Commonwealth Bank of Australia (ASX: CBA) shares have staged a strong comeback, rising around 10% over the past month.

This rally has firmly caught the market’s attention.

After a weak start to 2026, Australia’s largest bank is attracting buyers again.

The question now is whether that recovery has further to run.

As one of the largest companies on the ASX, every twist in CBA’s share price makes headlines.

Why CBA shares are rising again

CBA is one of the largest companies listed on the ASX.

The company dominates Australian retail banking, with a huge deposit base and a market-leading digital platform.

For much of early 2026, its shares were firmly out of favour with investors, and the stock hit a one-year-plus low of $147.22 back in January before the tide turned.

Since then, CBA shares have rebounded strongly to around $171.

Investors now appear willing to look past this year’s housing and budget worries, and cooling fears around mortgage growth and negative gearing changes have helped usher in renewed optimism.

Recent earnings and the road ahead

The rebound has been supported by a solid profit performance.

CBA posted third-quarter cash profit of $2.7 billion, up 4% on the prior year. Lending and deposits both continued to grow despite a softer economy, and home loan funding remained strong, with around $45 billion written in the quarter.

The bank’s capital position remains among the strongest in the sector.

CBA’s next major update is its FY26 full-year result, due in August, a report that will be watched very closely.

Investors want firm proof that earnings can keep growing from here.

Guidance on net interest margins and bad debts will likely be in as much focus as the headline profit number.

What do the numbers say?

Even after this rally, the debate over CBA shares comes down to price.

The stock trades on roughly 26 times forecast FY26 earnings, which is a remarkable multiple for a mature, slow-growing bank.

It is also far above the ratings applied to rivals like Westpac and ANZ.

CBA recently paid a fully franked interim dividend of $2.35, for a trailing yield of around 3.0%. That yield is modest next to several of its big-four peers.

As such, for value-focused investors, CBA’s valuation is the core of the problem.

Are CBA shares still a buy?

Brokers remain deeply cautious on the answer.

In one recent review, all eight analysts covering the stock rated it a sell, with an average price target implying downside of close to 30%.

The bull case rests on CBA’s unmatched quality and its defensive, dividend-paying nature. On the flipside, the bear case points squarely at the stretched valuation.

Both views have real merit at today’s price.

Much will depend on your own time horizon and your appetite for paying a premium.

Foolish takeaway

CBA shares have rallied hard, yet they remain expensive by almost any measure.

The business itself is arguably the highest-quality bank in the country, although the August FY26 result will be an important test for the company.

Income-focused investors can still find far higher yields elsewhere on the ASX, but quality-focused investors may appreciate CBA’s reputation and track record of earnings growth.

As always, it pays to focus on the long term rather than the last month’s move.

The post CBA shares have risen 10% in a month, are they still a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven 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.

The Mercury NZ Ltd (ASX: MCY) share price is in focus after reporting a robust fourth quarter, with trading margin up 33% to $390 million and higher renewable generation volumes compared to the prior corresponding period.

What did Mercury NZ report?

• Trading margin for Q4 was $390 million, up 33% on the same quarter last year.
• Year-to-date (YTD) trading margin rose $269 million to $1,421 million.
• Q4 generation volume climbed 339GWh to 2,344GWh; YTD up 1,163GWh to 9,070GWh.
• Hydrological inflows for Q4 were at the 61st percentile, slightly lower than 79th percentile PCP (YTD: 83rd percentile, up from 12th PCP).
• All turbines at the Kaiwera Downs Stage 2 Wind Farm are now installed, with reliability testing underway.
• Fast-track consent was granted for Puke Kapo Hau Wind Farm, strengthening Mercury’s renewable pipeline.

What else do investors need to know?

Mercury highlighted continued momentum in renewable developments and asset renewals. Notably, the Kaiwaikawe Wind Farm remains on schedule, starting first generation from six installed turbines in July.

The company also launched Flex Rates, a new time-of-use electricity plan, giving retail customers more control over their energy bills. Mercury’s May Geothermal Investor Day showcased its geothermal platform, with more than 1 TWh entering feasibility and $75 million committed to appraisal drilling.

What’s next for Mercury NZ?

Looking ahead, Mercury expects all turbines at Kaiwera Downs Stage 2 Wind Farm to be handed over by the end of August, with the Kaiwaikawe Wind Farm fully operational in the first half of FY27. The company’s wind platform is designed to deliver projects at scale, on time and within budget.

Mercury also plans to continue investing in renewable generation projects and asset renewals, strengthening its position as a leader in 100% renewable energy production across hydro, geothermal, and wind.

Mercury NZ share price snapshot

Over the past 12 months, Mercury NZ shares have declined 2%, trailing the S&P/ASX 200 Index (ASX: XJO), which has risen 1% over the same period.

View Original Announcement

The post Mercury NZ trading margin jumps 33% as renewables drive Q4 result appeared first on The Motley Fool Australia.

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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 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. 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.

DroneShield Ltd (ASX: DRO) shares have given investors a wild ride over the past year.

After reaching $6.71 in October, the counter-drone technology share is now trading around $2.17.

I think that reset has created a more appealing opportunity. Here are three reasons I would buy.

The valuation has become easier to justify

DroneShield remains a growth share, so investors should expect to pay more than they would for a mature industrial or defensive business.

According to CommSec consensus estimates, the company is expected to generate earnings per share of 2.6 cents in FY26, 4.3 cents in FY27, and 7.4 cents in FY28.

That puts the shares on price-to-earnings ratios of approximately 83 times FY26 earnings, 50 times FY27 earnings, and 29 times FY28 earnings.

The early multiples are high, but they fall quickly if DroneShield delivers the expected earnings growth. An FY28 multiple of around 29 times does not look excessive to me for a company whose earnings could almost triple between FY26 and FY28.

The share price could still fall if contract wins or earnings arrive more slowly than expected. Even so, investors are being asked to pay far less for the long-term opportunity than they were near the 52-week high.

Counter-drone demand could keep growing

DroneShield develops technology that helps military, government, law enforcement, and critical infrastructure customers detect, track, and respond to unwanted drones.

I think the need for those systems is becoming easier to understand.

Drones are now cheaper, more capable, and more widely available. They can be used for surveillance, smuggling, disruption, and attacks, creating security challenges across battlefields, airports, prisons, energy facilities, borders, and major public events.

DroneShield has spent years focusing on this market and offers portable, vehicle-mounted, and fixed-site systems. That specialist position could help it capture a growing share of customer spending as counter-drone protection becomes a more established part of defence and security budgets.

The company still competes with much larger defence groups, while government procurement can move slowly and produce uneven revenue. I would accept those uncertainties because I think the market itself has substantial room to expand.

Software could strengthen the business

Hardware currently generates most of DroneShield’s revenue, and I expect equipment sales to remain central to its growth.

However, the company also has a major opportunity to earn more from software.

Counter-drone equipment needs to keep recognising new drone models, frequencies, and tactics. Customers may therefore require software updates, threat libraries, support, and ongoing improvements after the original system has been delivered.

That can extend the relationship beyond a single hardware purchase.

As the installed base grows, DroneShield could have more opportunities to sell software and services to existing customers. A larger recurring revenue contribution could make earnings more dependable and increase the value of each customer relationship.

I think this part of the story deserves more attention because it gives the company another way to grow alongside rising hardware demand.

Foolish takeaway

DroneShield still carries more uncertainty than an established ASX blue chip share, and I would keep the position measured.

The company needs to convert market demand into contracts, deliver equipment on time, expand its operations carefully, and meet ambitious earnings expectations.

At around $2.17, I think the potential reward has become more attractive. The counter-drone market is expanding, DroneShield has built a strong specialist position, and growing software revenue could improve the business over time.

Those three factors make DroneShield shares a buy for me today.

The post 3 reasons to buy DroneShield shares now appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. 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.