Research notes

MGH recently provided FY26 earnings guidance (22-Oct) and subsequently presented at our Morgans Conference (23-Oct). Whilst FY26 guidance fell short of VA Consensus expectations, the outlook from management was positive. MGH noted margin pressure in the civil construction and hire segment, while the electrical and transmission business is ramping up and expected to play a larger role in future earnings. The group’s project pipeline is strong, with no delays reported, and guidance reflects project type and timing rather than weakness. The Central West Energy zone continues to see a ramp-up in worker numbers, while integration of the Illawarra hub is progressing and Melbourne is seeing early signs of a recovery. On this basis, we retain our price target at $5.45/sh, with an Accumulate rating.

1Q results were solid and broadly in line, with high-single digit revenue growth, ongoing margin expansion, and strong cash flow. Sleep and respiratory sales were solid, with above market growth in the Americas, although ROW mask growth softened due mainly to a tough pcp, while residential care software sales also slowed on challenges in skilled nursing, but with a portfolio review underway and management confident growth can accelerate. Importantly, operating leverage continues to improve, with GPM gains on ongoing manufacturing efficiencies and OPM growth on good cost control. We continue to view fundamentals as sound and the company in a strong position to support future earnings growth, with the upper end of FY26 GPM guidance (61-63%) likely achievable given a strong cadence of new high-margin product releases, an expanding US supply chain, along with continued investment in AI and digital health to drive awareness and increase patient diagnosis. FY26-28 earnings change negligibly, with our target price modestly declining to $47.04. ACCUMULATE.

In just two weeks, JIN has completed its second B2C prize draw acquisition, entering the US market with Dream Giveaway USA (DG) for A$55.4m (~7.8x LTM EBITDA). Not to be confused with the recent Dream Car Giveaways UK (DCG) acquisition, both deals have been in parallel development over the past year. While the acquisition will see JIN's balance sheet enter a net debt position, importantly it delivers on the company's stated strategy of transitioning from slower-growth B2B/SaaS to the higher-growth B2C market. We view this as disciplined capital allocation: Acquiring proven profitable assets at reasonable multiples with clear operational improvement pathways. The two B2C acquisitions combined add a base line A$24m in pro-forma EBITDA. We have lifted our FY27 EPS forecasts by +2.3% to reflect DG contribution. We maintain our Buy recommendation and lift our 12-month price target to $16.60 (previously $15.90).

An earnings beat driven by strong production, costs and realised copper prices. Operating execution continues to impress with CSC able to generate strong group production volumes despite interruptions across different assets over the course of FY25. Move to a BUY (from ACCUMULATE) following recent weakness with a A$16.10ps target price (previously A$16.30ps).

EDV’s 1Q26 sales trading update was weaker than expected overall. The Retail division showed some encouraging signs with sales momentum improving in September and October. Hotels also delivered solid sales growth (+4.4% in 1Q26), however higher costs including labour, security and depreciation & amortisation (D&A) are expected to weigh on margins in 1H26. We decrease FY26-28F group EBIT by 5% and underlying NPAT by between 7-8%, primarily due to reduced margin assumptions. This reflects sustained promotional intensity in Retail and inflationary cost pressures in Hotels. Our target price decreases to $3.70 (from $4.15) and we maintain our HOLD rating. While there are some encouraging signs in Retail sales heading into the key Christmas trading period, the overall liquor market remains subdued, with consumers continuing to prioritise value. With new CEO Jayne Hrdlicka not commencing her role full-time until January 2026 and an updated strategy not expected until April/May 2026, we see limited upside in EDV in the near term.

We update our forecasts to reflect ANZ’s update today regarding its 2H25 significant items. FY25F EPS downgraded by 1%. We also reprofile the assumed phasing of cost-out across FY26-27F. The result is a c.4% downgrade to FY26F EPS. 12 month target price $32.80 (+8 cps). TRIM retained at current prices. Next key event is ANZ’s FY25 result release due on Monday 10 November.

M7T has announced the initial go-live of the high-profile Veterans Health Administration (VHA) National Teleradiology Program (NTP) contract. The go-live of the NTP contract marks a significant operational and commercial milestone, positioning M7T as a core technology partner to the US Department of Veterans Affairs and once fully implemented, shifts the company’s financials into a materially strong position. Key forward catalyst lies in the outcome of the ongoing strategic review and FY26 guidance which is expected at the AGM on 28 November. No changes to valuation. Buy rating retained.

CHL’s 1Q26 trading update was released concurrently with the announcement of a strategic investment and commercial agreement with JB Group (RV manufacturer with a large retail and media network). JB Group will take a ~12.7% stake in CHL. The commercial agreement will see JB Group integrate CHL’s platform across its large network of RV dealerships and media channels. Whilst the 1Q26 trading update saw GTV and revenue decline ~6% vs the pcp, management noted business momentum is beginning to build coming into the key summer/holiday season in ANZ. We make no changes to our GTV, revenue or margin forecasts at this juncture, however our FY27-FY28 EPS reduces 11%-12% factoring in the strategic placement. Our price target reduces to A$1.00 (from $1.05). Buy maintained.

BETR Entertainment (BBT) reported a solid first quarter, delivering results modestly ahead of expectations across key metrics despite unfavourable sporting outcomes in September. Turnover, gross win, and net win margins all exceeded forecasts, supported by improved customer engagement and product mix. Encouragingly, management noted that momentum has continued into the Spring Racing Carnival. We take encouragement that the recent lift in brand and product investment is now translating into operating momentum. The balance sheet remains in a strong position, providing flexibility to pursue both organic and inorganic growth opportunities. Our BUY recommendation and $0.43 target price remain unchanged.

WES provided a trading update at its AGM with sales momentum for Bunnings, Kmart Group and Officeworks continuing since the FY25 result in August. However, 1H26 earnings for Officeworks will be impacted by lower operating margins as well as restructuring and ERP replacement costs. Management noted that while demand remains positive, consumers continue to be cautious. WES is also experiencing pressure across its divisions in relation to supply chain, labour, energy, and regulatory costs. On the back of the trading update, we decrease FY26-28F group EBIT by 1%, largely due to downgrades to Officeworks earnings forecasts. Our target price declines to $79.30 (from $83.20) and we maintain our TRIM rating with a 12-month forecast TSR of -4%. While we continue to view WES as a core long-term portfolio holding with a diversified group of well-known retail and industrial brands, a healthy balance sheet, and an experienced leadership team with a strong track record of growth, trading on 35x FY26F PE we see the stock as overvalued in the short term.