The All Ordinaries Index (ASX: XAO) has strengthened 0.93% over the past month and is up 0.47% at the time of writing this afternoon. And it seems like one All Ords financial services stock is driving some of the gains.
At the time of writing, Australian Finance Group Ltd (ASX: AFG) shares are trading 1.66% higher for the day, at $2.145 apiece. Over the year, the group's share price has risen an impressive 52.13%, the majority of which (42.05%) has occurred since early April.
For context, the All Ords Index has risen 4.60% for the year to date.
AFG's climbing share price can be attributed to the Reserve Bank's latest interest rate cuts. Combined with higher property prices, the market shift has sparked more confidence in the sector.
AFG has an extensive broker network and is expected to be well-positioned to meet the rising demand for home loans. In particular, it's manufacturing arm – AFG Home Loans – is expected to drive the majority of business revenue growth and profitability.
Here's what Macquarie Group Ltd (ASX: MQG) has to say about the stock.
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Macquarie's view on ASX All Ords stock
In a recent note to investors, the broker maintained its outperform rating on AFG shares and increased its 12-month target price to $2.20, up from $1.80. The upgraded target price represents a potential 2.56% upside.
"PT $2.20 (from $1.80), driven by higher multiple, implies ~13x 1Y fwd Cash EPS (from 10.5x), and compares to majors banks ex-CBA of ~16x. Our confidence reflects record lodgements, improved funding and operating leverage,'' the investor note said.
According to Macquarie, AFG's Home Load product activity and margin stabilisation are key growth drivers and support the broker's earnings outlook.
The group's total lodgement activity is a key driver of earnings in AFG's aggregation business. Total lodgements were up 18.7% year-on-year in Q4 2025. Volumes were 12.1% higher over the period, and the average loan size was 5.9% higher.
"Macquarie analysis of the AFG Home Loan lodgement data shows lodgements of ~ $1.81bn in 4QFY25, vs ~$1.78bn in the pcp, comprising AFG Securitisation (AFG Branded and AFG Funded product) and White-label product (AFG-branded, third-party funded product). 61% of was AFG's own funded AFG Securities products," the investor note said.
"AFG disclosed 61% of AFG HL product lodgements in 4Q25 were AFG's own higher margin AFG Securities products, vs 56% in the previous two quarters. This implies ~$1.1bn of AFG Securities product lodgements in 4Q25, and has stepped up compared to an average of ~0.9bn in the previous 6 quarters".
