Most investors wouldn’t think of drones initially when thinking of Codan Ltd (ASX: CDA), with the company having traditionally based its business around radio communications technology and metal detector sales.

But the company’s DTC division, which it acquired back in 2021, has developed radio technology for use on drone platforms, which has piqued the interest of the analysts at Macquarie.

Major opportunity for ASX drone players

The Macquarie team said in a recent note to clients that there is expected to be exponential growth in drone spending, citing a recent NATO initiative called “drone edge”, which envisages US$40 billion worth of investment in the sector from more than 30 countries.

They added:

As we mentioned in a previous report, the US Department of War’s 2027 budget overview includes US$53.6bn in funding for drone and autonomous systems and US$21bn for counter drone technologies. This dedicated investment into autonomous systems’ procurement, domestic production capacity and advanced capabilities is being divided across multiple specialised programs.

They said in relation to Codan:

When encompassing estimated communication layer drone costs and US-specific programs, together these frame a large, multi-year, structurally growing US demand pool that plays directly to DTC’s niche. DTC’s key offering of resilient datalink, mesh-networking and electronic warfare hardened communications layer is directly linked to various components that multi-domain drone and unmanned systems require.

The Macquarie team said beyond the US, “DTC also has significant opportunities in the European region as noted by management back at the 1H26 result”.

They added:

Europe has emerged as a structurally attractive opportunity as the recent step-change in defence spending driven by the war in Ukraine and NATO eastern-flank deterrence is flowing into unmanned-systems and resilient communications categories where DTC competes.

Macquarie said the Asia-Pacific region was also shaping up as one of the most compelling regions for DTC, driven by a surge in defence spending.

Australia itself was a “high-conviction oppoprtunity”, with the company’s radios already selected for the Land 129 UAV project.

Macquarie added regarding the company:

To meet surging international demand for secure communications solutions as a part of the increasing demand for drones and uncrewed systems, DTC has established a multi-country manufacturing footprint, expanding production outside the US. The newer established manufacturing locations for DTC, the United Kingdom and Australia, help to de-risk global supply chains. This expansion in manufacturing positions DTC well to capture opportunities across different regions globally.

Shares looking cheap

Macquarie has a price target of $48.50 on Codan shares compared with $43.25 currently.

The company is valued at $8.09 billion.

The post How high does Macquarie think this ASX drone technology company will go? 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 Macquarie Group. 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.

Elevra Lithium Ltd (ASX: ELV) shares are slipping on Friday after the lithium producer released an early look at its June quarter.

At the time of writing, the Elevra Lithium share price is down 4.54% to $8.62. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 0.5% to 8,809 points.

Despite today’s decline, Elevra shares remain up around 7% in 2026 and have climbed roughly 220% since this time last year.

The latest numbers included another strong quarter at the mine, although the lower price received for its lithium appears to be weighing on the stock.

Here’s what the company reported.

Production finishes the year strongly

According to the release, Elevra produced approximately 54,479 dry metric tonnes (dmt) of spodumene concentrate during the June quarter.

Production rose 15% from the March quarter and marked the second-highest quarterly result achieved at North American Lithium.

The operation delivered a particularly strong May, producing approximately 22,202 tonnes. Elevra described this as a monthly production record.

Full-year production reached approximately 197,968 tonnes, giving the company a stronger finish to FY26.

Management put the improvement down to continued work on plant optimisation, ore feed consistency, and recoveries. The company also pointed to throughput and operating efficiency gains across the quarter.

However, sales didn’t keep pace with production.

Sales came in at around 33,977 tonnes, which the company linked to customer delivery schedules.

As a result, Elevra finished June with a provisional inventory of around 40,863 tonnes.

Pricing takes the shine off production gains

The price Elevra received for its lithium was less than impressive.

The company reported provisional average realised pricing of approximately US$919 per tonne, sold free on board.

Management said June shipments were priced under contracts linked to average market prices between October 2025 and March 2026.

Lithium prices were lower through much of that period, which left Elevra receiving less than the current spot market.

The June quarter sales were also made under the company’s largest legacy contract, which uses the same delayed pricing structure.

Currently, the spot price for lithium is sitting at 158,500 CNY, down 3.35% for the day.

Can Elevra shares recover?

I think Elevra shares can recover from here.

Production is improving, and the pricing lag should start to ease as more sales move onto newer contracts.

The next step is to turn that higher output into better sales and cash flow, particularly after inventory increased during the quarter.

The full quarterly report later this month should show whether higher production is starting to improve the rest of the business.

The post Why record production could not save this ASX lithium stock today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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.

BHP Group Ltd (ASX: BHP) shares are rising strongly on Friday, up 2.2% to $58.09 apiece.

FY26 was a big year for the ‘Big Australian’.

The BHP share price soared 62% in FY26 to finish at $59.40 on 30 June.

BHP was one of the strongest performers for capital growth amongst the ASX 200 large-cap shares last year.

The company benefited from a rotation into mining stocks, as well as an 18% rise in the copper price and a 7% increase in the iron ore price.

While BHP is still a major iron ore producer, it is also now the world’s largest copper producer.

Copper, essential for electrification, rose to a record US$6.60 per pound in May amid high demand due to the green energy transition.

In 1H FY26, copper made up for more than half of BHP’s underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA). 

In its 3Q FY26 update, BHP said strong production at Escondida in Chile and Antamina in Peru meant it expected group production for full-year FY26 would be at the upper end of its guidance.

There was mixed news relating to other parts of the business in FY26.

In February, BHP announced a long-term silver streaming agreement with Wheaton Precious Metals Corp (NYSE: WPM).

The miner received US$4.3 billion upfront, which strengthened the balance sheet, for a share of its silver from Antamina.

But there was trouble at the Jansen potash project in Canada. In June, BHP revealed a US$2 billion estimated cost blow-out for Stage 2.

The miner said it now expected Stage 2 to cost US$6.9 billion, up from the previous estimate of US$4.9 billion.

Jansen Stage 1 remains on track for first production in FY27.

In March, we learned that CEO Mike Henry would be stepping down on 1 July after six-and-a-half years at the helm.

He was replaced by Brandon Craig, who has worked at BHP for 25 years and was formerly President of the Americas division.

In May, BHP took back its crown as the ASX 200’s largest company by market cap from Commonwealth Bank of Australia (ASX: CBA).

What do the experts think about BHP shares?

Looking ahead to FY27, brokers have a mixed view on whether BHP shares are a buy, hold, or sell.

They also offer a range of 12-month price targets on the ASX 200 mining share.

Let’s start with some consensus views, then hear some explanations from individual analysts regarding their ratings.

On the TradingView platform, there is a consensus neutral rating (equivalent to a hold call) from 20 analysts.

Four analysts give BHP shares a strong buy rating, 13 say hold, two say sell, and one analyst has a strong sell rating.

The 12-month share price targets among those 20 analysts range from $43.94 to $94.10.

On the CommSec trading platform, 19 analysts provide a hold consensus rating.

Four give the miner a strong buy rating, 14 say hold, and there is one strong sell recommendation.

Who says buy, and why?

Morgan Stanley maintained its buy rating on BHP shares with a 12-month price target of $67.50 yesterday.

Deutche Bank also gives BHP shares a buy call, and raised its target from $50.25 to $52.19 earlier this month.  

Blake Halligan from Catapult Wealth also has a buy rating on BHP shares and explains why:  

The global miner holds dominant positions in iron ore and copper and is leveraged to increasing demand during the energy transition.

Despite the Jansen impairment and the risk of industrial action at iron ore operations in the Pilbara region of Western Australia, near term earnings momentum remains strong.

The balance sheet remains robust with low net debt, while a recent dividend yield above 3 per cent adds income appeal.

Who has a hold call on BHP shares?

Hold is the dominant rating among the experts today.

Morgans reiterated its hold call on BHP shares yesterday, and increased its 12-month target from $54.90 to $59.80.

Bank of America, which has a history of optimistic price targets on BHP shares, reiterated its hold rating on Wednesday and reduced its target from $70 to $65.

Other analysts who reiterated hold calls but reduced their targets this week include Citi, from $66 to $63, and Jefferies, from $68 to $65.

Meanwhile, Macquarie stayed at $55, and UBS remained at $60 per share.

The most pessimistic target we found was $40.10, suggested by Barclays this week. This implies a potential 30% downside in FY27.

On The Bull, Remo Greco from Sanlam Private Wealth explained why he has a hold rating on BHP shares:

Several disappointing events have led us to downgrade BHP to a hold.

Cost over-runs at its Jansen stage 2 potash project in Canada lifts the investment cost by about $US2 billion to $US6.9 billion. Possible industrial action, although averted in June, may re-ignite at the company’s iron ore operations in the Pilbara region of Western Australia.

Any industrial action may impact stock performance.

Longer term, we like BHP’s exposure to copper – the key metal of the future.

James Bills from Shaw and Partners also has a hold rating and commented:  

BHP remains a cornerstone of the Australian sharemarket, underpinned by its scale, diversified commodity exposure and strong balance sheet.

While iron ore continues to drive earnings, BHP is increasingly leveraged to future-facing commodities, including copper, where demand is expected to increase significantly due to growth in data centres and electric vehicles.

Despite near term volatility in commodity prices and sensitivity to global growth, the company’s disciplined capital management and strong cash generation support shareholder returns.

Holding remains appropriate given its quality asset base and exposure to long term structural demand trends.

Michael Gable from Fairmont Equities recommends holding BHP shares because “the commodities bull market is still in the early stages of the latest cycle”.

Experts say there are five fundamentals driving this new commodities supercycle. Learn more about them here.

The post Here’s what brokers tip for BHP shares over the next 12 months appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Jefferies Financial Group and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Barclays Plc. The Motley Fool Australia has recommended BHP Group and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.