Australian Equity Strategy: Aug 2026 reporting season preview

Research evidence excerpt

Australian Equity Strategy: Aug 2026 reporting season preview

Global Research

24 July 2026ab

Australian Equity Strategy Equity Strategy

AustraliaAug 2026 reporting season preview

Richard Schellbach

Strategist

Strong headline earnings growth masks a softer underlying picture richard.schellbach@ubs.com

+61-2-9324 2277

Consensus forecasts point to 12% year-on-year EPS growth for the ASX 200 in FY26,

which would represent the strongest aggregate growth rate in four years and sit Lily Huang

Associate Strategistcomfortably above the market’s long-run annual average of approximately 4.5%.

lily.huang@ubs.com

However, the headline result is heavily influenced by the recovery in Mining profits. +61-2-9324 2656

Excluding the resource sectors, forecast growth falls to around 5.5%; excluding

Financials as well reduces underlying growth to approximately 2.5%. The reporting

season therefore begins with solid index-level earnings expectations, but a considerably

less compelling growth profile across much of the domestic corporate sector.

Earnings momentum in Australia has turned decisively negative

The more important development is the loss of earnings momentum in recent months.

Profit forecasts are now being revised lower across all 11 major ASX sectors, including

Resources, which had previously provided much of the market’s positive revision

support. This broadening downgrade cycle raises the hurdle for companies to

outperform during August: results will need not only to meet reported-period

expectations, but also to provide sufficient guidance confidence to arrest further

reductions to forward estimates. By contrast, the US earnings backdrop remains

substantially stronger, with S&P 500 profit growth forecasts of approximately 20% for