Big falls ahead for some of Australia's major stocks as they reveal profits
Australia's largest companies will reveal how they performed financially over the next few weeks, against the gloomy backdrop of a property downturn, stubborn inflation, higher interest rates and the Iran war.
Over the coming weeks, hundreds of Australian companies will release their financial results, with analysts predicting a 12% earnings per share growth for the 2025-26 financial year. However, some companies may issue profit downgrades due to the impact of the property downturn on consumer sentiment. Share prices could experience significant fluctuations depending on whether the results meet or exceed investors' high expectations.
On average, analysts forecast a 12% earnings growth rate for Australia's largest 200 companies, which is the strongest aggregate growth rate in four years. Nevertheless, when excluding mining and financial sector profits, this growth rate drops to a mere 2.5%. Investors are focusing more on companies' forward guidance, or their outlook for the next six to 12 months, as earnings momentum has turned negative.
The upcoming reporting season will be affected by higher interest rates, the Iran war, rising oil prices, and the Albanese government's decision to increase capital gains tax and restrict negative gearing for property investors. Companies exposed to the housing cycle, such as JB Hi-Fi, Nick Scali, Baby Bunting, Temple & Webster, and Breville, are expected to provide a more conservative outlook.
Stronger results are anticipated from mining companies due to higher commodity prices and demand from tech giants for copper used in AI data centres.
Written by urgent.news from ABC News AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
