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Challenger
(Sydney:CGF)
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Rating:63Neutral
Price Target:
AU$10.50
▲(9.03% Upside)
Action:Reiterated
Date:08/20/26
The score is driven primarily by strong cash generation and a constructive earnings-call outlook (clear EPS/ROE targets plus shareholder returns), supported by reasonable valuation. These positives are tempered by elevated leverage and volatile revenue trends, while technicals are mixed with mild near-term weakness.
Positive Factors
Annuity growth and distribution reach
Strong annuity growth and expanded distribution should deepen Challenger’s retirement-income franchise. Access to major platforms and adviser networks can support durable inflows, improve scale and strengthen customer reach over the medium term.
Negative Factors
Elevated balance-sheet leverage
Debt above twice equity leaves the group more exposed to funding conditions, asset performance and capital requirements. Although profitability and ratings improved, the leverage profile can constrain financial flexibility and amplify downside during stressed markets.
Read all positive and negative factors
Positive Factors
Negative Factors
Annuity growth and distribution reach
Strong annuity growth and expanded distribution should deepen Challenger’s retirement-income franchise. Access to major platforms and adviser networks can support durable inflows, improve scale and strengthen customer reach over the medium term.
Read all positive factors
Challenger (CGF) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$6.76B
Dividend Yield2.95%
Average Volume (3M)2.18M
Price to Earnings (P/E)12.2
Beta (1Y)0.90
Revenue Growth-24.88%
EPS Growth193.04%
CountryAU
Employees506
SectorFinancial
Sector Strength70
IndustryInsurance - Life
Share Statistics
EPS (TTM)0.82
Shares Outstanding681,584,900
10 Day Avg. Volume2,386,710
30 Day Avg. Volume2,180,027
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)1.69
Price to Sales (P/S)3.11
P/FCF Ratio3.61
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$11.11Price Target Upside15.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)0.7
Revenue Forecast (FY)AU$967.83M
Challenger Business Overview & Revenue Model
Company Description
Challenger Limited functions as a publicly listed investment management enterprise. The company also provides comprehensive retirement services to its clientele. It is actively involved in overseeing equity-focused mutual funds and deploys capital...
How the Company Makes Money
Challenger makes money mainly through two operating segments:
1) Life (Retirement income / annuities)
- Product pricing and investment returns (spread/margin): Challenger’s Life business sells guaranteed and non-guaranteed annuity products (commo...
Challenger Earnings Call Summary
Earnings Call Date:Aug 17, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Feb 11, 2027
Earnings Call Sentiment Positive
The call highlighted strong execution and momentum: record annuity and Life sales, disciplined cost management, upgraded credit ratings, improved capital resilience under new APRA standards, increased dividends and an upsized buyback, and a clear medium-term growth and ROE outlook. Challenges noted included persistently tight credit spreads that compress near-term yields, temporary increases in maturity rates from opportunistic short-dated business, transitional costs, and greater volatility in reported investment returns under the new framework. Overall the positives (growth in sales, improved capital position, higher dividends, strategic partnerships and distribution expansion) materially outweigh the operational and market headwinds.Positive Updates
Normalized Earnings and EPS Growth
Normalized net profit after tax of $468 million and normalized EPS of $0.681, both up 3% year-on-year, demonstrating steady underlying earnings growth under the previous reporting basis.
Negative Updates
Tight Credit Spreads Suppress Near-Term Yield
Credit spreads remained historically tight through FY26, moderating investment yield and COE margins; management is deliberately patient and disciplined, which has reduced short-term yield but preserved capital quality.
Read all updates
Q4-2026 Updates
Positive
Negative
Normalized Earnings and EPS Growth
Normalized net profit after tax of $468 million and normalized EPS of $0.681, both up 3% year-on-year, demonstrating steady underlying earnings growth under the previous reporting basis.
Read all positive updates
Company Guidance
Challenger guided FY27 core EPS of $0.45–$0.49 per share (midpoint $0.47), ~6% growth on the FY26 core EPS equivalent of $0.442, and set medium‑term targets to compound operating EPS at 8–10% over 3–5 years with an operating ROE target of 12–14% (after tax); the board targets a dividend payout ratio of 65–75% of core EPS (midpoint ≈46% of the old normalized EPS basis) and a PCA operating range of 1.15–1.35x (pro‑forma PCA today 1.5x, reported PCA 1.38x). Management said FY27 core guidance excludes investment returns (about $0.24 per share of FY26 sat in the non‑core bucket), flagged an ~ $8m post‑tax drag to FY27 from Calix Re ramp‑up and timing from the Fidante–Channel merger, and announced capital actions including an upsized $450m buyback (subject to APRA) after a $150m program ~60% complete and earlier redemption of $385m of capital notes; illustrative capacity under the new standards could support ~30% life‑book growth (~$7bn) with the current mix or ~80% (~$18bn) with a remix, while management targets $50bn AUM by 2030 (from $31bn today).Challenger Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
46
Neutral
Cash Flow
74
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.21B | 750.50M | 3.28B | 2.23B | -414.30M |
| Gross Profit | 2.21B | 750.50M | 635.90M | 652.20M | 1.36B |
| EBITDA | 1.25B | 1.11B | 924.70M | 970.50M | 414.30M |
| Net Income | 505.60M | 192.30M | 129.90M | 287.50M | 253.70M |
Balance Sheet | |||||
| Total Assets | 36.81B | 34.95B | 33.41B | 30.98B | 29.74B |
| Cash, Cash Equivalents and Short-Term Investments | 680.70M | 32.39B | 573.20M | 593.40M | 733.10M |
| Total Debt | 8.46B | 8.27B | 7.13B | 5.89B | 5.85B |
| Total Liabilities | 32.74B | 31.09B | 29.52B | 26.81B | 25.75B |
| Stockholders Equity | 4.06B | 3.86B | 3.88B | 4.16B | 3.99B |
Cash Flow | |||||
| Free Cash Flow | 1.90B | 399.40M | 841.80M | 1.27B | 2.48B |
| Operating Cash Flow | 1.90B | 399.60M | 843.70M | 1.27B | 2.49B |
| Investing Cash Flow | -1.75B | -1.18B | -1.94B | -1.34B | -2.12B |
| Financing Cash Flow | -88.80M | 854.70M | 1.08B | -35.00M | -619.80M |
Challenger Technical Analysis
Positive
9.63
Price Trends
9.94
Positive
9.42
Positive
8.96
Positive
Market Momentum
-0.02
Negative
56.07
Neutral
93.94
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:CGF, the sentiment is Positive. The current price of 9.63 is below the 20-day moving average (MA) of 9.67, below the 50-day MA of 9.94, and above the 200-day MA of 8.96, indicating a bullish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 56.07 is Neutral, neither overbought nor oversold. The STOCH value of 93.94 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:CGF.
Challenger Peers Comparison
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | AU$2.20B | 24.16 | 5.64% | 6.31% | -16.00% | ― | |
70 Outperform | AU$3.27B | 18.06 | 16.92% | 4.20% | 22.38% | 22.74% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | AU$6.02B | 50.21 | 21.88% | 1.06% | 23.25% | 50.21% | |
63 Neutral | AU$6.76B | 12.16 | 12.37% | 2.95% | -24.88% | 193.04% | |
53 Neutral | AU$6.03B | 33.20 | 5.08% | 2.02% | -4.68% | 4.33% |
* Financial Sector Average
AU:CGF
Challenger
9.97
1.85
22.81%
AU:AMP
AMP
2.48
0.83
50.49%
AU:PPT
Perpetual Limited
19.09
0.44
2.36%
AU:HUB
HUB24 Limited
73.81
-27.97
-27.48%
AU:PNI
Pinnacle Investment Management Group Limited
14.27
-4.30
-23.15%
Challenger Corporate Events
Challenger Updates Investors on Progress of On-Market Share Buy-Back
Aug 19, 2026
Challenger Limited has provided an updated daily notification on its ongoing on-market share buy-back program for its ordinary fully paid shares listed on the ASX under ticker CGF. The latest filing, dated 20 August 2026, reports that a total of 1...
Challenger exits substantial holding in Cleanaway Waste Management
Aug 19, 2026
Challenger Limited has notified the ASX that it and its associated entities have ceased to be a substantial holder in Cleanaway Waste Management Limited. The filing, made via a statutory Form 605 and signed by company secretary Linda Matthews, con...
Challenger to Resubmit Dividend Notice After ASX Request
Aug 18, 2026
Challenger Limited has cancelled a previously lodged dividend notification for its ordinary fully paid CGF shares following a request from the ASX. The company will resubmit the notice to clearly separate the distribution into ordinary and special...
Challenger Sets Out 2026 Governance Framework and AGM Plans
Aug 17, 2026
Challenger has released its 2026 Corporate Governance Statement alongside its broader reporting suite, outlining its approach to board structure, ethical conduct, risk management and fair remuneration. The documents, including the 2026 Annual Repo...
Challenger lodges updated ASX corporate governance disclosures
Aug 17, 2026
Challenger Limited has confirmed that its corporate governance statement for the year ended 30 June 2026 is available on its website and has been approved by the board as at 17 August 2026. The filing complies with ASX Listing Rules that require l...
Challenger Releases FY26 Analyst Pack and 2026 Annual Report Detail
Aug 17, 2026
Challenger has released its FY26 Analyst Pack alongside its 2026 Annual Report, presenting financial and operational performance on an operational basis in addition to statutory results under Australian Accounting Standards. The materials cover pr...
Challenger Affirms Respect for First Nations Communities
Aug 17, 2026
Challenger has issued a statement acknowledging the Traditional Owners of Country across Australia and recognising the enduring connection of Aboriginal and Torres Strait Islander peoples to the land.The company highlights its respect for Elders p...
Challenger Builds Momentum as Retirement Income Strategy Delivers in 2026
Aug 17, 2026
Challenger reported that its 2026 performance reflects successful execution of its strategy and growing momentum across its retirement income business. The company delivered strong financial and strategic outcomes, reinforcing its leadership throu...
Challenger Builds Momentum as Retirement Income Leader in 2026
Aug 17, 2026
Challenger reported that its 2026 performance reflects strong execution of its strategy, delivering solid financial and strategic outcomes while reinforcing its position as a leader in retirement income. The company highlighted new partnerships an...
Challenger Declares AUD 0.175 Interim Dividend for CGF Shareholders
Aug 17, 2026
Challenger Limited has declared a fully paid ordinary share dividend of AUD 0.175 for the six-month period ended 30 June 2026. The distribution applies to CGF shareholders on the Australian Securities Exchange, continuing the group’s focus o...
Challenger Profit Surges on Asset Gains as Dividends and NTA Rise
Aug 17, 2026
Challenger Limited reported revenue from ordinary activities of $2.94 billion for the year to 30 June 2026, up 1.3% on the prior year, with statutory net profit after tax jumping 163% to $505.6 million, largely due to positive asset and liability ...
Challenger exits substantial holding in Ooh!Media
Aug 12, 2026
Challenger Limited, a diversified Australian financial services group specialising in retirement income, investment management, securitisation and mortgage services, operates nationally through a suite of licensed subsidiaries. Its product range a...
Challenger revamps reporting ahead of new APRA capital rules
Aug 9, 2026
Challenger Limited will overhaul its financial reporting in the 2027 financial year, moving away from its Normalised Cash Operating Earnings framework to a new structure aligned with forthcoming APRA capital standards for longevity product provide...
Challenger Cancels Over 2.2 Million Shares in On-Market Buy-Back
Jul 9, 2026
Challenger Limited has announced the cessation of 2,231,859 ordinary fully paid shares, which have been cancelled following an on-market buy-back completed on July 2, 2026. The reduction in issued capital reflects the company’s ongoing capit...
Challenger Performance Rights Lapse After Unmet Conditions
Jul 2, 2026
Challenger Limited has notified the market of the cessation of a tranche of performance rights under its equity incentive arrangements. The ASX filing confirms that 355,134 performance rights, identified under the CGFAA security code, have lapsed ...
Challenger Updates Investors on Progress of Ongoing Share Buy-Back
Jun 30, 2026
Challenger Limited, a listed financial services and retirement income provider on the ASX under code CGF, offers investment products to Australian investors and retirees, with its ordinary fully paid shares forming the core of its traded securitie...
Challenger Reports Daily Progress in Ongoing On-Market Share Buy-Back
Jun 22, 2026
Challenger Limited has updated the market on its ongoing on-market share buy-back program, confirming that a total of 9,089,625 ordinary fully paid shares had been repurchased prior to the latest trading day. The company reported that it bought ba...
Challenger Issues Daily Update on Ongoing On-Market Share Buy-Back
Jun 21, 2026
Challenger Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back, covering ordinary fully paid shares under the ticker CGF. The company reported that it had repurchased a cumulative 8,493,709 shares...
Challenger to Merge Fidante with Channel Capital in $150bn Funds Platform
Jun 17, 2026
Challenger Limited has agreed to merge its multi-affiliate funds management arm, Fidante, with Channel Capital to form Channel Group, creating one of Australia’s leading active funds management platforms. Fidante will retain its standalone b...
Challenger Updates Market on Progress of On-Market Share Buy-Back
Jun 16, 2026
Challenger Limited has provided an updated notification on its on-market share buy-back program for its ordinary fully paid shares, reporting that a total of 8,274,523 securities had been repurchased before the previous trading day. The company di...
Challenger Updates Market on Progress of On‑Market Share Buy‑Back
Jun 4, 2026
Challenger Limited has provided an updated notification to the ASX on the progress of its on-market share buy-back program for its ordinary fully paid shares. The company reported that a total of 7,521,493 shares had been repurchased prior to the ...
Challenger Extends On-Market Buy-Back With Daily Share Repurchases
Jun 3, 2026
Challenger Limited has continued its on-market share buy-back program for its ordinary fully paid shares listed under the ASX code CGF, as disclosed in its latest Appendix 3C update. The company reported that a total of 7,236,600 shares had been r...
Challenger Updates Daily Progress of On-Market Share Buy-Back
Jun 2, 2026
Challenger Limited has provided an updated notification to the ASX on the progress of its on-market share buy-back program for its ordinary fully paid shares. The company reported that a total of 6,960,297 shares had been repurchased before the pr...
Challenger Updates ASX on Progress of On‑Market Share Buy‑Back
Jun 1, 2026
Challenger Limited has provided an updated notification to the ASX on its ongoing on-market share buy-back program for its ordinary fully paid shares under the CGF ticker. The update, dated 2 June 2026, reports that a total of 6,758,109 shares had...
Challenger Continues On-Market Share Buy-Back Program
May 28, 2026
Challenger Limited has provided an updated notification to the ASX confirming ongoing on-market buy-backs of its ordinary fully paid shares under code CGF, as part of a program first announced in February 2026. The company reported that a total of...
Challenger exits substantial holding position in Smartgroup
May 28, 2026
Challenger Limited has notified the market that it has ceased to be a substantial holder in Smartgroup Corporation Ltd, lodging the formal notice with the Australian Securities Exchange. The change, which applies across Challenger and its associat...
Challenger updates market on progress of on‑market share buy-back
May 27, 2026
Challenger Limited has provided an updated notification of its on-market share buy-back, confirming that a total of 6,026,185 ordinary fully paid shares had been repurchased before the latest reporting day. The company reported that a further 502,...
Challenger Declares Quarterly Distribution on Capital Notes 4
May 27, 2026
Challenger Limited has announced a new quarterly distribution of AUD 1.42 per security on its Challenger Capital Notes 4, which trade under ASX code CGFPD. The distribution relates to the period ending 24 August 2026, with an ex-date of 14 August,...
Challenger Updates Progress of On‑Market Share Buy‑Back
May 26, 2026
Challenger Limited has provided an updated notification to the ASX on the progress of its on‑market share buy‑back for its ordinary fully paid shares. The company first announced the buy‑back program in February 2026 and continue...
Challenger maps next growth phase as Australia’s retirement market matures
May 25, 2026
Challenger has used its 2026 Investor Day to outline a strategy for its next phase of growth as Australia’s retirement system reaches a demographic inflection point. The company is leveraging its strong brand and market position to lead the ...
Challenger Capital Notes 3 Redeemed and Delisted from ASX
May 25, 2026
Challenger Limited has confirmed that its Challenger Capital Notes 3, trading under the ASX code CGFPC, will be removed from official quotation at the close of trading on 25 May 2026 following their redemption. The delisting affects only this spec...
Challenger Retires 3.85 Million Perpetual Capital Notes
May 25, 2026
Challenger Limited has notified the market of the cessation of 3,850,000 of its capital notes, identified as CAP NOTE 3-BBSW+4.60% PERP NON-CUM RED T-05-26, effective 25 May 2026. The move updates the company’s issued capital structure and r...
Challenger Director Trims Direct Shareholding in On-Market Trade
May 22, 2026
Challenger Limited has disclosed a change in director Nicolas Hamilton’s holdings following an on-market trade in the company’s ordinary shares. The transaction reflects a disposal of a portion of his directly held equity while leaving...
Challenger Updates Market on Progress of On-Market Share Buy-Back
May 22, 2026
Challenger Limited has provided an updated notification to the ASX on its ongoing on-market share buy-back program for its ordinary fully paid shares. The filing confirms that the company repurchased 323,085 shares on the previous trading day, tak...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.