Stock Pick

  • 3 reasons I would invest $10,000 in Coles shares

    A happy young couple lie on a wooden deck using a skateboard for a pillow.

    Coles Group Ltd (ASX: COL) is one of Australia’s best-known shares, and I think there is plenty to like about its long-term prospects.

    But would I put $10,000 into Coles shares today?

    There are three reasons I would consider it.

    Defensive demand

    The first is the nature of Coles’ business. Groceries are an essential part of household spending, and that gives Coles a level of resilience that many other retailers simply do not have.

    Even when consumers are struggling financially, they still need to buy food and everyday essentials.

    They might switch to cheaper products, look for more specials, or reduce discretionary purchases, but supermarkets should continue seeing relatively consistent demand.

    I think that makes Coles a good business to own through different economic conditions.

    Its national store network, established supply chains, and growing online business also give it considerable scale.

    Of course, competition remains intense, particularly from Woolworths Group Ltd (ASX: WOW) and Aldi. But Coles has continued investing in its customer offering, and I think it is well positioned to defend its place in the market.

    Some protection against inflation

    My second reason is Coles’ ability to manage inflation.

    Coles has the ability to adjust its prices when the costs of purchasing and distributing groceries increase, giving it a degree of protection against inflation.

    In addition, Coles’ investment in automation could become increasingly important.

    Its automated distribution centres and improved fulfilment capabilities should help make operations more efficient, reducing some of the cost pressures associated with running a large supermarket network.

    If Coles can keep improving productivity while remaining competitive on price, I think that will put it in a stronger position to protect its profit margins.

    A positive earnings outlook

    The third reason I would consider investing $10,000 in Coles shares is the growth expected over the next few years.

    Coles generated earnings per share (EPS) of 81.5 cents in FY26.

    Consensus forecasts point to EPS increasing to 98.2 cents in FY27, $1.05 in FY28, and $1.15 in FY29. That would represent earnings growth of approximately 41% over three years.

    I think that is a strong outlook for a business operating in such a mature industry.

    The dividend is also expected to benefit. After paying a fully-franked 78 cents per share in FY26, analysts expect Coles to increase its annual payout to 83.5 cents in FY27, 88.8 cents in FY28, and 97.4 cents in FY29.

    With Coles shares trading around $23.70 on Wednesday, the FY27 forecast represents a dividend yield of approximately 3.5%, before franking credits.

    I think that provides a good income component alongside the prospect of further capital gains.

    Foolish takeaway

    I would be happy to invest $10,000 in Coles shares at current levels.

    I like the resilience of its supermarket operations, the opportunity to improve efficiency, and the earnings growth analysts are expecting.

    For me, Coles looks like a business that could deliver solid returns over the coming years while remaining a dependable long-term holding.

    The post 3 reasons I would invest $10,000 in Coles shares 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 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.

  • Woodside, New Hope, Flight Centre shares: Buy, hold, or sell?

    A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares

    The S&P/ASX 200 Index (ASX: XJO) has sunk lower again in early morning trade on Wednesday. Here’s how three major ASX shares, Woodside Energy Group Ltd (ASX: WDS), New Hope Corporation Ltd (ASX: NHC), and Flight Centre Travel Group Ltd (ASX: FLT) are tracking today, and what brokers expect next.

    Brokers rate Flight Centre shares as a BUY

    Flight Centre shares have fallen around 1% to $10.16 in Wednesday morning trade. The ASX travel shares have now fallen around 26% since the company posted a weaker FY26 result in late-August. They’re also down 32% for the year-to-date. Flight Centre hasn’t posted any price-sensitive news since its results announcement.

    The company faced several headwinds through its fourth quarter after conflict in the Middle East disrupted global travel plans. Its FY26 underlying profit before tax came in around 2% below market expectations and its leisure division missed consensus by about 8%.

    The company also expects travel to be subdued through the first half of FY27 while the conflict still goes unresolved. Flight Centre expects corporate earnings to be more heavily weighted toward the second half, with first-half profit likely to come in below last year.

    Investors aren’t impressed, and Flight Centre’s share price continues to be depressed.

    But the experts are much more bullish. Market Index shows that the majority of brokers still have a strong buy rating. The $13.75 average target price implies an upside of around 35%, at the time of writing.

    Brokers rate Woodside shares as a HOLD

    Woodside shares are climbing higher on Wednesday, up around 0.5% to $32.92 at the time of writing. The ASX energy shares have now climbed nearly 7% higher in October so far, and they’re up around 39% for the year-to-date.

    There isn’t any recent price-sentivie news out of the oil and gas major to explain this month’s rebound. The increase in investor interest is mostly likely the result of a climbing oil price.

    Trading Economics data shows that crude oil is close to US$95 per barrel, marking its fifth consecutive session of gains as conflict between ITan and Saudi Arabia intensifies further, renewing concerns about global oil supply out of the region.

    Woodside shares are also gathering investor attention following the company’s first-half FY26 update in August. The company reported a 13% increase in operating revenue, a 27% increase in NPAT, a 7% increase in underlying NPAT, and a huge increase in free cash flow to US$352 million.

    This past year has been a great success story for Woodside shares, but it looks like the shares could now be at, or past, fair value.

    Market Index data shows that all brokers have a hold rating on the shares. And thanks to the latest rally, the $28.51 average target price implies a downside of around 13%, at the time of writing.

    Brokers rate New Hope shares as a SELL

    New Hope shares are roughly flat, at $6 each, at the time of writing on Wednesday morning. The thermal coal miner’s shares have had a rocky ride over the past 12 months, fluctuating between $3.77 and $6.61. But they’re now up around 48% for the year-to-date.

    The miner lost some investor confidence last month after it posted its latest coal production update. But it flagged that weaker coal prices hit earnings hard, with its underlying EBITDA falling 32.8% to $514.3 million. Net profit after tax (NPAT) also came in at $161 million, down 63.4% from the previous year.

    The experts were also unimpressed, saying that the results came in below expectations.

    Market Index shows that the majority of brokers now have a sell rating on New Hope shares. The $5.68 average target price now implies a downside of around 5%, at the time of writing.

    The post Woodside, New Hope, Flight Centre shares: Buy, hold, or sell? appeared first on The Motley Fool Australia.

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    Motley Fool contributor Samantha Menzies 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 Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • This ASX gold developer could rise more than 70%: Broker

    Stacked gold bricks.

    WIA Gold Ltd (ASX: WIA) has recently made progress on several fronts at its Kokoseb gold project in Namibia, where it is planning a mining operation valued at US$475 million.

    The progress has piqued the interest of the analysts at Barrenjoey, who have issued a new research report on the company with a bullish share price target, which I’ll get to shortly.

    First, let’s have a look at what the company has been up to.

    Drilling shores up confidence

    Most recently, WIA Gold said in a statement to the ASX that recent drilling results from 33 new holes demonstrated strong grade continuity at the underground resource.

    The central underground exploration target was also extended by 170m to the northeast and continuity of the mineralisation was confirmed for 300m to the southwest.

    Significant assay results included 15.5m at 6.53 grams per tonne of gold from 499.5m.

    WIA Managing Director Henk Diederichs said:

    Our underground drilling programme continues to deliver both scale and grade, reinforcing the underground opportunity emerging beneath the planned open pit at Kokoseb. Recent drilling has extended the Central Underground Exploration Target by approximately 470 metres, while the Southern Underground Exploration Target remains open at depth and continues to return encouraging widths and grades. Results from the Deep High-Grade Exploration Target continue to highlight the broader underground potential of the Project.

    Expansion on the cards

    The drilling results follow WIA announcing in September that a review of their definitive feasibility study had found that an increase in processing throughput from 5.25 million tonnes per year to 7 million was viable.

    The company added:

    Based on a preliminary review, the definitive feasibility study mine schedule could supply a 7Mtpa plant without modification to the underlying mining schedule. No changes to mining costs, Ore Reserves or production schedules have been considered as part of the process plant engineering review.

    Barrenjoey said in its new research note on the company that the new drilling results supported its exploration target of 10 to 15 million tonnes of ore at 2 to 2.5 grams per tonne of gold.

    They added:

    Definition of sufficient high grade material at depth could boost Kokoseb project economics in the future through underground mining.

    Barrenjoey has a price target on WIA shares of 80 cents compared to 45 cents currently.

    The broker said:

    Our valuation is based on an exclusively open pit operation. Underground mining could expand operational mine life and is not included in our current forecasts.

    WIA Gold is valued at $898.5 million.

    The post This ASX gold developer could rise more than 70%: Broker 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.

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