ASX Reporting Season February 2026: Week 2
Week 2 of February 2026 reporting season adds 31 companies to our coverage. Eight are trading below fair value, seven at fair value, and sixteen are overvalued. The quality-price divergence is the defining theme.
We have now put 31 additional companies through the full analysis pipeline this week, bringing our reporting season total to 36. Of the 31 new companies, eight are trading below our fair value estimates, seven are approximately fairly priced, and sixteen are overvalued, some by extreme margins. The widest gap in either direction belongs to Viva Leisure (107% upside) and Evolution Mining (65% overvalued), and the pattern across the full set is clear: the market is paying large premiums for momentum and narrative while discounting cash flow and structural value.
The Scorecard
| Company | Ticker | Sector | Price | Fair Value | Gap | Verdict |
|---|---|---|---|---|---|---|
| Viva Leisure | VVA | Fitness / Health Clubs | A$1.63 | A$3.38 | +107% | Undervalued |
| Reckon | RKN | SaaS / Software | A$0.53 | A$0.75 | +42% | Undervalued |
| Amotiv | AOV | Auto Aftermarket | A$8.50 | A$11.77 | +38% | Undervalued |
| AGL Energy | AGL | Utilities / Energy | A$9.89 | A$11.58 | +17% | Undervalued |
| Orora | ORA | Packaging / Manufacturing | A$2.34 | A$2.73 | +17% | Undervalued |
| ASX Limited | ASX | Market Infrastructure | A$54.37 | A$61.94 | +14% | Undervalued |
| Centuria Industrial REIT | CIP | REIT / Industrial | A$3.24 | A$3.54 | +9% | Undervalued |
| Bailador Technology | BTI | LIC / Tech PE | A$1.22 | A$1.30 | +7% | Undervalued |
| Dexus Industria REIT | DXI | REIT / Industrial | A$2.54 | A$2.63 | +4% | Fair Value |
| Region Group | RGN | REIT / Convenience Retail | A$2.35 | A$2.41 | +3% | Fair Value |
| Regal Investment Fund | RG1 | LIC / Closed-End Fund | A$2.37 | A$2.42 | +2% | Fair Value |
| AMP Limited | AMP | Financial Services | A$1.31 | A$1.29 | -2% | Fair Value |
| Computershare | CPU | Financial Services | A$32.30 | A$31.60 | -2% | Fair Value |
| Insurance Australia | IAG | General Insurance | A$6.94 | A$6.65 | -4% | Fair Value |
| CSL Limited | CSL | Biopharmaceuticals | A$162.18 | A$138.00 | -15% | Overvalued |
| Kelly Partners Group | KPG | Professional Services | A$6.38 | A$5.00 | -22% | Overvalued |
| National Storage REIT | NSR | REIT / Self-Storage | A$2.75 | A$2.06 | -25% | Overvalued |
| Breville Group | BRG | Consumer Durables | A$32.62 | A$23.73 | -27% | Overvalued |
| James Hardie | JHX | Building Products | A$36.87 | A$27.00 | -27% | Overvalued |
| SGH Ltd (Seven Group) | SGH | Diversified Industrial | A$51.80 | A$37.00 | -29% | Overvalued |
| Bravura Solutions | BVS | Enterprise Software | A$2.31 | A$1.55 | -33% | Overvalued |
| humm Group | HUM | Non-bank Lender | A$0.73 | A$0.48 | -34% | Overvalued |
| Origin Energy | ORG | Integrated Energy | A$11.57 | A$7.58 | -35% | Overvalued |
| Temple & Webster | TPW | Online Retail | A$8.36 | A$4.86 | -42% | Overvalued |
| ANZ Group | ANZ | Banking | A$39.94 | A$21.40 | -46% | Overvalued |
| South32 | S32 | Diversified Mining | A$4.79 | A$2.50 | -48% | Overvalued |
| DPM Metals | DPM | Gold/Copper Mining | A$53.00 | A$24.25 | -54% | Overvalued |
| Commonwealth Bank | CBA | Banking | A$171.00 | A$77.00 | -55% | Overvalued |
| Northern Star | NST | Gold Mining | A$29.30 | A$11.62 | -60% | Overvalued |
| Pro Medicus | PME | Healthcare IT / SaaS | A$138.46 | A$54.00 | -61% | Overvalued |
| Evolution Mining | EVN | Gold Mining | A$16.28 | A$5.74 | -65% | Overvalued |
Viva Leisure (VVA)
BUY | A$1.63 vs Fair Value A$3.38 | 107% upside
Viva Leisure is the widest gap we have encountered in reporting season, and the reason is not deteriorating fundamentals. H1 FY26 revenue grew 17.6% organically, NPAT rose 46.8%, and the company operates 518 locations across Australia as the only ASX-listed fitness operator at scale. EBITDA margins sit at 21.8% pre-AASB16, the membership base exceeds 656,000, and at A$1.63 the stock trades at 4.5x EV/EBITDA versus a 10x global peer median.
The gap is almost entirely an accounting interpretation issue. Under AASB16 lease accounting, VVA carries A$271 million in lease liabilities on-balance-sheet. If the market deducts those liabilities from enterprise value (as it appears to), the implied equity value collapses to roughly A$1.50. Our analysis treats lease obligations as operating costs (consistent with pre-AASB16 norms for gym operators), which produces the A$3.38 fair value. Even our bear case of A$2.30 sits 41% above the current price.
The second driver is micro-cap illiquidity: limited institutional participation creates adverse price dynamics that compound the accounting confusion. The emerging TPLR technology and payments segment (growing at 45%, now 8.1% of revenue) adds optionality that the market is not pricing. VVA reports its FY26 full-year in August, and guidance achievement (A$237 million revenue, A$53 million EBITDA) would be the primary catalyst for re-rating.
Amotiv (AOV)
BUY | A$8.50 vs Fair Value A$11.77 | 38% upside
Amotiv is an automotive aftermarket group operating across eight countries with brands including Narva and Ryco, generating A$997 million in FY25 revenue. At A$8.50, the market implies roughly 45% probability of bear or severe outcomes, while our analysis assigns 30%, a disagreement worth approximately A$3.27 per share. Free cash flow of around A$96 million (FY26E) translates to an 11.3% FCF yield at market price.
The thesis is straightforward: this is a mid-quality business (5.3/10) generating substantial cash that the market discounts as if earnings are permanently impaired. ROIC runs at 13% against a cost of capital closer to 9%, and the Amotiv Unified integration program is driving cost synergies. The risks are real, particularly A$888 million in intangibles where the APG cash-generating unit has only A$33 million of headroom before impairment, and customer concentration (top two customers at 25% combined revenue). Geographic diversification into the US and Europe via Vision X provides upside if it scales beyond 15% of revenue. Expected return is approximately 11.5% per annum over three years.
AGL Energy (AGL)
BUY | A$9.89 vs Fair Value A$11.58 | 17% upside
AGL shares surged 11.75% on results day after management narrowed FY26 EBITDA guidance upward to A$2.02-2.18 billion (from A$1.92-2.22 billion), despite flat H1 EBITDA of A$1.09 billion and a 6% decline in underlying NPAT to A$353 million. The interim dividend rose 4.3% to A$0.24.
The investment case is a transition story. AGL is Australia's largest private electricity generator with 8.3 GW of flexible capacity and 4.7 million customer accounts. EBITDA declines from approximately A$2,100 million to A$1,980 million as wholesale price tailwinds fade before stabilising as battery contributions ramp. FY27 is the financial trough, with peak Tomago capex producing near-zero free cash flow. Post-FY28, growth capex moderates from A$500 million to A$300 million, unlocking FCF expansion. The market prices the transition risk while underweighting the post-transition value, which includes an 11.3 GW renewables and firming development pipeline and the possibility that NEM wholesale prices sustain above A$100/MWh, which alone would add approximately A$2.50 per share.
Commonwealth Bank (CBA)
SELL | A$171.00 vs Fair Value A$77.00 | 55% overvalued
CBA delivered a blockbuster 1H26 result this week, beating NPAT consensus by approximately 5% on strong lending growth and low loan losses. The stock rallied 6.8% on results day and added 3.8% the following day, bringing the two-day gain to roughly 10.9% and the price to around A$177.90. The result lifted the entire banking sector.
None of this changes the fundamental arithmetic. CBA is an exceptional quality business (7.8/10, the highest among Australian banks) with peer-leading efficiency (44.7% cost-to-income ratio), 13.8% ROE, and a 25% home loan market share. The issue is that at A$171, CBA trades at a 123% premium to our probability-weighted fair value of A$77. The premium appears driven by non-fundamental forces: passive index flows (CBA represents approximately 9% of the ASX200), retail scarcity bidding (800,000+ direct holders), and momentum reinforced by results like this week's. Credit cycle normalisation, where ROE mean-reverts from 13.8% toward 12.5% as loss rates move from 6 to 12 basis points, remains the primary risk. The AT1 capital instrument phase-out from January 2027 adds a structural overhang. The risk-reward is asymmetrically negative even after an excellent result.
Pro Medicus (PME)
SELL | A$138.46 vs Fair Value A$54.00 | 61% overvalued
Pro Medicus fell 14.9% on February 12 after H1 FY26 results missed revenue consensus by 2% and EBIT by 10%. Reported NPAT tripled to A$171.2 million, but this was driven by unrealised gains on a 4D Medical investment rather than core operations. The market reaction was severe, and the stock remains one of the most overvalued in our coverage universe.
The quality is undeniable: PME is the only true cloud-native enterprise imaging platform at scale, serves 11 of the top 20 US hospitals, generates 73% EBIT margins and near-100% gross margins, and has over A$1 billion in contracted backlog with 100% renewal rates. The quality score of 8.4/10 is joint-highest in our coverage alongside DPM Metals. The problem is that the market at A$138.46 embeds sustained 30%+ revenue growth at peak margins for 15+ years. Our 10-year DCF, modelling 22% revenue CAGR decelerating to 3.5% terminal, produces a fair value of A$54. The 156% premium represents approximately A$85 per share of optionality priced above fair value. Even a single quarter of deceleration (as this week demonstrated) triggers double-digit sell-offs, which illustrates the fragility embedded in the current valuation.
Evolution Mining (EVN)
SELL | A$16.28 vs Fair Value A$5.74 | 65% overvalued
Evolution Mining is the most overvalued stock in our Week 2 coverage, trading at roughly three times our probability-weighted fair value. The stock jumped 8.7% on February 11 as gold futures hit US$5,110/oz, pushing EVN near its 52-week high of A$16.30. The stock is up 92% since August.
The entire valuation gap is a gold price regime disagreement. Our model assigns 35% probability to cyclical mean-reversion from current levels near A$7,500/oz, while the market prices near-zero reversion probability. Even our base case (A$5,500/oz gold) yields a fair value of A$6.87 per share, which is 58% below the current price. EVN operates six mines producing 750,000 ounces of gold and 76,000 tonnes of copper, with AISC of A$1,493/oz and 57% EBITDA margins at current prices. A significant growth capex pipeline (E22 block cave at A$545 million, Bert at A$160 million, Cowal OPC at A$430 million) creates execution risk on top of the commodity price exposure. Management has earned credibility, with the Mungari expansion delivered 15% under budget and ahead of schedule, but execution quality cannot bridge a 65% valuation gap that rests almost entirely on the gold price staying at historically extreme levels.
Northern Star Resources (NST)
SELL | A$29.30 vs Fair Value A$11.62 | 60% overvalued
Northern Star reported H1 FY26 results on February 12: revenue of A$3.41 billion (+19%), EBITDA of A$1.88 billion (+34%), and NPAT of A$760 million. Shares rose 3.9% on the day to A$29.35. The numbers are strong, but they are strong because gold is at US$5,110/oz.
NST is a top-tier Australian gold producer with three production centres (Kalgoorlie, Yandal, Pogo), producing 1.63 million ounces at AISC of A$2,720/oz against a realised price of A$4,670/oz. The quality score of 5.4/10 is below average for our gold mining coverage, and NST trades at 11.3x EV/EBITDA versus an 8.0x peer median despite that lower quality rating. No quality-based justification exists for the premium multiple. Fair value is supported only if gold structurally exceeds A$4,500/oz, a possibility we respect but do not endorse as the base case. Even our bull case of A$18.24 sits 38% below the current share price. The KCGM mill expansion (commissioning early FY27, adding 200,000-300,000 ounces at declining unit cost) is the primary operational catalyst, but it cannot close a 60% gap that is fundamentally a commodity price bet.
Temple & Webster (TPW)
SELL | A$8.36 vs Fair Value A$4.86 | 42% overvalued
Temple & Webster dropped approximately 25% on February 12 after H1 FY26 results disappointed despite 19.8% revenue growth. This is Australia's largest pure-play online furniture and homewares retailer with A$601 million in FY25 revenue, targeting A$1 billion by FY28, and the business is genuinely high quality (7.2/10) with an asset-light, drop-ship-dominant model, negative working capital, A$161 million cash, and zero debt.
The core analytical question is whether margin suppression (3.6% EBITDA) is a temporary growth investment that reverses at scale, or permanent competitive equilibrium. We assign 60% probability to the structural thesis (margins reach 5-7%) and 40% to cyclical reversion (margins cap at 4%). Even the structural case yields a fair value of A$6.07, which is 27% below the current price. Gross margin compression from 34.0% to 31.4% is the warning signal, as it is outpacing fixed-cost savings. Cash of A$1.34 per share provides a hard floor, but the risk-reward at A$8.36 is unfavourable. The 25% sell-off this week narrows the gap but does not close it.
AMP Limited (AMP)
HOLD | A$1.31 vs Fair Value A$1.29 | Approximately fair value
AMP fell approximately 27% on February 12, one of the sharpest single-day declines in reporting season. The sell-off came despite FY25 profit rising 21%, which suggests the market had priced in considerably more.
AMP is a 175-year-old financial services institution repositioned as a retirement-focused wealth and banking group. AUM sits at A$161.7 billion with a cost-to-income ratio of 61.5% and ROE of 8.0%, which is below the 10-11% cost of equity. The stock at A$1.31 trades at 0.98x NTA, which is roughly where a business earning below its cost of equity should trade. The upside path requires ROE approaching cost of equity through buybacks from a A$287 million CET1 surplus and continued cost discipline. The downside is asymmetric: a 15% equity market decline alone would reduce NPAT by approximately A$90 million (32%). The 27% sell-off brings the stock closer to fair value after what appears to have been a momentum-driven overshoot.
Reckon (RKN)
BUY | A$0.53 vs Fair Value A$0.75 | 42% upside
Reckon is a small-cap software company with two distinct businesses: a mature Business Group (AU/NZ SME accounting, A$48.6 million revenue, 52% EBITDA margin) funding a growth-stage Legal Group (Zebraworks, serving 12 of the top 20 global law firms, A$13.8 million revenue with Billing Workflows growing 111% year-on-year). The market prices Reckon at 7x post-development EBITDA, implying near-zero growth and assigning no value to the Legal Group scaling optionality. Expected return is approximately 7% per annum including a 3.8% dividend yield, with asymmetric upside if the Legal Group scales or takeover interest materialises.
ASX Limited (ASX)
BUY | A$54.37 vs Fair Value A$61.94 | 14% upside
Australia's sole securities exchange and clearing house, a statutory monopoly generating 14% ROIC with 62% EBITDA margins. The discount reflects transient uncertainty: the ASIC inquiry requiring A$150 million in additional capital, CHESS replacement delays (targeting April 2026 go-live), and CEO departure in May 2026. Post-CHESS, capex normalises from A$175 million to A$110 million, unlocking FCF expansion from FY28. Risk-reward is modestly asymmetric: base case +21%, bear case -2%, severe -12%.
CSL Limited (CSL)
HOLD | A$162.18 vs Fair Value A$138.00 | 15% overvalued
CSL reported H1 FY26 results on February 11 showing underlying NPATA of US$1.9 billion (-7%) and revenue of US$8.3 billion (-4%). The result was weighed down by approximately US$1.1 billion in impairments across CSL Vifor and CSL Seqirus, and shares fell 4.6% on the day. CSL is undergoing a major transformation, with H1 representing the trough. The probability-weighted fair value of A$138 reflects the base case at A$148 offset by meaningful downside scenarios (45% combined bear and severe probability). If Ig recovery confirms (sequential volume above 5%), upside of A$10-15 per share exists. However, at A$162, the market partially discounts transformation success while underweighting execution and policy risks on the cost transformation targeting A$500-550 million in annualised savings by FY28.
Breville Group (BRG)
SELL | A$32.62 vs Fair Value A$23.73 | 27% overvalued
Breville is a high-quality (7.3/10) premium small kitchen appliance compounder with a 10-year unbroken growth record, 14% ROIC against a 9.5% WACC, and coffee as the dominant growth engine, where at-home espresso penetration remains below 15% in most Western markets. The stock rose 3% on mixed H1 results with tariff concerns flagged. Value creation is real (approximately 450 basis points of economic profit), but the market at A$32.62 capitalises growth optionality at full value while underweighting tariff-driven margin compression on China-sourced products and terminal competitive fade. Geographic expansion into China, the Middle East, and Korea, plus manufacturing diversification (80% US gross profit sourced ex-China), provide the bull case, but the risk-reward is unfavourable at current levels.
Origin Energy (ORG)
SELL | A$11.57 vs Fair Value A$7.58 | 35% overvalued
Origin reported HY26 results on February 12 with shares rising 4.65%. Statutory profit fell to A$557 million (from A$1,017 million) but adjusted free cash flow improved to A$705 million (from A$518 million). The key strategic announcement was the Kraken/Octopus separation, with the Kraken entity valued at US$8.65 billion. Origin is Australia's highest-quality integrated energy company (7.0/10) with a dominant retail position (4.8 million accounts, 30% market share), APLNG distributing approximately A$750 million annually at mid-cycle, and the Kraken/Octopus stake adding optionality. The market, however, appears to price full structural margin persistence plus Octopus at or above private valuation. Even our base case of A$8.24 sits 29% below the current price. The Eraring coal plant closure in FY29 removes 2.9 GW of baseload, partially offset by 1.74 GW of committed battery storage. The stock becomes interesting below A$8.50.
ANZ Group (ANZ)
SELL | A$39.94 vs Fair Value A$21.40 | 46% overvalued
ANZ released a strong Q1 update showing cash profit of A$1.94 billion, up 75% on the second-half FY25 average. Shares surged 8% on the day to A$40.41. Despite the strong quarter, the gap to fair value remains large. Expected three-year probability-weighted return is approximately -15% annually, with the base case delivering -46% total downside. The Suncorp Bank integration (approximately A$73 billion in loans) provides strategic value but carries integration costs (approximately A$1.1 billion in significant items) and ASIC penalties of A$240 million. ROE of 8.1% and NIM of 1.55% are both below CBA, yet ANZ still trades at a significant premium to fundamentals.
SGH Ltd (Seven Group) (SGH)
SELL | A$51.80 vs Fair Value A$37.00 | 29% overvalued
Seven Group reported flat H1 revenue of A$5.4 billion with NPAT up 2% to A$518 million, but operating cash flow surged 32% to A$1.1 billion, which lifted shares 4%. This is a high-quality (7.5/10) Australian industrial conglomerate with dominant moated positions (exclusive CAT dealership via WesTrac, vertically integrated Boral, Coates equipment hire) and exceptional Stokes family alignment at 40% ownership. ROIC of 12% versus 9% WACC confirms value creation, but the A$19 per share gap is predominantly a multiples debate: whether SGH deserves 20x (compounder) or 15x (standard industrial). Crux first gas in FY28 and A$1.5 billion in M&A capacity are genuine catalysts but insufficient to bridge the gap at current multiples.
South32 (S32)
SELL | A$4.79 vs Fair Value A$2.50 | 48% overvalued
South32 trades 92% above our fair value. The market capitalises peak commodity margins (28.2% EBITDA) and full Hermosa option value into a business that normalises to 24.4% EBITDA margins at mid-cycle pricing. Even our bull case (A$3.33, 10% probability) sits 30% below market. Hermosa Taylor, the major growth project, consumes approximately US$750 million per year with zero revenue expected until FY29. Sierra Gorda copper (45% interest) is the highest-value asset, with the fourth grinding line FID (mid-CY26) being the highest-probability catalyst. For the market price to be justified, copper must sustain above US$5.00/lb, Hermosa must deliver on time and on budget, and the market must assign a premium multiple, all simultaneously.
DPM Metals (DPM)
SELL | A$53.00 vs Fair Value A$24.25 | 54% overvalued
DPM scores 8.4/10 on our quality framework, the joint-highest in our coverage, with 11 consecutive years of meeting production guidance, 62% EBITDA margins, and AISC of US$1,121/oz. The operational quality is not in dispute. The valuation gap is entirely a commodity price regime disagreement: gold at approximately US$3,600/oz versus our model base of US$2,750/oz. If gold sustains above US$2,500 (which structural demand from central banks and electrification may support), a higher floor emerges. The nearer-term risk is the Ada Tepe mine closure by mid-2026, creating a production step-down before Coka Rakita (2029 target). The transformative A$1.5 billion Adriatic Metals acquisition adds polymetallic diversification via the Vares mine.
James Hardie (JHX)
SELL | A$36.87 vs Fair Value A$27.00 | 27% overvalued
JHX rallied 13% on a strong Q3 result and raised FY26 guidance, recovering from shareholder concerns around the US$8.4 billion AZEK acquisition. The market at A$36.87 prices in near-full synergy capture and housing recovery at approximately 14x FY28E EBITDA. Our analysis produces a fair value at approximately 11x, weighting cyclical reversion (65%) against the structural enhancement thesis (35%). The acquisition compressed standalone ROIC from 44% to approximately 8%, and cost synergies of A$125 million over three years are yet to be proven. US mortgage rates remain the key swing factor, with each 100 basis points moving fair value by A$3-4.
Computershare (CPU)
HOLD | A$32.30 vs Fair Value A$31.60 | Approximately fair value
The world's largest transfer agent, a post-transformation financial infrastructure compounder with number-one or number-two global positions across three oligopolistic franchises. ROIC exceeds 30%, FCF conversion tops 95%, and fee revenue is accelerating at 8.5% excluding margin income. The market prices this correctly. CPU reports in USD with approximately 56% US revenue, creating AUD/USD translation exposure (10% currency move shifts the AUD share price by roughly 10%). The primary risk is margin income decline (approximately 24% of revenue) as interest rates fall, with 100 basis points worth A$50-60 million.
Insurance Australia Group (IAG)
HOLD | A$6.94 vs Fair Value A$6.65 | 4% overvalued
IAG fell 5.8% on February 12 without a clear specific catalyst. This is a 7.6/10 quality business with widening competitive moats, 160+ years of history, and market-leading brands (NRMA, CGU, WFI, AMI). Underlying insurance margin sits at approximately 15.5%, with management having improved it from 13.7%. The key analytical variable is the RAC WA acquisition treatment (A$1.35 billion, ACCC decision pending), which embeds approximately A$0.33 per share of optionality. Over three years, expected annualised returns are modest at approximately 1-2% above dividends.
National Storage REIT (NSR)
SELL | A$2.75 vs Fair Value A$2.06 | 25% overvalued
NSR's probability-weighted fair value of A$2.06 implies the current A$2.75 embeds significant Brookfield/GIC scheme completion confidence. The scheme price of A$2.86 per security (26.5% premium) is expected to complete in Q2 2026, and we assign 70% probability to completion. If the scheme fails, downside ranges from A$0.42 to A$1.11 (62-85% below current price). Operationally, NSR is undeniably strong: 228 centres, REVPAM growth of 120-150 basis points above peers, and a 43-project development pipeline. The investment question is entirely about scheme risk, where investors are risking 62%+ downside for 4% upside at current prices.
Bravura Solutions (BVS)
SELL | A$2.31 vs Fair Value A$1.55 | 33% overvalued
Bravura is a niche enterprise software provider with genuine switching-cost moats serving 50+ blue-chip clients managing over A$10 trillion in assets. Revenue is 58% recurring, the balance sheet carries zero debt and A$65 million cash, and CEBITDA margins have recovered to 24%. The market at A$2.31 prices the bull case (sustained 24%+ margins, growth acceleration, premium multiple), which we assign only 20% probability. Our central fair value of A$1.55 reflects margin fade from 25% to 20% terminal under competitive and wage pressures. Leadership instability (third CEO in three years, with Colin Greenhill appointed January 2026) adds uncertainty.
Kelly Partners Group (KPG)
SELL | A$6.38 vs Fair Value A$5.00 | 22% overvalued
KPG is an Australian accounting roll-up with 43 offices across five countries, a proven 80+ deal track record, and a distinctive 51/49 partner-owner-driver model that aligns operators but means approximately 74% of group profit flows to non-controlling interests. ROIC of 20.8% is compressing as international expansion dilutes returns. At A$6.38, the market prices successful international margin convergence and sustained deal-pace economics. Our probability-weighted fair value of A$5.00 gives credit for the proven Australian model while requiring evidence for the bull case in unproven geographies (US and Hong Kong). Leverage at 1.79x gearing adds risk. The thesis improves materially below A$4.50.
humm Group (HUM)
SELL | A$0.73 vs Fair Value A$0.48 | 34% overvalued
HUM's fundamental standalone value of approximately A$0.45 sits 38% below the current price. The market prices Credit Corp's non-binding indicative offer at A$0.77 as the dominant value driver, implying roughly 75% deal success probability. Our analysis assesses approximately 35%. The 249F meeting is scheduled for February 19. The asymmetry is unfavourable: risking 42% downside for 5% upside. The Commercial segment is a quality franchise, but it is paired with impaired consumer businesses (humm AU volumes down 60.6%) and governance dysfunction from activist board challenges.
Centuria Industrial REIT (CIP)
MODERATE BUY | A$3.24 vs Fair Value A$3.54 | 9% upside
Australia's largest domestic pure-play industrial REIT with 85 properties valued at A$3.93 billion, 85% weighted to core urban infill markets. Occupancy exceeds 95%, re-leasing spreads average 34%, WALE sits at 7.1 years, and there is embedded rental reversion of approximately 20% below market. The emerging data centre pivot (40 MW development application) creates optionality not captured in book value. Upside/downside ratio of 2.1:1 is attractive. The primary risk is interest rate sensitivity, where 10-year bonds above 5.2% trigger cap rate expansion.
Orora (ORA)
HOLD | A$2.34 vs Fair Value A$2.73 | 17% upside
Orora is a modestly mispriced packaging company with a visible near-term catalyst: the FY26 FCF inflection as the major capex cycle ends, producing expected underlying free cash flow of A$250-280 million. ROIC at approximately 6.2% remains below the 9-10% WACC, reflecting the Saverglass acquisition goodwill drag. The Glass CGU has thin headroom (9.1% above carrying value) and Saverglass EUR revenue is declining. Expected return is approximately 6-7% annualised over three years (price appreciation plus 4.3% dividend yield). US tariff policy clarity on EU glass imports is a A$0.20 per share swing factor.
Bailador Technology (BTI), Dexus Industria REIT (DXI), Regal Investment Fund (RG1), Region Group (RGN)
These four names trade within a few percentage points of our fair values and are primarily income vehicles.
BTI (A$1.22, fair value A$1.30, +7%) offers an 8.9% grossed-up dividend yield from a tech-focused LIC trading at a 31% discount to post-tax NTA of A$1.76. It is not a compounder: fee drag, tax, and DRP dilution consume most gross portfolio return. Total 12-month return is approximately 12.7% including dividends.
DXI (A$2.54, fair value A$2.63, +4%) provides defensive income from an industrial REIT with 99.7% occupancy, conservative 26.2% gearing, and embedded rental growth from 87% fixed escalations averaging 3.3-3.5% annually. The Jandakot development pipeline (241,000 sqm) offers medium-term optionality.
RG1 (A$2.37, fair value A$2.42, +2%) is a concentrated long/short global equities fund managed by Regal Partners, offering a 7.3% grossed-up yield backed by the deepest profits reserve in the ASX LIC sector (138 cents per share, 11+ years coverage). Total grossed-up return of approximately 8.1% falls roughly 2% short of the 10.1% cost of equity.
RGN (A$2.35, fair value A$2.41, +3%) is Australia's largest owner by number of convenience-based retail properties, anchored by Woolworths and Coles (approximately 43% of rent). Distribution yield of 5.8% plus approximately 3% growth delivers total returns roughly equal to the required equity return.
Read the full BTI analysis | Read the full DXI analysis | Read the full RG1 analysis | Read the full RGN analysis
Related Analysis
We have published several companion pieces for deeper reading on the key themes emerging from this week's coverage:
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CBA vs ANZ: Australia's Banking Valuation Puzzle compares Australia's most expensive bank against its cheapest Big 4 peer, examining why CBA commands a premium multiple despite both earning below-average ROEs by global standards.
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EVN vs NST: Gold Miners at Peak Pricing examines whether Evolution or Northern Star offers better risk-reward if gold sustains above A$4,500/oz, and what happens to each if it does not.
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AGL vs ORG: Energy Transition Divergence contrasts AGL's transition trough (BUY at +17%) against Origin's premium pricing (SELL at -35%), despite both operating in the same market.
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The Quality Premium Puzzle explores why the highest-quality businesses in our coverage (PME 8.4/10, DPM 8.4/10, CBA 7.8/10) are also the most overvalued, and what this tells us about how the market prices quality versus value.
From Week 1, our earlier analyses of JIN, CCP, NWS, CAR, and REA remain available, along with the REA vs CAR marketplace comparison and the REA/NWS valuation paradox.
Analysis generated by the Alpha Insights AI research pipeline. All fair values are point estimates subject to model uncertainty. This is not financial advice. Do your own research before making investment decisions.