Research notes

COL reported a solid 1Q26 sales trading update driven by growth in its Supermarkets division. However, Liquor sales were softer than expected as consumers remain focused on value. Management indicated that Supermarkets sales growth in early 2Q26 has remained broadly in line with 1Q26, at ~4.8%. With Woolworths’ (WOW) Australian Food sales up ~3.2%, COL continues to outperform, although the gap is narrowing. The liquor market remains challenging. We decrease FY26-28F underlying EBIT by 1%, mainly on the back of lower Liquor forecasts due to the ongoing softness in the market. Our target price declines to $22.90 (from $23.45) and we maintain our HOLD rating. While Supermarkets momentum remains positive heading into the key Christmas trading period and execution continues to be strong, trading on 23x FY26F PE with a 3.6% yield, we view COL as fully valued. We would look to reassess our view should the share price weaken further.

Strong 1Q26 execution across Onslow, Mt Marion and Wodgina. Growth in mining services may be more muted going forward. Stronger lithium and iron ore prices are accelerating balance sheet repair. We see much of the near-term upside priced in and maintain our TRIM rating with a A$40.70ps Target Price (previously A$34ps).

WOW’s 1Q26 sales growth overall was broadly in line with our expectations but weaker than consensus estimates. Management acknowledged the performance fell short of their aspirations. Australian Food sales increased 2.1%. The quarter began with challenges, but following increased investment in the customer value proposition, management noted signs of modest improvement in item and transaction volumes in the early part of 2Q26, with sales up ~3.2%. We make minimal changes to earnings forecasts and maintain our $28.25 target price and HOLD rating. While the modest pick-up in operating performance in early 2Q26 and indications from customer surveys that cost-of-living pressures may be easing are encouraging, the group’s performance during the key upcoming festive period will be critical. The impact on margins from the increased investment will also be important to monitor. Trading on 21.5x FY26F PE with a 3.5% yield, we think the stock remains fully valued and prefer to wait for further evidence of improvement before reassessing our view.

DroneShield (DRO) specialises in counter-drone technology, offering a range of portable and fixed products that allow its customers worldwide to detect and defeat drones. Technology and drones are playing an increasingly critical role in modern warfare, as governments worldwide boost defence spending in response to escalating geopolitical threats. DRO has delivered strong growth so far in FY25 (Dec Y/E), with 3Q25 YTD secured revenue of $193.1m - more than triple its total FY24 revenue of $57.5m. The company delivered record 1H25 PBT of $5.2m. By 2027/28, DRO is targeting a doubling of its sales pipeline to $5bn. To support this growth, the company is expanding its Sydney manufacturing facility from $500m pa to $2.4bn pa by the end of 2026. DRO is also investing in a new R&D facility in Adelaide and scaling up its manufacturing operations in Europe and the US.

Building on its track record for consistent solid operating results, Amplitude delivered a largely in-line 1Q26 production and sales result. Net debt reduces materially to ~A$84m post-equity raise (-63%). FY26 production and cost guidance was maintained. Successful delivery of the ESCP+ drill program and development would support medium-term value upside beyond our A$0.31 target price. We maintain our BUY rating, with an updated A$0.31 target price (was A$0.34).

Despite the majority of the business “tracking to plan”, FY26 cc guidance had been downgraded (2-3% at revenue and NPATA mid-points), mainly reflecting continued declines in US influenza vaccination rates, although Chinese government cost containment affecting albumin demand was also flagged. While management is confident it can limit the impact of the latter to 1HFY26 via mitigation measures, ongoing uncertainty in the US influenza vaccine market has seen FY27-28 NPATA growth expectations moderate (to HSD from DD) and delay the demerger of Seqirus (prior FY26). Although it remains challenging to know when US influenza vaccination rates will stabilise, we believe the risk of a permanently lower base is being over-priced, with Seqirus and Vifor marked down, with even Behring trading below peers and well under its long-term average, which we see as unjustified. We lower FY26-28 net profit forecasts by up to 14.3%, with our PT decreasing to A$249.51 (from A$293.83). BUY.

SIG provided positive commentary at its recent AGM around continued domestic and international store expansion, solid like-for-like sales and reconfirmation of synergy benefits. At this stage we remain comfortable with our FY26 forecasts, which show sales and EBIT growth of 11.4% and 23.6% respectively. We forecast EBIT growth to continue (~18%) for FY27/28. Our valuation remains unchanged at A$3.39 and we maintain our ACCUMULATE recommendation.

It was a strong 1Q26 trading update by MoneyMe (MME), in our view, highlighted by strong book growth (+26% on the pcp), driven by an increase in originations (+18% on pcp). Asset quality remains sound given the increased skew of secured assets on the book and pleasing net losses had trended lower q-o-q. We make only minor adjustments to our assumptions across the forecast period, largely factoring in the trading update and marginal improvements to our book growth estimate. Our DCF/PB blended valuation (equal-weighted) and price target is unchanged at A$0.21. Retain Speculative Buy recommendation.

At its AGM, HLO provided FY26 EBITDA guidance which was materially ahead of expectations. While new acquisitions are helpful, HLO is also seeing strong forward bookings. We have upgraded our forecasts. Given HLO’s undemanding trading multiples, improved trading conditions and contribution from new accretive acquisitions, we reiterate our BUY rating.

September quarter was about execution and positioning, BTL successful on both. C-5H IP30 flow test next – key proof point ahead. Approvals nearing FID; gas-plant works underway. Basin re-rating with Tamboran deal spotlighting value gap. Maintain SPECULATIVE BUY rating and A$0.70 valuation.