Codan shares (ASX:CDA) are leading the ASX 200 today, up 8.37% at A$44.16, having reaffirmed FY26 guidance at a 60%+ Y/Y level on NPAT. The move pushes Codan’s share price back towards breakout range, up 85.57% since the start of the year.
The rally appears to reflect continued momentum buying after a period of consolidation, with the share price finding support willing to step in around A$38.50 for a bullish double bottom setup into the rally. Codan upgraded its FY26 guidance in late April, lifting expected net profit after tax to around A$170 million and EBIT to approximately A$235 million, triggering a sharp revaluation and reset the market’s earnings expectations higher.
Today’s move looks like the market continuing to lean into that story as the company reaffirmed FY26 NPAT of $170million, EBIT of $235million, with Communications profit margin at 30%. The Minelab update pointed to H2 being even better than H1, with gold prices supportive, and also continuing higher in recent weeks.
The broader thematic backdrop is also supportive. Defence communications remains a high-conviction sector theme given persistent geopolitical tension, and resource-linked detection demand has held up alongside sustained exploration activity in key gold markets. For a company with exposure to both, the combination has attracted a quality premium that was not fully priced in before the guidance upgrade.
View From The Street
The average price target of A$43.15 sits just below today’s price of A$43.48, with the Street not yet moving targets to match the market’s enthusiasm.
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On the charts, Codan’s medium-term trend remains bullish, with CDA above its 50-day moving average of A$42.33, with the 50-day comfortably above the 200-day. Today’s session has pushed the stock above the upper Bollinger band at A$43.47, indicating that near-term momentum is running hot even as the broader trend stays intact.
The key question from here is whether execution can justify the rerating. Codan has already priced in a meaningful earnings step-up, which leaves little room for disappointment in order flow, margin delivery, or early FY27 commentary. Gold prices are having some say over things at the moment, floating all boats, and if that trend continues alongside improving fundamentals, new highs could well be in store.
