Australian Emerging Companies Transfer of coverage of 11 companies

Research evidence excerpt

Australian Emerging Companies Transfer of coverage of 11 companies

Don Carducci AC Asia Pacific Equity Research

(61-2) 9003-8379 21 May 2026 J P M O R G A N

donald.n.carducci@jpmorgan.com

Investment Thesis, Valuation and Risks

Accent Group (Neutral; Price Target: A$0.64)

Investment Thesis

AX1 is an omni-channel vertically integrated retailer and distributor of performance and

lifestyle footwear apparel operating stores across Australia and New Zealand. AX1’s owned

brands include The Athlete's Foot, Platypus and HYPE DC, and it has wholesale distribution

agreements with major global brands, including Skechers, Dr. Martens, Vans and Hoka.

AX1’s challenging operating conditions are continuing through 1H26, reflected in both

ongoing gross margin pressure and weaker like-for-like sales trends. FY26 EBIT guidance

has been lowered by ~7%; however, despite the rebased expectations we remain cautious

moving forward, noting the ongoing promotional intensity and elevated investment

required for the Sports Direct roll-out.

Valuation

Our Dec-26 price target of A$0.64 per share is based on a DCF valuation (WACC: 10%;

forecast period: 10 years; terminal value: assumes the company does not generate ROIC

above WACC in perpetuity). Our share price target is based on the future value of our

valuation, less any dividends to be paid between now and the target date.

Risks to Rating and Price Target

Downside risks/upside catalysts include:

• Store rollout behind/ahead of expectations. AX1’s store rollout will be a key driver

of growth in the medium to long term. The pace of new store rollouts will present a key

downside risk/upside catalyst for the stock.

• Weaker-/stronger-than-expected consumer spending. AX1 is a retailer of