ANZ Group Holdings Ltd (ASX: ANZ) has plenty happening behind the scenes.

The banking giant is working to simplify its operations, improve efficiency, and make better use of its position in the Australian and New Zealand markets.

But with interest rates rising and the economic outlook remaining uncertain, is now a good time to buy ANZ shares? Here’s my view.

Why I like ANZ shares

One reason I like ANZ shares is the variety of businesses it operates.

Alongside its Australian mortgage and deposit operations, ANZ has a substantial banking business in New Zealand and a well-established institutional division serving large companies across international markets.

I think that provides several opportunities to generate earnings and build stronger customer relationships.

But what interests me most today is the work management is doing to improve the business. ANZ has been implementing its ANZ 2030 strategy, which aims to simplify the bank, reduce costs, and improve customer experiences.

A significant part of this involves integrating Suncorp Bank and bringing customers onto ANZ’s existing systems. Management is targeting substantial annual cost savings from the integration, with the full benefits expected towards the end of the decade.

I think there is considerable potential here. If ANZ can reduce duplication, improve its technology, and operate more efficiently, it could generate stronger returns from its existing businesses.

That gives me a reason to be positive about its longer-term prospects.

What about the economic outlook?

The next year could still be challenging for ANZ.

Australian interest rates have been rising as the Reserve Bank attempts to bring inflation under control, with further increases possible.

Higher rates can help banks earn more from lending, particularly when their funding costs increase more slowly. But competition for mortgages and deposits can limit those benefits. 

Higher borrowing costs can also reduce demand for new loans and put pressure on households and businesses. I think that helps explain why analysts are expecting relatively little earnings growth in the near term.

Consensus forecasts point to earnings per share of approximately $2.57 in FY26 and $2.55 in FY27. That is hardly an exciting outlook, but I think it is important to look beyond the next financial year.

The benefits of ANZ’s transformation should become more meaningful as its integration and efficiency programmes progress. For me, that provides an opportunity for earnings to improve over the following years.

Is the price reasonable?

ANZ shares are currently trading around $38.86. Based on consensus forecasts, that puts the bank on a price-to-earnings ratio of approximately 15 times FY27 earnings.

I think that is a reasonable price for a major Australian bank with opportunities to improve profitability.

There is also a healthy dividend on offer. Analysts expect ANZ to pay $1.66 per share in dividends in both FY26 and FY27, representing a dividend yield of approximately 4.3% at today’s price.

That provides some income while investors wait for the bank’s transformation to deliver results.

Foolish takeaway

I would be happy buying ANZ shares around $39.

I’m not expecting particularly strong earnings growth in 2027, but I think the work management is doing could leave ANZ in a much better position over the next few years.

With a reasonable valuation and a healthy dividend, I think there is enough on offer to make it worth buying today.

The post Is now a good time to buy ANZ shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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.

Woolworths Group Ltd (ASX: WOW) shares are up around 1% to $41.66 at the time of writing on Tuesday afternoon.

At one point earlier this morning, the shares were trading at an all-time high of $41.78 a piece.

The shares have spiked 9% higher over the past two weeks alone, and they’re now up an impressive 41% for the year-to-date.

What has sent Woolworths shares flying higher?

The supermarket giant hasn’t posted any price-sensitive news since its FY26 results announcement in August.

The sky-high share price has most likely been driven by renewed investor confidence that the company’s turnaround story is finally coming to fruition, after a difficult period in 2025.

In late-August, Woolworths posted a 3.6% year-on-year increase in sales and a 6.7% increase in EBITDA (before significant items). On the bottom line, Woolworths achieved a 15.4% increase in its NPAT (before significant items) for the year. Management also declared a 52-cent per share dividend, up 15.6% from FY25.

There has clearly been a shift in investor sentiment, and I think more recently a sector-wide investor rotation towards more defensive assets (and away from riskier or high growth shares), and some fresh economic data, has helped to propel the share price higher.

Last week, The Australian Bureau of Statistics (ABS) released data showing that, in seasonally adjusted terms, Australia’s employment rate increased by 0.1 percentage point to 4.7% in September. 

This has significantly boosted investor confidence that the Reserve Bank will decide to hold interest rates steady at its next meeting on the 3rd of November, rather than implement another hike as originally feared.

Less chance of another near-term interest rate hike has eased financial pressure on households. This is great news for an ASX consumer staples stock like Woolworths. As the company also leases large-scale stores, warehouses and distribution centres, it is highly sensitive to higher interest rates and higher lease costs.

The shares could also be climbing higher ahead of the company’s first-quarter FY27 update and annual general meeting. These are scheduled for the 28th and 29th of October, respectively.

Are the supermarket shares a buy, sell, or hold now?

According to expert forecasts, Woolworths shares are trading above fair value and we could see a correction ahead.

Market Index data shows brokers are split between a hold and a sell rating. However, the $37.73 average target price implies a downside of around 9%, at the time of writing.

Sentiment is similar on TradingView, although the majority (nine out of 17) have a hold rating on the shares. Another six rate Woolworths as a sell/strong sell and two have a buy rating.

The average $39.71 target price, however, still implies a downside of around 4%, at the time of writing.

The post Woolworths shares jump 9% to all-time high: Buy, sell or hold? appeared first on The Motley Fool Australia.

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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.

DroneShield Ltd (ASX: DRO) shares have been volatile over the past year, trading in a wide range from $1.41 right up to $5.09.

They are currently changing hands for $1.50, down 66.3% over a 12-month period.

The analysts at Cannacord Genuity believe this represents a good opportunity to buy in, and have a bullish 12-month share price target on the company, which I’ll get to shortly.

First let’s look at some recent news from DroneShield.

Revenue to come in as expected

Last week, DroneShield released an update, revealing that its committed revenue for FY26 was $261 million, which was at the midpoint of guidance of $250-$270 million.

Managing Director Angus Bean said at the time:

This is an encouraging update as we approach the end of the year. FY2026 Committed Revenue of $261 million is approximately 35% above that in October 2025, and 121% of our full-year revenue in 2025. We also have $29 million in Committed Revenue for FY2027 and a further $17 million for FY2028 and beyond. Committed Revenue gives us valuable visibility into future periods, with growing evidence of DroneShield’s leading role in the counter-drone industry. 2026 has been an important year when foundations have been reset, the platform has been built out, and we prepare for continued scale and growth in 2027 and beyond.

The research report from CG says that committed revenue for FY27 and FY28 was currently $29 million and $17 million, respectively.

They added that 15% of committed revenue was non-military, which was an important diversification.

CG said a late September announcement from DroneShield that it had been awarded a Joint Interagency Task Force contract in the US with a ceiling value of US$500 million was also a positive.

They said the DroneShield was one of 10 counter-drone operators of various sizes awarded the contracts, with US$500m ceilings being the largest awarded.

They added:

While not representing order guarantee, this is a strong indication of budgeting process from an existing DRO customer, with DRO having successfully completed delivery of a $25m order for DSX systems deployed on US military Infantry Squad Vehicles in September, an order executed through JIATF-401. In our view, this acts as a very late-stage, 3-year pipeline opportunity with clear visibility on contract orders from the US Department of War that has indicated its counter-drone spending intentions as a strategic priority.

DroneShield shares looking cheap

CG said they remained positive about DroneShield, despite the fact that its growth path was non-linear and difficult to predict.

They said, “we see increasing pipeline visibility and next generation product releases as future potential catalysts for the stock”.

CG has a price target of $2.60 on DroneShield shares compared to $1.50 currently.

DroneShield is valued at $1.44 billion.

The post How high will DroneShield shares go? A broker weighs in appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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 DroneShield. 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.