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

Citi rates MP1 as Buy

Following Megaport's recent contract wins, Citi decides to substantially upgrade its earnings forecasts and raise its target to $22.10 from $15.70.

The broker notes the latest compute contracts are 1.8 times larger than the previous major win, although they carry slightly longer payback periods and greater execution risk.

Commentary explains the recent equity raising strengthens the balance sheet, leaving Megaport with net cash and capacity to fund additional growth opportunities.

A summary of the broker's original view on the contract wins follows.

Citi believes Megaport's latest contract wins provide a meaningful earnings tailwind.

The newly announced agreements could contribute around $165m in earnings (EBITDA) by FY28 and approximately $220m at full run-rate, the broker forecasts.

The broker views the establishment of an on-demand GPU pool as strategically consistent with Megaport's network strengths and notes the return profile for this appears more attractive than large contracted deals.

Management's assumptions may prove conservative, particularly if demand remains strong and growth in the core Network business continues to accelerate, according to Citi.

Morgan Stanley rates PFP as Overweight

Propel Funeral Partners announced three acquisitions in NZ for up to a purchase price of AU$9.1m, delivering revenue of around AU$4m and up to 700-plus funerals, Morgan Stanley explains.

The acquisitions are due to be completed in 4Q26 or 1Q27 and be earnings positive in the first year.

Management also updated FY26 guidance, with a slight downgrade at the midpoint, the analyst observes. FY26 revenue midpoint guidance is below consensus current estimates by -3.8% and reflects a rise of 0.7% y/y.

Funerals performed are guided to around 22.85k, down -2.8% versus consensus.

Morgan Stanley remains Overweight with a $6 target. Industry view: In-Line.

Morgans rates TLC as Accumulate

The Lottery Corp's Investor Day outlined a new operating structure from July 1, with three standalone divisions expected to deliver $10m in annualised savings, Morgans highlights.

Savings will be reinvested into digital capability, AI and product development, the analyst explains.

Digital is seen as the key growth driver. Turnover has compounded at 22% annually since FY18 and the digital mix reached 41.2% in 1H26. The broker also sees growth opportunities from customer registration initiatives and the Keno transformation strategy.

Following softer jackpot activity and lower Keno forecasts, earnings estimates fall around -5% for FY26. Morgans retains an Accumulate rating and target of $5.90, down from $6.00.