Codan shares (ASX: CDA) were the second best performer on the ASX 200 today, adding 7.51% to $48.94 to bring the cumulative YTD gain to 68.64%.
Why Are Codan Shares Up?
Today is the payment date for Codan’s fully franked 29 cent final dividend, so cash is hitting shareholder accounts just as sentiment around the stock runs hot. Dividend reinvestment and income funds topping up positions can create a soft bid on days like this, and in a name already riding momentum, that kind of mechanical demand can amplify a move.
The fundamental backbone of the rally is the FY26 result. Group revenue rose 30% to $875 million, EBIT jumped 67% and net profit surged 69%, modestly ahead of guidance, while the full-year dividend of 48.5 cents was up 70% on the prior year. The Communications division was the standout, with revenue up 22% to $506.2 million, profit up 45% to $156 million and margins reaching 31%, hitting a FY27 target some 18 months early. Defence customers now account for 58% of segment revenue, up from 38% a year earlier, underlining how decisively Codan has pivoted toward military radios and unmanned systems.
What has really energised investors is the forward picture. The Communications order book stood at $380 million at 30 June, up 50% year on year, and management is guiding to roughly 20% revenue growth in FY27, with the first half expected to significantly exceed the prior corresponding period on what it described as unprecedented demand for unmanned systems.
Codan’s unmanned revenue more than doubled to about $215 million in FY26, and its acquisition of US firm Adaptive Dynamics adds anti-jamming technology aimed at contested battlefield communications, a priority area as NATO members pour money into drone and counter-drone capability. Meanwhile Minelab, the metal detection arm, gives the stock a second engine tied to a buoyant gold price and strong exploration demand.
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What Lay Ahead
The average CDA price target sits at $49.96, only marginally above today’s close, with momentum catching up to the average analyst. On the chart, the trend remains bullish, with Codan shares above its 50-day moving average of $43.63, which itself sits well above the 200-day average of $38.16, while the 20-day EMA also sits above the 50-day.
After the post-results breakout to all-time highs near $50, the stock spent time consolidating, and today’s push back toward the high-40s fits a pattern of buyers defending the emerging support zone around $45 and reasserting control. Bulls will be eyeing up that A$50 break and hold as the week draws to a close, with the ATH close at A$49.92 an interesting watchpoint.
