ASX 200 Midpoint Reporting Insights

We’ve reached the midway point of the February reporting season, with around a third of ASX 200 companies reporting this week alone. As expected, it’s been a bit of a mixed bag. Banks are profiting from higher interest rates, although the outlook for margins are less optimistic - particularly as competition intensifies for the tens of thousands of fixed-rate customers preparing to refinance this year.

And while consumers are still spending, retail earnings show early signs of a slowdown as rising interest rates hit household budgets. Yet many property owners are prepared to ride out the storm rather than sell their home at a discount – at least for the time being – with listing volumes and profit down at both REA Group (ASX:REA) and Domain (ASX:DHG).

What Does This Mean for Investors?

The long road to investing “The current reporting season is the snapshot from the rearview mirror—what happened in the period ending 31 December 2022,” he says. “Investors should be focused on what lies ahead and just like the roads we recently travelled, there are many potholes.”

Those potholes – caused by rapidly rising inflation and a belated and aggressive central bank response – are yet to be repaired.

“Corporate profitability will track the expected contraction in economic activity for the remainder of 2023 and likely into 2024,” Warnes says. But as outlined in my earnings season preview article, buying opportunities can arise from disappointing earnings results. Heeding the advice of Morningstar's director of equity research Mathew Hodge, I compiled my own wish list of high-quality companies I'd like to buy if the price was right. Even better if they have a wide moat.

For investors with their stock shopping list at the ready, let’s see if any buying opportunities among the ASX big hitters or sectors of interest have arisen so far.