Rudi's View | 4:20 PM
Conviction Calls, Best Buys and most favoured sector picks ahead of the February results season.
By Rudi Filapek-Vandyck, Editor
With the February results season approaching rapidly, the focus among local analysts is shifting towards sector updates and reviews of projections and expectations in light of what is likely to be yet another ultra-volatile roller coaster for Australian investors.
This week's share price responses to market updates by the likes of Qoria ((QOR)) and Generation Development ((GDG)) might well serve as preliminary indicators of what to expect from February in case of imperfection.
It need not only be negative news, of course, as also shown by Paladin Resources ((PDN)) and Hub24 ((HUB)).
Still, it might not be a bad idea to have some cash available.
Wading through the first hundred of pages in previews --and a lot more will be produced before month's end-- a few observations stand out, including:
-ongoing support for the newfound momentum for mining companies (though some valuation criticisms are creeping in)
-mostly cautiously positive views on banks (operationally, not valuations)
-ongoing strong outlooks for engineers and contractors
Among individual companies, the following three updates caught my personal attention this week:
Morgan Stanley suggests Lendlease ((LLC)) might well deliver "a sticker shock" on results day (scheduled for 23 February) with the broker toying with the idea this once great franchise could possibly have zero profit on the books as all major asset sales are due for completion in 2H26, and the first half carries costs associated with the CRU segment.
On the other hand, Goodman Group ((GMG)) is mentioned here and there as potentially in a position to upgrade FY26 EPS guidance, currently set for 9% growth. A recent report by Morgan Stanley suggests the recent establishment of the European data centre JV has provided Goodman with flexibility as to the timing of Development EBITDA.
RBC Capital has highlighted CSL's ((CSL)) interim result for a better-than-forecast outcome. No doubt, this will be music to the ears of long-suffering shareholders (which includes myself and the FNArena All-Weather Model Portfolio).
CSL's interim release is scheduled for the 11th of February. RBC sees revenue and gross profit exceeding consensus forecasts. Earnings estimates have already been lifted and the price target increased to $230.
FNArena's Corporate Results Monitor includes early updates for the February scheduling (scroll down on the page): https://fnarena.com/index.php/reporting_season/
Below are this week's fresh updates on sector favourites and Top Picks ahead of next month.
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