Research notes

TEA has agreed to acquire Victorian specialist electrical contractor Maxim Group for up to $254m (~5.4x FY26F EV/EBIT). The deal is ~31% EPS accretive, scales TEA’s Electrical segment to >$100m EBIT and diversifies earnings away from resources into data centres, infrastructure and Battery Energy Storage Systems (BESS). TEA will look to leverage its regional expertise as data centres increasingly move out of metropolitan areas. Maxim’s owner-led team is retained and aligned via scrip and a three-year earn-out. We make meaningful EPS changes of +30-34% in each of FY27 and FY28. Target price rises to $9.15 (from $5.25). BUY maintained.

NVIDIA Corporation is an American semiconductor company and a global manufacturer of high-end graphics processing units (GPUs). The company is based in California and has five operating segments: (1) Data Center, (2) Gaming, (3) Professional Visualisation, (4) Automotive, and (5) Original Equipment Manufacturer (OEM). As the engine of Artificial Intelligence (AI), NVIDIA is committed to accelerating the growth of generative AI, by recognising it as a new computing platform, like the PC, internet and mobile-cloud.

VYS is acquiring NewGround, adding highly accretive (~25% EPS) annuity-style earnings that, alongside greater customer-base diversification in the industrial division, materially increases earnings visibility. The limited upfront cash component of $8.3m preserves balance sheet flexibility, providing further capacity to continue building out its integrated water-services platform via acquisitions. Incorporating NewGround from early October, we raise our EPS forecasts in FY27 and FY28 by +19 and +24% respectively. Target price increases to A$1.10 (from A$0.90). Reflecting the improvement in earnings quality and reduced volatility, we upgrade VYS from Speculative Buy to Buy. While the Kariyarra asset management business carries a binary outcome, at the current share price, investors are getting this optionality for free.

Visa data in IDP's key destination markets remains in deep contraction, with AUS, CAD, and the UK all experiencing material volume and visa grant rate declines. Positively, IDP’s China IELTS is scaling quickly (13 test centres vs 5 at 1H26), the cost base reset is on track (A$25m net reduction), and the group continues to demonstrate pricing power across both IELTS and Student Placement (SP). With structural demand drivers for international study intact, a leaner cost base, growing China optionality and ongoing technology/product development (Navi, FastLane, One Skill Retake), we are willing to look through the near-term backdrop on a cyclically depressed multiple. We upgrade to BUY, A$3.15ps PT.

MP1’s move to expand TAM from comms to compute has paid off handsomely over the last few months with more compute ARR sold in the last 1.5 months than comms ARR has been sold in the last 13 years. This success in compute is symbiotic with the core communications platform and AI where GPU’s further deepen this symbiotic relationship. Consequently, MP1 is launching an on-demand globally distributed AI Inference cloud. This, plus recent take-or-pay-style contract wins has prompted a ~A$809m capital raise. We materially lift our earnings and our Target Price lifts to $21 per share. Following a ~90% share price rally in the last month, we move to an ACCUMULATE rating.

SkinKandy (SK1) is a leading piercing retailer in Australia and New Zealand, operating 107 stores in a fragmented market. Its service-led, vertically integrated model is underpinned by strong store economics and a standardised clinical store format with over 750 trained piercers, making it hard to replicate at scale. We see several growth levers ahead including organic earnings growth in the domestic footprint driven by store maturation, improving store economics, 15-20 store openings p.a. with international expansion providing upside optionality. We forecast EPS CAGR of 33% between FY25A-FY28F, with a FY27 PE of 21x and an attractive PEG ratio of 0.6x. We see this as a compelling opportunity to invest in a high-quality retailer with a strong store rollout opportunity. We initiate coverage with a BUY recommendation and a $2.90 price target.

SRG has upgraded FY26 EBITDA guidance to the upper end of its $164-168m range (~$168m) and, unusually early, provided FY27 EBITDA guidance of $190-200m. This underlines the group’s strong earnings visibility, which is arguably unparalleled in the services sector. The guide is underpinned by $1.85bn of new contract awards across nine sectors, headlined by a transformative eight-year Gympie water alliance and TAMS’ first E&C contract under SRG ownership. We lift our EBITDA forecasts +1% in FY26 and +3-4% in FY27-28, although we note that SRG management typically provides conservative guidance early in the year, reinforcing our view that risk to the FY27 guide is skewed to the upside. We forecast SRG reaches net cash in FY26 and, on that basis, expect it to resume acquisitions. We believe SRG may be able to continue to compound +20-30% EPS growth over the next few years as robust organic growth is supplemented by strategic acquisitive growth. Target price rises to $4.20 (from $3.20).

After a lull in activity levels during FY25/1H26, we believe CVL is entering a strong upgrade cycle. Following award of the main Eneabba contract (amongst others), we estimate that the order book – excluding the long-dated OPV program – stands at a record $1.1bn. FY27F revenue of $1bn is heavily de-risked and whilst margins will depend on execution, CVL has a strong track-record of delivery. We expect CVL to enjoy a strong 12-24 months given increased earnings certainty and an unprecedented outlook supported by capex programs across a broad range of commodities (iron ore, gold, rare earths, lithium, hydrocarbons, copper and alumina). In our view, the base business is undervalued (<10x FY27 EBIT), without ascribing any value to CVL’s strategic position at the WA defence precinct.

The latest Federal Government interference from the announced gas reservation policy (high on promised impact, low on any actual detail) ended up resulting in a renegotiated Mahalo deal between Santos and Comet Ridge (COI), shrinking the upfront cash payment, with both sides remaining aligned. Combining the Mahalo projects allows for a stronger development path, ultimately to 70-75 TJ/d. We maintain our Speculative Buy rating with an A$0.27ps TP (was A$0.25).

Following a review of our research universe, we discontinue coverage of Chalice Mining (CHN AU). Our forecasts, target price and recommendation should no longer be relied upon for investment decisions.