Financials have managed to surprise on the upside this earning season, according to UBS, with AMP among those identified for beating expectations.
In a reporting season update, the investment bank said market reactions to earnings update had, so far, been largely positive with more stocks beating expectations than missing them. As well as that, those companies that beat expectations had been rewarded while those that had missed had not been punished either.
“Financials have generally performed well following results. QBE and AMP both beat on earnings and dividends/capital management while Magellan provided lower than expected FY21 expenses,” the firm said.
“CBA’s results showed some net interest margin pressure from low rates while IAG showed some margin pressure. Medibank Private’s result was in line with expectations. The exception was Bendigo and Adelaide Bank which fell on its result day missing on EPS and deferring its final dividend.”
AMP and insurer QBE were both identified by the firm as having results that were “particularly well received” by the market with shares on results day rising by 11.5% and 7.4% respectively.
Since the start of the year, shares in AMP had lost 25% while QBE had lost 15% compared to losses of 6% by the ASX 200.
AMP had since been hit with a culture shock though as newly-appointed AMP Capital chief executive Boe Pahari had to resign following allegations of sexual harassment towards a former colleague.
Share price performance of AMP and QBE versus ASX 200 since start of the year to 24 August 2020
However, Commonwealth Bank and Bendigo and Adelaide Bank were among stocks named by the firm as having delivered a “negative surprise” in its reports, alongside property firm Vicinity, Telstra, building firm CIMIC and Origin Energy.
In its results earlier this month, CommBank announced a 12.4% increase in statutory net profit after tax to $9,643 million which it said included gains realised on the sale of businesses, while net cash profit after tax was down 11.3% to $7,296 million.
Shares in the firm had lost 10% since the start of the year but this was better than the other big four banks which had all lost more than 25% over the same period. ANZ, Westpac and National Australia Bank were yet to report their results.
Share price performance of CommBank versus ASX 200 since start of the year to 24 August
