Codan shares (ASX: CDA) continued to stretch the highs, adding 2.7% to A$51.37 having made a new ATH at A$51.60 intraday. It has been a mighty year for CDA holders, with the share price up 77% since the turn of 2026, with record results last month supporting the breakout.
The move is a continuation, as markets appear confident that Codan has shifted into a higher growth gear, treating the FY26 result as the start of a multi-year story. The numbers were strong, as group revenue rose 30% to $875 million, EBIT jumped 67% to $244.1 million, net profit climbed 69% to $175.2 million and the fully franked dividend was lifted 70%. Both divisions delivered records, with Communications revenue up 22% to $506.2 million at a 31% segment margin, and Metal Detection revenue up 42% to $362 million.
Looking out from here, management is targeting 20% group revenue growth in FY27, well above its long-term 10 to 15% ambition for Communications, with first-half FY27 trading in expected to come in significantly higher Y.Y. The Communications order book stands at $380 million, up 50% since June 2025, underpinned by what the company has described as unprecedented demand for unmanned radio systems. Minelab, meanwhile, has carried a monthly revenue run rate of about A$32 million into the new financial year, helped by new detector launches and a supportive gold price.
The macro backdrop also remains supportive, with elevated global defence spending, NATO’s “Drone Edge” initiative worth more than US$40 billion across over 30 allies, and the structural shift toward mass-produced drones and software-defined tactical radios all feeding into Codan’s addressable market. The July acquisition of Adaptive Dynamics added anti-jamming and interference-mitigation technology that strengthens its pitch for next-generation allied defence programs. The balance sheet has also swung from net debt of $88.2 million in December to net cash of $35.7 million at 30 June, giving management firepower for further deals.
The run up has seen Codan’s share price jump ahead of the average analyst target, with the consensus at A$49.96, roughly 3% below the latest close. Targets have been raised repeatedly through the year, yet the market keeps outrunning them, as momentum proves tough to crack.
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The chart structure supports the bull case, though it also flags how stretched the short-term move has become. The share price sits well above its 50-day moving average of A$44.15, with the 50-day above the 200-day at A$38.54, and the 20-day exponential average above the 50-day, a classic alignment for an established uptrend. At the same time, the stock has pushed above the upper Bollinger band at A$50.53 with band width around 14%, and 20-day volatility has risen to 2.71. That combination points to an accelerating move within a strong trend, the kind that tends to attract momentum-following flows but can also invite profit-taking and consolidation near the breakout zone.
The bear case rests largely on valuation, with the shares already above the average target and trading at a premium to peers, any slip on margins, supply chain delivery or acquisition integration could trigger some profit taking after an impressive run. That being so, momentum is clearly with the bulls for now, and with the stock in a period of price discovery, new levels of support and resistance are still yet to be found, creating a period of heightened volatility.
