Research notes

4Q25 earnings result was a material beat. Key positives: earnings well ahead of expectations and 2026 guidance in-line with expectations. Key negatives: no increase in per share dividend, elevated spend over next few years, limited clarity on when NEM intends to reach its 6Mozpa target. Move to an ACCUMULATE rating with a A$187ps Target Price.

BLX 1H26 result was weaker than expected, driven by softer sales in both retail and trade, which has tempered expectations of a meaningful recovery in the 2H. We have lowered our sales forecasts in FY26/27 resulting in 5%/6% downgrades to our EBITDA forecasts, and more meaningful downgrades at the NPAT line. Whilst earnings recovery is likely longer dated, we see long-term opportunity in trade, store network growth, and margin expansion as the cycle turns. We have a $3.20 price target (was $3.80) and upgrade to BUY (from ACCUMULATE).

1H26 was in line at revenue (+21% YoY), however lower margins saw a miss at both EBITDA and EBITA (each -9% vs MorgansF). Organic EBITDA growth was down 9% YoY due to a challenged environment in New Zealand offset in part by Australia which saw robust growth. The NZ performance may raise some eyebrows in relation to the defensiveness of this business. Positively, the environment in New Zealand has begun to normalise and the addition of Tyco NZ and Red Wolf should help to deepen this business and reduce volatility in the future. Guidance for underlying EBITDA (ex Tyco NZ) of $43-47m has been reiterated but the reported result will depend on the timing of settlement of Tyco. We have pushed completion out from end of February to end of May which, accompanied with a softer 1H, sees a reduction to our FY26 forecasts. We cut EBITDA by 10% and NPATA by 14%. Our forecasts for FY27-28 are unchanged.

PNV posted its 1H26 results where revenue was in line with our forecasts, although the cost base was higher than anticipated. While we expect a stronger 2H we have moderated our FY26 forecasts reflecting the higher costs. We have taken a more conservative stance in FY27 and FY28 on the cost side, but we remain comfortable with our revenue forecasts averaging ~20% growth. As a result of our forecast changes the valuation has reduced to A$1.83 (was $2.03). We maintain our BUY recommendation.

RHC has proposed an in-specie distribution of its 52.79% stake in Ramsay Santé via a scheme of arrangement. Subject to approvals, RHC shareholders would receive Ramsay Santé exposure through ASX-listed CDIs, with implementation targeting 4QCY26. We view the proposed separation as strategically sound and incrementally positive for sentiment, addressing a long-standing structural discount related to EU exposure and capital complexity. However, the proposed transaction has no immediate earnings impact, with the pathway toward margin expansion and potential multiple re-rating remaining uncertain. We make no changes to FY26-28 forecasts or our A$35.22 price target. Hold.

VNT reported an in-line FY25 with NPATA +13% YoY as revenue growth faded to just +1%. We find it noteworthy that VNT, a headcount business, was able to deliver earnings growth almost entirely through margin expansion. Indeed, FY25 was the first period when revenue costs growth and operating costs growth decoupled materially. While the company sounded a confident tone around continued margin expansion, this may be difficult to replicate following a heavy re-contracting cycle, which would ordinarily see margin pressure. The bright spot was a record order book of $22.1bn (+14% YoY). The extra ~$100m of buyback capacity should provide a helpful share price support mechanism but weak cash flow (capex 2.5% sales) and anemic forecast revenue growth leaves us on the sidelines. Target price rises to $5.85.

Solid earnings result, albeit flat earnings despite Copper EBITDA doubling. An investment heavy phase, FCF will rise on Simandou/OT ramp. Underlying NPAT US$10.9bn (in line with cons). Final dividend was 254 USc (+1% vs cons). Whether RIO prove sceptics wrong and unlock value from mega deals at the top of the cycle is a key question and risk. We lean towards ‘no’, as in our experience M&A action in bull markets pushes listed targets beyond fair value. RIO is keeping pace with the upgrade cycle, which supports gains but undermines our view on further value, although it remains one of the highest quality sector exposures. We maintain a TRIM rating on RIO with a valuation-based A$146 target price (previously A$142).

EBITDA margins expanded to ~21% from ~13% in 1H25, showing MSV delivered a step-change in business performance in 1H26. By driving greater productivity from its operating rigs and maintaining disciplined financial management, MSV has demonstrated its ability to do more with less, strengthening the business and returning that success to shareholders with a material 4cps dividend. FY26 continues to look like a strong year for earnings, higher EBITDA margins, robust free cash flow and a resumption of dividends. Although we have made numerous modelling adjustments, our full-year EBITDA estimates are largely unchanged. We lower our rating to HOLD (previously SPECULATIVE BUY) after a strong share price performance. Our target price is unchanged at A$0.50ps.

Inflation-linked revenues, a cost-out program and contributions from new assets underpin short-term earnings growth. Potential return on and of the enlarged growth capex pipeline in a rising interest rate environment will be a key investor focus, as will the headwind of approaching expiry of the WGP earnings in FY35. Underlying EBITDA upgraded 1-2% across FY26-28F (Vic+NSW), Free Cash Flow +/-4-5% (tax and interest paid), and DPS growth unchanged at +1 cps/yr. Target price $7.96/sh. The mid-6% cash yield doesn’t compensate for ongoing decline in purchasing power of the DPS and flat equity value outlook. TRIM.

LOV reported a strong underlying 1H26 result with EBIT up 20.4%, ~6% ahead of our expectations, driven by store network growth and strong gross margins. During the period, the pace of store rollout continued with a net of 64 new stores in the period, bringing the total count to 1,095. We have increased our EBIT by 3%/1% respectively in FY26/27, driven by higher sales and gross margin offset by higher costs and D&A. We see the pull back in share price as a buying opportunity at ~23x FY27 PE. Our valuation lowers to $36.80 (from $40) and we retain our BUY recommendation.