Research notes

ACE’s automated enforcement win in Kentucky is now the third contract of its kind awarded to ACE in the US, leveraging off a successful pilot program in the state and prior wins in Connecticut and Arkansas. ACE’s Kentucky win lifts our revenue & EBITDA forecasts by +1-2% in FY27-28. We roll forward our valuation and reduce the multiple used in our EV/Revenue & GP based price target. This sees our target price reduce to $2.00 (from $2.30). With a growing US pipeline and various contracts/tenders across AUS/US yet to be awarded, we continue to see a number of catalysts ahead of ACE into FY27. With 80% implied TSR, we reiterate our Speculative Buy recommendation.

CCP's FY26 NPAT of A$105.5m (+12% on the pcp) was a record and in line with consensus (VA A$104.4m, MorgansF A$102m). FY27 NPAT guidance of A$110m-118m (+8% vs the pcp at the midpoint) is solid, but the investment outlook is arguably the negative. Ledger investment guidance is down ~21% (midpoint) to A$200m-280m, with US purchasing down ~31% to A$100m-130m as the supply pulls back and competitive pressures persist. Operational efficiency/productivity has improved over FY26, however delivering on US divisional growth remains key to our long-term investment thesis. At ~7.7x FY27F PE, the valuation continues to appear undemanding. BUY retained.

VISA is a global payments technology company that enables fast, secure and reliable electronic payments across more than 200 countries and territories. It facilitates global commerce through the transfer of value and information among a global network of consumers, merchants, financial institutions, businesses, strategic partners, and government entities

We make minor changes to our forecasts ahead of the FY26 result on 20/08 to align with guidance for the second half to be “broadly in line with the first half performance”. We reduce FY26 EBITDA by 3% and FY27-28 by 5%. Our target price of $1.20 remains unchanged on valuation roll-forward.

In our view, ACF’s acquisitions of Ausgroup Industrial Services (AGIS) and Preston SuperDeck are highly complementary to the company’s existing operations, providing both cost and revenue synergies. We note management has a strong track record of extracting value from prior acquisitions. The surplus funds from the capital raise will be used to pay down debt, strengthening the balance sheet and addressing a key investor concern. We estimate the deals will be EPS neutral in FY27, due largely to the extra capital raised to reduce debt. Management indicated EPS accretion would have been double-digit had funding been limited to the acquisitions. Our target price rises slightly to $1.30 (from $1.28) and we maintain our BUY rating.

Shell PLC, previously Royal Dutch Shell PLC, is a British multinational integrated oil and gas company with headquarters in London and operations in over 70 countries. Shell operates across five divisions: Integrated Gas, Upstream, Marketing, Chemicals and Products, Renewables and Energy Solutions.

Hermès International, a French high-fashion luxury goods manufacturer, was founded in 1837 by Thierry Hermès. Hermès is known for its high-end craftsmanship. It specialises in leather goods, lifestyle accessories, home furnishings, fragrances, jewellery, watches, and ready-to-wear apparel. Many of its products have an equestrian theme, reflecting Hermès’ heritage in saddle making. Some of Hermès products, notably the Birkin and Kelly handbags, as well as its silk scarves, have attained iconic status in consumer culture.

A busy 4Q26 for COI, renegotiating the Santos-Mahalo deal, building up its balance sheet, and resetting the CleanCo GSA with a longer timeline. Gas reservation and energy market volatility has brought selling pressure to domestic gas developers. We maintain a SPECULATIVE BUY rating with an updated A$0.20 target price.

Chipotle Mexican Grill is the largest fast-casual restaurant chain in the US with total system sales of US$9.9bn in 2023. Chipotle’s store network is mainly company-owned and not franchised (apart from the Middle East). Chipotle sells burritos, burrito bowls, quesadillas, tacos, and salads made using fresh, high-quality ingredients, with a selling proposition built around competitive prices, high-quality food sourcing, speed of service, and convenience. It had a footprint of nearly 3,440 stores at the end of 2023, heavily indexed to the United States, although it maintains a small presence in Canada, the UK, France, and Germany.

SKS reported unaudited FY26 revenue of $347.9m (+33% vs FY25), +2% ahead of guidance. The group also delivered stronger-than-anticipated operating leverage, delivering FY26 PBT of $39.3m, +15% ahead of MorgansF $34.0m. We see SKS’s levels of work in hand and pipeline as continuing to support growth and sustained margins, which should see the group deliver further leverage as its pipeline of DC work converts into FY27-28F. We rebased our PBT margin forecasts higher to adjust for this new baseline, driving ~14-20% PBT upgrades in FY26-28F. We retain our ACCUMULATE rating with a revised PT of $9.40/sh (from $8.95/sh).