SKN | Goldman Sachs Lifts ASX to Neutral as Near-Term Risks Fade

Key Takeaways

• Goldman Sachs upgraded ASX Limited from Sell to Neutral, citing a more predictable first-half 2026 outlook.

• The bank sees ASX’s revenue, cost base, and capital expenditure profile as increasingly “de-risked” in the near term.

• Medium-term expense discipline and residual regulatory overhangs remain the key variables for longer-term valuation.

Why Goldman Is Reassessing ASX Now

Goldman Sachs has upgraded ASX Limited to Neutral from Sell, setting a new price target of AUD 57.00. The shift reflects a view that ASX’s first-half 2026 results are now more predictable, with fewer near-term surprises across revenue, operating costs, and capital intensity.

Goldman’s analysts describe the current setup as “relatively de-risked,” noting that key financial inputs — including expenses, depreciation, amortisation, and capital expenditure — are increasingly well understood by the market. In practical terms, this reduces the likelihood of negative earnings shocks over the next reporting cycle.

Revenue Environment Turns Supportive

A central factor behind the upgrade is the improving revenue backdrop. Goldman observes that ASX’s activity levels and pricing dynamics are “looking favourable,” suggesting a more constructive operating environment than was reflected in earlier, more cautious views.

At the same time, ASX’s valuation has de-rated, helping to reset expectations. That combination — steadier fundamentals alongside a lower valuation base — has provided sufficient support for Goldman to step back from its prior Sell stance.

What Still Holds the Rating at Neutral

Despite the upgrade, Goldman remains cautious on the medium-term outlook. The bank flags ongoing risks around the expense trajectory beyond fiscal year 2027, where cost discipline will be critical in sustaining returns.

In addition, “remnant regulatory risks” tied to historical disclosures around the CHESS replacement program continue to linger in the background. While these issues are no longer seen as acute near-term threats, they still cap valuation confidence over a longer horizon.

Valuation Context and Market Expectations

Goldman’s AUD 57.00 price target implies around 12% upside from current levels. That compares with an average upside of roughly 25% for the firm’s Buy-rated stocks and about 9% for Neutral-rated names, underscoring that ASX is now viewed as more fairly priced rather than a compelling re-rating opportunity.

In SKN CBBA terms, this is less about momentum and more about risk balance. ASX is transitioning from a period dominated by execution and regulatory uncertainty into one where predictability improves — but without yet offering a clear margin of safety or growth catalyst.

Forward View for Long-Term Investors

For sophisticated investors, Goldman’s move signals that downside risks are receding, but upside remains conditional. Execution on cost control and clarity on regulatory matters will determine whether ASX can move from “stabilising” to genuinely attractive.

At this stage, ASX is no longer a stock to avoid — but it is not yet one to aggressively accumulate. The next phase will be defined by discipline rather than drama.

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