Research notes

A good end to FY26 for BHP, with an operational result largely in line with consensus and a touch ahead of our estimates in places. Normally a source of volatility, BHP’s coal operations posted decent consensus beats at both BMA and NSWEC. FY27 guidance looks steady versus our existing estimates, although consensus does look high on group copper. Best-in-breed global diversified miner in what remains a healthy upcycle for resources. We maintain our HOLD rating and A$60.20 target price.

IMB has agreed to acquire ADT UK Residential from JCI for £180m (A$345m), funded by £155m debt and £25m scrip, at an attractive valuation of ~4x FY26 EBITDA. ADT UK brings a highly recurring (93%) UK residential base, lifting pro forma EBITDA to ~A$130m. Including the deal from 2H27, we forecast FY28 EBITDA +124%, NPATA +46% and EPSA +23%, with pro forma leverage of ~3x. The investment case will now hinge on the performance of the UK business, given its scale relative to ANZ. We lift our target price to A$1.20 (from A$1.00).

MAP's 4Q26 result delivered the strongest evidence yet that the enterprise account strategy is working, with a materially larger disclosed pipeline and a specific CY2027 break-even target. Core testing revenue hit a new record and operating burn fell 38% YoY. Core volume of 22,418 tests came in modestly short of the 24,000+ guided range, though an exit run-rate above 25,000 points to timing rather than demand. The reset cost base, strong underlying growth and new market expansion opportunities set up a quick path back into investors' good graces. We retain Speculative Buy, target price unchanged at A$0.12 p/s.

A solid Q4 production and sales result, with Orbost's continued outperformance the obvious standout. As we expected, revenue dipped on softer Victorian and South Australian spot prices through the quarter, though by less than we had allowed for. FY26 closed with records across the board. Group production of 27.6PJe (+3%), revenue of A$285.8m (+7%) and a record realised gas price of A$10.35/GJ (+4%), while net debt was slashed 85% yoy to A$37.2m. Management's outlook commentary was very positive, with the flagship Orbost plant setting fresh production records post quarter end. AEL is our top energy sector pick following recent share price weakness. We maintain our BUY rating and A$3.05 target price.

RIO posted a healthy Q2 where it matters, with Pilbara shipments beating consensus (+2%), while we see the headline Simandou miss (-68% vs consensus) as a net positive: a slower Simandou ramp supports iron ore benchmarks, and each US$10/t on the benchmark is worth ~US$2.5bn of annual EBITDA to RIO's far larger Pilbara business. The sting in the tail was Kennecott, with a late June converting furnace breach requiring a ~75-day full rebuild, hitting H2 refined copper and gold output (total copper including saleable matte unchanged). Copper C1 guidance halved to US30-50c/lb, on strong by-prod prices, a material margin tailwind into the H2 result. Trading back close to where we see fair value, RIO remains one of the highest quality global exposures to a sector enjoying a multi-year upcycle (albeit not without its volatility). We maintain our HOLD rating, A$163.00 TP (was A$165.00).

Copper production missed forecasts, but copper sales and zinc, gold and silver production made up for it, leading to a ~30% revenue beat versus forecasts. Liquidity remains sound. Cash and liquidity came in ahead of expectations. Maintain HOLD rating with a A$0.26ps target price (previously A$0.27ps).

4Q26 result and FY26 guidance were largely in line with expectations. FY27 outlook commentary flagged higher capex than previously expected and inflationary impacts to AISC, which affect FY27 cash flow forecasts. Maintain BUY with a A$14.60ps target price (previously A$16.00ps).

The late June trading update lifted the FY26 Middle East impost to $60m EBITA (from $30-40m) and quantified the 2H FX impact as $50m. Medium term, WOR should see some earnings support from Middle East repair activity and a broader uplift in global upstream hydrocarbon spending driven by renewed energy security concerns. However, consensus already embeds strong growth into FY27 (Visible Alpha EBITA +12% YoY) which is well above industry forecast growth rates. With capex expectations continuing to soften in the key Energy end-market and the order book likely to roll over at the FY26 result, we retain our conservative view. We reduce our EBITA forecasts by 8-9% across our forecast period and cut our target price to $10.80 (from $11.80). HOLD maintained.

LGI's FY26 growth update (via social media) highlighted five newly registered carbon sites (25 total, from 20 at 1H26), strong ACCU creation (FYTD May-26 +17% yoy) and in-line electricity generation (130 GWh, +33% yoy), which we expect to more than offset the delayed Mugga Lane battery commissioning (now FY27, previously 2H FY26). While we view FY26 as intact, weaker wholesale electricity and LGC prices have weighed on the medium-term earnings outlook, driving material EPS revisions (FY27 -25%, FY28 -38%) and a de-rating in the stock. Near-term earnings face ongoing headwinds from weaker commodity prices, and we expect FY27 to step back before growth resumes. Over the medium term, we continue to view LGI positively given the material development pipeline ahead (~4x FY25) as the group scales and executes its meaningful battery rollout. BUY, A$3.10ps price target.

MatrixCare will be divested for US$490m cash (c9x earnings), crystallising a disappointing financial outcome (paid US$750m (25x) in 2018) for a business that expanded software capabilities but delivered modest earnings growth. Strategically, however, we believe the transaction makes sense, as it simplifies the portfolio and retains Brightree and MEDIFOX DAN, while exiting a lower-growth, non-core software business. Importantly, net proceeds will largely be returned to shareholders via an accelerated share repurchase (ASR), which should substantially offset earnings dilution from both the MatrixCare disposal and the recently completed Noctrix acquisition, while FY26 guidance has been reaffirmed. We make modest adjustments to FY26-28 forecasts, with our target price moving to A$40.97 (from A$41.72). BUY.