Research notes

Alongside its AGM (where FY27 DPS guidance of 72 cps and Free Cash coverage slightly less than 95% were reaffirmed), TCL released its 1Q27 traffic data. We expect higher fuel costs and interest rates dampened Australian traffic growth (c.1% on pcp ex West Gate Tunnel). Dynamic pricing strength of the US Express Lanes continues to be terrific. >Target price of $12.06/s (+3 cps) aligned to our DCF valuation. Potential TSR at current prices is -9% (including c.5.1% cash yield). TRIM into share price strength.

NXT have downgraded FY27 EBITDA guidance by ~36% due to M3 power supplier Jemena deferring the increased power supply for M3 due in part to community and stakeholder opposition (aka the Not In My BackYard movement). >NXT’s share price is below Net Tangible Asset value of ~$7.50 p/share. This pessimism implies concerns around contagion. Management didn’t share investor concerns, saying M3 power is now expected to arrive “in FY28” and noting, in the context of debt, they are “in compliance with financial covenants”. >In our view NXT is incredibly cheap and its ~30% discount to NTA is unwarranted if these issues are just short term in nature. However, management needs to de-risk these key concerns for equity investors. This could take some time. >We set our Target Price at $7.50 which is broadly in line with NTA and below our valuation. We upgrade to a BUY recommendation, from HOLD. Noting the heightening risks relative to normal operating conditions for the business.

A weak quarter, with production and revenue materially below forecasts on an 11-day planned mill shutdown and low opening ROM stocks. >Much of the miss is timing related, but it has eroded the liquidity cushion as growth capex peaks. Guidance maintained. >Upgrade to ACCUMULATE (from HOLD) on share price weakness with an unchanged A$0.35ps target price.

A solid start to FY27. Gold sold of 364koz beat MorgansF and consensus, and AISC of A$3,217/oz was 8% below consensus, led by KCGM and Yandal. Pogo was weak. >FY27 guidance is unchanged and the KCGM ramp-up remains the key operational watch point. New CEO Suresh Vadnagra’s plans for the portfolio are likely a few months away. >In the meantime, market focus remains on a potential increase in the Gold Fields offer and KCGM commissioning performance.

CUV competitor Disc’s oral bitopertin swept its EPP Ph3 and is raising US$350m to launch. Its topline data is stronger than Scenesse’s pivotal package on cross-trial comparison. Our main concern of a daily tablet supported by stronger data is the scenario we’ve long flagged as the biggest threat to CUV’s only revenue line. >We now view EPP as a defensive franchise. As a result, we have cut US volume and pricing assumptions. We move to a TRIM rating and reduce our target price to A$7p/s (from A$10 p/s).

At its AGM, SIG provided a solid trading update where domestic LFL sales were in line with consensus at ~+10% and international LFL sales at +15.8% were ahead of consensus. >The potential selldown by the co-founders (~5% of issued capital, as disclosed in SIG’s July ASX announcement) may be keeping a lid on the share price. However, we see this as an opportunity to add to positions in this quality healthcare/retail name. >We have made immaterial changes to our forecasts (<1%). We forecast ~18% EPS CAGR over the next three years. We retain our BUY recommendation with a $3.19 price target.

TLX posted its 3Q26 business update, with group revenue of US$245m, an increase of 19% YoY. Management confirmed that FY26 revenue is expected to be in excess of US$1bn versus guidance of US$950m-US$970m, with R&D expenditure guidance revised to US$240m-US$260m (from US$230m-US$270m). >TLX received FDA approval for Pixclara® and completed enrolment for its BiPASS® study during the quarter, as well as announcing a merger with Isotope Technologies Munich (ITM).

EBO reaffirmed FY27 guidance at its recent AGM despite ongoing foreign exchange and fuel-cost headwinds, with management guiding to strong second half growth. Operational commentary was encouraging, with the Kemps Creek ramp-up on track, CWNZ contract extended and broad-based momentum across divisions. >The company’s multi-year distribution centre investment program is now complete, supporting stronger free cash flows and creating around $150m of strategic acquisition capacity. >Our valuation remains unchanged at $22.93 and we maintain our BUY recommendation.

HUB’s 1Q27 Platform net flows of A$4.0bn were in line with MorgF/VA consensus (A$3.97bn), -5% qoq (4Q26: A$4.2bn) and -23% yoy (1Q26: A$5.2bn was a 1Q flows record). Platform FUA closed at A$143.7bn (+3% qoq, +18% yoy) and Total FUA at A$168.6bn, both ~1.2% below VA consensus. Discretionary (IDPS) outflows persisted during the quarter, with IDPS gross & net inflows below a strong pcp; however, structural support from resilient Super flows remained evident. >Adjusting for HUB’s 1Q27 update, we trim our EPS by 1% in FY27-29F. HUB is now trading on an FY27F P/E of 38x (a ~17% / 1StDev discount to its 5yr average). Whilst cyclical headwinds are weighing on flows momentum in the near term, HUB remains strongly positioned to benefit from broader structural tailwinds. We see the pullback in the share price as an increasingly attractive entry point. We upgrade our recommendation to BUY (from ACCUMULATE), with a PT of A$86.00/sh.

RRL released its full 1Q27 quarterly report following its earlier production and cash preview: 83.0koz at an AISC of A$3,617/oz, with cash and bullion up A$93m QoQ to A$1.28bn. >Production and costs were weaker than consensus expectations, due largely to rainfall delaying mining and haulage. Underlying cash generation was moderate, with cash and bullion up only ~A$42m excluding the A$51m Vault break fee. FY27 guidance was reaffirmed. >Following an analyst change, we revise our recommendation to HOLD (from BUY) with a price target of A$6.46ps (previously A$9.39ps).