Zip Co Ltd (ASX: ZIP) shares were among the standout performers on Wednesday.

The buy now, pay later (BNPL) provider surged 8.5% to $3.20, comfortably outperforming the S&P/ASX 200 Index (ASX: XJO), which rose just 0.4%.

The rally extends Zip’s gain over the past month to 19%. While the shares remain down about 2% year to date, they’re now up roughly 13% over the past 12 months.

So, what’s suddenly got investors excited?

America is the prize

A big part of the optimism centres on Zip’s growing US business.

The company has spent several years investing heavily in expanding both its customer base and product offering across America, which has become its largest market.

That’s a market investors simply can’t ignore. Compared with Australia, the US buy now, pay later market remains relatively under-penetrated, giving Zip a sizeable runway for future growth as more consumers and merchants embrace flexible payment options.

Management of Zip shares has also been busy strengthening its distribution network. Late last year, Zip expanded its partnership with Stripe, allowing merchants using the payments platform to seamlessly offer Zip’s services at checkout.

It’s a meaningful opportunity. Stripe serves millions of businesses globally, giving Zip access to a huge pool of potential merchants without having to knock on every door individually.

UBS believes that Zip shares could have a strong finish to FY 2026, with robust transaction growth in the key US market. According to a recent note, the broker has been pleased to see that US consumer spending has been resilient despite global uncertainty.

The numbers are finally backing the story

For years, investors questioned whether BNPL companies could generate sustainable profits.

Zip is starting to answer that question. Over the past several quarters, management has tightened lending standards, controlled costs, and shifted its focus firmly towards profitability.

Those efforts are paying off. In its third-quarter FY26 update, Zip upgraded its group cash EBITDA guidance to at least $260 million, up from previous guidance of around $248.6 million.

That’s exactly the type of earnings upgrade investors in Zip shares like to see. It suggests the company is proving it can grow while also delivering stronger profits. A combination that was largely absent during the sector’s boom years.

Not without risks

The opportunity is attractive, but investors shouldn’t ignore the risks of Zip shares.

Competition remains fierce. Zip is battling global heavyweights including Klarna, PayPal, Block’s Afterpay business, traditional banks, and credit card providers. Any increase in competitive pressure could squeeze margins or slow customer growth.

Like many growth companies, Zip is also highly sensitive to interest rates, consumer spending, employment conditions, and overall market sentiment.

That means shareholders should probably expect plenty of volatility along the way.

What do the experts think?

Broker sentiment remains overwhelmingly positive. Analysts at UBS have retained their buy rating on Zip shares with an improved price target of $4.10, which points to a further 28% upside.

Meanwhile, United Capital Partners is even more bullish, with a $4.85 price target, around 52% above today’s share price.

According to TradingView data, 11 of the 12 analysts covering Zip have either a buy or strong buy recommendation. The average price target sits at $4.17, implying potential upside of around 30% from current levels.

The most optimistic analyst believes Zip shares could climb to $5.59, representing upside of roughly 75%.

The post Could US expansion send Zip shares soaring further? appeared first on The Motley Fool Australia.

More reading

• Perpetual receives sweetened $22.07 EQT AB takeover bid
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Evolution Mining posts record FY26 cash flow
• Rio Tinto: 3% production growth and strong lithium output in H1 2026

Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

Superannuation is a great tool to help build wealth for retirement years.

By investing today, you can benefit from low tax rates, compounding, and eventually a tax-free passive income once you transition to the pension phase.

But how much do you need in your super to be able to get the passive income you want?

Let’s use a $6,500 per month passive income as a guide. Here’s a breakdown of how much you need, and how to get there.

How much do I need in my superannuation to get a passive income of $6,500 every month?

The easy calculation is for you to divide your annual passive income by the overall yield of your portfolio. Of course, the answer varies significantly depending what that yield is.

So first you’ll need to work out your annual passive income amount. If you’re aiming for $6,500 per month, that’ll be a total of $78,000 over the year.

It’s a large passive income, but its achievable if you have a high enough balance.

If your portfolio has a 3% overall dividend yield, you’ll need to have a total superannuation balance of $2.6 million to be able to earn your $6,500 per month passive income. That’s because $78,000 (your annual passive income) divided by 3% (your yield), is $2.6 million.

Then obviously, as your yield increases, the amount of money you need in your superannuation goes down.

So a superannuation portfolio with a 4% dividend yield would need to be $1.95 million in size to earn the same passive income.

Then a 5% yielding portfolio would need $1.56 million, a 6% portfolio would need $1.3 million, and a 7% yielding portfolio would need closer to $1.1 million to earn the same dividend income.

And so on…

So, if I invest in the highest-yielding ASX shares available, that means my balance can be lower and still earn the same?

Technically yes. But it’s not a good idea from an investment perspective.

When it comes to ASX dividend shares, generally the higher the yield, the higher the risk associated with that stock.

Rather than trying to get rich quick, it’s a better idea to concentrate on a diverse range of good-quality businesses with strong balance sheets and stable earnings. These stocks are most likely to stand the test of time and while also building wealth.

What does a diversified portfolio look like?

Say you eventually plan to have around $1.5 million in your superannuation to invest for passive income. You could earn around $6,500 per month off a portfolio yielding around 5% overall. 

That doesn’t mean that every investment in that portfolio has to be 5%. It can be a variation which equates to a combined overall 5% yield.

And remember, you don’t need to invest the whole sum in one go. Start with a monthly investment and let compound growth do some of the hard work for you.

For example, I’d look at splitting my portfolio into different yielding stocks. 

I’d look to have around 65% invested into mid-range yielding ASX shares around 4-5%, another 20% invested into slightly higher yielding stocks maybe around 6%, and the remaining 15% could be invested into riskier but much higher yielding shares.

I’d also look to buy the ASX shares across multiple sectors to diversify my portfolio even further.

It’s important to note that the majority of ASX shares pay their dividends every six or 12 months. Only a small handful pay every month.

Also be aware that while a 5% yield from a diversified portfolio is a reasonable long-term target, it’s not guaranteed and could fluctuate depending on the company’s profits. 

The post How much do I need in my superannuation to receive $6,500 per month in passive income? appeared first on The Motley Fool Australia.

More reading

• Could US expansion send Zip shares soaring further?
• Perpetual receives sweetened $22.07 EQT AB takeover bid
• Own NDQ, GAME, or other Betashares ASX ETFs? It’s pay day for you!
• Why this ASX energy stock could be set to rise 80%: Expert
• Morgans just placed a fresh buy rating on this ASX utilities stock 

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.

The Perpetual Ltd (ASX: PPT) share price is in focus after the company revealed it has received a revised non-binding, indicative takeover proposal at $22.07 per share from EQT AB, up 2% from the previous offer.

What did Perpetual report?

• Received a revised non-binding indicative proposal from EQT AB to acquire Perpetual at $22.07 per share
• The offer is 2% higher than EQT AB’s original proposal of $21.64 per share
• Proposal remains conditional on several factors, including sale of Wealth Management to Bain Capital
• No shareholder action required at this stage

What else do investors need to know?

The new proposal from EQT is not yet binding and is subject to a range of conditions. These include completing the sale of Perpetual’s Wealth Management arm to Bain Capital, thorough due diligence, successful negotiation of binding agreements, and regulatory approvals.

Notably, EQT’s proposal states it would be withdrawn if disclosed. Despite this, Perpetual’s board has decided it is in shareholders’ best interests to be informed right away, demonstrating a focus on transparency.

What’s next for Perpetual?

Perpetual’s board and advisers are thoroughly evaluating the revised offer. However, there is no certainty a binding deal will be made or that any transaction will go ahead. In the meantime, the board remains confident in its ongoing business strategy, particularly the simplification program and the value of its diverse earnings.

Perpetual has committed to keeping shareholders and the market updated in line with its disclosure obligations. Investors are encouraged to stay tuned as the company updates on any major developments.

Perpetual share price snapshot

Over the past 12 months, Perpetual shares have declined 9%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 2% over the same period.

View Original Announcement

The post Perpetual receives sweetened $22.07 EQT AB takeover bid appeared first on The Motley Fool Australia.

More reading

• Could US expansion send Zip shares soaring further?
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• Evolution Mining posts record FY26 cash flow
• Rio Tinto: 3% production growth and strong lithium output in H1 2026

Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.