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  • Could Paladin Energy shares return 90% in 12 months?

    Happy businessman fist pumping while looking at a tablet.

    Recent weakness in the uranium industry could have created a buying opportunity for investors.

    That’s the view of analysts at Bell Potter, who believe that Paladin Energy Ltd (ASX: PDN) shares could offer significant upside.

    What is the broker saying?

    Bell Potter was a touch disappointed with Paladin Energy’s quarterly update, highlighting that production was lower than expected. 

    However, sales volumes were ahead of estimates and average realised pricing was up strongly quarter on quarter. It said:

    PDN reported quarterly U3O8 production of 1.0Mlb, below our 1.3Mlb estimate with a planned one-week plant shutdown and lower quality ore feed as mining focused on J pit development. Recoveries were 85% (4Q FY27 90%) and unit costs of production were up 19% QoQ to US$62/lb. Sales were 1.2Mlb (BPe 1.1Mlb) at an average realised price of US$79/lb (up 12% QoQ), reflecting stronger uranium prices and a higher portion of sales into market-linked contracts. 

    PDN closed the quarter with U3O8 inventory of 2.0Mlb. At 30 September 2026, PDN had cash and investments of US$209m, net cash (excluding leases) of US$181m and available liquidity of US$279m (30 June 2026 net cash US$233m and available liquidity US$335m).

    Looking ahead, the broker points out that management has reaffirmed its guidance for FY 2027. It adds:

    PDN reiterated FY27 guidance (production 5.1-5.6Mlb (BPe 5.1Mlb); sales 4.8-5.3Mlb (BPe 4.9Mlb); and unit cost of production US$44-48/lb (BPe US$48/lb) with output 2H weighted following a scheduled plant shutdown in the current quarter. Recoveries are expected to trend higher as ore quality improves in the lower, southern benches of J pit, with unit costs to trend lower.

    Paladin Energy shares tipped to rocket

    According to the note, in response to its quarterly update, Bell Potter has retained its buy rating on Paladin Energy’s shares with a trimmed price target of $13.80 (from $14.50).

    Based on its current share price of $7.28, this implies potential upside of 90% for investors over the next 12 months.

    Commenting on its buy recommendation, the broker said:

    We retain our Buy recommendation. We have a positive medium- to long-term outlook for the uranium market, supported by barriers to new supply and demand growth linked to electrification, energy security and AI-related power requirements. PDN has ~54% exposure to market prices out to 2030. Production at LH should improve with higher-grade mined ore feeding the processing plant. PDN continues to derisk its key growth project at PLS in Canada’s Athabasca Basin.

    The post Could Paladin Energy shares return 90% in 12 months? appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro 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.

  • Could high-flying Megaport shares rise another 50%?

    Man looking at his tablet in a data centre.

    Megaport Ltd (ASX: MP1) shares have been on fire this year.

    Since the start of the year, the cloud infrastructure provider’s shares have risen almost 50%.

    That is despite the company’s shares pulling back 25% from their 52-week high.

    The good news is that the team at Bell Potter doesn’t believe it is too late to climb on board the Megaport train.

    In fact, the broker believes there’s potential for big returns over the next 12 months.

    What is Bell Potter saying?

    Bell Potter notes that in its recent initiation note it underestimated Megaport’s growth potential and has upgraded its estimates to account for its recent contracts update. It said:

    We have reviewed our forecasts for Megaport post our recent initiation and also the contracts update in late September and decided we were too low, particularly in FY28. The key rationale is we estimate the annual underlying EBITDA from the GPU pool to be around $200m when fully utilised and, given this will ramp up in 1HFY28, we expect the EBITDA contribution in FY28 to be around $100m. 

    This will add to the underlying EBITDA of the core business which Megaport said in its recent contracts update will have an exit run-rate of >$650m in FY27. The total underlying EBITDA in FY28, therefore, should be >$750m and this is before any growth in the Network Services business which recently has been growing its top line in the mid to high teens and is expected to continue doing so for at least the short to medium term. All this makes our original underlying EBITDA forecast of $726m look too low and suggests a total figure of up around $770m looks more appropriate.

    Big potential returns

    Although Bell Potter has trimmed its valuation to reflect changes in peer multiples, it still sees potential for big returns between now and this time next year.

    According to the note, the broker has retained its buy rating on Megaport shares with a price target of $26.00 (from $27.00). 

    Based on its current share price of $17.39, this implies potential upside of approximately 50%.

    Commenting on its view of the stock, Bell Potter said:

    We have reduced the multiple we apply in our EV/EBITDA valuation from 10x to 9x and increased the WACC we apply in the DCF from 10.1% to 10.3% given the recent weakness in the share prices of both the domestic and offshore comps. The net result is a 4% decrease in our target price to $26.00 which is still a material premium to the share price so we maintain our BUY recommendation. 

    We continue to have a positive view on the stock due to valuation (FY28 EV/EBITDA of only 6x), strong forecast growth (which is fully funded), track record of execution, high visibility of earnings, AI exposure and differentiated business model (distributed inference).

    The post Could high-flying Megaport shares rise another 50%? appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Megaport. 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 ASX small-cap share is predicted to deliver market-beating returns

    Male hands holding Australian dollar banknotes, symbolising dividends.

    ASX small-cap shares don’t get a lot of attention, but they could be among the best investment opportunities given how much they could grow.

    Small businesses are usually much earlier on with their growth journeys than ASX blue-chip shares. This means the shares could have a lot of capital growth potential ahead, which is obviously compelling.

    But, on top of that, many ASX small-cap shares aren’t priced for how much growth they could achieve in the long term. In other words, they can be significantly undervalued for their growth outlook.

    One small business to consider is COG Financial Services Ltd (ASX: COG), according to the investment team at Wilson Asset Management (WAM). It’s one of the holdings in the listed investment company (LIC) WAM Research Ltd (ASX: WAX) portfolio, which targets the most compelling undervalued growth opportunities in the Australian market.

    Compelling ASX small-cap share

    WAM describes COG Financial Services as a business that’s Australia’s leading aggregator of finance brokers and equipment leasing brokers. Its net assets financed (NAF) were $9 billion in FY26. It also operates in the salary packaging sector, including novated leases.

    In FY26, total salary packaging customers were 31% higher year over year, to 68,510, and novated lease customers increased by 98%, to 22,281.

    WAM highlighted that the COG Financial Services share price rose 22% in September, following a stronger-than-expected FY26 full-year result and expectations of further earnings upgrades.

    The investment team noted that the ASX small-cap share’s management is targeting at least 10% earnings growth in FY27, supported by momentum in its salary packaging business and contributions from recent acquisitions.

    Wilson Asset Management believes the COG Financial Services share price remains attractive and could improve as salary packaging becomes a larger part of group earnings.

    The positive outlook for the business is also supported by opportunities for further acquisitions and earnings upgrades.

    Over the medium term, improvement in the broader economic environment could benefit the company’s broking and aggregation business, which has a significant presence in the small and medium-sized enterprise (SME) asset finance market.

    How much is the COG Financial Services share price undervalued?

    Other experts are also optimistic about the potential for this ASX small-cap share to deliver good returns.

    According to CMC Invest, there have been three analyst ratings on the business within the last three months, all of which were buy ratings.

    The average price target from those three analysts is $2.10, implying a possible 18% rise over the next year from its level at the time of writing. In other words, it could be one to watch.

    The post This ASX small-cap share is predicted to deliver market-beating returns 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 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.

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