Research notes

Nike, Inc. is a global leader in athletic footwear, apparel and equipment with an estimated market share in 2023 of 39% (investing.com). Nike’s iconic ‘Swoosh’ logo is one of the most recognisable consumer brands in the world. Nike sells directly through over 1,000 retail stores and ecommerce platforms, as well as through wholesale channels. It employs a contract manufacturing model.

JHX materially beat its prior 2QFY25 forecasts (released 20-Aug-25), as demand proved more resilient, destocking less material and the outlook incrementally better. So, whilst the outlook for new construction remains challenging and deck, rail and accessories enter a seasonal slow period, today’s announcement gives some indication the business may be approaching a cyclical low. It also suggests that the FY26 LTIs may prove to be a low hurdle. Whilst the outlook has incrementally improved, JHX continues to navigate an uncertain housing market, while investor concerns around corporate governance remain largely unresolved. To this end, we retain our ACCUMULATE recommendation with a $38.50/sh price target.

Since the FY26 result, capital markets activity for junior miners – the key lead indicator for exploration spend – has accelerated to unprecedented levels. Though IMD is facing intense competition in sensors (Axis) and fluids (various private players), our raisings data suggests that FY26 consensus revenue growth of +10% is too low. Our data indicates that ALQ’s geochemistry volumes, for which IMD’s sensors have historically had a 95% correlation (IMD no longer discloses sensor volumes consistently), will be around +20-30% for the December half and the exit rate is closer to +30-40%. For IMD, we assume +16% revenue growth in FY26 to account for competition. At NPAT, we increase our forecasts by +3% in FY26 and +7-9% in each of FY27-28. Our target price rises to $3.80 (from $3.45) which represents 30x PE (FY26 adjusted EPS). We note this is a peak historical multiple but is still a PEG of 1x as we forecast ~30% EPS growth. Upgrade to Accumulate.

ACE’s automated speed enforcement win with the Connecticut department of Transport (US$22.6m) is ACE’s largest US contract win to date and a significant proof-point in the US market, which remains a material opportunity for the group over the coming years. With the group progressing alternative bank funding options, we believe it remains in a solid position to deliver growth with improved funding flexibility, de-risking near-term requirements for further capital. Factoring in ACE’s US contract win along with an increase to market-based multiples in our blended valuation sees our price target lift to $2.05 (from $1.30/sh)

We preview BOQ’s FY25 result scheduled for release next week. Key headline earnings have been pre-disclosed, but trends in underlying drivers will be important for forecasts of future years. We downgrade forecast earnings due to gross loan declines below what we had previously anticipated combined with the fixed cost leverage. 12 month target price downgraded to $6.20/s. At current prices we estimate potential total return of -9%. Hence, we continue to recommend retain a TRIM rating.

VEE’s 9-year supply agreement with Northrop Grumman marks a major milestone, following its recent approval as a Level 1 supplier to HII-NNS. These agreements position VEE to provide equipment to two of the most prominent prime contractors in the US defence sector. VEE’s $14m capital raise will enhance its capacity to pursue further growth opportunities in the defence sector. Post-raise, pro forma net debt is expected to reduce to ~$0.6m compared to $13.7m at the end of FY25. Despite the strong momentum in defence, management noted that slower-than-expected conversion of gyro leads into orders and a delayed ramp-up in ASC orders means 1H26 EBITDA is expected to be slightly below 1H25. However, revenue is expected to accelerate in 2H26. We decrease our FY26 EBITDA forecast by 13% but increase our estimates for both FY27 and FY28 by 2% mainly on increased growth assumptions for defence. Our target price rises to $1.66 (from $1.30), reflecting upgrades to our outer-year earnings forecasts due to greater confidence in VEE’s ability to secure additional defence contracts, and a roll-forward of our model. We view further contract announcements as potential positive catalysts for the stock. With a 12-month forecast TSR of 14%, we move our rating to ACCUMULATE (from BUY).

Sunstone Metals (ASX:STM) reports a resource to JORC Code (2012) standards of 2.7Moz gold equivalent (AuEq - 1.8Moz Au and 378Mlb Cu) at Bramaderos, southern Ecuador (STM 87.5%), part of a much larger Exploration Target including the Limon epithermals and deeper gold-copper finger porphyries. At El Palmar, 60km north-west of the Ecuadorean capital Quito, Sunstone has identified five porphyry copper-gold targets extending from surface with an initial resource to JORC Code (2012) standards of 1.2Moz AuEq (800koz gold, 1.3Moz silver, 176Mlb copper) in one of these. Gold is trading above US$3,800/oz, up 90% over the past year, The share prices of ASX-listed gold producers have lifted, with the World’s largest gold miner, Newmont (ASX:NEM) up over 60% over the year. Our assessment is that share price appreciation for juniors with gold resources but no cashflow has yet to reflect this gold price strength across the board.

The FDA has finally lifted the clinical hold on NUZ-001 after 9 months, clearing the way for NUZ to join the HEALEY ALS Platform Trial and removing a major regulatory overhang. First patient enrolment in the HEALEY trial is targeted by the end of the year, with initial data possible by late 2026 depending on recruitment rates. This is a major catalyst and a clear regulatory de-risking event for NUZ. With a validated IND and a clear path into HEALEY, we expect renewed investor interest and momentum in the stock as the company advances towards trial and data. Our target price moderates to A$0.39 and we maintain our Speculative Buy rating.

MX1 continues to make solid progress across all its verticals. Today MX1 announced its largest contract for its Rover Plus worth A$3.3m. Other recent announcements note positive progress on the Head CT imaging project with the ASA, a A$4.4m grant to trial the head CT scanner in standard ambulances for stroke diagnosis and a contract extension with the DHS to enhance the self-screening checkpoint detection algorithm. We have made no changes to forecasts or valuation of A$0.17. The cadence of newsflow increases our confidence that MX1 has reached an important inflection point and deserves greater investor attention. We maintain our SPECULATIVE BUY recommendation.