ASX Midday Market Update: Movers and Highlights

Highlights 

• News Corp (ASX:NWS) surged 5.3% after delivering strong Q1 FY25 earnings, surpassing expectations in digital real estate, book publishing, and Dow Jones. 
• Generation Development (ASX:GDG) gained 3.6%, driven by upcoming legislative changes expected to expand the Investment Bonds market. 
• REA Group (ASX:REA) rebounded 2.5% following a solid 1H25 earnings beat, despite early volatility from a slight dividend miss and CEO departure. 

ASX Movers at Noon: Market Update and Key Developments 

The S&P/ASX 200 advanced 73 points (+0.87%), supported by a strong overnight session, easing bond yields, robust half-year earnings, and a fresh broker upgrade for Wesfarmers (ASX:WES). 

News Corp (ASX:NWS) – Strong Quarterly Performance Fuels Rally 

Shares climbed 5.3% after reporting a solid first-quarter FY25 earnings beat, driven by growth across its digital real estate, book publishing, and Dow Jones segments. Key financial highlights include: 

• Revenue: $2.23 billion (+4.8% YoY, 3.2% above consensus) 

• EBITDA: $478 million (+19.5% YoY, 12% ahead of expectations) 

• Net Profit After Tax (NPAT): $189 million (+24.3% YoY, 14.2% above consensus) 

• Earnings Per Share (EPS): 33 cents (+22.2% YoY, 13.3% above estimates) 

Generation Development (ASX:GDG) – Legislative Tailwinds Drive Optimism 

Shares rose 3.6% after Morgan Stanley pointed to potential regulatory changes that could significantly impact the Investment Bonds market. Key factors include: 

• Superannuation Tax Changes: The Australian government is considering raising the tax on superannuation accounts exceeding A$3 million from 15% to 30%, with Senate voting expected on February 6, 2025. 

• Impact on GDG: If implemented, the tax change could make Investment Bonds (IBs) a more attractive option for high-net-worth individuals, benefiting Generation Development, which holds over 50% of industry inflows. 

• Market Growth Potential: An estimated A$224 billion in super assets could be impacted, potentially increasing GDG’s Funds Under Management (FUM) by A$5.5 billion by FY27. 

BWP Trust (ASX:BWP) – Solid Earnings and Dividend Growth 

Shares gained 2.3% after Citi upgraded the stock from Sell to Neutral. The company reported 1H25 earnings growth of 22.2%, reaching $100.6 million, and increased its interim dividend by 2% to 9.20 cents per share. 

Wesfarmers (ASX:WES) – Broker Upgrade and Growth Drivers 

Shares advanced 2.5% after UBS upgraded the stock, citing continued growth opportunities for Bunnings. Key growth areas include: 

• Market Share Expansion: Increasing penetration in core categories and entry into new segments. 

• E-commerce Growth: Online sales accounted for 5.5% of FY24 revenue, still trailing global peers. 

• Commercial Sales Expansion: Currently 38% of FY24 results, lower than industry peers at approximately 50%. 

REA Group (ASX:REA) – Rebounds After Initial Volatility 

Shares rose 2.5% despite an early 3.0% dip, driven by a solid 1H25 earnings beat. The stock initially faced selling pressure due to a slight dividend miss and CEO departure. Key results include: 

• Revenue: $873 million (+20.3% YoY, 2.3% above expectations) 

• Expenses: $338 million (+17.9% YoY, 0.2% below consensus) 

• EBITDA: $521 million (+22.3% YoY, 1.2% ahead of consensus) 

• NPAT: $314 million (+25.8% YoY, 2.1% above consensus) 

• EPS: 238 cents (+25.9% YoY, 2.5% above expectations) 

• Dividend Per Share (DPS): 110 cents (+26.4% YoY, missing expectations by 4.2%) 

Pexa Group (ASX:PXA) – Weighs on Market Sentiment 

Shares declined 3.1% after the company announced non-cash impairment charges of $35-40 million, higher than its previous $15-20 million guidance, along with a tax expense increase to $40-45 million (previously $13-18 million). 

Beach Energy (ASX:BPT) – Weaker Guidance Pressures Stock 

Shares came under pressure after 1H25 results revealed mixed performance. Analysts at Jarden pointed to: 

• Lower-than-expected interim dividend 

• Weaker production guidance 

• Omission of fuel gas mention in the Waitsia gas plant update 

Banking Sector Gains 

Banks rallied, with Commonwealth Bank (ASX:CBA) gaining 1.5%, reclaiming $160, while Westpac (ASX:WBC), National Australia Bank (ASX:NAB), and ANZ Group (ASX:ANZ) all added between 1.5-2.0%. 

Conclusion 

The ASX is trading higher, supported by strong earnings reports and easing bond yields. Stocks like News Corp (ASX:NWS), Generation Development (ASX:GDG), and REA Group (ASX:REA) are outperforming, while Pexa Group (ASX:PXA) and Beach Energy (ASX:BPT) faced selling pressure. Banking stocks continue to see strength, helping to lift the broader market.