Research notes

WRK has completed a capital raising and provided an operational update. While the slower client ramp-up behind the capital raise is disappointing, we see it as a timing issue rather than a structural one. The drivers behind WRK's expected near-term earnings uplift remain intact, underpinned by signed contracts now converting to revenue. Off a low base, we cut our FY26F/FY27F EPS by >10%, reflecting the capital raise and business update including FY27 ARR guidance scenarios. Our target price is lowered to A$0.12 (previously A$0.14). Maintain BUY with >20% upside to our target price. As part of the capital raising, the company also provided a business update. Key points included: 1) FY26 cash receipts of A$18.2m were up a healthy ~84% on the pcp (A$9.9m), with FY26 net operating cash flow of -A$1.6m (vs A$0.6m in the pcp), compressed by higher investment spend; 2) FY26 ARR was ~A$10m, with FY26 EBITDA expected to be -A$6m including an approximate -A$0.5m impact from the PaidRight transition; and 3) WRK has released FY27 ARR and revenue scenarios based on various levels of client onboarding, with a base case FY27 revenue scenario of A$24m.

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.

IMR posted its 1H26 result which highlighted solid clinical and regulatory progress. Although revenue remains modest, we expect sales momentum to increase in 2H26 and FY27 with NorthStar, European and hopefully Middle East sales to be the highlight. We have revised down our revenue forecast for FY26. The cost across the forecast period has been revised up reflecting higher-than-forecast R&D and clinical expenses. As a result, our DCF valuation and target price moves to A$2.90 (from A$2.94). Key catalysts we are focused on include the submission of the 4th PMA module, additional NorthStar sales and orders from Europe. We maintain our SPECULATIVE BUY recommendation.

4Q26 was broadly in line, with another quarter of double-digit EPS growth, gross margin expansion and strong cash generation. FY27 guidance was introduced for the first time and, while appearing soft at the headline level, incorporates several portfolio changes and one-offs, with the underlying business driving c5-7% revenue and c12-14% EPS growth. Management reiterated confidence in the underlying sleep market, ongoing margin expansion and capital returns, while continuing to see no evidence that GLP-1 therapies are impacting patient demand. We make modest adjustments to FY27-28 forecasts to reflect updated guidance and portfolio changes, with our target moving to A$39.50. BUY.

We downgraded MND to Hold at 1H26 in February on fears it was reaching for growth in FY27 and that the November 1H27 revenue guide could underwhelm. That is now reflected in consensus and, with order book support in E&C and possibly heavy turnaround activity in Maintenance, risk is skewed to the upside. Nevertheless, a subdued 1H27 guide should be looked through given conservative full-year expectations (VA FY27 EBITDA +3% YoY), recent contract wins and the strength of the capex cycle. We leave FY26 unchanged, lift FY27 EBITDA +7%, and upgrade to BUY with a target price of $35.80 (from $33.85). This represents 25x FY27 PE, justified in our view given FY27 will not be the peak earnings year.

The FY26 result was broadly in line with expectations, with NPAT 1% above our forecast. The outlook commentary confirmed the ANZ retail environment remains challenging given the current macro backdrop, though the UK continues to progress well. We make minimal changes to our forecasts and price target but move from a BUY to an ACCUMULATE recommendation.

JHX is performing well against what remains a challenging macroeconomic backdrop. The legacy JHX division was the callout, growing organic net sales by c.20% as both price and volumes outperformed. AZEK saw a softer quarter as sales declined 5%, a trend which is expected to reverse in 2Q27. FY27 guidance was largely in line with expectations, as a strong 2Q27 guide leaves scope to accommodate a weaker market through 2H27. We retain our HOLD rating, with a A$45/sh price target.

A noisy FY26 result but still a healthy level of earnings, while FY27 guidance pointed to lower production, higher D&A and higher capex versus pre-result consensus. A new capital management framework, ranking growth amongst its highest priorities was revealed, while uncertainty remains around what will be acquired. BPT is a good business, and is enjoying higher output from Waitsia as it ramps up, but undersized oil & gas reserves reduces our view on valuation and risk. We maintain a SELL rating with A$0.82 target price (was A$0.81).

Construction has started. Capex estimates to be largely unchanged from 2024 estimates. Rook I entered construction on 8 June. Development spending is rising (C$30.7m in 2Q26 vs C$23.9m in 1Q26), and the company expects no material revisions to the capital cost estimate from August 2024. A near-term dilution overhang is approaching. From 22 September 2026, NXG can call their 2023 debentures and has signaled expectations of conversion to equity rather than repayment. That's up to 16.3m new shares on issue. We move to an ACCUMULATE rating (previously BUY) due to material valuation updates with a reduced price target of A$15.60ps (previously A$20.80ps).