Challenger Limited: FY26 Preview: Consensus on Day 2 impact appears inconsistent; JPM sees upside to standalone valuation and investment case... Main risk is risk asset sell-off

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Challenger Limited: FY26 Preview: Consensus on Day 2 impact appears inconsistent; JPM sees upside to standalone valuation and investment case... Main risk is risk asset sell-off

J P M O R G A N Asia Pacific Equity Research

03 August 2026

Challenger Limited

FY26 Preview: Consensus on Day 2 impact appears Overweight

inconsistent; JPM sees upside to standalone valuation CGF.AX, CGF AU

and investment case … Main risk is risk asset sell-off Price (03 Aug 26):A$9.91

▲Price Target (Jun-27):A$11.00

Prior (Dec-26):A$10.00

CGF will report its FY26 results on 18 August. We expect an FY26 result that tracks

towards the midpoint of CGF’s FY26 normalised EPS guidance, with solid net‑book Insurance and Diversified Financials

growth, cost control, a possible start of re-mixing to fixed income, and possibly more Siddharth Parameswaran AC

capital management. A key focus will be APRA ‘Day 2’ benefits from the new capital (61-2) 9003-8629

standards. We expect to see a strong focus on explaining higher EPS growth potential siddharth.x.parameswaran@jpmorgan.com

J.P. Morgan Securities Australia Limited

and still some capital management (with a focus on strong book growth, but with

Tharan Jeyathasanlower margin, and higher ROE fixed income asset allocation). We are yet to explicitly

(61-2) 9003-6098

allow for ‘Day 2’ benefits, as we await clarity from the company on ROE targets, tharan.jeyathasan@jpmorgan.com

growth and timeline. The only point of caution we would highlight is what appears to J.P. Morgan Securities Australia Limited

us as elevated consensus expectations for FY27 on how quickly Day 2 benefits will Rishi S Parihar

come through and a misreading of the interplay between book growth, capital and (91-22) 6157-3775

margins.