Australia’s big but unloved companies will test investors’ mettle

1 month ago 5

Opinion

January 14, 2026 — 3.45pm

It’s difficult to get excited about this year’s share price prospects for most of the heavyweight companies that dominate the Australian market – including our major banks where the winner’s trophy could come down to the one with the least bad performance.

For the major superannuation funds and the big international investors that load up on only the biggest companies that inhabit the index, it’s likely to be slim pickings among the blue chips.

The list of the top ten listed Australian stocks is dominated by our four big banks, biotech giant CSL, the big miners Rio Tinto, BHP, and Fortescue, plus the two dominant supermarket retailers Woolworths and Coles.

Who wins the performance race among the big four banks?

For the retail investors that cluster heavily in the banks and in particular in the Commonwealth Bank, 2026 is shaping up as a follow-on from the second half of 2025, where the CBA’s three competitors play share price catch up.

There is no overarching theme that provides for meaningful growth in bank earnings this calendar year – rather a continuation of the competitive landscape and the likelihood of the Reserve Bank keeping rates on hold.

The majors are all jostling to improve their share of business banking and retain share of retail deposits and mortgages – after the latter two were strong last year.

But after a spectacular share price run for a couple of years up to the middle of 2025, the CBA could be facing a second year of the share price laggard of the big four.

Its share price growth momentum ran out of puff last year after its stockmarket performance reached a level that left all the expert banking analysts tearing out their hair and tearing up their models in disbelief.

Since June CBA’s share price has re-entered the earth’s orbit having fallen 17 per cent, while Westpac has gained 13.5 per cent, National Australia Bank has moved ahead almost 6 per cent and the ANZ, which had been the bottom of the share price pile in 2024, went on a tear and picked up 20 per cent over final six months of the 2025 calendar year.

CBA’s precipitous fall off a cliff at the back end of 2025 made it the wooden spoon performer for last year among its large peers with a total shareholder return of 8 per cent.

Despite the acknowledgment that CBA is a particularly well-run bank, years of outperformance in its share price leaves it vulnerable to back up again for 2026.

Morgan Stanley banking analyst Richard Wiles reckons its earnings outlook is now being impacted by more robust performance from its key competitors in retail and business banking.

Additionally, CBA’s performance won’t be getting a boost from any major cost reduction story or any new capital management initiatives like share buybacks.

And most importantly CBA’s price is still significantly higher than its peers when measured as a multiple of its share price – a term known as its price earnings ratio.

In other words its chief executive Matt Comyn would have to find something shiny in the box of tricks to lift earnings and share price momentum.

ANZ, which Wiles thinks could take the ribbon as the largest share price gainer in 2026, is laced with possibility.

Other than in 2025, it has mostly been a chronic share price underperformer – so it has a position from which there is more room for recovery

It has a fresh new chief executive, Nuno Matos who is promising to shake up the place and who appears to have a credible plan to succeed.

But ANZ is certainly the wild card given it will take some years to judge whether Matos can back up the rhetoric with results.

Meanwhile, there is a very real possibility that BHP will overtake the CBA as Australia’s largest company based on market capitalisation.

How this plays out in 2026 depends in large part of the iron ore price and to a lesser extent on the copper price.

Iron ore pricing will also determine the trajectory of Fortescue’s total shareholder return, while the success of Rio Tinto’s potential merger with Glencore will play heavily into its performance.

As for CSL, its poor share price performance in 2025 was a result of the perfect storm of issues around costs, lagging plasma collection and large swathes of Americans turning their backs on vaccinations. After a 38 per cent plunge last year it has a lot of ground to recover.

None of the above are shaping up as big gainers this year. That said, it’s early days.

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