Rudi's View | 10:00 AM
Preliminary assessment of the August results season, with notes, stats and observations.
By Rudi Filapek-Vandyck, Editor
Today (Monday) marks the final day of Australia's corporate results season.
Because of the lag in broker research updates, followed by our assessment for the FNArena Monitor, it will still be a few days before a final verdict can be reached, but the bulk of earnings reports and trading updates are in.
Yet again, the season revealed a highly fractured and polarised landscape, but earnings performances generally proved more resilient than the more cautious forecasters among us had feared.
The flipside is that our Monitor has registered more disappointments than positive surprises, mostly because of cautious guidance statements from business leaders and management teams.
Other culprits included cost overruns, the need to ramp up spending and investment and, particularly among discretionary retailers, more subdued trading updates.
REITs and heavily indebted companies suffered from higher financing costs. Large projects suffered delays. The inability to contain costs remains a curse for some.
Earnings Momentum Remains Polarised
All in all, Morgan Stanley analysts report FY26 is most likely to show aggregate earnings-per-share growth of 12%, which is quite remarkable given the general caution ahead of the season.
This implies there has been no net change to the consensus growth forecast from before the season.
What has changed is the growth forecast for the year ahead, now reportedly 8.1%, down from more than 12% one month ago. The consensus EPS growth outlook for FY27 has fallen to 9.3%.
According to Ord Minnett's preliminary assessment, no less than 61% of companies have suffered downgrades to their outlook this month, versus only 35% receiving upgrades.
What has also changed is the share market's multiple, currently estimated at 17.9 times forward-looking EPS, versus 17.4 times at the start of the month.
The ASX itself is on course to deliver a positive performance for the month, up circa 1.1%.
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