Buy, hold, sell: Reece, Fortescue, Electro Optic Systems shares

S&P/ASX 200 Index (ASX: XJO) shares are narrowly lower, down 0.03%, at 8,726 points on Thursday.

Meanwhile, three experts explain their latest ratings on three ASX 200 shares.

Let’s review. 

Electro Optic Systems Holdings Ltd (ASX: EOS)

Electro Optic Systems shares are $8.54, down 8.1% today and up 38% over 12 months. 

Bell Potter has a buy rating on this ASX 200 industrials share. 

In a new note, the broker raised its 12-month target price from $12.60 to $13.80.

Analyst Baxter Kirk said:

EOS has entered into an agreement with the government of a Middle Eastern Gulf state (GCC member) for a nation-wide counterdrone (C-UAS) defence system valued at £370m (~$700m). This represents the largest contract ever secured by EOS.

EOS expects over 80% of contract revenue to be earned over the initial 12-24 months after the contract becomes unconditional.

Given the security deposit posted in August 2026, we believe this contract award was somewhat priced in by the market, however, we are surprised by the market’s reaction and given upcoming catalysts, believe current levels represent an attractive entry point.

Fortescue Ltd (ASX: FMG)

The Fortescue share price is $15.22, down 0.7% today and down 23% over 12 months. 

Bell Potter has a hold rating on this ASX 200 mining share. 

In a new note, the broker reduced its 12-month target price from $17.10 to $15.80.

Analyst David Coates said: 

FMG has reported a suite of negative metrics in an out-of-cycle preliminary report updating performance for the September 2026 quarter.

Total shipments were down 6% YoY to 46.8Mt (incl. 2.5Mt from Iron Bridge), with a scheduled port shutdown impacting volumes.

Sales of 42.9Mt were 8% below shipments of 46.8Mt, with the 3.9Mt gap attributed to ongoing negotiations with China Mineral Resource Group (CMRG), China’s centralised ore buying agency.

This is the first time FMG has disclosed a material discrepancy between shipments and sales.

Price realisations also weakened to 82% (vs benchmark Platts 61%: US$80/dmt). Absolute price received is down ~US$9/dmt QoQ.

Net debt rose to US$2.8bn (from US$0.9b at 30 June) as cash fell to US$3.2b (from US$5.1b) after US$1.0b final dividend, US$0.9b
of CAPEX and an estimated ~US$300m impact from unsold ore.

FY27 guidance of 197-207Mt at C1 costs of US$20.50-21.75/wmt is unchanged, but is now “subject to negotiations with CMRG”.

We had previously flagged risks to price realisations and we now make a greater allowance and for longer through our forecast period.

Reece Ltd (ASX: REH)

The Reece share price is $17.04, down 0.4% today and up 45% over 12 months. 

Blake Halligan from Gray Perry Wealth Advisers has a sell rating on this ASX 200 industrials share. 

Halligan said (courtesy The Bull): 

Reece is a plumbing supplies company in Australia, New Zealand and the United States.

Statutory sales revenue was up 4.5 per cent in reported currency in full year 2026 when compared to the prior corresponding period. However, earnings before interest and tax in reported currency fell 2.6 per cent.

Housing cyclicality and US execution remain material risks. Any slowdown in housing activity or property prices could weaken demand for plumbing products, placing pressure on revenue, margins and earnings.

In our view, the shares appear expensive relative to these risks.

The post Buy, hold, sell: Reece, Fortescue, Electro Optic Systems shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.