Author: openjargon

A new report from Betashares has provided a snapshot of what is set to be a record-breaking year for ASX ETFs. 

According to the report, the Australian ETF industry closed the financial year at a record $372 billion in funds under management, with $400 billion now firmly in sight. 

Net flows of $30 billion for the half matched the entirety of 2024, while AI-driven tech exposures led performance.

Market insights 

According to the report, global equity markets rallied through the first half of 2026, powered by evidence that AI capital expenditure is starting to convert into profit. 

Microsoft, OpenAI, and Anthropic all reported AI revenue run rates up more than 100% year on year, while Nvidia and the major memory makers, Samsung, SK Hynix, and Micron, were the clearest beneficiaries of the compute build-out. 

Asian semiconductor markets captured this directly, with North Asian chipmakers driving the MSCI Emerging Markets Index to the strongest returns of any major market, even as an Iran-triggered oil spike and a US$1.5 trillion software sell-off tested the rally’s nerve during the half. 

Domestically, the S&P/ASX 200 Index (ASX: XJO) managed just 2.4% over the same six months, the weakest of the major developed markets. 

Three RBA rate hikes in the half pushed inflation and unemployment back into focus, rewarding income and value over growth. 

Materials carried the bulk of the market’s earnings growth, benefiting from elevated iron ore and gold prices and from critical mineral demand driven by the AI rollout. 

The May budget’s proposed removal of the CGT discount added further uncertainty for households already absorbing higher borrowing costs, and the combination has weighed on consumer sentiment through the half. 

Performance – Half Year 2026

The Betashares Australian ETF Review revealed that the half-year performance was led by semiconductors, with AI-related hardware demand driving standout returns over the period. 

South Korea’s technology-heavy market also featured prominently, alongside broader Asian technology exposure, reinforcing a theme of innovation-driven outperformance. 

Hydrogen and clean energy themes made a strong showing, pointing to renewed appetite for energy transition plays. 

Crude oil rounded out the top five, with prices driven sharply higher by the Middle East conflict and resulting disruptions to the Strait of Hormuz, a key global oil transit route.

Top 5 performing funds for the half year to June 2026: 

• Global X Semiconductor ETF (ASX: SEMI) rose almost 102%
• iShares MSCI South Korea ETF (ASX: IKO) climbed 94%
• Global X Hydrogen ETF (ASX: HGEN) rose 70% 
• Betashares Capital – Asia Technology Tigers ETF (ASX: ASIA) increased by 59%
• BetaShares Crude Oil Index ETF – Currency Hedged (Synthetic) (ASX: OOO) rose over 44%

The post The ASX ETF market is set for a record year – Here are the best performers so far in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in Betashares Capital – Asia Technology Tigers Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Micron Technology, Microsoft, and Nvidia. The Motley Fool Australia has recommended Microsoft and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Wesfarmers Ltd (ASX: WES) is the kind of ASX share that can be hard to judge.

The business quality is obvious. The price is the harder part.

So, should investors buy, hold, or sell Wesfarmers shares today?

Why selling feels too harsh

I would find it difficult to call Wesfarmers a sell.

This is one of the strongest long-term operators on the ASX, and I think that still counts for a lot.

Bunnings remains one of the best retail businesses in Australia. It has strong customer trust, a dominant market position, and a role in home improvement that is hard for rivals to replicate at scale.

Kmart is also a much better business than it was many years ago. Its value focus has made it highly relevant at a time when households are watching spending more carefully.

I also like that Wesfarmers keeps looking for ways to make the group stronger. Health, data, digital initiatives, OnePass, and other growth options may not transform the business overnight, but they give the company more ways to deepen customer relationships and reinvest over time.

That is the part of Wesfarmers I find most appealing. It is not just a collection of retail brands. It is a management culture that has demonstrated a long-term ability to improve assets, make disciplined decisions, and allocate capital to better opportunities.

Why buying aggressively is harder

The issue is valuation. Wesfarmers shares are trading at around $91.67 at the time of writing, which is close to the upper end of their yearly range of $70.80 to $95.18.

According to CommSec consensus estimates, Wesfarmers is expected to generate earnings per share of $2.55 in FY26 and $2.74 in FY27.

That puts the stock on a price-to-earnings (P/E) ratio of around 36 times FY26 earnings and 33.5 times FY27 earnings.

I can justify a premium for Wesfarmers. I have much more trouble justifying any price.

At this level, investors are paying upfront for a lot of future success. That can work if Bunnings stays strong, Kmart keeps performing, the health division improves, and newer digital initiatives add value.

But the starting point is important for future returns. When a high-quality company is priced this fully, even a good business can deliver more modest shareholder returns if earnings growth is only steady rather than exceptional.

The forecast dividend yield also does not make the valuation look cheap. CommSec estimates dividends per share of $2.16 in FY26 and $2.33 in FY27, implying forward yields of around 2.4% and 2.5%.

That income is attractive enough, but it is not the reason I would own Wesfarmers.

My verdict

My verdict is hold. If I already owned Wesfarmers shares, I would be happy to keep them. The company has too many strengths for me to want to step away just because the valuation looks full.

For new money, I would be more patient. I could understand buying a small amount now for a long-term position, especially for investors who like building into quality companies over time.

But I would prefer to buy more meaningfully during a pullback.

Foolish Takeaway

Wesfarmers remains one of the ASX businesses I would trust to keep improving over the long term.

The company has strong brands, experienced management, and several areas where it can keep reinvesting for growth.

The share price already reflects a lot of that quality. That is why I would hold Wesfarmers shares today. I would keep it high on my long-term watchlist, stay patient, and look for a better chance to buy more when the market offers one.

The post Should you buy, hold, or sell Wesfarmers shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Wesfarmers. 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.

BHP Group Ltd (ASX: BHP) released its operational review for the past financial year this week, and it’s fair to say reaction from analysts has been muted, with the company guiding to a drop in copper production this year.

Are BHP shares fully priced at the moment?

BHP shares are up slightly more than 50% for the past 12 months, so given that strong result, it begs the question, do they have further to run?

The team at Macquarie have run the ruler over the company and come up with a neutral recommendation on the stock, and a share price target we’ll get to shortly.

First, let’s look at what BHP reported this week.

Solid operational results

The company said in a statement to the ASX that it had delivered record iron ore production over the year to the end of June, up 1% to 264.7 million tonnes.

Copper, however, was 3% lower than the previous year at 1.95 million tonnes.

BHP Chief Executive Officer Brandon Craig said it was a solid result.

He added:

For the second consecutive year, we produced around 2 Mt of copper and delivered record iron ore production, demonstrating the power of a disciplined operating system and world-class assets. We achieved this against a backdrop of stronger realised prices for both copper and iron ore, with copper prices around 35 per cent higher than a year ago. Cost control was particularly strong, with every asset expected to be within unit cost guidance despite headwinds from inflation, higher diesel prices and global supply chain disruptions.

While Mr Craig said the company had several growth projects underway, BHP is actually guiding to lower copper output this year, with a forecast of 1,650,000 to 1,800,000 tonnes of copper.

Iron ore is expected to stay largely flat at 260 to 272 million tonnes.

Copper output has been impacted by a conveyor belt failure at the Carrapateena mine, impacting output at the company’s South Australian operations for up to eight weeks.

Let’s see what the analysts think

The Macquarie team said in their note to clients that much of BHP’s value proposition was built on copper growth, and that South Australia was a key part of that.

They applauded the company’s record iron result however, in what they said had been a tough year.

But Macquarie said with the risk of strikes looming and significant maintenance work scheduled, they expected it to be a “holding year” for the division.

Macquarie has a 12-month price target of $55 on BHP shares compared to $59.14 at the time of writing. They are also predicting the dividend yield to stay steady on 3.4%.

The post Does Macquarie rate BHP shares a buy, hold or sell right now? 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended BHP Group and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A portfolio does not need dozens of holdings to cover a lot of ground.

With three carefully chosen investments, I think an investor could gain exposure to global growth, dependable infrastructure, and a business with substantial room to expand.

The key is giving each holding a clear job.

Start with global quality

I would make VanEck MSCI International Quality ETF (ASX: QUAL) the largest holding.

This exchange-traded fund (ETF) provides exposure to international companies selected using measures such as profitability, balance sheet strength, and earnings stability.

I like that approach because the global share market contains thousands of businesses, but they are not all equally attractive. A quality filter can direct more of the portfolio towards companies that have already shown an ability to generate strong returns without relying heavily on debt.

These businesses may sell software, medicines, consumer products, industrial equipment, or financial services. What connects them is the financial strength that can support continued investment through changing economic conditions.

International shares also give Australian investors access to industries and business models that are less prominent on the ASX.

I would expect this holding to do most of the long-term compounding.

Add dependable infrastructure

The second investment would be APA Group (ASX: APA).

APA owns and operates energy infrastructure, including pipelines and other assets that help move and store energy around Australia.

I think infrastructure can bring a different rhythm to a portfolio. Demand is linked to essential services, while many assets are supported by long-term agreements or regulated arrangements.

APA also pays dividends, which could provide some income while the wider portfolio continues growing.

The energy system is changing, and APA will need to invest carefully as Australia moves towards a different mix of generation and storage. Debt, interest rates, regulation, and project returns all deserve attention.

Even so, I like the idea of owning assets that remain deeply connected to how homes and businesses receive energy.

Include a long-term growth share

The final investment would be Xero Ltd (ASX: XRO).

Xero has developed accounting software that sits close to the daily financial activity of small businesses. Customers can use the platform for invoicing, payroll, payments, reporting, tax, and cash flow management.

That position gives Xero room to become more valuable to each customer over time.

The company can add services, improve automation, and use data to help business owners make better decisions. Its opportunity in the United States also leaves plenty of space for expansion if execution remains strong.

Xero shares can be volatile, and investors are often asked to pay a high valuation for future growth. I would therefore keep the allocation smaller than the global ETF holding.

For a long investment horizon, I think the company has the potential to become a much larger financial platform.

How I would split the money

I would put around 50% of the portfolio into the QUAL ETF, 25% into APA Group, and 25% into Xero shares.

That split would place most of the money in a diversified global holding while still leaving enough exposure to income and company-specific growth.

The exact percentages could change with an investor’s age, income needs, and tolerance for volatility. Someone closer to retirement may prefer a larger infrastructure allocation, while a younger investor may lean further towards growth.

Foolish Takeaway

A three-investment portfolio places more responsibility on every holding, so I would choose each one carefully and resist the temptation to keep adding shares without a clear reason.

This structure would give me access to established global businesses, essential Australian assets, and a company still building towards a much larger opportunity.

It would remain simple enough to follow, while offering several ways for wealth to grow over the years ahead.

The post How I would build an ASX portfolio with just 3 investments 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 positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Apa Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

It was a bit of a sour end to the trading week for the S&P/ASX 200 Index (ASX: XJO) and many ASX shares this Friday. After a bumpy trading week that saw the markets swing from gains to losses, investors ended up siding with the pessimists over today’s session.

After keeping to red territory all day, the ASX 200 ended up closing 0.5% lower. That leaves the index at 8,796.7 points as we head into the weekend.

This rough day for the Australian markets followed a similar session on Wall Street overnight.

The Dow Jones Industrial Average Index (DJX: .DJI) was not in a good mood, dropping 0.2% lower.

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) was punished even harder, falling a nasty 1.47%.

But let’s return to the local boards now and take a closer look at what was happening with the various ASX sectors this Friday.

Winners and losers

No one should be surprised to see that there were more losers than winners today.

Leading said losers were gold stocks. The All Ordinaries Gold Index (ASX: XGD) was slammed this session, crashing 4.95%.

Broader mining shares were also slammed, with the S&P/ASX 200 Materials Index (ASX: XMJ) tanking 2.91%.

Tech stocks sank hard as well. The S&P/ASX 200 Information Technology Index (ASX: XIJ) cratered 1.6%.

Next on the red list were healthcare shares, illustrated by the S&P/ASX 200 Healthcare Index (ASX: XHJ)’s 0.34% dive.

Our final losers this Friday were financial stocks. The S&P/ASX 200 Financials Index (ASX: XFJ) lifted 0.1% by the closing bell.

Let’s turn to the green sectors now. It was utilities shares that fronted the pack, with the S&P/ASX 200 Utilities Index (ASX: XUJ) surging up 1.77%.

Energy stocks ran hot, too. The S&P/ASX 200 Energy Index (ASX: XEJ) soared 1.66% higher this Friday.

Communications shares were also in demand, as you can see from the S&P/ASX 200 Communication Services Index (ASX: XTJ)’s 1.62% lift.

Consumer staples stocks weren’t left out either. The S&P/ASX 200 Consumer Staples Index (ASX: XSJ) bounced up 1.06% today.

Real estate investment trusts (REITs) came next, with the S&P/ASX 200 A-REIT Index (ASX: XPJ) seeing its value spike 1.02%.

After REITs, we had industrial shares. The S&P/ASX 200 Industrials Index (ASX: XNJ) enjoyed a 0.65% improvement this session.

Last and least, consumer discretionary stocks just stuck the landing, evidenced by the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ)’s 0.48% jump.

Top 10 ASX 200 shares countdown

Today’s top stock was once again the financial services company AMP Ltd (ASX: AMP). AMP shares rocketed another 6.32% today to close at $2.02 each.

This seems to be a continuation of the goodwill we saw yesterday following the earnings update that was released.

Here’s the rest of today’s best: 

ASX-listed company	Share price	Price change
AMP Ltd (ASX: AMP)	$2.02	6.32%
Brambles Ltd (ASX: BXB)	$19.44	3.46%
Woodside Energy Group Ltd (ASX: WDS)	$30.46	3.29%
Coles Group Ltd (ASX: COL)	$23.21	2.88%
Amcor plc (ASX: AMC)	$63.77	2.84%
Telstra Group Ltd (ASX: TLS)	$5.04	2.65%
Bega Cheese Ltd (ASX: BGA)	$6.10	2.52%
Domino’s Pizza Enterprises Ltd (ASX: DMP)	$17.62	2.50%
Ingenia Communities Ltd (ASX: INA)	$4.29	2.39%
Generation Development Group Ltd (ASX: GDG)	$3.56	2.30%

Enjoy the weekend!

Our top 10 shares countdown is a recurring end-of-day summary that shows which companies made big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 Domino’s Pizza Enterprises. The Motley Fool Australia has positions in and has recommended Amcor Plc and Telstra Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Generation Development Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investing in exchange-traded funds (ETFs) seems to grow more popular on the ASX with each passing year. ASX investors seem to love buying ASX ETFs, likely for their simple, hands-off nature and cheap market access, which they are well known for.

The ASX’s most popular ETFs, such as the Vanguard Australian Shares Index ETF (ASX: VAS), seem to increase their assets under management like clockwork every month. And the number of smaller, thematic ETFs has exploded in recent years. These days, you can pretty much find any ETF you can think of on the ASX.

This trend, in my view, is largely a happy one. ETFs can give ASX investors cheap access to industries and markets that were previously unavailable (or available but prohibitively expensive) to Australian investors. Australians who might have never taken the plunge of buying individual ASX shares are happy to part with their dollars when offered cheap, market-wide index funds that can simply be put into the proverbial bottom drawer and never touched again.

However, ETF investing is not without its potential risks and downsides. Today, I’m going to discuss what I consider the biggest red flag for ASX investors to watch out for when considering an ETF investment.

A big red flag when buying ASX ETFs

Any ASX ETF can theoretically find a happy place in an investor’s portfolio. Provided it aligns with their goals and risk tolerances, of course. However, I think there is one factor that should be assessed above all else when analysing your next ETF investment. That factor is the fee that the ETF will charge you.

All ASX ETFs charge their investors an annual fee for their services. That’s fair enough. After all, ETFs need to be maintained, their portfolios kept in line, their dividends distributed, and their investors kept informed. That doesn’t come free.

But although all ETFs are equal when it comes to imposing these fees, some are more equal than others. It is this fee that ASX ETF investors need to be discerning about.

Fees on ASX ETFs are wide-ranging. Some of the cheapest on the market go for under 0.05% per annum. That’s $5 a year for every $10,000 invested. Others are as high as 1%, or even greater.

Whether an ETF charges a fee of 0.05%, 0.5%, or 1% might not sound like a matter of great importance. But it is if you value your cash. Sure, that kind of difference isn’t enough to make a meaningful difference to one’s returns over a year or two. But it certainly starts to add up over five, ten, or 20 years.

When paying 1% can cost you a fortune

Just as returns from investments compound, so too do the lost potential returns of money that is eaten up by these fees. To illustrate, let’s assume one investor puts $100,000 into one ETF that is fee-free. Another investor puts the same amount into a fund that asks 1% per annum. If both ETFs return an average of 10% over 20 years, our 1% fund will turn that $100,000 into just over $600,000. But our fee-free fund will yield almost $730,300.

Yep, that 1% difference is worth more than $130,000 over two decades.

As such, all ASX investors who are thinking about buying an ASX ETF need to consider how much dead money their fund will take from them. A high fee, particularly one over 1% per annum, is, in my view, one of the biggest red flags an ETF can wave at us as investors. Ignore it at your money’s peril.

The post Buying ASX ETFs? Watch out for this red flag appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. 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.

Shares in Ora Banda Mining Ltd (ASX: OBM) have appreciated by more than 56% over the past 12 months but at least two brokers believe the stock still has a way to run.

The analyst teams at both Macquarie and UBS have bullish share price targets on the company which we’ll get to shortly.

Firstly let’s look at why they’ve recently published research reports on the company.

Strong fourth quarter production meets guidance

Ora Banda earlier this week published its quarterly production report which showed the company produced a record 39,552 ounces of gold during the June quarter to meet its full year guidance target.

The company said it had closing cash at the end of the quarter of $267.7 million with total available liquidity of $468 million including an undrawn $200 million debt facility.

The company had also during the quarter launched its “Drive to 300” initiative which is a multi-year target to increase production to 300,000 ounces of gold per year.

Ora Banda Managing Director Luke Creagh said of the result:

Another transformational year for Ora Banda is a credit to the exceptional work of our teams who achieved records across nearly every metric as well as set ting up the Company to deliver outstanding value creation with the launch of our ‘DRIVE to 300’ Project. Our organic growth strategy continues to gain momentum, with material increases in Resources and Reserves, and operating cashflows continuing to strengthen the balance sheet . The business has more than $468 million of liquidity to fund capital projects as we target a doubling of production and a step-change down in unit costs by FY29.

Ora Banda’s production guidance for the current year is 125,000-140,000 ounces of gold at an all-in sustaining cost of $3400-$3600. Last year’s production result was 140,949 ounces.

The company added:

Production is expected to be weighted towards the first half of FY27, with production supplemented by third-party processing through to October 2026 . Post October, the Company will commence building ore stockpiles ahead of commissioning of the new processing facility.

Ora Banda intends to spend $425 million in growth capital this year.                                                                                                           

Brokers this this ASX gold stock is going cheap

UBS said it had lowered its price target on the company due to higher capital expenditure and lower estimated earnings.

The broker’s price target for Ora Banda shares is now $1.45, down from $1.60, compared to the current price of $1.

Macquarie’s price target on the shares is $1.30.

The broker said:

OBM is firmly in its growth phase growing production from 141koz in FY26 to >300koz in FY29 by using its balance sheet (liquidity of A$468m) and internal cash flows to fund it.

The post This ASX gold stock could jump by 45% brokers say 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 positions in and has recommended Macquarie Group. 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.

Lithium shares have had another turbulent year to date, with the analyst team at Morgans noting that ASX lithium company share prices ran up as prices peaked in May, and have subsequently fallen back.

ASX lithium shares in focus

Three major broking houses in Morgans, UBS, and Macquarie have issued research notes on the lithium sector this week, with UBS saying they expect Australian lithium companies to generate strong cash flow over the June quarter, “as stronger realised lithium prices drive robust margins”.

They added:

With lithium prices recovering sharply since mid-CY25, producers have moved quickly to revisit and accelerate growth initiatives, although we believe the market is underestimating the capital required to deliver the next expansion phase. Concerns build around rising battery inventories, weak China NEV sales, an accelerating / uncertain supply response, though we continue to believe the market fundamentals remain strong and remain overweight lithium.

Macquarie notes that there remains limited visibility of the expansion of the major Chinese producer Jianxiawo and, therefore, its effect on the market.

Macquarie said they see significant uncertainty around the supply and demand outlook for CY27.

They added:

While future supply additions are highly visible, we believe the market may be underestimating project delays, commissioning risks and ramp-up challenges.

Which ASX lithium shares do the experts like?

Macquarie’s top pick in the sector is IGO Ltd (ASX: IGO), with a price target of $10.50.

Other companies it had assigned an outperform rating to include PLS Group Ltd (ASX: PLS), PMET Ltd (ASX: PMT), Elevra Lithium Ltd (ASX: ELV), Liontown Resources Ltd (ASX: LTR), Wildcat Resources Ltd (ASX: WC8), and Global Lithium Ltd (ASX: GL1).

In contrast, Morgans has a hold recommendation on PLS shares, preferring Liontown Resources, which it has an accumulate rating on and a price target of $1.70 on, compared to $1.36 currently.

Morgans also has an accumulate rating on Mineral Resources Ltd (ASX: MIN), with a $68 price target compared to $56.65 currently.

UBS also has a neutral rating on PLS shares, and buys on IGO, Liontown, PMET, and Elevra.

Morgans noted that the recent pullback in lithium prices was likely a short-term correction.

They added:

We see this recent sell-off as the market pricing in a step-change in near-term supply, not an expectation that the commodity is going to experience a severe sell off and enter another downcycle. Rather, we think investors have concluded that the probability of another leg is now considerably lower, given the CATL and Zimbabwe supply catalysts, plus incremental Australian supply coming back online. In our view, the equity rally through 1Q/2Q26 pushed several names ahead of what we’d consider fair value on a through-cycle price deck, and this correction is best read as a re-rating back toward more appropriate valuations, not a loss of confidence in sector fundamentals.   

The post What are the top picks in the ASX lithium sector right now? 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 positions in and has recommended Macquarie Group. 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.

Shares in Woodside Energy Group Ltd (ASX: WDS) are trading higher after a research report from Macquarie teased the idea of the oil and gas major being a takeover target.

US major rumoured to be on the hunt

The research report issued on Friday morning argued that the Strait of Hormuz crisis has de-rated Qatari liquefied natural gas (LNG) assets for now, and arguably permanently.

Macquarie said this could mean there is more pressure for mergers and acquisitions in the LNG space, “making Woodside a viable target”.

The broker is arguing that consolidation in the energy sector will continue, and notes that Exxon Mobil Corp (NYSE: XOM) missed out on buying assets in Guyana 12 months ago.

Quoting Bloomberg as a source, Macquarie writes that ExxonMobil is “screening LNG acquisitions including Woodside”.

They added:

With US shale consolidations done and opportunities maturing, international deals make sense again, particularly in the LNG segment (post Strait of Hormuz).

Woodside is an attractive candidate, they said, with its M&A strategy over the past five years building a company that aligned strategically with what ExxonMobil would be after.

Macquarie said ExxonMobil would have to bring an attractive offer to the table, adding, “In our view, a meaningful premium that would be much harder to deliver as a standalone entity could increase the likelihood of board engagement”.

Hurdles to the deal could be board reluctance and the company’s large retail shareholder base, Macquarie said.

Woodside Energy shares looking like a good buy

The broker has raised its price target on Woodside shares by 9% to $32.80 per share, and if a 20% weighting for M&A activity was included, this would rise to $38.50.

Woodside shares are currently changing hands for $30.29, up 2.7% on the day. The company is valued at $56.06 billion.

RBC Capital Markets is also a fan of the stock, saying in a research note earlier this week that Woodside was its top large-cap pick in the energy sector, “based on its strong longer-term growth profile, and potential to generate more near-term higher priced gas hub sales and LNG trading volumes due to the Middle East conflict”.

They added:

Woodside’s 2Q sales revenue is expected to be supported by higher crude and … commodity pricing, despite production volumes being affected by the Pluto LNG project scheduled turnaround. We expect the volatile pricing environment to create opportunity for relatively high gas hub sales and LNG trading volumes quarter on quarter. Woodside’s production growth outlook remains highly attractive, with Scarborough (Pluto LNG T-2) on stream by the end of 2026, followed by Trion oil in 2028 and Louisiana LNG in 2029.

RBC has a price target of $34.50 on Woodside shares.

The post Could Woodside Energy be a takeover target? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Which ASX oil companies does RBC Capital Markets like amidst more Middle East conflict?
• 5 things to watch on the ASX 200 on Thursday
• How much do I need in superannuation to receive $6000 per month in passive income?
• With Hormuz closed, is there an opening to buy Woodside shares?

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 positions in and has recommended Macquarie Group. 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.

When it comes to Australian financial services companies, at the moment it can pay to look beyond the big four banks when looking for outsized returns.

The brokers at Macquarie have this week issued reports into three ASX finance companies which they believe will perform well over the next 12 months.

Let’s see who they like.

Australian Finance Group Ltd (ASX: AFG)

Shares in this company have fallen 22.4% over the past 12 months, but the team at Macquarie think they will tick upwards over the next year.

AFG recently said in a statement to the ASX that AFG mortgage brokers had lodged $28.1 billion worth of home loans in the fourth quarter, which was the strongest June quarter on record.

AFG Chief Executive Officer David Bailey said regarding the result:

Following the strongest March quarter on record, some easing in June was expected, especially after the Federal Budget announcements on 12 May and during a tightening rate cycle. Despite divergence across states and shifting borrower sentiment mid-quarter, we delivered positive year-on-year growth and a record-high average loan size. We believe the fiscal policy changes announced during the quarter will represent a period of readjustment rather than a structural shift in underlying demand.

Macquarie said they were forecasting some headwinds for AFG as the impact of tax policy changes in the Federal Budget rolled through, and reduced their price target on the company from $3.01 to $2.26.

This remains well above the current price of $1.64.

Navigator Global Investments Ltd (ASX: NGI)

Macquarie has reinitiated coverage of this stock with an outperform rating after the company released a quarterly update earlier this week.

In that report, the company said assets under management were up 6% to US$33.6 billion, while assets under management in its Lighthouse Partners division were up 8% to more than US$20 billion.

The company said:

Ongoing geopolitical uncertainty, interest rate volatility and changing market conditions continue to create both opportunities and challenges for alternative investment strategies. Most of Lighthouse Partners’ strategies performed strongly during the quarter and several of NGI Strategic’s Partner Firms delivered strong performance on an absolute and relative basis during the quarter.

Macquarie said the company had a strong platform entering FY27, and the broker has a price target on the company of $3.28 compared to the current price of $2.44.

Netwealth Group Ltd (ASX: NWL)

Macquarie said Netwealth’s fund inflows of $3.09 billion were slightly below consensus, while total funds under administration of $134.3 billion were in line with expectations.

The broker has maintained an outperform rating on the stock due to “robust” earnings per share growth.

Macquarie’s share price target for Netwealth is $32.25 compared to $23.79 currently.

The post Macquarie tips three ASX finance companies to return better than 30% appeared first on The Motley Fool Australia.

More reading

• Are Macquarie, Qantas, and WiseTech shares buys?
• Are Netwealth shares a top buy after its update?
• 5 things to watch on the ASX 200 on Friday
• 3 ASX dividend shares that look better after CGT reforms
• Netwealth delivers record FUA in June 2026 quarter

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 positions in and has recommended Macquarie Group and Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. 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.