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Challenger
(Sydney:CGF)
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Rating:64Neutral
Price Target:
AU$10.50
▲(0.57% Upside)
Action:Reiterated
Date:03/26/26
The score is supported most by attractive valuation (low P/E with a decent yield) and a positive earnings-call read-through (reaffirmed guidance, ROE above target, dividend increase and buyback). This is tempered by uneven financial performance—especially the sharp revenue decline and high leverage—and softer technical momentum (negative MACD and sub-50 RSI).
Positive Factors
Strong annuity and life sales growth
Sustained, sizable annuity and life sales growth strengthens Challenger's core business model by expanding the annuity book and predictable liability base. Larger book scale improves pricing power, spreads and fee revenues over time, supporting more stable, recurring cashflows and operating leverage.
Negative Factors
High leverage on the balance sheet
Material leverage increases sensitivity to funding and interest-rate shocks and limits strategic flexibility. Over time high debt-to-equity can constrain capital allocation, elevate regulatory capital strain under stress scenarios, and raise refinancing risk if market conditions deteriorate.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong annuity and life sales growth
Sustained, sizable annuity and life sales growth strengthens Challenger's core business model by expanding the annuity book and predictable liability base. Larger book scale improves pricing power, spreads and fee revenues over time, supporting more stable, recurring cashflows and operating leverage.
Read all positive factors
Challenger (CGF) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$6.57B
Dividend Yield2.91%
Average Volume (3M)1.30M
Price to Earnings (P/E)13.3
Beta (1Y)0.98
Revenue Growth-24.88%
EPS Growth192.94%
CountryAU
Employees546
SectorFinancial
Sector Strength70
IndustryInsurance - Life
Share Statistics
EPS (TTM)0.82
Shares Outstanding681,584,900
10 Day Avg. Volume1,431,558
30 Day Avg. Volume1,295,356
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)1.44
Price to Sales (P/S)7.39
P/FCF Ratio13.89
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
AU$10.76Price Target Upside3.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)0.72
Revenue Forecast (FY)AU$1.02B
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
45
Neutral
Balance Sheet
55
Neutral
Cash Flow
60
Neutral
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.43B | 750.50M | 3.28B | 2.23B | -414.30M | 3.03B |
| Gross Profit | 2.43B | 750.50M | 635.90M | 652.20M | 1.36B | 1.79B |
| EBITDA | 1.25B | 1.11B | 924.70M | 970.50M | 414.30M | 1.17B |
| Net Income | 505.60M | 192.30M | 129.90M | 287.50M | 253.70M | 592.30M |
Balance Sheet | ||||||
| Total Assets | 36.81B | 34.95B | 33.41B | 30.98B | 29.74B | 29.99B |
| Cash, Cash Equivalents and Short-Term Investments | 680.70M | 32.39B | 573.20M | 593.40M | 733.10M | 989.40M |
| Total Debt | 8.46B | 8.27B | 7.13B | 5.89B | 5.85B | 6.39B |
| Total Liabilities | 32.74B | 31.09B | 29.52B | 26.81B | 25.75B | 26.17B |
| Stockholders Equity | 4.06B | 3.86B | 3.88B | 4.16B | 3.99B | 3.83B |
Cash Flow | ||||||
| Free Cash Flow | 1.90B | 399.40M | 841.80M | 1.27B | 2.48B | 2.56B |
| Operating Cash Flow | 1.90B | 399.60M | 843.70M | 1.27B | 2.49B | 2.58B |
| Investing Cash Flow | -1.75B | -1.18B | -1.94B | -1.34B | -2.12B | -865.00M |
| Financing Cash Flow | -88.80M | 854.70M | 1.08B | -35.00M | -619.80M | -1.38B |
Challenger Technical Analysis
Positive
10.44
Price Trends
10.09
Positive
9.39
Positive
9.06
Positive
Market Momentum
-0.07
Positive
57.61
Neutral
45.12
Neutral
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 10.44 is above the 20-day moving average (MA) of 10.05, above the 50-day MA of 10.09, and above the 200-day MA of 9.06, indicating a bullish trend. The MACD of -0.07 indicates Positive momentum. The RSI at 57.61 is Neutral, neither overbought nor oversold. The STOCH value of 45.12 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | AU$4.19B | 23.05 | 16.92% | 3.60% | 22.38% | 22.74% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | AU$7.03B | 62.17 | 19.71% | 0.82% | 23.25% | 50.21% | |
64 Neutral | AU$6.57B | 13.29 | 11.51% | 2.87% | -24.88% | 192.94% | |
53 Neutral | AU$5.59B | 30.32 | 5.08% | 1.87% | -4.68% | 4.33% | |
41 Neutral | AU$2.24B | -128.20 | -1.00% | 6.01% | 2.23% | 96.71% |
* Financial Sector Average
AU:CGF
Challenger
10.32
2.08
25.24%
AU:AMP
AMP
2.35
0.63
36.39%
AU:PPT
Perpetual Limited
19.18
-1.27
-6.19%
AU:HUB
HUB24 Limited
79.94
-24.10
-23.17%
AU:PNI
Pinnacle Investment Management Group Limited
18.31
-2.04
-10.04%
Challenger Corporate Events
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...
Challenger Capital Notes 3 to Be Suspended Ahead of May Redemption
May 13, 2026
Challenger Limited’s $385 million Challenger Capital Notes 3, trading under ASX code CGFPC, will be suspended from quotation at the close of trading on 13 May 2026, ahead of their planned redemption on 25 May 2026. The suspension is limited ...
Challenger Updates Market on Progress of On-Market Share Buy-Back
May 7, 2026
Challenger Limited has provided an updated notification to the ASX regarding its on-market share buy-back of ordinary fully paid shares under code CGF. The company reported that a total of 2,995,689 shares had been repurchased before the previous ...
Challenger exits substantial holding in Telix Pharmaceuticals
May 6, 2026
Challenger Limited has notified the ASX that it and its associated entities have ceased to be substantial holders in Telix Pharmaceuticals, ending a previously disclosed significant shareholding position. The change, formally lodged via a statutor...
Challenger updates market on progress of on‑market share buy‑back
May 4, 2026
Challenger Limited has provided an updated notification to the ASX regarding its ongoing on‑market share buy‑back of ordinary fully paid shares. The company reported that a total of 2,786,119 shares had been repurchased prior to the pr...
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.