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.

Whilst the headline 2QFY26 result was largely released in early Oct-25, the details and outlook were incrementally more positive than previously anticipated. Upgraded guidance reflects a c.6% organic decline (vs pcp), as a challenging environment sees volume declines exceed price increases. However, this is better than feared and may prove to be a bottoming in the cycle as demand stabilises. JHX is trading on c.17.1x FY26F as the business navigates its acquisition missteps, earnings downgrades and a challenging consumer environment in North America (NA). However, at EPS of c.U$1.04/sh in FY26 we see upside from both earnings and an undemanding PER (ave PER. 20x). It is on this basis we upgrade to a BUY recommendation and $35.50/sh target price.

DXB has announced that the 7th scheduled Independent Data Monitoring Committee (IDMC) review for its Phase 3 trial in FSGS has again found no safety concerns and recommended the study continue unchanged, reinforcing the continued safety profile of the treatment. With 271 out of a planned ~286 patients now enrolled, the trial is nearing full recruitment and maintains momentum toward key clinical milestones. Upcoming catalysts include the Part 2 interim analysis, an 8th IDMC review in early/mid 2026, as well as potential regulatory discussions around accelerated approval pathways based on proteinuria and kidney function endpoints derived from the upcoming interim analysis.

We update our TSO model, rolling our valuation forward and adjusting cash position. TSO remains our top gold pick in the Americas, supported by a robust production base case and district-scale resource growth potential that offers potential step-change upside. While the share price has performed well, TSO still appears inexpensive relative to peers on an EV/Resource basis, trading at A$54/oz (vs A$176/oz peer average), and on a P/NAV basis at 0.2x vs the peer benchmark of 0.4x. We maintain our SPECULATIVE BUY rating, with a price target of A$0.32ps (previously A$0.27ps).

TNE’s FY25 result was largely in line with our expectations with the group delivering, PBT growth of +19% to $181.5m ahead of its 13-17% guidance range, and in line with consensus. The negative share price reaction appears to have been driven by softer than expected ARR/NRR print, which saw a 2% miss to ARR growth expectations vs consensus, despite this, the group continues to deliver, with ARR of $554.6m (+18% YoY), which along with its NRR growth of 115% continues to see TNE Ontrack to achieve its long-term ARR growth aspirations. We modestly pare our EPS forecasts by 1-3% in FY26-28F. and move to an ACCUMULATE rating, with our target price $34.50 now reflecting a TSR of +19% following TNE’s post result share price movement.

The result was robust with earnings +3-4% ahead of our forecasts at EBIT and NPAT. Looking forward, our view is that the exploration cycle is set to accelerate given the unprecedented amount of capital raised over the last 4-5 months, which will drive upgrades in Commodities. Moreover, excess cash from Commodities will be used for acquisitions, resulting in capital driven upgrades in Life Sciences. Even accounting for the -$7m NPAT impact in FY26 from restructuring & other costs being taken above the line, we upgrade our NPAT forecasts by +2-3% in each of our forecast years. The stock is now trading on 24x PE (NTM) and we forecast EPS growth of +22-24% in each of FY26 and FY27. Our target price increases to $25.30 (from $24.60) which represents 27x our FY27 EPS forecast.

Rig productivity has surged 12% over the past four quarters, from 73% to 85%, driving EBITDA to more than double and lifting margins from 12% to 22%. This lift in rig productivity comes as the total operating fleet has contracted, enabling MSV to extract greater revenue from fewer rigs. 1Q also marked a significant balance sheet improvement, with net debt reduced by 93% to $0.9m. FY26 looks to be a strong year for earnings, higher EBITDA margins, robust free cash flow and an anticipated resumption of dividends. We maintain our rating of SPECULATIVE BUY on MSV with a target price of A$0.45ps as it remains cheap.

LGI has completed a ~A$56m capital raising (A$51m placement; A$5m SPP) to strengthen the balance sheet (net cash ~A$24m), expand its targeted development pipeline (>80MW) and accelerate project delivery (completed within 3 years). The extended pipeline (~28MW across six additional projects), will see LGI ~4x its ending FY25 MW under management, with a strong composition of high returning battery energy storage system (BESS) projects include (ROIC’s. est. >20%). FY26 guidance has been reaffirmed for 25-30% growth (MorgansF 27.3%). We have materially improved our forecasts (FY27-28F NPAT +17% and +24%), factoring in the development pipeline and raised our valuation to A$4.84ps. We are encouraged by the acceleration of the group’s MW capacity build out and maintain our confidence in managements strong operational execution to deliver it on time and on budget. Strong forecast earnings growth (MorgansF ~26% EPS CAGR) and LGI’s pure-play renewable exposure justify the valuation premium.

We attended the CGS shareholder day in November, which was highly informative as the company aims to deliver faster, more reliable CNS trial outcomes through technology-driven solutions and global partnerships. The strategic partnership with Medidata, expansion into other indications and the Alzheimer’s Disease trial read-out from Eli Lilly (within 9 months) are expected to drive revenue growth in FY26/FY27. CGS has had a solid start to the year and guided to 1H26 revenue growth of 18% to 20%.

Feedback from the recently concluded Asia Pacific Heart Rhythm Society (APHRS) conference highlights a meaningful shift in physician sentiment where confidence in conduction system pacing (CSP) for heart failure appears to be cooling following the PhysioSync-HF trial, reinforcing CRT’s position as the superior therapy. In contrast, enthusiasm for leadless pacing continues to build, with KOLs and industry executives proactively discussing WiSE as the enabling technology for totally leadless CRT and leadless conduction-system pacing (CSP) delivered from the LV side. We believe US physicians with early commercial WiSE experience are increasingly likely to focus on de novo applications, which may accelerate market expansion beyond previously untreatable CRT patients. These developments support our view that WiSE remains uniquely positioned in the evolving pacing landscape, with strengthening clinical pull-through and expanding addressable markets. BUY rating and A$2.86 PT maintained.