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It's reporting season time!
Hi there!
You know what time it is – August reporting season. It's one of the most rewarding (and punishing) stretches for holders, and in recent years a one-day move of +/-10% has become increasingly common.
Last season alone, Zip, Data#3, Pro Medicus, Austal, Cochlear, Lovisa, Megaport, AMP, Nick Scali and plenty more (what a broad list, I know) all copped one-day declines of 10% or worse.
The easiest season in recent memory, in my view, was February 2024. Coming out of the 2022-23 hiking cycle, expectations were on the floor, so all you had to do was edge past them to kick off a massive year-long rally into all-time highs.
The hardest was probably August 2025. After a solid run, share price gains had badly outpaced earnings growth. A name like JB Hi-Fi was trading on a price-to-earnings of 27x against a historical average in the low teens, and even a good result couldn't keep a lid on the volatility.
Come August 2026, we're somewhere in between. Valuations are more modest, but the operating backdrop is tough (inflation, minimum wage rises, high oil prices, soft consumer confidence). On top of that, Labor's CGT changes look set to reshuffle how investors and institutions weigh yield against growth, and possibly even shift out of the Aussie market as a whole.
What can you do to prepare for reporting season?
Bookmark our ASX reporting season calendar
Check out our Live Blog, where we will cover as many results as humanly possible
Both the calendar and blog feature consensus numbers, giving you as much context to make more informed decisions
Let’s dive in.
Investor sentiment survey
Bearishness climbed for a third-straight week, from 30.0% to 48.1%, and the spread has fallen from +5.8pp to -21.5pp. At 48.1%, this is in the 95th percentile (since we started the survey last May), and the spread is in the 8th. Neutral readers collapsed to 25.4%, the lowest since early June. So the fear is quite broad-based, pulling from both the bullish and fence-sitting camps simultaneously. Funny thing is, when the series dumps into bearishness, it almost always whipsaws back within a week or two.
Over the next three months, do you expect the Australian stock market to be:
Bullish
Neutral
Bearish
August reporting season: Key numbers, yields and most important metrics
Here are some broad numbers you should know about:
S&P/ASX 200 trading at an FY26 price-to-earnings of approximately 19x, so relatively expensive relative to historicals but an argument can be made that current valuations are normal relative to post-pandemic levels
S&P/ASX 200 earnings forecast to grow ~12% year-on-year in FY26, marking the strongest aggregate growth rate in four years
Strip out mining profits, forecast growth falls to just ~5.5%, according to UBS
If you take out Financials, growth falls even further to just ~2.5%
Morgans has already observed a rotation from growth to income in recent months, and the upcoming results season could drive more re-positioning. “Payout ratios and dividend guidance are the signposts we are watching. We will look for evidence of where boards land on the trade-off between reinvestment for growth and capital management,” said the analysts in their reporting season guide.
Now hear me out. Reporting season is a massive liquidity event (lots of turnover), which gives funds and institutions a window to re-position.
So what am I watching? In the early innings, two things stand out.
First, how do growth stocks behave? If a growth name reports better-than-expected numbers and guidance, does it catch a bid like usual, or get sold into?
Second, how do income stocks behave? Strong dividends always find buyers, but what about the not-so-exciting ones?
Lastly, one of my favourite charts for results-watchers. It's a touch dated (Aug-25) but it shows which reporting metrics move two-day returns the most.
If you're following the live blog, keep an eye out for results with a clean beat or miss across margins, NPAT, dividends and guidance. Those are the ones that tend to trigger an unearthly move.
Even a slow-moving and boring company like Aurizon managed an extraordinary move last February, where it delivered that exact clean beat. The stock opened 3.0% higher on the day (16-Feb) and finished the session up 6.9%. It finished higher nine of the next ten sessions, up 10.6% in total.
Best of Livewire: Did software stocks just find their catalyst?
Here are some of my favourite pieces from our friends over at Livewire:
ASX software stocks recovering. Beaten-down names like Xero and WiseTech have rallied from 52-week lows (above), with Microsoft's blowout earnings seen by Ben Clark and Henry Jennings as a catalyst for further re-rating into reporting season.
Katana holding 24% cash. Romano Sala Tenna has lifted cash above his usual 20% ceiling on stretched US valuations, while still backing Cuscal (CCL) and HealthCo REIT (HCW) as compelling ASX picks.
'Albo Accounts' ETF debate. Sparked by the US Trump Accounts scheme, three advisers rejected home-country bias for a hypothetical Aussie version, nominating globally diversified VGS, DHHF and VGRO.
The AI trillion-dollar question. Plato's Dr David Allen questions whether hyperscalers' ~US$5.3 trillion AI spend will earn adequate returns, warning history shows high-capex companies often destroy huge value.
How to invest $1 million (mid-year update). Charlie Viola and Ben Clark are shifting gradually toward global equities and alternatives, but keep Aussie shares for income and lower volatility despite the ASX 200's meagre ~2% FY26 return.
Classic ASX
We all know that ASX’s compliance and surveillance needs some work, but this week showcased two rather concerning moves that lacked any follow up.
Develop Global: DVP opened 1.4% lower on Wednesday, then cratered as much as 21% within two hours. There was zero news to justify it, aside from Bell Potter trimming their target 9.7% to $6.50. Yet no trading halt, and the ASX price query didn't land until 6:23pm. DVP couldn't explain the move and simply pointed to the broker note.
EnergyOne: EOL was halted on Thursday morning after the AFR reported a Norwegian suitor had approached the company at $17.00 per share, a ~56% premium. Here's the wild part. EOL admits it fielded an unsolicited, non-binding and conditional bid at $16.50 from the same suitor back on 6 July 2026, but never told the market. The only reason this one is public is that the AFR broke it first
Legally, the ASX's baseline rule (Listing Rule 3.1) requires "immediate disclosure of anything a reasonable person would expect to have a material effect on price."
However, there's a well-established carve-out (3.1A) that lets a company withhold confidential information, provided it stays confidential and falls into a protected category. The relevant one here is an incomplete proposal or negotiation.