Feature Stories | 1:17 PM
A compilation of stories relating to the August 2026 corporate reporting season in Australia, including FNArena’s final balance for the season.
By Rudi Filapek-Vandyck, Editor
Content (in chronological order of publication):
- The August Results Test Awaits
- July’s Stock Pickers’ Favourites
- Small Cap Favourites, AI & More
- Pre-August Picks In Resources, Retail & Small Caps
- The August Earnings Test Is Approaching
- TechOne, Banks & Wesfarmers
- Final Preparations For August
- That’s The Way Markets Crumble
- Upside Risk In Crowded Shorts
- Bear Market Be Gone
- Beats, Misses And Early AI Signals
- August Delivers Soft Guidance, Higher Dividends
- Resilient, But August Fails To Excite
- Resources, Healthcare & Best Buys
- Australia Remains Outside The AI Party
- Post-August Stock Picks & Best Buys
The August Results Test Awaits
(1 July 2026)
Corporate earnings are not everything for share market investors, but they do explain a lot.
Better-than-expected corporate profitability and growth in the US is the key reason Wall Street strategists are upgrading their year-end targets.
8,000 has become the new December 2026 number for the S&P500 from the likes of Goldman Sachs and Morgan Stanley. BCA Research and Citi have upgraded to 8,100.
RBC Capital just upgraded its target to 8,150 from 7,900.
Between now and then, a general pullback in the order of -5%-10% is still seen as a genuine possibility, also with an eye towards inflation and the midterm elections later in the year, but strong corporate results are underpinning general confidence the underlying trend remains ‘up’.
Following a much better-than-forecast Q1 results season, in which average EPS growth amounted to 30% year-on-year, consensus is now positioned for 23% growth in Q2.
At face value, this seems like analysts have lowered the bar for ongoing success, but history shows such growth numbers this late into a cycle are nothing short of extraordinary.
Some of the more level-headed market commentators are therefore expecting higher volatility, also because share prices are seen as already reflecting this year’s accelerated growth, raising the question: for how long can corporate America continue surprising to the upside?
Australia Is Different But The Same
The dynamics for corporate Australia are different. Here, average forecast EPS growth for FY26 stands at 12%, which is well above the historical average of circa 5% growth, but that number is also heavily dominated by miners and energy producers.
Strong earnings growth momentum for cyclical mining companies is equally a feature in the US, but that sector represents a much smaller index weighting over there.
For artificial intelligence (AI), the commonality applies the other way around.
Besides, with demand for metals and minerals boosted by investments in AI infrastructure, one could make the argument that AI is very much a central theme in both markets.
It’s just that the exact impact and magnitude are different.
While EPS forecasts in Australia remain generally under pressure — see also profit warnings from Baby Bunting ((BBN)), Judo Capital ((JDO)) and Worley ((WOR)), among others — strategists at Macquarie observe local AI Enablers stood out with the best earnings trends during the February results season.
Macquarie believes this group of AI beneficiaries may well again stand out in August.
Think Goodman Group ((GMG)) and NextDC ((NXT)), but also Infratil ((IFT)) and Macquarie Technology ((MAQ)), as well as the likes of APA Group ((APA)), Megaport ((MP1)), Sims ((SGM)), Southern Cross Electrical Engineering ((SXE)), Tasmea ((TEA)), and Ventia Services ((VNT)).
Those are my personal suggestions, not Macquarie’s.
Outside this group and resources companies (not all of them), EPS forecasts for the ASX are trending lower, as also shown through our weekly updates:
https://fnarena.com/index.php/2026/06/29/weekly-ratings-targets-forecast-changes-26-06-26/
Pros & Cons
For what it’s worth, Macquarie’s forecast is for 9.6% EPS growth for FY26, followed by 11.1% growth in FY27.
Next financial year, one of the supporting themes should be energy price relief (assuming peace and the reopening of the Strait of Hormuz).
This then leaves the question: will this be enough to spark more enthusiasm for Australian equities?
Maybe the RBA needs to join in as well?
Alas, we’ve only just started the public debate among economists over whether Michele Bullock & Co are done with tightening for this cycle, or whether one or two more rate hikes will be required.
It might still be a while before confidence in RBA rate cuts is strong enough to carry the local share market’s upward momentum.
Until that time, all the heavy lifting might well remain dependent on corporate earnings and the occasional spike in market sentiment, such as when the Strait of Hormuz effectively opens and stays open.
Year-end portfolio reallocations are currently directing money flows into local share market laggards, but Macquarie strategists suggest this is likely to prove premature in many cases.
A fairly regular stream of profit warnings a la Judo Capital and Worley at the very least signals such share prices may not have bottomed yet.
No doubt, short-term traders and bottom-fishers stand ready to start scooping up downtrodden share prices that have taken an extra hit because of tax-loss selling in June, but the window for pre-August profit warnings remains open, not to mention the results season itself.
The past four August and February seasons have been among the most punishing and volatile ever witnessed in Australia. It seems naive not to expect more of the same in August.
In Bullion We Trust
Not all share market laggards are equal, of course, and on Monday stockbroker Morgans makes the case for lifting exposure to gold stocks that have been de-rated in line with a -26% weakening in the price of bullion since January.
This year’s weakness is in line with history, Morgans argues, in that gold bull markets tend to experience such drawdowns, but each has proved temporary and an opportunity prior to the long-term thesis reasserting itself.
Morgans’ preference lays with (in order) Evolution Mining ((EVN)), Newmont Corp ((NEM)), and Northern Star ((NST)) among large caps, and Ramelius Resources ((RMS)), Catalyst Metals ((CYL)) and Regis Resources ((RRL)) for exposure to smaller caps.
It just so happens that, on the same day, Macquarie updated its views on gold producers in Africa.
Its preference is for Perseus Mining ((PRU)) — for stability — followed by Resolute Mining ((RSG)) — for growth — and Turaco Gold ((TCG)) third, for “attractive de-risking”.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE