Author: openjargon

Clarity Pharmaceuticals Ltd (ASX: CU6) shares are having a strong session on Monday.

In early trade, the ASX 300 stock jumped as much as 17% to $4.26 before pulling back.

At the time of writing, the clinical-stage radiopharmaceutical company’s shares are still up around 5%.

Why is this ASX 300 stock jumping?

Investors appear to be responding positively to an update from the company regarding new trial data for its prostate cancer imaging technology.

The company revealed that results from the Co-PSMA study were presented at the European Association of Urology (EAU) Annual Congress 2026 in London. The data has also been accepted for publication in the European Urology journal.

The trial evaluated Clarity’s diagnostic product, 64Cu-SAR-bisPSMA, in patients experiencing biochemical recurrence of prostate cancer after surgery.

Importantly, the study compared the ASX 300 stock’s imaging technology with a current standard-of-care PSMA PET scan.

The results showed that Clarity’s agent detected significantly more cancer lesions than the standard scan. Across the study participants, the new imaging approach identified 63 lesions compared with 24 detected using the standard-of-care method.

In addition, 78% of patients had a positive scan using 64Cu-SAR-bisPSMA compared with 36% using the existing imaging agent, highlighting a potential improvement in detecting recurrent prostate cancer.

The study also showed a higher true positive rate and lower false negative rate for the company’s imaging technology.

Why this matters

Detecting prostate cancer recurrence earlier and more accurately can significantly influence treatment decisions.

According to the trial data, the improved imaging results led to changes in planned patient management in 44% of participants, with many switching from surveillance to targeted radiotherapy.

These findings add to the growing body of evidence supporting the SAR-bisPSMA platform, which is designed as a targeted copper theranostic. This technology has the potential to be used both for cancer imaging and treatment depending on the isotope used.

Looking ahead, the company intends to combine results from this study with data from other trials, including the Phase II COBRA study and the Phase III AMPLIFY trial.

Together, these results are expected to support a future regulatory submission to the US Food and Drug Administration (FDA) for approval of 64Cu-SAR-bisPSMA in patients with recurrent prostate cancer.

The ASX 300 stock’s executive chair, Dr Alan Taylor, commented:

The extraordinary quality of the academic research is coupled with the feverish pace of commercialisation where our registrational Phase III trials, AMPLIFY and CLARIFY, are nearing completion. We have recently shared that AMPLIFY reached its target number of participants with rising or detectable PSA after initial definitive treatment at clinical sites across the US and Australia in just 9 months since imaging the first patient, and we look forward to collecting and analysing the final study data.

Combined with results from the Co-PSMA and COBRA trials, we believe it will constitute a compelling application for approval of 64Cu-SAR-bisPSMA by regulatory authorities for the BCR indication.

The post Why is this ASX 300 stock rocketing 17% today? appeared first on The Motley Fool Australia.

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• Why is this ASX 300 stock jumping 14% on Monday?

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.

The Challenger Ltd (ASX: CHF) share price is in focus today as the company announces a revised non-binding proposal to acquire Pepper Money Ltd (ASX: PPM) at a reduced offer of $2.25 per share.

What did Challenger report?

• Submitted a revised offer to acquire in joint venture with Pepper Group ANZ HoldCo Limited
• Revised offer price: $2.25 per Pepper Money share, down from $2.60 per share
• Offer price is reduced by the final fully franked Pepper Money 2025 dividend of 7.8 cents per share and any special dividend
• This offer is stated to be Challenger’s best and final, unless a superior proposal emerges
• The proposal remains confidential, non-binding, and conditional

What else do investors need to know?

Challenger advises that discussions with Pepper Money and Pepper Group ANZ HoldCo Limited are ongoing but incomplete at this stage. There is currently no certainty that the revised offer will result in a transaction.

The company emphasises that it will continue to keep the market informed in line with its continuous disclosure obligations. The decision to reduce the offer reflects ongoing negotiation dynamics and feedback from previous proposals.

What’s next for Challenger?

The market awaits further updates regarding Challenger’s proposal, as management has signalled this is the final offer unless a superior bid appears. Investors should watch for Pepper Money’s response and any changes in conditions.

Challenger continues to focus on its core strengths in investment management and annuities, while pursuing strategic opportunities that could enhance long-term value for shareholders.

Challenger share price snapshot

Over the past 12 months, Challenger shares have risen 42%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post Challenger revises Pepper Money bid to $2.25 in latest update 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 recommended Challenger. 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.

S&P/ASX 200 Index (ASX: XJO) gold stock West African Resources Ltd (ASX: WAF) is charging higher today.

West African Resources shares closed yesterday trading for $2.78. In early morning trade on Tuesday, shares are changing hands for $2.91 apiece, up 4.7%, giving the miner a market cap of some $3.3 billion.

For some context, the ASX 200 is up 0.5% at this same time on Tuesday.

Here’s what’s grabbing investor interest.

ASX 200 gold stock lifts off on 130% profit boost

Investors are bidding up the West African Resources share price following the release of the miner’s 2025 calendar year results.

Over the 12 months, the ASX 200 gold stock raked in $1.54 billion in revenue.

Gold production increased by 45.4% to 300,383 ounces, up from 206,622 ounces in 2024.

Costs were up too, with the miner reporting an all-in sustaining cost (AISC) of US$1,488 per ounce, up 20% from the US$1,240 AISC the prior year.

The year saw West African achieve gold sales of 280,065 ounces, with the miner receiving an average price of US$3,525 an ounce for the yellow metal.

With production and sales up, the ASX 200 gold stock saw its operating cash flow surge to $790 million, up 213.5% from $252 million in 2024.

Year end gold reserves fell to 6.2 million ounces, from 6.5 million ounces a year ago.

And on the bottom line, West African Resources revealed a net profit after tax (NPAT) of $567 million, up 130.5% from the 2024 NPAT of $246 million.

What did management say?

Commenting on the results helping lift the ASX 200 gold stock today, West African Resources CEO Richard Hyde said, “We finished 2025 in a strong financial position, with $584 million cash and net assets of $1.76 billion on our balance sheet.”

Hyde continued:

Sanbrado continued its solid performance in 2025, generating $1.1 billon of revenue from 205,517 ounces gold sold unhedged at an average realised price of $5,283 an ounce (US$3,407/oz). During its first five months of operational ramp-up, Kiaka generated $445 million of revenue from 74,548 ounces gold, sold unhedged at an average realised price of $5,971 an ounce (US$3,850/oz)…

WAF, as an unhedged gold producer is now incredibly well-positioned, particularly at the prevailing gold price levels, to significantly increase group profits and cash flows in 2026. We aim to maintain this for the next 10+ years from our two long-life major gold production centres of Sanbrado and Kiaka.

What’s next for the ASX 200 gold stock?

Looking ahead, Hyde said the company is well-placed for another uplift in revenue and operating cash flow in 2026. That growth should be driven by a full year of production from its gold production centres, Sanbrado and Kiaka.

“WAF’s strong production performance is expected to continue in 2026,” he said.

“We invested significantly in exploration drilling in 2025, and I look forward to releasing our updated Reserves, Resources, and 10-year production target by the end of Q1 2026,” Hyde concluded.

The post Why is this $3 billion ASX 200 gold stock leaping higher on Tuesday? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 S&P/ASX 200 Index (ASX: XJO) share space is a great place to find passive income ideas that could be better picks than term deposits.

ASX blue-chip shares can be a bastion of reliability because of the essential nature of their products and services. I’m going to talk about two of the most important businesses for the Australian economy, and why I think they’re top buys today.

I’m expecting both of the below companies to continue growing their earnings and payout in the coming years.

Coles Group Ltd (ASX: COL)

Coles is Australia’s second largest supermarket business, while also operating a large liquor segment, which includes Liquorland.

The company has delivered significant revenue growth over the last several years and yet it has managed to continue delivering solid revenue growth.

In the FY26 half-year result, Coles reported total revenue growth of 2.5%, operating profit (EBIT) growth of 10.2% and underlying net profit growth of 12.5% to $676 million.

Additionally, in the first seven weeks of the third quarter of FY26, supermarket sales were up 3.7% (or 5.3% excluding tobacco).

Food is an incredibly important part of life and Coles is an essential provider of that, making its earnings very defensive, in my opinion.

The ASX 200 share’s margins could continue rising as it utilises its new advanced warehouses to being more efficient with its own inventory and sell more online to customers.

In the FY26 half-year result, it increased its half-year payout by more than 10% and it currently has a grossed-up dividend yield of 5.1%, including franking credits, at the time of writing. Its payout has increased every year since 2019.

Telstra Group Ltd (ASX: TLS)

Telstra is another ASX 200 share with impressive credentials that makes it more appealing than a term deposit.

The business has an incredibly important telco network that is used for all purposes like work, education, entertainment, communication, online shopping, online banking and more.

I think Telstra has very defensive earnings, which is being driven by both a rising average revenue per user (ARPU) as well as a growing number of users (with both Telstra subscribers and wholesale).

The business is working hard to stay ahead of competition by investing further in its 5G network and building fibre cables. This can help it grow earnings in the coming years, particularly if it continues with inflation-linked price increases for mobile customers.

Telstra has hiked its annual dividend per share each year since 2021, meaning it is building a pleasing record of passive income growth. In the FY26 half-year result, it grew its interim dividend per share by 10.5% to 10.5 cents. That translates into an annualised grossed-up dividend yield of 5.75%, including franking credits, at the time of writing.

I believe Telstra could be one of the most defensive businesses to own over the next few years.

The post Forget term deposits! I’d buy these two ASX 200 shares instead 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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Rio Tinto Ltd (ASX: RIO) shares are on the move on Tuesday morning.

At the time of writing, the ASX 200 mining giant’s shares are up 2.5% to $158.45.

Why are Rio Tinto shares rising today?

The mining giant’s shares are trading higher following the release of an update on one of its key copper growth projects.

In addition, a rebound in the ASX 200 index today after a positive start to the week on Wall Street may also be supporting sentiment.

The benchmark index is currently up 0.35% in early trade.

What was the update?

This morning, Rio Tinto revealed that Resolution Copper, a joint venture between Rio Tinto (55%) and BHP Group Ltd (ASX: BHP) (45%), has completed a long-awaited land exchange with the United States Forest Service.

It notes that the milestone clears the way for the next phase of development at the Resolution Copper project in Arizona, which is considered one of the world’s largest untapped copper deposits.

Completion of the land exchange follows a decision by the U.S. Court of Appeals for the Ninth Circuit on 13 March. The court ruled in favour of Resolution Copper and the federal government, denying requests from plaintiffs seeking to halt the exchange.

Under the agreement, Resolution Copper has transferred more than 5,400 acres of environmentally and culturally sensitive land into protected areas, including land containing special status species habitats, riparian areas, and Native American cultural sites. In return, the project has received over 2,400 acres of land near the historic Magma copper mine in Superior, Arizona.

The land exchange was originally authorised by legislation passed with bipartisan support in 2014. Since then, the project has undergone more than a decade of consultation and coordination with civil society organisations, local communities, and Native American Tribes.

Major investment planned

Resolution Copper also revealed plans to invest approximately US$500 million over the next two years to support enabling works at the project.

This funding will support activities including surface drilling to gather additional resource information, upgrades to existing infrastructure, initial underground development work, and programs to support Native American Tribes and local communities.

The work is also expected to create around 100 new jobs and will take place alongside ongoing engagement with communities and the state-level permitting process.

Commenting on the development, Rio Tinto’s Copper chief executive, Katie Jackson, said:

Rio Tinto is building a stronger copper business with a pipeline of large, long-life resources that can help meet growing global demand for the materials needed for electrification, infrastructure and modern technologies. Completing the land exchange is a significant milestone and another positive step forward for the Resolution Copper project, which has the potential to satisfy up to 25% of America’s copper demand for decades to come.

It’s expected to add $1 billion a year to Arizona’s economy and create thousands of local jobs in a region where mining has played an important role for more than a century. As demand for copper continues to grow, projects like Resolution can play an important role in strengthening domestic supply chains. We acknowledge the support of the U.S. Government and its growing recognition of the need for domestic sources of copper and other critical materials.

The post Rio Tinto shares charge higher on big copper news 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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

New Hope Corporation Ltd (ASX: NHC) shares are sinking on Tuesday morning.

At the time of writing, the coal miner’s shares are down 12% to $4.63.

This follows the release of New Hope’s half-year results before the market open.

New Hope shares sink on results day

For the six months ended 31 January, New Hope posted a 20.1% decline in revenue to $814.4 million.

This reflects a modest 0.4% increase in group saleable coal production to 5.5Mt, which was offset by weaker realised prices.

The company notes that its average realised sales price, excluding hedging, was $137.80 per tonne, which is down 20.4% from $173.30 per tonne in the prior corresponding period.

As well as lower realised coal pricing, New Hope was exposed to increased prime overburden movement and lower non-regular gains, including the derecognition of deferred tax assets in relation to the divestment of Bridgeport Energy.

This led to the company reporting underlying EBITDA of $214.8 million, which is down 58.5% from $517.3 million a year earlier.

On the bottom line, net profit after tax was down a massive 84% to $54.3 million.

Dividend cut

New Hope revealed that it recorded net cash flow from operating activities of $185 million, down from $316.9 million a year earlier.

In light of this, the New Hope board cut its interim dividend almost in half. It declared a fully franked 10 cents per share payout, which is down from 19 cents per share in the prior corresponding period.

Commenting on the results, New Hope’s CEO, Rob Bishop, said:

In a lower coal price environment, our assets remain resilient and continue to generate solid margins. As a result of our performance, we are able to reward shareholders with a fully franked interim dividend of 10.0 cents per ordinary share.

Looking ahead, Bengalla Mine is expected to return to the 13.4Mtpa ROM coal production rate (100 per cent basis) during the second half of the 2026 financial year. In addition, New Acland Mine will continue to ramp up production and is scheduled to begin mining activities in the Manning Vale West pit during the final quarter of the 2026 calendar year. We are focused on remaining a resilient, low-cost coal producer and continuing to execute our organic growth plans, which will enable us to continue delivering value to shareholders.

The post New Hope shares crash 12% on profit crunch and big dividend cut 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.

AML3D Ltd (ASX: AL3) shares are on the move on Tuesday morning.

In early trade, the ASX defence stock is up 22% to 16.5 cents.

Why is this ASX defence stock jumping today?

The company’s shares are charging higher following the release of an announcement from the metal additive manufacturing company.

According to the release, AML3D has secured an order worth approximately $9.9 million from the largest military shipbuilder in the United States.

The ASX defence stock notes that the order has been placed by Newport News Shipbuilding (NNS), which is a division of Huntington Ingalls Industries (NYSE: HII). It is the largest military shipbuilder in the United States and delivers ships, aircraft carriers, submarines, and defence technologies.

The order is for four custom large-scale ARCEMY X 6700 additive manufacturing systems.

Once delivered, the purchase will bring the total number of ARCEMY X systems deployed at Newport News Shipbuilding to six.

AML3D advised that the systems will be supplied from its U.S. Technology Center in Ohio. All four additional units are expected to be installed and operational during the third quarter of FY 2027.

What is ARCEMY?

The ARCEMY systems that have been ordered are custom systems based on the large scale ARCEMY X 6700 but using a ~11,000kg positioner to create a heavy capacity build capability.

They are used for advanced metal additive manufacturing and will support a variety of shipbuilding applications. This includes the fabrication and replacement of ship components for U.S. Navy contracts.

Management highlighted that increasing the use of ARCEMY technology in U.S. Navy programs is a key part of the company’s growth strategy. The ASX defence stock’s CEO, Sean Ebert, said:

The step change in the size and value of this HII ARCEMY order is very much reflective of the strong and growing demand signals that underpin AML3D’s continued expansion into the U.S. defense market. It is also a strong endorsement of our U.S. ‘Scale up’ strategy which included establishing our U.S. Technology Center in Stow Ohio and our plans to invest $12 million to expand our U.S. production capabilities.

Not only do we expect to see a continued growth in U.S. defense orders we are also looking to continue to expand into other sectors. We have already successfully supplied ARCEMY technology to the Tennessee Valley Authority, the largest public utility in the U.S., and are targeting growth across the U.S. Marine, Energy, Aerospace and Oil & Gas sectors. In addition, we are seeing the emergence of early-stage demand in our UK and European markets that is similar to the demand signals that are driving our success in the U.S.

The post Guess which ASX defence stock is jumping 22% on US military order 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.

There are very few ASX blue-chip shares that I think are better suited to the current environment than the owner of Bunnings and Kmart. Considering how far the Wesfarmers Ltd (ASX: WES) share price has dropped over the last few months, as the chart below shows, I think this is the right time to buy.

Without a crystal ball, there’s no knowing what’s going to happen next. It could bounce back, keep falling or tread water from here.

We can only judge the business based on the current valuation and its prospects. I’m optimistic at the current valuation because of a few different reasons.

Strong value credentials

At the moment it’s looking as though there’s going to be another bout of inflation in 2026, unfortunately.

In that environment, I think it’d be useful to look at which businesses succeeded.

The biggest profit generators inside Wesfarmers are Bunnings and Kmart, which pride themselves on giving consumers great value. They’ve captured market share since the start of COVID-19 and I expect they can continue to gain further market share in this environment.

Additionally, I believe the expansion of Anko products into overseas markets, such as the Philippines, opens up a much larger opportunity for Kmart Group to grow earnings in the long-term.

Great return on equity

One of the best measures of a company’s quality is its return on equity (ROE).

That metric tells us how much profit a business makes compared to how much shareholder money a business is retaining. Obviously, shareholders want the business to earn a strong return on money that isn’t being paid out as a dividend.

Wesfarmers reported in its FY26 half-year result that its ROE was 32.7%. That’s high for a retailer and it was higher than HY25’s ROE of 31.2%. Increases are a great sign of a rising quality of the Wesfarmers share price.

Earnings diversification

One of the best reasons to like the Wesfarmers share price is because of the chemicals, energy and fertiliser (WesCEF).

I think it’s possible that the chemicals and fertiliser segments could see rising earnings in the coming years.

I’m particularly excited by the company’s growing exposure to lithium mining which the company has with its exposure through the Mt Holland project. The mine and concentrator performed well during the FY26 first-half result, with production reaching nameplate capacity.

Excitingly, lithium pricing significantly improved in the second quarter of 2026, supported by strong demand for battery energy storage systems (BESS) and supply constraints.

I like how the business is diversifying its operations and adding to its earnings growth avenue. It’s a great time to own exposure to lithium mining.

According to the forecast on CMC Invest, at the time of writing, the Wesfarmers share price is valued at 27x FY27’s estimated earnings.

The post 3 reasons why the Wesfarmers share price is a buy 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.

Several high-profile ASX shares have taken a beating in recent months. Technology and biotech names have been caught in the market sell-off, with some shares sliding 50% from recent highs.

But that weakness has also caught the attention of analysts. In fact, brokers believe several quality companies could rebound strongly, with some price targets suggesting the potential for 100% upside or more.

Here are three ASX shares that analysts believe could stage a major comeback.

WiseTech Global Ltd (ASX: WTC)

This ASX share has lost 52% of its value over 6 months at the time of writing. WiseTech is a logistics software company best known for its CargoWise platform, which helps freight forwarders manage global supply chains.

The tech company is widely regarded as one of Australia’s most successful software companies. CargoWise has become deeply embedded in the global logistics industry. It creates strong switching costs and a powerful competitive moat.

The ASX share also benefits from a highly scalable software model. Once the platform is built, additional customers can be added with relatively low incremental costs. This supports strong margins and long-term earnings growth.

However, WiseTech has faced governance concerns and investor worries about how artificial intelligence could disrupt traditional software businesses. The company has also announced a major restructuring involving significant job cuts as it pivots toward AI-driven operations.

Despite recent volatility, analysts still see major upside for the ASX share. The consensus rating on the tech stock remains buy with an average price target of $85.10, and the most bullish forecast at $122.64.

This points to upside between 80% and 165% from recent levels.

NextDC Ltd (ASX: NXT)

NextDC operates a network of high-performance data centres across Australia, providing critical infrastructure for cloud computing, artificial intelligence, and enterprise digital services.

Demand for data centre capacity is surging as businesses shift to cloud computing and AI workloads expand.

The $8.5 billion ASX share is well positioned to benefit from this trend. The company continues to build new facilities and expand capacity across major Australian cities, which could drive strong long-term revenue growth.

NextDC has also been steadily increasing contracted utilisation, suggesting customers are locking in long-term data centre capacity.

Data centre development is capital-intensive. Building new facilities requires significant upfront investment, which can pressure profits in the short term.

Interest rates are another risk. Higher borrowing costs can increase financing expenses for large infrastructure projects.

Analysts are bullish on the ASX share and expect it could hike up to $31.02. That’s a potential 133% increase over the next 12 months at the time of writing.

Telix Pharmaceuticals Ltd (ASX: TLX)

This ASX share has tumbled almost 60% in the past 12 months. Telix is a biotechnology company specialising in radiopharmaceutical treatments and imaging technologies for cancer.

The company is rapidly emerging as a major player in precision medicine. Its flagship prostate cancer imaging product, Illuccix, has already been commercialised and is generating strong revenue growth.

Telix also has a deep pipeline of cancer diagnostics and therapies in development across prostate, kidney, and brain cancers.

Biotech investing always carries risk. Clinical trials, regulatory approvals, and manufacturing processes can all affect a company’s timeline and profitability.

The ASX share has also been volatile following regulatory hurdles involving the US Food and Drug Administration, which have weighed on investor sentiment.

Despite these setbacks, analysts remain extremely bullish. The stock currently carries a strong buy consensus. Analysts have set an average 12-month price target of about $24, implying more than 118% potential upside from recent levels.

The most bullish broker sees the ASX share climb to $31.59, a potential 188% upside.

The post 3 ASX shares tipped to race up to 188% higher appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther 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 Telix Pharmaceuticals and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Shape Australia Corporation Ltd (ASX: SHA) share price has delivered strong returns for investors over the past year, although the share price of the small-cap has pulled back slightly from recent highs.

At the time of writing, shares in the fitout and construction services specialist were recently trading around $6.51, down from a high of $7.59 in mid-February following the release of its latest half-year results.

Despite that modest pullback, the company’s first-half FY26 result showed continued revenue growth, improving margins, and expanding opportunities in new markets.

Let’s take a closer look at what’s driving the company’s momentum.

Strong revenue and profit growth in 1H FY26

Shape reported revenue of $553.3 million for the six months to December, representing a 16% increase compared with the prior corresponding period.

Profitability also improved significantly during the half:

• Operating earnings (EBITDA) rose 45% to $21.4 million
• Net profit after tax (NPAT) climbed 49% to $14 million
• Earnings per share (EPS) increased to 16.8 cents

Management attributed the result to a diversified order book, disciplined cost management, and strong project execution.

Margins also improved during the period, with gross margin lifting to 9.8% from 9.1% in the prior corresponding period.

In addition, the company declared an interim dividend of 14 cents per share, which represented a 40% increase on the prior year’s payout.

Diversification strategy starting to pay off

A key theme in Shape’s strategy is diversification beyond its traditional office fitout market.

The company is increasingly targeting sectors such as education, industrial, data centres, aged care, and retail, which management believes can provide more stable demand and improved margins.

For example, project wins in the education sector surged 170% to $153.5 million during the half.

Meanwhile, emerging segments are also gaining traction. The industrial and data centre sectors delivered $137.4 million in project wins, compared with just $7 million a year earlier.

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Another growth area is “Modular by SHAPE”, the company’s modular construction business. Revenue from this division reached $38.7 million in the first half, already exceeding the $16.4 million generated across the entire FY25 year.

Acquisition expands addressable market

Shape also completed the acquisition of Arden Group in December 2025, a national retail fitout and maintenance specialist.

Management believes this deal could open new opportunities, particularly in multi-site rollout projects across fuel and convenience retail networks.

The acquisition is also expected to provide recurring maintenance revenue and cross-selling opportunities, potentially improving the group’s overall margin profile over time.

A strong pipeline heading into the second half

Looking ahead, the company appears well-positioned for the remainder of FY26.

Shape reported a backlog of $686.1 million, which is 33% higher than the prior year, along with an identified project pipeline of around $3.8 billion.

Management also noted that the Arden acquisition only contributed one month of earnings in the first half, meaning the second half of the financial year should reflect a fuller contribution.

Combined with growing demand in areas such as modular construction and data centres, this could support further growth in revenue and earnings.

The Foolish bottom line

Shape’s recent results highlight a company that is expanding its capabilities, improving margins, and diversifying into new markets.

While the share price has eased from its February highs, the underlying business continues to show steady operational progress.

For investors watching the small-cap construction space, Shape Australia’s growing pipeline, expanding modular division, and new retail capabilities could make the company one to keep on the radar as FY26 unfolds.

The post This ASX small cap could be in a sweet spot for construction demand appeared first on The Motley Fool Australia.

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Motley Fool contributor Leigh Gant 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 Shape Australia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.