Research notes

We mark-to-market our second half estimates for weaker spot gas prices, while also trimming our Waitsia output forecasts for FY26-28 on continuing struggles. After downgrading our Q4 estimates for daily production rates, we see potential for BPT to fall just short of its FY27 group production guidance. While BPT’s share price has already been under pressure, its earnings outlook has declined at a faster rate, with its forward EV/EBITDA actually rising. We downgrade our recommendation to Sell (from Hold) with a revised target price of A$0.81 (was A$1.10).

RWC has announced plans to close its Australian brass casting, forging and machining operations, along with several smaller sites, as part of its ongoing global footprint rationalisation program. We think the decision makes sense given RWC’s reduced reliance on Australian-sourced brass in recent years. Annualised net savings are expected to be ~US$9m by the end of FY27, with benefits in the Americas more than offsetting an adverse impact on APAC earnings. One-off costs of US$100-110m (including ~US$5m cash) are expected to be incurred in FY26. We make no changes to underlying assumptions, with changes to earnings forecasts reflecting the one-off costs in FY26 and net benefits expected across FY27 and FY28. RWC’s valuation remains undemanding (12.8x FY27F PE) and recent developments related to the Middle East conflict should be positive for the global macroeconomic outlook. However, US housing demand remains subdued with 30-year fixed mortgage rates still around 6.5%. The timing of a recovery in housing activity remains uncertain and we therefore maintain our HOLD rating. Our target price rises to A$3.60 (from A$3.25).

Credit Clear (CCR) is a leading Australian debt collections business, which focuses on contingent collections. CCR has to date made solid progress in establishing a commanding foothold within ANZ. We see the group's recently formed beachhead in the larger UK market as a material consolidation prospect to drive further scale. We initiate coverage on CCR with a Speculative Buy rating and $0.30 price target.

Following its merger with Berry Global in April 2025, AMC identified a non-core portfolio of ~US$2.5bn in revenue. These lower-growth or lower-margin businesses where AMC lacks scale or leadership positions are expected to be divested over time via cash sales or joint ventures/partnerships. While there is a range of scenarios that can play out, using conservative assumptions, we estimate the combined non-core portfolio could be worth ~US$1.8bn. To date, AMC has reached agreements to sell six businesses for a combined value of ~US$500m. AMC plans to use proceeds from non-core asset sales to reduce leverage, which stood at 3.8x at the end of 3Q26. While management expects leverage to end FY26 at 3.4-3.5x, the stretched balance sheet remains a key investor concern. Our analysis indicates a strong negative relationship (correlation coefficient -0.76) between AMC’s leverage and its 1-year forward PE multiple. We therefore expect a reduction in leverage to support an improvement in AMC’s PE multiple over time. We make no changes to our earnings forecasts and maintain our A$65.40 target price. However, with a 12-month forecast TSR of 18%, we move our rating to ACCUMULATE (from BUY).

IDP delivered a positive update, including better-than-expected net cost out in FY26 (A$30m vs A$25m), potential further cost reductions in FY27 and strong capital management discipline (deleverage to ~1x in FY26-27; ~A$50m buy-back). We are encouraged by management’s confidence in the progress of the multi-year business transformation, highlighted by the stated ~A$50m buy-back and ongoing operational performance (yield strength; working capital discipline) in a subdued volume backdrop. The update incrementally reinforces our recent upgrade. Our volume expectations remain conservative, with no meaningful SP recovery assumed until FY29 (-10% FY27; -3% FY28; +3% FY29). We remain willing to look through a cyclically depressed valuation for a leaner market leader, underpinned by structural demand, ongoing tech/product development and China testing optionality. BUY rec.

Given recent downgrades from other travel industry peers due to the conflict in the Middle East, FLT’s downgrade wasn’t a surprise. Given its balance sheet strength and depressed share price, a new up to A$200m share buyback was announced. We have made only minor changes to our forecasts given FLT’s guidance was broadly in line with our previous forecast. While a peace agreement and eased travel restrictions are positive, we think 1H27 will still be challenging. We forecast a strong recovery in 2H27. If it wasn’t for this conflict, FLT would have had a great year given its results for the first nine months were strong. We are buyers of FLT because when operating conditions ultimately improve, both its earnings and share price will be materially higher.

At SGH’s recent investor day management set out a medium-term strategy and framework to deliver 10% EPS/EBIT growth at a 15% ROCE, along with a near doubling of market cap. These ambitions are set against a track record of growing organically, while acquiring industrial businesses, improving operational performance and cash generation. SGH takes an entrepreneurial approach to leverage, gearing up to acquire what it perceives as ‘privileged assets’, with operational improvements then driving a quick deleverage. With first gas expected from Crux in FY28, the Ravenhall (DXS JV) underway, and Boral volumes muted, we believe the business can continue delivering double-digit earnings growth. The stock is trading at 16.8x PER (Consensus, NTM), in line with its historical 3-year average, but a c.4.5x PER (NTM) discount to the index (ASX 200 industrials). Given the baseline strategy is set, and potential levers for outperformance are clear (property, Crux, M&A), we rate SGH a BUY with a A$52.75/sh price target.

TCL’s update indicated traffic is running below expectations. TCL also announced its exit from the Montreal market via divestment, crystallising an equity value loss. DCF-based 12-month target price reset to A$12.50/sh (-5% vs previously), with forecast downgrades (we are more bearish on EBITDA, Free Cash and DPS growth than consensus) partly offset by discount rate adjustments. TCL’s recent share price strength (+9% since its February result and not far off all-time highs) is not reflective of the weaker traffic growth and higher interest rate environment that typically challenges TCL’s valuation. We recommend clients use the share price strength to take profits in overweight positions. Downgrade from HOLD to SELL.

A good company in a difficult position, dealing with multiple operational issues, albeit enjoying a nice bump in earnings resulting from the Middle East conflict. Operator LLOG advised of ongoing operational issues leading to a 41% downgrade to Who Dat production in 2026, an 11% downgrade at group level. Down 20% in two sessions, KAR is trading close to our revised target price. As a result, we lift our Trim rating to HOLD with a A$1.67 target price.

Incorporated in 1983, Adobe operates as a globally diversified software company. It operates through the following business segments: 1) Digital Media, which offers creative cloud services (including software such as Photoshop, Adobe Illustrator, Adobe Premiere Pro and Acrobat); 2) Digital Experience, which provides solutions including analytics, social marketing, media optimisation etc, and 3) Publishing and Advertising, which includes legacy products for eLearning and technical document publishing, web application development.