Research notes

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.

4Q25 spodumene production fell -10% qoq, but the result was lifted by sales which were +4% qoq. LTR finished FY25 with A$156m of cash (-10% qoq). FY26 will be a transitional year with production and cost reductions to be 2H26 weighted as LTR ramps up underground mining. We maintain our SELL rating with a A$0.56ps target price (previously A$0.50ps)

We note two successful events for APA in the last week or so, one in unregulated M&A and the other in dealing with the regulator on an acquired asset. While these wins are positive, we think the market’s focus will in time again be drawn to APA’s very material earnings and cashflow decline coming in less than 10 years’ time, which provides a meaningful headwind for equity value uplift and DPS growth. 12 month target price lifted to $7.60/sh. At current prices, we retain a TRIM rating given potential TSR of -c.4%.

REH provided a weak trading update on the back of ongoing soft housing market conditions in both ANZ and the US. Management has guided to FY25 group EBIT of between $548-558m. At the midpoint, this was ~5% below our forecast and ~6% lower than Visible Alpha consensus. We decrease FY25/26/27F group EBIT by 5%/7%/7%. Our target price falls to $14.80 (previously $18.70) and we downgrade our rating to HOLD (previously BUY). While we continue to see REH as a good business with a strong culture and long track record of growth, the near-term housing market outlook remains uncertain. We therefore prefer to wait for a further update on operating conditions at REH’s FY25 result on 25 August before potentially reassessing our view.

Back in Apr-25 PPE provided a 3Q25 update with EBITDA for the quarter at $6.3m, down 9% on the pcp. While in FY24, PPE delivered 4Q EBITDA of $9.8m, a benchmark which is unlikely to be beaten in 4Q25, given amongst other factors the timing of Easter. This note sees us adjust down our 4Q25 earnings expectations ahead of the full year result. It remains our expectation that PPE’s earnings are bumbling along the cyclical low, whilst the business is also trading at a relatively low PER multiple (8x FY26F). We reiterate our Speculative Buy rating and price target of $1.05/sh, pending a cyclical turnaround (the timing of which remains uncertain).