Research notes

Weak 3Q26 result was driven by lower recoveries, though ramp-up is progressing well and cash flow turned positive. Outlook is improving with recoveries and spodumene prices lifting. Move to a TRIM with a A$2.20ps TP on valuation but the outlook remains positive.

MX1 posted its 3Q26 cashflow report noting product sales were modest while project work milestones remain broadly on track. The expectations of receiving the R&D tax incentive as a cash receipt together with an intention to monetise the security (non-core) assets will assist future liquidity. We have reduced our FY26 revenue forecast and therefore increased the net loss. Our FY27/28 forecasts remain unchanged. This, together with a higher risk-free rate (house view), sees our DCF valuation reduce to A$0.15 (was A$0.16). We maintain our SPECULATIVE BUY recommendation.

COL’s 3Q26 sales update was slightly softer than expected, with another solid performance in Supermarkets offset by ongoing challenging conditions in Liquor. Supermarkets continues to gain market share from discounters and independents, with strong volume growth indicating the value proposition continues to resonate with customers. We reduce FY26-28F underlying EBIT by 0-1%, largely reflecting a more difficult outlook for Liquor. Despite the minor reduction in earnings, our target price increases to $24.60 (from $22.90), reflecting a higher valuation multiple. In our view, COL’s defensive earnings profile and strong execution warrant a premium amid macro uncertainty and Middle East geopolitical risks. In addition, the core Supermarkets division should benefit from increased at-home consumption and continued demand for own-brand products as customers become more value-conscious. ACCUMULATE rating maintained.

Copper production missed on lower Tritton grades but this was offset by a solid cost performance and strong cash flow (+72% qoq), materially strengthening the balance sheet and funding flexibility. Tritton is set up for a stronger 4Q26, while Constellation, Golden Plateau and the Peel acquisition underpin a longer-term production and mine life extension story. Maintain BUY rating with an unchanged A$0.70ps Target Price.

Kering is a French multinational luxury goods group and one of the world's foremost luxury conglomerates, alongside LVMH and Richemont. Founded in 1963 by François Pinault, its portfolio is concentrated on personal luxury goods. Core houses include Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, and Brioni, alongside jewellery brands Boucheron, Pomellato, DoDo, and Qeelin.

BETR Entertainment (BBT) reported its 3Q26 business update, marking a solid sequential improvement. Encouragingly, margins have normalised following the customer-friendly Spring Carnival period in Q2, and the business looks well placed to achieve its H2 targets. The one real negative was the cash position at period end, though this was impacted by a number of one-off items that won't recur in Q4. With the internal focus firmly on value-generating customers, a leaner cost base now in place, and the streamlining of operations largely complete, we remain optimistic about the path ahead. We make relatively minor changes to our earnings forecasts. We reduce our valuation to $0.35 (previously $0.41), reflecting a higher risk-free rate and cost of capital assumptions. In our view, BBT is trading well below fair value and looks compelling at current levels. Maintain BUY recommendation.

Strong 3Q26 beat against expectations led by Onslow and lithium. FY26 guidance upgraded marginally across Mining Services, Onslow, Wodgina and Mt Marion. Diesel headwinds are emerging but remain contained. No supply risk currently but cost inflation is apparent. Compelling outlook supported by continued deleveraging and commodity prices. Maintain ACCUMULATE with a A$71ps target price (previously A$67ps).

WRK has put out its Q3 FY26 activity report. While cash outflows have increased to support growth, the business appears to be tracking well operationally, highlighted by the successful live launches of REST Pay and AustralianSuper. Off low bases, we lift our WRK FY26F EPS by +7% but lower our FY27F EPS by 6% on a broad review of our earnings assumptions. Our target price is unchanged at A$0.14. We continue to think WRK is well positioned for a significant earnings inflection point in FY27, and we maintain our BUY recommendation.

WOW’s 3Q26 sales trading update was mixed. Strong sales growth was offset by softer FY26 earnings guidance for Australian Food and NZ Food, as management chose to absorb higher fuel costs and invest in pricing. Management noted that value is becoming increasingly important, as customers become more cautious amid rising cost-of-living pressures. We reduce group FY26-28F underlying EBIT marginally by 1%. Our target price remains unchanged at $37.30. With a 12-month forecast TSR of 12%, we upgrade our rating to ACCUMULATE (from HOLD). While absorbing higher costs and investing in pricing will weigh on margins in the near term, we believe this is the right strategy in the long-term as WOW works to improve its value perception with customers. These are levers within management’s control, and improving sales and volume momentum indicates the strategy is resonating. In an uncertain macro environment with soft consumer sentiment, WOW’s dominant market position and relatively defensive characteristics should support steady and resilient earnings growth.

CHL’s quarterly update was a mixed bag overall. We note the transition to a membership-led strategy is still underway (i.e. pulling back on low-margin volume) within the business (improving take-rates), along with a newly implemented ~A$2m annualised cost-out plan. For 3Q26, GTV fell ~3% on pcp to ~A$33m, and revenue was down ~8% to ~A$11m. Key negative in the update however was the fall in future bookings to ~A$17m, which management has attributed to fuel concerns from the US/Iran conflict.