If you are in the market for some new portfolio additions, it could be worth seeing what the team at Morgans is saying about the three ASX shares in this article.

Does the broker rate them as buys, holds, or sells? Let’s find out:

Fortescue Ltd (ASX: FMG)

Morgans was disappointed with this iron ore giant’s recent update, which revealed weak shipments and higher net debt.

In response, the broker has downgraded Fortescue shares to a trim rating with a reduced price target of $15.40. It 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. On updated estimates we lower our rating to TRIM (from HOLD) with an A$15.40 target price (was A$18.70).

Guzman Y Gomez Ltd (ASX: GYG)

Another ASX share that has been downgraded by Morgans is quick service restaurant operator Guzman Y Gomez.

While it has been pleased with its resilient performance, the broker cut its rating in response to recent share price strength. 

Morgans has downgraded Guzman Y Gomez shares to an accumulate rating with an improved price target of $31.30. It said:

We view GYG’s 1Q27 trading update as evidence that its sales are resilient. Backing out the high-single digit first seven weeks already disclosed (we estimate ~8.5%, supported by the Uber Eats deal), comps ran at ~5.5% in weeks 8-13, transaction-led and in line with the mid-single digit FY27 guidance. 

GYG remains our key pick in the QSR sector and the highest-quality operator in our coverage. We lift our FY27 same-store sales (SSS) growth forecast by 50bps to 5.5% and refine our margin mix, which raises FY27 underlying EPS by 1.9% and our price target to A$31.30 (from A$31.00). We move to ACCUMULATE (from BUY) given recent share price appreciation and would be buyers on any weakness.

Megaport Ltd (ASX: MP1)

One ASX share that Morgans is recommending to clients is cloud infrastructure provider Megaport.

It was impressed with its recent update, which revealed a significantly stronger earnings outlook.

In response, the broker has retained its buy rating on Megaport shares with an improved price target of $27.00. It said:

MP1 recently raised its FY27 EBITDA guidance by 25%. The compute and network businesses continue to deliver above expectations and MP1 announced three new AI infrastructure contracts with a Total Contract Value of ~A$1bn. Collectively these set a glide path for annualised EBITDA in excess of $850m. >We upgrade our EPS forecasts materially. Our Target Price lifts to A$27 per share and we retain our BUY recommendation.

The post Buy, hold, sell: Fortescue, Guzman Y Gomez, and Megaport shares appeared first on The Motley Fool Australia.

More reading

• 3 reasons why the Rio Tinto share price could be a buy
• UBS’ top nine ASX large-cap stock picks
• Here are the top 10 ASX 200 shares today
• Down 29% so far in 2026: What do brokers tip next for Fortescue shares?
• Fortescue vs Rio Tinto: Which ASX mining giant is the better buy today?

Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. 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 vs Pro Medicus shares: Which ASX growth stock comes out on top?

Weighing up Droneshield Ltd (ASX: DRO) and Pro Medicus Ltd (ASX: PME) as growth shares? Both are well-known names in their own fields, but they couldn’t be more different. Whether you’re into defence tech or backed by healthcare innovation, choosing between Droneshield and Pro Medicus means thinking about more than just which one’s made headlines lately. Let’s take a closer look at what sets them apart for ASX growth investors.

The case for Droneshield

Droneshield rides the wave in anti-drone and counter-drone technology. The company’s artificial-intelligence-driven hardware and software help protect critical infrastructure, venues, and government operations from drone threats – a niche but increasingly important sector. Its products, such as DroneGun and DroneSentry, are in use by militaries, airports, and commercial operators across Australia, the US, and the UK.

From a fundamentals angle, a few things really stand out:

• Market cap: $1.45 billion — Droneshield is a chunky player in Australian defence tech, but much smaller than Pro Medicus.
• P/E ratio: 433.75, which is extremely high on face value. Note, though, Droneshield’s earnings per share is negative (-$0.033), so this P/E may be based on adjusted or forward figures rather than traditional trailing earnings.
• Dividend yield: 0.00%. This is a pure growth story — you’re not investing here for income today.

Droneshield’s share price has had a wild ride recently and is well down for the year, but its underlying business taps into a field where new geographies and customers could drive future bursts of growth.

The case for Pro Medicus

Pro Medicus is no stranger to growth investors. It’s a leading Australian medical imaging software company, providing radiology systems and cloud-based solutions for hospitals and health networks, with a particularly strong foothold among US clients. If healthcare digital transformation continues, Pro Medicus is clearly positioned to benefit.

Looking at the key metrics:

• Market cap: $17.31 billion — more than ten times Droneshield’s, putting Pro Medicus up with the ASX big hitters.
• P/E ratio: 65.35, reflecting very high growth expectations, but nowhere near the triple-digit figure we see at Droneshield.
• Dividend yield: 0.42%. While modest, Pro Medicus does pay regular, fully franked dividends, which can be appealing for some growth-minded income seekers.
• Earnings per share: 2.536, well into positive territory and supporting sustainable growth alongside dividends.

Pro Medicus has a proven track record of scaling up from Australia to dominate radiology tech for major hospitals worldwide, and its fundamentals show the company is profitable, pays dividends, and holds a healthy valuation compared to its own sector.

Valuation comparison

Here’s how the two stack up on key numbers:

Metric	Droneshield	Pro Medicus
Market Cap	$1.45 billion	$17.31 billion
P/E Ratio	433.75	65.35
Earnings per Share	-0.033	2.536
Dividend Yield	0.00%	0.42%
Franking	–	100%

Note: Droneshield’s P/E ratio appears mathematically inconsistent with its negative earnings per share. This suggests the P/E may be forward-looking or based on adjusted earnings rather than trailing net profit.

Pro Medicus trades on a much lower P/E than Droneshield, though both are considered highly valued, especially when compared to classical “value” names. Pro Medicus also provides a small fully franked dividend, absent from Droneshield.

Recent share price momentum

Comparing recent share price performance up to 9 October 2026:

• Droneshield: Closed at $1.57 on 9 Oct 2026. Its year-to-date return is a rough -49.2%, with the past few weeks also showing persistent declines after a small spike in late September.
• Pro Medicus: Closed at $165.73 on 9 Oct 2026. Its year-to-date return is also in the red at -24.7%, but well ahead of Droneshield. The recent movement was positive, gaining 4.5% on the day, and showing several up days in the past fortnight.

Both have struggled year-to-date, but Pro Medicus has been the less volatile and better performing of the two over the period measured.

Which is the better buy?

If I need to pick just one as the stronger ASX growth stock, my lean is towards Pro Medicus. While Droneshield is tackling an exciting and rapidly evolving sector, its negative earnings, lack of dividends, and extreme valuation make it a riskier bet for now. Pro Medicus is far from cheap, but its profitability, fully franked dividends (even if small), positive earnings, and less severe drawdown this year all make it the stand-out for me between these two. There’s also proven history in scaling complex software, with stickier revenue and wide adoption in the US. I reckon Pro Medicus offers the higher-quality growth profile on the data at hand — which is what I want in my portfolio, even at a premium price tag.

The post Droneshield vs Pro Medicus: Which is the better ASX growth stock right now? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Could the DroneShield share price reach $2 in 2027?
• Here are the top 10 ASX 200 shares today
• Life360 vs Droneshield: Which ASX tech stock is a better buy?
• These 3 ASX shares have the ingredients of long-term compounders

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 positions in and has recommended DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. 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 draft. 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.

Analysts are just getting back into the swing of things after reporting season and the research reports are starting to flow.

I’ve picked out three companies that brokers have tipped for differing fortunes.

Let’s have a look.

Mesoblast Ltd (ASX: MSB)

Bell Potter published a research report last week which said that the outlook for Mesoblast’s short term revenue growth “remains highly attractive”.

There are also some pivotal events in the wings next year, including the interim readout on the clinical study for Mesoblast’s drug Ryoncil to be used in adults to treat graft versus host disease, and the headline data for a study of another compound in treating chronic lower back pain.

Bell Potter said:

Both are substantially larger markets than paediatric GvHD, nevertheless the market remains cautious. Australian biotech has had a difficult 12 months with several randomised clinical trials failing to meet clinical endpoints and we expect this has undermined investor confidence in the sector and is a contributing factor to the recent MSB share price.

The broker said the lower back pain drug could be a blockbuster in its own right, but the bar for approval was high.

They added:

Randomised controlled trials in pain management are difficult, however, the first Phase 3 in this indication achieved highly statistically significant reductions in pain from baseline. Since then patient selection criteria has been tightened and clinical endpoints refined in moves which we believe enhance the prospects for meeting the clinical endpoints in next year’s headline data readout.

Bell Potter has a $4.45 price target on Mesoblast shares compared to $1.98 currently.

Dicker Data Ltd (ASX: DDR)

Computer hardware company Dicker Data has just announced a deal to buy Sektor Group in New Zealand for $111.8 million.

Broker UBS said the motivation for the deal was to drive more growth in the southeast Asian region, “and further bolster its dominant Trans-Tasman offering within high margin technology”.

UBS said it was a positive incremental step for Dicker Data with the deal transacted at an attractive multiple.

The broker added:

Given the transaction consideration is entirely cash and no explicit management retention arrangements have been disclosed, retention of key personnel and vendor/ reseller relationships will be important to successful integration.

UBS has a neutral recommendation on Dicker Data shares and a $15.40 price target compared to $16.08 currently.

ASX Ltd (ASX: ASX)

Macquarie released a new research report into ASX, saying they were cautious on the company due to leadership transition and downside earnings risk from potential higher than expected capital expenditure.

The broker increased their price target from $52 to $53. However, it remains well below the current price of $61.10.

They also have an underperform rating on the company. At the time of writing, ASX is valued at $11.96 billion.

The post Buy, hold, sell: Mesoblast, Dicker Data, ASX shares appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Mesoblast, Transurban, NextDC shares
• Top brokers name 3 ASX shares to buy next week
• 2 ASX 200 shares tipped to rise 39% to 130%
• 5 things to watch on the ASX 200 on Friday

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