Research notes

The FY26 annual report confirms the numbers already flagged via quarterlies, but the real signal is the FY27 outlook section, which reads as almost entirely execution language now the balance sheet question is solved.  The market is still waiting on an FDA decision for its Heart Failure (HF) application, which remains the key near-term catalyst and value inflection driver. Despite delays, we maintain a positive view on approval. Speculative Buy retained and A$1.85 p/s target price unchanged.  

FY26 normalised NPBT was up 20% (vs pcp), 1% above MorgansF and in line with consensus, as FUM increased 36% to $11.9bn. More importantly, FY27 guidance for NPBT of $74m to $80m was above MorgansF and bracketing consensus - a modest beat. The FY26 result leant on performance fees while the recurring base management fee line was broadly in line. Operationally, QAL keeps benefiting from the retreat of retail and wholesale lenders (better terms and deal flow) and strong institutional demand for underlying funds, with a record $6.5bn deployed at a post-IPO high of 45.4% gross operating margin. We remain a BUY with a target price of $3.90/sh, with operational outperformance continuing to run counter to the adverse narrative toward private credit.

PPE's FY26 sees the completion of its portfolio simplification, with two subscale divisions divested (c.35% of the business) and the ongoing operations returned to growth. Group Normalised EBITDA of $19.0m (+1.6% pcp) was in line with MorgansF, while Normalised NPATA of $8.7m (+29.9% pcp) came in c.53% ahead on a lower underlying D&A (excl acquisitions amortisation). Debt continues to decline, with capital management centred on dividends/buybacks, along with incremental M&A. Second-half momentum was the feature, with 2H26 Normalised EBITDA up 19.0% on 2H25 and Engineering, Trades and Labour up 122.7%, as the Queensland infrastructure ramp began to convert. We retain our Speculative BUY with a revised A$1.00 target price (70% PER / 30% DCF).

The Home Depot is the world’s largest home improvement retailer with operations in the US and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products.

KSL’s 1H26 NPAT (PGK ~60m) was up 4% on the pcp and in-line with MorgansE. The 1H26 dividend of 14.2 toea (AUD 4.5cps) was above MorgansE (13.1 toea). Overall, we would describe this as a reasonable result, broadly in line with expectations. The key result negative was slower revenue growth, while the key positive was a strong bad debt performance. We make nominal changes to our KSL FY26F EPS, but lower future year EPS by 8%-10% on softer revenue growth expectations. Our PT is reduced to A$1.38 (previously $1.48). With >20% TSR upside, we maintain our BUY call.

RDY’s FY26 result came in towards the lower end of its revised FY26 guidance range, with revenue of $125m & EBITDA of $34.8m -1%/-4% lower than MorgF respectively, with contract implementation timing and customer churn across RDY’s legacy portfolio key headwinds during the period. Lower planned investment into FY27 and an improved cost base stemming from the group’s FY26 efficiency program should see the pathway back towards improved growth and margins as achievable, underpinning FY27 guidance of revenue of ~$128-132m (+2.4-5.6% YoY) & cash EBITDA margins of 15-17%. We trim EBITDA forecasts by -3-4% in FY27-FY29F, with our SPEC BUY retained.

FY26 underlying EBITDA missed consensus estimates but was in line with MorgansF, while underlying NPAT beat expectations as the company swung to a net profit from a loss in FY25. FY27 outlook was unchanged with guidance already provided at the 4Q26 result and today’s release contained no material updates on the Kathleen Valley expansion timeline or ramp-up. FID for the expansion is expected by the end of 1Q27. Maintain ACCUMULATE with a A$1.40ps target price.

MVF delivered FY26 underlying NPAT of $16.1m, which was below the revised guidance range of $17-18m, although included a $1.4m write-off of prepaid assets. Excluding this, it would have been in line ($17.5m). FY26 was a challenging year, with NPAT down 41.2% yoy driven by soft industry cycles, market share losses in the 1H, and no price increases to offset inflationary cost pressures. As a result, EBITDA margins fell materially (down 460bps). MVF did not provide any quantitative FY27 guidance but expects earnings growth to be driven by industry volume improvements, market share gains (focus on NSW, VIC) and cost efficiencies delivering EBITDA margin improvement. We have made modest downward revisions to FY27F earnings. We have moved to an ACCUMULATE rating (from Speculative Buy), with an $0.82 price target (was $0.80).

1H FY26 delivered the earnings improvement flagged in July, with IME returning to statutory profitability and Underlying EBITDA rising materially off a small base. However, the quality of that improvement is less convincing. Cash conversion was weak, receivables increased and Software ARR was broadly flat over the half. Risk tolerance is low, and investors are less willing to overlook funding, liquidity and execution barriers, leaving IME with a higher burden of proof from here. Recent trading is a material improvement versus historical but longer-term growth still missing key ingredients. Higher risks, less conviction. Move to a HOLD, target price reduces to A$0.37 (from A$0.50).

PXA’s FY26 results came in ahead of Visible Alpha consensus at both EBITDA (+3%) and Core NPAT (+11%). However, FY27 guidance was significantly below expectations, reflecting a more difficult outlook for the domestic mortgage market, with transaction volumes now expected to decline materially this year. We make sizeable downgrades to our EPS forecasts over the next two years (>20%) on the softer guidance commentary, and our price target falls to A$7.12 (from A$9.35). While there is likely inherent value in PXA at current levels, we think there are too many headwinds and unknowns near term to turn positive.