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

Bell Potter rates CIA as Hold

Champion Iron's FY26 result was weaker than expected by Bell Potter, with softer realised prices and higher unit costs weighing on earnings.

The broker also highlights a reduced final dividend, reflecting management's decision to preserve liquidity amid volatile macroeconomic conditions.

The board recently revised its dividend framework and now targets payouts of 30%-40% of trailing six-month free cash flow (FCF).

Bell Potter expects FCF to improve from FY27 as capital expenditure declines and Direct Reduction Pellet Feed (DRPF) production ramps up.

The broker retains a Hold rating and lowers its target to $4.85 from $5.00.

Morgans rates EDV as Hold

Management highlighted at the Endeavour Group Investor Day the view around the current operating business model as being far too complicated and bureaucratic. A cost reduction of $300m is targeted for by FY29 including $100m in FY27, Morgans highlights.

Changes include "right-sizing" labour, better productivity, simplification of processes and streamlining supply chains.

The dividend payout ratio has been changed to a 50%-75% payout from 70%-75% for better funding optionality. Management is also selling the non-core winery and vineyard assets which opens up the capacity to focus on high-performing brands.

EPS forecasts are tweaked lower with the target price downgraded to $2.80 from $3.30. A Hold rating is retained.

Macquarie rates WEB as Outperform

Web Travel reported total transaction value in FY26 of $5.8bn with a margin of 6.8%, amid strength in AI pricing conversion and direct contracting, which was ahead of Macquarie's estimates.

Whilst operating leverage was evident, underlying EBITDA growth of 23% in WebBeds was slightly below guidance. Uncertainty regarding current trading, amid the impact of the Middle East war, makes achieving its target of 50% underlying EBITDA margin in FY27 unlikely, the broker asserts.

Despite the outlook being obscured by uncertainty and amid FX headwinds that will drag on performance, particularly EUR/AUD, Macquarie assesses the ongoing investment by the company will position it well for a rebound in activity and retains an Outperform rating. Target is reduced to $4.05 from $4.34.