Research notes

BLX reported a slightly better than expected FY26 result (~2%), with NPAT down 4.5% on an underlying basis. This was driven by improved momentum in the 4Q, where LFL sales growth was up 7.1% and momentum has continued into FY27. The trade business continues to deliver strong growth, +14.5% yoy. We expect trade sales to continue to grow at ~15% p.a. over the next few years. We have made modest revisions to earnings, down ~2% in FY27/28. Our valuation increases to $2.30 (from $2.13), and we maintain our BUY recommendation.

S32 delivered a broadly in line FY26 result, with FY27 guidance on unit cost and capex reflecting existing market expectations of continued cost pressure. Don’t count on S32 returning a meaningful part of the Alcoa deal proceeds, with the company going as far as talking down its commitment to its ordinary dividend. Similar to some of its peers, S32’s earnings have enjoyed a healthy upcycle, our concern is that it is starting to increasingly look factored in (while the company arguably swaps its earnings clout for a mid-cycle M&A war chest post Alcoa deal). With S32’s share price outperforming even its pure-copper ASX peers year-to-date on larger cycle leverage, we downgrade our rating to HOLD (from Accumulate).

HLO’s FY26 result was in line with recent guidance and our forecast. Reporting earnings growth was a credible outcome given the Middle East conflict materially impacted the 4Q26, albeit HLO benefited from acquisitions. While no formal earnings guidance has been provided for FY27, HLO highlighted the strength of its forward bookings. We have made modest changes to our EBITDA forecasts. We assume that the conflict continues to impact the 1H27, followed by a strong recovery in the 2H27. This could prove conservative given HLO’s strong bookings. HLO is materially undervalued, especially when we back out its investment in WJL from its EV. We think patient investors will be rewarded when a travel rebound eventuates given both its earnings and share price should be significantly higher.

WTC’s FY26 result was largely in line with Morgans forecasts (MorgansF), with FY26 revenue of US$1,396m and EBITDA of US$558m coming in towards the lower end of its initial FY26 guidance range. While CargoWise revenue growth of +11% was softer than expected, WTC delivered annualised run-rate savings of ~US$115m in FY26, supporting further margin expansion into FY27. FY27 guidance will see revenue growth 2H-weighted, reflecting the timing of growth initiatives, while Underlying EBITDA guidance of US$725-780m implies EBITDA margins tracking back towards 49-51%. Our Underlying EBITDA forecasts are revised by +3%/-2% in FY27-FY28F and we retain our BUY rating with a price target of A$62.50ps (previously A$67.00ps).

Underlying NPAT of A$121.6m (+4.0% on the pcp) beat MorgansF A$117.8m and Visible Alpha A$119.4m and finished at the top end of pre-released guidance, but the beat was low quality, with EBIT up 1.0% to A$200.1m and carried by lower D&A (-15.7% on the pcp) and net interest expense. The balance sheet is strong, with net leverage down to 1.86x, free cash flow of A$164.1m and a 32.5cps final dividend (+51.2%) with a 50% payout ratio. FY27 started soft with -5.8% same-store sales (SSS) for the first 8 weeks. We maintain HOLD and lift our price target to A$20.00 (from A$17.60); we view the reset as necessary, but the recovery is cost led and volume growth needs to return.

FLT’s FY26 result came in at the lower end of guidance which is disappointing given its 18 June trading update. Leisure was the key miss for us. Corporate had a strong year (+28% NPBT growth), while Leisure was weak (NPBT -22%) given the Middle East conflict. Outlook comments disappointed with Corporate expected to have a weak 1H27, followed by growth in the 2H27. Pleasingly, Leisure is off to a strong start. With one-off costs associated with Productive Operations and World360 Rewards now being placed above the line, we have made minor downgrades to our forecasts. While investors will need to be patient for another six months, FLT’s fundamentals remain attractive (FY27F PE of 11.6x) and we retain a Buy rating with a new A$14.25 price target. When operating conditions ultimately improve, both its earnings and share price will be materially higher.

NWL reported FY26 Revenue +21%; EBITDA +18%; and NPAT +16% on pcp, which was largely in line with MorgF / Consensus expectations. Whilst flows momentum 1Q27 to date has seen a slower start, NWL reaffirmed its FY27 Flows guidance of $18-20bn, with the cadence of flows from MS and other sources expected to step up over the course of the year. We make minor changes to our NPAT forecasts of +1% in FY27-29F, overall, this sees our price target unchanged at A$27.50/sh. We move to a BUY rating.

Koala delivered a strong FY26 result with EBITDA norm more than doubling to $27.9m, which was 12.5% above the Prospectus. This was driven by broad-based gross margin expansion. We upgrade our earnings, retain our BUY rating, and remain enthused by the growth outlook with the stock continuing to screen cheaply relative to peers (FY27F PER 16x and NPAT norm growth >20% across FY27-FY29).

HMC delivered FY26 Operating EPS (pre-tax) of 40.4c, in line with the ~40c guidance. On a like-for-like basis the result was broadly in line with MorgansF, with recurring funds management the standout - FM EBITDA of $88.5m (+12% vs MorgansF) and recurring FM revenue of $165.5m (+22% on FY25). Fee-generating AUM rose 15% to $16.9bn. FY27 underlying EPS guidance of at least 35cps implies ~16% growth on FY26's new 30.2c underlying (cash-backed) measure, ~7% below MorgansF (37.8c) at the floor but a clean step-up; DPS guidance of 15cps implies +25%. The balance sheet has re-set post the Illuma (Energy) sell-down, with gearing of 10.7% and ~$0.5bn undrawn. We see the more important signal in the FY27 pivot toward cash-backed recurring earnings, away from lumpy transaction fees and fair-value gains. Target price broadly unchanged at A$4.00; we reaffirm our BUY.

The FY26 accounts and news release contained limited surprises, after the result was pre-released in late July via an investor update. As a result, we make no changes to our forecasts or target price ($1.40) and reiterate our BUY rating. The main incremental information from the release relates to the Kariyarra Water Scheme (KWS), whereby it has been revealed that the formal market sounding process was successful in that the non-binding EOIs received underpin demand >10gL. Going forward, the nature of the business will change materially, with both the NewGround (Defensive diversification) and Welltech (A deeper well of earnings) acquisitions due to complete at or around the end of September.