CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please consider our Risk Disclosure Notice and ensure that you fully understand the risks involved.

ASX Reporting Season: what to expect from this half’s results

ASX Reporting Season for the half picks up this week, and will continue for the next 4 weeks.

Source: Bloomberg

The market data that matters (ASX200):

Est. Trailing EPS Growth (YoY)


Est. FY1

Current Dividend Yield





What is the market expecting out of this earnings season?

The market is prepared for a soft reporting period for Australian corporates. The results delivered by companies will encompass the deepest depths of the Covid-19 recession in Australia, with the effects of the downturn tipped to show-up clearly in earnings. Given expectations are set so low, the market will be primarily focused on what companies say about the future, what shape the recovery for the broader economy and corporate profits may take, and what risks exist to any guidance provided.

What are the key themes to watch out of earnings season?

What has the impact of the Covid-19 recession been on earnings?

The impact of the Covid-19 recession on earnings growth across the ASX200 is expected to be considerable. Estimates for the contraction in EPS growth range from around -15% to -20%, with Bloomberg’s consensus estimate suggesting a -19.3% decline over the past 12 months. A close eye this reporting season will be kept on earnings reported by companies in what have proven to be the most sensitive sectors to economic lockdowns and social distancing measures: consumer discretionary, financials and real estate.

What guidance can companies provide investors about the future?

That it will be a historically poor earnings season is taken as given. But the performance of the market this earnings period will rest on what corporates can say about the future. ASX-listed companies have been reticent when it comes to delivering forward guidance to the market as uncertainty about the crisis reined, and as regulators eased disclosure obligations. With valuations still lofty, and indicating prices have run some way ahead of forward earnings, the market will be searching for clear and positive guidance about the path forward for profits from companies.

Dividends, capital raisings and (for the banks) provisions.

Some other key issues will cut down the sector and industry lines. The prospect for further capitals raises will be closely watched amongst market participants, as certain companies battle to remain well-capitalized during the Covid-19 crisis. The extent of dividend cuts, especially amongst the systemically important banks, will be crucial to the ASX200’s performance this reporting period. And specific to the banks, what provisions they plan to set aside for bad debts will be a keenly awaited barometer on the current state of the broader Australian economy.

Source: Bloomberg

How could this earnings season impact the financial markets?

The ASX200 has remained in consolidation-mode for months. After hitting post-crisis highs in early June, the index has traded sideways, oscillating around the key 6000-level. The trend for the market appears skewed to the upside in the medium term, with indicators of momentum all pointing to a market absent of a directional bias in the short-term. Investors will be watching for a catalyst for the market to break to the upside during this reporting period. The ASX200’s 200-day EMA remains a key level of resistance, while a breakthrough June’s 6220 an indicator the index is renewing its recovery.

Source: Bloomberg

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Take your position
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take your position.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.