Summary
Our portfolios performed well in the last quarter of 2025. Part of the reason for this was the ongoing de-rating of many of the high-flying growth stocks. A bit like what’s happening to many of the tech names in the US.
Our team put this chart together to highlight some of the de-ratings. We picked a collection of Big Cap Australian stocks, across a range of industries. The blue columns represent the peak Price Earnings (P/E) multiple that that particular stock traded on since January 2020. The brown columns represent the P/E multiple as at December 2025. The multiples are all based on FactSet consensus, so its not as if its impacted by our own potentially overly “cautious” forecasts.
Source: FactSet, Maple-Brown Abbott. Peak P/E since Jan 2020; current P/E as at 31 Dec 2025.
A few observations:
- The Healthcare de-ratings were particularly severe as evidenced by Cochlear (COH) and CSL. CSL is particularly noteworthy as it went from a P/E of almost 50x (and the biggest stock in our market) down to less than 20x
- Some of the de-ratings have provided opportunities for our portfolios. We now own both Woolworths (WOW) and CSL now that they are more sensibly priced
- However most of the rest still look pretty expensive to us and hence not held. Highlighting two of the biggest names, CBA has de-rated from a P/E of ~ 30x down to ~ 25x but that still looks pretty rich to us for a Bank with minimal earnings growth
- Similarly Wesfarmers (WES), owner of the Bunnings hardware chain, has come down from a P/E in the high 30x to low 30x. Now that stock is forecast to grow earnings at low single digits (say ~ 4%) over the next few years and we can’t see why you should pay over 30x for that type of growth.
So valuation still matters. Eventually.
Disclaimer: This information was prepared and issued by Maple-Brown Abbott Ltd ABN 73 001 208 564, AFSL No. 237296 (“MBA”). This information is general information only and it does not have regard to any person’s investment objectives, financial situation or needs. Before making any investment decision, you should seek independent investment, legal, tax, accounting or other professional advice as appropriate, and obtain the relevant Product Disclosure Statement and Target Market Determination for any financial product you are considering. This information does not constitute an offer or solicitation by anyone in any jurisdiction. Past performance is not a reliable indicator of future performance. Any views expressed on individual stocks or other investments, or any forecasts or estimates, are point in time views and may be based on certain assumptions and qualifications not set out in part or in full in this information. The views and opinions contained herein are those of the authors as at the date of publication and are subject to change due to market and other conditions. Such views and opinions may not necessarily represent those expressed or reflected in other MBA communications, strategies or funds. Any companies, securities and or/case studies referenced or discussed are used only for illustrative purposes. The information provided is not a recommendation for any particular security or strategy, and is not an indication of the trading intent of MBA. Information derived from sources is believed to be accurate, however such information has not been independently verified and may be subject to assumptions and qualifications compiled by the relevant source and this information does not purport to provide a complete description of all or any such assumptions and qualifications. To the extent permitted by law, neither MBA, nor any of its related parties, directors or employees, make any representation or warranty as to the accuracy, completeness, reasonableness or reliability of the information contained herein, or accept liability or responsibility for any losses, whether direct, indirect or consequential, relating to, or arising from, the use or reliance on any part of this information. This information is current at 02 February 2026 and is subject to change at any time without notice. © 2026 Maple-Brown Abbott Limited.
BEc, LLB (Hons), FFIN, CFA
Dougal joined Maple-Brown Abbott in 2001 as an equity analyst. He is currently a portfolio manager and equities analyst. Dougal was an Executive Director from July 2009 to October 2018. Dougal’s responsibilities include equity analysis and portfolio management, including managing a large number of institutional and retail accounts. He attended the Advanced Management Program at Harvard Business School in 2014. Prior to joining Maple-Brown Abbott Dougal worked in a national law firm and at an international investment bank.
Dougal joined Maple-Brown Abbott in 2001 as an equity analyst. He is currently a portfolio manager and equities analyst. Dougal was an Executive Director from July 2009 to October 2018. Dougal’s responsibilities include equity analysis and portfolio management, including managing a large number of institutional and retail accounts. He attended the Advanced Management Program at Harvard Business School in 2014. Prior to joining Maple-Brown Abbott Dougal worked in a national law firm and at an international investment bank.
Board and committee membership:
Asset Allocation Committee
Dougal
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