In Brief: Novonix, Catapult & Online Retailing

This story features NOVONIX LIMITED, and other companies. For more info SHARE ANALYSIS: NVX

The company is included in ASX300, ALL-ORDS and ALL-TECH

This week’s In Brief offers insights into a company winning the tariif war; a sports growth tech star and how retailers performed online in May

-Novonix a ‘chicken-dinner’ winner with US trade tariffs
-Sports Tech and AI meet with Catapult’s latest acquisition
-Online retails sales slip in May, which categories and companies were the winners/losers?

By Danielle Ecuyer

This week’s quote comes from Josh Nelson, head of Global Equity, T Rowe Price

“We are returning to an investing environment in which more sectors and regions can generate meaningful returns; an environment demanding diversification and favoring active management. The broadening of equity market leadership is likely to favor value stocks and select emerging markets.”

Synethic rutile supply chain in focus for Novonix

Pouring through the beneficiaries or potential companies impacted by US tariffs is an ongoing process for analysts, with so much uncertainty around where the final numbers will fall, and on which countries and industries.

Having said so, Petra Capital featured Novonix ((NVX)), producer of synthetic graphite, as a standout winner from US trade restrictions.

Post the latest London talks between China and the US, China has agreed to a six-month limit on rare-earth export licenses in lieu of US concessions on Chinese students in the US.

Rare earths and raw battery materials are at the centre of the US/China trade skirmishes, with Chinese natural graphite subject to multiple US tariffs and penalties, the analyst explains.

Enter Novonix as one of the very few beneficiaries from graphite tariffs.

Petra calculates total cumulative tariffs potentially sit between 41% to 756%, with more anti-dumping measures to be determined in July. For battery and electric vehicle manufacturers, the input graphite prices will be much higher for anode products, with few alternative suppliers to Novonix.

The company has a complete US domestic supply chain. The feed comes from US Gulf oil refineries, and its plants are in Tennessee.

Novonix’s Riverside plant, which is due to start producing battery-grade synthetic anodes later this year with capacity of up to 20ktpa in 2026, plus an additional 30ktpa from Enterprise South, will supply existing offtake agreements with Panasonic, Stellantis, PowerGo, and LG.

The Riverside plant has received a grant from the US Department of Energy for US$100m and a US$103m tax credit, as well as US$30m from LG Energy Solutions plus US$150m from Phillips66 (the likely feedstock supplier).

The Department of Energy also offered a direct loan of up to US$754m to the Enterprise plant.

Stellantis has a six-year commitment for up to 115,000 tonnes starting in 2026 to cell manufacturers LG Energy Solutions and Samsung.

-PowerCo has a minimum 32,000 tonnes for five years, starting in 2027.
-Panasonic Energy has a 10,000-tonne commitment for four years.
-LG Energy Solutions has an option to acquire up to 50,000 tonnes over ten years.

Petra Capital has a Buy rating and a 77c target price.

Catapulting into AI

Using cash reserves of US$3m and an equity issue of US$15m, Catapult International ((CAT)) announced the acquisition of Perch for -US$18m, a Boston-based sports technology company that offers off-field, AI-integrated athlete monitoring solutions.

Canaccord Genuity believes Perch is an advantageous strategic bolt-on acquisition, which reflects management’s aims of adding accretive and tuck-in acquisitions for the company.

Perch’s technology employs a combination of a 3-D camera with proprietary AI, which tracks athletes in the weights room and offers insights into performance to assist in personalised training programs.

The insights will be integrated into Catapult’s existing on-field wearable tech, which is designed to offer professional teams an end-to-end athlete monitoring solution.

Perch’s exposure to largely American football athletes offers a synergistic overlap with the company’s existing clients while improving the annual contract value per team, which is expected to be US$27k/team in FY25.

There is also scope for cross and upselling in other sports, an extension out to the international market and the existing 3,600 pro teams.

With Perch profitable, and annual contract values running at US$2.5m, the analyst forecasts the annual contract value for Catapult to rise by 2% in FY26 to US$122m.

Canaccord Genuity explains the robust rally in the share price is indicative of increasing awareness around the earnings quality of the company and the size of the sports tech market at over US$71bn, combined with a leadership position, which is expected to underwrite over-trend growth over the longer term.

A Buy rating is retained with a target price of $6.20, up from $5.

FNArena’s daily monitored brokers consensus target price is $5.90, with two Buy-equivalent ratings and one Hold.

Online shopping remains below pre-COVID levels

Jarden reports online web traffic for May slipped around -3% compared to the previous year and was below the April run-rate of a -1% decline due to weakness in meal kits, footwear, and the marketplace.

While there has been some pick-up in online share, globally, the trend has illustrated a declining rate of market share gains as consumers return to stores and employ omnichannel shopping, including click-and-collect.

Breaking down into sectors, the analyst highlights department stores sales rose 3%, as did household goods, alongside ‘other’ (which rose 15% on a year earlier). Those were the outperformers.

Meal kits declined -22%, footwear dived -21%, and the marketplace retreated -15%, in part relating to Wesfarmers ((WES)) closing Catch.

In terms of brands, Mocka rose 67%, Big W up 24%, Total Tools up 19%, Harvey Norman ((HVN)) up 16%, Bunnings up 11%, and Temple & Webster ((TPW)) up 10%.

By contrast, Footlocker fell -55%, Adore Beauty Group ((ADY)) down -18%, Home Hardware off -17%, Universal Store down -15%, BCF down -15%, Mitre 10 down -15%, and David Jones off -11%.

With the Federal election in the rear-view mirror, Jarden is increasingly positive about consumer spending, with household deposits rising and house price growth (ex-Victoria), estimating double-digit growth in discretionary cash flow for families in FY26.

Jarden recently upgraded its estimates for household goods on improved housing activity, which should be positive for Harvey Norman, Temple & Webster, JB Hi-Fi ((JBH)), Neutral rated with a $95.50 target, and Beacon Lighting (BLX).

In the retail sector generally, the broker also highlights a preference for Flight Centre ((FLT)), Buy rated with a $19.30 target price, Sigma Healthcare ((SIG)), Universal Store Holdings ((UNI)), and Woolworths Group ((WOW)). The latter is Overweight rated with a $36.30 target.

Coles Group ((COL)) is Neutral rated with a $20.60 target price, and Super Retail ((SUL)) is Overweight rated with a $14.80 target.

FNArena’s daily monitored brokers consensus target price for the latter is $5.90, with two Buy-equivalent ratings and one Hold rating.

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