Research notes

SKY continues to advance Tallebung toward development, with approvals momentum building and drilling continuing to support resource growth and project confidence. Recent drilling has returned high-grade tin mineralisation alongside meaningful silver and tungsten results, with both commodities trading at or near all-time highs. We maintain our SPECULATIVE BUY rating and A$0.35ps price target, uplift a function of an increase to our bull case following sustained tin price appreciation.

MQG delivered a very strong FY26 result with NPAT (A$4.8bn) up +30% on the pcp and +8% above company-compiled consensus. Whilst acknowledging this result was aided by significant volatility in commodity markets that assisted CGM, MQG’s performance was generally strong across the board. We increase our MQG FY27F/FY28F EPS by +9%/+2%. Our price target rises to A$248 (previously A$223) on our earnings changes and a valuation roll-forward. MQG is a quality franchise, and a proven performer, but with <10% upside to our PT, we maintain our Hold call. We increase our MQG FY27F/FY28F EPS by +9%/+2%. Our price target rises to A$248 (previously A$223) on our earnings changes and a valuation roll-forward.

REA's 3Q26 result was driven by a strong yield outcome (+14%) in the resilient domestic residential business, and new listings also returning to growth (+1% on the pcp). FY26 Operating cost guidance being lowered was a key takeaway. We make minor revisions to our FY26-FY28F EPS forecasts (-0.5%) reflecting the lowered cost guidance, offset by a more conservative FY27 yield assumption. Our DCF-derived price target is lowered slightly to A$219 (from A$220). BUY.

SKS’s $22m contract win for the new Coles head office sees the group work in hand expand to $355m ($270m for FY27), with SKS’s Tenders pipeline exceeding $1.2bn (of which >$1bn relates to prospective data centre projects). SKS’s share price momentum increasingly reflects confidence in the group’s strong FY27 outlook, and ability to win a greater share of its healthy pipeline of prospective data centres. We lift our PBT forecasts by ~12-15% in FY27-28F, reflecting our expectations for further conversion of SKS’s share of this pipeline over the year ahead. We retain our ACCUMULATE rating with a revised PT of $8.95/sh.

3Q26 Gold production of 6.1koz at an AISC of A$4,126/oz missed our expectations on a cost front despite pre-reporting production. Cash is in focus - MEK closed the quarter with A$50.1m with a further ~3.2koz of gold on hand (~A$20m at spot) which may provide additional liquidity, albeit with limited visibility on timing of monetisation. Head grade of 1.6g/t Au was the driver of the miss (-51.5% QoQ) and remains the critical swing factor into 4Q26. The recent Mt Holland Gold acquisition (A$20m) adds incremental pressure to deliver on grade recovery. We now model open pit operations to begin curtailing in FY26, with the second Turnberry underground reaching nameplate in FY28. This pulls back our prior assumption of an extended open pit phase. We maintain our BUY rating, but view the next two quarters as critical as MEK needs to demonstrate clear grade improvements to remain on track for the anticipated step-change in free cash flow into FY27.

Light & Wonder (LNW) delivered a softer than expected 1Q26 result missing MorgansF and consensus on revenue and AEBITDA in what is seasonally the group's weakest quarter. The North American Gaming operations installed base was the standout negative surprise - ex-Grover net installs of -420 units, driven by the earlier than anticipated Resorts World New York VLT to Class III conversion - compounded by weak international machine sales and ongoing SciPlay softness. Grover delivered a strong 660 sequential net adds on Indiana market entry, and AEBITDA margins expanded across every segment. We reduce FY26-27F EPSA by 5% and 2% respectively, reflecting a more conservative stance on land-based net leased adds and digital performance. A material 2H26 recovery is required to validate the mid-to-high single digit AEBITDA growth guide (MorgansF: 6%). We retain Buy but lower our 12-month target price to A$168 (previously A$183). The market's 8% sell-off reflects legitimate frustration, though at ~10x forward PER and an FY26-28F EPSA CAGR of 17%, we view the dislocation as an opportunity.

ORI’s 1H26 result beat consensus estimates across all business units. Cashflow was much stronger than feared and the balance sheet is in strong shape. Consequently, the Board rewarded shareholders with a step-up in the dividend. The outlook remains positive and further growth is targeted in FY26 and over the medium term. Our forecasts remain largely unchanged. With leverage to attractive industry fundamentals, market leading positions, solid earnings growth, proven management team and strong balance sheet, we reiterate our BUY rating with a new price target of A$26.60.

MFG has announced the transfer of management of its Global Equities funds (MGOC and the Hedged Fund, ~A$5.3bn AUM) to Vinva Investment Management, a Sydney-based systematic equity manager with A$47bn+ AUM in which MFG already holds a 28% stake. In terms of financial impact, we estimate a revenue reduction of approximately A$29m in year one, partially offset by management's flagged cost savings of ~A$7m. On our estimates, this implies a ~16% reduction in Funds Management PBT and a ~8% decline in group EPS for FY27. While changes are clearly needed to revive MFG's stalled funds management franchise, this update is a reminder that the path forward may involve some short-term pain. We lower our MFG FY27/FY28F EPS by 7% on the changes announced with this Global Equities funds transition. We lower our PT to A$11.19 (previously A$11.99). Maintain BUY on longer-term upside post the Barrenjoey merger.

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.