Research notes

Vertex is a global biotechnology company that invests in scientific innovation to create transformative medicines for people with serious and life-threatening diseases. Founded in 1989 in Cambridge, Massachusetts, the corporate headquarters is now located in Boston’s Innovation District, with the international headquarters in London, United Kingdom. Currently, Vertex has approximately 3,500 employees in the United States, Europe, Canada, Australia and Latin America with nearly two-thirds of staff dedicated to research and development. Vertex is recognised as one of the industry’s top places to work by Science Magazine, The Boston Globe, Boston Business Journal and the San Diego Business Journal. Vertex’s research and medicines have also received esteemed recognitions, including the Robert J. Beall Therapeutics Development Award, the French Prix Galien and the British Pharmacological Society awards.

AstraZeneca is an Anglo-Swedish multinational pharmaceutical and biotechnology company headquartered in Cambridge, England. It is science-led and patient-focussed within its four primary therapy areas: Oncology, Biopharmaceuticals, Vaccine and Immune Therapies; and Rare Diseases. AstraZeneca is focussed on the discovery, delivery and commercialisation of prescription medicines.

Cisco Systems, Inc. (CSCO) is a leading multinational technology conglomerate headquartered in San Jose, California. The company has established itself as a dominant force in the digital communications landscape since its founding in 1984.

CGS posted its FY26 result, announcing record contract wins and increasing diversification of the revenue base across psychiatric, rare disease, sleep and neurological disorders. Management expects this broader CNS footprint to reduce dependence on any single therapeutic area and support the sustainability of future growth. CGS has flagged increasing investment in AI and workflow automation as a strategically important development. With active trials growing to 171 and contract wins reaching record levels, management is building the infrastructure required to scale without a commensurate increase in headcount. CGS enters FY27 with record contracted revenue of US$118.5m, with plans to invest in AI-driven automation while maintaining FY26-level EBITDA margins. CGS’s share price has increased 14.1% since 1 July.

FY26 EBITDA rose +9% to A$68m, with margins up c.30bps; FY27 guidance points to a further ~14% EBITDA growth (A$75-80m; MorgansF A$75.3m). Despite strong 4Q growth (+19% yoy), macroeconomic headwinds detracted from the result, seeing FY26 slightly below the guided range of A$70-75m. Importantly, the group is continuing to deliver progress on the recovery (Collision EBITDA +40% yoy; margins +80bps), pursuing disciplined capital management initiatives (dividend; buyback; M&A) and guiding for another year of growth. BUY.

A FY26 result that offered few surprises, but highlights DRR’s quality earnings. EBITDA was -1% yoy, while underlying NPAT was +14% yoy. Final dividend of A 10.8cps trailed our estimate by 4%. A good business with an irreplaceable royalty at Mining Area C, and steady progress developing Thacker Pass (lithium royalty), but earnings growth from here is reliant on expanding its portfolio. We maintain a BUY rating, with a A$4.85 target price. DRR could benefit from a growing number of investors seeking inflation protection while also offering an above-market yield.

The signed Letters of Intent (LOIs) over the remaining 52MW would take the Australian portfolio to full capacity - a strong demand signal that de-risks management’s pathway to $250m of EBITDA. However the ramp-up in earnings is back-ended, hence FY27 guidance was ~8% below MorgansF and ~13% below Consensus. Liquidity of ~$1.2bn funds the ~$1.2bn capex bill, with management calling out no need for additional equity. We still see clear value, but the cashflows are pushed out - this is now an FY28-into-FY29 story. Target price unchanged at A$3.60; reaffirm BUY.

GQG’s 1H26 NPAT of US$228m, was -1% on the pcp, but +2% above consensus (US$225m).  We would summarise this result as resilient margins in a tough operating environment, offset by the key concern that GQG's investment performance is materially lagging its benchmarks on both a 1 and 3-year basis. In a shock, management also flagged GQG is now overweight technology and semiconductor stocks, except within its emerging markets portfolio. We leave GQG FY26F EPS forecasts largely unchanged, but lower outer years 3%–5% on reduced net flow assumptions; our GQG price target falls to A$1.52 (from A$1.66). The near-term operating environment remains difficult for GQG; however, we think it's hard not to see long-term value in the franchise at current levels, trading on ~7x FY1 PE with a ~>10% dividend yield. ACCUMULATE.

LGI delivered 26% EBITDA growth, as margins expanded (+356bps to 55%), leading to NPAT growth of 35% yoy to A$8.8m (+1.5% ahead of consensus). The group has pointed to a robust outlook for ACCU volume growth whilst executing on its +80MW pipeline build amidst prolonged approval processes. LGI has managed a volatile commodity price backdrop well (realised electricity price 35% above the average AEMO price), whilst driving meaningful operating leverage across its network. We remain encouraged by the progress and view FY27-28 as a catalyst rich period as execution turns to delivery. BUY maintained.

TPG’s 1H26 results and reiteration of full-year guidance were largely in line with expectations. For us the highlights were: a clean and easily digestible set of accounts that sets the path for growth; double-digit growth in FCF to equity; and an 11% YoY increase in the dividend to 10cps, which is now 25% franked. We make immaterial forecast changes, retaining our $4 target price and our Accumulate recommendation.