OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Macquarie rates HMC as Outperform

HMC Capital’s outlook is improving, assesses Macquarie, as FY26 pre-tax OEPS guidance of at least 40c is re-affirmed and key strategic concerns begin to clear.

The REIT is viewed as undervalued relative to its fund-management potential, despite conservative growth assumptions.

The broker sees progress on Healthscope, data-centres and US asset sell-downs, and third-party capital partnerships as central to restoring confidence.

The analyst highlights the Neoen process as well-progressed, with an independent valuation materially above cost supporting the de-gearing pathway.

Outperform rating and target of $4.90, following a period of research restriction.

Morgans rates JHX as Upgrade to Buy from Accumulate

James Hardie Industries is the highest quality building products business on ASX, Morgans asserts, upgrading the stock to Buy from Accumulate. Market conditions are more stable and inventory levels have normalised.

Hence the company's upgrade of full year guidance, with FY26 adjusted EBITDA increasing 11% to $1.2-25bn.

The broker found the outlook incrementally more positive than previously anticipated and envisages upside from both earnings and an undemandiing P/E ratio. Target is reduced to $35.50 from $38.50.

Citi rates NUF as Upgrade to Neutral from Sell

Along with an improved outlook on Nufarm following FY25 results, Citi sees upside risks to Omega-3 earnings, easing balance-sheet risks and believes the CEO transition is unlikely to disrupt this positive momentum.

Rating upgraded to Neutral from Sell. Target rises to $2.55 from $2.35.

Summary of Citi's comments post-results and conference call follow:

After the conference call, Citi has an improved outlook on Nufarm. Among the highlights are supportive Crop Protection conditions, margin gains in Omega-3, reduced supplier-finance use, stable fish-oil assumptions, and lower, more focused FY26 R&D.

On first take, the broker pointed to an earnings beat with a positive outlook statement, which it expects would support the shares.

Underlying earnings (EBITDA) of $302.5m were better than expected and within guidance, while margins beat at 8.8% despite more elevated corporate costs versus expectations. Crop protection in North America, Asia and Europe assisted.

Omega-3 and Carinata, the emerging platforms, generated a loss of -$53m at the EBITDA level and net interest expense was above expectations by 10-14%. Net free cash flow was negative -$131m, with Nufarm seeking to generate positive free cash flow in FY26.