Two of the most influential ASX defence stocks released half-year results yesterday: Droneshield Ltd (ASX: DRO) and Elsight Ltd (ASX: ELS). 

These companies are involved in the defence sector, which boomed on the back of tailwinds through 2025 and into 2026. 

However, since then, it hasn’t been all smooth sailing. 

How the tables have turned

Defence-related ASX shares surged in 2025 as investors anticipated sustained growth in global military spending.

Ongoing conflicts, strategic competition, and a growing focus on national security reinforced expectations of stronger demand for defence equipment, cybersecurity, surveillance systems, and advanced military technologies.

However, the share prices of many ASX defence stocks have reversed course in recent months. 

This decline has largely reflected profit-taking and a reset in valuations after a strong rally, with investors becoming less willing to pay the high premiums built on expectations of sustained defence spending growth.

One stock hit harder than almost any other has been DroneShield shares. Once fetching over $6, DroneShield shares have come crashing back to earth in 2026. 

Its stock price is down 45% year to date and is now hovering around $1.70. 

Meanwhile, Elsight shares have continued to steadily grow. 

Its share price is up more than 220% in the last 12 months. 

Why Elsight shares are a buy

Despite moving in such different directions this year, the team at Bell Potter has similar optimism about both companies over the next 12 months. 

Following the half-year results, the broker has a buy recommendation on Elsight shares along with a price target of $8.20. 

From current levels, this indicates an upside potential of 42%. 

We believe ELS has developed a market leading product that is leveraged to the proliferation of unmanned systems in both a defence and commercial context. We believe ELS shares offer relative value versus listed peers at 33x CY26e EV/EBIT given its recurring revenue, high ROIC business model and defensible niche.

Elsight’s half-year report can be found here.

DroneShield shares a bounce-back candidate

After crashing in 2026, the team at Bell Potter believes DroneShield shares could be a value at its current price. 

Following its results, the team at Bell Potter issued a new report on the company. 

The broker has a buy recommendation and $2.40 (previously $2.50) price target on DroneShield shares. 

From yesterday’s closing price, this indicates an upside of 38%. 

We expect RFRecon and new high-moat next gen products to drive continued contract wins, particularly from Europe where DRO has a leading presence in the CUAS EW vertical. Top end of CY26 revenue guidance looks achievable. Retain Buy.

The post Defence Duel: Are Elsight or DroneShield shares a better buy right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 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.

The Mesoblast Ltd (ASX: MSB) share price is in focus after the company reported a sharp increase in revenue to US$120.3 million for the 2026 financial year and a 44% reduction in net loss.

What did Mesoblast report?

• Total revenue climbed to US$120.3 million, up from US$17.2 million in FY2025
• Gross profit reached US$103.6 million, with gross profit excluding amortisation at US$109.7 million
• Net loss reduced by 44% to US$57.5 million, down from US$102.1 million last year
• Net operating cash spend was US$43.8 million, improved from US$50.0 million in FY2025
• Period-end cash balance stood at US$103 million with a new US$125 million five-year credit facility
• US commercial launch of RYONCIL generated US$115.2 million in net revenue

What else do investors need to know?

Mesoblast successfully launched RYONCIL in the US for children with steroid-refractory acute graft versus host disease, securing broad adoption at major paediatric transplant centres and major payer coverage. The median time from patient identification to treatment dropped from 29 days at launch to 8 days.

The company is expanding RYONCIL’s use to adults with severe SR-aGvHD, a market potentially three times larger than the paediatric segment, and progressing a registration trial as part of a second-line regimen with ruxolitinib. Mesoblast also obtained FDA clearance for a trial in children with Duchenne muscular dystrophy.

For its rexlemestrocel-L platform, Mesoblast completed treatment of 350 patients in a Phase 3 clinical trial for chronic low back pain, positioning the company to address a market worth over US$10 billion. Top-line results are expected in mid-2027.

What did Mesoblast management say?

Mesoblast’s CEO, Dr. Silviu Itescu, commented:

We are very pleased to report a strong full year gross profit of US$104M for the fiscal year 2026. The financial result is a product of continued growth in RYONCIL market adoption and focus on disciplined capital allocation while investing in our high-value opportunities.

What’s next for Mesoblast?

Looking ahead, Mesoblast plans to expand RYONCIL’s label to adults with severe SR-aGvHD and further advance development for chronic low back pain using rexlemestrocel-L, with a pivotal data readout due next year. The company also aims to develop next-generation cell therapies through new CAR-MSC and oncolytic virus technologies, broadening its pipeline for inflammatory and immunological diseases.

With a solid cash balance and new funding in place, Mesoblast intends to continue investing in high-value clinical programs and commercial execution, maintaining its position as a sector innovator.

Mesoblast share price snapshot

The Mesoblast share price has underperformed the S&P/ASX 200 index (ASX: XJO) with a decline of around 5% over the past 12 months.

View Original Announcement

The post Mesoblast earnings: Strong revenue growth and operational milestones in FY26 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. 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 Eagers Automotive Ltd (ASX: APE) share price could be in focus after the company delivered a record half-year result, with revenue rising 24% to $8.05 billion and net profit after tax up 23% to $165.2 million.

What did Eagers Automotive report?

• Revenue rose 24% to $8,053.5 million compared to 1H25
• Statutory net profit after tax increased 23% to $165.2 million
• Underlying EBITDA up 23% to $364.6 million
• Ordinary interim dividend up 4% to 25 cents per share, fully franked
• Liquidity at $2.61 billion and net debt at $674.9 million as at 30 June 2026
• Acquisition of CanadaOne Auto Group contributed $40.5 million in profit before tax across two months

What else do investors need to know?

Eagers Automotive entered the Canadian market by acquiring a 65% stake in CanadaOne Auto Group, which made an immediate positive impact on group results and expanded the company’s international footprint. The strategic investment saw the company issue exchangeable shares as partial consideration, strengthening the balance sheet and broadening shareholder alignment.

In Australia, Eagers increased its market share in new vehicles, reaching 15.9%, up from 13.8% a year ago. The group also signed a non-binding agreement to divest its franchised automotive business in New Zealand—retaining the easyauto123 operations—to redeploy capital into other growth initiatives.

What’s next for Eagers Automotive?

Eagers Automotive expects a full second-half contribution from CanadaOne Auto Group, with further opportunities for organic and acquisitive growth in North America. The company remains focused on optimising its partner portfolio, expanding its independent pre-owned vehicle business, and leveraging its unique scale and brand partnerships to outperform industry benchmarks.

Management cited a disciplined approach to capital allocation and cost management, aiming for sustainable, industry-leading returns. While mindful of current economic conditions and higher interest rates, the board remains optimistic about growth prospects in both the Australian and Canadian markets.

Eagers Automotive share price snapshot

The Eagers Automotive share price has modestly outperformed the S&P/ASX 200 index (ASX: XJO) on a 12-month basis with a gain of over 6%.

View Original Announcement

The post Eagers Automotive posts record 1H26 earnings on strong Canadian expansion 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 recommended Eagers Automotive Ltd. 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.