from ACCUMULATE to HOLD.

ORI has updated the market on its US AN sourcing, non-core land sale, recent acquisitions, cost out program and FY26 business performance. The important point is that the broader business continues to perform strongly, in line with its expectations. ORI will report its FY26 result on 12 November. >We have trimmed our FY27 NPAT forecast by 3.6% reflecting increased AN sourcing costs in the US, more gradual recovery in Indonesia coal production, plant turnarounds and higher interest costs given the Deer Park sale isn’t going through. >We move to an ACCUMULATE rating with a revised price target of A$26.52.