ASX Earnings: Increased Focus on Business Rationalization Gives Confidence in Margin Recovery

We raise our fair value estimate for wide-moat ASX by 3% to AUD 75 per share following its first-half results. Management commentary increased our confidence that ASX can return to historic operating margins, although exact timelines are still unclear. We expect operating margins to start recovering in fiscal 2026. ASX shares continue to trade materially below our fair value estimate as the market focuses on near-term expense and capital expenditure growth.