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.

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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.

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• 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.

The recent decision by the Reserve Bank of Australia to increase official interest rates once again has pushed the share price of seven of the nation’s major real estate companies to 12-month lows, raising the question: Are they becoming even more attractive dividend plays?

Since the start of October, Arena REIT (ASX: ARF), Charter Hall Long WALE REIT (ASX: CLW), HomeCo Daily Needs REIT (ASX: HDN), Waypoint REIT (ASX: WPR), GPT Group Ltd (ASX: GPT), Vicinity Centres Ltd (ASX: VCX), and BWP Group Ltd (ASX: BWP) have all hit 12-month lows, with the dips concurrent with the RBA’s rates decision.

Low share prices translating to good yields

Each of these real estate companies is now trading with a healthy trailing dividend yield. The question will be, can they maintain it?

Examples of some of the yields include Charter Hall with a yield of 7.94% unfranked, HomeCo on 8.03% unfranked, and BWP on 5.49%.

Arena REIT is trading with a trailing yield of 7.76%. The company, in releasing its full-year results in August, gave guidance of 18 cents per share in distributions for the current financial year, which, at the current share price, would be a yield of 7.4%.

However, this estimate assumed the company would derive no income from the Arena properties occupied by Edge Early Learning Centres, which had entered administration.

Arena has subsequently told the ASX that all 27 of these properties are in the process of being leased to new owners; however, the deals are yet to settle.

As such, no dividend or guidance update has been made.

Interest rates a key focus

With real estate companies generally having large amounts of debt, their share prices could once again come under pressure if the RBA lifts interest rates again at its next meeting on 3 November.

ANZ Senior Economist Jasmine Zheng said this week a rate rise was “more likely than not”, while Betashares Chief Economist David Bassanese was also predicting a hike.

The RBA’s minutes from the meeting on October 6 indicated that further rate rises could be on the cards.

As they said:

Members discussed the challenges of judging how large the upside risks to inflation were or could become. They noted that the outlook for inflation would depend, among other things, on developments in the Middle East, the path of external demand, the extent of domestic capacity pressures and on how that influenced the pass-through of cost shocks and the evolution of inflation expectations. Members noted that it was possible these factors could continue to place upward pressure on inflation. Against that backdrop, members agreed that they would remain attentive to incoming data and the evolving assessment of the outlook and risks when making their decisions.

The post Dividend yields in focus as seven ASX real estate companies hit 12-month lows 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended HomeCo Daily Needs REIT. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.