Reporting Season

7 ASX 200 stocks with the "greatest potential to surprise" this reporting season

Tue 04 Feb 25, 11:36am (AEDT)
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Key Points

  • Goldman Sachs identified seven ASX stocks likely to outperform in the 1H25 reporting season, citing offshore revenue benefits, easing wage pressures, and rate cut expectations
  • Breville is expected to deliver strong growth, driven by coffee machine demand and market expansion, while News Corp anticipates solid Q2 results, boosted by record US political ad spend and diverse revenue streams
  • Codan and QBE Insurance are poised for positive earnings surprises, with strong organic growth, synergies, and favorable market trends expected

Goldman Sachs has identified seven stocks with the greatest potential for earnings beats, guidance surprises, or strong capital management in the upcoming reporting season.

In their 1H25 results preview, the analysts noted a scarcity of profit downgrade pre-announcements and observed stronger-than-expected earnings revision trends in January. They attribute these optimistic trends to factors such as the 10% fall in the Australian dollar—given that around 50% of ASX 200 revenues come from offshore—along with easing wage pressures and growing expectations for rate cuts.

Below, we highlight Goldman Sachs' seven "positive surprise candidates" for the February reporting season.

Ratings and Target Summary

Ticker

Company

Close

Target price

% Dif

BRG

Breville Group

$37.10

$40.90

10.2%

NWS

News Corp

$50.81

$55.00

8.2%

CDA

Codan

$16.23

$18.00

10.9%

QBE

QBE Insurance

$20.45

$22.50

10.0%

WOR

Worley

$14.36

$18.00

25.3%

HMC

HMC Capital

$9.25

$9.86

6.6%

NEM

Newmont Corp

$68.56

$76.20

11.1%

Data as of Monday, 3 February 2025 close

Breville Group

Breville Group (ASX: BRG) is positioned for robust growth, driven by its strong performance in the Americas and the global coffee premium industry. The company continues to benefit from secular trends favoring coffee machine adoption and category upgrades.

  • Analysts forecast 1H25 sales and EBIT growth of ~9.2%, with Americas sales up 11% in constant currency.

  • Positive read-across from industry peer DeLonghi, which reported annual revenue growth of +14%.

  • New market entry in 2H25 is expected to act as a catalyst, alongside commentary on potential tariff impacts.

News Corp

News Corp (ASX: NWS) is set to deliver a strong 2Q25 result, supported by diverse revenue streams and operational improvements across its divisions. The company may also provide updates on its strategy following the sale of Foxtel.

  • Q2 EBITDA growth is forecast at 8% (continuing operations), with contributions from Dow Jones (ARPU growth), REA listings (+3%), and US residential listings (+2%).

  • Record US political ad spend in 2024 is expected to benefit News Media revenue.

  • Net debt/EBITDA is projected at ~0.7x post-Foxtel sale, creating room for portfolio management updates.

Codan

Codan’s (ASX: CDA) communications business could outperform expectations due to synergies from acquisitions and favorable demand trends. Its track record in acquisition integration bolsters confidence in upside risks.

  • Organic revenue growth is estimated at +10-15%, with additional contributions from recently acquired businesses.

  • Analysts see potential for margin expansion driven by FX tailwinds and acquisition synergies.

  • Consensus estimates appear conservative, leaving room for positive surprises.

QBE Insurance

QBE Insurance (ASX: QBE) is poised for earnings improvement, supported by favorable operating trends and strong capital management. The company’s valuation remains attractive compared to peers.

  • FY25 COR guidance is expected at 92.5%, slightly better than consensus (92.8%).

  • Mid-single-digit GWP growth is anticipated, driven by rate moderation and volume growth.

  • Reinsurance market dynamics provide a margin tailwind, while capital strength supports potential buybacks.

Worley

Worley (ASX: WOR) is positioned for stable earnings growth despite a challenging macro backdrop. Its focus on cash generation and capital management could drive shareholder returns.

  • EBITA margin expansion of 30bps (1H25) and 50bps (FY25) is forecasted due to operating leverage.

  • Management has highlighted potential share buybacks given leverage below target levels (1.5x vs 2-2.5x target).

  • WOR trades at an attractive valuation of 11.1x consensus EBIT, below its historical average of 12.2x.

HMC Capital

HMC Capital (ASX: HMC) has delivered stronger-than-expected pre-tax EPS growth, driven by the outperformance of its private equity fund. The company’s ambitious FUM targets suggest further upside potential.

  • Management has raised FUM targets to $50bn+ over the next 3–5 years, up from $20bn previously.

  • Performance fees remain a key earnings driver due to HMC Capital Partners Fund’s strong track record (24% IRR since inception).

  • Improved macro conditions could further support fund performance and fee outcomes.

Newmont Corp

Newmont (ASX: NEM) stands out for its diversified growth options and cost improvements across its portfolio. Its defensive positioning amid softer gold pricing enhances its appeal.

  • Margin performance is expected to improve due to cost efficiencies and contributions from copper revenues.

  • Analysts highlight diversified organic growth opportunities across multiple projects (e.g., Red Chris, Yanacocha sulphides).

  • Ongoing buybacks and capital returns are likely, with further upside from divestment-driven de-gearing.

 

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Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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