Research notes

A mixed quarter, with copper production ~7% below MorgansF/consensus and costs above guidance, driven by a late-quarter seismic event at Eloise and earlier-than-planned plant shutdowns for cutover works. >The miss was largely timing related, with the higher-grade Deeps and Lens 6 ore rescheduled rather than lost. The Eloise plant expansion and Jericho are both running ahead of schedule. FY27 guidance maintained. >We maintain our BUY rating and A$1.20ps target price.

MGH released a corporate update on 16-Oct, confirming settlement of the Construction Materials (CM) divestment, including the receipt of $1.61bn, the paydown of syndicated debt and $600m of retained cash. Post tax payable and incorporating the buyback, we estimate net debt stands at ~$50m. With the balance sheet in solid order, the MGH investment thesis hinges on Firmus: both the value of the stake and the volume of flow-on work. >Our baseline assumes the prior valuation of Firmus at $4.60/sh ($230/sh pre-split, pre-tax) holds, along with a run-rate for the ‘Power Cubes’ >200MW pa. Even if we were to assume both the Firmus investment and ‘Power Cube’ contribution halved (vs our expectations), our valuation would still be ~$4/sh, offering downside protection at current levels (refer to sensitivity analysis in Figure 3). On this basis, we reiterate our BUY recommendation with a $5.90/sh price target.

SOL released its FY26 result in late September, its first full year following the Brickworks merger. We update our model and valuation accordingly. In our view, the portfolio's cash generation held up through a year of significant restructuring, which included A$12.7bn of transactions, the A$1.9bn sale of the industrial property JV interests and a rotation out of listed equities into Fixed Income and private markets. >Credit, Private Companies and Real Assets drove NCFI up 11.5% on pcp to A$572m. A 63cps fully franked final dividend was declared, taking the FY26 total to 111cps (+7.8%) and extending the record to 28 consecutive years of dividend increases. Pre-tax NAV was A$13.7bn, a 10.2% return against 6.0% for the ASX200 Total Return Index. >Our price target is increased to A$44 (from A$41.85). Our changes to forecasts are overleaf. With the stock trading around our 12-month price target we maintain our HOLD recommendation. We remain attracted to the SOL business and its capital allocation strategy and continue to look for attractive entry points.

GDG has provided a 1Q27 update. >We saw this as a broadly solid quarter, led by record Investment Bond (IB) sales and net flows, which comfortably beat consensus. Evidentia flows were slightly softer than expected, while weak markets weighed on investment performance in both divisions. >We make no changes to our forecasts or A$5.98 target price. We maintain our BUY recommendation, with >20% TSR upside.

BAP delivered a mixed trading update, with 1Q27 LFL sales (cc basis) up +0.5% and reported total sales down -0.5%, tracking broadly in line with expectations. >Strength in Networks (sales +4.1%) and Trade Parts (+2.5%) was offset by a materially weaker Retail outcome (MorgansF est. -7% to -9%). >Positively, net debt continues to improve (down ~A$19m to A$116m) and BAP is delivering improved gross margins across Retail and Trade. >We view the business as continuing to make progress on its turnaround and are encouraged by early signs of strength in Networks and Trade Parts. However, we are cautious of the sharp deceleration in Retail sales ahead of peak trading and the meaningful 2H NPAT skew. Hold maintained.

MAF has released its 3Q26 operating update. >We view 3Q26 as a broadly solid quarter, with strength in MA Money and Corporate Advisory more than offsetting a slightly softer Asset Management result. >We make minor changes to FY26F/FY27F EPS (-1% in each year), with lower AUM forecasts partly offset by strong MA Money lending growth. Our price target falls marginally to A$8.47 (from A$8.66). >MAF has a consistent recent track record of delivery and, in our view, remains well placed to produce strong long-term growth. With more than 70% upside to our price target, we maintain our BUY call.

ALX released its 3Q26 traffic and toll revenue data, as well as an update on the proposed French tax changes applicable to its key APRR investment. >Material downgrade to our FY27-28 DPS outlook and APRR valuation, as we incorporate extension of the temporary supplemental tax as well as the sizeable increase in the long-distance Transport Infrastructure Tax (TEILD) assuming it is applied to the APRR from FY27. >Target price set at $3.37/sh (from $4.74), being a blend of an upside valuation based on IFM returning with a further takeover offer but at a much reduced price and a business-as-usual valuation that ignores the potential for further IFM M&A.

Alongside its AGM (where FY27 DPS guidance of 72 cps and Free Cash coverage slightly less than 95% were reaffirmed), TCL released its 1Q27 traffic data. We expect higher fuel costs and interest rates dampened Australian traffic growth (c.1% on pcp ex West Gate Tunnel). Dynamic pricing strength of the US Express Lanes continues to be terrific. >Target price of $12.06/s (+3 cps) aligned to our DCF valuation. Potential TSR at current prices is -9% (including c.5.1% cash yield). TRIM into share price strength.

NXT have downgraded FY27 EBITDA guidance by ~36% due to M3 power supplier Jemena deferring the increased power supply for M3 due in part to community and stakeholder opposition (aka the Not In My BackYard movement). >NXT’s share price is below Net Tangible Asset value of ~$7.50 p/share. This pessimism implies concerns around contagion. Management didn’t share investor concerns, saying M3 power is now expected to arrive “in FY28” and noting, in the context of debt, they are “in compliance with financial covenants”. >In our view NXT is incredibly cheap and its ~30% discount to NTA is unwarranted if these issues are just short term in nature. However, management needs to de-risk these key concerns for equity investors. This could take some time. >We set our Target Price at $7.50 which is broadly in line with NTA and below our valuation. We upgrade to a BUY recommendation, from HOLD. Noting the heightening risks relative to normal operating conditions for the business.