Author: openjargon

I like to make regular, smaller investments in my portfolio to build up positions in ASX dividend shares that I’m bullish about. MFF Capital Investments Ltd (ASX: MFF) was the latest investment I made, with a $1,100 purchase.

I invested last week, when the price was a bit lower. But, when I talk about the dividend yield below, I’ll look at the yield at the time of writing.

I’m buying ASX dividend shares like MFF because of the investment exposure they provide as well as the compelling dividend payouts. One day, I’d love for my dividend income to be able to cover the core spending essentials in my life.

With that goal in mind, MFF looks like a leading contender for that purpose.

Strong dividend income

Let’s start with the passive income payments.

Over the past five years, the investment business has grown its six-monthly dividends at a compound annual growth rate (CAGR) of 26%.

It intends to grow its FY27 first-half dividend by another 20% to 12 cents per share and I expect the FY27 final dividend will be increased by 18% to 13 cents per share.

If the ASX dividend share does deliver on those expectations, the annual dividend per share would be 25 cents. That’s a FY27 grossed-up dividend yield of 6.6%, including franking credits.

That’s just the starting dividend yield – if it continues growing the payouts, then the dividend yield could quickly grow to more than 7%, then 8% and so on over the coming years.

Impressive investment process

A big factor in funding such a pleasing dividend history has been its investment performance.

Over the five years to 30 June 2026, its post-tax net tangible assets (NTA) has grown at an average of 14%.

With its portfolio, its goal is to build lasting wealth for shareholders through ownership of a portfolio of advantaged businesses.

Its investment mandate is unconstrained – it’s not limited to certain sectors, geographic markets or size of business. This flexibility allows the MFF to “adapt to changing investment market conditions and pursue opportunities that it identifies as offering attractive risk-adjusted investment returns”.

Currently, some of its biggest holdings include Mastercard, Alphabet, Visa, Bank of America, Amazon and Microsoft.

Capital growth

With those impressive investment returns, the business has only paid out part of its profits as dividends. The retained amounts can compound for investors, which is a key tailwind for the MFF share price.

Over the past five years, MFF shares have risen by 84%. I think it’ll continue rising in the long-term, though I’m not expecting the next five years to be as strong as the last five years, particularly with how it needs to fund its rising dividends.

But, as an ASX dividend share, it ticks the boxes of what I’m looking for.

The post Why I just invested $1,100 in this ASX dividend share appeared first on The Motley Fool Australia.

More reading

• How much do I need to retire on $75,000 a year at 45?
• How much is needed in superannuation to target a $70,000 annual passive income?
• Post-earnings: I’d buy these ASX dividend stocks for income today
• How much is needed in superannuation to target a $60,000 annual passive income?
• How much is needed in superannuation to target a $2,500 monthly passive income?

Motley Fool contributor Tristan Harrison has positions in Mff Capital Investments. 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 Mff Capital Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a very small gain. The benchmark index rose a fraction to 8,731.9 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX 200 to rise

The Australian share market looks set for a good session on Tuesday following a strong night in the United States. According to the latest SPI futures, the ASX 200 is expected to open the day 28 points or 0.3% higher. On Wall Street, the Dow Jones rose 0.7%, the S&P 500 jumped 1.5%, and the Nasdaq stormed 2.25% higher.

Dividend payday

A group of ASX 200 shares will be rewarding their shareholders with their latest dividend payments on Tuesday. This includes Sigma Healthcare Ltd (ASX: SIG), Suncorp Group Ltd (ASX: SUN), and Coles Group Ltd (ASX: COL). The latter is paying shareholders a fully franked 37 cents per share dividend later today.

Oil prices tumble

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a tough session on Tuesday after oil prices tumbled overnight. According to Bloomberg, the WTI crude oil price is down 4.9% to US$95.37 a barrel and the Brent crude oil price is down 3.6% to US$100.10 a barrel. This was driven by optimism that the US and Iran could start peace talks.

Gold price falls

ASX 200 gold shares Genesis Minerals Ltd (ASX: GMD) and Capricorn Metals Ltd (ASX: CMM) could have a soft session after the gold price dropped overnight. According to CNBC, the gold futures price is down 1% to US$4,381.3 an ounce. The precious metal has come under pressure due to increasing US rate hike bets.

Buy Telix shares

Telix Pharmaceuticals Ltd (ASX: TLX) shares could be in the buy zone according to Bell Potter. In response to its merger news, the broker has retained its buy rating and $19.00 price target on Telix’s shares. It said: “We are yet to include the earnings impact from the transaction in our forecast, nevertheless, it represents a once in a lifetime opportunity to acquire a dominant share in the supply of Lu-177 that is very difficult to replicate. While earnings may take a year or two to realise, the underlying value is obvious. Maintain Buy rating.”

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• Should I buy Coles shares for passive income?
• Telix shares just crashed 12% on merger news. Time to buy the dip?
• Here are the top 10 ASX 200 shares today
• ASX 200 claws back its early losses. What’s moving the market?
• Sigma Healthcare vs Sonic Healthcare: Which ASX healthcare share wins?

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 positions in and has recommended Telix Pharmaceuticals. 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 CSL Ltd (ASX: CSL) share price has been one of the ASX’s best performers since early June 2026, rising about 90%. We’re going to look at the potential returns CSL could deliver in the year ahead.

The ASX biotech share had a difficult FY26, but FY27 looks much more positive.

In FY26, total revenue declined 1% to $15.8 billion, underlying net profit (NPATA) declined 2% to $3.1 billion, operating cash flow fell 1% to $3.5 billion and its net profit worsened by 184% to a net loss of $2.6 billion.

To go from a business regularly generating double-digit growth to a business seeing its underlying financials fall wasn’t appealing to investors.

However, FY27 looks much more positive for the business. We’ll look at the guidance for the upcoming year ahead and then look at what analysts are projecting for the CSL share price.

FY27 guidance

In the 2027 financial year, CSL expects revenue to be in line with the prior year and underlying NPAT growth of approximately 5%.

The CSL Behring division expects mid-single-digit revenue growth, with Ig growth in the mid-to-high single-digits. CSL said Behring will continue to focus on core plasma collection efficiency and manufacturing productivity.

CSL Seqirus expects low single-digit revenue growth. Immunisation rates in the United States are expected to decline, but at a slower rate than recent seasons.

The company also said that Vifor expects revenue to decline by approximately 25%, driven by “generic competition in iron products, the conclusions of the TDAPA period for VELPHORO, and the revocation of the marketing authorisation for TAVNEOS.

The company’s interim CEO and managing director Gordon Naylor gave some positive commentary with the outlook:

CSL is positioned for a return to sustainable growth, supported by solid plasma market fundamentals, a simplified business and targeted investment in our commercial capabilities and development programs.

The company’s ongoing strong cash flow and balance sheet have enabled us to announce a further A$1.1 billion share buy-back program and maintain our dividend.

What could happen with the CSL share price?

The CSL share price has risen enormously, and analysts seem to think it has peaked for now.

According to CMC Invest, the business has received 11 ratings in the last three months. The average price target is $175.02, implying it could trade at the same price a year from now.

The most optimistic price target is $213, implying a 12% rise. However, the most negative price target is $133, suggesting a possible 24% decline.

If it is flat over the next 12 months, there could be better ASX shares to buy today. 

The post How much could the CSL share price rise in the next year? appeared first on The Motley Fool Australia.

More reading

• CSL shares are back near $180. Here’s the level I’m watching
• Why brokers think CSL shares could be on track for $200
• Buy, hold, sell: Coles, NAB, CSL shares
• ASX 200 healthcare shares lead a weaker market amid 82% chance of a rate hike
• How much passive income could I make by investing $500 a month in ASX shares?

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

BHP Group vs Rio Tinto shares: Which is better for passive income investors today?

If you’re searching for steady dividends and long-term portfolio strength, two giants often come into focus: BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO). Both are titans in global mining with reputations for pumping out franked cashflows to shareholders, and their scale makes them regulars in most Aussie blue-chip portfolios. But when it comes to passive income—reliable, chunky dividend streams—how do the shares stack up for investors today? Here’s my breakdown comparing BHP Group vs Rio Tinto shares, with a focus on the numbers that matter most for income seekers.

The case for BHP Group

BHP Group is a world-spanning mining powerhouse, headquartered in Melbourne and known for steelmaking ingredients like iron ore and copper, as well as coal, nickel, and potash. Following a restructure in 2022, it now sports a primary ASX listing, keeping things simpler for local shareholders. BHP’s earnings and share price can swing with commodity cycles, but it’s famed for its size, diversification, and disciplined capital returns.

A few key takeaways:

• Market cap: At $310.39 billion, BHP dwarfs most local peers and brings both scale and global reach.
• Dividend yield: Currently 3.96%, and crucially, with full 100% franking—the kind of income profile many Australian retirees crave.
• Dividend consistency: BHP’s dividend history shows regular twice-yearly payments, typically fully franked, with occasional special dividends sprinkled in.
• YTD return: The shares have surged 39.5% year to date, indicating strong momentum, likely helped by resource price moves.

According to its company profile, BHP boasts a formidable global footprint with operations reaching from Australia to South America and across various high-demand commodities.

The case for Rio Tinto

Rio Tinto is another Australian mining icon, originally founded in 1873 and now one of the largest metals and mining corporations worldwide. Its core businesses are iron ore, aluminium and lithium, and copper—products right at the heart of global electrification and decarbonisation trends. Like BHP, it benefits from scale and commodity diversification.

Here’s what stands out:

• Market cap: Rio Tinto’s value sits at $62.28 billion—substantial, though well below BHP’s heft.
• Dividend yield: Also at 3.96%, and like BHP, fully franked, which is a major plus for Aussie income investors.
• Dividend per share: $6.63, higher than BHP’s $2.42 per share (though both have different share prices and outstanding shares, so yield is what counts).
• Earnings per share: At $7.382, Rio has a higher reported EPS than BHP, reflecting mining cycles and possibly a leaner capital base.
• YTD return: Shares are up 18.6% in the year to date—a strong but more modest lift compared to BHP.

Rio Tinto’s latest business description highlights a focus on growth areas like lithium and copper, putting it front and centre for big trends like electric vehicles, even as iron ore remains its engine room.

Valuation comparison

For passive income investors, yield and valuation are top-of-mind. Let’s look at direct fundamentals:

Metric	BHP Group	Rio Tinto
Market Cap	$310.39 billion	$62.28 billion
P/E Ratio	22.40	16.08
Dividend Yield	3.96% (100% franked)	3.96% (100% franked)
Earnings per Share	1.932	7.382
Dividend per Share	2.42	6.63
Year To Date Return	39.5%	18.6%

A few nuances: Rio Tinto’s lower P/E ratio could suggest it’s trading on more cautious earnings expectations, relative to BHP. Both offer identical dividend yields (and franking), but Rio’s higher dividend per share simply reflects its higher share price, not greater yield.

Note: BHP’s reported P/E ratio and EPS combination suggests its P/E is calculated using a different earnings measure than the simple EPS figure, which is why they may appear inconsistent. The same logic applies to Rio Tinto.

Recent share price performance

Comparing the past month (21 August to 18 September 2026):

• BHP Group: Rose from $65.16 (21 Aug) to $61.05 (18 Sep), a decline of about 6.3% over the period, despite a strong YTD gain of 39.5%.
• Rio Tinto: Rose from $175.38 (21 Aug) to $167.49 (18 Sep), also down approximately 4.5% over the same period, with a YTD gain of 18.6%.
• Both showed volatility typical of diversified miners, driven by swings in commodity prices and broader market mood.
• These prices are as at September 18, 2026, and may have shifted since.

Which is the better buy?

With income in mind, here’s how I see it: Both BHP Group and Rio Tinto currently offer a healthy 3.96% fully franked dividend yield, which will put a smile on most passive income seekers’ faces. BHP is by far the bigger beast, with a greater global reach and a much fatter market cap, but size alone doesn’t make BHP the better buy for dividend collectors.

The most meaningful real difference right now is in valuation and share price performance. BHP’s shares have smashed out a bigger YTD gain (39.5% versus Rio’s 18.6%), suggesting a stronger run of late and perhaps higher investor confidence. But that means BHP now trades on a higher P/E (22.4 vs. 16.08), so Rio looks the more “value-priced” choice for those worried about buying in at a peak.

Each company has a well-established record of fully franked dividends and a diversified mining footprint. In this context, with yields identical and both offering franking, I’d lean toward Rio Tinto as my passive income pick today: it’s trading on a lower price-to-earnings multiple, offers the same headline yield, and has a strong track record. If BHP’s valuation pulled back or its dividend yield moved ahead, I’d reconsider—but for now, Rio’s combination of income and sensible valuation wins the day for me.

The post BHP Group vs Rio Tinto shares: Which pays better dividends? appeared first on The Motley Fool Australia.

More reading

• Up 52% and paying dividends: Are BHP shares a buy, hold, or sell today?
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• Buy, hold, sell: Orica, GQG Partners, BHP shares
• If I invest $15,000 in BHP shares, how much passive income will I receive in 2027?
• Rio Tinto vs APA Group: Which is better for passive income?

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 BHP Group. 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 draft. 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.

If you’d invested $10,000 in Air New Zealand Ltd (ASX: AIZ) and Qantas Airways Ltd (ASX: QAN) shares three years ago, which investment would have returned more?

And would either of the ASX travel stocks have beaten the 23.5% gains delivered by the S&P/ASX 200 Index (ASX: XJO) since 22 September 2023 as of Monday afternoon trade?

I’m glad you asked!

Buying $10,000 worth of Qantas shares

Three years ago, you could have bought Qantas shares for $5.31 apiece.

So, for $10,000, you could have picked up 1,883 shares in the ASX 200 airline stock.

On Monday, shares were changing hands for $8.80 each.

Meaning the 1,883 shares you bought on 22 September 2023 are worth $16,570 today.

But wait. There’s more!

As you may recall, Qantas suspended its dividend payouts in 2020 after the global pandemic slammed the door on air travel and saw Qantas’ profits dry up. However, as COVID came under control and air travel lifted off again, Qantas recommenced its twice-yearly dividend payments, starting in April 2025.

If you’d owned Qantas shares for the last three years, you would have received (or shortly will) the past four dividend payments, totalling 92.4 cents a share.

If we add that back into Monday’s share price, then the accumulated value of the Qantas shares you bought three years ago is now worth $18,310. Or a gain of more than 83%, with some tax benefits from those franking credits.

So, we know that Qantas flew ahead of the ASX 200 over the last 36 months. But how about Air New Zealand stock?

How have Air New Zealand shares fared over three years?

Air New Zealand has had a more difficult time of it since 2023.

Three years ago, you could have bought shares in the Kiwi airline for 68 cents apiece. So, your $10,000 investment would have netted you 14,705 Air New Zealand shares.

On Monday, shares were swapping hands for 33 cents each.

Meaning the 14,705 shares you bought for $10,000 are worth $4,853 today.

Now Air New Zealand also suspended its dividend payments in 2020, resuming them in 2023.

If you’d owned the shares for the last three years, you would have received the past four unfranked dividend payments, totalling 4.7 cents a share.

Adding that back to the recent share price, the accumulated value of the Air New Zealand shares purchased on 22 September 2023 for $10,000 is now $5,544. Or a loss of 44.6%.

Which makes Qantas shares the clear winner in the three-year returns delivered from the two ASX airline stocks.

The post $10,000 invested in Air New Zealand and Qantas shares 3 years ago is now worth… appeared first on The Motley Fool Australia.

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• 3 ASX 200 shares forecast to fly 30% to 40% higher
• Could I retire comfortably with $800,000 in superannuation?
• Why I’d invest $10,000 into Qantas shares today
• Looking to bank the final Qantas dividend? You’d better hurry!
• How many Qantas shares do I need to buy for $5,000 of passive income in FY27?

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.

While many international technology companies have enjoyed big gains in 2026 on the back of the AI buildout, ASX technology shares have struggled. 

Year-to-date, the S&P ASX All Technology Index (ASX: XTX) has fallen almost 20%. 

There have been a couple major headwinds that have put pressure on the sector. 

Higher interest rates and bond yields have impacted sentiment on future growth, while concerns about AI disrupting traditional software business models have also hit valuations. 

The sell-off has been amplified because many Australian tech stocks entered 2026 on relatively high valuations, so even companies reporting solid earnings growth have experienced sharp share-price declines.

However these factors have now created an enticing value opportunity for several ASX technology shares. 

Here are three worth considering. 

WiseTech Global Ltd (ASX: WTC)

WiseTech shares are currently trading near 52-week lows at around $31 per share. 

The company provides logistics software that aims to improve the world’s supply chains. WiseTech’s software solutions, including its flagship CargoWise One solution, are now used by the top 25 global freight forwarders, including Toll and DHL.

The share price is down a significant 68% in the last 12 months. 

However, there is reason to be optimistic. 

The bull case for a WiseTech bounceback is that the market may be underestimating the durability and profitability of CargoWise. 

Morgans currently has a price target of $62.50. 

That would be a 100% rise from current levels for the ASX technology stock. 

Xero Ltd (ASX: XRO)

Xero is another ASX technology stock that may have been oversold.

It offers cloud-based, accounting software for small to medium businesses. It is a subscription-based service offering monthly plans at various price points.

After being hit hard by AI replacement fears, it now sits at around $60 per share, down 60% from a year ago. 

Brokers targets are hovering around an average price of $111 per share. 

If this ASX technology stock were to reach this figure, it would be a rise of 85%. 

Betashares S&P ASX Australian Technology ETF (ASX: ATEC)

Another option for investors aiming to buy low on the Australian technology sector is this ASX ETF. 

It has fallen by 36% in the last 12 months.

The ETF provides exposure to leading ASX-listed companies across tech-related market segments such as information technology, consumer electronics, online retail, and medical technology.

It offers a more diversified option for investors looking to buy low, without having to pick individual bounce-back candidates. 

The post Do these ASX technology shares have too much upside to ignore? appeared first on The Motley Fool Australia.

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• Xero shares crash to a 7-year low after a brutal sell-off
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• 3 ASX 200 shares I’d buy and hold for a decade
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Motley Fool contributor Aaron Bell has positions in WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Coles Group Ltd (ASX: COL) shares have a lengthy track record of paying two fully franked dividends a year.

But is the S&P/ASX 200 Index (ASX: XJO) supermarket giant a good buy for passive income today?

We’ll look at Catapult Wealth’s Dylan Evans recommendation below (courtesy of The Bull).

But first, a little background.

Atop the passive income on offer, Coles stock has outperformed in 2026.

On Monday, shares were changing hands for $23.07 each, up 8.1% year to date. That compares to the 0.1% loss posted by the ASX 200 this calendar year.

As for the latest round of passive income, when Coles released its FY 2026 results on 25 August, the company declared a fully franked final dividend of 37 cents per share. That’s an increase of 15.6% from the FY 2025 final Coles dividend.

If you held the stock at market close on 2 September, you can expect to see that income hit your bank account tomorrow, on 22 September.

Adding in the 41 cent per share interim dividend, paid on 30 March, and at the recent share price, Coles shares trade on a fully franked trailing dividend yield of 3.4%.

Which brings us back to…

Are Coles shares are good passive income buy?

“The supermarket industry structure remains favourable, with Coles and competitor Woolworths dominating market share,” Catapult Wealth’s Evans said.

Commenting on Coles FY 2026 results, he noted:

Coles posted group sales revenue of $45.580 billion in full year 2026, up 2.8 per cent on the prior corresponding period. Excluding significant items, group earnings before interest and tax of $2.322 billion was up 9.9 per cent. Supermarket eCommerce sales was a highlight, growing 26.4 per cent.

Summarising his buy recommendation on Coles shares, Evans concluded, “Coles offers a reliable dividend yield, backed by defensive earnings. Catalysts for growth include online expansion, population growth and supply chain automation.”

Bonus ASX 200 stock tip

Atop his buy recommendation on Coles shares, in part for the company’s reliable passive income payouts, Evans also issued a buy recommendation for Netwealth Group Ltd (ASX: NWL).

“Netwealth operates a leading investment management platform used by financial advisers in Australia,” he said.

As for his bullish outlook on the ASX 200 finance stock, Evans noted:

The company’s full year 2026 results continued to deliver strong growth, with the platform’s funds under administration increasing 20.3 per cent to $135.7 billion and earnings per share growing 16 per cent to 55.2 cents.

Despite these strong results, the share price has fallen significantly, most likely and partially in response to a compensation payout of about $101 million to members in the collapsed First Guardian Master Fund.

Share price weakness presents an opportunity, as Netwealth still holds a net cash position and is poised to generate strong revenue growth moving forward.

I’ll add that Netwealth also provides some passive income, with the ASX 200 stock trading on a 2.2% fully franked trailing dividend yield.

The post Should I buy Coles shares for passive income? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Coles, NAB, CSL shares
• 2 ASX 200 shares to buy and 1 to sell now
• Here’s the dividend forecast out to 2029 for Coles shares
• Netwealth Group vs HUB24: Which financial platform is better from an investor’s perspective?
• How much do I need in superannuation to receive $1,000 passive income per week?

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 positions in and has recommended Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Treasury Wine Estates Ltd (ASX: TWE) investors have been strapped into quite the roller coaster. And the ride isn’t over yet.

After a brutal plunge over the past year, Treasury Wine shares have staged a sharp comeback. The ASX wine stock kicked off the new week around 4% higher at $5.36, pushing its six-month gain to roughly 50%.

Impressive stuff, until you zoom out. Over the past 12 months, Treasury Wine shares are still down about 28%.

So which is it: genuine turnaround, or a rebound that’s got ahead of itself?

A radical reset or a radical gamble?

The company’s June strategy reset is doing a lot of heavy lifting here. Treasury Wine is ripping up its old playbook, slashing its brand count from 76 down to fewer than 30 over five years and throwing its weight behind flagship label Penfolds.

The troubled Americas business is under review, and management is chasing roughly $100 million in annualised cost savings by FY29.

The stated goal: fatter margins, a simpler business, and capital funneled toward the brands that can actually move the needle. Treasury Wine is now targeting a long-term EBITS margin above 25%.

The market went wild for it, shares have jumped more than 25% since the day the reset strategy dropped. But strip away the enthusiasm, and there’s a much less comfortable story underneath.

Not so fast, this isn’t a turnaround yet

A share-price rally doesn’t magically erase the problems that caused the crash in the first place. Treasury Wine has already booked a further $558.4 million post-tax non-cash impairment on its US assets — a brutal reminder of just how badly the Americas business has gone off the rails.

FY27 is shaping up as a transition year for Treasury Wine shares, not a victory lap. The entire bull case hinges on management nailing a portfolio overhaul, fixing bloated inventory, actually banking those promised cost savings, and keeping Penfolds growing through it all.

That’s a lot of moving parts, and a lot can still go wrong. The uncomfortable read is that the recent rebound might just be the market getting ahead of itself, pricing in a turnaround before any of those benefits have actually shown up in the numbers.

What do the brokers think?

Analysts are warming up to Treasury Wine shares, but nobody’s fully sold. Morgans has a buy rating and a $7.30 target, recently lifted from $5.95. That suggests a 36% upside from current price levels.

Citi is bullish too, with a buy rating and $6.95 target. UBS sits more cautiously at hold with $6.50, and JPMorgan mirrors that with a $6.00 hold.

Across 16 analysts, the average target lands around $6.25, 17% above Treasury Wine’s current $5.36 price. On paper, that’s real upside if the transformation actually delivers.

Foolish takeaway

After one of the wildest years in Treasury Wine’s history, a 50% six-month rally isn’t proof of anything. It’s a promissory note. Brokers see potential for Treasury Wine shares, but potential and delivery are two very different things.

Until the wine company actually executes on cost cuts, inventory discipline and Penfolds growth, calling this a turnaround might be jumping the gun. Investors watching from the sidelines are right to want to see results before believing the story.

The post Treasury Wine shares: turnaround or trap? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
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• What are the most shorted ASX shares on the market right now?
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JPMorgan Chase is an advertising partner of Motley Fool Money. 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 JPMorgan Chase and Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

You have to go all the way back to June 2019 to find the last time Xero Ltd (ASX: XRO) shares were trading below the $60 mark.

Xero finished Monday at $60.08 after dropping another 4.30%, having touched an intraday low of $59.65.

The last time Xero closed below $60 was 28 June 2019, when the shares finished at $59.94.

That’s pretty remarkable when you consider Xero was trading as high as $196.52 in late June last year.

The selling has been relentless recently as well.

Xero shares are now down almost 30% over the past month and around 47% since the start of 2026.

September has been brutal

What makes the latest slide a little harder to pin down is that Xero hasn’t released any bad news to the market.

There has been no profit warning, earnings downgrade or major operational update behind the recent selling.

Instead, a few things seem to be working against the stock at the same time.

ASX tech shares had another tough session on Monday as expectations for another RBA rate rise increased.

Australian 10-year bond yields were also sitting around 5.3%, which hasn’t helped high-growth tech stocks either.

Xero has also been caught in the software sell-off as investors question what AI could mean for the sector over the next few years.

And then there’s Melio.

The acquisition pushed Xero further into US payments, while bringing extra costs and lower-margin revenue into the business as well.

This isn’t the same Xero as 2019

That’s what makes the current share price hard to ignore.

Xero may be back around its 2019 share price, but the business is now much larger.

In FY26, operating revenue rose 31% to NZ$2.75 billion, while adjusted EBITDA increased 18% to NZ$757.4 million.

Free cash flow reached NZ$554 million, while Xero added another 506,000 customers to finish the year with 4.92 million.

The numbers weren’t all heading in the right direction though.

Net profit fell 27% to NZ$167.4 million, while gross margin dropped from 89% to 83.9% as Melio started contributing to the group.

Xero has also flagged up to NZ$55 million of additional US brand spending during FY27.

Analysts value Xero much higher

The other thing worth watching is just how far Xero has fallen below some analyst valuations.

Morningstar has a fair value estimate of $97.87, although it also gives the stock a high uncertainty rating.

TipRanks shows Citi with a $113.60 price target, while RBC Capital has a more conservative target of $85.

Even the lowest of those figures is still well above yesterday’s close of $60.08.

That doesn’t mean Xero shares can’t keep falling, particularly after the way they’ve traded through September.

But it shows just how quickly the market has changed its view of the stock.

The post Xero shares crash to a 7-year low after a brutal sell-off appeared first on The Motley Fool Australia.

More reading

• Why brokers think Xero shares could surge 130% from here
• 3 ASX 200 shares I’d buy and hold for a decade
• 7 ASX 200 shares with reaffirmed buy ratings this week
• Forget Xero shares! Broker tips this top ASX tech stock for 24% gains
• Xero shares crashed 59%. What do brokers see next?

Motley Fool contributor Aaron Teboneras 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 Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telix Pharmaceuticals Ltd (ASX: TLX) shares got smashed on Monday, plunging 12% to $15.76 after a blockbuster merger announcement. Zoom out, though, and the nuclear healthcare stock is still up 40% year to date — though that gain has shrunk to just 12% over 12 months.

So did the market overreact, or is this the start of something worse?

The deal

Here’s the short version: Telix just agreed to buy Germany’s ITM, one of the biggest players in radioisotope production, for US$1.65 billion.

And Telix isn’t paying with cash. It’s paying with shares – 105.8 million of them, worth about US$1.25 billion. On top of that, it’s taking on US$302 million of ITM’s debt, plus another US$96 million in transaction costs and management payouts.

That’s not all. Telix could end up paying a further US$700 million down the track. That will depend on how ITM’s cancer drug ITM-11 performs — up to US$250 million if it clears FDA approval across three indications, and up to US$450 million if sales blow past US$150 million by 2030.

Once the dust settles, current Telix shareholders will own about 76% of the combined company. ITM’s shareholders will get the other 24%.

Why the market panicked

In plain terms: Telix just diluted itself, big time. Issuing 105.8 million new Telix shares is a serious jump in shares on issue, and that’s really what was crushing the price on Monday. Not doubts about the strategy itself.

The deal still needs shareholder approval at a meeting expected in November, which adds a layer of ‘wait and see’. And the combined company’s 2026 revenue guidance of just over US$1.3 billion isn’t exactly blowing anyone away relative to the price tag. So investors are left weighing genuine strategic upside against real, near-term dilution.

CEO Christian Behrenbruch made the case for why it’s worth it:

ITM is the leader in radioisotope production, with deep scientific expertise and a track record of value-adding innovation. By combining our complementary strengths, we will create a company with commercial scale, world-leading supply and the most exciting theranostic drug portfolio in the sector.

What do brokers think?

Brokers, for the most part, aren’t panicking. Five of the latest broker ratings are a buy — Canaccord Genuity, Citi, JPMorgan, UBS and Jarden, while RBC Capital is the lone hold.

Where they disagree is on price. Targets range from $19 all the way to $31, suggesting upsides between 21% and 97%. Canaccord just lifted its target to $30.25, Citi sits at $31 and JPMorgan is at $25.58. Jarden nudged up to $21, while UBS trimmed its target to $22 but kept its buy rating intact.

Foolish takeaway

Every one of those price targets sits well above where Telix shares trade today. Brokers clearly like the story, but they just can’t agree on the price tag.

The real test isn’t whether the ITM deal makes strategic sense. It probably does. It’s whether Telix can actually integrate a US$1.65 billion acquisition, hit ITM-11’s regulatory milestones, and prove the dilution was worth it.

Until then, this drop looks more like nerves than a verdict.

The post Telix shares just crashed 12% on merger news. Time to buy the dip? appeared first on The Motley Fool Australia.

More reading

• Neuren Pharmaceuticals vs Telix Pharmaceuticals: Which healthcare stock is best?
• Why are Telix Pharmaceuticals shares on the slide today?
• Telix Pharmaceuticals: ITM merger builds a sector leader
• These are the 10 most shorted ASX shares
• ASX 200 healthcare shares lead a weaker market amid 82% chance of a rate hike

JPMorgan Chase is an advertising partner of Motley Fool Money. 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 JPMorgan Chase and Telix Pharmaceuticals. 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.