EARNINGS PER SHARE – AUSTRALIA

Earnings haven’t been revised low enough

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Original article by William McInnes
The Australian Financial Review – Page: 31 : 8-Apr-20

Earnings per share forecasts for S&P/ASX 200 companies have been reduced by seven per cent since February, due to the impact of the coronavirus pandemic. Macquarie argues that this downgrade is too small, given that Australia’s GDP growth is expected to contract in 2020; the broker adds that the financial market appears to have priced in a much higher decline. Macquarie notes that forecasts are difficult at present as many listed companies have withdrawn their earnings guidance in response to the pandemic.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MACQUARIE GROUP LIMITED – ASX MQG

Analysts cut bank earnings forecasts

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Original article by Gerard Cockburn, Joyce Moullakis
The Australian – Page: 21 : 5-Mar-20

JP Morgan expects the net profits of Australia’s major banks to fall by 3-4 per cent over coming years after they moved to reduce their mortgage interest rates by 25 basis points, in line with the latest official interest rate cut. JP Morgan adds that the prospect of lower profit margins may prompt banks to reduce their dividend payouts. Macquarie has reiterated its ‘underweight’ recommendation on the banking sector, while UBS has downgraded its earnings-per-share forecast for bank stocks.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, UBS HOLDINGS PTY LTD

Little room for error as reporting season nears

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Original article by David Rogers
The Australian – Page: 25 : 24-Jul-19

The consensus forecast is for S&P/ASX 200 companies outside of the resources sector to post earnings per share growth of one per cent for 2018-19. Morgans Financial expects the August 2019 reporting season to generally exceed expectations, due primarily to the fact that earnings forecasts have been downgraded so much. Andrew Tang of Morgans favours stocks such as BHP, Rio Tinto, Telstra and A2 Milk. He says Suncorp, Spark Infrastructure, Computershare and REA Group are among the stocks whose 2018-19 earnings and future guidance may disappoint the market.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, MORGANS FINANCIAL LIMITED, BHP GROUP LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, TELSTRA CORPORATION LIMITED – ASX TLS, THE A2 MILK COMPANY LIMITED – ASX A2M, SUNCORP GROUP LIMITED – ASX SUN, SPARK INFRASTRUCTURE GROUP – ASX SKI, REA GROUP LIMITED – ASX REA, MACQUARIE GROUP LIMITED – ASX MQG, STANDARD AND POOR’S ASX ALL ORDINARIES INDEX

Confession season to give rally a reality check

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Original article by David Rogers
The Australian – Page: 27 : 30-Apr-19

The Australian sharemarket has had its best start to a calendar year since 1991, despite retreating on 29 April. However, the banks’ reporting season will be the next key test for the local bourse, along with trading updates from other listed companies. Meanwhile, the consensus forecast for growth in earnings per share in 2019 is 2.8 per cent, compared with 8.4 per cent at the same time in 2018.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, STANDARD AND POOR’S 500 INDEX, SHANGHAI COMPOSITE INDEX, MORGAN STANLEY AUSTRALIA LIMITED, CITIGROUP INCORPORATED

Resources strength holds up reporting season

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Original article by David Rogers
The Australian – Page: 28 : 5-Mar-19

Paul Winter of UBS notes that Australia’s latest February reporting season featured more earnings downgrades than upgrades for the first time in the last four years. Hasan Tevfik of MST Marquee adds that while the reporting season was better than expected, this was largely due to a strong performance by the resources sector, which offset weakness in other sectors. Earnings-per-share growth for S&P/ASX 200 stocks is now forecast to be 6.3 per cent in 2018-19, compared with 7.6 per cent in 2017-18.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, UBS HOLDINGS PTY LTD, MST MARQUEE, MORGAN STANLEY AUSTRALIA LIMITED

Citi eyes value in beaten-down media sector

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Original article by Lilly Vitorovich
The Australian – Page: 20 : 16-Jan-19

Citigroup has downgraded its 2018-19 earnings-per-share forecasts for listed media groups, including Nine Entertainment Company, Seven West Media and Southern Cross Media. The investment bank has also reduced its share price targets for these stocks, although its recommendations on Nine, Seven, Southern Cross and News Corporation have been upgraded.

CORPORATES
NINE ENTERTAINMENT COMPANY HOLDINGS LIMITED – ASX NEC, SEVEN WEST MEDIA LIMITED – ASX SWM, SOUTHERN CROSS MEDIA GROUP LIMITED – ASX SXL, NEWS CORPORATION – ASX NWS, HT&E LIMITED – ASX HT1, CITIGROUP PTY LTD, DOMAIN HOLDINGS AUSTRALIA LIMITED – ASX DHA

Woolies to return $1.7b to shareholders

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Original article by Sue Mitchell
The Australian Financial Review – Page: 16 : 13-Nov-18

Shaun Cousins of JP Morgan estimates that the sale of Woolworths’ fuel retailing business will reduce earnings per share by 7.4 per cent in 2020 and 8.1 per cent in 2021. However, the impact on EPS would be lower if Woolworths opts to return the proceeds of the sale to shareholders via a buyback. Woolworths is widely tipped to return most of the sale proceeds to investors, having initially flagged its intention to use some of the funds to reduce to debt and finance store refurbishments.

CORPORATES
WOOLWORTHS GROUP LIMITED – ASX WOW, JP MORGAN AUSTRALIA LIMITED, EG GROUP, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, BP PLC, CITIGROUP PTY LTD, BIG W DISCOUNT STORES, AUSTRALIAN LEISURE AND HOSPITALITY GROUP LIMITED, ENDEAVOUR DRINKS

Westpac challenged on growth

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Original article by Joyce Moullakis
The Australian – Page: 23 : 7-Nov-18

Credit Suisse and Bell Potter have upgraded their earnings forecasts for Westpac following the release of the bank’s latest full-year financial results. Credit Suisse expects Westpac’s cash profit to rise to $8.29bn in 2018-19, after a flat profit of $8.07bn for 2017-18. Meanwhile, Macquarie Group and Morgan Stanley have reduced their earnings-per-share forecasts, and Victor German of Macquarie expects Westpac’s earnings growth in 2018-19 to be "negligible".

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, CREDIT SUISSE (AUSTRALIA) LIMITED, BELL POTTER SECURITIES LIMITED, MACQUARIE GROUP LIMITED – ASX MQG, MORGAN STANLEY AUSTRALIA LIMITED

Music to the ears of investors as the beats go on

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Original article by David Rogers
The Australian – Page: 27 : 21-Aug-18

The August corporate reporting season in Australia has generally been positive, with about half the companies that have reported to date announcing earnings and dividend payouts that met expectations. This has been reflected in share prices, with stocks that have beaten expectations rising by 2.8 per cent on average and those that failed to do so tending to fall by around three per cent. However, Jason Steed of JP Morgan notes that earnings per share forecasts have been downgraded for 29 per cent of stocks, while just nine per cent have been upgraded.

CORPORATES
JP MORGAN AUSTRALIA LIMITED, DEUTSCHE BANK AG, MORGAN STANLEY AUSTRALIA LIMITED, BRAMBLES LIMITED – ASX BXB, COLLECTION HOUSE LIMITED – ASX CLH, ARB CORPORATION LIMITED – ASX ARB, COCA-COLA AMATIL LIMITED – ASX CCL, STANDARD AND POOR’S ASX 200 INDEX, RIO TINTO LIMITED – ASX RIO, AGL ENERGY LIMITED – ASX AGL, CHALLENGER LIMITED – ASX CGF, MINERAL RESOURCES LIHIR PTY LTD, PACT GROUP HOLDINGS LIMITED – ASX PGH, COCHLEAR LIMITED – ASX COH, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, SEEK LIMITED – ASX SEK, ANSELL LIMITED – ASX ANN

Risks are real even in blur of reporting season

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Original article by David Rogers
The Australian – Page: 28 : 15-Aug-18

The earnings outlook for Australian companies has been encouraging so far in the August reporting season. There has been an 0.5 per cent increase in the consensus estimate for growth in earnings per share over the next year, based on financial results to date. Local investors have largely shrugged off global issues such as the downturn in the Turkish lira and continued trade tensions between the US and China. However, local shares – and other asset classes – remain vulnerable to external risks.

CORPORATES
STANDARD AND POOR’S ASX 200 INDEX, DOMINO’S PIZZA ENTERPRISES LIMITED – ASX DMP, COCHLEAR LIMITED – ASX COH, CHALLENGER LIMITED – ASX CGF, CSL LIMITED – ASX CSL, WOODSIDE PETROLEUM LIMITED – ASX WPL, WESFARMERS LIMITED – ASX WES, QBE INSURANCE GROUP LIMITED – ASX QBE, DEXUS – ASX DXS, INSURANCE AUSTRALIA GROUP LIMITED – ASX IAG, SEEK LIMITED – ASX SEK, PERPETUAL LIMITED – ASX PPT, UNITED STATES. EXECUTIVE OFFICE OF THE PRESIDENT, EUROPEAN CENTRAL BANK