Research notes

3QFY26 activity continued to build on strong 1H performance, with accelerating US commercial momentum underpinning another revenue upgrade. Revenue grew 13% QoQ to US$23.8m (+34% YoY), supported by strong growth in implanted patients (+55% YoY), active physicians and utilisation, we believe highlighting increasing traction across the US footprint. We view the second consecutive guidance upgrade (now US$87m, +24% YoY) as evidence of improving visibility, with salesforce scaling and physician productivity continuing to trend ahead of expectations. We update FY26 forecasts in line with guidance, with our DCF-based target price lowered to A$2.94, mainly on FX and risk-free rate adjustments. SPECULATIVE BUY maintained.

3QFY26 activity highlights improving execution, with DETECT enrolment and site activation now gaining traction following a slow start. Since 1HFY26, EPI has expanded to 18 Tier-1 US centres and increased enrolled patients to 15 (from 3 in February), remaining on track to reach 25 this month. Cash burn was lower than expected, reflecting timing of site invoicing, while runway remains intact through CY28. We adjusted FY26-28 forecasts and lowered our DCF-based target price to A$2.23 mainly on risk-free rate adjustment. SPECULATIVE BUY rating maintained.

ARX has upgraded FY26 revenue and EBITDA guidance driven mainly by higher Myriad sales. We have revised our forecasts in line with guidance and increased our risk free rate (house view) which results in a small downgrade to our DCF valuation to A$0.77 (was $0.79). ARX will release its FY26 results on 26 May which will include FY27 guidance. The market will focus on revenue growth (MorgansF sit at 15%) and commentary around the continuing momentum with Myriad and SymphonyTM. We maintain our BUY recommendation with investor sentiment towards the name improving.

4Q25 spodumene production fell -10% qoq, but the result was lifted by sales which were +4% qoq. LTR finished FY25 with A$156m of cash (-10% qoq). FY26 will be a transitional year with production and cost reductions to be 2H26 weighted as LTR ramps up underground mining. We maintain our SELL rating with a A$0.56ps target price (previously A$0.50ps)

We note two successful events for APA in the last week or so, one in unregulated M&A and the other in dealing with the regulator on an acquired asset. While these wins are positive, we think the market’s focus will in time again be drawn to APA’s very material earnings and cashflow decline coming in less than 10 years’ time, which provides a meaningful headwind for equity value uplift and DPS growth. 12 month target price lifted to $7.60/sh. At current prices, we retain a TRIM rating given potential TSR of -c.4%.

REH provided a weak trading update on the back of ongoing soft housing market conditions in both ANZ and the US. Management has guided to FY25 group EBIT of between $548-558m. At the midpoint, this was ~5% below our forecast and ~6% lower than Visible Alpha consensus. We decrease FY25/26/27F group EBIT by 5%/7%/7%. Our target price falls to $14.80 (previously $18.70) and we downgrade our rating to HOLD (previously BUY). While we continue to see REH as a good business with a strong culture and long track record of growth, the near-term housing market outlook remains uncertain. We therefore prefer to wait for a further update on operating conditions at REH’s FY25 result on 25 August before potentially reassessing our view.

Back in Apr-25 PPE provided a 3Q25 update with EBITDA for the quarter at $6.3m, down 9% on the pcp. While in FY24, PPE delivered 4Q EBITDA of $9.8m, a benchmark which is unlikely to be beaten in 4Q25, given amongst other factors the timing of Easter. This note sees us adjust down our 4Q25 earnings expectations ahead of the full year result. It remains our expectation that PPE’s earnings are bumbling along the cyclical low, whilst the business is also trading at a relatively low PER multiple (8x FY26F). We reiterate our Speculative Buy rating and price target of $1.05/sh, pending a cyclical turnaround (the timing of which remains uncertain).

FY25 earnings risk has been mostly removed with firm guidance provided for EBITDA, D&A and net interest. Focus of the August result will be on FY26 guidance - we target c.15% EBITDA growth and c.44% EPS growth. Expect FY27 growth to be far more benign. The stock faces negative narrative on its underperforming Bulk and Containerised Freight investments, but we also see heightened pressures in its Coal segment. Short-term valuation metrics look attractive but our revised DCF-based target price of $2.94/sh is weighed down by updates to our medium term forecasts (especially Coal). Downgrade to HOLD.

XRO will acquire North American Digital Payments business, Melio, for US$2.5bn. The acquisition is short-term dilutive as XRO is acquiring a loss-making business. However, medium term this should help XRO fast track its American expansion. The acquisition brings product innovation and makes XRO’s NAM product more compelling due to combining digital payments and accounting. It also brings additional scale which should, with additional sales and marketing investments, move XRO closer to a scale player with critical mass in North America. We maintain our Accumulate recommendation and $215 Target Price.