Research notes

NGI on the 4th of May announced the acquisition of a portfolio of alternative asset manager interests from Stable Asset Management, alongside a new strategic partnership between the two firms. Following the completion of the entitlement offer and lifting of research restrictions we update our forecasts. We view the transaction as strategically attractive, though the projected double-digit EPS accretion in Year 1 assumes Stable sustains its strong near-term growth trajectory (EBITDA +35% - MorgansE). We revise our NGI FY26F EPS down -5%, reflecting management’s updated FY26F EBITDA guidance range (US$100m-US$104m), which came in below our prior forecast (US$106m). Our FY27F and FY28F EPS forecasts are lifted by 9%–13%, incorporating the earnings accretion from the Stable transaction. Our price target increases to A$3.42 (from A$2.97). We maintain our BUY rating with >20% upside to our price target.

Target price lifted to align with IFM’s revised takeover offer price of $5.10/sh. HOLD retained. A counter-bid is unlikely and IFM has said $5.10/sh is its maximum bid until offer close (less ALX distributions paid) and for the following 12 months after offer close (but is silent on adjusting the price for distributions paid in this period).

Founded in Spain, Inditex (ITX.MAD) began in 1963 when AmancioOrtega opened a small dressmaking workshop. Twelve years later, the first Zara store was opened in Spain, signalling Ortega’s transition from maker to retailer. In 1985, Inditex brought all its companies together under the one banner, making it an official retail conglomerate. The brand continued to grow by expanding worldwide, adding new brands to the group and going public on the Madrid Stock Exchange. Now, the group features seven brands, operating over 5,800 stores in 213 markets worldwide.

Frasers Group has made an unconditional on-market cash takeover offer for AX1 at $0.65 per share, which represents no premium to the closing share price. We see this offer as opportunistic, given the weakness in the share price over the last 12 months (down 64%), and see scope for Frasers to revise its bid higher. We have made no changes to our forecasts, but have increased our target price to $0.85 (from $0.75) applying a lower discretionary discount. We retain our BUY recommendation.

SUL's Investor Day contained limited surprises, with the group setting out FY31 network targets as it looks to organically grow share (via network growth ~3% pa, and category/service expansion) and optimise the business (ERP/supply chains). We left SUL's Investor Day encouraged by the clarity of the long-term organic growth strategy and the renewed management team tasked to execute. However, with valuation near our revised A$12.30ps price target, a softer consumer backdrop and lingering competitive pressures, we retain our Hold recommendation.

The trading environment for DMP has become more challenging than previously assumed, and we have updated our forecasts to reflect a weaker SSS (same-store-sales) outlook across all three regions, compounding cost pressures on ANZ franchisee economics, and a more adverse FX environment in Japan. The earnings recovery, albeit modest, remains on track but it is entirely cost-driven; there is no volume improvement embedded in our numbers until outer years. We move to a HOLD rating until there is evidence of further cost management and SSS recovery. We reduce our price target to A$17.60 from A$25.00.

In this note, we update our forecasts to better reflect the timing of recent acquisition settlements, along with an anticipated increase in D&A and interest expenses. While incrementally positive for FY27/28 EBITDA, the higher D&A sees our underlying NPAT decline by mid-single digits. From a valuation perspective, the roll-forward of the valuation date offsets the impact of lower earnings. More broadly, our investment theme remains intact, with SYL forecast to capture an increasing share of the total addressable market across the key verticals of infrastructure, digital, energy and defence. Supported by additional M&A, the business could deliver early on its FY30 aspirational EBITDA target of $200m. On this basis, we reiterate our BUY recommendation, with a $3.35/sh price target.

MVF provided a weaker than expected trading update, with underlying NPAT guidance for FY26 revised down 12.5% at the midpoint. This was driven by soft industry cycles, down ~4.7% on a rolling 3-month basis (up to April), with weakness continuing into May and June. While this is a disappointing update, we still see longer-term value in the business through the short-term volatility. The business remains the second largest player in the Australian IVF market, underpinned by strong structural tailwinds (advanced maternal age, increased focus on families, growing service offering), with cost-out initiatives likely to support earnings growth in FY27. We have lowered our price target to $0.80 (from $0.90) and retained our SPECULATIVE BUY recommendation.

We initiate with a BUY and $17.84 PT on Nick Scali. We use an FY28 PER and DCF when setting our price target as we opt to look through near-term consumer weakness, with the current price providing an attractive entry point. High-quality retailer with a long track record. Nick Scali has delivered long-term EPS growth through disciplined store rollout, LFL growth, best-in-class margins, and operating leverage. Strong cash generation and balance sheet. Structural negative working capital supports high cash conversion, while the low capital intensity of new store rollouts leaves ample cash flow for dividends and property purchases and/or growth ventures. Store rollout optionality. Further Plush and Nick Scali rollout in ANZ and the Nick Scali rollout opportunity in the UK provide an attractive growth leg.

Diageo is a global leader in premium alcoholic beverages and the number one player in the international spirits category. The company owns nine of the world’s top 30 spirits brands and operates across multiple categories including Scotch whisky, vodka, rum, gin, tequila, beer, ready-to-drink (RTD) products and liqueurs. Its portfolio features iconic names such as Johnnie Walker, Crown Royal, Buchanan’s, Windsor and Bushmills whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan rum, Baileys liqueur, Don Julio tequila, Tanqueray gin and Guinness stout.