Challenger Limited (AU:CGF)
ASX:CGF
Want to see AU:CGF full AI Analyst Report?
Top Page
Challenger
(Sydney:CGF)
Select Model
Select Model
Rating:64Neutral
Price Target:
AU$10.00
▲(19.05% 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
Record annuity sales & book growth
Sustained, record annuity sales and steady book growth underline a durable, recurring revenue base from retirement products. A growing annuity book increases fee and spread income predictability, supports scale in risk pooling and distribution, and strengthens long‑term earnings resilience.
Negative Factors
High leverage on balance sheet
Elevated debt-to-equity increases interest‑rate and refinancing sensitivity, reducing financial flexibility over cycles. In adverse markets this leverage can amplify capital strain, constrain organic investment or bolt‑on M&A, and heighten regulatory capital management demands for a life insurer.
Read all positive and negative factors
Positive Factors
Negative Factors
Record annuity sales & book growth
Sustained, record annuity sales and steady book growth underline a durable, recurring revenue base from retirement products. A growing annuity book increases fee and spread income predictability, supports scale in risk pooling and distribution, and strengthens long‑term earnings resilience.
Read all positive factors
Challenger (CGF) vs. iShares MSCI Australia ETF (EWA)
Market Cap
AU$6.34B
Dividend Yield3.1%
Average Volume (3M)1.30M
Price to Earnings (P/E)4.8
Beta (1Y)1.08
Revenue Growth-9.16%
EPS Growth234.45%
CountryAU
Employees566
SectorFinancial
Sector Strength70
IndustryInsurance - Life
Share Statistics
EPS (TTM)0.72
Shares Outstanding687,737,850
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$9.43Price Target Upside12.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)0.65
Revenue Forecast (FY)AU$989.54M
Challenger Business Overview & Revenue Model
Company Description
Challenger Limited is a publicly owned investment manager. The company also provides retirement services to its clients. It manages equity mutual funds. The firm invests into the public equity markets across the world. Challenger Limited was found...
How the Company Makes Money
Challenger makes money primarily from (1) earnings generated by its life insurance operations and (2) fees earned from its funds management activities. In its life insurance segment (Challenger Life), the company issues retirement income products ...
Challenger Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 18, 2026
Earnings Call Sentiment Positive
The call emphasized strong operational and strategic progress: record annuity sales and book growth, earnings and ROE above targets, a sizeable after‑tax asset experience, a ratings upgrade, strengthened liquidity and origination activity, plus shareholder returns via a dividend increase and $150m buyback. Headwinds were clearly acknowledged — notably very tight credit spreads compressing reinvestment margins, higher near‑term liquidity holdings, regulatory and licensing timing uncertainty for offshore expansion, and an incomplete Pepper Money discussion — but management framed these as manageable, temporary or strategic trade‑offs while reiterating full‑year guidance and long‑term targets. Overall, positive execution of strategy and capital strength outweigh the cyclical and execution risks discussed.Positive Updates
Earnings Growth and Profitability
Normalized EPS of $0.333 in H1, up 2%; normalized NPAT $229m, up 2%; statutory NPAT $339m reflecting a positive after-tax asset experience of $105m. Group normalized ROE 11.4%, above full‑year target of 10.7% (outperformance 70 bps).
Negative Updates
Margin Compression from Tight Credit Spreads
COE (cash operating earnings) margin moderated to 2.95% due to historically tight credit spreads and a challenging reinvestment environment, weighing on near‑term reinvestment spreads despite disciplined pricing.
Read all updates
Q2-2026 Updates
Positive
Negative
Earnings Growth and Profitability
Normalized EPS of $0.333 in H1, up 2%; normalized NPAT $229m, up 2%; statutory NPAT $339m reflecting a positive after-tax asset experience of $105m. Group normalized ROE 11.4%, above full‑year target of 10.7% (outperformance 70 bps).
Read all positive updates
Company Guidance
Challenger reaffirmed FY26 normalized EPS guidance of $0.66–$0.72 per share (H1 delivered $0.333) and left through‑the‑cycle targets for ROE, cost‑to‑income and capital unchanged; H1 metrics included normalized ROE 11.4% (above the full‑year target of 10.7%, +70bps outperformance), normalized NPAT $229m (+2%), statutory NPAT $339m, Life normalized NPAT $226m (+1%), group net income $487m (+1%) and total expenses $154m (flat) with cost‑to‑income improving ~30bps and sitting below the 32–34% target range; management announced a fully franked interim dividend up 7% to $0.155 per share and a proposed $150m on‑market buyback, reported Life PCA of 1.58x with $1.7bn of capital above APRA minimum (pro‑forma ~1.74x day‑1 of new standards, ~1.82x at long‑term spreads), and highlighted growth metrics—record annuity sales $3.8bn (+32%; domestic $3.1bn,+37%; offshore $0.7bn,+13%), total life sales $5.1bn (+11%), book growth 5.8%, annuity book growth 7.4%, cash & equivalents $3.3bn (up 27%), $105m after‑tax asset experience and $5.9bn of originations (incl. $2.5bn private credit)—while flagging further capital‑framework work ahead of APRA reforms effective 1 July 2026.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 | 2.74B | 750.50M | 3.28B | 2.23B | -414.30M | 3.03B |
| Gross Profit | 295.10M | 750.50M | 635.90M | 652.20M | 1.36B | 1.79B |
| EBITDA | 1.23B | 1.11B | 924.70M | 970.50M | 414.30M | 1.17B |
| Net Income | 458.80M | 192.30M | 129.90M | 287.50M | 253.70M | 592.30M |
Balance Sheet | ||||||
| Total Assets | 35.37B | 34.95B | 33.41B | 30.98B | 29.74B | 29.99B |
| Cash, Cash Equivalents and Short-Term Investments | 755.20M | 32.39B | 573.20M | 593.40M | 733.10M | 989.40M |
| Total Debt | 8.07B | 8.27B | 7.13B | 5.89B | 5.85B | 6.39B |
| Total Liabilities | 31.26B | 31.09B | 29.52B | 26.81B | 25.75B | 26.17B |
| Stockholders Equity | 4.11B | 3.86B | 3.88B | 4.16B | 3.99B | 3.83B |
Cash Flow | ||||||
| Free Cash Flow | 1.88B | 399.40M | 841.80M | 1.27B | 2.48B | 2.56B |
| Operating Cash Flow | 1.88B | 399.60M | 843.70M | 1.27B | 2.49B | 2.58B |
| Investing Cash Flow | -1.95B | -1.18B | -1.94B | -1.34B | -2.12B | -865.00M |
| Financing Cash Flow | 265.40M | 854.70M | 1.08B | -35.00M | -619.80M | -1.38B |
Challenger Technical Analysis
Positive
8.40
Price Trends
8.37
Positive
8.62
Positive
8.60
Positive
Market Momentum
0.23
Negative
70.25
Negative
87.42
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 8.4 is below the 20-day moving average (MA) of 8.80, above the 50-day MA of 8.37, and below the 200-day MA of 8.60, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 70.25 is Negative, neither overbought nor oversold. The STOCH value of 87.42 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 |
|---|---|---|---|---|---|---|---|
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
64 Neutral | AU$6.34B | 4.78 | 11.51% | 3.10% | -9.16% | 234.45% | |
61 Neutral | AU$3.47B | 14.10 | 13.61% | 3.45% | 11.69% | -15.05% | |
50 Neutral | AU$1.84B | 9.75 | -1.00% | 6.01% | 2.23% | 96.71% | |
49 Neutral | AU$6.57B | 32.82 | 19.71% | 0.57% | 25.05% | 79.97% | |
44 Neutral | AU$3.97B | 32.88 | 3.56% | 1.65% | -14.25% | -25.71% |
* Financial Sector Average
AU:CGF
Challenger
9.26
1.97
26.97%
AU:AMP
AMP
1.57
0.29
22.18%
AU:PPT
Perpetual Limited
15.98
-0.96
-5.66%
AU:HUB
HUB24 Limited
80.50
0.28
0.36%
AU:PNI
Pinnacle Investment Management Group Limited
15.17
-3.79
-19.98%
Challenger Corporate Events
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...
BOQ Sells $3.6bn Equipment Finance Loan Book to Challenger in Strategic Shift
May 1, 2026
Bank of Queensland has completed the sale of its whole-of-loan equipment finance portfolio to Challenger Limited, disposing of $3.6 billion in assets as part of its strategy to become a simpler, specialist bank with stronger returns. The transacti...
Challenger Updates Market on Progress of On‑Market Share Buy‑Back
Apr 30, 2026
Challenger Limited has provided an updated notification regarding its ongoing on‑market share buy‑back of ordinary fully paid shares. The company reported that a total of 2,566,301 shares had been repurchased before the previous tradin...
Challenger Exits Substantial Shareholder Position in IDP Education
Apr 30, 2026
Challenger Limited has notified IDP Education Limited and the Australian Securities Exchange that it has ceased to be a substantial holder in IDP Education. The change, formalised through a statutory notice signed by company secretary Linda Matthe...
Challenger Cuts Share Count with On-Market Buy-Back Cancellation
Apr 24, 2026
Challenger Limited has cancelled 2,099,686 ordinary fully paid shares following an on-market buy-back, as disclosed in its latest notification of cessation of securities. The reduction in issued capital may marginally enhance value per remaining s...
Challenger exits substantial holding in Elanor Investors Group
Apr 23, 2026
Challenger Limited has notified the ASX that it has ceased to be a substantial holder in Elanor Investors Group, which comprises Elanor Investors Limited and Elanor Investment Fund. The change in relevant interest follows previously approved clawb...
Challenger Updates Market on Progress of On‑Market Share Buy‑Back
Apr 22, 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 latest daily disclosure states the company has repurchased a cumulative 2,099,686 shares pr...
Challenger updates market on ongoing on-market share buy-back
Apr 21, 2026
Challenger Limited has updated the market on its ongoing on-market share buy-back, confirming that its ordinary fully paid shares under ticker CGF remain the focus of the program. The latest notification states that a total of 1,698,606 securities...
Challenger exits substantial holder position in A2 Milk
Apr 21, 2026
Challenger Limited has notified The A2 Milk Company that it has ceased to be a substantial holder in the dairy producer, lodging the required notice with the ASX. The move indicates Challenger and its associated entities have reduced their relevan...
Challenger to Redeem Capital Notes 3 After APRA Approval
Apr 20, 2026
Challenger Limited will redeem all outstanding Challenger Capital Notes 3 on 25 May 2026 at their A$100 face value in cash, following approval from the Australian Prudential Regulation Authority. A final distribution of $1.47 per note is expected ...
Challenger lifts annuity sales and deepens retirement partnerships as funds under management fall
Apr 20, 2026
Challenger reported a strong third quarter in its life business, with total life sales rising 19% to $1.7 billion and annuity sales up 10% to $1.1 billion, driven by robust demand for domestic lifetime annuities and Japanese reinsurance annuities....
Challenger Reports Daily Progress on Ongoing On-Market Share Buy-Back
Apr 14, 2026
Challenger Limited has provided an update on its on-market share buy-back program for its ordinary fully paid shares traded under the ASX code CGF. The company continues to actively repurchase its stock as part of a previously announced capital ma...
Challenger Provides Daily Update on Ongoing On‑Market Share Buy‑Back
Apr 13, 2026
Challenger Limited has issued an updated notification on its ongoing on‑market share buy-back program, confirming a daily buy-back report for its ordinary fully paid CGF securities. The company disclosed that it had repurchased a cumulative ...
Challenger updates market on progress of on‑market share buy‑back
Apr 9, 2026
Challenger Limited has provided an updated notification on its on-market share buy-back program for its ordinary fully paid shares. The update notes that, as of 10 April 2026, the company had repurchased a cumulative 1,127,505 shares before the pr...
Challenger Updates Market on Progress of On-Market Share Buy-Back
Apr 8, 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 latest daily update, dated 9 April 2026, confirms that the company is continuing to execute...
Challenger exits substantial holder position in Telix Pharmaceuticals
Apr 7, 2026
Challenger Limited has notified the ASX that it has ceased to be a substantial holder in Telix Pharmaceuticals Ltd, formally lodging the required notice under the Corporations Act. The change, covering Challenger and a range of associated entities...
BOQ Sells $3.7bn Equipment Loan Book to Challenger in Capital-Light Growth Push
Apr 6, 2026
Bank of Queensland has entered a strategic capital partnership with Challenger that combines a $3.7 billion whole-of-loan sale of equipment finance assets with a forward flow arrangement for new originations. The deal supports BOQ’s strategy...
Challenger Director Nicolas Hamilton Trims Stake in On-Market Share Trade
Apr 2, 2026
Challenger Limited has reported a change in the security holdings of director Nicolas Hamilton, who conducted an on-market trade in the company’s ordinary shares. Hamilton disposed of 185,000 Challenger shares at $8.076 per share, while reta...
Challenger Issues New Performance Rights Under Employee Incentive Scheme
Apr 2, 2026
Challenger Limited has notified the market of the issue of 58,819 unquoted performance rights under its employee incentive scheme, dated 27 March 2026. The additional equity-based awards, which will not be quoted on the ASX, form part of Challenge...
Challenger Performance Rights Lapse Following Unmet Conditions
Apr 2, 2026
Challenger Limited has announced the lapse of 112,187 CGFAA performance rights after the conditions attached to these securities were not met or became incapable of being satisfied as of March 31, 2026. The cessation of these performance rights re...
Challenger updates market on small self-held share interest via performance plan trust
Apr 1, 2026
Challenger Limited has disclosed that it and its controlled entities have an interest or derivative exposure over 55,724 of its own ordinary shares, representing 0.0081% of the company’s issued capital. The shares are held in the Challenger ...
Challenger Updates Market on Ongoing On-Market Share Buy-Back
Apr 1, 2026
Challenger Limited has provided an updated notification to the ASX confirming continued execution of its on-market share buy-back program for its ordinary fully paid shares under code CGF. The latest daily buy-back report shows that the company re...
Challenger Exits Substantial Holding in Omni Bridgeway
Mar 31, 2026
Challenger Limited has notified the ASX that it has ceased to be a substantial holder in Omni Bridgeway Limited, formally lodging the required notice under the Corporations Act. The change reflects that Challenger and its associated entities have ...
Challenger backs APRA capital overhaul for longevity products
Mar 31, 2026
Challenger Limited has welcomed the Australian Prudential Regulation Authority’s final capital framework for providers of longevity products, which will take effect from 1 July 2026. The company says the reforms are a major development for A...
Challenger Director Somerville Buys First Stake via Family Trust
Mar 30, 2026
Challenger Limited has disclosed that director John Somerville, via the Somerville Family Trust, acquired 8,760 ordinary shares in the company on 26 March 2026 through an on-market trade at $8.22 per share. The purchase, representing his first hol...
Challenger Continues On‑Market Buy‑Back With Fresh Share Repurchases
Mar 30, 2026
Challenger Limited has updated the market on its ongoing on‑market share buy‑back, reporting that a total of 183,970 ordinary fully paid shares had been bought back prior to the most recent trading day. The company disclosed that a fur...
Challenger Director Lisa Gray Increases Indirect Shareholding
Mar 30, 2026
Challenger Limited has disclosed a change in director Lisa Gray’s indirect shareholding in the company, as required under ASX listing rules. Her interest is held via IOOF Investment Services Limited under an IPS Superfund account.On 26 March...
Challenger Begins Daily On-Market Buy-Back Reporting to ASX
Mar 29, 2026
Challenger Limited has provided an updated notification to the ASX regarding its ongoing on-market share buy-back program for its ordinary fully paid shares under code CGF. The latest daily report, dated 30 March 2026, confirms that 183,970 shares...
Challenger Drops Pepper Money Bid as $150m Share Buy‑Back Cleared
Mar 24, 2026
Challenger Limited, the Australian retirement‑focused investment manager and annuities provider, has confirmed that its proposed joint acquisition of Pepper Money Limited will not proceed after Pepper Money’s Independent Board Committe...
Pepper Money Drops Challenger Bid as Strong Growth Supports Standalone Strategy
Mar 24, 2026
Pepper Money has ended discussions with Challenger Limited after its Independent Board Committee concluded that Challenger’s revised non-binding offer of A$2.25 per share was not reasonably capable of execution. The decision halts a potentia...
Challenger Flags Historic Oversight in Director Interest Disclosure
Mar 23, 2026
Challenger Limited has disclosed an historic oversight in reporting a director’s interest in an unlisted managed investment scheme issued by its subsidiary, Fidante Partners. The interest, held indirectly by director Melanie Willis via the W...
Challenger Cuts Bid but Declares Final Offer for Pepper Money
Mar 16, 2026
Challenger Limited has submitted a revised, confidential, non-binding and conditional proposal, alongside Pepper Group ANZ HoldCo, to acquire Pepper Money Limited. The new offer reduces the price from $2.60 to $2.25 per share, adjusted for Pepper ...
Challenger Cuts Takeover Offer for Pepper Money Amid Market Deterioration
Mar 16, 2026
Challenger Limited has revised its non-binding indicative offer to acquire 100% of Pepper Money Limited, cutting the proposed scheme of arrangement price from A$2.60 to A$2.25 per share. The new price is expressed as Challenger’s best and fi...
Challenger targets investors with new discussion pack at Jefferies Asia Forum
Mar 16, 2026
Challenger Limited has released an investor discussion pack in conjunction with a presentation at the Jefferies Asia Forum in March 2026, underscoring its ongoing engagement with global capital markets. The materials, authorised by the group’...
Challenger Suspends DRP in Update to December Half-Year Dividend
Mar 12, 2026
Challenger Limited has updated its earlier dividend notification relating to the six-month period ended 31 December 2025, confirming key dates including an ex-dividend date of 24 February 2026, a record date of 25 February 2026 and a payment date ...
Challenger Suspends Dividend Reinvestment Plan for Interim 2026 Payout
Mar 12, 2026
Challenger Limited has suspended its Dividend Reinvestment Plan for the interim 2026 dividend, with the decision taking effect immediately under its DRP rules. While the plan remains suspended, all existing DRP participants will receive their inte...
Challenger exits substantial holder position in IPD Group
Mar 6, 2026
Challenger Limited has notified IPD Group Limited and the ASX that it has ceased to be a substantial holder in IPD Group, ending its previous large-shareholder status. The change, formalised through a statutory notice under the Corporations Act, m...
Challenger sets discretionary quarterly distribution on Capital Notes 4
Feb 27, 2026
Challenger Limited has declared a discretionary quarterly distribution of AUD 1.30 per Challenger Capital Notes 4 security (ASX: CGFPD), linked to 3‑month BBSW plus a 3.60% margin. The distribution relates to the quarter ending 24 May 2026, ...
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.