Research notes

Berkshire Hathaway, Inc. is a holding company, which engages in the provision of property and casualty insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, and retailing services. It operates through the following segments: Insurance, Burlington Northern Santa Fe (BNSF), Berkshire Hathaway Energy, Pilot Travel Centers (PTC), Manufacturing, McLane, and Service and Retailing.

Flutter Entertainment plc is a global sports betting and gaming company headquartered in Dublin, Ireland. Its offerings span online and retail sports betting, online poker, casino games and daily fantasy sports. The company operates through several key brands including Betfair, Paddy Power, Sky Bet, Sportsbet and FanDuel, catering to customers across Europe, Australia and North America.

3Q26 Gold production of 6.1koz at an AISC of A$4,126/oz missed our expectations on a cost front despite pre-reporting production. Cash is in focus - MEK closed the quarter with A$50.1m with a further ~3.2koz of gold on hand (~A$20m at spot) which may provide additional liquidity, albeit with limited visibility on timing of monetisation. Head grade of 1.6g/t Au was the driver of the miss (-51.5% QoQ) and remains the critical swing factor into 4Q26. The recent Mt Holland Gold acquisition (A$20m) adds incremental pressure to deliver on grade recovery. We now model open pit operations to begin curtailing in FY26, with the second Turnberry underground reaching nameplate in FY28. This pulls back our prior assumption of an extended open pit phase. We maintain our BUY rating, but view the next two quarters as critical as MEK needs to demonstrate clear grade improvements to remain on track for the anticipated step-change in free cash flow into FY27.

Light & Wonder (LNW) delivered a softer than expected 1Q26 result missing MorgansF and consensus on revenue and AEBITDA in what is seasonally the group's weakest quarter. The North American Gaming operations installed base was the standout negative surprise - ex-Grover net installs of -420 units, driven by the earlier than anticipated Resorts World New York VLT to Class III conversion - compounded by weak international machine sales and ongoing SciPlay softness. Grover delivered a strong 660 sequential net adds on Indiana market entry, and AEBITDA margins expanded across every segment. We reduce FY26-27F EPSA by 5% and 2% respectively, reflecting a more conservative stance on land-based net leased adds and digital performance. A material 2H26 recovery is required to validate the mid-to-high single digit AEBITDA growth guide (MorgansF: 6%). We retain Buy but lower our 12-month target price to A$168 (previously A$183). The market's 8% sell-off reflects legitimate frustration, though at ~10x forward PER and an FY26-28F EPSA CAGR of 17%, we view the dislocation as an opportunity.

ORI’s 1H26 result beat consensus estimates across all business units. Cashflow was much stronger than feared and the balance sheet is in strong shape. Consequently, the Board rewarded shareholders with a step-up in the dividend. The outlook remains positive and further growth is targeted in FY26 and over the medium term. Our forecasts remain largely unchanged. With leverage to attractive industry fundamentals, market leading positions, solid earnings growth, proven management team and strong balance sheet, we reiterate our BUY rating with a new price target of A$26.60.

MFG has announced the transfer of management of its Global Equities funds (MGOC and the Hedged Fund, ~A$5.3bn AUM) to Vinva Investment Management, a Sydney-based systematic equity manager with A$47bn+ AUM in which MFG already holds a 28% stake. In terms of financial impact, we estimate a revenue reduction of approximately A$29m in year one, partially offset by management's flagged cost savings of ~A$7m. On our estimates, this implies a ~16% reduction in Funds Management PBT and a ~8% decline in group EPS for FY27. While changes are clearly needed to revive MFG's stalled funds management franchise, this update is a reminder that the path forward may involve some short-term pain. We lower our MFG FY27/FY28F EPS by 7% on the changes announced with this Global Equities funds transition. We lower our PT to A$11.19 (previously A$11.99). Maintain BUY on longer-term upside post the Barrenjoey merger.

HMC’s 3QFY26 update outlined a strategic shift to a more focused and simpler business model – concentrating on a) growing FUM across existing verticals (health, energy, digital and real estate), and b) delivering returns across the various co-investments (distributions and fair value gains). Furthermore, the scaled back operations should deliver c.$15m of run-rate cost savings (3.6cps). With FUM continuing to grow across real estate and private credit and an expectation HCW distributions may recommence in c.FY27, the c.40cps of NPBT in FY27 looks baseline and leaves the business trading on a modest 10x PER, while the current share price is underpinned by a mark-to-market NTA of c.$2.10/sh or c.$2.69/sh when adopting our target prices for the underlying listed funds. On this basis, we reiterate our Buy recommendation with a $4.05/sh target price.

Credit Corp’s (CCP’s) 3Q26 trading update was broadly positive, seeing upgraded FY26 consumer lending guidance and tightening of the ledger investment range. FY26 NPAT and EPS guidance was maintained. Both PDL businesses showed stronger 3Q26 momentum than the 1H26 trajectory implied, with US collections +27% on pcp and ANZ collections +34% on pcp. Management noted CCP is on track for strong earnings, with investment providing “a platform for growth in FY27”. Sustained delivery of the 3Q PDL momentum, alongside conversion of the US scale-up is key to a re-rating in our view. CCP is trading on ~7x FY27 PE, which we view as undemanding given the earnings profile. We make only minor changes to forecasts; our blended PE/DCF target price is lowered marginally to A$19.15 (from A$19.35) on the incorporation of the new house RFR (4.6%). BUY maintained.

While AMC’s 3Q26 earnings were largely in line with expectations, FY26 underlying EPS and FCF guidance was downgraded. The EPS guidance downgrade was better than feared, but reduced FCF (due to increased inventory investment) which has maintained pressure on the balance sheet. Key positives include Berry synergy benefits tracking above initial expectations, continued progress on portfolio optimisation with further non-core asset divestments, and pass-through mechanisms working well with movement in resin prices due to the Middle East conflict not having a material impact on earnings. Key negatives include ongoing soft volumes, a downgrade to FY26 underlying EPS guidance (albeit better than feared), a reduction to FCF guidance, and leverage at the end of FY26 now expected to be higher than previously anticipated. We make minor reductions of 0-1% to FY26-28F underlying EBIT. We also adjust our FX assumptions slightly. Our target price falls to $65.40 (from $68.20). Trading on 9.2x FY27F PE with a 6.7% yield, we believe AMC's valuation remains attractive with Berry synergies tracking well. Further non-core asset sales (particularly the North America Beverage business) will be a potential positive catalyst. BUY rating maintained.