Research notes

Exploration activity is poised to accelerate. Our proprietary raisings data indicates that geochemistry sample volumes will be trending up +20-30% in November which will be a key positive catalyst for the stock. Despite a sharp rise in volumes, we forecast FY26 Commodities revenue to grow +12% (from +10%) as price lags volume and downstream (metallurgy) lags upstream (geochemistry). In FY27, we forecast +20% revenue growth in Commodities (from +12%). This sees our FY26 NPAT forecast largely unchanged (+1-2%) but our FY27-28 forecasts rise by +7-8%. Our target price increases to $24.60 (from $20.00).

RIC produces premium quality, high performance animal nutrition products. Its recent acquisition of Incitec Pivot Fertilisers (IPF) distribution business has now transformed RIC into a leading diversified Australian agricultural services provider. Similar initiatives that successfully turned around the base RIC business over the last few years can now be applied to IPF, underpinning solid earnings growth. Despite strong share price appreciation since announcing the acquisition of IPF, we are positive on the group’s future prospects and initiate coverage with an Accumulate rating and A$3.25 price target.

APE has executed on two highly strategic transactions: 1) taking a majority interest (65%) in CanadaOne Auto; and 2) Mitsubishi Corporation acquiring 20% of EA132. As part of the transactions, APE is conducting an underwritten entitlement offer (to raise A$452m) and Mitsubishi is investing A$50m in APE via a placement. The combined deals are ~15% EPS accretive (on LTM financials to June-25). APE’s opportunity set has expanded, with the business having levers for a material earnings step-up over time across: domestic franchise auto (market share and margin); Canadian auto retail (significant market share opportunity); Independent used (global opportunities); and ancillary opportunities (enabled by scale).

NHC delivered increased production through FY25, reduced its FOB costs, and maintained both a high dividend yield and a strong net cash position, reinforcing its operational discipline and financial resilience. NHC’s strengthening production profile is underpinned by low-cost, high-margin, long-life assets. We think that thermal coal pricing has found its natural floor and that NHC offers a resilient, high-quality exposure to the next coal price cycle. NHC looks cheap, but does suit patient/ value investors, particularly as catalysts for thermal coal look limited in the short term. We rate NHC an ACCUMULATE with a target price of A$4.35ps.

DNL’s trading update was materially stronger than expected for the business it no longer wants, Fertilisers. Explosives in on track to achieve previous guidance. We have made material upgrades to our FY25 and FY26 forecasts for a much higher DAP price. However, given DNL is likely to close Phosphate Hill from September 2026, we have made material downgrades to our FY27 forecasts reflecting the highly dilutive nature of this decision. In its first year with no fertilisers, DNL is trading on a full FY27 PE of 18x and EV/EBITDA of 8.6x. We prefer ORI for exposure to the Explosives industry.

Following recent share price weakness, we upgrade TPG to an ACCUMULATE recommendation. Our target price remains unchanged at $5.50. Recent challenges facing Optus could benefit Vodafone’s mobile growth while TPG’s upcoming capital management initiatives could deliver share price upside.

Given the strong outlook for South East Queensland construction markets and the WGN share price, the business has taken the opportunity to raise an additional $30m via an institutional placement, while the Wagner Family has sold an additional $36m of stock to reduce their holding to c.44%. Despite 14% of share on issue being transacted in the past month (across these transactions), the stock is up c.8.2%. Despite the strong demand signals across South East Queensland (SEQ) and our expectation this can drive earnings higher in FY27/28, a stretched valuation sees us reduce our recommendation to a HOLD with a $2.90/sh price target.

We re-initiate coverage on Ramelius Resources (RMS) with an ACCUMULATE rating and price target of A$4.00ps. RMS is our preferred gold pick in the ASX gold producer space, underpinned by consistent cash generation, operational performance, a defined growth pipeline at Dalgaranga (acquired via ASX.SPR) and the 3.2Moz Au Rebecca-Roe project. The company’s operational track record in extracting margins, paired with SPR’s high-grade resource base and existing infrastructure, creates a platform for sustained, meaningful free cash flow - blending operating expertise with orebody quality. With a pipeline of growth, cash generation and capital management, we believe RMS holds a competitive advantage over its mid-tier peers.

Symal Group (SYL) is a vertically integrated self-performing contractor spanning civil contracting, plant hire, and material recycling. Despite SYL continuing to deliver strong returns on capital across diversified and resilient end markets, the stock is trading at a PER half its peers, and we believe investors are over discounting the risks associated with construction contracting. For example, if we compare SYL’s contingent liabilities (bank guarantees) to revenue, its exposure (along with margins) is in line (if not above) with peers. Our conviction in SYL’s risk management is further supported by strong cash conversion and substantial insider ownership. On this basis, we rate SYL a BUY with a $2.40/sh target price.

ACF’s strategy has focused on supplementing organic growth with complementary acquisitions, enhancing scale and enabling entry into new markets. We estimate that 58% of EBITDA growth between FY18-25A was driven organically, while 42% came from acquisitions. Over the past two years, ACF has strengthened its Industrial Access offering through four acquisitions. If ACF hadn’t done these deals, we estimate that FY24A-26F underlying EPS would be between 4-18% lower. We make no changes to earnings forecasts and maintain our BUY rating and $1.32 target price. Trading on 9.8x FY26F PE with a 5.3% yield, we continue to view ACF as an attractive investment with the company’s long-term growth prospects remaining strong despite some near-term uncertainty around the commencement of key projects.