ASX reporting season: Wednesday's hits and misses

Wednesday recorded a clean sweep of better-than-expected earnings from several sectors – companies are clearly weathering the storm quite well.

Today's Reporters

The Most Expensive Bank

Commonwealth Bank (ASX: CBA) trades at a price-to-earnings of around 23 – That's almost twice as expensive as its peers and well-above its long-term average of around 15. It also reported zero growth for FY24.

Some of its key FY24 numbers include:

• Cash net profit down 2% to $9.83 billion

• Net interest margin down 8 bps to 1.99%

• Final dividend of $2.50 per share

• Total dividend for FY24 up 3% to $4.65 per share, representing a payout ratio of 79% of cash NPAT and towards the upper end of target payout range

Interestingly, all the above metrics were slightly ahead of market expectations.

CBA is now up 34% in the past twelve months and trading less than 3% away from all-time highs.

Commonwealth Bank 12-month price chart (Source: TradingView)

Food for thought | While everyone is bearish on CBA – It's also the largest stock on the ASX. In other words, ETFs and funds that track the index have to buy it. Given its sheer size/weighting – You can always justify adding CBA because at worst, you perform close to the benchmark.

Even More Growth

Pro Medicus (ASX: PME) might go down as one of the strongest growth stories on the ASX 200 after reporting:

• Revenue up 29.3% to $161.5m, in-line with consensus

• Net profit up 36.5% to $82.8m, 4.5% beat vs consensus

• Cash at bank up 27.9% to $155.4m

• Total dividend for FY24 up 33% to 40 cents per share

Its got some incredible operating leverage – Turning $161.5 million revenue into $82.8 million net profit.

The company's earnings call was equally as impressive, with Chief Executive Sam Hupert highlighting:

• More growth to come: "Our pipeline going forward continues to grow strongly... We have had increasing number of inbound RFPs... we see that cadence increasing further."

• So much opportunity: "We are looking at some new geographic markets. But I think our main focus is currently the US simply because we have so much runway there, and we are making very significant inroads."

• Perfect customer retention: "No, we haven't lost anybody. So our retention rate is 100%."

Broker upgrades to come? | I wonder if the earnings beat, sheer operating leverage and positive management commentary can drive a wave of positive broker upgrades tonight/tomorrow morning.

Gold's time to shine

Evolution Mining (ASX: EVN) has not reported meaningful cash flows in over four years amid rising costs as well as sustaining and growth capex.

But times are changing. As cost inflation begins to stabilise, gold prices soar to record highs and capex commitments begin to taper off. Today's FY24 result reported a record set of numbers including:

• Underlying EBITDA up 67% to $1.51 billion

• Underlying profit after tax up 135% to $481.8 million

• Average gold selling price up 23% to A$3,190

• All-in sustaining cost down 2% to A$1,477

• Final dividend up 150% to 5 cents per share

More importantly, Group cash flows flipped from $116 million in outflows in FY23 to $367 million in inflows.

I guess the current gold price environment is doing wonders for miners.

Gold price chart (Source: TradingView)