Research notes

The Bowdens DFS confirms a materially larger and longer-life project, with reserves up 30% to 93.5Moz at 60.8g/t Ag, and total operational life extended to 26 years (previously 16 years). Project economics have improved materially, with DFS Stage 1 pre-tax NPV5 up 144% and IRR lifting to 31.5% (base case US$45/oz Ag, AUD/USD 0.70), despite notably higher upfront capital requirements. We maintain our SPECULATIVE BUY rating and lift our price target to A$0.43 per share (previously A$0.40 per share).

IMD delivered a robust FY26 result, with EBITDA +29% and NPATA +34%. All earnings metrics were broadly in line with our forecasts. The disappointment was below the operating lines. FY26 integration costs of $9m will continue into FY27, while new guidance below EBITDA implies a $12-13m impost to pre-result consensus NPBT(A). We leave our FY27 EBITDA forecast unchanged at $200m and continue to think the market underappreciates operating leverage in the core business. But with EPS(A) growth moderating from +34% in FY26 to +16% in FY27F, and FY26 net debt growing to $200m, a 30x forward PE multiple is difficult to justify. We reduce our valuation to ~28x FY27 EPS(A), which sees our target price fall to $4.30 (previously $5.00). We move to ACCUMULATE (from BUY).

IRE’s 1H26 result was softer than anticipated, with slower revenue momentum along with currency headwinds the main drivers. While Group revenue & underlying EBITDA fell short of MorgF by -2%/-4% respectively, earnings quality continued to improve as efficiency program cost improvements saw underlying EBITDA margins from continuing operations improve +330bps YoY. Revised FY26 guidance sees revenue & UPAT expectations lowered by ~4% at the midpoint, however Cash EBITDA guidance of A$119-124m (+19-24% YoY) was raised, supported by efficiency program delivery, more moderate Capex outlook, and a further A$6-9m of cost savings to be delivered over 2H26 (implying 2H26 Cash EBITDA of A$58-63m). We trim our underlying UPAT forecasts by -2 to -6%, which sees our price target reduce by ~7% to A$9.65. Although top line momentum has softened in the half, execution of IRE’s broader efficiency / modernisation story in our view remains on track (albeit early days). We therefore retain our BUY rating.

While interest rates continue to drive investor sentiment towards the A-REIT sector, GPT is controlling the controllables, as operational execution and treasury management combine to see HY26 FFO +5% (vs pcp), or 8.3% when trading profits are excluded. Fund management metrics remain on track, with AUM increasing +4.6% (hoh) to $41.6bn. With the stock trading on a 5% distribution yield and forecast FFO growth of c.4.0-4.5% (pa), sustainable returns should continue for investors. Combined with an 11% discount to NTA and little recognition of the funds management business (c.$90m of EBIT pa), we see downside protection at the current share price. On this basis, we reiterate our Accumulate recommendation with a $5.65/sh price target.

JBH reported a broadly in-line FY26 result, with NPAT up ~3%. However, sales growth slowed in the 4Q, including turning negative in JB Hi-Fi Australia. The July trading update was below market expectations, with 3 out of 4 divisions reporting negative comparable sales growth, and tracking below 1H27 consensus. This was impacted by price increases, supplier stock shortages, weaker consumer backdrop and cycling a strong pcp. We expect some of these headwinds to ease as the year progresses, although the macro trading environment remains choppy. We have downgraded our NPAT forecasts by ~5% in FY27 and FY28, respectively. Our valuation lowers to $82.00 driven by earnings downgrades, offset by rolling forward our model. We maintain our ACCUMULATE rating.

Constellation Software (CSU) acquires, manages and builds industry specific software businesses aka Vertical Market Software (VMS) companies. Uniquely they are perpetual owners of all their businesses. CSU has six operating groups: Volaris, Harris, Jonas, Vela Software, Perseus Group and Topicus, which service customers in over 100 markets worldwide. Each operating group serves as a holding company for dozens of underlying software companies. The company is headquartered in Toronto, Canada, and has offices in North America, Europe, Australia, South America and Africa.

Cash surprise strengthens the dividend outlook - NHC finished FY26 with A$485m of cash, materially ahead of both our forecasts and consensus expectations. The stronger cash position supports our decision to increase dividend assumptions for 2H26 and beyond. FY27 production growth remains intact - Bengalla and New Acland enter FY27 with positive momentum. Bengalla delivered a strong operational finish to FY26 and should benefit from more normal weather conditions versus the start of FY26, while New Acland continues progressing along its ramp-up trajectory towards nameplate production. We maintain a HOLD rating with an increased price target of A$5.45ps.

We attended the Australasian Gaming Expo (AGE) in Sydney last week, which serves as the key annual showcase for the region’s major slot machine manufacturers. Alongside meetings with other suppliers and operators, we attended a Q&A session with ALL management and took a guided tour of its product. Land-based momentum looks solid to us. ALL continues to push new titles onto its existing cabinets while laying the groundwork for the next wave of hardware and the content that comes with it. We made minor changes to our EPSA estimates across FY26-27F (+1%) following stronger assumed land-based gaming performance in the forecast period. Despite the stock trading on c.23x forward PER with a c.2% yield, we continue to see upside potential given the strong momentum entering peak season. However, following recent share price strength, we revise our rating to Accumulate with a 12-month target price of A$70.00 (prev. A$67.00).

Tesla designs, develops, manufactures and sells fully electric vehicles; energy generation and storage systems; and offers related services around these products. The group operates under two reportable segments: (1) Automotive; and (2) Energy generation and storage. Within Automotive, Tesla manufactures five consumer vehicles and in 2022 began early production and deliveries of a commercial electric vehicle, the Tesla Semi. Tesla has product plans to launch a lower priced point vehicle and develop an autonomous Tesla ride-hailing network. Tesla continues to leverage developments in its proprietary Full Self-Driving (FSD) capability, battery cell and other technologies (namely robotics). The energy generation and storage segment includes the design, manufacture, installation, sales and leasing of solar energy generation and energy storage products. Tesla’s stated mission is to ‘accelerate the world’s transition to sustainable energy’.

Berkshire Hathaway, Inc. is a holding company, which engages in the provision of property and casualty insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, and retailing services. It operates through the following segments: Insurance, Burlington Northern Santa Fe (BNSF), Berkshire Hathaway Energy, Pilot Travel Centers (PTC), Manufacturing, McLane, and Service and Retailing.