Highlights:

  • Bell Potter Securities assigns a ‘Buy’ rating to Challenger with a target price of AUD 10.25 per share.
  • Total Life sales for the first quarter of FY26 stood at AUD 2.5 billion, up 4% year-on-year.
  • Challenger Life’s annuity net book growth reached AUD 415 million, a 2.5% increase for the quarter.

Bell Potter Securities (Institutional) has issued a ‘Buy’ rating on Challenger Limited (ASX:CGF), setting a target price of AUD 10.25 per share. The rating might follows Challenger’s first-quarter FY26 update, which highlighted growth in annuity sales and stable performance across key business divisions.

Bell Potter’s Rating on Challenger 

Bell Potter Securities (Institutional) has maintained a positive stance on Challenger , assigning a ‘Buy’ recommendation with a target price of AUD 10.25 per share.

First Quarter Performance Overview

For the first quarter of FY26, Challenger reported total Life sales of AUD 2.5 billion, marking a 4% increase compared to the same period last year. Lifetime annuity sales rose 16% to AUD 320 million, while fixed term annuity sales grew 29% to AUD 1.1 billion. Japanese annuity sales were stable at AUD 246 million, maintaining consistent performance in that market.

Annuity net book growth stood at AUD 415 million, equivalent to 2.5% growth for the quarter. The tenor of new business annuity sales was 5.1 years, improving the overall composition of the annuity book. Challenger Life’s investment assets increased 2% to a record AUD 26.0 billion, while the company’s Prudential Capital Adequacy (PCA) ratio remained at 1.58 times, indicating a well-capitalised position.

Funds Management Update

Funds Management Funds Under Management (FUM) totalled AUD 109.6 billion, a 3% decline for the quarter. Group Assets Under Management (AUM) stood at AUD 120.9 billion, down 2%.

Fidante’s FUM was AUD 91.4 billion, down 4%, influenced by institutional mandate redemptions, while Challenger Investment Management (Challenger IM) FUM increased 6% to AUD 18.2 billion. The growth included AUD 350 million raised through the launch of Challenger IM LiFTS Notes on the ASX in September 2025.

In October 2025, Fidante added London-based Fulcrum Asset Management to its affiliate platform, marking its second affiliate addition in 2025, following System Capital’s inclusion in February. Fulcrum manages approximately GBP 6.2 billion, primarily in liquid alternatives and macro strategies.

Outlook

Challenger reaffirmed its FY26 normalised basic earnings per share (EPS) guidance range between 66 and 72 cents per share.