Research notes

Berkshire Hathaway, Inc. is a holding company, which engages in the provision of property and casualty insurance and reinsurance, utilities and energy, freight rail transportation, finance, manufacturing, and retailing services. It operates through the following segments: Insurance, Burlington Northern Santa Fe (BNSF), Berkshire Hathaway Energy, Pilot Travel Centers (PTC), Manufacturing, McLane, and Service and Retailing.

We are moving our coverage on Gold Hydrogen to our ‘Keeping Stock’ format which will enable us to continue to provide regular and timely updates. We will cease providing a rating, valuation and forecasts, therefore, our previous forecasts, target price and recommendation should no longer be relied upon for investment decisions.

BBN reported FY26 pro-forma NPAT of $16.1m, which was at the lower end of revised guidance range, but represents +33.9% growth yoy. The trading update was solid, reporting +4.3% LFL sales growth in the first 6 weeks of FY27. BBN also provided FY27 pro-forma NPAT guidance of $19-21m which represents ~24% growth yoy, with earnings skewed to 2H (one-third/two-third). We have downgraded our FY27/28 NPAT by $2-3m driven by lower LFL sales growth, less stores, and higher D&A costs. Our valuation lowers driven by earnings downgrades, offset by higher peer multiples. BBN is trading on <9x FY27 PE, which we think is too cheap given the earnings growth profile over the next few years. We upgrade to a BUY (from ACCUMULATE), with a $1.62 price target.

Underlying earnings growth, delivery of cost decline and low bad debts were a feature of the trading update, with lifting momentum behind revenue growth. Forecast changes are immaterial. 12-month target price reset to $33.53/s. TRIM retained, with potential TSR at current prices of c.-9% (including 4.4% yield).

ASX’s FY26 result was in line with expectations. The overall operational performance was positive, showing solid top-line momentum at the group level (+13% on pcp) and growth across all four segments. An elevated near- and medium-term cost profile, however, remains the key drag on the bottom line, on our forecasts. Our FY27-FY29 EPS estimates increase marginally (+2%) factoring in the result and better than previously forecast trading volumes across cash markets and Futures/OTC. Price target increases to A$57.80 (from A$53.90). Hold maintained.

ORA's FY26 result was slightly softer than our forecasts but largely in line with consensus. Key positives: Cans continued to perform well with EBIT up 7% on the back of 6% volume growth. The balance sheet remains strong, supporting the resumption of the on-market buyback following the result. Key negatives: The near-term outlook for Saverglass remains challenging. ORA also recorded a non-cash impairment of $742.8m following a reassessment of the business's earnings outlook relative to expectations at the time of its acquisition in 2023. We decrease FY27-29F underlying EBIT by 5-10%. Our target price decreases to $1.45 (from $1.55) and we maintain our HOLD rating. With the outlook for the Glass business remaining challenging and group earnings expected to decline in FY27, a recovery still appears some way off. While management is implementing initiatives to restore growth, progress is likely to be constrained until consumer demand for wine and spirits improves.

Siemens AG is a technology company which engages in the areas of automation and digitalisation. It operates through the following segments: Digital Industries, Smart Infrastructure, Mobility, Siemens Healthineers, and Siemens Financial Services.

EBITDA was slightly below and Free Cash slightly above consensus expectations. FY27 DPS growth guidance was in-line with consensus, but guidance on Free Cash coverage surprised by implying approximately no FC growth in FY27. The Free Cash guidance indicates TCL is a slower growth stock than implied in its trading yield. If TCL were repriced to APA Group’s yield the share price would trade down towards our $12.53 target price. TRIM into share price strength.

TWE’s FY26 result came in above the top end of its original EBITS guidance range and NPAT beat consensus expectations. While FY27 is a transition year, we think guidance will prove conservative and could be upgraded at the 1H27 result given the progress on inventory rebalancing (ahead of expectations) and the strong depletions growth across key brands. Strategies to improve TWE’s performance are well underway and should result in it returning to solid earnings growth and a strong balance sheet in FY28. We have upgraded our forecasts. With a multi-year transformation program in place, strong management and the strength of the Penfolds brand, we reiterate our BUY rating with a new A$7.30 PT.

We retain an ACCUMULATE, whilst reducing our target to $1.33/sh (from $1.36) following a FY26 result that was in line on FFO and DPS, and FY27 guidance of 8.8cps that sits 2% below the pcp and c.4% below our prior forecast. The shortfall is entirely financing. Comparable NPI growth is guided at +4.0%, but higher debt costs more than offset it. Distributions are held at 8.6c, a 7.1% yield, though at c.98% of FFO this leaves limited retained earnings to fund the developments. Like most of its peers, HDN cannot grow FFO (ps) while debt costs transition higher towards market, something we expect to persist through FY27 and into FY28. Hedging at 68% with 0.8 years of tenor leaves limited protection, and selective asset recycling is now the stated route back below the gearing midpoint. Against that, NTA rose 6.1% to $1.56 in what remains a deep and liquid physical market, whilst the securities trade at a 23% discount (to NTA). On a 7.1% yield with that asset backing, we still see value.