Jefferies initiates Australia's Superloop with 'buy,' views earnings quality improving

** Analysts at Jefferies initiate coverage of Superloop SLC.AX with a "buy" rating at a price target of A$3.60 per share

** Brokerage views that SLC has underperformed within ordinaries index .AORD in last quarter as investors stay concerned about domestic competitors such as Telstra TLS.AX, Optus and foreign entrants like SpaceX's SPCX.O Starlink

** Smart Communities — SLC's business segment that offers direct fibre to the premises, or FTTP, and owns the last-mile fibre infrastructure serving new residential developments — is viewed as a quality earner for SLC, according to Jefferies

** Brokerage estimates Smart Communities can grow gross profit from A$17 million in FY26 to A$40 million by FY29

** Eight of 10 analysts rate the stock "buy" or higher, two "hold"; their median PT is A$3.75, according to data compiled by LSEG

** Stock down 7.7% YTD, as of last close