NEWS + VIEWS – 28/08/2026
MARKETS
Over the past week, global share markets have been driven mainly by the outlook for inflation, interest rates and AI. Investors have been cautious ahead of Federal Reserve Chair Kevin Warsh’s speech at Jackson Hole, with US inflation still above the Fed’s 2% target and bond yields elevated, keeping uncertainty around future rate moves high. At the same time, strong results and an upbeat outlook from Nvidia revived enthusiasm for AI and technology stocks.
In Australia, the major influence has been July’s higher-than-expected inflation data, which has increased expectations that the Reserve Bank of Australia (RBA) may need to raise interest rates again. The ASX 200 consequently fell sharply on Thursday and Australian shares have also been influenced by global technology sentiment, commodity prices and the strengthening Australian dollar.
REPORTING SEASON
Following the other major banks, NAB last week reported a mixed 3Q26 result. Cash earnings rose 2% to $1.83 billion versus the 1H26 quarterly average, while net profit increased 32% to $1.81 billion. The bank’s net interest margin fell -0.02% to 1.79% and operating expenses rose 4%. Business lending remained resilient, but the key negative was housing, with home loan applications down -15% over the quarter. NAB’s expectation that Australian housing credit growth will slow to 2.5% in FY27 weighed heavily on sentiment, with the share price falling -4.6% after the update.
BHP delivered a strong FY2026 result, with revenue up 15% to US$58.8 billion and underlying profit rising 30% to US$13.2 billion, driven by higher copper prices, stronger production and cost improvements. The key structural shift was copper overtaking iron ore as BHP’s largest earnings contributor for the first time, accounting for around 54% of earnings. BHP also reduced net debt to US$8.7 billion and declared a US$0.99 final dividend, taking the full-year dividend to US$1.72 per share, its highest in four years. Overall, the result was stronger than expected with management targeting significant production growth over the next decade as demand from electrification, power infrastructure and AI data centres supports the long-term copper outlook.
CSL reported a mixed FY2026 result, with revenue falling -1% to US$15.8 billion and underlying Net Profit After Tax (NPAT) declining -3% to US$2.8 billion, reflecting weaker performance across CSL Behring and Seqirus and continued pressure at Vifor. However, strong cash generation and cost reductions provided some positives. Management is now focused on returning to sustainable growth, forecasting roughly 5% underlying NPAT growth in FY2027, with CSL Behring expected to regain mid-single-digit revenue growth, although Vifor remains a significant drag. Overall, the result was operationally weak, but the outlook was better received by investors, with the share price jumping more than 17% following the result.
Pro Medicus (PME) delivered another very strong full year result, with revenue rising 23% to $261.7 million and underlying NPAT increasing 24% to $145 million. The company added 10 new contracts, achieved 100% renewal of existing contracts and increased its five-year recurring contract coverage to around $1.3 billion. The company remains debt-free, and management is particularly optimistic about FY2027, pointing to contributions from recent implementations, a strong pipeline and new products in digital pathology and reporting. PME’s share price rose around 12% on the day of the announcement.
Santos’ (STO) half year result was mixed with sales revenue up 2% to US$2.6 billion, while underlying profit fell a less-than-expected -22% to US$397 million. Production increased 3% to 45.6 million barrels of oil equivalent (mmboe). Importantly, Barossa was operating at 97% of planned rates and Pikka achieved first oil, with the company expecting second half production to rise 20-30% as both projects ramp up. The company maintained FY26 production guidance of 99-105 mmboe.
Fortescue (FMG) delivered a strong operational FY2026 result, with record iron ore shipments of 201.3 million tonnes, revenue increasing 9% to US$17 billion and underlying NPAT rising 3% to US$3.5 billion, reflecting higher realised iron ore prices and continued supply-chain performance. Free cash flow grew 25% to US$3.2 billion, supporting a full-year dividend of A$1.08 per share. However, statutory NPAT declined 15% to US$2.9 billion, largely due to a US$525 million impairment related to Iron Bridge.
Sonic Healthcare (SHL) reported a solid FY2026 result, with revenue increasing 13% to $10.9 billion, supported by 5% organic growth and contributions from acquisitions, while underlying net profit increased 17% to $621 million. Despite the strong headline result, the outlook was more cautious, with FY2027 earnings guidance of $1.95-2.03 billion, reflecting higher interest costs, regulatory pressure in Switzerland, integration challenges in the UK and ongoing restructuring in the US. SHL’s share price fell more than -9% following the result.
Woodside Energy (WDS) delivered a strong half year result, with operating revenue rising 13% to US$7.5 billion, supported by higher realised commodity prices, while production reached 86.5 mmboe and underlying NPAT increased 7% to US$1.33 billion. Free cash flow more than doubled to US$352 million, despite higher operating costs associated with the Pluto turnaround and the commencement of Beaumont New Ammonia. WDS also made strong progress on its major growth projects, with Scarborough 98%, Trion 64% and Louisiana LNG 28% complete, while maintaining FY2026 production and capital expenditure guidance.
Coles (COL) reported an increase in group sales revenue of 2.8% to $45.6 billion, while underlying NPAT increased 13.7% to $1.26 billion, demonstrating strong operating leverage and cost control. The key driver was Supermarkets, where sales grew 3.7% to $41.5 billion, with improved customer satisfaction, product availability and value offerings supporting performance. eCommerce was particularly strong, with sales up 26.4% to $5.6 billion. Liquor remained the weak spot, with sales down -3.3%, prompting a repositioning program and store closures.
PolyNovo (PNV) delivered a strong FY2026 result, continuing its rapid growth trajectory, with the company benefiting from accelerating adoption of its NovoSorb technology, particularly in the US. Commercial sales growth remained strong, supported by increasing surgeon adoption of NovoSorb BTM and the continued rollout of NovoSorb MTX, while PNV’s expanded manufacturing capacity in Port Melbourne provides additional scope to support future demand.
Woolworths (WOW) announced a strong FY2026 result, with group sales rising 3.6% to $71.5 billion and NPAT increasing 18.1% to $1.14 billion, supported by improved trading momentum and cost savings. Australian Food sales increased 4.6% to $53.9 billion, while eCommerce sales grew strongly and the popular Disney Ooshies campaign helped drive customer engagement and item growth. BIG W also returned to profitability, although New Zealand Food remained challenging amid intense competition and value-focused consumers.
Wesfarmers (WES) delivered a solid FY2026 result, with revenue increasing 3.4% to $47.3 billion and underlying NPAT rising by 8.3% to $2.9 billion. Bunnings remained the key earnings driver, with earnings up 5.1% to $2.46 billion, while Kmart delivered 6% earnings growth to $1.11 billion, benefiting from its strong value proposition and higher customer volumes. Officeworks was the main weakness, with earnings falling around -20% due to transformation and restructuring costs. Free cash flow increased 15.8% to $4 billion, and the full-year dividend was increased by 7.8% to $2.22 per share. Despite the strong result, WES’ share price fell by more than -4% on the day of the announcement.
In its first full financial year following the merger with Chemist Warehouse, Sigma Healthcare (SIG) delivered a strong FY2026 result, with revenue increasing 15.5% to $10.8 billion and NPAT increasing 22.3% to $732.3 million. The Australian business remained the key contributor, while the international segment delivered particularly strong growth, and Ireland becoming profitable for the first time. SIG also delivered $32.6 million of integration synergies, while net debt fell to $663 million, leaving the group conservatively leveraged.
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