Labor’s landslide reshapes market outlook

In this week’s edition of IG Macro Intelligence, we explore the market implications of the ALP’s significant victory in the 2025 Federal election and the stocks set to benefit or suffer.

“Curtin call”: Historic win for Labor

Prime Minister Anthony Albanese and the Federal Labor Party secured an extraordinary victory, achieving their strongest electoral result since John Curtin’s wartime government in 1943. This result marks the first time since John Howard in 2004 that a prime minister has secured a second consecutive term.

Former Opposition Leader Peter Dutton lost his seat after 24 years, highlighting the magnitude of Labor’s win. Andrew Thomas of Magenta Advisory told ausbiz:

“It's quite extraordinary in a way for labor. You have to go back to John Curtin, who in 1943, was in wartime government to see a higher vote for the Labor Party. And there's really only been two subsequent elections where the Liberal Party have achieved a higher top vote, and they were Menzies in 66 and Fraser in 75. So that means this result for Albanese is higher than Hawke got in 83, higher than Howard got in 96 and higher than Rudd got in 2007. So it give you a sense of the of the magnitude of this result.”

Prime Minister Anthony Albanese

Stocks positioned for Labor gains

So, what stocks are set to benefit under a second Labor term?

Labor's emphatic win brings some clarity to financial markets, reducing the risk of policy gridlock and political uncertainty had it not been able to form a majority government. However Morningstar analysts note that given that the Senate remains without a clear majority, "Labor will still need to negotiate with the crossbench to advance its agenda." Morningstar analysts expect concessions to the Independents or other minor parties may have modest fiscal policy implications.

The ALP's key policy planks link to housing supply, expanding the Medicare system and renewable energy.

Tim Buckley, director of independent think tank Climate Energy Finance, says the electorate has given the Albanese a crystal clear mandate and that "The LNP's nuclear furphy is dead, buried and cremated."

Labor is aiming for 82% of Australia's electricity to come from renewable sources – solar, wind, hydro – by 2030.

The winners

• AGL Energy 

(AGL) AGL Energy will be a key beneficiary of Labor's proposed $4,000 per household battery subsidy, which could help stabilise electricity prices, according to Macquarie. Brokers are positive on AGL, with an average target price of $12.20 and a median buy recommendation.RetryClaude can make mistakes. Please double-check responses.

AGL Energy daily chart

AGL Energy historical trends and price targets

• Novonix 

Novonix daily chart

Novonix historical trends and price targets

• Ramsay Health Care (RHC)

Ramsay Health Care (RHC) could see potential upside, with the Health Minister indicating he would like private insurers to increase the claims ratio paid to hospitals, according to Morgan Stanley analysts. The analysts point out RHC is trading close to recent five-year lows. They've upgraded their price target on RHC by 3% to $37.20 a share, UBS is neutral on RHC with a target price of $38.50, suggesting further 10% upside from current levels. The average broker recommendation on the stock is a hold, with a $38.89 target price, suggesting a further 14% rally.

Ramsay Health Care daily chart

Ramsay Health Care buy/sell indicators and analyst projections

The losers

• Whitehaven Coal

Whitehaven Coal shares are down 21% year-to-date, while ASX Tradewatch data show little demand for the stock, amid the recent weak price action and with its 200-day moving average sloping downwards. The company may face headwinds with Labor's push toward net-zero targets and clean energy. "Same job, same pay" laws will continue to impact ASX-listed companies with significant contractor workforces, including Whitehaven Coal.

• ARB Corporation

Analysts say EV demand and the push for cleaner energy could affect automotive parts suppliers like ARB Corporation. UBS is most negative on the stock, with a SELL recommendation and $34 price target.

• nib

nib is up 25% year to date, and is currently trading on a PE ratio of 20.46. Private health insurers may come under margin pressure if premium indexation is scrapped, according to The Australian Shareholders' Association. Deep Data Analytics' Mathan Somasundaram recommends holding the stock at current levels, but calls it too expensive to buy: "The multiples are not cheap. The yield is below bond yield. So you're not there for the yield. You kind of have to be there for the growth. Um and I don't see huge growth. Uh, this is not a massive growth machine. So you buy these stocks when they're beaten up and nobody wants to touch it. It's not the case at the moment."

• BHP

"Same job, same pay" laws will continue to impact ASX-listed companies with significant contractor workforces, including BHP.

• Downer EDI

"Same job, same pay" laws will continue to impact ASX-listed companies with significant contractor workforces, including Downer EDI.

Qantas

Qantas reported $22 million in compliance-related costs in the first half of the 2025 financial year due to "same job, same pay" laws, which will continue to impact the company. However, Qantas's broader outlook is driven by macroeconomic factors, with the stock recently rallying amid a drop in oil prices, which signal lower jet fuel costs.

Market Outlook

ST Wong from Prime Value Asset Management says ultimately the broader macroeconomic environment will have more of an impact on the ASX than the outcome of the election: "Lift your eyes towards the horizon. Think longer term and look for ideas that way. And that's how pretty much I've been positioning into this environment."