This is the last weekly wrap for the August 2026 earnings season. Despite earnings season now winding down, several notable companies released results over the past week. Fortescue reported softer than expected earnings and dividends while Ampol delivered a sharp profit rebound on the back of elevated refining margins.

Woodside’s net profit fell short of expectations due to higher costs and a larger tax bill. Meanwhile, Coles continued to grow profits and improve margins, though our analyst believes the market may be overly optimistic on the long-term outlook. Here’s a breakdown of what mattered from the last full week of results and whether the results changed our analysts’ views on valuation.

Fortescue (ASX:FMG)

  • Fair Value Estimate: $15.50 (15% premium at 27 August)
  • Rating: ★★
  • Moat: None

Fortescue’s adjusted fiscal 2026 net profit after tax of USD 3.5 billion (USD 1.12 per share) is slightly up on the year, with higher realised prices partially offset by increased unit cash costs on broadly flat volumes. Final dividend of 46 cents per share brings the total dividend to $1.08, down 2%. Results are moderately below what we expected, and so is the dividend. We assumed a 70% payout rather than an unchanged 65%, the midpoint of its 50%-80% target.

We keep our fair value estimate at $15.50 for no-moat Fortescue. Shares trade about 15% above our intrinsic assessment, likely due to the market expecting the iron ore price of about USD 95 per metric to remain higher for longer than we do.

We assume it falls to about USD 75 midcycle from 2030, based on our estimate of the long-run marginal cost of production. Likely softening demand from China, which comprises about 75% of the seaborne trade, as its steel production falls and as its scrap use rises, along with increasing supply led by Simandou and Vale, drive our midcycle assumption.

Ampol (ASX:ALD)

  • Fair Value Estimate: $32 (30% premium at 27 August)
  • Rating: ★★
  • Moat: None

Refined fuel retailer Ampol had a 440% increase in underlying first-half 2026 net profit after tax to $829 million. Middle East disruptions saw underlying EBITDA jump 73% to $1.55 billion in line with unaudited guidance. DPS rose 363% to $1.85. Shares were steady.

Underlying net profit after tax was 7% ahead of our expected $775 million on lower depreciation and net interest expense. We lift our 2026 EPS and DPS forecasts by 2% to $5.08 and $3.03, respectively. Dividend equates to a healthy 7.5% fully franked yield.

Ampol’s interim dividend payout ratio of 53% was lower than we expected. But we estimate a 74% second-half payout bringing the full year to the 60% midpoint of the 50%-70% company policy. Such high dividends shouldn’t be expected to persist however—our 2027 EPS forecast is $2.25, down 26%.

The Middle East conflict created shortages in refined product that raised second-quarter 2026 Lytton refiner margin by 260% on the previous corresponding period, to USD 30.93 per barrel. Hedging also generated material value. We expect highly supportive conditions to ultimately ease.

Our $32 fair value estimate for no-moat Ampol stands. Ampol shares are up nearly 50% since February this year and in our view are overvalued, in 2-star territory. Ampol expects tailwinds to persist into the second half, but not at the extraordinary levels of the first half.

Woodside (ASX:WDS)

  • Fair Value Estimate: $43.80 (25% discount at 27 August)
  • Rating: ★★★★
  • Moat: None

Australian hydrocarbon producer Woodside reported a 7% increase in its first-half 2026 underlying NPAT to USD 1.3 billion. The result was struck by a 13% decline in production due to cyclones, planned maintenance, and asset divestments, comfortably offset by higher pricing.

Underlying NPAT was sharply below our USD 1.7 billion expectations, chiefly due to higher tax, but operating costs were also higher on maintenance and ramp-ups. Woodside’s normalized effective tax rate was 48% for the half. We reduce our 2026 EPS forecast by 11% to USD 1.62, though with no long-term implication. Woodside retains all prior 2026 guidance, including production of 174-185 mmbo/e while we sit at 182 mmbo/e.

We expect oil demand to stay resilient with strong demand from the heavy transport and petrochemical segments, and a potential supply gap to support pricing. Economic expansion in emerging Asia markets is also expected to support healthy LNG demand growth.

Our $43.80 fair value estimate for no-moat Woodside stands. At about $33, the market is too bearish. The energy transition casts a pall over hydrocarbon demand. But significant investment is needed in most demand scenarios to backfill natural decline.

Coles (ASX:COL)

  • Fair Value Estimate: $16.50 (30% premium at 27 August)
  • Rating: ★
  • Moat: None

Coles’ underlying net profit after tax increased 14% to $1.3 billion in fiscal 2026. Profit margin expansion was driven by 3% higher sales revenue and a positive mix shift toward higher-margin supermarket sales. Operating efficiency gains offset wage inflation and underperformance in liquor.

Underlying operating profit of $2.3 billion, up 10% year-on-year, was in line with our expectations, and our medium-term EBIT forecast is largely unchanged.

Underlying EBIT margins improved 40 basis points to 5.1%, despite profits in its small liquor business almost halving. However, we expect profit margins to be relatively flat at around 5% from fiscal 2027 as competition and wage inflation offset efficiency gains and greater scale.

Declines in tobacco sales were the key driver of the gross margin uplift. But with tobacco now only a fraction of total supermarket sales, we anticipate this tailwind has played out. We expect earnings growth to track sales growth, averaging 3% per year over the decade.

We maintain our fair value estimate on no-moat Coles at $16.50 per share. Shares are materially overvalued. We think the market is expecting profit margins to improve significantly, spurred by more efficient operations.

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