J.P. Morgan Australia FTM 28 May 26 Australian Banks; Endeavour Group; WEB Travel Group Limited; HMC Capital; Australian CPI: Downside surprise and More

Research evidence excerpt

J.P. Morgan Australia FTM 28 May 26 Australian Banks; Endeavour Group; WEB Travel Group Limited; HMC Capital; Australian CPI: Downside surprise and More

Asia Pacific Equity Research

Australia First to Market 28 May 2026

Top Stories

Australian Banks (Andrew Triggs)

Key themes post 1H26 results: Budget/macro uncertainties at odds with still-high valuations

Major banks’ 1H26 reporting season felt like a sideshow to the Federal Budget and RBA meeting, with these events more

meaningful for the market’s perception of the sector outlook. Results themselves were reasonably close to expectations (with

only NAB missing at PPOP), supported by largely in-line NIM performance and modestly weaker average balances (NAB miss

again more pronounced). While all banks saw relatively subdued UL banking income growth in Q2, we highlight the drag from

rate lag timing impacts, which will somewhat reverse in Q3. As such, revenue growth should pick up in the near term. The

medium term is a different matter, however, with the Federal Budget investor tax policy changes likely to dampen mortgage

growth (we now factor in average major bank Australian housing growth of ~4% in FY27/28). This a) reverses some of the YTD

EPS upgrade momentum, and b) raises the risk that the sector is viewed as ex-growth. When combined with significant

uncertainty on the macro outlook, we think the sector will struggle to perform in the near term. This supports our preference for

MQG outside the majors, and our UW ratings on the more expensive mortgage-heavy banks (CBA and WBC). NAB has been a

material underperformer but APRA’s PD model overlay throws up new concerns on the credit quality outlook.

Endeavour Group (Bryan Raymond) (EDV AU, UW)

Investor Day - Difficult to have confidence in the sales and earnings recovery