Research notes

ALQ's recent share price weakness reflects a perfect storm of headwinds – slowing organic growth from offshore peers, FX pressure, Middle East exposure, and concerns around fuel availability. We have sought to capture the first three in our forecasts and see limited net impact at the group level, as softer Life Sciences growth is offset by a stronger Commodities outlook. Fuel availability is an unknown, though we view any disruption as a blip given juniors’ balance sheets and supportive commodity prices. Copper is trading at all-time highs (US$6.65/lb) and the GDXJ is back around the 2011-12 cycle peak, when exploration spend topped US$20.0bn. This is +65% above CY25 spend (US$12.4bn) and over +125% higher in real terms. On forecasts, we cut FY27 Life Sciences revenue by -6% on FX, and move Commodities higher by +3%, which is earnings-neutral. Our TP rises to $27.20 (from $25.30) on valuation roll-forward. ALQ reports on Monday 18/05.

1Q26 updates from key offshore peers have shown broadly positive read-throughs for BRG, despite an ongoing challenging consumer and macro backdrop. We consider small domestic appliance peers with a premiumisation focus (DLG / KitchenAid), innovation-led NPD (SN), high Coffee exposure (DLG) and ongoing geographic expansion (all) as holding strong relevance for BRG. Sales momentum across these select peers in 1Q26 (DLG +6.6%; Ninja brand +9.1%; KitchenAid +10%) appears broadly positive and supportive of our view for ongoing outperformance from BRG. BUY maintained.

EBR has secured a purchasing agreement with HCA Healthcare, one of the largest healthcare systems in the US, representing an important commercial milestone. We believe the agreement not only should support more efficient procurement and contracting processes, building on US commercial momentum following strong 1Q implant growth, but also reinforce management’s recent commentary around increasing engagement with large IDNs and GPOs, which we view as critical to scaling adoption over time. We continue to view EBR favourably given growing physician enthusiasm, expanding reimbursement support, increasing repeat utilisation and emerging evidence of institutional validation. We make no changes to CY26-28 forecasts or A$2.47 DCF-based valuation. BUY.

3Q26 delivered a strong operational period, with core testing revenue doubling YoY and volumes tracking to FY26 guidance of 24k+ tests. Record Microbiome Explorer volumes in both AUS and the UK, accelerating clinic account momentum and a meaningful improvement in cash outflows were the highlights. Despite the strong Explorer trajectory, MetaPanel is a slower burn than expected so happy take a more conservative stance on the ramp here. Likewise, headed into a tougher discretionary spending environment, we re-map expectations to what we view as base-case growth scenarios while rolling through higher risk-free rates and remove Therapeutics from our SOTP. We retain our Speculative Buy, but our target price reduces to A$0.15 (from A$0.29). The operational momentum is in train, the catalyst pipeline is building, and any therapeutics transaction remains a free option, but the macro backdrop warrants a more conservative hand on the dial for now. Cash remains tight but a flagged "significant corporate transaction" adds intrigue. Sounds imminent.

DNL’s 1H26 result was materially stronger than expected. After a stronger than expected 1H26, DNL would have upgraded its FY26 Explosives guidance had it not been for a stronger AUD, cost headwinds given the conflict in the Middle East and stranded costs post the sale of Phosphate Hill. We have made material revisions to our FY26 forecasts reflecting the sale of Phosphate Hill for a poor price. Moving forward, DNL is now a pure play explosives company. We have made modest upgrades to FY27/28. In its first year with no Fertilisers, DNL is trading on a fair FY27F PE of 17.9x and EV/EBITDA of 9.3x. We maintain a Hold rating with a new price target of A$3.46.

FY26 guidance was downgraded on China Albumin price pressure, US Ig channel inventory normalisation and other impacts (paused Iran sales, lower Hemgenix and and Iron sales), combined with a further cUS$5bn in flagged impairments. Importantly, issues are framed as primarily executional rather than structural, with infrastructure overbuild, organisational complexity, and weak commercial execution cited, while underlying demand and industry structure remain healthy. Encouragingly, Seqirus is performing better than expected, Ig demand remains mid-to-high single digit, and there are early signs of plasma share stabilisation. While forward earnings visibility remains limited, we believe the current valuation increasingly discounts a structurally impaired plasma franchise, which we do not believe the current industry dynamics support. We reduce FY26-28 forecasts and lower our blended DCF, PE and EV/EBITDA-based target price to A$147.59. Given CSL’s global leadership positions, structurally growing end markets and operational initiatives, we retain a BUY rating.

SKY continues to advance Tallebung toward development, with approvals momentum building and drilling continuing to support resource growth and project confidence. Recent drilling has returned high-grade tin mineralisation alongside meaningful silver and tungsten results, with both commodities trading at or near all-time highs. We maintain our SPECULATIVE BUY rating and A$0.35ps price target, uplift a function of an increase to our bull case following sustained tin price appreciation.

MQG delivered a very strong FY26 result with NPAT (A$4.8bn) up +30% on the pcp and +8% above company-compiled consensus. Whilst acknowledging this result was aided by significant volatility in commodity markets that assisted CGM, MQG’s performance was generally strong across the board. We increase our MQG FY27F/FY28F EPS by +9%/+2%. Our price target rises to A$248 (previously A$223) on our earnings changes and a valuation roll-forward. MQG is a quality franchise, and a proven performer, but with <10% upside to our PT, we maintain our Hold call. We increase our MQG FY27F/FY28F EPS by +9%/+2%. Our price target rises to A$248 (previously A$223) on our earnings changes and a valuation roll-forward.

REA's 3Q26 result was driven by a strong yield outcome (+14%) in the resilient domestic residential business, and new listings also returning to growth (+1% on the pcp). FY26 Operating cost guidance being lowered was a key takeaway. We make minor revisions to our FY26-FY28F EPS forecasts (-0.5%) reflecting the lowered cost guidance, offset by a more conservative FY27 yield assumption. Our DCF-derived price target is lowered slightly to A$219 (from A$220). BUY.

SKS’s $22m contract win for the new Coles head office sees the group work in hand expand to $355m ($270m for FY27), with SKS’s Tenders pipeline exceeding $1.2bn (of which >$1bn relates to prospective data centre projects). SKS’s share price momentum increasingly reflects confidence in the group’s strong FY27 outlook, and ability to win a greater share of its healthy pipeline of prospective data centres. We lift our PBT forecasts by ~12-15% in FY27-28F, reflecting our expectations for further conversion of SKS’s share of this pipeline over the year ahead. We retain our ACCUMULATE rating with a revised PT of $8.95/sh.