Macro Intelligence: Australia 200 delivers best annual gains since Covid-19 pandemic

Best & worst of FY2025

In this week’s edition of IG Macro Intelligence, we take a look at some of the best and worst performing Australian Securities Exchange (ASX) stocks over financial year (FY) 2025.

Top of the class

The 2024/2025 FY was a positive one for investors, with the Australia 200 (ASX 200) index delivering nearly a 10% return, marking its best year since the FY2020/2021 when Australia was emerging from the depths of the Covid-19 pandemic.

Australia 200 one year chart

Financial, telecommunications (telco), and information technology (IT) stocks experienced the biggest gains, while geopolitical tensions that disrupted the crude oil market caused the energy sector to underperform, dropping more than 13% in the 12 months to 30 June.

Zach Riaz from Banyantree Investment Group highlights the overall recovery, stating that without paying attention to financial news, 'you would have thought it's not a bad start to the year considering what we delivered in 2020 for calendar 2024.' He notes that 'all markets are now in the black,' with Australian investors up 7.3% and the US 500 (S&P 500) and US Tech 100 (Nasdaq 100) indices returning to positive territory.

Australia 200 sector perfomance

Commonwealth Bank of Australia (ASX:CBA)

Not investing in the country’s biggest bank and largest ASX stock by market capitalisation, the Commonwealth Bank of Australia (CBA), proved to be a mistake. CBA shares rose more than 46% in the FY, despite analyst concerns that the stock is overvalued.

Shares hit an all-time high of $192 in late June, and ASX Tradewatch data suggests the bullish momentum for CBA could continue. Specifically, the 5-day moving average (MA) of CBA is tracking above the 50-day MA while both the 200-day MA and 20-day MA are also trending higher.

CBA daily share price chart

However, analysts have called time on CBA’s run, with the average broker recommendation a 'Sell' according to Refinitiv data, with a target price around $117, suggesting CBA at current levels is around 37% over-valued.

Martin Crabb from Shaw and Partners cautions against the high valuation of CBA, expressing that at $190 'it's 30 times earnings' and ' it's four times the book (value).' Crabb argues that CBA 'is not a growth stock' and advises investors, 'Do not buy this stock,' as it is unlikely to achieve more than 4- 5% earnings growth annually.

CBA historical trends and price targets

Evolution Mining (ASX:EVN)

Safe-haven buying, which partially helped propel CBA, also bolstered gold stocks in FY2025, alongside the price of the physical commodity. Shares in gold miner Evolution Mining rose almost 130% in the 12 months to June.

Evolution Mining daily share price chart

ASX Tradewatch data shows some caution towards staying in the stock, with the 5-day MA below the 20-day MA. However, the 200-day MA is trending upwards, suggesting long-term interest in the stock.

While some analysts are cautious about the stock's future, UBS sees Evolution Mining as a 'cleaner' large-cap gold play but has downgraded it to a 'Sell' from 'Neutral', citing lower earnings expectations.

In contrast, Adam Dawes from Shaw and Partners maintains his commitment to the stock, emphasising a preference for quality producers with gold prices looking 'really good.'

Evolution Mining buy/sell indicators and analyst projections

Temple & Webster (ASX:TPW)

E-commerce retailer Temple & Webster is another stock which has risen more than 100% over the past 12 months.

Temple & Webster daily share price chart

Analysts, on the whole, remain confident Temple & Webster can continue its recent run, with the average broker recommending 'Buy', with a mean price target of $19.55. The interest rate-cutting cycle and stronger consumer confidence are expected to work in its favour.

However, Jefferies recently initiated coverage on the stock with an 'underperform' rating and a $17 price target, suggesting that while Temple & Webster holds an advantage in the online furniture space, it may face challenges in maintaining market leadership due to increasing competition. Valuation metrics are also noted as demanding, with the stock trading around 29% above its target.

Temple & Webster historical trends and price targets  

Stocks lagging behind

IDP Education (ASX:IDP)

Shares in IDP Education came near the bottom of the class in FY2025. The stock has been hit by policy headwinds across all its major markets, including visa restrictions, processing delays, and tighter immigration policies.

IDP now expects FY25 student placement volumes to be down 28-30% on the prior year, with language testing volumes tipped to fall around 18-20%.

IDP daily share price chart

Despite recent losses, analysts at Refinitiv see potential  see potential for IDP Education to rally to its mean target price of $6.18.

UBS is more conservative with a $4.95 price target but upgrades the stock to a 'Buy' from 'Neutral', believing that current trading conditions are nearing a trough.

Andrew Coleman from Teaminvest underscores the risks, noting that the business relies heavily on contracts with universities and international student numbers, suggesting that Covid-19 was a significant warning signal.

IDP Education historical trends and price targets

Mineral Resources (ASX:MIN)

Shares in Mineral Resources fell more than 60% in FY2025.

Mineral Resources daily share price chart

Macquarie, which recently had an 'outperform' rating on the stock, has now turned bearish on Mineral Resources, cutting its iron ore and lithium forecasts. It now has a 'Neutral' rating and $22 price target, largely in line with where the stock finished the year.

Shares appear to be in a near-term rally within a longer bearish trend, implying limited demand for the stock according to ASX Tradewatch data. The recent rally isn’t showing enough signs of the beginning of a new trend according to technical analysis, meaning investors should proceed with caution.

Mineral Resources historical trends and price targets

CSL Limited (ASX:CSL)

Healthcare heavyweight CSL Limited (CSL ended the FY2025 down almost 20%.

Ongoing tariff uncertainty has impacted the company, which receives around half its revenue from the United States (US) market. US government drug policy and proposed cuts to Medicare have also led investors to sell. 

CSL daily share price chart

However, many analysts think the future is brighter for CSL, with the average target price at $313, suggesting 30% upside.

Morgan Stanley has an 'overweight' recommendation on the stock, while Citigroup asserts CSL offers good value at current prices with a 'Buy' rating.

CSL buy/sell indicators and analyst projections 

FY2026 outlook

The Australia 200 is kickstarting the new financial year just over 1% from its all-time high. Meanwhile, Wall Street bulls drove stocks in the US to all-time highs at the end of June. The US 500 index is up 25% from April lows and notched its best quarter since December 2023. 

Risks to the upside: 

• Impact of Donald Trump’s tariffs, coming into effect from 9 July
• The American debt crisis
• Geopolitical uncertainty.

However, the expected rate-cutting cycle could prove fruitful for Australian investors.

Julia Lee from FTSE Russell is optimistic about the outlook for China, highlighting that upcoming capital projects are supportive of a more positive outlook for the market. She emphasises the importance of the August reporting season as key for the Australian sharemarket, given current high valuations.

Zach Riaz from Banyantree Investment Group expects the index to 'grind higher' by year-end, noting that while easy gains are mostly realised, a genuine correction is anticipated midway through next year.

S&P 500 notches

Julia Lee from FTSE Russell is optimistic about the outlook for China, highlighting that upcoming capital projects are supportive of a more positive outlook for the market. She emphasises the importance of the August reporting season as key for the Australian sharemarket, given current high valuations.

Zach Riaz from Banyantree Investment Group expects the index to 'grind higher' by year-end, noting that while easy gains are mostly realised, a genuine correction is anticipated midway through next year.