Research notes

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.

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

TWE’s Investor Day was the positive share price catalyst we were expecting. Solid depletions growth continues and the mid-point of FY26 EBITS guidance was slightly ahead of consensus estimates. Importantly, Ascent or TWE’s transformation program is expected to deliver sustainable, high-quality earnings growth and deleverage the balance sheet over the medium to long term. We have upgraded our FY27 and FY28 forecasts. Given TWE’s low trading multiples and our belief that new management can deliver more acceptable returns overtime, we reiterate our BUY recommendation with a new A$5.95 price target.

The Lottery Corporation’s (TLC) Investor Day in Sydney highlighted two key areas: resetting the operating model and reframing how the market should think about TLC’s growth potential. Three standalone business verticals (Lotteries, Digital, Keno) will replace the prior structure from 1 July, generating ~$10m of annualised savings on a full run-rate basis, which will be reinvested into digital capability, AI and product development. No medium-term financial targets were provided. Importantly, the VIC licence extension to 2068 means that over 90% of lotteries turnover is now licenced until at least 2050. Near-term opex guidance was trimmed $10m at the midpoint and all existing guidance was reaffirmed. Our EPS forecast reduces by 5% in FY26 following a mark-to-market of lottery volumes. We retain an Accumulate rating on TLC, and our 12-month target price reduces to $5.90 (previously $6.00), following near-term revisions across both Lotteries and Keno. We continue to rate TLC given its long-dated licences and infrastructure-like characteristics, proven pricing power and a largely variable cost structure that insulates margins through economic cycles.

We initiate coverage on G50 Corp with a SPECULATIVE BUY rating and price target of A$2.14ps. A US-centric asset portfolio (Golconda and White Caps) provides growing exposure to both precious metals (gold and silver) and critical metals gallium and antimony, both of which are being increasingly recognised as strategic commodities by the US given their importance across semiconductor, AI and defence related supply chains. We view the underlying gold exploration potential at Golconda to be capable of supporting meaningful resource growth over time, while the greater gallium and antimony exposure may provide optionality from both a strategic funding and permitting perspective as the US increasingly prioritises domestic critical mineral supply chains independent of China. Exposure to precious and critical metals uniquely positions G50 to deliver several pathways of value creation beyond exploration and is a key point of differentiation vs. other juniors.

JDO announced its second capital relief securitisation transaction backed by SME business loans. The transaction is significant as it shows JDO’s ability to again source and its willingness to utilise capital relief securitisations to support its CET1 capital ratio without the need for equity raisings. Target price of $2.15 per share, with strong double digit earnings growth forecast across FY26-28F. BUY retained, with potential TSR at current prices of c.38% (driven entirely by capital growth).

Unsurprisingly, given the conflict in the Middle East, THL has revised its FY26 NPAT guidance given weaker than expected RV sales. We have revised our forecasts. The conflict, higher fuel prices and cost of living pressures push out the earnings recovery despite all of THL’s internal initiatives to improve the business. Taking advantage of another crisis and a depressed share price, BGH Capital and the Trouchet shareholders have presented a revised takeover offer of NZ$3.10.

ASX released FY27 total cost guidance along with FY28 capex expectations both of which were materially above consensus at the time of release. Whilst the topline shows encouraging growth (+~12.5% FYTD), we anticipate the market to remain cautious given the elevated cost profile as the technology refresh continues. We lift FY26F EPS ~4% on stronger-than-forecast cash market and Futures/OTC volumes, but lower FY27-FY28F EPS by ~5%, as the updated cost guidance more than offsets the higher revenue base in the outer years. Our DCF/PE-derived PT is lowered to A$51.50 on the above, accompanied by an increase in the house RFR to 4.6%. We maintain our Hold recommendation and note near-term elevated costs will likely remain a headwind.