Mid-Year Prospects: Industrials

Research evidence excerpt

Mid-Year Prospects: Industrials

J P M O R G A N Asia Pacific Equity Research

24 July 2026

Mid-Year Prospects

Industrials

This report forms part of the J.P. Morgan Australia Mid-Year Prospects series as Australia

we take stock at the midpoint of 2026 and set out our Top Picks and Least Preferred

Australia Industrials

stocks (among our large-caps) for the remainder of the year.

Lee Power AC

(61-2) 9003-8725

lee.power@jpmorgan.com

Top Pick – Cleanaway Waste Management (CWY AU, OW) Dylan Adrian

Growth outlook into FY27 is compelling. We expect CWY to guide FY27 EBIT (61-2) 9003-7397

of $510m-540m at its August result (JPMe: $535m; consensus: $536m), which dylan.adrian@jpmorgan.com

would put FY27 growth within the 10-15% through-cycle EPS growth target Nick Torelli

(likely conservative, given the cost-out actions in 2HFY26, noting that CWY has (61-4) 6817-5219

nick.torelli@jpmorgan.com

previously guided that it will be above this in FY27). Following ~3 years of J.P. Morgan Securities Australia Limited

investment in digital modernisation and the embedding of the Blueprint 2030 1.0

transformation, we believe the building blocks underpinning this target are sound.

We forecast a FY25-28E EPS CAGR of 12% and see further upside should CWY CWY.AX, CWY AU

deliver against its stated >260bp margin expansion target (JPMe: 200bp).

Overweight

FCF set to inflect from FY27 onwards. We expect CWY to provide an FCF target Price (24 Jul 26): A$2.36

for FY27 (including as a basis for the CEO’s incentive plan). We expect operating Price Target (Jul-27): A$2.90

cash conversion to recover to >70% by FY28, noting that, while remediation is a

recurring impact, other legacy drags (acquisition/integration costs and catch-up AZJ.AX, AZJ AU

tax) are complete.