Rudi’s View: February Favourites & Avoids

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            [26] => ((CAR))
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            [28] => ((XYZ))
            [29] => ((IEL))
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            [47] => ((SEK))
            [48] => ((WTC))
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            [58] => ((QAL))
            [59] => ((ARF))
            [60] => ((ANN))
            [61] => ((TLX))
            [62] => ((RMD))
            [63] => ((SHL))
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            [65] => ((PME))
            [66] => ((RMD))
            [67] => ((IDX))
            [68] => ((NEU))
            [69] => ((CSL))
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            [71] => ((HLS))
            [72] => ((SHL))
            [73] => ((CSL))
            [74] => ((RMD))
            [75] => ((TLX))
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            [77] => ((COH))
            [78] => ((RHC))
            [79] => ((SIG))
            [80] => ((FLT))
            [81] => ((UNI))
            [82] => ((ADH))
            [83] => ((HVN))
            [84] => ((WOW))
            [85] => ((ING))
            [86] => ((COL))
            [87] => ((AX1))
            [88] => ((EDV))
            [89] => ((LOV))
            [90] => ((MND))
            [91] => ((NXT))
            [92] => ((SIG))
            [93] => ((NWH))
            [94] => ((GLF))
            [95] => ((SUN))
            [96] => ((RWC))
            [97] => ((BGA))
            [98] => ((CVW))
            [99] => ((EGH))
            [100] => ((HDN))
            [101] => ((MAF))
            [102] => ((MGH))
            [103] => ((MTO))
            [104] => ((MX1))
            [105] => ((NAN))
            [106] => ((PME))
            [107] => ((SRG))
            [108] => ((SYL))
            [109] => ((TEA))
            [110] => ((HLS))
            [111] => ((ING))
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            [10] => CAR
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            [16] => 360
            [17] => PMV
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            [23] => WTC
            [24] => SLC
            [25] => ABB
            [26] => CAR
            [27] => TNE
            [28] => XYZ
            [29] => IEL
            [30] => DMP
            [31] => CSL
            [32] => PMV
            [33] => VEA
            [34] => MIN
            [35] => AMC
            [36] => XYZ
            [37] => WEB
            [38] => MTS
            [39] => DXS
            [40] => NIC
            [41] => WOR
            [42] => FLT
            [43] => SEK
            [44] => BHP
            [45] => GLF
            [46] => ILU
            [47] => SEK
            [48] => WTC
            [49] => ASK
            [50] => DGT
            [51] => RGN
            [52] => APZ
            [53] => CWP
            [54] => GLF
            [55] => GMG
            [56] => GMG
            [57] => MGR
            [58] => QAL
            [59] => ARF
            [60] => ANN
            [61] => TLX
            [62] => RMD
            [63] => SHL
            [64] => CSL
            [65] => PME
            [66] => RMD
            [67] => IDX
            [68] => NEU
            [69] => CSL
            [70] => ACL
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            [73] => CSL
            [74] => RMD
            [75] => TLX
            [76] => FPH
            [77] => COH
            [78] => RHC
            [79] => SIG
            [80] => FLT
            [81] => UNI
            [82] => ADH
            [83] => HVN
            [84] => WOW
            [85] => ING
            [86] => COL
            [87] => AX1
            [88] => EDV
            [89] => LOV
            [90] => MND
            [91] => NXT
            [92] => SIG
            [93] => NWH
            [94] => GLF
            [95] => SUN
            [96] => RWC
            [97] => BGA
            [98] => CVW
            [99] => EGH
            [100] => HDN
            [101] => MAF
            [102] => MGH
            [103] => MTO
            [104] => MX1
            [105] => NAN
            [106] => PME
            [107] => SRG
            [108] => SYL
            [109] => TEA
            [110] => HLS
            [111] => ING
        )

)

This story features CREDIT CORP GROUP LIMITED, and other companies.
For more info SHARE ANALYSIS: CCP
The company is included in ASX300 and ALL-ORDS

Updates on Conviction Calls, Best Buys and most favoured sector picks for the February results season, including those likely to 'miss' and best to avoid.

By Rudi Filapek-Vandyck, Editor

The local February results season starts Friday this week when Credit Corp ((CCP)), Champion Iron ((CIA)) and ResMed ((RMD)) are scheduled for updates on financial performances.

See https://fnarena.com/index.php/reporting_season/ for regular updates (starting next week) and a calendar (scroll down).

At face value, this will be a markedly different proposition from the years past as average earnings forecasts are on the rise, and generally anticipated to continue rising, but that generalisation ignores the bifurcation that has happened underneath the surface.

As also pointed out by market strategists at Wilsons on Thursday morning (earlier today): strip away the mining companies and the rest of the local resources basket, and net trend is net negative, i.e. more downgrades than increases.

That assessment equally features in the latest update by Macquarie where the analysts note the local energy sector has been the stand-out in terms of positive earnings revisions for two consecutive weeks, while property trusts have been detracting from the positive trend on the prospect for RBA rate hikes.

See also FNArena’s very own weekly update every Monday morning: https://fnarena.com/index.php/2026/01/27/weekly-ratings-targets-forecast-changes-23-01-26/

On Morgan Stanley’s numbers, forecast consensus EPS growth has grown to 9.5% in aggregate, but two-thirds of it is expected to come from the Materials sector.

Wilsons highlights seven out of nine industrials sectors are experiencing net downgrades to forecasts. Heaviest hit have been IT and consumer staples, but for all of healthcare, consumer discretionary, communication services and utilities the net balance from the past three months is negative.

The two exceptions? Materials and Financials.

As the ASX200 is still seen trading around one standard deviation above its five-year average PE multiple, Wilsons wholeheartedly agrees with my personal prediction the trend in above average share price volatility is likely to continue next month.

On Macquarie’s numbers, the Australian market’s PE ratio for December 2025 has increased to 20.1x, while for June 2026 it decreased to 19.2x.

Investors better buckle up. In August last year circa one third of companies reporting saw their share price move by 10% or more on the day, in either direction; more than half of shares in reporting companies moved by over 5%.

Share market updates to date in January –think Qoria ((QOR)) and Generation Development ((GDG)), but also Life360 ((360)), Paladin Energy ((PDN)) and Hub24 ((HUB))– certainly are indicating volatility is not likely to subside.

In the words of Wilsons: “We expect upgrades to be rewarded while downgrades are likely to be disproportionately punished by investors”.

Core predictions made in this week’s preview:

• Mining sector to continue enjoying upgrades to forecasts, also because many models still need to catch up on (much) higher commodity prices
• Retail sector will likely feature cautionary statements in the face of RBA rate hikes. As valuations remain high, any sign of disappointment will likely trigger outsized punishment, Wilsons predicts
• Among Supermarkets, Wilsons’ focus is on whether Woolworths ((WOW)) can finally put an end to its two-year long downgrade cycle?
• A similar question rules inside the banking sector: can CommBank ((CBA)) surprise and deliver an upgrade in February?
• Among online classifieds, Wilsons suggests both Car Group ((CAR)) and REA Group ((REA)) appear well-positioned for relief rallies… assuming either can deliver upgrades to consensus forecasts.
• In healthcare, Wilsons’ High Conviction remains with ResMed ((RMD)). The strategists wonder whether CSL ((CSL)) can change the negative trend after four successive downgrades and remain cautious towards Cochlear ((COH)) following three successive downgrades.

Note The Aussie Dollar

USD/AUD is back at 70c. While once upon a time the long-term average was determined to be 75c, it has been three years since the Aussie battler managed to surge towards a 7 in front of it instead of a 6.

That rally is not necessarily finishing anytime soon either. Apart from a discrepancy in respective outlooks for central bank cash rates (Fed on hold, RBA about to start tightening) strategists at UBS point out AUD usually performs strongly when commodity prices are booming and risk appetite is high.

UBS is equally of the view that foreign investors are still “crowded short” the local share market. A rising AUD in combination with commodities booming and elevated risk appetite should see this positioning reverse towards global investors building ASX exposure again.

To throw in one additional element of support for AUD, UBS believes the local currency remains “structurally undervalued”. Not mentioned is that increasingly erratic US government actions are pressuring the global reserve currency into a persistent de-rating, which is equally fueling the bull market in precious metals.

UBS thinks the RBA could be forced to hike three times throughout 2026.

The implication for investors:

• Best to overweight Australian equities inside a global portfolio
• Best to overweight Mining equities within an Australian portfolio

Taking guidance from your typical historical correlations at the individual stock level, UBS has compiled a list of 14 companies –all Buy rated– whose shares this time around have underperformed more significantly than has been the case in the past.

It should not surprise, the list is over-populated with technology companies, for which headaches and headwinds have formed through alternative narratives including AI and rising bond yields.

UBS’ list of 14 underperforming Buy-rated stocks

• Catapult Sports ((CAT))
• Life 360 ((360))
• Premier Investments ((PMV))
• GQG Partners ((GQG))
• Telix Pharmaceuticals ((TLX))
• SiteMinder ((SDR))
• Zip Co ((ZIP))
• Xero ((XRO))
• WiseTech Global ((WTC))
• Superloop ((SLC))
• Aussie Broadband ((ABB))
• Car Group ((CAR))
• TechnologyOne ((TNE))
• Block ((XYZ))

UBS’s update also contains a second list of companies whose share price today is a lot lower compared with the last time USD/AUD was at 70c (all are Buy rated). PE multiples are generally significantly lower too:

• IDP Education ((IEL))
• Domino’s Pizza ((DMP))
• CSL ((CSL))
• Premier Investments ((PMV))
• Viva Energy ((VEA))
• Mineral Resources ((MIN))
• Amcor ((AMC))
• Block ((XYZ))
• Web Travel ((WEB))
• Metcash ((MTS))
• Dexus ((DXS))
• Nickel Industries ((NIC))
• Worley ((WOR))
• Flight Centre Travel ((FLT))
• Seek ((SEK))

Morgan Stanley’s BHP Conviction

Morgan Stanley has added BHP Group ((BHP)) to its Asia Pacific ex Japan Focus List (selection of highest convictions), citing an attractive mix of commodity exposures (iron ore, copper and met coal) which allows for resilient free cash flows and shareholder returns.

The full list contains 20 stocks, with Wynn Macau removed to free up space for the Big Aussie, of which three others are ASX-listed;

• GemLife Communities ((GLF))
• Iluka Resources ((ILU))
• Seek ((SEK))

Other international names on the list are Delta Electronics, ICICI Bank, Samsung Electronics, Singapore Exchange, and Zijin Mining Group.

Top Global Ideas

RBC Capital’s Top 30 Global Ideas for 2026 only includes one lonely ASX representative: WiseTech Global ((WTC)).

Other companies selected are Air Products and Chemicals, Airbnb, Alcon, Amazon, Biogen, Boston Scientific, Brookfield Corp, ConocoPhillips, Constellation Software, DuPont de Nemours, Engie, International Paper, Loblaw Companies, L’Oreal, Microsoft, Moody’s, Palo Alto Networks, RB Global, Royal Gold, Safran, Schneider Electric, Shopify, Snowflake, The Williams Companies, US Bancorp, Visa, Xcel Energy, Ventas, and Xylem.

AREIT Favourites

Ahead of February results, Bell Potter has picked its favourites among AREITs:

• Abacus Storage King ((ASK))
• DigiCo Infrastructure REIT ((DGT))
• Region Group ((RGN))

Others liked are

• Aspen Group ((APZ))
• Cedar Woods Properties ((CWP))
• GemLife Communities Group ((GLF))
• Goodman Group ((GMG))

****

Macquarie analysts keep the faith that most preferred quality REITs with earnings growth should still perform in the face of rate hikes and rising bond yields:

• Goodman Group ((GMG))
• Mirvac Group ((MGR))
• DigiCo Infrastructure REIT (DGT))
• Qualitas ((QAL))
• Arena REIT ((ARF))

Healthcare Reviews

Here’s one observation that pretty much characterises the experience of investors in healthcare companies in 2025: all but one company –Ansell ((ANN))– delivered a negative net performance.

The observation was made by sector analysts at Citi who, admittedly, do not cover every single company in the sector locally, but the broader message still stands. It’s been tough for the sector generally post covid and last year was no exception.

Citi thinks 2026 will be more determined by individual narratives with the two most obvious candidates to shake off the bad sector smell identified as:

• Telix Pharmaceuticals ((TLX))
• ResMed ((RMD))

Citi is mostly Neutral-rated throughout the sector, but has downgraded Sonic Healthcare ((SHL)) to Sell, which says a lot given where that share price is trading at compared to late 2021 (more than -50% erosion).

CSL ((CSL)), by the way, is Buy rated, and so is Pro Medicus ((PME)).

****

Macquarie’s most preferred healthcare picks:

• ResMed ((RMD))
• Integral Diagnostics ((IDX))
• Neuren ((NEU))

Least preferred:

• CSL ((CSL))
• Australian Clinical Labs (((ACL))
• Healius ((HLS))
• Sonic Healthcatre ((SHL))

The three post CSL are all part of the local pathology sector.

****

Over at Morgan Stanley, healthcare sector analysts see favourable risk/reward for:

• CSL ((CSL))
• ResMed ((RMD))
• with upside for Telix Pharmaceuticals ((TLX)) on pipeline delivery
• Fisher & Paykel Healthcare ((FPH)) on US respiratory hospitalisations

Morgan Stanley is not so enthusiastic about:

• Cochlear ((COH))
• Ramsay Health Care ((RHC))

The Aussie Consumer & RBA Hikes

Jarden’s key picks among consumer-oriented companies are:

• Sigma Healthcare ((SIG))
• Flight Centre Travel ((FLT))
• Universal Store Group ((UNI))
• Adairs ((ADH))
• Harvey Norman ((HVN))
• Woolworths Group ((WOW))

Are considered at-risk:

• Inghams Group ((ING))
• Coles Group ((COL))
• Accent Group ((AX1))
• Endeavour Group ((EDV))

Overall, the key sector risk as identified by Jarden revolves around RBA rate hikes as these could dampen spending, with confidence already fragile, the analysts state.

Morgans’ Pre-February Key Calls

Stockbroker Morgans’ Key Calls ahead of February:

Positive

• Lovisa Holdings ((LOV))
• Monadelphous ((MND))
• NextDC ((NXT))
• Sigma Healthcare ((SIG))
• NRW Holdings ((NWH))
• GemLife Communities Group ((GLF))

Negative

• Suncorp Group ((SUN))
• Reliance Worldwide ((RWC))

With honourable mentions of:

Positive

• Bega Cheese ((BGA)) – result beating expectations?
• Clearview Wealth ((CVW)) – strong outlook?
• Eureka Group Holdings ((EGH)) -strong outlook?
• HomeCo Daily Needs REIT ((HDN)) – result beating expectations?
• MF Financial ((MAF)) – strong outlook?
• Maas Group ((MGH)) – strong outlook?
• Motorcycle Holdings ((MTO)) – result beating expectations?
• Micro-X ((MX1)) – strong outlook?
• Nanosonics ((NAN)) – strong outlook?
• Pro Medicus ((PME)) – strong outlook?
• SRG Global ((SRG)) – strong outlook?
• Symal Group ((SYL)) – strong outlook?
• Tasmea ((TEA)) – strong outlook?

Negative

• Healius ((HLS)) – weak outlook?
• Inghams Group ((ING)) – result underwhelming expectations?

Do make sure you also read:

https://fnarena.com/index.php/2026/01/22/rudis-view-key-picks-sector-favourites/

https://fnarena.com/index.php/2026/01/15/rudis-view-pre-february-top-picks-favourites/

https://fnarena.com/index.php/2025/12/24/rudis-view-best-buys-favourites-for-2026/

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi’s View stories. Go to My Alerts (top bar of the website) and tick the box in front of ‘Rudi’s View’. You will receive an email alert every time a new Rudi’s View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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