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

Macquarie rates APE as Outperform

Eagers Automotive has bought a 65% equity stake in CanadaOne for $1,043m, which is composed of $386m in scrip and $658m in cash. The owner/founder of CanadaOne, Pat Priestner, will retain a 30% stake in operating companies and 35% in property.

The Canadian market is around 1.6x larger than the Australian market and has grown at a long-term rate of up to 5.5% versus the Australian market at 3.4%.

The deal will be funded by a $452m entitlement offer of around 21.5m new shares at $21, a discount of -28.4% from the close. Nick Politis picked up 100% of his pro rata entitlement.

The analyst tweaks EPS estimates down -4% for 2025 for dilution, and up 7% and 5% for 2026/2027, respectively.

Target price lifts to $29.98 from $27.33. Macquarie believes the re-rating in the stock is justified and reflects the higher quality rating ascribed to overseas opportunities and a possible earnings upgrade cycle boosted by rate cuts.

Morgan Stanley rates GLF as Overweight

Morgan Stanley retains a positive view on residential-exposed stocks including Stockland, Gemlife Communities and Mirvac Group.

The broker's 8th Australian Alphawise survey showed the biggest positive change in 2025 for investors, with the First Home Guarantee expected to help, and revealed a positive outlook for residential sentiment.

The survey showed 55% of potential buyers indicated they were interested in buying for investment this year, up from 35% in 2024.

Gemlife Communities is rated Overweight. Target set at $5.40. Industry view: In Line.

Citi rates NIC as Neutral, High Risk

Citi revised its model for Nickel Industries to factor in ENC acquisition payment delays and a new US$800m bond issuance.

The two ENC acquisition payments of US$126.5m each are now due in 1H27, a delay of six months. The US$800m 9% senior unsecured notes maturing 2030 will replace the 11.25% $400m notes that were due to amortise Oct 2028.

The broker expects US$250m to be used to repay existing Indonesian debt. While bond refinancing and bank debt repayments are positive outcomes, the larger new issuance means higher interest payments, the broker explains.

Catalysts ahead include RKAB permit at Hengjaya mine, outstanding $100m VAT refund and ENC commissioning in 1H2026.

Neutral, High Risk. Target rises to 80c from 70c on roll forward.