ASX earnings recap from last week
We heard from some of the heavy weights in the ASX 200 including CBA and CSL.
Mentioned: Aurizon Holdings Ltd (AZJ), Commonwealth Bank of Australia (CBA), Computershare Ltd (CPU), CSL Ltd (CSL), JB Hi Fi Ltd (JBH), Pro Medicus Ltd (PME)
Last week we heard from the follow companiies and our analysts weighed in how investors should interpret these results.
Commonwealth bank CBA
Commonwealth Bank has been dubbed the world’s most expensive bank by the AFR. The question is if that valuation is justified. CBA’s earnings highlight the quality of the wide-moat bank. A clear market leader with the lowest cost/income ratio, thanks to scale, cheaper funding costs, and leading digital offerings. Add to this low loss rates, a strong capital position, and strong track record of dividend growth.
Read our take for the shares which are screening as overvalued.
Pro Medicus PME
Pro Medicus shares had returned an average of 63% per year over the past ten years – enough to turn every $10 invested into over $1300. The magic formula? Rapidly growing revenue and profits combined with sky-high valuation multiples for the shares.
That trifecta continued to work its magic after Pro Medicus announced its full-year results this week. The shares are now up over 50% this calendar year and more than 100% ahead over the past twelve months.
Computershare CPU
Computershare’s fiscal 2024 underlying results were largely as expected, with core businesses performing a little better than expected. Underlying EBIT of USD 1.15 billion met our forecasts, with stronger operating income (excluding margin income) offset by slightly lower margin income than anticipated.
CSL CSL
ASX healthcare giant CSL reported an 11% increase in sales and a 15% increase in net profit on a currency adjusted basis for 2024. This was largely thanks to the strong performance of CSL's Behring division, which benefitted from healthy demand for immunoglobulin and an improved global supply situation.
Despite those fairly strong top-line numbers, CSL shares weakened after the results were released. Morningstar’s CSL analyst Shane Ponraj thinks that this was mostly down to the company’s guidance for 2025.
Read our take on earnings and why we believe CSL is undervalued.
JB Hi-Fi JBH
JB Hi-Fi’s trading momentum keeps on improving—beating our prior expectations. Its Australian sales grew in the June 2024 quarter compared with the previous corresponding period. This is the first time Australian quarterly sales increased on the prior corresponding period (“PCP”) since December 2022. On average, no-moat JB Hi-Fi is outperforming its peers.
According to the Australian Bureau of Statistics, retailing sales of electrical and electronic goods declined by 1% in the June 2024 quarter. We calculate JB Hi-Fi’s Australian sales increased by 3%—a delta of 4 percentage points.
We increase our fair value estimate by 9% to $41 on a 4% uplift of long-term sales levels, slightly higher midcycle operating margins, and the time value of money.
Aurizon AZJ
At first glance, the headlines from Aurizon’s full-year results seemed fairly positive.
Earnings from Aurizon's Central Queensland Coal Network (CQCN) railway assets were up 14%. Aurizon’s coal haulage operations earnings rose by 16%. Non-coal haulage earnings were up 6% and management announced a $150 million share buyback.