Feature Stories | 3:35 PM

A compilation of stories relating to the February 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):

• Pre-February Top Picks & Favourites
• Key Picks & Sector Favourites
• February Favourites & Avoids
• Many February Uncertainties
• Woolies, CSL, Macquarie (& More)
• Behind The AI Threat Narrative(s)
• Rudi Interviewed: February Is Less About Earnings
• Is Higher Volatility Now A Permanent Feature?
• More Surprises, Led By CBA & BHP
• Positives From February Results
• A Season Of Large Cap Winners
• TACO Time?
• Post-February Conviction Calls
• Oil, Inflation, Growth & Stagflation
• Top Picks & Conviction Buys
• Make Today’s Crisis Your Opportunity

Pre-February Top Picks & Favourites

In less than two weeks –can you believe it?– the February results season will be upon us.

Initial signals are patchy, though not necessarily representative.

Gold producer Northern Star ((NST)) started the year with a disappointing market update and the same observation can be made for Super Retail ((SUL)), Endeavour Group ((EDV)) and –earlier today–Amaero ((3DA)).

I am less familiar with smaller cap stories behind Biome Australia ((BIO)), Carma ((CMA)), TMK Energy ((TMK)), and Metro Mining ((MMI)), but in all cases the share price reaction has been negative. Biome’s share price has since recovered (almost).

Have thus far seen their share price respond positively post market update: Codan ((CDA)), Nexsen ((NXN)), Ryman Healthcare ((RYM)), and Kingsgate Consolidated ((KCN)).

Decidre AI Industries Ltd ((DAI)) –market cap $174m– issued an update on January 8 which initially saw its share price rally in response, but none of that proved sustainable and –no surprise to those owning technology and/or AI-related equities– selling orders came thick and fast next.

Decidre shares are now noticeable weaker than previously. In Australia, growth and technology remain out-of-favour, no matter the market update (or so it still appears).

According to the ASX website: “Decidr AI Industries enables businesses to use Generative and Agentic Artificial Intelligence, unlocking new levels of productivity, automation, and personalized customer engagement.”

I might be reading too much into these early signs, but my inclination is to expect a continuation of the trend that started during results season in February last year: above average volatility with higher spikes and falls, and in much higher numbers.

It might be an apposite strategy to hold cash in advance. There might be opportunities galore with eyes firmly on the longer-term horizon.

Corporate USA – Trends

Apart from a handful of early reporters, such as Alcoa ((AAI)), Credit Corp ((CCP)) and ResMed ((RMD)), it’ll still be a good month before corporate Australia unleashes its financial performances into the public arena.

Before then, there’s plenty to pay attention to, and to possibly take guidance from, during the quarterly reporting season in the USA. Early signals over there are equally rather patchy.

An at face value better-than-expected quarterly performance by JP Morgan resulted in a weaker share price and the likes of Bank of America, Citi and Wells Fargo have equally found the bar for further share price upside has been lifted.

Once again, with indices at or near all-time record highs, and after three years of double digit percentage returns, corporate results are being touted as at an important inflection point. After all, those “expensive” looking share prices need to be confirmed and verified.

Or so the narrative goes.

I am sure investors get a bit tired of hearing the same warnings over and over again. Which is not to say a bad reporting season couldn’t possibly put a dent in the hereto irresistible market enthusiasm and optimism.

In the lead-in, risk appetite remains high and analysts have been lifting their forecasts in direct contravention to the usual seasonal pattern. As analysts at Blackrock put it: solid economic growth combined with Fed rate cuts have boosted earnings and profit margins.

Now add the prospect of AI-driven efficiencies and (expectations of) active stimulus from the Trump administration and there should be no secrets as to where all this optimism stems from. But that’s only half of the story, at best.

One of the ruling narratives is that cyclicals and small caps will outperform Megacaps and yesteryear’s AI Champions and that thesis will surely be put under the microscope over the coming weeks.

In Australia the one sector that has noticeably enjoyed an uptick in earnings forecasts –well above the rest of the market– is Materials.

For good measure: the Magnificent7 are still projected to grow strongly. It’s the gap with the remaining 493 that make up the S&P500 that is expected to narrow significantly.

Watch this space. This might be one reporting season that lives up to the hype of being “very, very important”.

Plenty of US strategists and investment advisors continue to support the Megacaps and AI Champions, though none of that is mirrorred in Australia. Here one of the big questions remains: when will the bear market for Quality, Technology and Growth stocks end?

Not sure whether February might/can produce enough answers to that question. Maybe fear for imminent RBA tightening needs to dial down? Maybe the Nasdaq needs to have a sizeable wobble first?

So far, and no matter the narrative or personal perspective, one observation stands as a rock in Australia: selling orders still dominate share prices for Pro Medicus ((PME)), TechnologyOne ((TNE)), WiseTech Global ((WTC)), Xero ((XRO)), and the likes.

That’s extraordinary given most share prices started weakening in July last year. Bear markets are, indeed, truly brutal.

Just ask any investor who held shares in Pilbara Minerals ((PLS)) in 2024 or Woodside Energy ((WDS)) shares since 2023.

Early Previews

Analysts are by no means back in full action mode this early in the new year (judging from the many email bounces: neither are investors and advisors) but the first previews are cautiously being issued.

Banking analysts at Jarden are wondering whether 2026 could actually become the year when a repricing of bank deposits could turn into a headwind for most inside the sector?

CommBank ((CBA)) could potentially re-ignite market concerns about pressure on the net interest margin (NIM), while Bendigo and Adelaide Bank ((BEN)) is yet to reveal provisions (market is apparently waiting for it) and Judo Bank ((JDO)) might yet again showcase its disruptive business is truly operating in a sweetspot.

Jarden also suggests the upcoming Q3 trading update from Macquarie Group ((MQG)) could turn into a positive event on the back of a general pick-up in capital markets and upward volatility in commodities.

Then what else is the share market but a melting pot of conflicting narratives and approaches?

Banking sector analysts at Citi are expecting positive follow-through from deposit pricing with banks expected to issue cautiously positive outlook statements. They too are positively-biased towards Macquarie Group’s update, also because last year’s comparables were quite soft.

To express their positive view on Judo Bank, Citi analysts have opened a positive 90 days catalyst watch on the stock.

As per usual, not everything will be straightforward negative or positive in February. Jarden’s preview on The Lottery Corp ((TLC)), for example, implies the interim result is likely to be weak (with Jackpot weakness to blame) –with downside risk seen to consensus forecasts– but with the added thought this might well already be in today’s share price.

No double-guessing as to what are Jarden’s thoughts about the current set-up: earlier this morning, this broker upgraded its rating to Overweight from Underweight. Target $5.30 (up by 10c) on positive revisions to longer-term growth projections.

To be continued over the following weeks.

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