Research notes

ORI’s FY25 result slightly beat consensus. It delivered another year of strong earnings and cashflow growth, improved margins and returns. Its strong balance sheet rewarded shareholders with increased capital management initiatives. The outlook remains positive and further growth is targeted in FY26. Importantly, ORI has upgraded its medium-term growth targets for Digital Solutions and Specialty Mining Chemicals and its new 3-year RONA target has increased. With leverage to attractive industry fundamentals, market leading positions, solid earnings growth, proven management team and strong balance sheet, we reiterate our BUY rating with a new price target of A$28.00.

Diageo is a global leader in premium alcoholic beverages and the number one player in the international spirits category. The company owns nine of the world’s top 30 spirits brands and operates across multiple categories including Scotch whisky, vodka, rum, gin, tequila, beer, ready-to-drink (RTD) products and liqueurs. Its portfolio features iconic names such as Johnnie Walker, Crown Royal, Buchanan’s, Windsor and Bushmills whiskies, Smirnoff, Cîroc and Ketel One vodkas, Captain Morgan rum, Baileys liqueur, Don Julio tequila, Tanqueray gin and Guinness stout.

DMP’s FY26 AGM update was positive, in our view, given the company is on track to exceed FY26 consensus NPAT, cost out was quantified, and its gearing metrics are improving. The trading update was weak, with Same-Store Sales (SSS) growth still negative; however, we think this is somewhat irrelevant while the business transitions to its new pricing strategy to drive higher margin sales for franchisees given the noise around the short-term volume impact of less discounting (i.e. lost sales were unprofitable anyway). While DMP’s share price has recently increased ~55% off its lows on the back of potential corporate activity, the stock is still only trading on a FY26F PE of 16x which is a ~30% discount to CKF. With improving confidence in the turnaround, we continue to think the risk reward looks attractive from here. Maintain BUY.

3Q25 results were broadly in line with expectations, with cash burn increasing US$1.7m to US$13.1m, mainly on higher SG&A and adequate funding for more than five quarters (cash US$73m). Importantly, case volumes increased 3x q/q, despite limited reimbursement, with sales up US$342k (201%) to US$512k, reflective of growing confidence among physicians and patients. We continue to view the phased US rollout as disciplined, with higher case volumes, new hospital agreements, and expanding physician training programs supporting controlled adoption ahead of the broader 2026 launch. We make no changes to CY25-27 forecasts, with our DCF-based valuation retained at A$2.86. BUY.

Hermès International, a French high-fashion luxury goods manufacturer, was founded in 1837 by Thierry Hermès. Hermès is known for its high-end craftsmanship. It specialises in leather goods, lifestyle accessories, home furnishings, fragrances, jewellery, watches, and ready-to-wear apparel. Many of its products have an equestrian theme, reflecting Hermès’ heritage in saddle making. Some of Hermès products, notably the Birkin and Kelly handbags, as well as its silk scarves, have attained iconic status in consumer culture.

Aristocrat Leisure (ALL) delivered a solid FY25 result, posting healthy yoy growth following the sale of Plarium and full inclusion of NeoGames. Headline numbers were broadly in line with both our and market expectations, though a few soft spots emerged beneath the surface. Interactive (online casino-style games) was weaker than expected and punished, given it’s a smaller, faster growing segment, core to longer-term growth plans. Gaming Operations in North America (NA) were also soft, with only 4.1k net adds and lower-than-expected fee-per-day metrics weighing on performance. Encouragingly, management expects the business to return to its normalised growth range moving forward. We see no structural shift in market dynamics and remain comfortable with the outlook. ALL reiterated its qualitative guidance for constant currency NPATA growth in FY26 (MorgansF: +10%). Following the result, our EPSA forecasts decrease ~6% across FY26-27F. Given recent share price weakness and a more compelling valuation, we upgrade ALL from Accumulate to Buy, with our 12-month target price reduced to $73 (from $77).

TTX posted its 1Q26 cashflow report and held its AGM noting the business is on track (clinically and regulatory) across its key verticals – bone regeneration, tissue spacing and tissue healing. The cadence of newsflow is expected to continue and maintain investor interest. We have made no changes to forecasts or target price. Our recommendation is maintained as a SPECULATIVE BUY.

BRG's share price has retreated ~16% following the FY25 result, which we attribute to expectations of muted earnings growth in FY26 as the group navigates tariff-related margin pressure and an uncertain consumer discretionary backdrop. We view this weakness is more warranted for mass-market exposed peers such as Groupe SEB (SK-FRA) and Newell Brands (NWL-US), which have delivered softer updates amid consumer demand pressure (~30% share price decline). However, we believe BRG's premium positioning, strong focus on new product innovation, and leverage to the coffee category position it to better withstand these pressures. We are encouraged by recent positive updates from peers who share key attributes with BRG, including strong new product innovation and geographic expansion (SharkNinja; SN-US), premium brand positioning (KitchenAid / Whirlpool; WHR-US) and growing coffee category exposure (both). We view recent weakness in BRG as an opportunity to build a position in a high-quality, well-managed business, with structural coffee tailwinds. Upgrade to BUY.

Revenue growth was outpaced by cost growth and loan impairment charges. The net result was c.1% profit growth, which is less than the 1.7% benefit from 1.5 additional days in the period (and that was with the benefit of seasonally low IT vendor spend which continues to rise). While the market wasn’t expecting much earnings growth (c.2% for 1H26, and we were more bullish than consensus), growth was weaker than these expectations. The market’s response to a mild earnings miss for a stock priced for perpetual perfection was today’s sharp share price decline. WBC seemed to be a beneficiary. We’ve downgraded FY26-28F EPS and DPS by c.3%. Lower earnings also reduces terminal ROTE and sustainable growth in our DCF valuation. DCF-based target price declines to $96.07/sh. We remain SELL rated on CBA, recommending clients aggressively reduce overweight positions given the risk of poor future investment returns arising from the even-now overvalued share price and low-to-mid single digit EPS/DPS growth outlook.

Unpacking the current pipeline of data centre projects within SKS’ key Victorian market, we believe there is a high degree of visibility over ~$17.9-27.6bn of data centre projects to be undertaken by a number of key market participants. We estimate that this pipeline of Victorian projects could equate to ~$3.6bn of potential contract value (to be realised over the coming years) for electrical contractors such as SKS. This in our view provides strong visibility over the outlook for the company and the sector over the coming years. We therefore reiterate our ACCUMULATE rating with a revised price target of $3.80/sh (previously $3.15/sh).