Research notes

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.

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.

TLX is an oncology company that operates in the radiopharmaceutical industry. Their portfolio consists of an extensive pipeline of in-licensed, acquired and Company-originated IP that focuses on“molecularly targeted radiation” (MTR) for kidney, prostate and brain cancer products. TLX operate two divisions: precision medicine (diagnostics with an estimated TAM of US$9bn) and therapeutics (with an estimated TAM of US$23bn). The precision medicine division is guided to generate revenue of US$800m to US$850m for FY25 with products in the therapeutic division still in clinical trials. Consensus has a target price of A$26.37 which provides significant upside to the current share price. Management expects several significant catalysts in 2026.

In our view, NWH has scope to re-rate to 11x FY26/27 EBIT in the near term. The company’s relative valuation has lagged the sector following a challenging FY25, marked by cash collection issues, an unexpected CFO transition, material weather disruptions in QLD, and a weak met coal market. With the exception of weather – which remains inherently difficult to forecast – these issues are in the rear-view mirror. We expect a strong 1H26, with demand indicators suggesting that earnings momentum will extend into 2H26. Our FY26 EBITA forecast has been upgraded to near the top of the guidance range of $260-265m, which translates to +26% EPS growth. We view guidance as conservative, though we remain within the range given weather risk in 2H. We lift our price target to $6.00 (from $4.50) and maintain our Accumulate recommendation.

Following the agreement to acquire Tyco NZ and Red Wolf on 12/12 (Hungry Caterpillar), IMB raised $20m on 16/12/25 at $0.58/share via an institutional placement to return leverage back to pre-acquisition levels (1.6x net debt/pro forma EBITDA). We incorporate the equity raise, though our price target is unchanged ($1.00) as a re-rating in peer multiples offsets the dilution.