Author: openjargon

Commonwealth Bank of Australia (ASX: CBA) shares have been a great option for passive income over the years, but I think there are plenty of better ASX dividend share options today.

CBA faces a more difficult operating environment these days following the Federal budget changes.

It’s possible the ASX bank share may not see as much loan demand for the foreseeable future, following changes to negative gearing and capital gains tax (CGT) discounts announced in the most recent Federal Budget.

CBA’s annual dividend per share is only expected to increase by 1% year-over-year in FY27 to $5.15 per share. That translates to a grossed-up dividend yield of 4.4%, including franking credits.

In my view, the following two businesses are better picks for passive income.

Medibank Private Ltd (ASX: MPL)

Medibank is the largest private health insurer in Australia, with its main brands of Medibank and ahm.

Private health insurance is an industry with useful tailwinds, including ageing demographics and a rising population. This helps support Medibank’s policyholder numbers and underlying net profit, which are key drivers of the dividend.

The FY26 half-year result was a great example of its ability to pay attractive and growing dividends.

In HY26, the business revealed that revenue grew 5.5%, segment operating profit grew 5.9%, and group operating profit increased 6%. This helped the business fund a 6.4% increase of the interim dividend per share to 8.3 cents.

The ASX dividend share’s expansion into other areas of healthcare can also help grow and diversify its earnings, giving further support for the dividend. Medibank Health segment profit increased by 28.5%, which includes community and acute healthcare. One recent initiative included increased ownership of Amplar Health Home Hospital.

According to the projection on Commsec, the business is forecast to pay an annual dividend per share of 22 cents in FY27. That translates into a potential grossed-up dividend yield of 6.2%, including franking credits, at the time of writing. That’s a noticeably better yield than what CBA shares offer.  

Dexus Industria REIT (ASX: DXI)

Dexus has a very large exposure to Australia’s real estate market, so why not just invest in a compelling passive income option from the real estate space?

Dexus Industria is a real estate investment trust (REIT) that is invested in high-quality industrial warehouses. Its real estate portfolio is located across major Australian cities, with a goal to provide securityholders with sustainable income and capital growth.

There is strong demand for industrial properties as a result of growing e-commerce usage, data centres and so on. This is helping drive pleasing rental growth for the business. In the first six months of FY26, the ASX dividend share saw like-for-like income growth of 7.4%, with rental escalations, strong re-leasing spreads and higher average occupancy.

The business is paying an annual distribution per security of 16.6 cents in FY26, translating into a distribution yield of 6.8%, which is much stronger than what’s on offer from CBA shares.

The post Forget CBA shares! I’d rather buy these ASX dividend shares appeared first on The Motley Fool Australia.

More reading

• Expert warns: These ASX bank shares could disappoint in FY27
• The bull and bear case for CBA and BHP shares
• How much do I need in my superannuation to get $52,000 per year in passive income?
• Dump ’em! Morgan Stanley slaps sell ratings on 5 ASX 200 shares
• I’d buy these 5 ASX dividend investments for retirement income

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 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.

Australian passive income investors are a lucky bunch.

The local share market is home to a large number of ASX shares that reward their shareholders with dividends every year.

So, if I were looking for ASX shares to buy now for passive income, these three would be on my shortlist.

Charter Hall Retail REIT (ASX: CQR)

Charter Hall Retail REIT would be an ASX passive income share I would look at.

The REIT owns convenience-focused retail properties across Australia. These are the types of centres anchored by supermarkets, everyday services, and tenants linked to regular household spending.

Its tenants include Coles Group Ltd (ASX: COL) and Wesfarmers Ltd (ASX: WES).

This gives the portfolio a different feel from large discretionary shopping malls. People may delay buying furniture, electronics, or luxury items when conditions are tough, but I would expect grocery shopping and local errands to continue through most economic cycles.

Rising interest rates remain a key risk. But if rates ease over time, or even just stop pressuring valuations, investor sentiment toward quality property trusts could improve.

The Charter Hall Retail REIT offers an estimated FY 2027 dividend yield of approximately 6.9%.

Flight Centre Travel Group Ltd (ASX: FLT)

Flight Centre Travel Group is a different type of passive income idea.

It is not a traditional defensive ASX dividend share. Its earnings are tied to travel demand, business activity, leisure spending, airfares, and consumer confidence.

Flight Centre has spent the past few years rebuilding after the severe disruption caused by the COVID pandemic. And while trading conditions have been tough due to the conflict in the Middle East and the cost of living crisis, its evolution means the company is well-placed to grow its earnings materially once conditions normalise.

So much so, Flight Centre shares are expected to offer a fully franked 4.2% dividend yield in FY 2027.

Woolworths Group Ltd (ASX: WOW)

Woolworths is the most defensive name on this list.

The supermarket giant gives passive income investors exposure to everyday spending through food, groceries, household essentials, and related retail operations.

It is not a high-yield ASX share, and I would not buy it expecting the biggest dividend on the ASX. The main attraction here is its dependability.

Woolworths has scale, brand recognition, loyalty data, a major store network, and an important position in Australian household budgets. As I mentioned above, even when consumers become more cautious, groceries remain a core expense.

Looking to FY 2027, Woolworths shares are expected to offer a fully franked dividend yield of 2.8%.

The post 3 strong ASX passive income shares I’d buy now appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 sectors paid the highest dividend yields in FY26?
• Flight Centre shares rebound 30% from multi-year low: Can they keep climbing higher?
• 7 ASX 200 shares given buy ratings this week
• Why I want to own these ASX shares brokers rate as buys
• Up 33%, are Woolworths shares still a good buy for passive income?

Motley Fool contributor James Mickleboro has positions in Woolworths Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Charter Hall Retail REIT. The Motley Fool Australia has recommended Flight Centre Travel Group and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A buy and hold for life ASX 200 share does not mean investors should buy it and never look at it again.

It means finding a business with quality, a strong market position, and a long-term growth runway to justify patience through different market cycles.

If I were looking for ASX 200 shares that could sit in a portfolio for decades, I would want companies that are difficult to replace, still have ways to grow, and are not relying on one good year to make the investment case work.

Here are three that stand out to me.

Goodman Group (ASX: GMG)

Goodman Group could be one of the ASX 200’s best long-term compounders.

The company owns, develops, and manages industrial property in major global markets.

That includes warehouses, logistics facilities, and data centre infrastructure. These assets may not be as exciting in the same way as a new app or consumer brand, but they are deeply connected to how the modern economy works.

Goods need to be stored and moved, online orders need fulfilment networks, cloud computing and artificial intelligence need physical infrastructure, and businesses want high-quality space close to customers, transport routes, labour pools, and power.

Goodman’s advantage is that prime industrial land in major cities is not easy to recreate. Once a company has the right sites, customer relationships, planning approvals, and development expertise, it can become very hard for others to catch up.

Its shares can look expensive at times, but quality rarely comes at bargain prices for long. Overall, I think Goodman’s mix of property, infrastructure, and development capability makes it a standout ASX 200 share for patient investors.

REA Group Ltd (ASX: REA)

REA Group is another ASX 200 share that could be bought with a very long-term mindset.

The company owns realestate.com.au, which is Australia’s leading property website.

What makes REA strong is its position between buyers, sellers, renters, agents, developers, and advertisers. When Australians want to look for property, many go straight to its platform. When agents want attention for listings, they also need to be where the audience is.

That creates a powerful loop. More listings attract more users and more users make the platform more valuable to agents and advertisers. That kind of network position is difficult to attack unless user behaviour changes dramatically.

Property listings can rise and fall with interest rates, housing sentiment, and market conditions. But Australians remain deeply engaged with property over the long term, whether they are buying, selling, renting, renovating, or simply watching the market.

REA is not immune to downturns, but its brand, audience, and pricing power give it rare durability.

Xero Ltd (ASX: XRO)

Xero is a very different type of ASX 200 share, but also has long-term appeal.

The company provides cloud accounting software for small businesses, accountants, and bookkeepers.

This popular software helps businesses keep track of money, invoices, payroll, bills, payments, and compliance. That may not sound glamorous, but it sits close to the daily financial life of millions of small businesses. 

This makes it increasingly sticky. Once a business, accountant, or bookkeeper builds workflows around a platform, switching can be inconvenient and risky. This supports strong user retention rates and user growth.

Another positive is its investment in artificial intelligence. This could make the platform more valuable to users if it helps automate routine admin, improve bank reconciliation, speed up reporting, and give business owners better financial insights.

As with the others, Xero’s valuation can be demanding. But Xero has a strong product, a large global market, and a role in small business that could become more important over the next decade.

The post 3 ASX 200 shares I’d buy and hold for life appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Goodman Group, Endeavour, Resmed shares
• The only 3 ASX blue-chip shares I’d buy and hold until 2036
• July is historically one of the best months for ASX shares. Can July FY27 deliver?
• 7 ASX 200 shares given buy ratings this week
• 2 ASX shares highly recommended to buy: Experts

Motley Fool contributor James Mickleboro has positions in Goodman Group, REA Group, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX growth share space is a great place to find ideas that can help us outperform the wider stock market.

The smaller we go down the market capitalisation list, the more likely it is to find an undervalued business with a long growth runway, in my opinion.

Experts from the listed investment company (LIC) WAM Research Ltd (ASX: WAX) have outlined two businesses that could be ones to watch. The LIC looks for the most compelling, undervalued growth opportunities on the ASX.

Civmec Ltd (ASX: CVL)

WAM described Civmec as a founder-led, mining, construction and engineering services company based in Western Australia.

During June, the company announced its order book had reached $1.5 billion. Growth was supported by a series of new contract awards, panel agreement extensions and new orders across its resources, infrastructure, energy and maintenance activities.

Key project wins included a further package of work with Iluka Resources Ltd (ASX: ILU) at the Eneabba Rare Earths Refinery and the major construction contract for Perth Park, delivered through an alliance with Seymour Whyte and Aurecon.

The investment team at WAM believes these projects provide strong earnings visibility over the next two years. Wilson Asset Management also believes that the ASX growth share is well positioned to win significant defence contracts which are expected to come to market over the next two to three years.

WAM suggested that Vicmec’s ownership of strategic land at the Henderson precinct in Western Australia positions it well in tendering for these projects.

Reliance Worldwide Corporation Ltd (ASX: RWC)

The other ASX growth share that was highlighted in the WAM Research portfolio was plumbing supplies company Reliance, which has operations across Australia, Europe and North America.

WAM noted that during June, it announced the next stage of streamlining its manufacturing operations.

That plan includes the closure of its brass casting, forging and machining operations in Moorabbin and Braeside, Melbourne, along with additional smaller sites.

Those changes are expected to deliver a benefit to net annual operating profit (EBITDA) of approximately US$9 million across the group by the end of FY27.

WAM said the ASX growth share has suffered headwinds in recent years, including US tariffs and higher interest rates, but the investment team believe the outlook is improving as macroeconomic indicators begin to stabilise and the company resets its cost base.

In WAM’s view, this positions Reliance to grow earnings into FY27 and FY28. The fund manager sees potential for a rerating in the Reliance share price as earnings momentum improves.

The post 2 ASX growth shares with strong potential to buy appeared first on The Motley Fool Australia.

More reading

• Guess which ASX mining stock is jumping 76% today on a rare earths deal with Iluka Resources
• 6 ASX shares with upgraded ratings from experts this week
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• Here are the top 10 ASX 200 shares today
• Why Centuria Capital, Iluka, Metcash, and Reliance Worldwide shares are falling today

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 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.

If I had $10,000 to invest in Betashares exchange-traded funds (ETFs), I would want more than simple market exposure.

I would be looking for funds that give me access to different engines of long-term growth: global innovation, emerging economic scale, and local technology businesses trying to become much larger over time.

Here are three Betashares ETFs I would consider buying.

Betashares Nasdaq 100 ETF (ASX: NDQ)

The first ETF I would consider is one that gives investors exposure to some of the world’s most powerful businesses.

The NDQ ETF tracks the Nasdaq 100, which means it allows investors to buy a portion of companies shaping how the digital economy works.

I like this ETF because many of its holdings are not just selling products. They are building systems that other businesses and consumers rely on every day.

Search, cloud computing, semiconductors, digital advertising, productivity software, streaming, e-commerce, payments, and artificial intelligence all sit inside the broader Nasdaq story.

That makes this Betashares ETF more than a simple technology ETF in my mind. It is a way to invest in companies that keep finding new ways to turn scale, data, software, and user attention into earnings.

Betashares India Quality ETF (ASX: IIND)

The second ETF I would look at is focused on a market that feels very different to the usual developed-market options.

The IIND ETF gives investors exposure to Indian companies with quality characteristics.

What interests me about India is not just population size. It is the combination of rising incomes, expanding digital infrastructure, formalisation of the economy, and increasing demand for financial services, healthcare, consumer goods, and technology.

India has a long runway if more households enter the middle class, more businesses move into the formal economy, and more spending shifts through digital channels.

I also like that this Betashares ETF has a quality filter. Emerging markets can be volatile, and not every fast-growing company creates value for shareholders. A quality-focused approach can help tilt the portfolio toward businesses with stronger financial foundations.

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

The final Betashares ETF I would consider is the most local of the three.

The ATEC ETF gives investors exposure to Australian technology companies.

I like this idea because Australia has produced some strong technology businesses, but they can be hard to pick individually. Some will disappoint, some may be acquired, and some may grow into much larger companies than investors expect. An ETF approach spreads that risk.

Its holdings include companies offering payments, logistics, accounting, real estate, data, software, and online marketplaces, which can all create value when they make customers faster, more efficient, or better informed.

Foolish takeaway

If I were investing $10,000 into Betashares ETFs, I would want the money working across different types of growth.

I like the idea of combining global digital leaders, India’s long-term economic development, and Australian technology companies trying to scale.

That mix would not be smooth every year. But I think it gives investors exposure to areas of the market where change can create real wealth over time.

For patient investors, I think these three Betashares ETFs could be strong long-term buys.

The post 3 Betashares ETFs I’d buy with $10,000 appeared first on The Motley Fool Australia.

More reading

• Betashares Nasdaq 100 ETF: What stocks are actually in NDQ?
• 5 of the best investments on the ASX right now to complement your superannuation
• Are these some of the best Betashares ETFs to buy?
• SpaceX will be included in the Nasdaq index this week. Here’s what that means for ASX investors
• The best ASX ETFs to buy and hold for 10 years

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 BetaShares Nasdaq 100 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Value investing is the core principle of many successful investors. 

This includes legendary investors like Warren Buffett. 

But it doesn’t take a mathematical genius to apply it to your own portfolio. 

The core ethos is simple: buy low and sell high.

You don’t have to time it to perfection 

There are plenty of strategies you might consider for your portfolio. However, one of the benefits of value investing is that you don’t need to time a purchase to perfection. 

All stocks go up and down, but when you apply a long-term strategy, there are instances where quality blue-chip companies fall too far, past fair value. 

This can happen even in the midst of real headwinds, and this is where value investors swoop in. 

It’s important to be less concerned with getting the perfect valuation, but rather focus on identifying companies whose long-term prospects remain intact despite short-term setbacks. 

When the market overreacts to temporary challenges, it can push the share price well below what the business is really worth. For investors willing to look beyond the next quarter or even year, those periods can provide some of the best buying opportunities.

With that in mind, here are three blue-chips that are offering compelling value opportunities right now. 

Light & Wonder Inc (ASX: LNW)

Light and Wonder is one of the largest ASX consumer discretionary companies. 

It develops technology-based products and services, as well as associated content. It operates through the following segments: Gaming, SciPlay, and iGaming.

In 2026, its share price has fallen 30%, and now appears to be a long-term value option. 

It currently trades for around $107 per share. 

This is almost 90% below recent targets from Macquarie. 

Furthermore, 22 analysts offering a one year price target via TradingView have an average target of $179.09 on this blue-chip stock. 

That indicates roughly 66% upside from current levels. 

JB Hi Fi Ltd (ASX: JBH)

Another blue-chip discretionary stock that could be a value play is JB Hi Fi. 

The specialty retailer of home entertainment and home appliance products has seen its share price fall 27% over the last year. 

It currently is trading at approximately $78 per share. 

However, Bell Potter currently has a buy rating on JB Hi-Fi shares with a price target of $87.

Of 15 analysts forecasts via TradingView, the highest targets sit at $98 per share. 

These targets indicate an upside between 11% and 25%. 

CSL Ltd (ASX: CSL)

CSL is the largest ASX healthcare stock by market cap. 

This is despite its share price tumbling nearly 50% in the last 12 months. 

While the company faces ongoing sector headwinds, this could be a long-term value play, as the stock now appears oversold. 

The underlying business remains strong as CSL maintains its position as one of the world’s largest plasma-derived therapies companies.

A recent target from Morgans indicates the share price is likely to recover in the long term. 

The broker has a buy rating and price target of $147.59 on this blue-chip stock. 

This indicates a 17% upside from current levels. 

The post 3 ASX blue-chip shares that could be strong long-term value plays appeared first on The Motley Fool Australia.

More reading

• Up 36%: Can CSL shares keep rebounding?
• Which ASX 200 sectors paid the highest dividend yields in FY26?
• Is CSL a fallen ASX giant to buy in July?
• The only 3 ASX blue-chip shares I’d buy and hold until 2036
• July is historically one of the best months for ASX shares. Can July FY27 deliver?

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

The team at Morgans has released a number of broker notes this week covering well-known ASX shares.

Let’s see if its analysts rate the following three shares as buys, holds, or sells. Here’s what you need to know:

Netwealth Group Ltd (ASX: NWL)

Morgans was pleased with this investment platform provider’s contract win with Morgan Stanley. It believes this is a testament to the quality of its offering.

However, it isn’t quite enough for a buy rating. Morgans has put an accumulate rating (between buy and hold) and $27.50 price target on Netwealth’s shares. It commented:

NWL’s recent win with Morgan Stanley Wealth Management represents strong early validation of NWL’s iHIN offering and expansion into the broker segment of the market, which represents a net-flows tailwind into FY27-FY30. We see NWL’s incremental investment into FY27 as a doubling down on its strategy to drive further long-term scale benefits. We reiterate our Accumulate rating with a A$27.50 PT.

Qantas Airways Ltd (ASX: QAN)

The broker has initiated coverage on Qantas shares this week. It highlights that FY 2027 is going to be a transitional year, with FY 2028 expected to be higher growth. 

As a result, Morgans has put an accumulate rating and $11.50 price target on the airline operator. It said:

Qantas’s post-COVID balance sheet strengthening and cost discipline have positioned it to absorb the current fuel cost shock and consumer softness with genuine resilience. We forecast 2H26 PBT to be down on pcp as fuel and economic conditions bite, with FY27 forecast to deliver a moderate uplift. We view FY27 as a transition year for Qantas with higher growth expected from FY28 onwards as oil prices, refining margins and demand normalise. Structural growth drivers (fleet renewal, Project Sunrise, Loyalty scaling toward FY30 target) remain intact. We initiate coverage with an ACCUMULATE rating and an A$11.50ps price target.

Silver Mines Ltd (ASX: SVL)

Another ASX share that Morgans has initiated coverage on its silver developer Silver Mines.

It is a fan of the company and sees significant potential in its Bowdens Silver Project in New South Wales. This has seen the broker put a speculative buy rating and 40 cents price target on Silver Mines shares, which is more than triple its current share price. It explains:

Silver Mines is advancing the 100%-owned Bowdens Silver Project in the Central West region of NSW, Australia’s largest undeveloped silver project and one of the largest primary silver development assets globally, underpinned by a 334Moz AgEq Mineral Resource and 71.7Moz Ag Ore Reserve. Our thesis rests on what we view as an increasingly compelling asymmetry in Bowdens’ risk-reward profile, underpinned by exceptional leverage to a strengthening silver price, a technically mature development plan and a more clearly defined permitting pathway. Despite this improving outlook, the stock continues to trade at a material discount to our assessed intrinsic value. 

We see the improving silver market, permitting progress and the approaching DFS collectively driving a period of meaningful value creation. We initiate coverage with a SPECULATIVE BUY recommendation and a target price of A$0.40 per share.

The post Buy, hold, sell: Netwealth, Silver Mines, and Qantas shares appeared first on The Motley Fool Australia.

More reading

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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 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.

ASX bank shares have been one of the market’s favourite hiding spots for years. But after a huge run in the past five years, one major broker thinks investors may be overstaying their welcome.

Morgan Stanley (NYSE: MS) has slapped sell ratings on three of Australia’s biggest banks – Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), and National Australia Bank Ltd (ASX: NAB).

The common theme? Valuations have raced ahead of fundamentals.

In other words, the broker isn’t questioning whether these are great businesses. It simply believes investors are paying too much for them.

Commonwealth Bank of Australia

If Morgan Stanley had a least-favourite ASX bank share, CBA would probably wear the crown. In 2026, CBA shares have risen 4.7% in 2026 to $168.11 but are down 6% over 12 months.

The broker has a target price of $125 on CBA shares, implying around 26% downside from current levels.

Why so bearish? The biggest issue is valuation. CBA trades on the richest price-to-earnings multiple of any major Australian bank despite operating in a mature, highly competitive market.

Morgan Stanley also sees pressure on net interest margins, slowing earnings growth and limited upside from here after years of strong share price performance.

That doesn’t mean CBA is suddenly a bad business. Far from it.

It remains Australia’s largest bank, with market-leading positions in home lending, deposits and digital banking. It also consistently delivers industry-leading profitability, strong capital generation and fully franked dividends.

Quality isn’t the problem. The price investors are paying for that quality is.

Westpac Banking Corp

Westpac shares have also enjoyed a solid run, climbing 4.6% over the past month. They’re still down 6% this year, but remain almost 9% higher than a year ago.

Morgan Stanley believes the stock could fall around 13%, assigning a price target of $31.50.

The main risks for this ASX bank share are margin pressure, fierce competition for mortgages and deposits, and limited earnings growth as key risks. Banks continue to fight aggressively for customers, making it harder to grow profits without sacrificing pricing.

Still, Westpac has plenty going for it. Its large retail banking franchise provides stable earnings, while ongoing investments in technology and simplification should gradually improve efficiency.

Like its peers, it also offers an attractive, fully franked dividend that continues to appeal to income-focused investors.

National Australia Bank

NAB has been the strongest performer of the trio recently, jumping 9% over the past month.

Even so, Morgan Stanley isn’t buying the rally of the ASX bank share. Its $34.50 price target suggests roughly 12% downside from current levels.

The broker believes business banking competition is intensifying, while slowing economic growth could eventually weigh on business lending demand and bad debts. Rising operating costs also remain a challenge.

On the positive side, NAB arguably boasts Australia’s strongest business banking franchise. Its deep relationships with small and medium-sized businesses provide a competitive advantage that’s difficult to replicate.

Combined with a solid balance sheet and dependable dividend payments, NAB remains a high-quality bank despite the broker’s concerns.

Foolish takeaway

Morgan Stanley’s message is clear: great businesses don’t always make great investments when expectations become too optimistic.

For long-term investors already holding these ASX bank shares, there’s little reason to panic. But for those thinking of buying today, it may be worth asking whether too much good news is already reflected in the share prices.

The post Expert warns: These ASX bank shares could disappoint in FY27 appeared first on The Motley Fool Australia.

More reading

• The bull and bear case for CBA and BHP shares
• How much do I need in my superannuation to get $52,000 per year in passive income?
• Dump ’em! Morgan Stanley slaps sell ratings on 5 ASX 200 shares
• I’d buy these 5 ASX dividend investments for retirement income
• These ASX shares could generate $10,000 per year in passive income

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 ASX 200 is dominated by two blue-chip companies:

• Commonwealth Bank of Australia (ASX: CBA)
• BHP Group Ltd (ASX: BHP).

These companies are the largest ASX-listed stocks by market cap. For this reason, they make up a fundamental part of many investors’ portfolios.

You might own these shares without even knowing it 

Many Australians own shares in BHP and Commonwealth Bank without ever buying them directly. 

This is because their superannuation funds and many ASX-listed ETFs automatically invest in the largest companies on the Australian share market. 

Since BHP and Commonwealth Bank are among the largest companies in the ASX, they’re common holdings in diversified super funds and broad-market ETFs, meaning millions of Australians have exposure to these shares simply through their retirement savings or index investments.

According to a recent report, these two companies account for almost 20% of the ASX 200 index. 

So if you own an ASX 200 or 300 tracking ETF, the performance of CBA and BHP shares have a big impact on the performance of your portfolio. 

A wide gap in 2026

Despite the two companies being vital parts of portfolios, they have performed very differently so far this year. 

BHP shares have risen by 24% year to date, while CBA shares are up just 4%. 

BHP’s 2026 rally has been driven by genuine structural tailwinds. 

Copper prices have surged on electrification, AI-driven data centre demand, and grid upgrades. For the first time in the company’s history, copper now contributes more than half of group earnings. 

A resilient iron ore price has added further support, giving BHP two strong earnings engines rather than one and thanks to the operating leverage inherent in mining, that extra revenue flows largely to the bottom line and the dividend. 

Meanwhile, CBA’s flat performance reflects a different dynamic: the bank continues to deliver solid results, with growing cash earnings and healthy lending volumes, but it already trades at a significant valuation premium to its big four peers. 

So are these shares a buy? Here is the glass half full and glass half empty case for both.

The bull and bear case

For those looking for a reason to buy BHP shares, the bull case is simple: Copper and iron ore prices are strong, and copper demand looks set to keep growing thanks to AI, data centres, and electrification. 

However on the flip side, BHP shares have already risen 50% in the last 12 months. 

This means much of the good news may be priced in. Furthermore, a pullback in copper or iron ore prices, or rising costs on projects could quickly compress margins.

Meanwhile, for CBA shares optimists would argue CBA’s premium valuation is earned through best-in-class execution, a dominant deposit franchise, superior technology investment, and consistent market share gains in a stable banking sector. 

However, bears see a stock priced for perfection, trading well above peers. 

This suggests limited room for further upside – and outsized downside risk if growth disappoints or Australian housing conditions deteriorate.

The post The bull and bear case for CBA and BHP shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has positions in BHP Group. 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.

ASX consumer discretionary stock Jumbo Interactive Ltd (ASX: JIN) soared 10% yesterday. 

Jumbo Interactive operates Oz Lotteries, a reseller of digital lottery tickets (e.g., Powerball, Oz Lotto) in Australia, and provides lottery software platforms and lottery management expertise to government and charity lotteries, primarily in Australia, the UK, and Canada.

Investors were jumping on board after the company released an updated FY26 outlook.

The 10% rise was a welcome change for investors as the lottery company has seen its share price fall almost 40% year to date.

What did the company report?

Yesterday, the consumer discretionary company provided an update to its FY26 Outlook ahead of the scheduled release of its FY26 results on 27 August 2026.

• Dream UK: EBITDA for the 8.5-month period has been revised down to £7.0-7.3m (previously £8.0-8.3m).
• Dream US: EBITDA for the 8-month period has been upgraded to US$5.2-5.5m (prev. US$2.7m-3.0m).

Dream UK and Dream US are lottery businesses that Jumbo Interactive has acquired. 

What is Bell Potter’s view?

Following the announcement, Bell Potter provided updated guidance on the consumer discretionary stock. 

Commenting on the release, Bell Potter said the downgrade of Dream UK reflects increased business investment during the founder transition period, new market-testing initiatives, and seasonality. 

Despite this, the business remains on a strong trajectory with expected annualised year-on-year growth of between 20% and 25%.

Meanwhile, commenting on the Dream US update, the broker said this strong performance was driven by an increased number of draws (29 draws in FY26e vs 16 previously) and favourable draw timing. 

JIN will migrate Dream US onto the Jumbo Lottery Platform (JLP) and a new app in 1Q27. We are pleased that JIN is already seeing revenue synergies in this business and are incrementally more confident of further synergies following JLP integration.

Minimal upside for ASX consumer discretionary stock

Despite the 10% jump in share price yesterday, Bell Potter appears to see this as a one off spike rather than a sign of further growth. 

The broker has retained its hold recommendation on the ASX consumer discretionary stock. 

It has slightly raised its price target to $7.20 (previously $7.10). 

From yesterday’s closing price of $7.18, this indicates little to no upside in the next 12 months. 

Although we are encouraged with the improvement in Dream US and Stride, we continue to see risks to market share as TLC’s offering improves and as new players play lotteries. We await evidence of positive market share data during periods of strong Powerball jackpots before we turn more positive on the stock.

The post Is this ASX consumer discretionary stock a buy after jumping 10% yesterday? 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 positions in and has recommended Jumbo Interactive. The Motley Fool Australia has recommended Jumbo Interactive. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.