Company Interview / Elfreda sees 2026 as the year "of the Es" .... and likes these stocks

Key points:

Forecasts strong earnings momentum across the ASX, with a focus on resources and banks Favouring BHP, Rio Tinto, IGO, Mineral Resources, and gold stocks for diversified commodity exposure Shifts preference in retail from JB Hi-Fi to Harvey Norman; a2 Milk remains top pick in staples Life360 and TechnologyOne highlighted in tech; Ampol added in energy despite sector underweight

Elfreda Jonker from Alphinity Investment Management outlines an optimistic view for the Australian market in 2026, expecting it to be a year defined by earnings growth across diverse sectors. Jonker sees renewed expansion potential, especially after a period where resilience, rates, and the resources sector played pivotal roles. Jonker points to strong earnings momentum in commodities, favouring exposure to base metals such as aluminium and copper through companies like BHP (ASX:BHP) and Rio Tinto (ASX:RIO), as well as single-commodity producers such as Alcoa, IGO (ASX:IGO), and Mineral Resources (ASX:MIN). Gold allocations have been trimmed to a more neutral stance, while names like Northern Star Resources (ASX:NST) and Newmont Corporation (ASX:NEM) remain in focus.

Jonker shows continued optimism for Australian banks, with National Australia Bank (ASX:NAB) and Westpac (ASX:WBC) preferred over regional lenders. Hub24 (ASX:HUB) is also highlighted for further upside. In consumer discretionary, Jonker shifts preference from JB Hi-Fi (ASX:JBH) to Harvey Norman (ASX:HVN) for broader exposure and operating leverage, while a2 Milk Company (ASX:A2M) stands out in staples for its strong growth outlook in China.

In technology, Jonker identifies Life360 (ASX:360) and TechnologyOne (ASX:TNE) as top picks, acknowledging recent pullbacks as buying opportunities. Although underweight in energy, Jonker recently added Ampol (ASX:ALD) on the back of improving retail fuel margins, reflecting a balanced approach to sector exposures.