Author: openjargon

WiseTech Global Ltd (ASX: WTC) shares are starting October around $32.46.

Is this a good price to pay for the logistics technology company’s shares?

Here’s what I think.

Are WiseTech shares cheap?

At first glance, WiseTech shares do not look obviously cheap.

According to CommSec, consensus forecasts point to earnings per share (EPS) of $1.43 in FY27.

At $32.46, that puts the shares on a forward price-to-earnings ratio of roughly 23 times.

For a mature business, I would probably find that fairly unattractive. But WiseTech is not expected to stand still.

EPS is forecast to rise to $1.89 in FY28 and $2.29 in FY29. That would represent growth of around 32% in FY28, followed by another 21% increase the year after.

By FY29, earnings would be around 60% higher than the FY27 forecast.

That changes the valuation picture significantly. If the share price stayed where it is today, WiseTech would be trading on roughly 17 times FY28 earnings and just over 14 times FY29 earnings.

I think that starts to look quite attractive for a business expected to grow profits at that pace.

Why could earnings keep climbing?

The key for me is CargoWise.

WiseTech’s software sits at the centre of complex logistics operations, helping freight forwarders and other supply chain businesses manage areas such as customs, warehousing, transport, and compliance.

Once that software is embedded across a customer’s operations, there is scope for WiseTech to grow in more than one way.

It can win additional customers, expand the number of services existing customers use, and benefit as more logistics processes move onto digital platforms.

That is where I think the long-term opportunity becomes interesting.

Global supply chains are complicated, highly regulated, and increasingly dependent on software. As logistics businesses look to automate more tasks and manage operations more efficiently, I think CargoWise can keep becoming more important inside those organisations.

That gives WiseTech a credible path to growing revenue and earnings without relying on one short-term trend.

What am I paying for today?

This is the part I would focus on most in October.

At $32.46, investors are still paying for future growth. There is no getting around that.

But I think the better question is whether the current price looks demanding relative to the earnings WiseTech could generate in two or three years.

On that basis, I am much more comfortable.

If EPS reaches $2.29 in FY29, the current valuation would look far less expensive than it does today. And if the business is still growing strongly at that point, I think investors could be willing to pay more than 14 times earnings.

That gives me a reasonable margin for upside if execution remains strong.

Foolish takeaway

WiseTech still needs to deliver, but I think the current share price gives investors a much better setup than the headline valuation suggests.

The real appeal is how quickly earnings are expected to grow into today’s share price.

If that trajectory holds, I think $32.46 could prove to be a very good entry point for long-term investors.

The post Should I buy WiseTech Global shares in October? appeared first on The Motley Fool Australia.

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• Is WiseTech the most undervalued growth stock on the ASX 200?
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• 5 best ASX shares to buy in October
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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 WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

October is here, and investors looking to put fresh money to work have plenty of Vanguard exchange-traded funds (ETFs) to choose from.

For me, the best choices do not all need to play the same role.

These are three Vanguard ETFs I would be happy to buy this month, each for a different reason.

Vanguard Diversified High Growth Index ETF (ASX: VDHG)

The VDHG ETF is probably the simplest choice of the three. Rather than giving investors exposure to one country or sector, it bundles together Australian shares, international shares, emerging markets, small caps, and bonds in one investment.

Vanguard currently targets 90% of the portfolio towards growth assets and 10% towards defensive assets. The fund ultimately provides exposure to more than 16,000 securities.

I like the Vanguard Diversified High Growth Index ETF for investors who want broad diversification without having to decide how much money should go into Australia, overseas markets, or fixed income themselves.

Vanguard also manages the rebalancing, so the ETF is designed to keep returning towards its target allocation over time.

For me, that makes the VDHG ETF a strong option for someone who wants a long-term investment that can largely look after itself.

Vanguard S&P 500 US Shares Index ETF (ASX: V500)

The V500 ETF gives investors exposure to around 500 of the largest Wall Street-listed companies, representing roughly 80% of the value of the American share market.

That means investors are putting money behind many of the businesses leading some of the biggest areas of global growth.

NVIDIA, for example, sits at the heart of the artificial intelligence (AI) infrastructure boom, while Microsoft has exposure to cloud computing, software, and AI. Both are among the ETF’s largest holdings.

Importantly, the fund extends well beyond technology. The S&P 500 also includes large healthcare, financial, industrial, and consumer businesses.

Vanguard FTSE Asia ex Japan Shares Index ETF (ASX: VAE)

The VAE ETF is the more targeted pick on my October list. It invests across Asian markets while excluding Japan, Australia, and New Zealand.

What I like is that this gives investors exposure to a part of the world that can look quite different from the US-heavy portfolios many Australians already own.

Technology is still an important part of the story. Taiwan Semiconductor Manufacturing Co, Samsung Electronics, and SK Hynix are currently the fund’s three largest holdings. Together, they give the VAE ETF meaningful exposure to the semiconductor industry that underpins AI, smartphones, data centres, and other areas of technology.

The ETF also reaches into other parts of the Asian economy, including Chinese internet and consumer businesses.

I think that makes the Vanguard FTSE Asia ex Japan Shares Index ETF a great way to add another source of long-term growth without simply buying more US shares.

Foolish takeaway

If I were adding to my ETF holdings in October, I would be looking for something that genuinely adds to what I already own.

That is why these three stand out to me. Each offers a different route to long-term growth, and I would be happy to own any of them for many years.

The post My top 3 Vanguard ETFs for October 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 Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. 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.

Codan Ltd vs Xero shares: Which tech stock looks better this month?

Sometimes, investors have to choose between two very different tech shares that both sit at the heart of the Aussie market’s innovation scene. Codan Ltd (ASX: CDA) and Xero Ltd (ASX: XRO) are two leaders in very different technology niches—one focused on essential communications, mining and defence electronics, the other a cloud-based accounting software platform with global ambitions. Here’s how they stack up in October if you’re weighing Codan vs Xero shares.

The case for Codan

Codan is a homegrown electronic technology company that’s been around for decades but has seen a huge surge in attention lately. Its operations cover advanced communications, gold and metal detection equipment (Minelab), mining technology solutions, and defence electronics. Codan’s customer base includes governments, the mining sector and private consumers, and, according to its most recent public description, it draws a significant chunk of its sales from North America. The company is truly global, with manufacturing in Adelaide and Malaysia, and a network of business and engineering sites across several continents.

Several key numbers jump out from Codan’s current snapshot. Its market cap sits at $11.75 billion, making it a substantial ASX tech presence. Year to date, its share price has rocketed up 84.6%, which is phenomenal momentum even by tech sector standards. Codan delivers a fully franked dividend, with a current yield of 0.93%—not huge, but backed by a long record of paying and steadily increasing dividends over time (and always fully franked). The P/E ratio is 54.21, and its latest reported earnings per share is $0.959.

The case for Xero

Over in the cloud, Xero has grown from a New Zealand-scale disruptor to a global force in small-business accounting software. The company is all about delivering its platform via monthly subscription, targeting small and medium businesses everywhere. The sticky, recurring nature of this business is a big attraction for fans of ‘SaaS’ (Software as a Service) models in tech investing.

By the latest figures, Xero’s market cap is $9.90 billion—a sizeable company, but a touch smaller than Codan. However, 2026 to date has been rough for Xero; the shares are down 49.4%. Despite a P/E ratio of 49.87 being assigned in the headline metrics, Xero shows a negative earnings per share (-$0.158), which doesn’t mathematically match (see the note below). It does not pay a dividend and has no franking. For investors looking for aggressive growth, though, Xero remains a business with a global media profile, a strong market position, and a product that has become mission-critical for thousands of businesses.

Valuation comparison

Let’s line up both companies’ key numbers:

Metric	Codan	Xero
Market Cap	$11.75 billion	$9.90 billion
P/E Ratio	54.21	49.87
Dividend Yield	0.93% (fully franked)	0.00%
EPS	$0.959	-$0.158
Year to Date Return	84.6%	-49.4%

Note: Xero’s reported P/E ratio may be based on a different earnings measure (e.g. underlying or forward earnings) than the EPS figure shown, which is why they may appear inconsistent.

Codan trades on a high P/E—but that is similar to Xero’s, and both are at the end of the tech sector’s usual range. The key difference? Codan is profitable (and growing fast), while Xero currently shows a negative EPS.

Codan provides a modest, fully franked dividend, while Xero pays none.

Price-to-book or other balance sheet valuation metrics weren’t available in the data supplied for this article.

Recent share price performance

Comparing recent share price activity up to 29 September:

• Codan closed at $64.43, soaring almost 24% on the day and up 84.6% for the year to date.
• Xero finished at $58.04, up 0.57% for the session but down a striking 49.4% for the year to date.

That’s as stark a contrast as you’ll see. Codan has enjoyed surging investor confidence and some major catalysts in September, while Xero is still in the doghouse for 2026, at least by share price action.

Which is the better buy?

If I had to pick between Codan and Xero, my vote right now goes to Codan. While both are quality tech stories and both trade at punchy multiples, Codan is not just profitable but thriving—and that’s reflected in its cracking 84.6% share price surge this year. Xero, meanwhile, remains a fantastic business but is still struggling on the profit front, and its share price has been absolutely hammered in 2026.

Codan’s fully franked dividend, even if small, is a cherry on top. Xero’s lack of yield and negative EPS add another strike for now. For anyone seeking profitable growth today, my pick would be Codan.

The post Codan vs Xero: Which ASX tech stock is the better buy in October? appeared first on The Motley Fool Australia.

More reading

• 5 leading ASX shares I’d buy and hold until 2040
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• Up 120%, is it too late to buy Codan shares?
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• Can the Xero share price climb back to $100?

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 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. 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.

ASX passive income shares could be a great pick right now because of the large dividend yields they can provide investors.

It’s true that interest rates are higher these days, and that means savings accounts, term deposits and bonds are paying more income from ‘safe’ assets. But some stocks are paying much more than term deposits, and the payouts are proving to be resilient.

Let’s look at two stocks I expect to pay high dividends in the coming years.

Dexus Industria REIT (ASX: DXI)

This real estate investment trust (REIT) owns a portfolio of industrial real estate across Australia. It’s invested in high-quality warehouses in Australia’s major cities. At 30 June 2026, the property portfolio was valued at $1.5 billion and it aims to provide sustainable income and capital growth prospects for investors.

There are a number of drivers of rental demand, including e-commerce and data centres. I think this helps support rental earnings, income distribution to investors, and property valuations.

During FY26, it achieved strong like-for-like portfolio income growth of 5.3%, supported by rental escalations, strong re-leasing spreads of 21.4% and a high occupancy rate of 98.8%.

The business plans to maintain its annual distribution per share at 16.6 cents per share in FY27. That translates into a forward distribution yield of 7%, which I’d describe as an excellent starting yield.

Shaver Shop Group Ltd (ASX: SSG)

The other ASX share I want to highlight is Shave Shop, a retail chain with stores across Australia and New Zealand.

Its position in the market means it has been able to negotiate exclusive products with certain brands, unlocking impressive items that shoppers enjoy. This can come with a higher gross profit margin.

Another pleasing element of Shaver Shop’s strategy is the fact that it has launched its own brand called Transform-U. The ASX share has filled in certain gaps in its guidance range and price point range, while achieving a higher gross profit margin.

The company can also grow its earnings in a number of other ways including more stores, growth of online sales, new high-quality brands, and selling more non-shaving health and beauty items.

It has been impressively consistent with its payout – it hiked each year between FY17 and FY23, maintained it in FY24, grew it in FY25 and then maintained it FY26. As you can see, there have been no dividend cuts in that time.

Using the FY26 payout, it has a grossed-up dividend yield of 11%, including franking credits, at the time of writing.

$300 per month of passive income

Between those two ASX passive income shares, the average dividend yield is 9%, which is impressive.

They don’t pay dividends monthly, so investors need to think about an annual target of $3,600. At an average dividend yield of 9%, it would take $40,000 to make that income money.

Of course, I wouldn’t just invest in two stocks for dividends, I’d spread the money around other ASX shares for diversification to generate returns.

The post 2 ASX passive income share ideas I’d use to generate $300 a month in 2027 appeared first on The Motley Fool Australia.

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

Megaport Ltd (ASX: MP1) shares have risen almost 40% over the past 12 months, but according to the analysts at Macquarie, new contract wins make the case for further strong rises even more compelling.

Macquarie has released a new research report into Megaport, with an upgraded price target, which I’ll get to shortly.

First, let’s look at the company’s recent news.

Major new contract wins lead to revenue upgrade

Megaport said earlier this week that it had struck three new AI infrastructure contracts worth $978.6 million in total.

The new contracts increase the company’s annual recurring revenue (ARR) to about $1.1 billion, and the company would also book $322.6 million in prepayments from the contracts.

Megaport added:

The three agreements, two of which are with new customers, have a combined total contract value of approximately US$685.0M ($978.6M ) and encompass GPU and CPU compute,  network, and storage for AI applications and inference workloads. These contracts are expected to contribute approximately US$162.7M ($232.4M1) in ARR. Megaport has secured 2 power and space for the new strategic customer contracts.  

The company said it had started procurement for the equipment needed to replenish its GPU pool to fulfil the new contracts, and it had also secured the power and space required for the new equipment.

Megaport Chief Executive Officer Michael Reid said:

Since April, we’ve announced approximately $2.3 billion in total strategic contract value. Earlier deployments, new contracts, and Network growth underpin our upgraded FY27 revenue and EBITDA margin guidance. Customers have committed approximately $323 million in prepayments on today’s contracts, supporting the infrastructure investment behind future growth. “We’re broadening our customer base, replenishing our GPU pool, and expanding our AI inference platform. Our progress has been extraordinary, and we remain focused on delivery and disciplined investment. We’re just getting started.

Megaport upgraded its full-year guidance, saying revenue was now expected to be $720 million to $810 million up from $620 million to $730 million.

The company’s EBITDA margin is now expected to be 42% to 44%, up from 38% to 40%.

Megaport shares looking cheap

Macquarie said in its research note on Megaport that the company’s GPU pool was a strategic advantage.

They said:

Capacity can initially support on-demand workloads but be redirected to longer-term contracts as opportunities arise. This allows MP1 to respond quickly to demand, bringing forward billing while reducing utilisation and funding risk.

Macquarie said Megaport had AI exposure with shorter lead times and less capital expenditure than data centres and neoclouds.

Following this week’s update, Macquarie increased its price target for Megaport from $32 to $34.70.

If achieved, this would be a 68% increase from the current level of $20.65.

Megaport is valued at $4.91 billion.

The post How high does Macquarie think Megaport shares will go? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has positions in Megaport. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Megaport. 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.

The Yancoal Australia Ltd (ASX: YAL) share price is in focus after the company announced it had completed the acquisition of an 80% interest in the Kestrel Coal Mine, adding a high-quality, long-life metallurgical coal asset to its portfolio.

What did Yancoal Australia report?

• Completed acquisition of an 80% stake in the Kestrel Coal Mine, Queensland
• Upfront cash consideration of US$1.85 billion paid at completion
• Funded through available cash and a five-year US$1.2 billion syndicated loan facility
• Contingent cash consideration up to US$550 million subject to coal price benchmarks
• Yancoal to recognise production, revenue, and earnings from Kestrel from 1 October 2026

What else do investors need to know?

The Kestrel Coal Mine is a large-scale, long-life asset located in Queensland’s Bowen Basin and is known for its premium metallurgical coal. This acquisition increases Yancoal’s scale and product diversification, strengthening its footprint in the Australian coal industry.

Yancoal’s liquidity remains well-supported, with a US$200 million working capital facility undrawn as of completion. The company plans to issue a detailed circular to shareholders by 23 November 2026, outlining further information and independent reports relating to the acquisition.

What did Yancoal Australia management say?

CEO Sharif Burra said:

The acquisition of an 80% interest in the Kestrel Coal Mine represents a strong strategic fit for Yancoal and adds a high-quality, long-life metallurgical coal asset to our portfolio. Kestrel delivers increased scale and diversification to Yancoal’s portfolio; it adds a premium metallurgical coal to our product mix. The acquisition positions us to deliver greater value to our shareholders and consolidates Yancoal’s position as a leading Australian coal miner. We have worked closely with EMR, Adaro and KCG management over the past months to facilitate integration of Kestrel into the Yancoal portfolio. We look forward to working closely with the committed Kestrel employees, and Mitsui, our joint venture partner and owner of 20% of Kestrel, to continue to add value to the mine, local communities and stakeholders.

What’s next for Yancoal Australia?

Yancoal intends to integrate Kestrel’s operations swiftly, focusing on maximising the value of its new, long-term metallurgical coal asset. The company’s expanded scale and product mix are expected to support its ongoing commitment to delivering value for shareholders.

Looking ahead, Yancoal will be providing shareholders with detailed reports and updates on the full impact of the acquisition over the coming months. The extra scale positions Yancoal well to navigate market dynamics and strengthen its leadership in Australian coal production.

Yancoal Australia share price snapshot

Over the past 12 months, Yancoal shares have risen 14%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has declined 1% over the same period.

View Original Announcement

The post Yancoal Australia share price in focus as Kestrel Coal Mine deal closes 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.

The Wesfarmers Ltd (ASX: WES) share price has been a solid performer over the last five years, rising by 40%. Investors may be wondering what’s next after that strength.

The owner of Kmart and Bunnings has proven very effective at reinvesting for long-term growth. Rising earnings is the best thing a company can do to send its share price higher.

I’d need a crystal ball to know exactly what’s going to happen next for Wesfarmers, but we can look at its most recent trading update, analyst earnings estimates and Wesfarmers share price targets to give insights.  

Recent sales performance

The company said with its FY26 result that in this environment its retail divisions are well-positioned to grow profitably, supported by their strong value credentials, focusing on improving the customer experience and expanding addressable markets.

Some of those struggles for Australian consumers include cost of living pressures, uncertainty about the outlook for inflation, house prices, interest rates and tax settings. Costs of doing business are reportedly weighing on business confidence and spending.

To mitigate the higher costs of doing business, of elevated labour, energy and supply chain costs, Wesfarmers’ said it will continue to execute their productivity agendas, through a ‘people-first, digitally-enabled’ approach including digitising operations and leveraging AI and technology to support operating efficiency.

In the first seven weeks of the 2027 financial year, Bunnings’ sales growth was slightly stronger compared to the second half of the FY26, partly helped by unseasonably dry weather in July. In the second half of FY26, Bunnings achieved revenue growth of 4%.

Kmart Group’s sales growth for the first seven weeks of FY27 was in line with the second half of FY26. In the six months to 30 June 2026, Kmart Group’s revenue growth was 2.3%.

Wesfarmers said that Officeworks’ sales growth in the first seven weeks of FY27 was positive, though it was slightly below the second half of FY26 growth rate of 2.8%.

Within WesCEF (chemicals, energy and fertilisers), the company said that it, along with its joint venture partner, remain focused on the ramp-up of the Covalent Lithium refinery, with production rates expected to accelerate through the second half of FY27 as further odour mitigation solutions are implemented.

Product qualification with key offtake partners will continue to progress while the refinery ramps up. Spodumene concentrate (lithium) production at Mt Holland is expected to be in line with nameplate capacity of approximately 380kt (with WesCEF’s share being approximately 190kt), with around half of this production to be sold to the market.

Finally, the company said the healthcare division of Wesfarmers is well-positioned to continue improving earnings by executing its transformation program and capitalising on long-term health and wellness trends. This division remains focused on accelerating growth in its higher-margin consumer business and building on recent improvements in wholesale.

Wesfarmers share price predictions by analysts

According to CMC Invest, there has been a mixture of analyst opinions on the business.

Within the last three months, there have been three buy call ratings, three hold call ratings and five sell call ratings.

Of those 11 analyst ratings, the average price target was $77.69. That implies a possible rise of around 1%, so it seems virtually fully valued according to experts. But, according to the projection on CMC Invest, it could pay a grossed-up dividend yield of 4.5%, including franking credits, at the time of writing. So, it could still produce positive returns.

The most optimistic price target is $88.80, which implies a possible rise of around 16%.

Overall, I think Wesfarmers is a high-quality business that can compound over the long-term, but analysts seem to be suggesting that there are better value opportunities out there.

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

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

September was a mixed month for S&P/ASX 200 Index (ASX: XJO) bank shares.

Some ASX bank stocks experienced a pullback over the past month, while others started trending higher. 

It looks like investors aren’t sure what to make of rising inflation, higher interest rates, a weakening housing market, all against a backdrop of macroeconomic pressures and broad-based uncertainty.

What happened to the ASX 200 big four major banks in September?

Australia’s banking sector is dominated by the big four banks: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ).  

Together, they make up around a quarter of the ASX 200 by market capitalisation. 

There wasn’t any price sensitive news out of any of the big four banks in September, so share price fluctuations were due to shifts in investor sentiment.

At the close of the last day of the month, CBA shares were around 0.5% higher to $151.01 each. But the ASX 200 major bank’s shares have dropped around 6% over the course of September. 

NAB shares also ended the month in the green, up slightly by around 0.1% for the day on Wednesday, at $39.15 a piece. NAB shares have been relatively stable over the past month, and ended around 1% higher than they started. 

ANZ shares, however, ended the last day of the month in the red. The shares fell around 0.5% to $38.31 on Wednesday afternoon, to $38.31 each. But over the past month, the bank stock has climbed around 3% higher.

Meanwhile, Westpac shares ended around 0.2% higher on Wednesday afternoon, at $35.07 each. Over the past month, the shares have risen around 1.5%.

What about the ASX 200 mid-tier banks?

It was a similar story among the ASX 200 mid-tier banks too.

Bendigo and Adelaide Bank Ltd (ASX: BEN) closed around 0.5% higher on the last day of September, at $10.36 each. Over the month the shares fell around 3%.

Bank of Queensland Ltd (ASX: BOQ) shares climbed slightly into the green, up around 0.2% to $6.61. They were also up around 1% over the course of September. 

While Macquarie Group Ltd (ASX: MQG) also tumbled around 0.5% on Wednesday, closing the month at $246.10 a piece. The bank shares were also down around 2% over the month.

Which ASX bank shares are a buy for October?

Macquarie shares were one of the poorest performing ASX bank shares in September. But it’s still the only stock that brokers are bullish about going forward. Market Index data shows that the majority have a strong buy rating on Macquarie shares. The average $270.89 target price implies the shares have the potential to climb another 10% higher, at the time of writing.

Which ones have been rated as a sell?

The experts have had a strong sell rating on CBA shares for some time now. And there hasn’t been a change in sentiment this month either. Market Index data shows the majority of brokers have a strong sell rating, and the $125.20 target price implies a downside of around 17%, at the time of writing. That’s the largest forecasted downside of any of the ASX banks.

The experts also have a sell rating on Westpac shares. Market Index data shows the average $34.18 target price implies a downside of around 3%, at the time of writing.

Brokers are also bearish on the outlook for Bendigo and Adelaide Bank shares. Market Index data shows the majority have a sell rating, and the $10.06 average target price also implies a downside of around 3%.

And what shares do brokers rate as a hold?

The data also shows that the majority have a hold rating on NAB shares. The $39.88 average target price implies the shares have the potential to climb slightly, by around 2%, over the next 12 months.

It’s a similar story for ANZ shares. Most brokers also have a hold stance on the major bank, but after a slightly stronger September, the $36.05 average target price now suggests the shares could fall by up to 6% over the next 12 months, at the time of writing.

BOQ shares are the last on the list. Again, the majority have a hold rating, and the $6.06 average target price implies a downside of around 8%, at the time of writing.

The post Are ASX 200 bank stocks a buy in October? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 positions in and has recommended Bendigo And Adelaide Bank. 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.

DroneShield Ltd (ASX: DRO) shares are starting October around $1.70 after a jump on the final day of last month.

Investors were buying the counter-drone technology company’s shares after it was awarded a major US procurement vehicle.

Does that make the shares a buy in October?

I think so, although investors need to be comfortable with plenty of volatility.

What does the US win actually mean?

DroneShield has been awarded an Indefinite Delivery, Indefinite Quantity contract supporting the US Joint Interagency Task Force 401 Domestic Shield initiative.

The vehicle has a maximum value of US$500 million over three years and is designed to provide a streamlined way for the US government to procure DroneShield’s counter-drone capabilities.

Importantly, that does not mean DroneShield has suddenly booked US$500 million of revenue.

Individual orders still need to be awarded under the agreement, and DroneShield says it will announce material orders as they occur.

For me, that distinction is important, but it does not take away from the significance of the announcement.

DroneShield has already delivered DroneSentry-X Mk2 systems in support of JIATF-401 requirements, including systems that have been installed and accepted on US military vehicles. The new agreement gives the company another pathway to supply its technology as the US expands counter-drone protection across military installations and other priority locations.

That is the sort of relationship I want to see developing.

The valuation is demanding

One thing that can’t be ignored is DroneShield’s valuation.

Consensus forecasts currently point to earnings per share (EPS) of around 1 cent in FY28.

At a $1.70 share price, that would put DroneShield shares on a PE ratio of roughly 170 times forecast FY28 earnings.

That is clearly expensive by almost any conventional measure. But I am not convinced that figure tells us everything about the company’s longer-term earnings power.

DroneShield is still investing heavily to become a much larger business. That includes manufacturing capacity, research and development, sales operations, and its international footprint.

Those costs can constrain reported earnings today while potentially creating the capacity to generate much more revenue later.

If US defence demand accelerates and DroneShield converts procurement vehicles like this one into substantial orders, I think profits could eventually scale much faster than the current EPS forecast suggests.

Why I would still buy

Counter-drone technology is becoming increasingly important as cheap and readily available drones change the nature of warfare and create new security challenges.

DroneShield is positioning itself directly in that market with technology spanning detection, electronic countermeasures, command and control, and sensor integration.

The latest US agreement gives me more confidence that its products are gaining traction with a strategically important customer.

But I would expect the journey to be bumpy. Defence contracts can be large and irregular, expectations around DroneShield are already high, and a valuation of around 170 times FY28 forecast earnings leaves little room for disappointment.

Foolish takeaway

I would buy DroneShield shares around $1.70, but I would go in expecting volatility.

The current earnings numbers make the shares look extremely expensive. For me, though, the bigger question is what earnings could look like once today’s investment starts translating into a much larger order book.

The new US procurement vehicle does not guarantee that outcome, but I think it strengthens the case that DroneShield has a genuine opportunity to become a much larger defence technology business.

The post Should I buy DroneShield shares after its big US news? appeared first on The Motley Fool Australia.

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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.

The Transurban Group (ASX: TCL) share price is in focus after announcing a $4.5 billion deal to acquire additional stakes in key Sydney toll road operators, boosting its interests in Westlink M7, NorthConnex, and WestConnex.

What did Transurban Group report?

• Agreed to acquire CPPIB’s 25% interest in NorthWestern Roads Group (Westlink M7, NorthConnex)
• Also acquiring a 10.5% stake in Sydney Transport Partners (WestConnex)
• Total cash consideration for the deal is $4.5 billion
• Post-acquisition: 75% of NWRG and 60.5% of STP owned by Transurban
• Funding via new committed debt facilities—no equity raising required
• No expected impact on FY27 free cash and distributions

What else do investors need to know?

The acquisition is set to boost Transurban’s weighted average concession life, with asset concessions running as long as 2060. There will be no change to tolls or the daily experience for NSW motorists—only the economic interest splits among partners are changing.

The deal must clear several regulatory and contractual conditions, including approval from the Australian Competition and Consumer Commission. Completion is anticipated during calendar 2027, with the final valuation set as of 31 March 2027.

What did Transurban Group management say?

Transurban CEO Michelle Jablko said:

Sydney is a core market for Transurban. WestConnex, Westlink M7 and NorthConnex provide options for Sydney motorists as they move around the city and will play an important role in supporting Sydney’s growth for decades to come. We remain disciplined with how we allocate capital in our key markets of Australia and North America and we are committed to maintaining strong investment grade credit metrics.

What’s next for Transurban Group?

Transurban expects to complete the acquisition in 2027 after securing all necessary approvals. The company has stressed its continuing commitment to strong credit metrics and investment-grade ratings, planning to refinance the acquisition debt into longer-term facilities over time.

Management highlighted that no equity raising is required and that the acquisition is expected to drive long-term growth in free cash per security, with only a minor short-term impact initially.

Transurban Group share price snapshot

Over the past 12 months, Transurban shares have declined 4%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 1% over the same period.

View Original Announcement

The post Transurban Group share price: $4.5bn deal for bigger Sydney road stakes 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 positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Transurban 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 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.