Author: openjargon

Electro Optic Systems Holdings Ltd (ASX: EOS) shares remain in a trading halt on Tuesday.

But that hasn’t stopped the company from releasing its 2026 annual general meeting (AGM) update.

The defence and space technology company used the event to outline its current strategy, order book, acquisition plans, capital raising, and outlook.

Turnaround complete

One of the key messages from chair Garry Hounsell was that the company’s turnaround phase is now complete.

Hounsell said the board and management had spent the past three years resetting EOS’ strategy, leadership, balance sheet, and operating discipline. He said this work was completed in 2025, with the company now entering its next growth phase.

This follows the sale of the non-core EM Solutions business.

Focus on counter-drone and space control

EOS’ growth strategy is now centred on counter-drone systems and space control.

The company’s core product lines include remote weapon systems, high energy laser weapons, MARSS command-and-control software, and space intelligence and control systems.

Management highlighted that geopolitical tensions and the rapid use of low-cost drones are increasing demand for these capabilities.

Order book growing

EOS advised that its illustrative total order book is now $726 million, including approximately $217 million of acquired MARSS contracts, subject to completion of the acquisition.

The company expects around 60% to 80% of this order book to convert to revenue during 2026 and 2027.

This order book includes recent contract wins across Europe, Australia, the Americas, and the Middle East.

MARSS acquisition

A major focus of the AGM was the proposed acquisition of MARSS, a European command-and-control and AI software business.

EOS said the deal would expand its product range and help it become an integrated turnkey counter-drone systems provider, rather than simply a supplier of individual components.

Management also noted that MARSS has recently secured new orders totalling approximately $165 million from an existing Middle East customer.

Laser and space opportunities

EOS also highlighted its high energy laser program.

In 2025, the company signed a EUR71.4 million contract, worth approximately A$125 million, with the Netherlands for a 100kW high energy laser weapon system. Management said the project is ahead of schedule and expected to be profitable and cash flow positive.

In space, EOS has launched its ATLAS product family, which is being developed to perform missions such as dazzling satellite sensors, disabling satellites, and moving satellites or space debris.

Capital raising and outlook

As mentioned at the top, EOS shares are currently in a trading halt.

This is because it is undertaking a capital raising of up to approximately $175 million, comprising a $150 million placement and a share purchase plan of up to $25 million.

The proceeds will help fund the MARSS acquisition and provide additional balance sheet flexibility to pursue growth opportunities.

Looking ahead, EOS said the market backdrop remains supportive, with strong customer engagement and a growing pipeline of potential future orders.

The post Own EOS shares? Here’s what you need to know from the AGM appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• EOS shares halted after huge run as $175 million raising lands
• Why EOS, Megaport, Racura, and Xero shares are racing higher today
• EOS shares rocket as $726 million order book turns heads
• 3 superannuation decisions you’ll regret in retirement

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 Electro Optic Systems. 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.

S&P/ASX 200 Index (ASX: XJO) gold stock Catalyst Metals Ltd (ASX: CYL) is charging higher today.

Catalyst Metals shares closed yesterday trading for $5.46. In early morning trade on Tuesday, shares just jumped to $5.91 each, up 8.2%. At time of writing, shares are changing hands for $5.75 apiece, up 5.1%.

For some context, the ASX 200 is up 1.1% at this same time.

Here’s what catching investor interest.

ASX 200 gold stock jumps on growth plans

Catalyst Metals shares are leaping higher after the miner announced the results of a review seeking to increase the throughput capacity of its Plutonic processing plant, located in Western Australia.

The ASX 200 gold stock said it initiated the review after reserves at its Plutonic Gold Belt project increased from 500,000 ounces to 1.5 million ounces amid ongoing exploration successes.

In September, Catalyst released a 10-year production plan showing growth in gold production at Plutonic from 100,000 ounces to 200,000 ounces per year.

The company is looking to increases the plant’s processing capacity from the current 2.0 million tonnes per annum (Mtpa) to between 2.5Mtpa and 3.0Mtpa.

The miner expects that capacity boost will cost between $50 million and $75 million.

Catalyst noted that this potential low capital means to mill throughput expansion is based on refurbishing a second processing circuit that’s been on care and maintenance.

This second circuit, situated next to the operating plant, can be restarted without needing any significant approvals. And it’s able to leverage Plutonic’s existing infrastructure and workforce.

As yet, the ASX 200 gold stock has not made a firm decision on whether to expand the plant’s throughput. This will hinge on further exploration success across its Plutonic Belt project.

What did Catalyst Metals management say?

Commenting the expansion plans helping to lift the ASX 200 gold stock today, Catalyst Metals CEO James Champion de Crespigny said, “This optionality to expand Plutonic’s milling capacity, along with ongoing exploration success, will further de-risk Catalyst’s long-term 200,000 ounce per annum production plan.”

Champion de Crespigny added, “It is an option that will allow additional ore sources, including lower grade, bulk, open pit material to be included in the plan.”

He concluded:

Between 1990 and 2008, Plutonic sustained average gold production rates much higher than today. This was a product of a 3Mtpa processing plant and large mineral endowment. Both attributes remain at Plutonic today, albeit they have suffered from underinvestment.

Catalyst has invested heavily in infrastructure and exploration. The goal has been to return Plutonic to a long life, self-sustaining, gold production centre commensurate with the scale of the mineral endowment. We believe that to be around 200,000 ounces per annum.

The post Guess which ASX 200 gold stock is leaping higher today on big expansion plans 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.

DroneShield Ltd (ASX: DRO) stock has been under pressure.

Since this time in January, the counter-drone technology company’s shares are down almost 33%.

That is a meaningful fall for one of the ASX’s most talked-about growth shares. It also raises an interesting question.

Is it time to get greedy?

I think it could be for investors who understand the risks.

Why the selloff could be an opportunity

DroneShield is not a stock for cautious investors.

Its share price can move sharply, expectations are high, and the company operates in a fast-moving defence technology market where contract timing can be uneven.

There is also a new issue for investors to consider.

Last week, DroneShield announced that it had received a notice from ASIC requiring the company to provide reasonable assistance in connection with an investigation. 

The investigation relates to announcements and information provided to the ASX in November 2025 and trading in DroneShield shares during the same month. DroneShield said it will cooperate fully, and that it is not clear what action, if any, may result.

That should not be ignored. Governance and disclosure issues can weigh on confidence, especially when a stock has already enjoyed a huge run in recent years.

But I also do not think the investigation should distract investors completely from the long-term opportunity.

The long-term theme still looks powerful

DroneShield develops technology to protect against drones and autonomous systems. Its customers include military, intelligence, government, law enforcement, critical infrastructure, and airports.

I think that market has a long way to grow.

Drones are becoming cheaper, more capable, and more widely used. They can be deployed for surveillance, disruption, targeting, smuggling, and attacks on critical infrastructure.

That creates a problem for governments, defence forces, airports, prisons, energy assets, and event operators.

DroneShield is trying to solve that problem with detection, tracking, electronic warfare, and artificial intelligence (AI)-enabled counter-drone systems.

Recent updates also show the company is busy building out its ecosystem. DroneShield has announced work with Overland AI to integrate counter-UAS capability with an autonomous ground vehicle, and a memorandum of understanding with Terma focused on layered counter-UAS capabilities.

Foolish takeaway

DroneShield has real risks. The ASIC investigation needs to be watched, the share price is likely to stay volatile, and investors should expect bumps along the way.

But the counter-drone opportunity still looks compelling to me.

If drones continue reshaping modern security and defence planning, companies that can help detect and respond to those threats could become far more important over time.

After a 33% fall, I think DroneShield stock is starting to look like the kind of higher-risk opportunity where it may pay to be greedy while others are stepping back.

The post Time to get greedy with DroneShield stock? appeared first on The Motley Fool Australia.

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• After a rollercoaster start to the year, are Droneshield shares headed up?

Motley Fool contributor Grace Alvino has positions in DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are plenty of options for investors at the small end of the Australian share market.

One small-cap ASX share that stands out right now according to analysts at Bell Potter is Alcidion Group Ltd (ASX: ALC).

What is the broker saying?

Bell Potter notes that the healthcare technology company has just announced the acquisition of the Kyra business from Telstra Group Ltd (ASX: TLS).

It was pleased with the deal and has described it as “attractive”. It said:

ALC have acquired a business unit within Telstra Health, referred to as Kyra flow, for $3.0m cash upfront plus an additional $1.0m earn-out dependent on recurring revenue thresholds within 12 months of deal completion. The accretive transaction will be funded relatively comfortably from ALC’s existing cash balance, which was $15.1m at 31-March and expected to increase to >$20m as at 30-June (excluding the acquisition payment). Key financial details of the acquired business are: (1) FY26e revenue of $3.7m, >90% is recurring revenue); (2) FY26e underlying EBITDA $1.1m; (3) Revenue and EBITDA “broadly consistent with FY25 financial performance” – i.e. modest growth, if any; (4) completion by end-June 2026; and (5) Kyra has 33 Australian customers across various hospital settings, 31 of which are not prior ALC customers.

The purchase price (including earn-out) is 1.1x revenue and 3.6x underlying EBITDA and is therefore immediately accretive to ALC’s current valuation of 2.4x EV/Rev and ~17x EV/EBITDA per our FY26e forecasts. We view this as an attractive and disciplined bolt-on acquisition where the most obvious synergy is the longer term up-selling potential of 31 new customers using Kyra’ older product to a superior (and more lucrative) cloud-based product from Alcidion (Miya Precision).

In light of this, the broker has boosted its revenue forecasts for FY 2027 and FY 2028 and is now forecasting annual recurring revenue (ARR) of $38 million in FY 2027.

Small-cap ASX share tipped to fly

According to the note, Bell Potter has reaffirmed its buy rating and 16 cents price target on the company’s shares.

Based on its current share price of 10.5 cents, this implies potential upside of 52% for investors over the next 12 months.

Speaking about its recommendation, Bell Potter concludes:

There is no change to our $0.16 PT or BUY recommendation following the acquisition. We continue to employ an EV/Revenue multiple (3.5x the avg of FY26/27 revenue) and DCF (10.0% WACC, 3.0% TGR) methodology to derive our PT, with key valuation assumptions unchanged. The most immediate catalyst for ALC is the imminent finalisation of the UHSussex contract, expected within May.

The post Bell Potter says this small-cap ASX share could rise 50% 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 positions in and has recommended Alcidion Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Alcidion Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many investors utilise ASX ETFs to capture returns of global indexes like the S&P/ASX 200 Index (ASX: XJO) and S&P 500 Index (SP: INX). 

However there are a growing number of thematic funds that target more niche sectors. 

These funds can offer targeted exposure to high-growth trends, helping investors diversify beyond traditional sectors and potentially capture outsized returns. 

However, they are often more volatile, less diversified, and more sensitive to changing market sentiment. This can lead to sharper losses if the underlying theme falls out of favour.

While this balance is important to understand, there are some global trends emerging that could be poised to outperform traditional indexes in the next 12 months. 

Let’s look at three possibilities. 

Global X Artificial Intelligence ETF (ASX: GXAI)

A new report from Global X highlighted that recent US earnings season results pointed towards good news for AI. 

The key takeaway according to Global X was that corporate earnings have come in stronger than investors expected. Largely, earnings growth accelerated from last quarter. 

Global X reinforced that large global technology companies are now spending real money on AI infrastructure including data centres, cloud capacity, chips and power. 

Capital spending plans across the biggest US tech firms have been revised higher, and cloud revenue growth is accelerating rather than slowing.

This is good news for AI focussed ASX ETFs like GXAI. 

This fund seeks to invest in companies that potentially stand to benefit from the further development and utilisation of artificial intelligence (AI) technology in their products and services, as well as in companies that provide hardware facilitating the use of AI for the analysis of big data.

These tailwinds could push this fund ahead in the coming months. 

VanEck MSCI International Small Companies Quality ETF (ASX: QSML)

Turning attention to global small-caps, this fund from VanEck could be set for outperformance in the near term. 

According to a recent report from VanEck, global small company valuations, relative to large companies, are at a discount.

The ASX ETF provider believes small-cap stocks are beginning to outperform as easing geopolitical tensions shift investor focus from defensive large caps toward undervalued companies with stronger fundamentals and more attractive valuations.

This could be good news for the VanEck MSCI International Small Companies Quality ETF. 

It offers a diversified portfolio of 150 international developed market small-cap quality growth securities. 

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

Australian technology stocks were among the most heavily sold-off in early 2026. 

The S&P/ASX All Technology Index (ASX: XTX) crashed almost 30% between January and March of this year. 

This was spurred on by panic that SaaS companies would be replaced by cheaper, more efficient AI models. 

This belief has started to reverse course, as many shares in the sector appear oversold. 

In summary, many of these companies remain fundamentally strong despite large share-price declines earlier in 2026. This means valuations may now look attractive if earnings continue growing.

This ASX ETF from Betashares targets aims to track the performance of the S&P/ASX All Technology Index. 

The Index provides exposure to leading ASX-listed companies in a range of tech-related market segments such as information technology, consumer electronics, online retail and medical technology.

If Aussie tech recovers, this fund will be set to succeed. 

The post 3 ASX ETFs that could outperform the ASX in the next 12 months  appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

Zip Co Ltd (ASX: ZIP) shares are giving investors another wild ride.

The ASX buy now, pay later (BNPL) stock dropped 5.5% to $2.23 at the start of the week. That pushed its one-month loss out to roughly 11% and its 2026 decline to around 32%.

And yet, somehow, Zip shares are still up about 8% over the past 12 months.

Confused? You are not alone.

Dramatic rollercoaster

The volatility has been relentless.

Back in April, Zip shares surged from $1.55 to $2.58 in just weeks. That marked a massive 66% rally as investors piled into the stock following a strong quarterly update.

But in May, sentiment turned sharply again. The ASX financial stock has since given back a large chunk of those gains and now trades roughly 54% below its 52-week high reached in October last year.

Zoom out further and the rollercoaster becomes even more dramatic. Zip shares are down around 68% over five years. But over 10 years, they are still up roughly 233%.

Seasick yet?

Consumer spending, risk sentiment

So what is actually driving all this volatility? Part of the answer comes down to sentiment.

Technology and growth shares have been under pressure again as investors reassess valuations and risk appetite. Higher interest rates, macro uncertainty, and concerns around consumer spending have all weighed on the sector.

Zip shares tend to amplify those swings because it sits right at the intersection of fintech, consumer spending, and risk sentiment.

When investors feel optimistic, Zip can soar. When markets turn defensive, the stock often gets hit hard.

April’s rally was largely driven by improving operational momentum. The company’s quarterly update showed continued progress on margins, profitability, and credit quality.

Investors responded positively to signs that Zip’s turnaround strategy may finally be gaining traction.

What next for Zip shares?

Management has been focused on increasing revenue per customer while tightening lending standards and improving the quality of its loan book.

If successful, that strategy could turn Zip into a far more sustainable and profitable business over time.

But there are still plenty of risks.

Competition in the buy now, pay later sector remains fierce. Regulatory scrutiny also continues to hang over the industry, while changing consumer behaviour creates another layer of uncertainty.

Losing branding rights

And recently, Zip was hit by another setback after losing a court case linked to its branding rights in Australia.

The ruling means the company cannot use the “Zip” brand name locally in the way it had planned, adding another complication for investors already trying to assess the company’s long-term outlook.

That combination of improving fundamentals and lingering uncertainty helps explain why the price of Zip shares keeps swinging so aggressively.

What do analysts think?

This remains a highly speculative ASX growth stock. The upside can be huge when momentum builds, but sentiment can also reverse very quickly.

Despite the recent sell-off, some analysts still see strong upside potential ahead. UBS remains bullish on Zip shares and recently reaffirmed its buy rating on Zip shares.

The broker has a 12-month price target of $3.10 on Zip shares. From current levels, that suggests potential upside of around 39%.

The post What on earth’s going on with Zip shares? 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 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 Australian share market has traditionally delivered an average annual return of around 10%.

While that is a great return, the team at Bell Potter thinks you could potentially double this return with the ASX 200 stock in this article.

Which ASX 200 stock?

The stock that Bell Potter is recommending to clients is ALS Ltd (ASX: ALQ).

It is a global testing, inspection, and certification (TIC) company, servicing clients across several industries.

Bell Potter notes that ALS commands a market-leading position in geochemical testing, leveraging its hub-and-spoke model, Laboratory Information Management System (LIMS) and innovative value-added capabilities.

In Life Sciences, it operates one of the largest global environmental testing businesses, with a footprint spanning 35+ countries.

It released its full-year results on Monday and delivered numbers that were largely in line with Bell Potter’s expectations. It said:

ALQ’s FY26 result was headlined by uEBIT of $599m, up 19.3% YoY and in line with BPe. Group uEBIT margin expanded 130bps to 18.0% (BPe 17.5%).

Key points: Operating result: Group organic revenue growth of +8.4% (BPe +9.1%), was led by Commodities (+18.1%; BPe +16.6%), with mixed performance reported at Life Sciences (+2.8%; BPe +4.8%). Expanding exploration activity in 2H across Junior, Intermediate and Major customers delivered an acceleration in sample volume growth and improved pricing dynamics, with lower-priced legacy contacts rolling off as guided.

It also notes that its guidance for FY 2027 was also in line with expectations. The broker adds:

Outlook commentary include: 1) FY27 Minerals organic revenue expected to rise 13.0-15.0% YoY (BPe old 14.5%), with 1H FY27 uEBIT margin to be consistent with 2H FY26 levels, then rising a further 30-50bps in 2H FY27; and 2) Life Sciences targeting mid-single digit organic revenue growth in FY27 (BPe old 4.6%), with incremental EBIT margin improvement of 30-50bps (BPe old 44bps).

Big potential returns

According to the note, Bell Potter has retained its buy rating on the ASX 200 stock with a trimmed price target of $26.00 (from $28.00).

Based on its current share price of $21.83, this implies potential upside of 19% for investors over the next 12 months.

In addition, a partially franked 2.3% dividend yield is expected in FY 2027, boosting the total potential return to approximately 21%.

Commenting on its buy recommendation, Bell Potter said:

Our downgraded Target Price reflects a higher WACC of 8.3% (previously 7.8%). We view the FY27 Minerals revenue and EBIT margin outlook as conservative, with FY26 exit-rates and exploration market indicators suggesting Minerals could deliver organic revenue growth of >20.0% in FY27 (BPe new 14.9% – within guidance).

The post Buy this ASX 200 stock for a 21% return: Broker 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.

The Contact Energy Ltd (ASX: CEN) share price is in focus as the company delivered solid growth in both customer and wholesale electricity sales for April 2026, with mass market electricity and gas sales up to 372GWh from 284GWh a year ago, and wholesale contract volumes rising noticeably.

What did Contact Energy report?

• Mass market electricity and gas sales jumped to 372GWh (April 2025: 284GWh)
• Customer netback increased to $153.24/MWh (April 2025: $148.59/MWh)
• Contracted wholesale electricity sales rose to 898GWh (April 2025: 655GWh)
• Electricity and steam net revenue was $148.95/MWh (April 2025: $146.59/MWh)
• Unit generation cost decreased to $44.95/MWh (April 2025: $49.48/MWh)
• Electricity generated or acquired grew to 962GWh (April 2025: 722GWh)

What else do investors need to know?

Otahuhu’s ASX futures settlement price for Q3 2026 stood at $144/MWh as at 30 April, down from $189/MWh at 31 March. This highlights some recent wholesale price pressure, although market storage levels are robust, with South Island and North Island controlled storage at 107% and 179% of mean respectively as of mid-May.

Progress continues on Contact’s renewables pipeline, including the Kōwhai Park Solar project (expected online Q3 CY2026), Te Mihi Stage 2 geothermal (Q3 CY2027), and the Glenbrook-Ohurua Battery (Q1 CY2028). Contracted gas volumes for the next 12 months are 8.7PJ, providing supply flexibility.

New Zealand’s total electricity demand rose 3.6% year-on-year for April, aided by warmer temperatures and ongoing population growth. Retail customer connections edged up, with electricity and gas accounts reaching approximately 460,000 and 78,000 respectively.

What’s next for Contact Energy?

Contact Energy is ramping up its focus on renewable energy development, with several major projects scheduled for completion in the coming years. This investment supports Contact’s aim to lower generation costs and provide more sustainable options to customers.

Storage levels are currently above long-term averages, positioning the company well for winter and allowing for flexibility in managing energy supply and market risk. Watch for updates on project milestones and evolving wholesale price trends in the months ahead.

Contact Energy share price snapshot

Over the past 12 months, Contact Energy shares have declined 5%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 3% over the same period.

View Original Announcement

The post Contact Energy reports April 2026 earnings 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Elders Ltd (ASX: ELD) shares started the week in a very disappointing fashion.

On Monday, the ASX 200 share crashed 23% following the release of its half-year results.

Has this created a buying opportunity for investors? Let’s find out.

What is Bell Potter saying about this ASX 200 share?

The team at Bell Potter has been looking over the result. It highlights that Elders fell short of expectations with its results. It said:

ELD reported 1H26 underlying EBIT slightly below our forecasts at $76.6m (vs. BPe of $77.9m). Key operating statistics of the result included: Operating results: Operating revenue of $1,768m was up +25% YoY (vs. BPe $1,789m). EBIT of $76.6m was up +19% YoY (vs. BPe of $77.9m). Underlying NPAT of $38.0m was down -1% YoY (and BPe of $41.3m). Gross profit, up +22% YoY, was stronger than forecast, particularly in crop protection and ERS, however, operating costs are running higher than forecast, up +23% YoY and largely driven by a $15m YoY uplift in corporate services.

Speaking about its outlook, the broker adds:

Key outlook comments include: (1) ERS to benefit from margin optimisation program (SYSMOD) and strong livestock and wool prices; (2) Focus on procurement synergies from integration with Delta in Crop Protection ; (3) AIRR to continue positive momentum in 2H26; (4) Delta to have a stronger 2H26e contribution, with synergies weighted to 2H26; and (5) pressure on cost base to ease in 2H26.

Should you buy the dip?

According to the note, the broker remains positive on the ASX 200 share despite the earnings miss.

In response, Bell Potter has retained its buy rating on Elders’ shares with a reduced price target of $6.45 (from $9.00).

Based on its current share price of $5.55, this implies potential upside of 16% for investors over the next 12 months.

In addition, Bell Potter is forecasting fully franked dividend yields of 6.5% in FY 2026 and then 7.2% in FY 2027.

Commenting on its buy recommendation, Bell Potter said:

1H26 was a consensus miss on higher SYSMOD linked costs and to a degree reflects dual running costs that should reduce into FY27e. However, this was poorly communicated and largely mitigated the benefit of operating leverage. Delivering on the promise of Delta, backward integration and SYSMOD, while unwinding duplicate cost structures are central to EPS growth, but this needs to be done in a potentially more difficult 2HCY26 seasonal backdrop with a CEO transition.

The post Should you buy this ASX 200 share after it crashed 23%? appeared first on The Motley Fool Australia.

More reading

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• Elders posts higher HY26 profit and holds interim dividend

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 Elders. 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) shares have fallen a long way from their highs.

At $71.26, the blue-chip share is trading just above its 52-week low of $70.80 and well below its 52-week high of $95.18.

That is a large pullback for one of the ASX’s highest-quality businesses.

I think it could also be a buying opportunity.

A better price for a quality business

Wesfarmers is rarely an obvious bargain.

The market usually gives the company a premium valuation because of the quality of its brands, its strong balance sheet, and its long record of creating shareholder value.

So when the share price falls this far, I think investors should pay attention.

Wesfarmers owns businesses that are deeply embedded in everyday Australian life.

Bunnings remains a leader in home improvement. Kmart has become one of the country’s strongest value retailers. Officeworks serves households, students, and businesses. Priceline gives the group exposure to health and beauty. WesCEF adds industrial earnings and a long-term lithium opportunity.

That is a useful mix. It gives Wesfarmers exposure to household spending, commercial customers, healthcare, industrial activity, and batteries. This makes it more diversified than many other blue-chip shares on the ASX.

Why I like the timing

The current environment is not easy.

Consumers are dealing with cost-of-living pressure, interest rates are rising, and confidence is under strain. Retailers need to work harder to win spending.

But I think Wesfarmers is better placed than most.

Its strongest retail brands have clear value credentials. Kmart’s low-price model can resonate when households are watching every dollar. Bunnings also has a powerful position because many customers still need products for repairs, maintenance, trade work, and smaller home projects even when larger renovations slow.

This is where Wesfarmers’ scale can help.

Large businesses with trusted brands, strong supplier relationships, and disciplined cost control can often manage tougher periods better than weaker competitors.

I also like the way Wesfarmers continues to invest in productivity, digital capability, data, and customer experience. These are not flashy growth stories, but they can improve efficiency and help the group stay relevant as shopping habits change.

More than retail

Another reason I like Wesfarmers shares is that the company has growth options beyond its core retail brands.

Its lithium exposure through Mt Holland gives the company a connection to batteries, electric vehicles, and energy storage. Lithium prices can be volatile, so I would not make this the only reason to buy the stock.

However, I like having that option inside a larger, profitable, diversified group.

Wesfarmers also has the financial flexibility to invest through the cycle. That can be a major advantage when competitors are under pressure or when new opportunities appear.

Foolish takeaway

Wesfarmers shares are not going to suit investors looking for a deep-value stock on a very low earnings multiple.

This is still a premium business. But after falling close to a 52-week low, I think the share price now offers a more attractive entry point into one of the ASX’s best blue chips.

The group has trusted brands, exposure to value-focused spending, a diversified earnings base, and long-term growth options in health, digital, and lithium.

For investors looking for a high-quality ASX share to buy and hold, Wesfarmers looks very interesting at these levels.

The post Why Wesfarmers could be one of the best blue-chip shares to buy 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.