Research notes

HDN delivered a consistent set of results, with property fundamentals seeing NOI growth at +4.6% (vs pcp) and NTA growth of 5.4% (vs Jun-25). However, higher rates and increased debt saw FFO growing a more modest 2.8% - a trend we expect to continue as the business navigates potentially higher rates. Given HDN is trading at a 17% discount to NTA, with a 6.7% distribution yield (FY26), there is cause to see value. However, it appears FFO growth greater than inflation may remain elusive for the medium term. On this basis, we retain our Accumulate rating with a $1.40/sh price target.

Named one of Time Magazine’s Best Companies of 2024, KLA Corporation makes high-tech equipment used in the production of semiconductors, which are essential components in electronic devices like smartphones and computers. It helps manufacturers improve the quality and efficiency of their production processes by providing tools that detect and analyse defects in the manufacturing process.

MQG has hosted its annual operational briefing, together with releasing its 3Q26 update.  On the 3Q26 update, we saw this as a solid performance overall, benefitting from market-facing businesses (CGM and Macquarie Capital) seeing results “substantially up” on the pcp. Additionally, there was an underlying upgrade to CGM guidance, albeit this has been offset, to some degree, by an expected higher FY26 tax rate. We lift our MQG FY26F/FY27F EPS by +2%/+4% reflecting the more positive CGM commentary, blunted somewhat by higher expected tax. Our target price rises to ~$223 (from A$214). We maintain our HOLD recommendation.

We recently attended a site visit to TCG’s Afema Gold Project in Côte d’Ivoire. Afema represents one of the largest undeveloped gold projects on the ASX, hosting a 4.06Moz resource at 1.2g/t Au. The visit included all key resource prospects, future growth corridors, site infrastructure, core yard and a visit through the local community - reinforcing both the scale of the system and development readiness. We maintain our BUY rating and lift our price target to A$2.19ps (previously A$1.63ps).

CBA delivered a meaningful beat of 1H26 earnings expectations. We have materially upgraded our EPS forecasts after factoring in continuation of higher loan growth and benign credit loss environments. We expect DPS growth won’t match EPS growth as we see approaching CET1 capital tightness. Target price lifted to $124.26. SELL retained, with potential TSR of -24% (including 3% cash yield) at current elevated prices and trading multiples.

JHX delivered a clean Q3 beat with sequential margin improvement, disciplined execution on AZEK integration, and early evidence that volumes in core Siding & Trim (S&T) are stabilising at low levels. While NPAT remains temporarily weighed by amortisation and higher interest, the underlying margin trajectory and synergy capture both point to improving earnings quality into FY27. With US housing likely near the trough, we see medium-term upside as organic growth returns, synergies compound, and leverage falls toward <2.0x by 3Q28. We retain our BUY rating and lift our valuation to A$45.75/sh.

1HFY26 result was softer and less clean than expected, with adjusted NPATA declining 7% and revenue modestly below forecasts. The result was further complicated by US$1.1bn in impairment charges, largely relating to Vifor and Seqirus, weighing on statutory earnings and sentiment. Importantly, FY26 guidance was maintained, despite Behring weakness and heightened scrutiny following the announced CEO transition, suggesting a 2H recovery, pointing to an execution reset, not structural impost, in our view. The outlook looks supported through a combination of cost-outs, marketing initiatives, new product launches and diminishing headwinds, reinforced by the Board’s urgency around operational delivery. We adjust FY26-28 forecasts modestly, with our PT decreasing to A$241.34. BUY.

1H26 result: no major earnings surprises with a small underlying NPAT miss more than offset by a strong dividend beat of 20cps (+6%/+17% vs MorgansF/consensus). Key positives: dividend beat and approval of major projects and studies at Northparkes and Ernest Henry, which are expected to underpin production and throughput across both assets in the medium-to-long-term. Key negatives: there weren’t any. Our adjusted EBITDA forecasts for FY26/FY27/FY28 are -2%/+1%/+1%, respectively. We Maintain a HOLD rating with a A$14.50ps target price.

DXC delivered a solid 1H26 operating result, with FFO and distributions underpinned by 2.9% like-for-like income growth and contracted rental escalators across a predominantly metro and highway-focused portfolio. Post period end, the company has agreed to acquire two fund-through developments (~$35m combined), consistent with its ongoing portfolio repositioning toward metro and highway locations. Portfolio fundamentals remain sound, supported by long-dated leases, high occupancy and a tenant base weighted toward national operators, while gearing sits at the lower end of the target range, providing balance sheet capacity to fund the development pipeline. The staged completion of Glass House Mountains and recently agreed fund-through developments are expected to incrementally enhance portfolio quality and traffic exposure over time, with earnings contributions largely weighted to >FY27. Valuations were supported by modest cap rate compression and continued liquidity in the direct market, partially offsetting the impact of higher interest rates. DXC is trading at a 26% discount to NAV and an 7.4% Distribution Yield (FY25F). We now rate DXC an Accumulate with a $2.90 target price.

A noisy 1H26 result that was hard to analyse, with the treatment of various items not aligning with what we would expect. Pushing its accounting treatments harder than its operations leaves us concerned around BPT’s forward FCF profile. Gradually declining reserves could suppress BPT’s valuation until it makes an acquisition, a difficult position to be in. We downgrade our rating to TRIM (from HOLD), with an updated A$1.09 target price.