Weekly Reports | May 29 2026
Three companies carving out growth against a challenging macroeconomic backdrop from infrastructure investment (data centres), EV demand and telecommunications.
- IPD Group enjoying Electrification and Data Centre Investment Tailwinds
- Superloop positioned for growth ahead of Investor Day and NBN price changes
- Eagers Automotive backed by EV demand and Canada expansion
By Danielle Ecuyer
This week's quote comes from CommBank's Belinda Allen:
"The pipeline of nominal capex plans was upgraded with growth of 11% now expected in FY26 and 5% in FY27 based on five year realisation ratios. Much of this was driven by upgrades to plant & equipment investment intentions in the non-mining sector.
"The data centre investment cycle is taking off here in Australia. However, this investment is highly import intensive, which will dampen the impact on GDP. The pass through to the local economy will be important to watch."
Post IPD Group's trading update; sweat the big stuff?
As identified by FNArena daily monitored broker Morgan Stanley this week, the outlook for the Australian economy has deteriorated.
Against this worsening growth backdrop, the broker continues to be more upbeat on policy-linked capex as an “economic buffer”.
Enter IPD Group ((IPG)), an Australian electrical infrastructure and automation company supplying products and services across power distribution, industrial automation, renewables, and energy management.
The company services customers across infrastructure, utilities, commercial, and industrial markets, and is leveraged to growing electrification and renewable energy investment trends.
As noted by Shaw and Partners, the company’s FY26 trading update indicated earnings growth (EBIT) of 19%, representing 10% growth ex the Platinum Cables acquisition.
Going into the update, the share price had rallied some 26%, so the update, which marked a slight miss on consensus, failed to meet the lofty expectations discounted into the stock, prompting a -12%-plus sell-off.
Management’s FY26 guidance for underlying earnings (EBITDA) was indicated between $54.5m-$55.3m compared to consensus of $55.1m and Shaw’s estimate prior to the announcement of $55.6m.
Underlying earnings (EBIT) were guided to $46.3m-$47.1m compared to consensus of $47.4m and the analyst’s prior forecast of $47.5m.
Shaw sees robust revenue growth for IPD’s core businesses in FY26, as well as a record result from CMI, which specialises in electrical products and solutions for hazardous area and industrial environments, particularly servicing mining, energy, infrastructure, and heavy industry customers.
The CMI business is anticipated to beat pre-IPD acquisition levels in terms of revenue.
Data centre-generated growth remains very strong, a consistent story across companies exposed to the segment, and should lift 25% y/y.
Over 2H26, gross profit margins are expected to remain stable on the first half, while Shaw observes the order book continues to transition to more complex and competitive orders.
Investment in the operating base of the business has underpinned a decline in operating expenses as a percentage of revenue.
Shaw believes IPD is well positioned to address macro-related challenges, including volatility in freight and logistics costs, as well as generate services growth.
Earnings forecasts were tweaked only slightly lower by less than -1%, and the target price was raised to $5.85 from $5.35.
Buy rating retained.
Don't underestimate Superloop's three year targets
Telecommunications challenger Superloop ((SLC)) is due to host an investor day on June 3, which will be the first since 2023.
The analyst at Canaccord Genuity is looking forward to a trading update, with guidance, as well as management’s three-year aims, with specific commentary around Smart Communities.
Current FY26 earnings (EBITDA) guidance stands at $112m-$113m, with the analyst forecasting $119.3m.
The Consumer and Wholesale businesses are flagged to have performed well thus far this fiscal year based on the telco’s market positioning and promotional activity. Marketing spend is identified as the possible “swing factor” against the upper end of guidance.
Existing promotions, which have another 35 days to run (as at May 27), are anticipated to continue to generate a high return on investment, carried forward from 1H26.
The telco is seen as well positioned to either beat FY26 expectations or go into FY27 stronger than anticipated. Observing the seasonal historic trend, 39k customer subs are expected to be added in 2H26 versus 49k in 1H26, and 32k wholesale subs in 2H26 versus 19k in 1H26.
Management is knowingly letting low-margin customers that chase discounts go elsewhere to other providers.
At the 2023 Investor Day, management set out three-year goals for revenue, opex, and earnings, with a general expectation around similarly shaped targets to be announced. The commentary could include aspirations for return on capital and free cash flow.
Notably, the 2023 targets appeared “lofty” at the time, but revenue in FY26 is expected to reach $650m, which is above the prior high target, Canaccord points out.
This time around, the view is the “three-year ambitions, which could be lofty but should be taken seriously”. Recent historical metrics would vindicate that opinion.
Regarding Smart Communities, the analyst views this as likely to be a major generator of growth, quality, and share price outperformance over the next few years.
The unit economics around this business are not considered to be well appreciated or understood by the market, hence the analyst flags management is likely to provide more colour and detail around the metrics, including capex and earnings potential.
Telstra Group ((TLS)) and Optus have had “muted” responses to the NBN Co wholesale price rises on July 1, which Canaccord expects will see most speeds experience an increase of around $2.30 per month from retail service providers.
The focus will be on whether Superloop and Aussie Broadband ((ABB)) target competitive pricing or margin expansion in the consumer businesses. Canaccord believes Superloop can achieve both due to the product pricing position against Telstra.
Buy rating, unchanged, with a $3.55 target.
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