Research notes

MFG has given an end-to-March 2026 quarterly FUM update. FUM (A$37.5bn) was down 6% for the quarter due to a combination of outflows across most funds and market movements. Overall this was a softer quarter at the headline level, albeit some impacts from market volatility are unsurprising. We downgrade our MFG FY26F/FY27F EPS by -1%/-8% due to slightly weaker FUM assumptions and also applying more conservatism to our future Barrenjoey earnings forecasts. Our PT falls to A$11.99 (from A$12.43). Whilst MFG’s Investment Management performance remains patchy, we think the Barrenjoey merger fundamentally changes MFG’s overall outlook, strengthening the business and providing additional pathways for growth. MFG also retains a strong balance sheet (~A$650m of liquidity, post deal). BUY maintained.

We initiate with a BUY rating and A$4.85 target, implying ~20% total return (15% capital + ~5% fully franked yield). DRR offers a rare capital-light exposure to tier-1 iron ore via a 1.232% Gross Revenue Royalty over BHP’s Mining Area C (a 45yr+ mine life asset with near-zero operating risk for the royalty holder) which delivers a 93% EBITDA margin. The Trident acquisition (Sep-24) added Thacker Pass, a 1.05% Gross Royalty Revenue (GRR) over a global-scale lithium deposit (85yr mine life, General Motors-backed). This provides genuine battery metals optionality worth A$0.40/share risked, diversifying the revenue base beyond iron ore. DRR trades at 9.7x FY27F EV/EBITDA, a 32-46% discount to global royalty peers (Franco-Nevada 19x, Wheaton 18x) that we believe is excessive given robust earnings platform, path to net cash, and emerging capital return optionality.

Many Peaks Minerals (ASX:MPK) is exploring the Ferke Gold Project (76.5%) in Cote d’Ivoire. Our modelling suggests the Ouarigue South system has already exceeded 1Moz Au ahead of an imminent Maiden MRE. At Ferke, our thesis is driven by geometry and early-stage economics rather than in-situ ounces. Broad widths deliver favourable geometry supporting low strip ratios and unit costs, meaning scale doesn’t need to be excessive to deliver robust economics. Our mining scenario outlines an initial 7.5-year operation producing ~110kozpa at an AISC of ~A$2,525/oz, with underground and regional potential providing a clear runway for mine life extensions and project scale growth. We initiate with a SPECULATIVE BUY recommendation and price target of A$1.92ps (assuming an effective 76.5% ownership, incl. government free carry).

GYG's Q3 FY26 trading update delivered a meaningful acceleration in Australian comp sales growth, providing tangible evidence that the business is executing well against a challenging consumer backdrop. Transaction growth continued to outpace comp sales growth, maintaining GYG’s strategy to be volume and frequency-led rather than price-driven. We have upgraded our comp sales growth assumptions and lifted our price target to A$26.70, reflecting higher forecast earnings and an increase in our valuation multiple to 24x FY27 EV/EBITDA. We maintain our BUY rating.

SOL has recently released its 1H26 result, which represents the first reporting period post the completion of the Brickworks (BKW) merger (Sep-25). It was another strong period for SOL, with Pre-tax NAV increasing ~15% on pcp to ~A$13.8bn. The portfolio delivered a 9.7% increase in NAV per share in the period (versus the ASX200 total return index returning 3.1%). Net cash flow from investments (NCFI) grew ~15% on pcp to ~A$334m, supported by strong contributions from the private, credit and real asset portfolios. Regular NPAT from the portfolio was up ~21% on pcp to ~A$397m. A 48cps fully-franked interim dividend was declared (28 consecutive years of dividend increases). Our DDM/SOTP-derived price target is now A$41.85 following the BKW merger, which materially changed the portfolio composition and tax base. We also remove the associated premium we had applied to our prior valuation to factor in index upweighting post the merger. Our updated forecasts are overleaf. We continue to like the SOL story, particularly its track record of growing distributions and history of uncorrelated and above market returns. We maintain our Hold recommendation.

We downgrade our rating on WDS to HOLD (from ACCUMULATE). Owning WDS has been powerful insurance (as a hedge against supply disruption) but now trading above A$35/share and above our NAV, it has crossed over into an active wager that the crisis is more permanent than we estimate, which sadly is possible, but should this be our base case steering our strategy? No. We remove our 10% conflict premium and apply our upgraded oil/LNG deck, for a small net change in our target price, now at A$33.40 (was A$33.55).

ACF’s trading update was encouraging. While FY26 revenue and underlying EBITDA guidance was reaffirmed, management commentary pointed to improving activity levels across Australia. This was particularly pleasing in the QLD formwork division, which has experienced softer conditions over the past two years. Momentum in QLD appears to be turning, with improvement evident heading into FY27. Initial FY27 guidance was a positive surprise. While broadly in line with consensus, we view the early guidance as conservative and achievable, reflecting management’s confidence in the outlook. Importantly, FY27 guidance also implies an improvement in EBITDA margins, suggesting a favourable shift in sales mix toward the higher margin Formwork segment. We make no changes to our FY26F estimates. However, we reduce FY27F and FY28F revenue by 3%, while leaving underlying EBITDA estimates unchanged. We maintain our positive view on ACF with a BUY rating and $1.28 target price. With formwork activity - particularly in QLD - now improving, momentum into FY27 continues to build. With Brisbane Olympics-related activity also expected to ramp up over the next 12-18 months, we see ACF’s outlook as strong. Trading on 8.6x FY27F PE with a 6.0% yield, we believe the valuation remains attractive.

The INPEX/Formentera Beetaloo JV terms imply US$3,059/acre at base earn-in, escalating to US$3,547-$5,480/acre on option exercise, a 20-37x uplift on the prior Tamboran/DWE benchmark in 2025. BTL trades at an implied ~A$140/acre, a 97% discount to the INPEX base deal. Even heavy discounting for acreage quality differences leaves material upside. INPEX has committed development-scale capital (up to US$619m) to the Beetaloo as an LNG-grade resource. Farm-out leverage for BTL has stepped up materially. We maintain our Spec Buy rating, with an upgraded A$0.90 TP.

IPART has released a methodology paper outlining its proposed approach to calculating an Initial Asset Base (IAB), which has direct implications for the pricing of Electronic Lodgment Network Operators (ELNOs). While this is just a discussion paper, it certainly points to a likely more rigid structure controlling PXA’s future pricing, while elements such as the potential exclusion of goodwill from IPART's proposed IAB calculation could present downside risk. We make nominal changes to our PXA earnings of -1%-2% on some post results earnings tweaks. While it is too early to factor in the full implications of the pricing review, we now apply a 15% discount to our valuation to account for potential regulatory risk, setting our price target at A$14.31. We maintain our ACCUMULATE recommendation with >10% upside to our PT.

Microsoft is an American multinational technology company that develops and markets software, services and hardware. The company is best known for its software products, including Microsoft Windows operating systems, the Microsoft Office suite and the Internet Explorer web browser. Its five main operating segments include: Windows & Windows Live Division, Server and Tools, Online Services Division, Microsoft Business Division, and Entertainment and Devices Division.