Challenger's (ASX:CGF) fiscal 2026 third-quarter update missed consensus across key Life metrics, with FM outflows significantly worse than expected, driven by institutional equity mandate attrition in both Australian and global equities, according to a Tuesday note by Jarden.

The firm's redemption of all CGFPC notes on May 25 simplifies the capital structure, reduces the AT1 coupon burden, and is earnings-per-share accretive.

Jarden sees balanced risk/reward for Challenger in the future, with catalysts including capital management flexibility from the Australian Prudential Regulation Authority reform, as well as expanding retirement partnerships across superfunds.

It lowered its fiscal 2026 sales forecast to reflect weaker institutional fixed-term sales, partially offset by higher retail annuity sales as partnerships come online.

The investment firm retained its neutral rating on Challenger and raised the price target to AU$8.70 per share from AU$8.60 per share.