This is the third edition of our weekly wrap for the August 2026 earnings season. Earnings is now in full swing with some of the largest names on the ASX reporting this week.

BHP reported strongly on the back of record copper prices, NAB highlighted weaker credit conditions ahead and CSL shares rallied on lower investor expectations and steady profit guidance.

At the other end of the spectrum, JB Hi-Fi shares fell 12% post earnings as tighter household budgets weigh on consumer stocks. Here’s a breakdown of what mattered from key results and whether it changed our analysts’ views on valuation.

BHP Group (ASX:BHP)

  • Fair Value Estimate: $46 (38% premium at 20 August)
  • Rating: ★
  • Moat: None

BHP’s fiscal 2026 underlying net profit after tax was up 30% on last year to USD 13.2 billion, or USD 2.60 per share, on stronger prices led by copper. Shares rose 3% as investors cheered the USD 0.99 fully franked final dividend per share, up 65%, and a 72% payout above the target minimum of 50%.

Total dividends of USD 1.72 were more than we expected on the higher payout, though the result was slightly weaker. However, unit cost and capital expenditure guidance was broadly as we expected, with production guidance unchanged.

Our earnings estimates are little changed. We raise our dividend per share (“DPS”) forecasts for fiscal 2027 through fiscal 2029 by an average of 9% on an assumed payout ratio of 60%, increased from 55%.

We raise our fair value estimate for no-moat BHP by 5% to $46 per share due to the time value of money and BHP likely generating an additional USD 3.5 billion in proceeds from selling noncore assets. Foreign-exchange movements since our last update partially offset this.

JB Hi-Fi (ASX:JBH)

  • Fair Value Estimate: $58 (24% premium at 20 August)
  • Rating: ★★
  • Moat: Narrow

JB Hi-Fi’s group sales increased 5% in fiscal 2026 to $11.1 billion. Underlying EBIT margins fell slightly, driving operating earnings growth of 4%. Its Australian sales momentum slowed significantly in the June quarter and into early fiscal 2027. Shares dropped 12%.

Fiscal 2026 underlying earnings were in line with our expectations, up 6% to $4.48 per share. Nevertheless, we were surprised by recent softness in sales momentum. Australian sales were virtually flat year-on-year in the June quarter, and momentum deteriorated further in July 2026.

Demand for home appliances is soft. Rising inflation and cash rates are cutting into household budgets and weighing on consumer sentiment. Consumers are also balking at steep price hikes for computers, as manufacturers pass on rampant inflation in memory chips—fallout from the data center boom.

However, we expect a near-term demand recovery. We think consumers will adjust to the higher price levels, which should underpin sales growth. And while cost-of-living pressures are biting, we expect rising household incomes to support group sales growth of 4% in fiscal 2027.

Our earnings forecast is virtually unchanged. We lift our fair value for no-moat JB Hi-Fi by 2% to $58 on the time value of money. Shares are significantly overvalued. We believe the market expects significant long-term margin expansion. All else equal, EBIT margins would need to average 7.5% over the decade for our valuation to match current share prices. An uplift of some 90 basis points on the 6.6% in fiscal 2026.

National Australia Bank (ASX:NAB)

  • Fair Value Estimate: $33 (18% premium at 20 August)
  • Rating: ★★
  • Moat: Wide

National Australia Bank’s third-quarter underlying profit of $1.8 billion is up 2% on the quarterly average for the first half. Loan growth of 2% more than offset a modest reduction in net interest margins, aided by lower loan impairments. But shares slipped 4%.

We lower our fiscal 2026 profit forecast 2% to $7.3 billion, with benefits to NIM from recent cash rate increases being eroded faster than expected by competition in home lending and deposits. Slowing credit growth likely keeps rate competition high.

Rate increases and budget tax changes led mortgage applications to fall 15% from the second quarter, likely hitting credit growth next year. We forecast fiscal 2027 home loan growth of just 2.5%, a sharp pullback from system growth of 6.9% in the year to June 2026.

While business credit growth is robust, up 2% in the quarter (8% annualized), higher rates and headwinds for consumers, such as inflation and falling house prices, are headwinds for business credit. Business confidence and investment intentions have weakened, so we forecast business loan growth slows to 5% in fiscal 2027.

We retain our $33 fair value estimate for wide-moat National Australia Bank, with shares 20% overvalued. A forward P/E of 17 and fully franked dividend yield of 4.3% are rich, given our expectation for around 5% average profit growth per year to fiscal 2030.

CSL Limited (ASX:CSL)

  • Fair Value Estimate: $165 (5% discount at 20 August)
  • Rating: ★★★
  • Moat: Narrow

CSL’s fiscal 2026 underlying earnings fell 2%, in line with the guidance reset in May, and USD 7.1 billion of impairments drove a statutory loss. Fiscal 2027 guidance is for flat revenue and underlying profit growth of about 5%. Shares surged 17% on Aug 18.

The rally says more about expectations than the result. After three downgrades in a year, the market was probably braced for a fourth, so merely meeting guidance was enough. Little in the result changes our view of the business.

The fiscal 2027 outlook is not demanding: immunoglobulin sales growing in line with the market and Behring margins recouping only what was lost in fiscal 2026. Nonetheless, it marks a return to growth for the core plasma business.

Vifor’s guided 25% revenue decline on generic competition is ugly, but it is not the main game. We assume essentially no net growth from Vifor for a decade, and at about 10% of midcycle earnings, it does not move the valuation much either way.

We maintain our $165 fair value estimate for narrow-moat CSL, with modestly trimmed revenue offset by lower operating costs. Shares appear fairly valued.

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