Recce Pharmaceuticals Ltd (ASX: RCE) shares are being hammered on Friday after the ASX biotech company released an update.

At the time of writing, the Recce share price is down a massive 18.48% to 37.5 cents.

That leaves the ASX healthcare stock down 40% since the start of 2026, wiping out a large chunk of its earlier momentum. However, the stock is still up 25% over the past year.

The latest announcement appears to have rattled investors, raising questions about Recce’s funding needs and whether the market is losing patience.

Recce is developing synthetic anti-infectives designed to address antimicrobial-resistant infections.

The capital raise behind the sell-off

According to the release, Recce has received firm commitments to raise $4 million before costs through an institutional placement.

The company will issue 10 million new shares at 40 cents per share.

The placement price appears to be the sticking point for investors. It is slightly above the current share price, but still well below where Recce shares were trading before the update.

Reece is also launching a share purchase plan (SPP) to raise up to another $4 million. Eligible shareholders can apply for up to $30,000 worth of new shares on the same terms as the placement.

Investors taking part in the placement and SPP will also receive one free attaching option for every two new shares issued. These options will have an exercise price of 60 cents and expire on 30 June 2027.

On top of that, holders who exercise those attaching options will receive two piggyback options, with an exercise price of $1 and an expiry date of 30 June 2028.

Where the money is going

Recce said the funds will be used across several parts of the business.

The cash will help strengthen its balance sheet, support commercial licensing work with a leading Middle Eastern pharmaceutical company, and fund clinical trials.

The company pointed to ongoing work on diabetic foot infections, including a Phase 3 registration trial in Indonesia and another in Australia.

Funds will also go toward activities linked to an Investigational New Drug application with the US Food and Drug Administration (FDA) and Indonesia’s BPOM.

After the offer, Recce expects pro forma cash liquidity of approximately $29.5 million before offer costs.

Can Recce win back investors?

Capital raisings can be very hard for smaller biotech companies, especially when commercial revenue is still limited.

Recce’s market capitalisation is now about $108 million, so a potential $8 million raise is definitely meaningful.

The company now needs to show that this funding can support clinical progress, regulatory work, and commercial deals. 

Until then, it looks like investors are staying on the sidelines.

The post Guess which ASX stock is crashing 18% 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.

S&P/ASX 200 Index (ASX: XJO) shares are just inside the green, up 0.03%, at 8,752.1 points on Friday.

This week, brokers have renewed their buy ratings and updated their 12-month price targets on several ASX 200 shares.

Let’s take a look.

Judo Capital Holdings Ltd (ASX: JDO)

The Judo share price is 90 cents, down 1.6% today.

This ASX 200 bank share was smashed yesterday, collapsing 46% on a profit guidance downgrade.

Today, Morgans renewed its buy rating on Judo shares but slashed its 12-month target price from $2.15 to $1.47.

This implies a potential bounce back of more than 60% over the next year.

Morgans said:

JDO downgraded its FY26 PBT guidance by c.8% at the mid-point. Even more disappointing was first-time FY27 PBT guidance which was c.16% below expectations at the mid-point.

The share price drawdown was vicious (particularly considering the decline that had already occurred since February).

While the earnings growth outlook has moderated, we still forecast c.30% EPS growth across both FY26 and FY27 with the stock now trading on a c.6.8x PER (FY27F) and 0.6x P:BV (end-FY26).

A significant risk premium or probability of failure has been priced into the stock. BUY.

BHP Group Ltd (ASX: BHP)

The BHP share price is $57.17, up 1.1% today.

The market’s largest ASX 200 mining share has lifted 29% in the year to date (YTD).

BHP shares have dropped almost 10% since last Thursday amid news of a $2.8 billion cost blow-out at its Jansen potash project.

Morgan Stanley reiterated its buy rating on BHP shares with a price target of $67.50.

This implies a potential 14% upside ahead.

Qantas Airways Ltd (ASX: QAN)

The Qantas share price is $10.65, down 0.6% on Friday.

The ASX 200 airline share has ripped 18% over the past month.

Ord Minnett reiterated its buy rating on Qantas shares this week.

The broker raised its 12-month price target from $10.50 to $11.50.

This suggests a potential 8% upside ahead.

Goodman Group (ASX: GMG)

The Goodman share price is $32.06, down 0.4% today.

The ASX 200’s biggest real estate share has risen 4% YTD.

Citi renewed its buy rating on Goodman shares with a $40 target yesterday.

This suggests a potential 25% upside ahead.

NextDC Ltd (ASX: NXT)

The NextDC share price is $14.44, down 1.9% today.

This ASX 200 tech share has risen 17% YTD amid a broader sector rebound.

Citi reiterated its buy rating on NextDC shares with a price target of $19.10.

This implies potential capital growth of 32% ahead.

Electro Optic Systems Holdings Ltd (ASX: EOS)

Electro Optic Systems shares are $9.33, down 2.8% today.

The ASX 200 defence share has lost 6% of its market valuation YTD.

Bell Potter renewed its buy rating on Electro Optic Systems shares this week.

The broker increased its 12-month price target from $10.60 to $12.50.

This suggests a potential 34% upside ahead.

Lynas Rare Earths Ltd (ASX: LYC)

The Lynas Rare Earths share price is $19.02, up 1.7% today.

This ASX 200 rare earths share has ripped 56% higher YTD.

UBS upgraded Lynas Rare Earths shares to a buy rating with a $23.65 target on Thursday.

This implies a potential 24% upside ahead.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price is $8.12, down 1.2% today.

Over the past month, this ASX 200 financial share has lifted 8%.

Goldman Sachs reiterated its buy rating on IAG shares with an $8.60 target yesterday.

This suggests a potential 6% upside ahead.

The post 8 ASX 200 shares with reaffirmed buy recommendations this week 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 positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Electro Optic Systems, Goldman Sachs Group, and Goodman Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has recommended BHP Group and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Commonwealth Bank of Australia (ASX: CBA) shares are down 0.5% to $161.82, while CSL Ltd (ASX: CSL) is down 1% to $116.48 on Friday.

In a newsletter this week, Blackwattle Large Cap Quality Fund portfolio managers, Joe Koh and Elan Miller, explain why they are underweight on the market’s largest ASX 200 bank share and overweight on the market’s biggest healthcare share.

If you’re unfamiliar with the lingo, underweight and overweight compare a fund manager’s holding in an ASX stock to its weighting in the benchmark index.

If a fund manager is overweight a stock, they hold a larger proportion of that stock than the benchmark index does.

The Large Cap Quality Fund aims to outperform the S&P/ASX 200 Accumulation Index (ASX: XJOA), after fees, over the long term.

CBA shares

CBA shares represents 10.2% of the ASX 200 Accumulation Index’s market capitalisation.

Koh and Miller said they are underweight CBA shares, and this helped the fund outperform the market in May.

They commented:

CBA provided a Q3 update, which saw its cash earnings narrowly miss consensus estimates by 1%, notwithstanding stable net interest margins and robust home lending growth of 7.1% and business lending growth of +12.5%, year-on-year.

The small earnings disappointment, combined with (in our view) expensive valuation and uncertainty around housing due to negative gearing tax changes, saw CBA’s shares underperform the S&P/ASX 200 index in May.

The night before CBA’s update, the Federal Government proposed a raft of tax changes in the 2026-27 Budget.

CBA shares experienced their biggest daily fall ever, dropping 10.2% and descending to No. 2 in the S&P/ASX 200 Index (ASX: XJO).

Koh and Miller said the Federal Budget marked “the biggest changes to the tax system since the introduction of the GST”.

The changes include replacing the 50% capital gains tax (CGT) discount for assets held longer than 12 months with a cost base inflation indexation method and a minimum 30% CGT rate; and limiting negative gearing to new builds, effective 1 July next year.

Koh and Miller expect this to adversely affect ASX 200 bank shares.

… we anticipate slower credit growth moving forward, as well as increased risk of bad and doubtful debts, given that individuals are already feeling the impact of the RBA’s rate hikes, higher fuel prices, and increased inflation.

We believe the Budget will place increased pressure on the banks’ operating margins, increasing the risk of earnings downgrades.

The managers pointed out:

Australian home loans comprise about 63% of CBA’s total loan book, of which about one third is to investors.

CBA shares are up 0.4% in the calendar year to date (YTD) compared to a 0.3% rise for the ASX 200.

CSL shares

ASX 200 healthcare shares appear to be staging a comeback after a horror 12 months amid many industry challenges.

The S&P/ASX 200 Health Care Index (ASX: XHJ) appears to have hit a pivot point on 3 June when it touched a 9-year low.

At that stage, ASX 200 healthcare shares had fallen by more than 40% over 12 months.

Since then, healthcare shares have risen 15% as value investors return to the sector, hunting bargains.

CSL shares have been a clear target, lifting 26% since 3 June.

The CSL share price commenced a downward spiral in early FY25 amid far bigger problems than sector weakness.

Koh and Miller said CSL downgraded its earnings forecast again in May after previously reaffirming guidance when the then-CEO resigned.

The managers said:

CSL now expects FY26 revenue to be around $15.2 billion (market expectations were $15.8bn) and NPATA (excluding restructuring costs and impairments) to be around $3.1 billion (market expectations were $3.35bn), both on a constant currency basis.

CSL also intends to recognise approximately $5 billion of non-cash, pre-tax impairments across FY26 and FY27, in addition to those
announced at the FY26 half-year results.

The market continues to be wary of CSL, as the new CEO is yet to be named and the competitive environment remains difficult.

Despite this, Koh and Miller have faith that this former ASX 200 blue-chip company can pull itself out of the mud.

While previously underweight this stock, the Fund has recently moved to a small overweight position given the stock’s
now more attractive valuation, which sits at a substantial discount to the ASX 200.

CSL shares are down 32% YTD and make up 2.1% of the ASX 200 Accumulation Index.

The post Why this fundie is overweight CSL and underweight CBA shares appeared first on The Motley Fool Australia.

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