Megaport Ltd (ASX: MP1) shares have risen almost 40% over the past 12 months, but according to the analysts at Macquarie, new contract wins make the case for further strong rises even more compelling.

Macquarie has released a new research report into Megaport, with an upgraded price target, which I’ll get to shortly.

First, let’s look at the company’s recent news.

Major new contract wins lead to revenue upgrade

Megaport said earlier this week that it had struck three new AI infrastructure contracts worth $978.6 million in total.

The new contracts increase the company’s annual recurring revenue (ARR) to about $1.1 billion, and the company would also book $322.6 million in prepayments from the contracts.

Megaport added:

The three agreements, two of which are with new customers, have a combined total contract value of approximately US$685.0M ($978.6M ) and encompass GPU and CPU compute,  network, and storage for AI applications and inference workloads. These contracts are expected to contribute approximately US$162.7M ($232.4M1) in ARR. Megaport has secured 2 power and space for the new strategic customer contracts.  

The company said it had started procurement for the equipment needed to replenish its GPU pool to fulfil the new contracts, and it had also secured the power and space required for the new equipment.

Megaport Chief Executive Officer Michael Reid said:

Since April, we’ve announced approximately $2.3 billion in total strategic contract value. Earlier deployments, new contracts, and Network growth underpin our upgraded FY27 revenue and EBITDA margin guidance. Customers have committed approximately $323 million in prepayments on today’s contracts, supporting the infrastructure investment behind future growth. “We’re broadening our customer base, replenishing our GPU pool, and expanding our AI inference platform. Our progress has been extraordinary, and we remain focused on delivery and disciplined investment. We’re just getting started.

Megaport upgraded its full-year guidance, saying revenue was now expected to be $720 million to $810 million up from $620 million to $730 million.

The company’s EBITDA margin is now expected to be 42% to 44%, up from 38% to 40%.

Megaport shares looking cheap

Macquarie said in its research note on Megaport that the company’s GPU pool was a strategic advantage.

They said:

Capacity can initially support on-demand workloads but be redirected to longer-term contracts as opportunities arise. This allows MP1 to respond quickly to demand, bringing forward billing while reducing utilisation and funding risk.

Macquarie said Megaport had AI exposure with shorter lead times and less capital expenditure than data centres and neoclouds.

Following this week’s update, Macquarie increased its price target for Megaport from $32 to $34.70.

If achieved, this would be a 68% increase from the current level of $20.65.

Megaport is valued at $4.91 billion.

The post How high does Macquarie think Megaport shares will go? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Megaport. 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.

The Yancoal Australia Ltd (ASX: YAL) share price is in focus after the company announced it had completed the acquisition of an 80% interest in the Kestrel Coal Mine, adding a high-quality, long-life metallurgical coal asset to its portfolio.

What did Yancoal Australia report?

• Completed acquisition of an 80% stake in the Kestrel Coal Mine, Queensland
• Upfront cash consideration of US$1.85 billion paid at completion
• Funded through available cash and a five-year US$1.2 billion syndicated loan facility
• Contingent cash consideration up to US$550 million subject to coal price benchmarks
• Yancoal to recognise production, revenue, and earnings from Kestrel from 1 October 2026

What else do investors need to know?

The Kestrel Coal Mine is a large-scale, long-life asset located in Queensland’s Bowen Basin and is known for its premium metallurgical coal. This acquisition increases Yancoal’s scale and product diversification, strengthening its footprint in the Australian coal industry.

Yancoal’s liquidity remains well-supported, with a US$200 million working capital facility undrawn as of completion. The company plans to issue a detailed circular to shareholders by 23 November 2026, outlining further information and independent reports relating to the acquisition.

What did Yancoal Australia management say?

CEO Sharif Burra said:

The acquisition of an 80% interest in the Kestrel Coal Mine represents a strong strategic fit for Yancoal and adds a high-quality, long-life metallurgical coal asset to our portfolio. Kestrel delivers increased scale and diversification to Yancoal’s portfolio; it adds a premium metallurgical coal to our product mix. The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner. We have worked closely with EMR, Adaro and KCG management over the past months to facilitate integration of Kestrel into the Yancoal portfolio. We look forward to working closely with the committed Kestrel employees, and Mitsui, our joint venture partner and owner of 20% of Kestrel, to continue to add value to the mine, local communities and stakeholders.

What’s next for Yancoal Australia?

Yancoal intends to integrate Kestrel’s operations swiftly, focusing on maximising the value of its new, long-term metallurgical coal asset. The company’s expanded scale and product mix are expected to support its ongoing commitment to delivering value for shareholders.

Looking ahead, Yancoal will be providing shareholders with detailed reports and updates on the full impact of the acquisition over the coming months. The extra scale positions Yancoal well to navigate market dynamics and strengthen its leadership in Australian coal production.

Yancoal Australia share price snapshot

Over the past 12 months, Yancoal shares have risen 14%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 1% over the same period.

View Original Announcement

The post Yancoal Australia share price in focus as Kestrel Coal Mine deal closes 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.

The Wesfarmers Ltd (ASX: WES) share price has been a solid performer over the last five years, rising by 40%. Investors may be wondering what’s next after that strength.

The owner of Kmart and Bunnings has proven very effective at reinvesting for long-term growth. Rising earnings is the best thing a company can do to send its share price higher.

I’d need a crystal ball to know exactly what’s going to happen next for Wesfarmers, but we can look at its most recent trading update, analyst earnings estimates and Wesfarmers share price targets to give insights.  

Recent sales performance

The company said with its FY26 result that in this environment its retail divisions are well-positioned to grow profitably, supported by their strong value credentials, focusing on improving the customer experience and expanding addressable markets.

Some of those struggles for Australian consumers include cost of living pressures, uncertainty about the outlook for inflation, house prices, interest rates and tax settings. Costs of doing business are reportedly weighing on business confidence and spending.

To mitigate the higher costs of doing business, of elevated labour, energy and supply chain costs, Wesfarmers’ said it will continue to execute their productivity agendas, through a ‘people-first, digitally-enabled’ approach including digitising operations and leveraging AI and technology to support operating efficiency.

In the first seven weeks of the 2027 financial year, Bunnings’ sales growth was slightly stronger compared to the second half of the FY26, partly helped by unseasonably dry weather in July. In the second half of FY26, Bunnings achieved revenue growth of 4%.

Kmart Group’s sales growth for the first seven weeks of FY27 was in line with the second half of FY26. In the six months to 30 June 2026, Kmart Group’s revenue growth was 2.3%.

Wesfarmers said that Officeworks’ sales growth in the first seven weeks of FY27 was positive, though it was slightly below the second half of FY26 growth rate of 2.8%.

Within WesCEF (chemicals, energy and fertilisers), the company said that it, along with its joint venture partner, remain focused on the ramp-up of the Covalent Lithium refinery, with production rates expected to accelerate through the second half of FY27 as further odour mitigation solutions are implemented.

Product qualification with key offtake partners will continue to progress while the refinery ramps up. Spodumene concentrate (lithium) production at Mt Holland is expected to be in line with nameplate capacity of approximately 380kt (with WesCEF’s share being approximately 190kt), with around half of this production to be sold to the market.

Finally, the company said the healthcare division of Wesfarmers is well-positioned to continue improving earnings by executing its transformation program and capitalising on long-term health and wellness trends. This division remains focused on accelerating growth in its higher-margin consumer business and building on recent improvements in wholesale.

Wesfarmers share price predictions by analysts

According to CMC Invest, there has been a mixture of analyst opinions on the business.

Within the last three months, there have been three buy call ratings, three hold call ratings and five sell call ratings.

Of those 11 analyst ratings, the average price target was $77.69. That implies a possible rise of around 1%, so it seems virtually fully valued according to experts. But, according to the projection on CMC Invest, it could pay a grossed-up dividend yield of 4.5%, including franking credits, at the time of writing. So, it could still produce positive returns.

The most optimistic price target is $88.80, which implies a possible rise of around 16%.

Overall, I think Wesfarmers is a high-quality business that can compound over the long-term, but analysts seem to be suggesting that there are better value opportunities out there.

The post How much could the Wesfarmers share price rise in the next year? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison 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 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.