Research notes

The acquisition of two predominantly sensors businesses, in our view, is preferred against acquiring purely software businesses. IMD has paid a full price for ALT and MSI (~15x CY24 EBITDA), though with 55-60% exposed to mining exploration, both should be seeing substantial growth. Perhaps more importantly, IMD has now cleansed P&L costs below EBITDA which will likely trigger EPS downgrades. However, this disregards the strength of the base business, for which volumes have sequentially improved through 2Q, notwithstanding usual seasonal softness. We cut our EPS forecasts by 5% in FY26 as we incorporate ALT and MSI and higher D&A, interest and tax. We also fully consolidate Datarock and Krux. In FY27 and FY28, cuts to our forecasts are marginal (1-2%) as we increase our revenue growth assumption in FY27 from +7% to +10%. Target price to $3.70 (from $3.80).

NXT has announced that following recent customer contract wins, presumably including a large single customer contract win across multiple locations, its contracted utilisation has increased by 71MW to 316MW as at 1 December 2025. Further contract wins were, and remain in, our forecasts so this mostly underpins our expectations. However, we upgrade our capex assumptions and lift our FY27/28 EBITDA forecasts by 5%. Our target price remains $19 per share. The share price has declined ~19% in the last three months and given a ~40% differential between the current share price and our $19 target price we upgrade our recommendation to BUY from ACCUMULATE.

GPT is executing its strategy, growing, and diversifying the group’s management platform across both asset classes and product types, while aligning with investment partners via its significant co-investment. This strategy could see AUM increase from $37bn to >$85bn, driving earnings growth of 5-7% pa, particularly as GPT leverages its $12bn of balance sheet assets to seed new vehicles. We view this strategy as a paradigm shift. Whilst GPT trades in line with peers and toward the upper end of its historical trading range, the outlook should see the business become increasingly capital light (relative to AUM) which may achieve a higher multiple (peer fund managers trade at c.17.5x management earnings + NTA). In the meantime, GPT currently trades at a 4.5% distribution yield and towards NTA, reflecting nominal value for the funds management division. We initiate coverage of GPT with an Accumulate rating and $6.20/sh target price.

CTD has provided an update on its financial statements following a draft report from KPMG. The financial impact and restatement to past financial years is worse than expected and there will now be a material cash impact given impacted clients will need to be refunded. There is still work to be done and CTD is not in a position to quantify this impact at this point. CTD is also not in a position to release its FY25 result. The stock will therefore remain suspended. We place our rating, target price and forecasts under review pending the outcome of audited accounts and fully understanding the amounts that need to be repaid. Given potential brand damage, we highlight the risks around possible contract and staff losses. The potential cash impact could place pressure on CTD’s balance sheet.

A2M has had a stronger than expected start to FY26 and consequently, it has upgraded its sales and NPAT guidance. We have upgraded our forecasts and forecast strong growth from FY27 onwards. While we rate the company and its management team highly, we believe that the stock is trading on fair multiples (FY27 PE of 31.5x and PEG of 1.8x). We maintain a Hold rating with a new price target of A$9.40.

M7T released its strategic transformation plans at its AGM, introducing a customer-focused operating model and the upcoming Flamingo AI platform to drive long-term growth, efficiency, and new revenue through modernised imaging solutions. Despite potential near-term revenue softness, the transformation is well-aligned with industry trends and positions M7T for sustainable growth and signals genuine innovation and a commitment to delivering what radiology customers want. We roll through lower near-term growth expectations and our target price moderates marginally to A$0.76 (from A$0.81). We retain a BUY recommendation.

VEE’s AGM update was softer than expected, primarily due to delays in receiving ASC orders and a hold-up in obtaining security clearance for the Hunter-class propeller project. Additionally, anticipation around the launch of the Mark III gyro led to purchase hesitancy among potential customers in 1H26. These delays have shifted some work to 2H26, which management expects to be stronger, driven by significant contributions from defence (particularly ASC). Following the trading update and updated guidance, we decrease FY26/FY27/FY28F EBITDA by -51%/-28%/-26%. Our target price falls to $1.10 (from $1.66), and with a 12-month forecast TSR of 26%, we move our rating to SPECULATIVE BUY (from ACCUMULATE). While the trading update was disappointing, we believe VEE’s outlook remains positive with multiple growth opportunities across defence (eg, HII, Northrop Grumman, Hunter Class Frigate Program), propulsion (VEEM Extreme, Sharrow), and gyros (Mark III). Timing of order flow remains uncertain, which is likely to cause earnings volatility in the near term. However, the long-term earnings potential of these opportunities remains significant.

FY25 was ahead of prospectus pro forma forecasts at both EBITDA (+4%) and NPAT (+5%) as the company benefited from lower-than-expected operating costs. Excluding the recent Ovun acquisition, EBITDA and NPAT exceeded expectations by +7% and +11%. Looking forward, AIH has reiterated FY26 pro forma prospectus forecasts for revenue of $388m and EBITDA of $62m. With a healthy order book and strong demand tailwinds in key markets, we reiterate our BUY recommendation (Initiation - Precious Cargo). Target price rises to $1.50 (from $1.40) on the back of a stronger pro forma net cash position.

MTO has commenced FY26 positively, delivering +19% sales growth (+6% organic; +13% inorganic) on better-than-expected gross margins (+85bps on pcp). The Peter Stevens Motorcycles (PSM) turnaround and integration process is taking shape quickly, with MTO driving a return to sales growth in October (+16% on pcp). Organic sales growth of +6% through FY26 (4 mths) was a commendable outcome given weak industry volumes through 3Q CY25 (-6%), leading to further incremental organic market share gains for the group (17.8% vs 15.5% pcp). We view a stronger 2H to be driven by a full contribution of PSM (at a normalised run-rate); a seasonally stronger Mojo 4Q; and benefits from the group’s broader initiatives (digital transformation; used volume growth; eCommerce) taking effect. Despite industry conditions remaining cyclically low from a volume and margin perspective, MTO has continued to improve the business, acquiring material scale through PSM, diversifying operations via Mojo, stabilising the cost base and driving organic share gains. We view the valuation undemanding (~11x FY26F PE; ~5% yield), with a material margin expansion opportunity ahead should volumes turn slightly more favourable. BUY maintained.

Catapult Sports Ltd (CAT) is a global leader in sports performance technology that provides a comprehensive all-in-one platform for elite professional and collegiate sports. This encompasses coaching, scouting, analytics and athlete management. Initially landing with its core wearables technology, CAT has since expanded its service offering and opened up new key verticals assisting its penetration into a large addressable market of ~20k teams globally. We forecast strong topline growth for CAT, estimating a ~20% ACV 3-year CAGR, reaching ~US$180m by FY28. A scalable platform and strong SaaS metrics should see CAT join the ‘Rule of 40’ club by FY27. We initiate coverage on Catapult Sports (CAT) with a Buy recommendation and a A$6.25 per share price target.