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| On Wednesday, 11 February, the ASX jumped 147 points to close at 9015 8889. That’s 126 points higher than the last Not So. The ASX crossed over 9000 again for the first time since 28/10/25. Today, the market was mainly driven by the CBA result (40% of the ASX gain), which was better than expected, and a slight increase in the dividend. The stock jumped 6%. At the other end, CSL was hammered as the board sacked the CEO. It was down 12% during the day and finished 4% lower. From Bell Potter’s Coppo report And FYI – how’s this for one of the markets great ironies !!! BUYS HOLDS SELLS CBA {169.56 10.82 6.82%} ZERO 3 14 CSL {163.44 -7.95 –4.64%} 14 4 ZERO The other banks also got a lift as the banking index jumped from 114.9% to 119.2%. Resources also saw a solid lift today with BHP up 1.6% and RIO 1.2%. EQR was up another 19% The US market was mixed overnight after retail sales came in weaker than expected. Other important data this week includes the US CPI and US jobs. The AUD rallied to over 71c on the back of the weaker US data. Stories below include; Software Meltdown – UBS Reporting season We are happy for you to share our Not So Daily Bulletin with family and friends. If we can help them, we are also happy to chat. |
| Software Meltdown – stay patient or buy dip UBS provided the following research The sell-off across the software sector this month, building on weakness YTD and throughout 2025, was severe, triggering an even sharper debate about AI disruption risk. In this note, we weigh in with our view of the bull and bear case on software stocks, with a focus on the seat-based SaaS or application software stocks for which the perceived terminal value risk is highest. Bottom line, should investors stay patient or buy the dip? We’re ok staying patient and prefer the infra, data and security-exposed names near-term. The Catalyst Path From Here At the center of the sell-off is the belief – legitimate in our view – that AI-driven change is coming faster to the software sector than expected, given the combination of a rapid pace of AI model improvement (Google Gemini 3 in November, Anthropic Claude 4.5 in December, Open AI in the next few months?), a growing ability to leverage these new models into new use cases (creating overlap with software firms), declining inference costs and progress in terms of enterprise AI receptivity (evident in Palantir’s outstanding results). We’re likely sitting in front of a steady stream of such news and we are loosely expecting some form of “AI pivots” from software firms (faster re-architecting of the core, lower GMs, shift to new pricing models, perhaps accompanied by headcount cuts). Against this backdrop, the growth rates of many SaaS/apps firms are stable at best (no bending of the growth curve yet despite AI revs) and we haven’t even seen real evidence of any AI disruption in the numbers. Bending this negative narrative could take time, as we likely need to see growth rates accelerate (or at least see upward estimate revisions), more partnerships between the SaaS firms and the likes of OpenAI and Anthropic (sending a message that the two parties can co-exist) and more comforting anecdotes (we’ve offered up several in this report) that net spending with apps firms are still UP even with AI-driven customer headcount cuts. UBS Top Picks For well over a year now, we’ve expressed a clear bias toward infrastructure and data-exposed names (Microsoft, Snowflake, Datadog) as well as cybersecurity stocks (Okta, Zscaler), for which the AI disruption risk appears lower and customer spending trends remain healthy. These infra/data/security-exposed stocks have been thrown out with the bath water, and if we were to wade back in to the software sector, this is where we’d start. While we’d prefer to remain patient with the SaaS/apps stocks, we can envision a path for ServiceNow and Salesforce to come out of this AI period stronger. Reporting Season UBS provided an update on the earnings season. Earnings should show how the economy gained momentum through 1H26 The strength in the domestic economy has not surprised us, and is why the RBA had to hike rates this week after only having just finished its cutting cycle back in August. Profit growth for ASX200 companies this year will be in excess of 10%…six months ago this number was just 3%. Miners are looking at profits to leap by 30%, while Banks also see themselves with earnings tailwinds. Meanwhile, Technology stocks (which had been a bright spot for earnings over recent years) have stumbled badly over the past six months and now look set to see their profits shrink. Stocks where UBS analysts see UPSIDE risk at result Through February, our analysts see upside risk at results from BUY-rated names Coles, Cleanaway, Domino’s Pizza, Flight Centre, Goodman, GPT Group, HomeCo Daily, IAG, IDP Education, Navigator Global, Qantas, Sigma, Universal Store and Wisetech Stocks where UBS analysts see DOWNSIDE risk at result Through February our analysts see downside risk at results from Accent Group, Aurizon, Bendigo Bank, Charter Hall LW REIT, Guzman y Gomez, JB Hi-Fi, Mirvac, Monadelphous, Orora, Reliance Worldwide, Scentre Group, Stockland, Super Retail, TPG Telecom, Treasury Wine and Woolworths. Theme 1: ‘staying with cyclicals’ The strength in the domestic economy, PMIs >50, rising A$, and earnings momentum all tilt towards cyclical-type GDP businesses being able to perform. Through February results, many of these more ‘value’ inclined businesses will be keen to highlight their linkages to the domestic economy, or global commodities, and hence offer investors a place of ‘relative safety’ through this current washout being seen through much of the quality segments of the market. Theme 2: ‘beware the quality meltdown’ The ‘capital light / growth / quality’ companies will be on the back foot as investors apply a level of scepticism which hasn’t been seen for quite some time. Until today, the downward pressure on valuations had been isolated to Tech. This contrasts with the last time we saw such valuation compression through the market back in February 2022. At that time, the invasion of Ukraine impacted not just the relativity within sector valuations, but saw the overall market de-rate with the ASX200 fwd PE falling below 13. Currently the market multiple still sits above 18x, which suggests that the wobbles in Tech are of the micro, not macro, nature, and have (thus far) been contained. Theme 3: ‘return of the old guard’ The pain being seen right now in Aussie Tech like stocks, combined with the surge upwards from Miners and health of Bank earnings, has meant that the ‘old guard’ sectors of Resources and Banks have now reached the highest combined weight they have held in the ASX200 for 15 years. Results through February should allow stocks in these sectors to highlight their earnings resilience amid AI/Tech worries. The half-yearly results. From the CORE Watchlist. These are the dates we expect the profit results. 30/1 Resmed – good result with 11% growth for the quarter. Dividend same 4/2 Amcor – good quarterly result. $55m synergies from Berry acquisition. Dividend same 10/2 Computershare 11/2 CBA – good result. $5.4bn up 6% dividend $2.35 up 4%. CSL – not good. profit $1.9bn US down 7% 12/2 South 32 Orora 16/2 JB HiFi 17/2 BHP Seek.com 18/2 Santos 19/2 Brambles Goodman RioTinto Sonic Health Transurban Wesfarmers 20/2 Telstra 23/2 Lend lease 24/2 Nine Entertainment NextDC Woodside 25/2 Woolworths 27/2 Coles Financial Planning Snippets PLEASE BE VIGILANT regarding financial scamming. If anyone is requesting financial information from you (via phone, email, text, or social media), please contact us first or ask them for their ABN. Super Guarantee (SGC) for employees increases to 12% from 1/7/25. Concessional super contributions maximum of $30k Commonwealth Seniors Health Care card has seen the income limit increase to $158,440 (couple) $99,025 (single). If you are of Age Pension age and don’t have the card, please let us know. Macquarie Cash accounts – IF CHANGING YOUR PHONE, YOU NEED TO DEACTIVATE AUTHENTICATOR AND SWITCH TO THE NEW PHONE New AGED CARE fees come into effect from 1/11/25. Only for those entering care after this date. |
| Other Stories Rio Tinto merger with Glencore called off. CSL CEO steps down. |
| Broker Target Price Changes Target Prices should be viewed as a compass (the general direction) rather than a GPS destination. Ord Minnett Rio Tinto (RIO) increased from $158 (highest broker) to $173 (still highest broker) Morgans BHP increased from $47.90 to $48 RIO increased from $140 to $142 Morgan Stanley Woolworths (WOW) increased from $29.30 to $31.20 Macquarie BHP increased from $48 to $51 Brambles (BXB) decreased from $25.20 to $24.85 South 32 (S32) increased from $4.60 to $4.80 Transurban (TCL) decreased from $14.55 to $14.46 Bell Potter/Citigroup UBS Computershare (CPU) decreased from $37.80 to $35.30 RIO increased from $140 to $160 Tracking changes for 2026 Upgrades 55 Downgrades 52 |
| Core Watchlist Index (changes since last Not So) The CORE Watchlist is a collection of 30 Australian shares, predominantly “Blue Chip”. We obtain research from up to 6 brokers on each share. Each broker provides a Target Price (value in 12 months) which then provides us with an average for each stock. We then compare that average to the current price as a percentage. IE Macquarie price $176.95 Av. Target Price $205.96= 85.9% (meaning 14.1% upside over next 12 months) + income 4.35% (including franking). To get the CORE Index we take the average across the 30 stocks. This provides us with a market average as there are up to 80 teams of analysts providing the research and target prices. The CORE Watchlist stocks represent more than 55% of the ASX 200 and so provide us with a good indicator of the market value. When it’s at 100% then the market is fully priced. We have seen that when the index is below 90%, then it’s good buying, but that doesn’t happen very often. Should you have any questions, please let me know. The Core index increased from 93.08% to 93.13%. If we removed the 4 banks, the index falls to 89.12% Overall Earnings Per Share (EPS) FY26 increased from 5.41% to 5.47% FY27 decreased from 14.23% to 14.18% Most expensive – CBA 141.7% (176.5% highest ever). Least expensive – Seek.com (SEK) 60.5% The CORE Watchlist has 10 (8) stocks trading above 100%; they are; ANZ BHP CBA NAB RIO TLS WBC WDS WES WOW lowest number ever is 0, highest is 15. While 8 (10) is trading below 85% (the highest is 18, and the lowest is one). ALL CSL GMG JBH LLC NXT RMD SEK (Figures in brackets are last Not So). STOCKS TRADING BELOW ALL BROKER FORECASTS ARE AS FOLLOWS; (it has been a handy indicator in the past). 12 out of the 30 CORE stocks are trading below the lowest broker target price. Highest 24. Lowest is 2. ALL current price $52.22 Broker range $66 to $74 BXB current price $22.72 Broker range $25.50 to $29.40 COL current price $21.75 Broker range $22.90 to $25.40 CSL current price $181.24 Broker range $188 to $275.00 GMG current price $30.75 Broker range $31.25 to $41.50 JBH current price $83.27 Broker range $87.80 to $112 LLC current price $4.67 Broker range $5.25 to $6.30 NXT current price $13.22 Broker range $18.35 to $21.45 NEC current price $1.19 Broker range $1.20 to $1.41 RMD current price $37.45 Broker range $43.70 to $50 SEK current price $19.63 Broker range $27.50 to $32.50 SHL current price $22.57 Broker range $23.97 to $29.33 Added GMG Removed AMC |
| Banking Index (changes since last Not So) Like the CORE Watchlist index, the Banking index is the four major banks’ average target price based on research from up to 6 brokers. The percentage below 100% is the potential upside over the next 12 months (not including income). If at or over 100%, then this indicates the Banks are fully priced. The banking index increased from 112.2% to 116.1%. The index has jumped amid volatility in gold /silver over the last week. |
| Other Indicators (changes since last Not So) US VIX (Fear) Index decreased from 18.64 to 17.79. Normal is 10-17. Just above normal. Iron Ore decreased from $102.15 to $100.80. The average expectation for 2026 has increased from $92 to $94.75. Copper increased from $5.83 to $5.94. It reached an all-time high of $6.11 on 6/1/26. Gold increased from $4928 to $5081. New ATH $5303.6 last month. Silver increased from $74 to $83.24 AUD/USD increased from 69.77c to 71.04c. Asian markets – MIXED US 10-year Bonds decreased from 4.27% to 4.14%. 2-year rate 3.45%. 30 year rate below 5% at 4.78%. German 10 year Bonds decreased from 2.86% to 2.80% Japanese 10 year Bonds decreased from 2.24% to 2.23%. Highest since July 2007 30-year Bond hit an ATH of 3.25% Aussie Bonds 10 year Bonds decreased from 4.84% to 4.77%. 2025 high 4.95%. Oil prices increased from $63.77 to $64.52 The price of tungsten is still going up. China increased from $1473 mtu to $1603 mtu. The European price range increased from $1100mtu-$1398mtu to $1200-$1550mtu (only changes once a week. Another new ATH. EQR shares have continued to move higher, jumping 4c today to 25c. They were 3c as at 30/9/25. |
| This week & next week Last, “Not So” opened in 7 Aust states (excl NT), 6 US states, Bulgaria, Sweden, Czech Rep, Indonesia, Turkey, India, Greece and UK. . This week: February reviews.Next week: February reviews. |
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