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

Macquarie rates BKW as Neutral

Brickworks and WH Soul Pattinson ((SOL)) announced intention to merge, which will unwind longstanding complex cross-holding structures between the two companies.

Macquarie explains a new entity, TopCo, to be renamed Washington H. Soul Pattinson ((SOL)), will issue stock to the respective shareholders, with WH Soul Pattinson, Brickworks and new investors receiving around 72%, 19%, and 9% of the stock, respectively.

Shareholders in Brickworks will receive 0.82 shares in TopCo, implying a value of $30.28 pre-deal (and $35.26 on spot), a premium to the past tax NAV, and is subject to a favourable ATO confirmation, Macquarie highlights.

The merger will create a $14bn group with a more diverse asset base, including WH Soul Pattinson's private and public investments, while Brickworks will increase the property exposure by around $2.2bn to 19% of the combined portfolio.

Neutral rated with target price raised to $32.20 from $26, marking to market WH Soul Pattinson, which will raise $550m initially.

Morgans rates EPY as No Rating

EarlyPay's FY25 trading update highlighted lower client activity in 2H25, mainly in invoice financing, leading the company to downgrade EPS guidance to 1.8c from 2.2c. 

Morgans notes Solvar ((SVR)) recently acquired a 19.9% stake in the company, and there's a possibility of commercial engagement between the two companies. There's also potential for Solvar to take full control in time.

Share buyback is currently suspended until a transaction possibility exists. The broker has no rating or target price on the stock.

Citi rates QRI as Buy

Citi cut dividend forecasts for Qualitas Real Estate Income Fund after factoring in the house forecast for lower Australian interest rates.

FY25-27 dividend forecasts trimmed by -6%.

Buy. Target unchanged at $1.60 on valuation roll-forward.