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

Bell Potter rates ANG as Buy

Austin Engineering reported strong 1H25 results, with revenue up 18.5%, exceeding Bell Potter’s forecast by $10m. Underlying earnings (EBITDA) rose 22%, in line with expectations. The order book grew 22% and the dividend was raised 50% to 6cps.

The analyst notes higher activity led to increased investment and working capital, with -$6.8m in one-off costs and a $20m rise in raw materials.

Inventory increased from $43m to $63m, reducing cash by -$20m and shifting from a $9.6m cash position to $10.5m in net debt.

Bell Potter sees continued growth, supported by improved APAC margins, North American expansion, and South American restructuring.

Management's FY25 guidance remains unchanged. Buy. Target price slips to 85c from 86c.

Citi rates HVN as Buy

Harvey Norman's 1H25 earnings (EBITDA) of $507m was below Citi's estimate by -2% but above consensus by around 1%, driven by a strong Australian Franchise performance.

The broker comments sales momentum in Australia remains solid, while New Zealand appears to be stabilising. FY25 earnings (EBITDA) forecast is lowered by -2% but FY26 remains largely unchanged.

Buy rating unchanged. Target price rises to $5.80 from $5.20, reflecting higher market and peer multiples with slightly lower discounts.

The analyst explains its 90-day upside catalyst watch is closed after a 10% stock gain since January 2025.

Shaw and Partners rates VGL as Buy

Shaw and Partners believes it is time to snap up shares in Vista International after FY24 results saw a material lift in long-term margins, particularly in cloud migration. A FY30 cash earnings (EBITDA) margin of 32% is now forecast, versus 23% prior.

Recurring revenue grew by 9% year-on-year, largely driven by the cloud migration, notes the broker, while earnings were a 6% beat against the analysts' forecast.

Management expects strong future growth, with substantial upside from its embedded payments strategy.

Shaw retains a Buy rating, raising the target to $4.10 from $3.00, driven by stronger long-term margin forecasts.