Research notes

CGS posted its FY26 result, announcing record contract wins and increasing diversification of the revenue base across psychiatric, rare disease, sleep and neurological disorders. Management expects this broader CNS footprint to reduce dependence on any single therapeutic area and support the sustainability of future growth. CGS has flagged increasing investment in AI and workflow automation as a strategically important development. With active trials growing to 171 and contract wins reaching record levels, management is building the infrastructure required to scale without a commensurate increase in headcount. CGS enters FY27 with record contracted revenue of US$118.5m, with plans to invest in AI-driven automation while maintaining FY26-level EBITDA margins. CGS’s share price has increased 14.1% since 1 July.

FY26 EBITDA rose +9% to A$68m, with margins up c.30bps; FY27 guidance points to a further ~14% EBITDA growth (A$75-80m; MorgansF A$75.3m). Despite strong 4Q growth (+19% yoy), macroeconomic headwinds detracted from the result, seeing FY26 slightly below the guided range of A$70-75m. Importantly, the group is continuing to deliver progress on the recovery (Collision EBITDA +40% yoy; margins +80bps), pursuing disciplined capital management initiatives (dividend; buyback; M&A) and guiding for another year of growth. BUY.

A FY26 result that offered few surprises, but highlights DRR’s quality earnings. EBITDA was -1% yoy, while underlying NPAT was +14% yoy. Final dividend of A 10.8cps trailed our estimate by 4%. A good business with an irreplaceable royalty at Mining Area C, and steady progress developing Thacker Pass (lithium royalty), but earnings growth from here is reliant on expanding its portfolio. We maintain a BUY rating, with a A$4.85 target price. DRR could benefit from a growing number of investors seeking inflation protection while also offering an above-market yield.

The signed Letters of Intent (LOIs) over the remaining 52MW would take the Australian portfolio to full capacity - a strong demand signal that de-risks management’s pathway to $250m of EBITDA. However the ramp-up in earnings is back-ended, hence FY27 guidance was ~8% below MorgansF and ~13% below Consensus. Liquidity of ~$1.2bn funds the ~$1.2bn capex bill, with management calling out no need for additional equity. We still see clear value, but the cashflows are pushed out - this is now an FY28-into-FY29 story. Target price unchanged at A$3.60; reaffirm BUY.

GQG’s 1H26 NPAT of US$228m, was -1% on the pcp, but +2% above consensus (US$225m).  We would summarise this result as resilient margins in a tough operating environment, offset by the key concern that GQG's investment performance is materially lagging its benchmarks on both a 1 and 3-year basis. In a shock, management also flagged GQG is now overweight technology and semiconductor stocks, except within its emerging markets portfolio. We leave GQG FY26F EPS forecasts largely unchanged, but lower outer years 3%–5% on reduced net flow assumptions; our GQG price target falls to A$1.52 (from A$1.66). The near-term operating environment remains difficult for GQG; however, we think it's hard not to see long-term value in the franchise at current levels, trading on ~7x FY1 PE with a ~>10% dividend yield. ACCUMULATE.

LGI delivered 26% EBITDA growth, as margins expanded (+356bps to 55%), leading to NPAT growth of 35% yoy to A$8.8m (+1.5% ahead of consensus). The group has pointed to a robust outlook for ACCU volume growth whilst executing on its +80MW pipeline build amidst prolonged approval processes. LGI has managed a volatile commodity price backdrop well (realised electricity price 35% above the average AEMO price), whilst driving meaningful operating leverage across its network. We remain encouraged by the progress and view FY27-28 as a catalyst rich period as execution turns to delivery. BUY maintained.

TPG’s 1H26 results and reiteration of full-year guidance were largely in line with expectations. For us the highlights were: a clean and easily digestible set of accounts that sets the path for growth; double-digit growth in FCF to equity; and an 11% YoY increase in the dividend to 10cps, which is now 25% franked. We make immaterial forecast changes, retaining our $4 target price and our Accumulate recommendation.

AX1 reported FY26 EBIT down 25% to $82.6m (excluding $48.6m non-cash goodwill impairment), which was broadly in line with expectations and guidance. Sales deteriorated through the year, LFL sales down 0.5% (1H: +0.9%, 2H: -2.0%). Sports Direct rollout continues, 4 stores currently trading and a further 4 expected to open before December. Other performance sports related banners continue to grow (TAF, Saucony, Merrell, Hoka) along with vertical brands (NL and SR). Our EBIT forecasts remain broadly unchanged in FY27, and down 2% in FY28. We have moved to an ACCUMULATE rating with a $0.77 price target.

Despite the cost pressures associated with the conflict in the Middle East, ING delivered its FY26 EBITDA guidance, albeit at the lower end of its range. ING has now dealt with its excess inventory levels, core poultry volumes are back in growth, selling prices are higher and normal production settings and improved network efficiency resulted in a much stronger 2H26 vs 1H26. While leverage was too high, ING has a clear strategy to reduce it over coming years. FY27 guidance disappointed with challenges around materially higher feed costs, inflationary cost pressures associated with the Middle East conflict and declining Wholesale prices. We have made significant downgrades to our forecasts. While ING is materially undervalued based on its more normalised earnings, while headwinds remain and will impact FY27, we move to a Hold rating. The key upside risk is corporate activity. We note speculation continue to surround the company.

Underlying EBITDA of A$85.0m (+28.7%) was in line with our forecast and guidance; statutory NPAT of A$40.6m beat our A$36.8m. FY27 EBITDA guidance for 6.7-6.9% of network sales is at-to-above consensus, and the first seven weeks of comp sales are high-single digit. 14.4cps special dividend and a further A$100m buyback, reflects balance sheet strength (net cash) and the Board’s confidence in the outlook. We upgrade our price target to A$31.00. Given the share price run, we move to ACCUMULATE. We maintain our conviction and would buy on weakness.