Research notes

SFR’s 1Q27 result was softer than expectations but overall in-line with guidance. >Group CuEq was -3%/-7% vs consensus/MorgansF and underlying EBITDA was -13%/-11% vs consensus/MorgansF, largely driven by lower than expected zinc volumes out of MATSA. >The quarter still ran exactly at the FY27 guidance midpoint run-rate (25% of CuEq). Production, cost and capex guidance were all maintained. >Net cash of US$342m was down only US$11m qoq, after paying a US$117m fully franked dividend that was largely funded from quarterly free cash flow. >Upgrade to BUY following recent share price weakness with an unchanged A$23ps target price.

Nike, Inc. is a global leader in athletic footwear, apparel and equipment with an estimated market share in 2023 of 39% (investing.com). Nike’s iconic ‘Swoosh’ logo is one of the most recognisable consumer brands in the world. Nike sells directly through over 1,000 retail stores and ecommerce platforms, as well as through wholesale channels. It employs a contract manufacturing model.

Top-end of saleable guidance in sight – Managed ROM production of 5.28Mt exceeded expectations, with South Walker Creek continuing to outperform and ROM inventories building materially across the portfolio. We believe these stockpiles position SMR to deliver saleable production modestly above the top end of FY26 guidance. >Coal prices drive upgrades – We have increased our metallurgical and thermal coal price assumptions to reflect stronger market conditions. Combined with strong operational performance, this drives meaningful upgrades to our FY26 & FY27 revenue, EBITDA and NPAT forecasts. >Surprise dividend – SMR declared a fully franked US2.2cps interim dividend. While modest in size, the payment demonstrates confidence in cash flow generation from the current coal price environment. >We maintain our HOLD rating with an increased price target of A$2.85ps (previously A$2.75ps).

Palo Alto Networks, Inc. is a global cybersecurity leader headquartered in Santa Clara, California. Founded in 2005, the company provides advanced security platforms including next-generation firewalls, cloud security via Prisma Cloud, secure access through Prisma Access, and AI-driven security operations with its Cortex platform.

In the context of a challenging consumer environment, UNI has delivered a robust trading update at its AGM for the first 17 weeks of FY27. Total direct to consumer sales are up 9.3%. LFL sales in the core Universal Store banner remained broadly consistent with the first 7 weeks, against a strong comp in the pcp. Perfect Stranger has delivered double digit LFL sales growth and CTC/ THRILLS remains volatile. >Gross margins continue to benefit from PS mix and favourable FX is offsetting higher transport costs. We also anticipate ongoing cost investment, but we expect cost growth to moderate. UNI has a strong pipeline of new store openings (16-20 in FY27), which will support total sales growth. >We have made minor revisions to forecasts (<1%) and no changes to our valuation. BUY maintained with a $10.20 price target.

AOV delivered a softer trading update, with 1Q27 LFL sales down 5% yoy. >The Powertrain & Undercar (PTU) segment delivered marginal sales growth, with flat Lighting, Power & Electrical (LPE) sales and a materially weaker 4WD result. >Positively, the group is targeting a further ~A$10m pa in net efficiency benefits (2H weighted), acquired a controlling stake in a high-ROIC filtration business (VAFI), formed a strategic alliance with US performance aftermarket brand owner Holley (HLLY-US) and announced a further 5% share buyback. >Whilst FY27 sales and EBITA guidance (ex VAFI) has been cut to up to a 5% decline on FY26 continuing ops, the group expects a broadly flat result including the VAFI consolidation. >Despite progress across various strategic initiatives, earnings growth expectations remain anaemic, which will likely cap any potential re-rate for the stock. HOLD.

Cuscal (ASX: CCL) provides card, batch and real-time payments and regulated data services to banks, credit unions, fintechs and corporates across Australia and New Zealand. >In our view, CCL's defensive, transaction-led model has underpinned strong long-term compounding growth, and we think the company remains well placed from here. Operating leverage should continue to build as past technology investment scales against a growing transaction base, while recent accretive acquisitions provide an additional layer of near-term earnings support. >We initiate coverage on CCL with an ACCUMULATE recommendation, with ~15% upside to our blended valuation of A$6.71 per share.

MI6 has materially de-risked its funding position, securing an additional A$200m from Franco-Nevada (A$170m for a further 1.45% royalty plus a A$30m equity cornerstone) and raising A$250m via a two-tranche Placement at A$0.88ps. >This lifts pro forma cash to ~A$601m (at quarter-end; incl. Tranche 2 and ~A$2m from the SPP), with the remaining funding to be met via project debt ahead of a targeted 1Q CY27 FID. We model a ~A$330m debt drawdown, assuming moderate cost inflation to the PFS estimates, plus ongoing exploration and working capital. >We maintain our BUY rating with a price target of A$1.57 per share (previously A$1.38).

We make 0-2% changes to FY26-28 forecasts ahead of the FY26 result, largely related to balance sheet growth and loan loss provisioning assumptions. >Target price lifted to $34.44/sh, from $33.53/sh previously. >TRIM retained, given potential TSR at current prices of c.-9%.

6KA delivered a strong September quarter update, with revenue up 61% to US$7.2m. This implies an annualised run-rate of ~US$29m, slightly ahead of the ~US$28m runrate achieved in 2Q26. >Importantly, the Burgettstown, Pennsylvania expansion project remains on schedule with initial commissioning of the powder expansion expected in late 4Q26 and production ramp-up anticipated in 1Q27. >6KA’s funding position remains healthy with available liquidity of US$55.0m. Even if the 3Q26 operating cash burn rate were to persist, which we think is conservative given expected revenue growth and operating efficiencies following the expansion, management believes existing funding is sufficient through to the end of CY27. >We make only minor changes to our forecasts, increasing CY26F earnings by 2% while leaving CY28-29F unchanged. >Our target price remains unchanged at $1.30 and we maintain our SPECULATIVE BUY rating. Following another solid quarter with strong revenue growth, an accelerating order backlog and continued progress on the Burgettstown expansion, we remain confident in 6KA's long-term growth outlook.