Australia Diversified Financials: Lower CPU to Neutral; 4Q mark to market across Div. Financials

Research evidence excerpt

Australia Diversified Financials: Lower CPU to Neutral; 4Q mark to market across Div. Financials

Viewpoint |

13 Jul 2026 18:35:31 ET │ 39 pages

Australia Diversified Financials

Lower CPU to Neutral; 4Q mark to market across Div. Financials

CITI'S TAKE

Nigel Pittaway AC

We lower CPU to Neutral following strong outperformance (shares up ~30%) +61-2-8225-4860

and a more balanced risk-reward. Across our coverage, we lift EPS as shown

in Fig 1, including positive mark to market (MTM) for strong offshore equities nigel.pittaway@citi.com

ACand tightening credit spreads in 4Q. Our ratings are Buy (AMP, CGF, GDG) Jeff Cai, CFA

and Neutral (CPU, ASX and PPT). More specifically: 1) on AMP: recent

budget/macro volatility may adversely affect 4Q North Platform flows, but +61-2-8225-2688

AMP’s higher skew to super clients should provide insulation; 2) on CGF: jeff.cai@citi.com

MTM suggests relatively benign investment experience but reduced capital Donna Funote dilution lifts our EPS. We still see medium term appeal; 3) PPT: we lift

earnings by ~3% to reflect higher market returns, and 4) GDG: we cut +61-2-8225-4801

FY27E/28E EPS by ~10%, mainly due to removing potential mandate wins. donna.fu@citi.com

Stronger global markets drive +ve MTM — Easing geopolitical tensions and tech

stocks contributed to a strong 4Q for offshore equities, with the MSCI/S&P 500 up

~13-15% qoq while the AU market rose ~3.5%. Meanwhile, corporate bond yields

and CDS credit spreads both tightened in 4Q. Overall, these moves have led to

positive MTM across most of our coverage driving EPS upgrades (Figure 1) for most

but cuts to GDG. We adjust our target prices as shown on page 2.

CPU — lower to Neutral — Our FY27E forecasts are broadly unchanged and remain

~3% above VA consensus.