Research notes

CSC has announced a 25% sell-down of its Santo Domingo and Sierra Norte assets to Orion for up to US$360m. The sell-down replicates CSC’s Mantoverde partnership model and reduces CSC’s own equity requirement for development to ~US$420m, fundable from internal cash flows. Buyback right is retained, allowing CSC to reconsolidate Orion’s 25% interest post commercial production at a fixed, pre-agreed price. Maintain ACCUMULATE with a A$16.30ps target price (previously A$16.00ps).

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TWE’s trading update and the removal of guidance is clearly disappointing given a slowdown in China and uncertainty surrounding the timing and quantum of compensation from its previous Californian distributor, RNDC. This is despite TWE reiterating its growth targets two months ago. The fact that TWE is not in a position to provide 1H26 or FY26 guidance demonstrates the uncertainty facing the group in the near term. The new CEO doesn’t begin until the end of this month. We have made double digit downgrades to our forecasts and stress that earnings uncertainty remains high. Consequently, we move to a HOLD rating. We will reassess our investment view post hearing from the new CEO.

MI6 released updated metallurgical test work results for its 2.3Moz Au Bullabulling Gold Project, located just ~65km from Kalgoorlie. Results outline consistent gold recoveries between 90-95% which are materially higher than historical actuals (87%) and MorgansF (86%). We update our model to adjust for increased recoveries, lifting our average annual production forecasts to 176koz Au per annum (previously 160koz Au). We maintain our SPECULATIVE BUY rating, price target A$0.55ps (previously A$0.50ps).

The PME share price has bounced around since the initial positive reaction on the release of its FY25 result, however we failed to find new and material information to warrant upgrades and at the time maintained our TRIM call. Market volatility has weighed on high growth names since, and the absence of new material contracts signings has taken some momentum away from the stock and within range of our target price. PME continues to trade on elevated multiples, even at our target price with FY26F PE of ~200x, EV/EBITDA ~130x, and PEG ratio of 5x. While these metrics reflect the company’s exceptional quality and growth profile, they also imply limited valuation support in the absence of new large contract announcements which is an opaque and often protracted process. At current levels, the risk-reward profile justifies a more balanced stance. Buyers on weakness, trimmers on strength. Following a model roll forward, the valuation increases marginally to A$290 (from A$285) and our recommendation on Pro Medicus upgrades to HOLD (from TRIM), as the share price has now retraced to neutral territory versus our target price. This move is entirely valuation-driven, with no changes to our forecasts or model assumptions.

We update our model for TCL’s September quarter traffic data and US$ bond issue. 12 month target price lifts 51 cps to $13.39/s, due to c.3% forecast free cash flow upgrades reflecting mild upgrades to EBITDA (especially Brisbane and North America) and adjustments to capital management and debt service assumptions. We upgrade from TRIM to HOLD given the potential TSR (0%) at current prices.

The ACCC has finally approved ELD’s acquisition of Delta Agribusiness, subject to six store divestments (not material to earnings). ELD has provided FY25 guidance which was 9.3% below forecast at the mid-point. While its 2H25 performance was disappointing, the improved seasonal conditions didn’t eventuate until the 4Q. Importantly, FY26 should benefit from a positive rainfall outlook, higher selling prices, acquisitions and the transformation projects. We retain a BUY recommendation with a new price target of A$8.50.

The 1Q26 played out largely as expected with comp sales growth improving slightly through the quarter as GYG cycled through a period of elevated demand in the pcp (IPO and ‘Clean is the new Healthy). Our forecasts are largely unchanged. Whist comp sales growth is tracking below our FY26 forecast of +5% (which is in line with VA consensus), GYG continues to expect comp sales growth to improve from 1Q26 levels. We see higher comp sales growth being delivered in 2Q26 (MorgansF is +6.0%) driven by Caesar (already driving improved comp sales growth) and cycling an easier comparison (on a two-year stack GYG is cycling +9.4% in 2Q compared to +10.2% in the 1Q). In our view, 1Q26 will likely be the low point for comp sales growth this year and accelerating comps combined with conservative margin guidance should continue to drive the stock higher from here. Maintain BUY.

Copper prices are up +11.5% in the last month and CSC, in our view, remains the most leveraged to further price upside. Operations at Mantoverde and Pinto Valley are recovering from 3Q25 interruptions. A partial asset sell down at Santo Domingo is imminent. Higher near-term copper prices and a revised blended valuation lifts our Target Price to A$16.00ps (previously A$12.10ps). Move to an ACCUMULATE rating (previously BUY).