Corporate Australia's 2027 Bets

This reporting season could make 2027 far more interesting than investors expect, writes Dale Gillham. Market discussion remains dominated by inflation, weak growth, geopolitical risk and the question of whether markets have run too far. Yet beneath those concerns, some of Australia's biggest companies appear to be preparing for something very different. Most of the market reports on a June fiscal year-end, which is why full-year results and guidance for the year ahead arrive together at this time of year.

The clearest signal is where the money is flowing. BHP's latest result showed copper overtaking iron ore as its largest earnings contributor — a notable shift for a miner whose earnings have long been anchored by iron ore sold largely into steelmaking. Rio Tinto has delivered $870 million in productivity benefits while increasing its exposure to copper, aluminium and lithium. Across the sector, investment continues to flow into copper, lithium, rare earths and critical minerals — the raw materials of electrification, which electric vehicles, power grids, wind turbines and battery storage all depend on. These are not decisions made for the next quarter; they are bets on where demand could be years from now.

Significant changes are also emerging elsewhere. After a difficult period, CSL — one of the world's largest producers of plasma-derived therapies — expects underlying profit to grow in FY27 despite broadly flat revenue. AGL, one of Australia's biggest electricity generators, is forecasting stronger earnings as its battery portfolio expands and costs fall, part of a wider build-out of grid-scale storage as the country's power system shifts away from coal-fired generation.

Interest rates add a further dimension. The RBA expects inflation to move back towards its 2–3 per cent target band over time, while CBA is forecasting two rate cuts in 2027. If rates fall while companies emerge leaner and more efficient, Gillham argues, the combination could be powerful.

His focus is on companies demonstrating three qualities: falling costs, improving earnings potential and investment in areas where future demand is growing. Not because 2027 is guaranteed to be a great year, but because this reporting season is providing an early look at where corporate Australia is placing its bets. “The headlines remain focused on what could go wrong. Yet some of Australia's biggest companies are spending billions on what they believe will go right. That is the part of this reporting season I wouldn't ignore.”

Best and Worst Sectors

Healthcare was the best-performing sector this week, rising more than 11 per cent, driven largely by an impressive result from its biggest constituent, CSL Limited. Materials gained more than 5 per cent as investors responded positively to mining giants including BHP and Rio Tinto continuing to shift towards higher-growth commodities, helping offset the effect of weaker iron ore. Energy rose more than 3 per cent, with another surge in oil prices supporting the sector as instability surrounding the Iran conflict continued.

At the other end of the market, Financials — the market's heaviest sector, dominated by the major banks — was the weakest, falling more than 5 per cent. Selling continued from the previous week as reporting season weighed on sentiment towards the sector. Consumer Discretionary dropped more than 4 per cent after a result from JB Hi-Fi, the consumer-electronics retailer, triggered a broader sell-off across retail stocks. Consumer Staples fell more than 2 per cent, weakness that may reflect short-term profit-taking following the sector's strong run earlier this year.

Best and Worst Stocks

CSL Limited led the ASX Top 100 this week, climbing more than 25 per cent following its FY26 result, with the market responding positively to the company's major restructuring plans. Pro Medicus, whose medical-imaging software is licensed to hospitals internationally, followed, rising more than 15 per cent, as another strong FY26 result reassured investors that its underlying growth story remains firmly intact. Evolution Mining, a gold miner, rounded out the leading performers, gaining more than 14 per cent after delivering a record FY26 result supported by another strong rise in the gold price.

JB Hi-Fi was the weakest performer, falling more than 14 per cent. Despite record FY26 sales, investors focused on weaker recent trading and its implications for FY27 growth. Aurizon Holdings, the coal-focused rail haulage operator, fell around 13 per cent, with expectations of lower coal earnings in FY27 overshadowing an otherwise solid result. HUB24, the wealth-platform provider, declined more than 12 per cent despite delivering strong earnings growth; after a significant rise in recent years, its share price is now trading sideways, and investors are weighing how much future growth is already priced in.

All Ordinaries Index Update

The All Ordinaries Index — which spans Australia's 500 largest listed companies — finished almost flat, falling just 0.16 per cent this week. The most important move came on Thursday: after drifting lower earlier in the week, the market tested the 9,200 level Gillham has been highlighting, and buyers stepped in to push it higher. That initial reaction is encouraging and reinforces 9,200 as the key level to watch. If it fails to hold, 9,000 becomes the next important support level.

Healthcare was the strongest-performing sector this week, led by CSL, and Materials also performed strongly — an encouraging sign given the significant volatility seen in individual stocks throughout reporting season. Only a couple of weeks of reporting season remain, and most major companies have now released their results. Volatility should therefore begin to settle, providing a clearer picture of where the market wants to head next.

The market's underlying structure looks considerably different from what was seen earlier this year. The recent weakness still resembles a retracement within a broader bullish move and, at this stage, does not appear to signal the beginning of something more serious. The market's reaction around 9,200 is now crucial and, so far, positive. If buyers continue defending this level, it will strengthen the bullish case and could position the market for a healthy finish to the year — an outlook that would improve further if the traditional Christmas rally begins to take shape.

Good luck and good trading.

About the Author

Dale Gillham is Chief Analyst at Wealth Within and an international bestselling author of How to Beat the Managed Funds by 20%. He is also the author of Accelerate Your Wealth—It's Your Money, Your Choice, which is available in bookstores and online at www.wealthwithin.com.au.

Disclaimer

Wealth Within holds an Australian Financial Services License (AFSL:226347). The information featured in this program is general in nature and therefore should not be relied upon. Before making any investment decisions, you should consult a licensed professional who can advise whether your investment decisions are appropriate for you. The material provided in this article is for information only and should not be treated as investment advice.