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

Citi rates ABB as Buy

Citi says it is now more positive on Aussie Broadband following an investor call with management relating to the AGL Energy transaction. It’s thought $21m of underlying earnings (EBITDA) is post-marketing and bundling, with risk skewed to the upside. 

Unit costs are likely higher initially, though the broker expects these to fall with migration and growth. The analyst assesses the deal as 10-10.5% accretive, factoring in -$1-1.5m of D&A.

A summary of the broker's research yesterday follows.

Citi analysts are pleasantly surprised by Aussie Broadband's acquisition of AGL Energy's ((AGL)) telco customers given the latter was locked in an exclusive contract with Superloop ((SLC)) until 2028 (five years from 2023).

Target $6.15. Buy.

Citi rates CBA as Sell

Following interim results for CommBank, Citi raises its target to $140 from $137 after lifting its FY26-28 earnings forecasts by 2% and 3%, respectively. While noting ongoing market share gains to the majors, the broker's Sell rating for CommBank is retained on valuation.

A summary of research issued by Citi yesterday follows.

Today's interim result by CommBank beat Citi's expectations on higher net interest income (NII) and much better-than-forecast bad debt charges. Cash earnings of $5,445m came in around 5% ahead of the consensus forecast, while costs met expectation.

The key positive, according to the broker's initial assessment, was margin resilience. It's felt underlying net interest margin (NIM) commentary implied improvement through 2Q26 despite earlier signs of pressure and rising basis risk.

Asset quality trends were notably strong, the analyst highlights, with lower provisioning in business lending and a solid CET1 position supporting balance sheet strength.

The interim dividend of 235cps was slightly better than the broker was anticipating, reflecting better earnings.

While the result should be well received, Citi's valuation concerns remain unchanged.

Shaw and Partners rates HUM as Buy

Humm Group announced 1H26 net profit after tax down -49% to $13.9m, which met Shaw and Partners expectations.

Flexicommercial, which represents 65% of group cash profits, fell -30% on higher net credit losses and opex, while the NIM was flat at 3.4%.

NZ cards, at 25% of group cash profits, saw sound volume growth despite an adverse macro backdrop, while Ireland was very robust and offset losses in the UK and Canada. Ireland generated $6.9m in profit, up from $2.9m in the previous year.

The analyst upgrades FY27 and FY28 EPS estimates by 4-7% on changes to opex and credit loss estimates, while the FY26 EPS forecast is lowered by over -10% due to a negative litigation judgement of around -$20m.

The EGM meeting is on Feb 19 to consider Board changes.

Shaw and Partners has a Buy, High risk rating with a higher target of 85c from 80c.