S&P/ASX 200 Index (ASX: XJO) shares are up 0.8% to 8,795 points on Friday.

Let’s take a look at some new ratings from Morgans.

Paladin Energy Ltd (ASX: PDN) 

The Paladin Energy share price is $7.40, up 7% today and down 25% over 12 months. 

Morgans has a buy rating on this ASX 200 uranium mining share.

In a new note, Morgans shaved its 12-month price target down from $13.30 to $13.10.

The broker said: 

PDN’s 1Q27 result reflected the anticipated slow start to FY27, with Langer Heinrich Mine (LHM) uranium production of 1.0Mlbs below consensus expectations of 1.16Mlbs. Uranium sales of 1.16Mlbs were in line with consensus expectations of 1.13Mlbs.

The result was impacted by the flagged and planned July plant shutdown and weaker recovery rates due to ore characteristics.

Mining momentum and realised pricing – mining performance improved qoq following strong performance in 4Q26 and realised pricing increased 12% to US$79.4/lb, a record at LHM.

Following recent share price weakness, we upgrade our rating to BUY (previously ACCUMULATE) with a price target of A$13.10ps (previously A$13.30ps).

Rio Tinto Ltd (ASX: RIO)

Rio Tinto shares are $154.23, up 1% today and up 19% over 12 months. 

Morgans has a hold rating on this ASX 200 mining share. 

In a new note, the broker increased its 12-month target on Rio Tinto shares from $159 to $162.

Morgans said: 

RIO delivered a largely steady quarter, with slight beats from copper and alumina, iron ore inline, while lithium trailed estimates.

Oyu Tolgoi was the highlight in 3Q26, enough to offset lower output from Escondida and Kennecott.

RIO’s share price has traded sideways so far through 2026, in a ~20% range.

Our new forced ranking is now RIO then South32 Ltd (ASX: S32), BHP Group Ltd (ASX: BHP), and Fortescue Ltd (ASX: FMG).

Fortescue Ltd (ASX: FMG)

The Fortescue share price is $15.32, up 2% today and down 23% over 12 months. 

Morgans has a sell (trim) rating on this ASX 200 iron ore share.

In a new note, the broker slashed its 12-month target from $18.70 to $15.40.

Morgans said:

We have long argued that investing material capital in near-term loss-making projects (magnetite and new energy) has not diversified Fortescue, and has instead left group earnings more exposed to the iron ore price.

Magnetite adds more iron ore exposure but at a higher cost, while new energy investment, and US$0.9-1.3bn of FY27 decarbonisation spend, are funded from hematite cash flow. This dynamic is starting to show in the numbers.

Fortescue flagged that net debt rose US$1.9bn in 1Q27, equal to the final dividend (US$1.0bn) plus quarterly capex (US$0.9bn), implying negative FCF for the quarter.

We attribute this mainly to weaker hematite cash flow after the central buying group China Mineral Resources Group (CMRG) reportedly halted purchases of two of Fortescue’s products during the quarter, leaving shipments 6% and actual sales 14% below Visible Alpha (VA) consensus in 1Q27.

The post Buy, hold, sell: Paladin Energy, Fortescue, Rio Tinto shares appeared first on The Motley Fool Australia.

More reading

• I investigated 3 ASX shares that have fallen sharply. Are they bargains or value traps?
• Should you buy Evolution Mining and Rio Tinto shares?
• 5 ASX 200 stocks analysts have upgraded this week
• 3 ASX shares tipped by brokers to return 41% to 85% in the next 12 months
• Buy, hold, sell: Reece, Fortescue, Electro Optic Systems shares

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) shares are up 0.8% today but down 3% over 12 months.

The market has been volatile this year amid the US-Iran war, persistent inflation, and now rising interest rates at home and in the US.

The market has weakened significantly since hitting a 52-week high in August.

Amid the weakness, brokers see opportunities to invest in some ASX 200 sector heavyweights.

Let’s take a look.

BHP Group Ltd (ASX: BHP)

The BHP share price is $59.47, up 2.5% today.

Over the past month, this ASX 200 mining share has fallen 1%.

Morgan Stanley renewed its buy rating on BHP shares on Monday.

The broker raised its 12-month price target from $68 to $69.

This suggests a potential 16% upside ahead.

Telstra Group Ltd (ASX: TLS)

The Telstra share price is $4.74, down 1.2% today.

Over the past month, this ASX 200 telco share has fallen 3%.

Citi reaffirmed its buy rating on Telstra shares with a 12-month target of $5.25.

This suggests a potential 11% upside ahead.

CSL Ltd (ASX: CSL)

The CSL share price is $190.41, up 1.9% today.

This ASX 200 healthcare share has risen 9% over the past month.

Morgan Stanley reiterated its buy rating on CSL shares this week.

However, the broker has a 12-month target of $182, which implies a 4% downside from here.

Xero Ltd (ASX: XRO)

The Xero share price is $61.14, up 5.9% today.

Over the past month, this ASX 200 tech share has fallen 8%.

RBC Capital renewed its buy rating on Xero shares this week.

The broker upped its 12-month price target from $85 to $96.

This suggests a potential 57% upside ahead.

Santos Ltd (ASX: STO)

The Santos share price is $9.17, down 0.2% today.

Over the past month, this ASX 200 energy share has increased 5%.

UBS reaffirmed its buy rating on Santos shares on Tuesday.

The broker raised its 12-month target from $8.30 to $9.50.

This suggests a potential 3% upside ahead.

PLS Group Ltd (ASX: PLS)

The PLS share price is $3.04, up 2.2% today.

This ASX 200 lithium share has tumbled 29% in just one month.

Jefferies renewed its buy rating on PLS shares on Monday.

The broker lowered its price target from $6.30 to $5.50.

This implies potential capital growth of 81% over the next year.

Stockland Corporation Ltd (ASX: SGP)

The Stockland share price is $4.21, down 0.8% today.

This ASX 200 property share has risen 2% over the past month.

Jarden reiterated its buy rating on Stockland shares on Wednesday.

The broker decreased its 12-month target from $5.69 to $5.

This still implies a potential 19% upside ahead.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price is $8.56, up 0.9% today.

This ASX 200 financial share has ascended 6% over the past month.

UBS reiterated its buy rating on IAG shares with a price target of $9.10.

This implies a potential rise of 6% ahead.

Newmont Corporation CDI (ASX: NEM)

The Newmont share price is $165.26, up 3.4% today.

This ASX 200 gold mining share has fallen 5% over the past month.

Jefferies renewed its buy rating on Newmont shares with a $224.12 target.

This implies potential capital growth of 35% over the next year.

The post 9 ASX 200 shares experts are backing for growth amid market weakness appeared first on The Motley Fool Australia.

More reading

• I investigated 3 ASX shares that have fallen sharply. Are they bargains or value traps?
• PLS Group to invest $650m in Pilgangoora upgrades to fuel growth
• How much do I need in my superannuation to generate a $108,000 annual passive income?
• 5 things to watch on the ASX 200 on Friday
• Telstra vs ANZ: Which ASX blue chip is better for retirees?

Citigroup is an advertising partner of Motley Fool Money. 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 CSL, Jefferies Financial Group, and Xero. The Motley Fool Australia has positions in and has recommended Telstra Group and Xero. The Motley Fool Australia has recommended BHP Group and CSL. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX shares have come off the boil over the past couple of months as September’s highly anticipated interest rate hike, surprisingly high inflation figures, and mortgage market pressures grip investor attention.

Add geopolitical uncertainty and shifting commodity trends into the mix, and it’s no wonder that investors are spooked.

Some ASX shares have been worse-affected than others, and it’s easy to just flee falling stocks in times of stress.

The thing is, some of these share price crashes actually present investors with a great opportunity to buy into a company for cheap.

But the theory isn’t universal. Buy into the wrong stock, and you could quickly see your investment go down the drain.

And it made me wonder: How do I tell which is which?

I decided to investigate three depressed high-profile ASX shares to determine if they’re a bargain buy or a value trap.

Was their share price crash warranted, and are there signs the company can turn it around?

Here’s what I found.

Xero Ltd (ASX: XRO)

It’s no secret that Xero shares have been under incredible pressure over the past 12 to 18 months, and that selling pressure has continued through most of 2026. Xero showed positive signs of recovery through the month to late August, rebounding 44% in just four weeks.

But sentiment quickly turned again and, at the time of writing, the shares have fallen 33% over a seven-week period, to just $59.53. In fact, in early October, the ASX shares dropped to a seven-year low of $55.31.

But what is interesting about Xero’s latest fall from grace is that it isn’t driven by a breakdown of the company’s core operations or a company crisis. Instead, the latest downturn looks like a combination of the latest macroeconomic stresses and general investor uncertainty.

And this caught my attention.

The Melio acquisition in the US is still weighing on confidence. The short-term effect of the acquisition is clear, but there isn’t much indication that the long-term effect will be negative. It’s mostly speculative at the moment.

In my view, Melio could plug a gap in Xero’s product suite by adding features it doesn’t have. And that could unlock a huge pool of untapped revenue and improved gross margins.

I think we could soon see concrete proof that the new products are turning into sales. If that happens, I expect Xero could pull forward its timeline of profitability (the company is currently guiding the second half of FY28), which would, in turn, quickly drive the share price higher.

So, are Xero shares a bargain buy, or a value trap?

My verdict: Bargain buy.

Fortescue Ltd (ASX: FMG)

The iron ore miner’s shares were relatively resilient through the first half of 2026. But investor sentiment tumbled in early June, sending the share price crashing. And it’s continued falling ever since. At the time of writing, the ASX iron ore shares have fallen 32% over the past four months. They’re now down 31% year to date, and trading at $15.07.

Unlike Xero, Fortescue’s sharp share price decline is multifaceted. 

The company generates a substantial amount of its cash flow from its large iron ore operations, so while rising iron prices act as a tailwind, falling iron ore prices do the opposite. Iron ore prices have crashed to around a four-year low of just over US$90 per tonne at the time of writing, severely affecting the miner’s margins.

The miner has also faced ongoing tensions and contract negotiations with China’s state-backed buyer, China Mineral Resources Group (CMRG). The group has urged Chinese mills to curb delivery of iron ore from major miners while it negotiates with domestic steelmakers. It plans to force major miners into lower pricing agreements

Understandably, the falling iron ore price and contract issues have caused a significant drop in shipments, which in turn has put pressure on the miner’s earnings.

There’s more, though. Fortescue has also been criticised for heavy spending on its green energy expansion, including green hydrogen and renewable grids in the Pilbara. Earlier this year, the miner said it had committed an additional US$680 million to the project, bringing the total investment to US$6.88 billion.

It’s clear that Fortescue’s investment outgoings and revenue are out of kilter. But the key question is, will any of these headwinds soon turn into tailwinds?

I don’t think so.

It would depend on three things. A rebound in iron ore prices, settlement with the CMRC, and tighter capital expenditure.

The price of iron ore is heavily tied to China’s infrastructure growth. So we’d need to see a monetary injection into the sector to create a pickup in steel mill production, and a pickup in iron ore demand.

We’d also need to see a resolution of the CMRG’s negotiations with major iron ore companies. And one that doesn’t translate to significantly lower pricing agreements for Fortescue.

Fortescue’s green energy transition is expected to eliminate an 800 million-litre annual diesel bill in the Pilbara by 2030. That’s great, but it’s another four years away.

So, are Fortescue shares a bargain buy, or a value trap?

My verdict: Value trap.

DroneShield Ltd (ASX: DRO)

DroneShield shares have fallen out of favour with investors this year following concerns about an ASIC investigation and questions about whether its share price had run too far ahead of true value.

At the time of writing, the ASX shares are $1.43 a piece. The ASX shares have crashed 37% since posting a disappointing first-half FY26 result in August. They’re down 57% year to date.

The counter drone operator’s shares were firmly on my radar earlier this year. And while I think the sell-off has been overdone, I understand why investors have reacted so strongly.

DroneShield’s revenue came in line with guidance expectations. But recurring revenue was a miss, at $11.5 million versus guidance of $14.2 million for the six-month period.

The update came amid an ongoing ASIC investigation that relates to market announcements and share trading in November 2025.

And recently, the company appointed a chief financial officer, Rebecca Lowde, and a new non-executive director, Lynne Saint. It’s not uncommon for investors to sell up on leadership changes because it implies potential for new uncertainties, but the timing makes me question if there are more issues deeply rooted in the business.

Can DroneShield turn its business around?

At the moment, I’m not sure. 

The company continues to win new deals and contracts and recently confirmed it has committed $261 million of FY26 revenue, which is the midpoint of its FY26 revenue outlook range. It’s likely that DroneShield will reach its full-year target, but what I’m interested in is whether the company can maintain the same trajectory into FY27.

That’s what I’m unsure about. 

Achieving the same sort of scale next year depends heavily on whether it can convert its procurement contracts into actual binding ones. That’s where there is a legal requirement to deliver the order. 

Perhaps the new leadership change might be exactly what the business needs to move into the next stage of growth.

Or perhaps DroneShield will take one step backwards before going forward again.

So, are DroneShield shares a bargain buy, or a value trap?

My verdict: Value trap.

The post I investigated 3 ASX shares that have fallen sharply. Are they bargains or value traps? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Reece, Fortescue, Electro Optic Systems shares
• Droneshield vs Xero: Which ASX tech stock is the better buy for a young growth investor?
• Down another 4% to a 52-week low. What should I do with my DroneShield shares now?
• Own ASX mining shares? Official forecasts show commodity prices peaking in FY27
• How much must I invest in Fortescue shares to earn a $1,000 passive income in 2027?

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 positions in and has recommended DroneShield and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.