The ASX 200 is off to a volatile start on Friday, February 20, with a mix of gains and losses across the board. But here's where it gets controversial - some analysts are questioning the market's resilience as it faces a potential storm of geopolitical tensions and economic headwinds. Let's dive in:
Wesfarmers: Despite a 5.6% drop in shares on Thursday, analysts remain divided. UBS maintains a Neutral rating, citing a balanced risk outlook, while Morgans highlights productivity gains but flags near-term valuation concerns. JPMorgan, however, takes a bearish stance, pointing to lower-quality segments driving earnings.
Telstra: A modestly positive result sees Morgan Stanley and JPMorgan optimistic, with mobile strength and AI exposure noted. Jarden, however, suggests the stock is fairly valued, leaving little room for upside.
Guzman Y Gomez: The company's shares hit all-time lows, down 10.3% in early trade, after a weaker-than-expected result. This follows a 27% tumble in the last six months, raising concerns about its US expansion strategy.
Rio Tinto: Trading 2.7% lower after missing earnings expectations, the company is entering a significant capex period. The failed Glencore merger talks have left the market skeptical of future M&A activity.
Inghams: A 13.9% drop in early trade follows a disappointing earnings downgrade, with operational improvements taking longer than expected. The stock is now down 16% YTD and 30.5% in the last twelve months.
ASX 200: After a four-day rally, the index eases slightly, with broad weakness across sectors. Telix rallies on strong results, while tech names struggle.
Megaport: A strong first half, driven by strategic acquisitions, sees Megaport beat expectations and lift guidance. The company's revenue and EBITDA are ahead of estimates, with a 49% year-on-year growth in Group ARR.
Ramsay Health Care: Proposing a spin-off of its Ramsay Santé stake, Ramsay aims to unlock value through a simplified corporate structure. The distribution is targeted for Q4 2026, providing shareholders with direct exposure to Ramsay Santé.
Inghams Group: Despite a first half in line with earnings guidance, Inghams cuts FY26 guidance due to supply chain challenges and excess inventory. The company expects operational improvements to take longer to impact financials.
Guzman y Gomez: A strong underlying profit beat is overshadowed by revenue and EBITDA misses, with US expansion weighing on group earnings. The company's shares have tumbled in recent months, raising questions about its growth strategy.
Alliance Aviation: A sharp earnings decline in H1, driven by a commercially unviable wet-lease arrangement and higher maintenance costs, prompts a turnaround plan. The company aims to improve capital allocation and contract quality.
Perseus Mining: A solid H1 result sees Perseus beat profit estimates, despite lower volumes and higher royalties. The company reaffirms FY26 guidance, with gold production and AISC targets.
Newmont: Wrapping up CY25 with record free cash flow and a strong EBITDA beat, Newmont guides to slightly lower production in 2026. The company's NYSE-listed shares are up in after-hours trading.
QBE Insurance Group: A solid full-year result sees QBE beat profit, premiums, and combined operating ratio estimates. The company's adjusted ROE hits 19.8%, and it provides FY26 guidance with a focus on investment returns.
PWR Holdings: A strong first half, driven by a new headquarters and improved product mix, sees PWR beat expectations across the board. The company expects modest NPAT margin improvement in FY27, with higher volumes and early productivity gains.
Rio Tinto: Solid full-year results are underpinned by record iron ore output and copper ramp-up, but underlying profit falls short. The company targets asset divestments, and its NYSE-listed shares slipped overnight.
And now, a quick look at some earnings:
- Alfabs Australia, Boom Logistics, BSA, and more reported results, with varying degrees of success.
- A new report warns of Australia's unsustainable government spending, with debt set to rise despite strong national income.
- Oil prices surge to August highs as US-Iran tensions escalate, with markets pricing in a potential military conflict.
- Trump's 10-day deadline to Iran for a nuclear deal, backed by a massive US military build-up, raises the stakes in the Middle East.
- Amazon overtakes Walmart as the world's largest company by revenue, but cloud computing, not retail, is the real driver.
The ASX 200 futures point to a cautious start, with geopolitical tensions and earnings in focus. Stay tuned for more updates throughout the day, and feel free to share your thoughts on these market moves and the potential impact of geopolitical events on the economy. Are we headed for a turbulent ride, or will the market prove its resilience once again?
