Research notes

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.

Chipotle Mexican Grill is the largest fast-casual restaurant chain in the US with total system sales of US$9.9bn in 2023. Chipotle’s store network is mainly company-owned and not franchised (apart from the Middle East). Chipotle sells burritos, burrito bowls, quesadillas, tacos, and salads made using fresh, high-quality ingredients, with a selling proposition built around competitive prices, high-quality food sourcing, speed of service, and convenience. It had a footprint of nearly 3,440 stores at the end of 2023, heavily indexed to the United States, although it maintains a small presence in Canada, the UK, France, and Germany.

SUL delivered a softer trading update, with all divisions seeing a deceleration in LFL sales through Mar/Apr (group LFL -2%) and group gross margin compression. Weaker consumer sentiment from inflationary pressures (fuel and rates) weighed over the key Easter period as the promotional environment remains intense. Limited earnings visibility and a challenging backdrop persist, with capital management initiatives unlikely to feature in FY26. HOLD maintained.

Following a review of our research universe, we discontinue coverage of Proteomics International Laboratories (PIQ AU). Our forecasts, target price and recommendation should no longer be relied upon for investment decisions.

ALX recommended its investors ignore IFM’s hostile off-market takeover bid, citing the offer price as too low, the timing opportunistic, and the offer highly conditional. It also disclosed it initiated a sale process for its interest in Chicago Skyway which, if successful, could be value accretive (at least to our valuation). While the Chicago Skyway divestment process is underway we moderate our rating from TRIM to HOLD given potential for value realisation above what we consider to be the intrinsic value of the asset and hence driving our ALX valuation up close to where the share price is currently trading.

MI6 has awarded an A$59m contract for a 400-person accommodation village at Bullabulling, marking a key step toward development. Ongoing drilling continues to support resource growth, conversion and strike continuity, reinforcing confidence in the scale and quality of the system. As a result, our confidence in Bullabulling’s commerciality strengthens and update our model to reflect a larger-scale operation, lifting Stage 2 milling capacity to 8Mtpa (from 7Mtpa) and increasing forecast production to ~228kozpa. Our revised development scenario aligns with expectations from A$220m financing partner Franco-Nevada. We maintain our BUY rating and lift our price target to A$1.40ps (from A$1.20ps), driven by the increased scale and improved production profile under our revised development scenario.

Microsoft is an American multinational technology company that develops and markets software, services and hardware. The company is best known for its software products, including Microsoft Windows operating systems, the Microsoft Office suite and the Internet Explorer web browser. Its five main operating segments include: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.