ASX opportunities after earnings season

Morning Star AU

Sep 15

This reporting season was characterised by a level of volatility we haven’t seen in years. Despite substantial coverage, it wasn’t just Aussie small caps posting wild swings. On average, companies ...

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Despite substantial coverage, it wasn’t just Aussie small caps posting wild swings. On average, companies ...</p>\n\n<a href=\"https://www.morningstar.com.au/stocks/asx-opportunities-after-earnings-season\">Source Link</a>\n\n</div>\n","source":"morningstar_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>ASX opportunities after earnings season</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nASX opportunities after earnings season\n</h2>\n\n<h4 class=\"meta\">\n\n\n2025-09-15 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.morningstar.com.au/stocks/asx-opportunities-after-earnings-season><strong>Morning Star AU</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>This reporting season was characterised by a level of volatility we haven’t seen in years. Despite substantial coverage, it wasn’t just Aussie small caps posting wild swings. On average, companies ...</p>\n\n<a href=\"https://www.morningstar.com.au/stocks/asx-opportunities-after-earnings-season\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK7082","symbol_name":"大卖场与超市","start_time":0,"source_url":"https://www.morningstar.com.au/stocks/asx-opportunities-after-earnings-season","article_id":"2567109939","we_media_id":null,"thumbnails":[],"rights":{"source":"morningstar_stock","url":"https://www.morningstar.com.au/stocks/asx-opportunities-after-earnings-season","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2567109939","pubTimestamp":1757865600,"columns":[],"sourceInfo":{"source_id":"morningstar_stock","name":"Morning Star"},"weMediaInfo":null,"summary":"This reporting season was characterised by a level of volatility we haven’t seen in years. Despite substantial coverage, it wasn’t just Aussie small caps posting wild swings. On average, companies across our coverage universe saw their share prices move over 6% on results days. Big names like CSL and Woolworths had the market pendulum swung against them with mass selloffs – the likes of which we haven’t occurred in decades. Portfolio currently hurting?","collect":0,"end_time":0,"defaultTopTitle":"morningstar.com.au","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK7082":"大卖场与超市","BK7511":"ESG概念","BK7501":"新冠治疗股","BK7040":"食品零售","WOW.AU":"WOOLWORTHS GROUP LTD","COL.AU":"COLES GROUP LTD"},"translate_title":"财报季后的澳大利亚证券交易所机会","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"COL.AU":0.9,"WOW.AU":0.76},"content_text":"This reporting season was characterised by a level of volatility we haven’t seen in years. Despite substantial coverage, it wasn’t just Aussie small caps posting wild swings. On average, companies across our coverage universe saw their share prices move over 6% on results days. Big names like CSL and Woolworths had the market pendulum swung against them with mass selloffs – the likes of which we haven’t occurred in decades. Portfolio currently hurting? Amidst all the noise, it’s easy to forget we are humans first and investors second. Taking a long-term view, reporting season should be judged not by volatility, rather, clear changes in intrinsic value. Our equity analysts downgraded around 14% of companies which is broadly in line with past reporting seasons. Short term share price movement shouldn’t be the reason we buy or sell securities. Volatility can be driven by random factors whilst long term returns are the result of more predicable financial metrics like earnings growth and dividend yield. Market price is simply a function of the market’s perception of future value at any given time, thus there can often be a disconnect between how a company is performing vs how its price performs. In the absence of thesis-shattering developments, one should beware of following the trading herd over the cliff. Nevertheless, the occasion provides an apt time to review the investment thesis for each company in your portfolio and determine whether it still meets your long term expectations. Earnings results are only one data point among many, but they can be important in understanding the bigger picture. Pockets of opportunity Valuations already looked stretched coming into earnings. Nevertheless, the ASX 200 clawed almost 3% higher in August trading on a trailing price to earnings multiple of around 20x. This is historically more than investors have been willing to pay, and higher than our ‘fair’ estimate of 17x. However, trailing multiples are only a good indication of the past, whilst markets are forward looking. But the forward outlook doesn’t look terrific either. Earnings for the ASX 20 fell again, marking a third consecutive year of declines. We forecast low-single-digit earnings growth carrying into fiscal 2026 and 2027. The diversion between earnings growth and share price means that Australian equities under our coverage currently trade almost 10% above our fair value estimates. In his latest earnings analysis Morningstar’s market strategist Lochlan Halloway pointed out several new opportunities that reporting season madness had tossed up. Below are two stocks that have since come into undervalued territory either due to price swings or fair value upgrades. Woolworths Group WOW ★★★★Moat Rating: Wide Share Price: $28.07 (15/09/25) Fair Value: $30.50 (maintained) Price to Fair Value: 0.92 (Undervalued) Uncertainty Rating: Low Plunging to its lowest price in years, Australia’s largest supermarket was punished by investors after reporting a 17% decline in net profit after tax. Rising wages, industrial action and elevated supply chain costs weighed heavy as Woolies continues to lose market share to its closest competitor, Coles. Sales growth and margin trajectory are also underperforming Coles, who is currently taking position as the market darling. Accordingly, we reduce our fiscal 2026 earnings before interest and tax to grow at a muted 9%, half our prior forecast. However, power is in the pricing. Woolworth has notable scale advantage over Coles, which allows it to cut prices and rebuild consumer trust, regaining market share. This restoration of trust is key to close the growing sales gap to Coles. Although this won’t happen overnight, but it’s reasonable to expect the performance gap between the two to close in the coming years. For the first time in years, Woolworths shares screen as undervalued. Whilst we downgrade medium-term forecasts, our long term earnings per share estimates remain broadly unchanged. Current share price movement signals an overreaction to softer results. The market is expecting Coles to hold on to its operational outperformance, but Woolworths has the ability to drop prices more than Coles and ultimately lure shoppers back. We maintain our $30.50 fair value estimate. WiseTech Global WTC ★★★★ Moat Rating: Wide Share Price: $97.64 (15/09/25) Fair Value: $138 (upgrade) Price to Fair Value: 0.71 (Undervalued) Uncertainty Rating: High WiseTech took a big hit this season as investors punished the SaaS provider after softer-than-expected results (revenue +14% and EBITDA +17%) and near-term guidance. The core product suite, CargoWise, delivered 17% organic revenue growth driving group underlying net profit after tax up by 30%. The company guided for similar organic revenue growth for CargoWise in fiscal 2026 despite prior indication for revenue growth to accelerate. Morningstar analyst Roy Van Keulen believes this is likely why the shares have taken a dive. Whilst this is disappointing in the near term, several new medium-term productivity initiatives have been put in place, such as AI assistants to automate tasks and provide quality control. Furthermore, to mitigate the potential revenue impact of this, the CargoWise commercial model has shifted away from being partially seat-based (flat fee per user) to fully transaction-based (volume). Van Keulen views WiseTech as a Kingmaker stock. Given freight forwarders who use the product suite outperform their competitors, we expect it to take the market, either through new customer acquisition or existing customers taking share. AI products and the revenue model shift indicate a leap in productivity improvements, therefore reinforcing the likelihood of outperformance. Morningstar increases our fair value estimate by 6% up to $138 per share. At current prices the company screens as materially undervalued and not reflective of the high likelihood that WiseTech will capture the entire freight-forwarding market, from its current ~10% market penetration.-It is important to note that any asset class should be considered as part of a well-defined investment strategy. For a step-by-step guide to defining your investing strategy, read this article by Mark LaMonica. Get Morningstar’s insights in your inbox","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}