Weekly Reports | Jul 04 2025
Structural growth and challenges are in focus this week for In Brief's stock snacks with those companies benefitting from longer term trends or impeded by uncertainty.
-Supercharging SuperLoop's outlook
-Defense stock Austal in the slip stream on government investment revival
-Motorcycle Holdings grabbed some market share from administrators
-Nanosonics squeezed by competition and changing healthcare policy
By Danielle Ecuyer
Quote of the week comes from Stephen Innes, SPI Asset Management.
"We're still in a world of rising geopolitical tension, un-anchored fiscal policy, and growing skepticism over the long-term integrity of the global dollar system. These aren't short-term narratives, they're structural. And gold is one of the few assets with a proven track record of outperforming when confidence in fiat regimes starts to wobble."
The trifecta update on SuperLoop
At the risk of Superloop ((SLC)) becoming a regular for In Brief, Wilsons' and UBS' reports caught our attention this week post the company's upgraded FY25 guidance.
For background, Superloop appeared in November 2024 and May 2025 and is a case in point of where the author now wishes she'd acted on the updates. For more reading see links:
https://fnarena.com/index.php/2024/11/29/in-brief-superloop-qantas-jumbo-qualitas-gqg/
https://fnarena.com/index.php/2025/05/16/in-brief-superloop-woolworths-ampol-in-focus/
The Superloop story continues to improve. The latest guidance upgrade, while largely discounted in the market judging by the sanguine share price response, included nevertheless yet more good news.
Wilsons highlighted broad growth across all businesses, with organic subscriber growth remaining robust and Origin Energy ((ORG)) volumes continuing to be better than expected. April retail price rises on Superloop's consumer NBN plans pre-emptively ahead of the July NBN cost increases should assist margins. In addition, the analyst notes Symbio has also remained part of the network, adding further earnings accretion.
To achieve the company's revenue target of over $700m by FY26, Wilsons views M&A as a possibility, with the broker's forecast needing to advance to 28% growth from 19% currently to reach $650m. Without add-ons, consumer subscriber growth would need to rise to 28% from the current forecast of 17% to achieve over 500k in FY26.
Due to the deal structure with Origin, whereby Origin receives $5m in Superloop shares for every 50k Origin broadband subscribers, or $100 per subscriber, the analyst believes there are strong fiscal incentives to retain discounts for subscriber growth beyond the end of the current campaign, which ended on June 30.
UBS takes the Superloop bullish thesis a step further, detailing the latent incremental value from Superloop Smart Communities, which the analyst views as being underappreciated by the market.
Smart Communities represents the "last-mile" fibre for new residential single and multi-dwelling units, which could be worth as much as $510m or $1 per share, as Superloop receives a monthly fee of an estimated $40 once the service is activated.
The company has secured 97k lots, with an average of 125k residential lots constructed each year. UBS expects Superloop can achieve a 10% market share, composed of 12k lots per annum or $5m to gross profits annually.
The potential earnings stream is both incrementally accretive and a high-quality earnings stream, as well as offering recurring revenue with a high profit margin, estimated at 80% versus 34% currently.
UBS ups its target price to $3.80 from $2.55 with a Buy rating, against a consensus target price of $3.26.
Wilsons has a Buy-equivalent rating and a $3.44 target price.
Defense thematic, a global winner
Austal ((ASB)) was another stock that enjoyed a sizable lift in target price, this time from MST Access, to $5.58 from $3.90.
Austal designs and constructs customised aluminium and steel commercial and defense vessels, as well as training, support, and maintenance of vessels globally, with operations in Australia and the US.
The company announced it had secured credit facilities of $488m, which completes the funding for the expansion program at Mobile, its shipbuilding facility in Alabama, valued at $1.15bn.
Austal is expected to contract a significant amount of new work via the Federal Government's Strategic Shipbuilding Agreement. MST Access has upgraded the base revenue forecast for FY30 to $3bn from $2.5bn.
The company has retained FY25 earnings before interest and tax guidance of not less than $80m and has reconfirmed the potential for group revenue of $3.5bn by FY30, with a current order book of $14.2bn.
Management envisages an additional $20bn of work over the next 20-plus years, excluding current orders.
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