Research notes

Record 4Q Pilbara production and shipments enabled RIO to land at the lower end of CY25 guidance, recovering from cyclone disruptions back in 1Q. Copper beat estimates by 14% on Escondida and Oyu Tolgoi strength. Simandou achieved first shipment in December as guided. Making hay while the sun shines, with copper and iron ore beats, but a quarter that will be hard to repeat with Pilbara shipments to normalise and Escondida grades set to moderate in CY26. Valuation remains stretched at current levels. We maintain our TRIM rating with target price unchanged at A$140.

HUB’s 2Q26 Platform net-flows of $5.6bn were the group’s largest on record, coming in ahead of consensus expectations of $4.6bn. On an underlying basis (excluding $1.5bn of flows from the EQT migration in 2Q25), core net inflows were up +42% yoy. This strong organic momentum was also supported by positive mark-to-markets during the quarter which saw HUB report Total FUA of $152.3bn, +26% yoy, and Platform FUA of ~A$127.9bn, +29% yoy. We see the company as well positioned to deliver strong growth at its upcoming 1H26 result and on track to reach its FY27 Platform FUA targets. We upgrade our underlying NPAT forecasts by 1-2% and retain our Hold rating with an unchanged $110.60 price target.

CYL delivered a solid operating result for 1Q driven by record production of 28.2koz Au and 24.8koz Au in sales from the Plutonic Gold Belt. FY26 guidance of 100-110koz Au at an AISC of A$2,200/oz - A$2,650/oz was reiterated. We now forecast FY26 sales of 109koz at an AISC of A$2,539/oz and update our price deck to align with recent spot gold movements. We update our model for the result, reiterate our BUY rating and increase our price target to A$12.51ps (previously A$10.58ps).

A sound 2Q26 result operationally, with WAIO setting a H1 production record and BHP upgrading guidance at both Escondida and Antamina. The offsetting negative was the separate update on the Jansen Stage 1 potash project, seeing a further budget upgrade to US$8.4bn and leaving concern around possible changes to Jansen Stage 2. We have applied upgraded metal price forecasts, driving the upgrade in our target price but not transforming the value proposition, with BHP still appearing fair value. In our sector investment strategy we view BHP as a core holding on earnings and portfolio quality grounds as well as dividend profile, we maintain our Hold rating.

1H26 underlying PBT of A$58m (~16% below pcp; ~14% below cons) reflected softer group sales and margin pressure (AUD/THB weakness and lower factory recoveries), with a pronounced 2Q deterioration (group sales -5.8%). All divisions weakened through the period, with implied Aftermarket sales -4.4% in 2Q26 (vs -1.7% in 2Q25); OEM -43% (vs -2%); and Export flat (vs +20.4%). The softness within the Aftermarket division is somewhat understandable, given the sharp deterioration in our tracked ARB new vehicle sales index through November (-14.8%) and December (-6.8%), dragging 2Q FY26 volumes 6.7% lower vs the pcp. However, the slowing rate of growth within Export is a point of concern (flat in 2Q) as ARB will cycle a more demanding comp in 2H FY26 (2H FY25 A$142m; vs A$125.4m 1H26). We expect FY26 earnings will reflect a 'base' year for ARB to reset margins and resume a more sustainable growth trajectory (MorgansF FY25-28F EPS CAGR +7%). We are encouraged by ongoing US strength (1H26 +26%); a commanding balance sheet position (A$59.4m net cash); and various tailwinds supporting Aftermarket division recovery through CY26 (new OEM launches; network growth/upgrades; and eCommerce launch). Accumulate maintained.

We recently attended a site visit to TSO’s El Zorro Gold Project in Chile – the host to the 2Moz Au Ternera Gold Deposit. The trip included a tour of proximal existing power and water infrastructure (with which TSO has existing MOUs), Ternera and greater El Zorro concession. We maintain our SPECULATIVE BUY rating and price target of A$4.88ps.

We update our FY26 half-year earnings splits ahead of CWY’s 1H26 result on 26 February. 12 month target price unchanged at $3.11/sh. Valuation upside is evident from the takeover bid for QUB that implies a takeover value for CWY of c.$4/sh. Given CWY’s recent share price weakness we upgrade from ACCUMULATE to BUY, with total potential return of c.25% at current prices.

EQ Resources produced 38,292 metric tonne units (mtu) of tungsten for the December 2025 Quarter. Our expectation is that ~32,000-33,000mtu was from Barruecopardo, and the balance from the underperforming Mt Carbine mine. The ammonium paratungstate (APT) price averaged above US$700/mtu through the December Quarter, and is currently above US$1,000/mtu. We have lifted our long-term price from US$350/mtu to US$600/mtu. The Mt Carbine open pit has underperformed since production of 26,028mtu in the September 2024 Quarter, with mine production stalled for remediation and redevelopment of the Andy White open pit, and the Wet Season effects.

We formally transfer coverage in this research note. Whilst our investment thesis and ACCUMULATE recommendation remain unchanged, we take the opportunity to revisit key topics that are important to the investment thesis.

Following AMC’s recent 5:1 share consolidation, we update our per share estimates (EPS and DPS) to reflect the new share count. Our underlying earnings forecasts change marginally (between 0-1%), largely reflecting updates to FX assumptions. Our target price increases to $76.00 (from $15.20 previously) following the share consolidation. With a 12-month forecast TSR of 21%, we maintain our BUY rating. Following AMC’s solid 1Q26 result, management’s increased confidence in delivering FY26 synergy targets, and the reaffirmation of FY26 guidance, we believe the outlook remains positive. Trading on 10x FY27F PE with a 5.8% yield, we continue to view the valuation as attractive. AMC is due to report its 1H26 result in early February.