The performance of True North Copper Ltd (ASX: TNC) shares over the past year has been underwhelming to say the least, but the analyst team at Morgans is tipping that’s about to change.

They have just issued a new research note on the company, assigning a speculative buy rating and a very bullish share price target, which I’ll get to shortly.

So what’s getting them all excited?

Queensland projects progressing well

True North has two projects in development: Mt Oxide and Cloncurry, both in Queensland.

Just this week, the company announced further high-grade copper and gold exploration results at Cloncurry, building on the mineral resource announced in September of 152,000 tonnes of copper and 171,000 ounces of gold.

True North is expecting to complete a prefeasibility study on the Cloncurry project later this year.

The company said the recent drilling results showed the potential for further near-mine extension opportunities.

The company added:

Further drilling in late 2026 and into 2027 will target near mine exploration and resource extension opportunities, with the potential to grow the resource and further optimise value across the broader Cloncurry Copper Project.   

Broker likes what it sees

Morgans said True North was well-positioned, with the region likely poised for a wave of consolidation.

Long fragmented between underutilised mills and mill-constrained juniors, Cloncurry is now seeing long-anticipated consolidation gain momentum. Evolution Mining has agreed to acquire Carnaby Resources ($213m, scheme), citing latent mill capacity at Ernest Henry. Austral Resources Australia has beaten Larvotto Resources to a binding scheme for Hammer Metals ($80.7m), and AIC Mines has agreed to acquire Materra Metals (Mt Cuthbert) for $120m (~$488/t contained Cu). We see this as supportive for TNC. It validates the strategic value of Cloncurry copper gold inventory, provides fresh regional transaction benchmarks and highlights the scarcity of what TNC already holds: resources on granted mining leases alongside permitted processing infrastructure.

Morgans said the company had plenty of options for how to develop its projects, given the available infrastructure in the region.

The broker has a price target of $1.31 on True North shares, compared to the current price of 33.5 cents.

If achieved, this would constitute a 291% increase in value.

Morgans said further:

We view TNC as a compelling emerging copper opportunity, anchored by its flagship Mt Oxide project, with the Cloncurry Copper Project (CCP) providing a complementary near-term development pathway on granted leases with existing infrastructure. Further Mt Oxide drilling and the CCP prefeasibility study in late 2026 are among multiple catalysts over the next 12 months that could build scale, de-risk the portfolio and narrow TNC’s valuation discount to peers.

True North Copper is valued at $62.9 million.

The post Morgans tips 290% upside for this up-and-coming ASX copper company 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 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 Fortescue Ltd (ASX: FMG) share price is trading around $16.29 on Friday, only slightly above its 52-week low of $16.13.

At first glance, that might look like an attractive entry point for one of Australia’s biggest miners.

But I think the valuation needs a closer look before calling the shares cheap.

Cheap based on past earnings

Fortescue generated earnings per share (EPS) of $1.71 in FY26. Against today’s share price, that puts the stock on a price-to-earnings (P/E) ratio of roughly 9.5 times.

That certainly looks inexpensive. The company also paid $1.08 per share in dividends for FY26, which represents a high trailing dividend yield at the current share price.

The problem is that analysts are not expecting those earnings or dividends to hold.

Consensus forecasts point to EPS falling to $1.33 in FY27, then to $1.21 in FY28, and to $1.12 in FY29.

That changes the valuation considerably. At $16.29, Fortescue is trading on around 12 times FY27 earnings, rising to roughly 13.5 times FY28 earnings and about 14.5 times FY29 earnings.

So the further out I look, the less obvious the bargain becomes.

The dividend tells a similar story

The income outlook follows the same direction.

Consensus forecasts point to dividends of 85 cents per share in FY27, 76.8 cents in FY28, and 70 cents in FY29.

Those would still provide reasonable yields at today’s price, but they are a long way below the $1.08 paid in FY26.

For income investors, I think that is important. A high historical yield can look tempting, but what ultimately counts is what Fortescue can afford to distribute from future earnings.

Right now, the market expects both profits and dividends to decline.

What could push the Fortescue share price higher?

For me, the key would be a change in the earnings trajectory.

If consensus forecasts remain where they are, I struggle to see why investors would suddenly pay a much higher earnings multiple for Fortescue.

A stronger iron ore price could change that picture, as could better-than-expected production, costs, or progress elsewhere in the business.

But based on the numbers currently expected, the company would be earning far less in FY29 than it did in FY26.

That makes it difficult for me to build a strong re-rating case.

Would I buy Fortescue shares?

I would stay on the sidelines for now.

I think Fortescue is more of a hold than a sell at $16.29. The valuation is not excessive, and existing shareholders may still be comfortable owning the business through the commodity cycle.

But if I were putting fresh money into the resources sector, I would prefer BHP Group Ltd (ASX: BHP) shares.

BHP gives investors exposure to both iron ore and copper, which provides a broader mix of commodity drivers and, in my view, a stronger long-term growth story.

Foolish takeaway

The Fortescue share price looks cheap based on FY26 numbers. The problem is that the forecasts are heading in the wrong direction.

Until I see signs that earnings can stabilise or start growing again, I think the shares are closer to fair value than bargain territory.

For now, I would hold rather than buy.

The post Is the Fortescue share price a cheap buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Wesfarmers Ltd (ASX: WES) shares have underperformed over the past 12 months, slipping 17.1% over the period.

The analyst team at Jarden believe a turnaround is on the way, however, with a modest share price improvement forecast over the next year.

Muted revenue growth for FY26

Wesfarmers, which owns Bunnings, Kmart, and its lithium mining operations WesCEF, grew its revenue in FY26 by just 3.4% to $47.3 billion.

Net profit came in at $2.9 billion, down 1.8%.

The Jarden team said the drop in the Wesfarmers share price over the past year meant that it was “nearing its oversold territory”.

They added:

The weakness is a function of negative earnings per share revisions and macro concerns. We view these concerns as overdone – with WES’ retail divisions consistently growing regardless of the cycle.

Jarden said Australian consumers were facing headwinds, with cost-of-living pressures eroding cash flow and discretionary spending growth halving.

With this as the backdrop, they looked at Wesfarmers’ performance over the past 20 years to assess how it performed through the cycles.

Our conclusion: a combination of share gains, space growth, expandable categories and an everyday low pricing offer that outperforms in cyclical downturns, has seen WES’ brands consistently deliver sales growth over the past 20yrs. The above, combined with its category killer status and marketplace/AI push, leaves WES retail well-positioned to continue this growth. We see limited risk to consensus, with market margin forecasts arguably conservative, led by Bunnings, which is forecast to contract 6 basis points in FY27. This is despite sourcing, productivity and mix benefits that should see Bunnings continue its 2H26 margin trend, the biggest lift since 2021.  

Jarden said Wesfarmers management was executing well, with a clear plan, and they believed there was upside developing into FY28.

They said there was an opportunity for Wesfarmers to become the leading customer-facing business in Australia across health, consumables, and energy, “and while this will take time and money, we don’t believe it’s reflected in the current share price”.

Jarden said earnings growth was likely to accelerate into FY28 as Wesfarmers’ digital and AI push drove better return on invested capital, similar to the experience of Walmart in the US.

Share price should appreciate

Jarden has a price target of $83.20 for Wesfarmers shares, compared with the current $75.77.

If achieved, this would constitute a 9.8% return, with the company also paying a 3.3% dividend yield.

Wesfarmers is valued at $85.9 billion.

The post In a tough retail environment, what’s the outlook for Wesfarmers shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Walmart and Wesfarmers. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.