Research notes

1H27 fuel costs have increased to ~$3.75bn from $3.6bn at the FY26 result, reflecting elevated oil prices and jet fuel crack spreads. Despite the higher fuel burden, travel demand remains resilient, with Domestic and International TRASK expected to increase 8-10% in 1H27, as QAN continues to offset cost pressures through higher fares and strong load factors. >Domestic capacity has been reduced further, with Group Domestic ASKs now expected to decline 3% in 1H27 and 4% in 3Q27, whilst International Capacity for 1H27 is increasing modestly to +4%. >We downgrade our recommendation to HOLD (previously ACCUMULATE) with a reduced price target of A$9.60ps (previously A$10.60ps).

AVH’s 3Q26 result was strong, with revenue up 53% YoY, opex flat and net cash use of just US$0.6m. Operating leverage has now shown up in the numbers, and cash flow breakeven looks to be a quarter early. >Guidance was upgraded and the going concern flag is gone, largely removing the risks behind our cautious stance. The bear case has thinned materially, though the US$60m debt balance remains a meaningful drag and risk. >The recovery came faster than we expected; we were too focused on near-term funding risk and underestimated how quickly operating leverage would kick in. But at these prices and with debt still to work through, we want to see a sustained breakeven before turning more positive. We move to Hold with a A$5.00 TP.

BMC has released an updated Feasibility Study (FS) for the Kudz Ze Kayah (KZK) Project in Yukon, Canada, providing an economic refresh. The Ore Reserve, mine plan, flowsheet and production schedule are unchanged, while costs have been reset to a Jun-26 basis and prices to long-term consensus. >Economics remain compelling: post-tax NPV5 of US$1.70bn (~A$2.43bn) and IRR of 54%, with a 1.4-year payback. LOM EBITDA is US$4.58bn, with post-tax FCF of ~US$392m pa during operations. Higher capex and opex are more than offset by stronger metal prices. >We maintain our SPECULATIVE BUY rating with price target of A$5.49 per share.

The 2H26 earnings decline missed consensus expectations, almost entirely due to substantially higher credit impairment charges. >NAB further built its expected loan loss provisions and has discounted another DRP to protect capital, signalling concerns for weaker asset quality ahead. >12-month target price reduced 4% to $34.19/sh, due to forecast changes. TRIM retained, given potential TSR at current prices of c.-8%.

REA’s 1Q27 result was driven by strong controllable Buy yield growth (+14%) and tight cost control (Australian costs +3%), which helped offset a relatively large geomix drag and a ~2% decline in new listings. FY27 guidance was unchanged. >We make no changes to our forecasts in this note. Our DCF-derived price target remains A$203. Strong recent share price appreciation has now resulted in ~15% TSR upside to our valuation and so we move to an ACCUMULATE (from BUY) recommendation per house structure.

Yesterday the media reported that Digital Realty (DLR.NYS) in conjunction with Goodman Group (GMG:ASX) were seeking 9.9% of NXT at A$9.50 per share. >Today NXT have responded in an ASX release stating that NXT “does not know the outcome of the share raid” and the board is "not in possession of any takeover proposal at this time". >We think this is a move that puts NXT in play. We move from a BUY to an ACCUMULATE recommendation and lift our target price to $11.50 p/s.

APE has delivered a softer trading update, with underlying PBT guidance ~15% below prior consensus at the mid-point and the implied 2H26 >25% below. >The weaker update was driven by cyclical economic pressures, compounded by structural industry challenges, namely elevated supply, brand proliferation and share loss for legacy ICE OEMs. >Positively, APE continues to meaningfully outperform the broader industry, and CanadaOne is tracking ahead of expectations. We expect earnings to recover through FY27 as economic headwinds ease, with APE’s scale and Toyota/BYD weighting leaving it well placed to navigate the structural industry shift.

While AMC’s Sep-26 quarter result was in line with expectations, guidance for the Dec-26 transition period was downgraded by ~5% at the midpoint due to a timing lag in recovering higher energy and distribution costs. >Volume growth was a key highlight with group volumes rising ~1%. Growth was driven by a ~1.5% increase in core volumes, partly offset by a low- to mid-single-digit decline in non-core volumes. >AMC remains on track to achieve its 3-year Berry synergies target of US$650m, with over half (US$345m) delivered over the past 15 months. >We decrease CY27-29F underlying EPS by 3%. Our underlying EPS forecast for the Dec-26 transition period declines to US$1.75 from US$1.85 previously. >Our target price falls to $62.50 (from $65.30) and we maintain our HOLD rating.

COG’s 1Q27 update delivered a strong performance, in our view. EBITDA to shareholders rose 53% on the pcp to A$15.3m, with the annualised run-rate (~A$61m) implying ~19% growth, well above FY27 guidance of 10%+. >We lift our FY27F/FY28F EPS forecasts by 13–15% on higher growth expectations for the Salary Packaging business. We now forecast FY27 EBITDA to shareholders growth of ~15%, above guidance of 10%+. Our target price is set at A$2.19 (previously A$2.00). >We see COG as undervalued, trading at ~10x FY27F EPS, given the long-term growth potential and optionality in the business. We retain a BUY recommendation.