Author: openjargon

Shares in Acrow Ltd (ASX: ACF) have been sold off over the past few weeks in particular and are now trading marginally above their 12-month lows.

The team at Shaw and Partners believes that this creates a buying opportunity for investors in the All Ords company, and they’ve issued a bullish price target on the stock, which we’ll get to later.

‘Firstly, why does Shaw like the look of this company?

Recent headwinds no big deal

The Shaw team said in a research note to clients that current headwinds, in the form of negative free cash flow and an increase in net debt, can be explained by project delays in Queensland and by investments for growth.

But they say a turnaround for Acrow could be rapid.

As they said:

Our forecasts assume a return to normal conditions in infrastructure spending across Australia and suggest that Acrow can generate positive free cash flow as early as 2H26. Potentially above-average margins from Olympics work represent upside to our forecasts.

Citi said the company had been investing via expenditure on equipment for leasing, working capital, and acquisitions, with Acrow buying four companies recently for a combined $75.4 million.

The Citi team said Acrow also remained exposed to strong-growth markets.

They said further:

These include the Industrial Access division’s significant growth opportunities in the defence and asset maintenance sectors, and the Brisbane 2032 Olympic and Paralympic Games. Regarding the Games, staged construction on venues is expected to commence in the March Qtr 2027 with peak activity across multiple venues expected between 2027 and 2031. We expect contract awards to be announced from July 2026. The 2032 hard-close date may also provide various Engineering & Construction companies the ability to surge-price for several years.

Shares looking cheap

Citi said that despite the near-term growth drivers, Acrow was trading at a discount to its peers.

Citi has a price target of $1.25 per share for Acrow, compared to its current share price of 85.5 cents, which would represent a 46.2% return.

The company also pays a trailing dividend yield of 5.78%.

Acrow in February reported record sales revenue of $155.9 million for the first half, up 23% on the previous corresponding period, while underlying net profit was 22% lower at $12.9 million.

The company’s accelerated capital expenditure during the half saw net debt increase by $28.2 million to $151.5 million, which was above the company’s target range.

Acrow was valued at $266.4 million at the close of trade on Friday.

The post Which All Ords builder could benefit from Brisbane’s big Olympics build? appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

Plenty of technology shares have been sold down in recent months as uncertainty about how artificial intelligence will disrupt legacy business models spooks the market.

Some of these companies have been oversold, however, and for some, AI looks set to be a positive, allowing them to build products more cheaply and serve their customers better.

The analyst team at Citi has recently issued research notes to their clients on three ASX technology shares they think are looking cheap.

So let’s take a look.

Xero Ltd (ASX: XRO)

Citi says that its analysis of the rate of business formation and insolvencies paints a positive outlook for Xero, “with business formation accelerating in Australia and US and insolvency trends improving in Australia and New Zealand, steady in UK and increasing in US”.

The Citi team added:

While there is typically a lag between both metrics and subscriber growth and churn for Xero, we see this as positive. One question is whether AI is driving an increase in business formation – in our view, it is likely too early but is an interesting trend to watch as it could be an offset to the disruption thesis.  

Citi has a price target of $144.80 on Xero shares, compared with its current price of $77, which would represent an 88.1% return if achieved.

Seek Ltd (ASX: SEK)

The Citi team believes there are some headwinds coming for employment listings company Seek, but they still think the company is undervalued.

On the downside, Citi says job listings in Australia were down 3% year on year in February and 0.5% month on month, which they said wasn’t surprising given the rate hike in February.

The Citi team added:

After the rate hikes in February and March, Citi economists expect another hike in May due to concerns over inflation expectations. These may pose downside risk on job volumes for the remainder of FY26 and 1H27 job volumes.

Despite these moderating factors, Citi has a price target of $26 on Seek shares compared with $14.44 currently. If achieved, this would be an 80.1% return.

Block Inc (ASX: XYZ)

This company, which owns payments brands Square and CashApp, announced last month that it would slash staff numbers by 4,000 to a new headcount of 6,000.

Citi said this has been the focus of much investor attention, but in its view, the more interesting AI development would be its ability to drive product releases “leading to potential gross profit upside”.

The Citi team added:

Focusing on recent initiatives led by AI releases, our proprietary analysis shows potential gross profit growth outperformance vs consensus by about 180 basis points in 2026, about 430 basis points in 2027 and about 440 basis points in 2028, pushing consolidated GP growth to the high-teens.

Citi has a price target of US$85 on Block shares, compared to US$59.37 currently. That increase would represent a 43.2% gain.

Applied to the Australian-listed Block shares, it would mean an increase from $82.86 currently to $118.57.

The post What are the 3 ASX technology shares Citi rates as a buy at the moment? appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block and 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.

The Genesis Energy Ltd (ASX: GNE) share price is in focus today after the company wrapped up a NZ$300 million fully underwritten renounceable rights offer, with the shortfall bookbuild clearing at a premium and total funds raised across all offers reaching NZ$400 million.

What did Genesis Energy report?

• Successful completion of the NZ$300 million 1 for 7.9 renounceable rights offer
• Shortfall bookbuild cleared at NZ$2.22 per new share, NZ$0.17 above application price
• Aggregate of NZ$400 million raised, including a NZ$100 million placement
• Settlement on ASX expected 24 March 2026, NZX on 25 March 2026
• New shares to rank equally with existing Genesis Energy shares
• FY25 revenue reported at NZ$3.7 billion

What else do investors need to know?

Genesis Energy’s shortfall bookbuild was well supported, delivering a premium over the general rights offer price. Eligible shareholders not taking up their full allocation, and ineligible shareholders, will receive NZ$0.17 per new share not taken up, with payment expected by 31 March 2026.

Settlement of new shares will enable trading to commence on both the NZX and the ASX. Genesis confirmed that these shares will have the same rights and status as existing ordinary shares. The company also continues as a leading NZ energy retailer with a strong mix of thermal and renewable generation assets, and a 46% stake in the Kupe Joint Venture.

What’s next for Genesis Energy?

With the equity raise completed, Genesis Energy will focus on deploying these new funds to support its ongoing operational and growth initiatives. The capital injection strengthens Genesis’ balance sheet and positions the business to further invest in its diverse generation portfolio.

Investors can expect updates on the company’s use of proceeds and strategic roadmap, particularly around renewable energy opportunities and customer growth in New Zealand’s competitive energy market.

Genesis Energy share price snapshot

Over the past 12 months, Genesis Energy shares have declined 4%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Genesis Energy completes NZ$400 million capital raise and rights offer 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.

It’s been a rough stretch for some of the most talked-about ASX shares. But here’s the twist: while share prices have slid or stalled, broker optimism hasn’t. In fact, it’s surging.

Three ASX shares stand out right now: Mesoblast Ltd (ASX: MSB), Telix Pharmaceuticals Ltd (ASX: TLX), and Zip Co Ltd (ASX: ZIP). All three have had turbulent months. Yet analysts see massive upside, in some cases, more than a double from here.

Let’s break them down.

Mesoblast: Largely pre-profit

This ASX share has had a shaky start to the year, with the share price down about 25%. That’s nothing new for this high-risk biotech stock. Volatility comes with the territory.

Strengths? Mesoblast is targeting major unmet medical needs with its stem cell therapies. Regulatory progress and clinical milestones can be powerful catalysts. When sentiment turns, it can turn fast.

Weaknesses? It’s still largely pre-profit and heavily dependent on approvals. Delays or setbacks can hit the share price hard. Funding risk also lingers.

Analyst outlook: This is where things get interesting. Brokers have an average price target on the ASX share of $4.23 at the time of writing. That implies around 105% upside. In other words, analysts believe a doubling is firmly on the table if execution improves.

Telix: Pipeline gaining traction

Telix is the outlier here. It’s actually up about 13% this year. But zoom out and the picture changes — the ASX share is still down roughly 54% over 12 months.

Strengths? Telix is already generating revenue from its prostate cancer imaging product. It’s not just a story stock. Its pipeline in therapeutic radiopharmaceuticals is also gaining traction.

Weaknesses? Growth expectations are high, and any miss can disappoint. The company also operates in a complex regulatory and manufacturing environment.

Analyst outlook: Brokers remain firmly bullish. The average price target sits at $23.97, suggesting 88% upside. Even more striking, the most bullish target is $31.59 — a potential 148% gain. That’s serious conviction.

Zip: Cutting costs, improving margins

Zip has had the toughest run of the three. The buy now, pay later ASX share is down around 55% this year. Investor sentiment has been fragile.

Strengths? The company has been aggressively cutting costs and focusing on profitability. Its US business is showing resilience, and margins are improving.

Weaknesses? It’s still exposed to consumer spending cycles and credit risk. Competition in the BNPL space remains fierce. Market trust also needs rebuilding.

Analyst outlook: Despite all that, brokers are highly optimistic. The average price target is $4.21. That’s about 191% upside — nearly triple its current share price. Few ASX shares carry that kind of implied return.

Foolish Takeaway

These three ASX shares aren’t for the faint-hearted. Each carries risk. Each has burned investors recently.

But here’s the bottom line: brokers see significant mispricing. If even part of the bullish thesis plays out, the upside could be substantial.

For investors willing to stomach volatility, the ASX growth stocks could be worth a closer look.

The post 3 top ASX shares that could double in value from here 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 positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Amid significant ASX share market volatility in recent weeks, there are a number of appealing opportunities, according to experts.

Some businesses may be impacted by higher costs (from higher energy costs), while others may be able to increase their profitability.

It’s curious when one analyst rates a business as a buy, but it’s fascinating when there are numerous buy ratings on the same business. We’re going to look at two of the most highly rated ASX shares out there right now, in terms of the number of buy ratings on them.

Coles Group Ltd (ASX: COL)

Coles is one of Australia’s largest supermarket operators. According to CMC Invest, there are currently 11 buy ratings on the supermarkets.

One of the brokers that likes Coles is UBS, which has a buy rating on the business with a price target of $24.

In a recent note, UBS highlighted the strength of the ASX share regarding its ongoing sales growth. It said that its supermarket business is delivering strong execution because of promotional effectiveness and cost leadership. At the same time, it’s trading at a sizeable price/earnings (P/E) ratio gap to Woolworths Group Ltd (ASX: WOW).

In the first six months of FY26, the supermarket division of Coles reported sales growth of 3.6% and underlying operating profit (EBIT) growth of 14.6%. This helped the overall business deliver underlying net profit growth of 12.5% to $676 million, despite challenges in the liquor division.

UBS also highlighted its recent investments in its supply chain and new warehouses will help product availability and improve its online offering, which help provide confidence for sales growth in 2026.

The broker projects the business could generate $1.25 billion of net profit in FY26 and pay an annual dividend per share of 77 cents.

Judo Capital Holdings Ltd (ASX: JDO)

Another business that is highly rated by analysts is small and medium business-focused bank Judo. A significant portion of its funding comes from term deposits for businesses, SMSFs and individuals.

According to CMC Invest, there have been seven recent buy ratings on the business.

One of the brokers that likes Judo is UBS, with a buy rating and price target of $2.25.

UBS thought the ASX share’s FY26 half-year result was impressive, with “plenty going right”. The broker highlighted that management are having improving confidence in lending book growth and net interest margin (NIM) delivery.

Management has guided that the NIM could be 3.15% in the second half of FY26. Judo also said that management’s guidance for cost-to-income (CTI) to reach around 30% is “achievable given NIM can continue to expand from deposit growth and mix”.

UBS said that it thinks Judo looks “well placed to benefit from structural tailwinds to business banking credit growth”.

The broker forecasts the business could generate a net profit of $133 million in FY26, which would represent significant year-on-year growth. UBS also predicts that the business could start paying a dividend in the 2027 financial year.

The post 2 ASX shares highly recommended to buy: Experts 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 positions in and has recommended Woolworths Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Some weeks feel like a good time to sit back and do nothing.

Others feel like an opportunity to lean in.

With several high-quality ASX 200 shares trading well below their highs, I think this is one of those moments where it’s worth taking a closer look at strong businesses that don’t often come down to these levels.

Here are three I’d be comfortable buying this week.

CSL Ltd (ASX: CSL)

CSL has had a tough run, with its share price falling significantly over the past year.

But when I look past the recent weakness, I still see one of the highest-quality biotech businesses in the world.

It operates in global plasma therapies, vaccines, and specialty medicines, with strong margins and a long history of innovation.

Short-term challenges have weighed on sentiment, but I don’t think they change the long-term outlook. Demand for its products remains supported by ageing populations and ongoing healthcare needs.

For me, this looks like a case where the share price has moved more than the underlying business.

Netwealth Group Ltd (ASX: NWL)

Netwealth is another high-quality ASX 200 share that has come off its highs despite continuing to perform well.

It operates a wealth management platform that is benefiting from the ongoing shift toward financial advice and digital investment solutions.

What stands out to me is its ability to consistently attract net inflows and grow funds under administration.

That kind of momentum can compound over time, particularly as more advisers move toward independent platforms.

I think Netwealth remains a high-quality growth business with strong long-term potential and is now trading at a compelling price.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is one of those businesses I keep coming back to.

It has a diversified portfolio that includes retail, chemicals, and industrial operations, which gives it multiple earnings streams.

The company also has a strong track record of capital allocation, whether that’s reinvesting in its existing businesses or making strategic acquisitions.

What I like most is its balance of stability and growth. Businesses like Bunnings provide consistent earnings, while newer initiatives offer additional upside over time.

It may not always look cheap, but when the share price pulls back, I think it’s worth paying attention.

Foolish takeaway

CSL, Netwealth, and Wesfarmers are all very different businesses, but they share a common theme of quality.

They have strong positions in their industries, proven track records, and the ability to grow over time.

After recent share price weakness, I think they’re worth considering for investors looking to buy high-quality ASX 200 shares this week.

The post Why I’d buy these high-quality ASX 200 shares this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Netwealth Group, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool Australia has recommended CSL and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

At the start of each week, I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Domino’s Pizza Enterprises Ltd (ASX: DMP) continues to be the most shorted ASX share with short interest of 16%. This is up week on week. Short sellers appear doubtful that the struggling pizza chain operator’s turnaround strategy will be a success.
• Telix Pharmaceuticals Ltd (ASX: TLX) has short interest of 15.3%, which is up again since last week. This radiopharmaceuticals company has been struggling with FDA approvals. It seems that short sellers don’t believe regulators will be approving its therapies any time soon.
• Treasury Wine Estates Ltd (ASX: TWE) has seen its short interest rise again to 15.1%. This wine giant has been battling very tough trading conditions, with consumers focusing on value rather than its premium wines.
• Guzman Y Gomez Ltd (ASX: GYG) has short interest of 13.4%, which is down week on week. This may be due to the burrito seller struggling the United States market, which was supposed to be its largest growth opportunity.
• Polynovo Ltd (ASX: PNV) has short interest of 13.3%, which is up again since last week. This medical device company’s shares trade with a premium valuation.
• Nanosonics Ltd (ASX: NAN) has 11.7% of its shares held short, which is up week on week again. This infection prevention company’s performance has been underwhelming in FY 2026, with profit before tax falling 3% during the first half.
• Boss Energy Ltd (ASX: BOE) has short interest of 11.2%, which is down since last week. Short sellers continue to close positions in the uranium producer, which was the most shorted ASX share for much of 2025.
• IDP Education Ltd (ASX: IEL) has 10.7% of its shares held short, which is down week on week again. Short sellers have been targeting this student placement and language testing company due to unfavourable changes to visa rules in key markets.
• Lynas Rare Earths Ltd (ASX: LYC) has short interest of 10.5%, which is flat week on week. This is likely due to valuation concerns after the rare earths producer’s shares rocketed over the past 12 months.
• Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 10.3%, which is up week on week. There are concerns that the travel agent won’t deliver on its revenue margin targets, especially given how the war in the Middle East could impact travel markets.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, Nanosonics, PolyNovo, Telix Pharmaceuticals, and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Lynas Rare Earths Ltd. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Flight Centre Travel Group, Nanosonics, PolyNovo, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Premier Investments Ltd (ASX: PMV) shares have been under pressure over the past 12 months.

During this time, the ASX 200 share has lost almost 40% of its value.

While this is disappointing for shareholders, it could be a buying opportunity for the rest of us, according to Bell Potter.

What is the broker saying?

Bell Potter highlights that Premier Investments released its half-year results last week and delivered a result largely in line with expectations.

However, the main story from the result was the announcement of a strategy reset for the Smiggle brand. It explains:

Premier Investment’s 1H26 result was largely in line the company guidance and market expectations at the Premier Retail EBIT (Pre-AASB 16 ex-Peter Alexander UK and other non-recurring items) level, however revenue a ~3% miss to Consensus/BPe. The FY26 guidance of $183m Retail EBIT was also in line with Consensus/BPe, but the interim dividend was a beat to Consensus/BPe while the trading update for the first 7 weeks of 1H26 commenced with the company noting a good momentum in the core brand, Peter Alexander (~70% of Premier Retail) ahead of the pcp.

The key announcement was the strategy reset undertaken in Smiggle to address the current poor performance in the brand with product repositioning into innovated new stock, speed to market and brand elevation planned in 2H26 (ongoing half), with the new and improved Smiggle division to return to positive growth (in decline since 1H24) by the end of 1H27. The cash and inventory position remained healthy coming ahead of BPe. The company also announced exploring of global wholesale partnerships for the Peter Alexander (PA) brand as the next leg of growth.

Big potential returns for this ASX 200 share

According to the note, the broker has retained its buy rating on this ASX 200 share with a trimmed price target of $18.00 (from $20.00).

Based on its current share price of $11.98, this implies potential upside of 50% for investors over the next 12 months.

But the returns don’t stop there, according to Bell Potter. The broker is forecasting a very generous fully franked dividend yield of 7% over the period.

Commenting on its buy recommendation, the broker said:

Our PT is based on a SOTP with a 11x (prev. 13x) multiple for PA, 4x (prev. 5x) for Smiggle and a current market valuation for Breville Group (BRG). We view PMV as trading at a discount to our coverage, considering the Premier Retail division with two global roll-out worthy brands together with equity investments, land bank and cash position while retaining a strong balance sheet supportive of M&A. Our SOTP sees an attractive $1.8b EV for the key PA brand vs PMV’s $1.9b market capitalization.

The post Why this ASX 200 share could be dirt cheap with a 7% dividend yield appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday

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

I’m calling Universal Store Holdings Ltd (ASX: UNI) an ASX value stock that looks too good to miss because of the reduction of the share price, the growth of earnings and the cheap price/earnings (P/E) ratio.

Universal Store is a fashion-focused ASX retail share that sells clothes focused on younger shoppers. Its main two brands are Universal Store and Perfect Stranger, though it also sells through CTC (which includes Thrills and Worship).

Unfortunately for shareholders, the Universal Store share price has already 14% in March and it seems likely that the business could face more pain this week. I think it’d be an even more attractive buy.

Continuing impressive growth

The FY26 half-year result was a strong reflection of its ability to deliver growth even in challenging trading conditions.

In the first six months of the 2026 financial year, group sales grew 14.2% to $209.6 million, with Universal Store sales growth of 11.9% to $174.8 million and Perfect Stranger growth of 41.5% to $17.8 million. Even CTC delivered sales growth, with a rise of 4.8% to $23.2 million.

Profitability is increasing too. Increasing scale helped the gross profit margin rise 150 basis points (1.50%) to 62.1%. Combined with cost discipline, the underlying operating profit (EBIT) grew 23.2% to $43.6 million and underlying net profit after tax (NPAT) rose 22% to $28.3 million.

I’m particularly excited by the potential of the Perfect Stranger brand which is rapidly growing. I expect it to make a greater contribution to the ASX value stock as time goes on. Three new stores were opened during the period, giving the brand 22 stores at the end of HY26.

The business is expecting to grow its overall store count by at least 13 in FY26 and management are pursuing additional store opportunities while being prudent.

In the first several weeks of the second half of FY26, the business reported direct-to-customer sales growth of 13.5%, which included Perfect Stranger Sales growth of 39%.

This isn’t just one year of strength, but it has delivered year after year performance since the onset of COVID-19.

It’s growing rapidly, but it isn’t priced that highly.

The ASX value stock’s cheap valuation

The experts at UBS project that the business could make net profit of $43 million in FY26, which translates into earnings per share (EPS) of 55 cents.

At the current Universal Store share price, that means it’s trading at 15x FY26’s estimated earnings.

In terms of next year’s valuation, it’s forecast by UBS to see net profit grow by 14% to $49 million, putting it at 13x FY27’s estimated earnings. With the potential profit growth figure similar to the P/E ratio number, we’re talking about a PEG ratio of close to 1, which is very attractive in my book.

Over the next three years, I think this ASX value stock has a great shot at outperforming the S&P/ASX 200 Index (ASX: XJO), including the dividends.

The post After falling 14%, this ASX value stock looks filthy cheap with a P/E of just 15! appeared first on The Motley Fool Australia.

More reading

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• Why buying ASX shares in March could supercharge your wealth
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• Bell Potter names more of the best ASX dividend shares to buy this month
• 2 ASX shares highly recommended to buy: Experts

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 Universal Store. 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 are likely to be volatile this week, but it could be a smart ASX dividend share pick for passive income amid all of the pain.

Wesfarmers is best known as the owner of Bunnings, Kmart and Officeworks. But, it owns plenty of other businesses like Priceline, Target, healthcare businesses, chemical, energy and fertiliser (WesCEF) businesses, and more.

I believe that out of all ASX retail shares, Wesfarmers could be a leading choice because of its focus on providing customers with good-value products.

Good idea for passive income

The business has increased its annual payout per share since 2020 following the demerger of Coles Group Ltd (ASX: COL). Not many ASX retail shares can point to a record like that.

Companies with a consistent record of growth seem more likely to continue increasing their payout, as long as the profit keeps heading higher over the long-term.

Analysts are currently optimistic that the business can continue growing its shareholder payments.

According to Commsec, the business is currently projected to pay an annual dividend per share of $2.16 in FY26 and then $2.33 in FY27.

Given how much volatility Wesfarmers shares could face this week, I’m going to just calculate what the passive income would be using the valuation at the time of writing.

The forecast FY26 payout translates into a grossed-up dividend yield of more than 4.2%, including franking credits. It’s a cash dividend yield, excluding franking credits, of around 3%.

$20,000 investment in Wesfarmers shares

Investing $20,000 into the retail giant (at the time of writing) and unlocking those yields would mean receiving cash payments of around $600 per year and $840 of grossed-up dividend income, including franking credits in FY26.

Of course, that’d just be year one.

If the projections on Commsec are right, then shareholders could see an 8% increase in the dividend payout in FY27, which would mean the figures I mentioned above would become approximately 8% larger year-over-year.

Is this a good time to invest in Wesfarmers shares?

A volatile market is not an easy thing to navigate.

However, if we just ask ourselves the question of whether we’d prefer to invest at a higher valuation or lower valuation, then I think the answer is obvious.

The market is presenting us with lower share prices almost across the board. This week seems like a good time to invest because of the lower valuations.

I know I’ll be putting some money into the ASX share market today.

The post $20,000 of Wesfarmers shares can net me $820 in passive income! 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.