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

Shaw and Partners rates DUR as Buy, High Risk

Shaw and Partners highlights the strategic shift in Duratec's earnings profile and sector exposure. The company has increased works exposed to energy decommissioning across aging oil and gas assets, alongside building/facades from defence.

In FY25, defence revenue declined to 32%, down -15 percentage points (pp) from FY23, while energy, building and facades rose 5pp to 34%.

Current estimates for energy decommissioning and remediation are $60bn of works and $28bn across the next decade. Aging towers, stricter safety rules, and sustainability upgrades are generating demand for facade remediation.

A Buy, High risk rating is retained. Target price is lifted to $2.20 from $1.90, with the analyst ascribing a higher valuation to the company.

UBS rates RIO as Neutral

Rio Tinto’s September quarter result aligned broadly with expectations held by UBS, with iron ore softer but copper and bauxite strong and 2025 guidance unchanged.

Pilbara shipments of 84mt were flat year-on-year and in line with consensus and the broker, while 4Q production guidance implies to the analysts a record 88mt.

Aluminium and bauxite output exceeded the broker's expectations, with guidance lifted to 59-61mt. Copper rose 10% year-on-year to 204kt, tracking the top end of 780-850kt guidance, with Oyu Tolgoi on course for a greater than 50% lift in 2025, highlights UBS.

The broker retains a Neutral rating and target price of $130.

Citi rates SCG as Buy

Citi made minor adjustments to its net property income and finance cost assumptions for FY25-27 for Scentre Group.

This reflects current macro and market conditions. FFO/share forecasts are broadly unchanged.

Buy. Target unchanged at $4.60.