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Challenger Ltd CGF Stock Quote

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Morningstar‘s Stock Analysis CGF

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Unnerving Headlines Spook Investors, but Challenger Is Making Progress at Its Core

Shaun Ler Equity Analyst

Analyst Note

| Shaun Ler |

No-moat Challenger’s underlying NPAT of AUD 322 million for fiscal 2022, up 15% from fiscal 2021, met our expectations. But investors disliked slow progress toward improved profitability, the shares down as much as 15% intraday. Despite strong product sales, operating earnings margin for the Life business was flat at 2.6%. Cost control supported earnings, but this is likely a one-off with increased growth expenses being flagged for fiscal 2023. Calling a strategic review on the loss-making Challenger bank also spooked investors. Management appears to have overestimated its synergies to the group, both in revenue and expenses.  

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Key Statistics CGF

Company Profile CGF

Business Description

Challenger’s core business is selling annuity products in the Australian retirement market and, since November 2016, selling Australian dollar-denominated annuities into Japan's large retirement market. The firm’s annuity products provide investors guaranteed regular payments over an agreed term for an up-front lump sum investment and is designed primarily to protect investors from the longevity risk of outliving their savings. Challenger also operates a funds management business, Fidante Partners, which has minority stakes in several boutique global investment managers, and Challenger Investment Management, which primarily manages investments supporting its annuities business.

5 Martin Place, Level 2
Sydney, NSW, 2000, Australia
T +61 299947000
Industry Insurance - Life
Most Recent Earnings
Fiscal Year End Jun 30, 2023
Employees 770