Category: Stock Market

Growth stock Electro Optic Systems Ltd (ASX: EOS) share price has taken a heavy hit recently, tumbling roughly 50% from its earlier highs. For most companies, a drop like that signals trouble. But when you look at what Electric Optic Systems has delivered this year, the pullback starts to look completely disconnected from the fundamentals.

At around $5 per share, Electric Optic Systems now trades at levels that simply don’t reflect the momentum building inside the business. And after going through its latest numbers, I honestly think this is shaping up as one of the more interesting growth opportunities on the ASX.

A defence business gaining serious momentum

Electric Optic Systems has moved beyond its early days as a speculative tech name. The growth stock is now landing substantial defence contracts in high-demand areas like counter-drone technology, high-power laser systems and next-generation remote weapon station (RWS).

The company delivered a solid set of numbers in the first half of FY25, including:

• Revenue jumped 69% to $143.6 million

• Underlying EBITDA returned to profit at $17.3 million

• Operating cash flow came in at $26.4 million

• Cash on hand improved to $65 million

A contract pipeline that keeps growing

One of the most important metrics for a defence company is its backlog. And Electric Optic Systems now has a $414 million order backlog.

That includes:

• The huge A$125 million laser contract with the Netherlands
• Multiple Slinger counter-drone system orders in Western Europe
• A $108 million LAND 400-3 contract supplying RWS to the Australian Defence Force

This is not potential work waiting to be won. These are firm contracts that give Electric Optic Systems clear revenue visibility for years to come.

On top of that, the company is still in the running for a potential $500 million-plus Middle Eastern defence opportunity and a second high-power laser contract, which management has already hinted could materialise. Electric Optic Systems has the advantage of offering proven technology, something defence buyers value heavily, especially in fast-moving areas like counter-drone warfare.

Even if one of these contracts’ lands, it would significantly reshape the company’s revenue outlook. If both opportunities come through, I doubt the market will keep valuing the growth stock anywhere near its current levels.

Why I think the sell-off has gone too far

The fall in the Electric Optic Systems share price has been mostly sentiment-driven. But the numbers show a company:

• Growing revenue rapidly
• Returning to EBITDA profitability
• Generating positive operating cash
• Expanding its footprint across key global defence markets

And importantly, the world is moving toward exactly the kind of technology Electric Optic Systems specialises in. Drones and counter-drone systems are now priority spending areas for militaries everywhere.

My take

Looking at the fundamentals, Electric Optic Systems appears much stronger than a company that has shed 50% of its share price. If the company keeps delivering on contracts and lifting margins, I can easily see the share price bouncing back to its recent highs.

For long-term investors willing to be patient, I think this downturn is offering a rare chance to buy a genuinely exciting defence growth story at a heavily discounted price.

The post After falling 50%, this under-the-radar growth stock looks like brilliant value to me appeared first on The Motley Fool Australia.

More reading

• Bell Potter names the best ASX defence stocks to buy
• Two ASX defence stocks to add to your christmas wish list
• The sleeper defence stock set to explode? Up 240% in 2025, and poised to fire again!
• 4 ASX shares I’d buy today with $10,000
• Top brokers name 3 ASX shares to buy next week

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

Energy One Ltd (ASX: EOL) is a soaring ASX technology stock that is now drawing attention from broker Bell Potter. 

The company is a global provider of software products, outsourced operations, and advisory services for wholesale energy, environmental, and carbon trading markets. Its solutions support energy participants across Europe, the UK, and the Asia-Pacific region.

In the last 12 months it has soared almost 180%. 

The surge has been thanks to a strong financial performance. Revenue growth fuelled a surge in profitability, driven by the operating leverage of the software business.

In FY25, the company reported revenue growth of 17% to $61.4 million and annual recurring revenue (ARR) jumped 22% to $60.4 million.

EBITDA rose by 57% to $10.5 million, and net profit after tax (NPAT) increased by 74% to $5.9 million.

Bell Potter initiates coverage

The surging ASX technology stock has drawn the attention of Bell Potter. 

The broker issued a new report on Thursday last week that included a buy recommendation and price target of $20.80. 

Shares closed last week at $17.58, which means the broker sees an upside of approximately 18.31%. 

The broker said the company now has more than 450 customer installations in 30+ countries with 12 different products available. 

The company’s value proposition is flexibility, speed of implementation and the removal of complexities. EOL’s ‘one-stopshop’ approach is a key differentiator against more pure-play competitors.

The company delivers software and services which are crucial to the operations of its customers. Without it, customers are unable to perform day-to-day. 

Bell Potter believes as a result, Energy One intimate client offering has high switching costs leading to a sticky customer base as evidenced by its historically low churn. 

Emerging tailwinds 

Bell Potter also has optimism around the leverage of this ASX technology stock to decarbonisation tailwinds. 

EOL is well placed to benefit from the rising share of renewable energy in the global energy system. The variability and intermittency of renewables increase market complexity and volatility, driving demand for reliable software and operational support.

It said Europe’s recent quadrupling of its electricity trading windows enhances this company’s opportunity to sell, cross-sell and up-sell its product suite.

Bell Potter believes the ‘mission-critical’ nature of Energy One’s offering provides a resiliency to its earnings and an ability to push through necessary price increases.

Potential catalysts for further upside include further M&A in Europe to hasten expansion and management commentary ensuring confidence in their ambitious cash EBITDA margin target.

The post Bell Potter just initiated coverage with a buy recommendation for this ASX technology stock appeared first on The Motley Fool Australia.

More reading

• After falling 50%, this under-the-radar growth stock looks like brilliant value to me
• These two ASX ETFs soared in the month of November
• 5 things to watch on the ASX 200 on Monday
• Why I think this ASX small-cap stock is a bargain at $4.26
• Why these brokers are bullish on the Santos share price

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 Energy One. 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.

A new report from Betashares has revealed the best performing ASX ETFs across the month of November, with two in particular standing out. 

ASX ETFs snapshot

According to the Betashares Australian ETF Review report, the Australian ETF industry recorded $4.3 billion of inflows in November. 

This helped the Australian ETF industry to a new record high of $324.9B in funds under management which is a rise of $3.2B or 0.98%.

ETF flows have been above $4 billion for five consecutive months. Over the last 12 months the Australian ETF industry has grown by 33.8%, or $82 billion. 

A separate report from the ETF provider forecasts a further 300,000 first-time ETF investors in 2026, which would lift total participation beyond three million for the first time.

Betashares CEO Alex Vynokur said the findings reflect how deeply ETFs have become embedded in Australian investing.

ETFs are now being used by 2.7 million Australians to build wealth and support their long-term financial goals. More than ever, Australians are turning to ETFs as a foundation for their financial future.

The report shows ETFs now comprise 17% of the average investment portfolio, the highest level recorded in the research’s history.

Betashares also released data about the best performing funds in November. 

BetaShares Global Gold Miners ETF – Currency Hedged (ASX: MNRS) 

According to the latest report from Betashares, the Betashares Global Gold Miners Currency Hedged ETF (ASX: MNRS) extended its YTD performance lead after being the best performing fund in November.

It rose more than 18% from November to December 1. 

It’s no surprise this fund has performed well, as the gold sector has raced ahead in 2025, fuelled by commodity price surges and defensive investment sentiment.

This ASX ETF tracks the performance of an index (before fees and expenses) that comprises the largest global gold mining companies (ex-Australia), hedged into Australian dollars.

It is now up 143.89% year to date. 

Betashares Energy Transition Metals Etf (ASX: XMET)

This ASX ETF also raced ahead of the market in November. 

It rose 15.83% from November to December 1. 

According to Betashares, the fund is now the third best performing fund this year.  

It tracks the performance of an index (before fees and expenses) that provides exposure to a portfolio of global companies in the Energy Transition Metals (‘ETMs’) industry. 

ETMs are raw materials that are essential to the transition to a less carbon-intensive economy.

XMET ETF provides exposure to global producers of copper, lithium, nickel, cobalt, graphite, manganese, silver and rare earth elements.

This fund is now up almost 90% in 2025.

The post These two ASX ETFs soared in the month of November appeared first on The Motley Fool Australia.

More reading

• 70% of institutional investors expect gold price to rise in 2026
• How to take the guesswork out of getting exposure to the mining sector

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

On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week in style. The benchmark index rose a sizeable 1.2% to 8,697.3 points.

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

ASX 200 expected to tumble

The Australian share market looks set for a very poor start to the week following a selloff on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 51 points or 0.6% lower. In the United States, the Dow Jones was down 0.5%, the S&P 500 fell 1.1%, and the Nasdaq pushed 1.7% lower.

Oil prices weaken

It could be a poor start to the week for ASX 200 energy shares such as Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices weakened on Friday night. According to Bloomberg, the WTI crude oil price was down 0.3% to US$57.44 a barrel and the Brent crude oil price was down 0.25% to US$61.12 a barrel. This was driven by oversupply concerns.

Buy Harvey Norman shares

Bell Potter thinks that Harvey Norman Holdings Ltd (ASX: HVN) shares could be a top pick for investors. This morning, the broker has retained its buy rating and $8.30 price target on its shares. It said: “Australian household spending for Oct’25 has been somewhat assisted by the earlier start of the Black Friday promotional period (running on an extended basis from mid-late Oct to Cyber Monday), with non-food categories up 5.3% YOY. While we expect a relatively robust promotional period apart from the weakest discretionary categories as somewhat evident in the recent trading updates (such as mass apparel, lifestyle footwear and some parts of household goods), we also remain cautious on trends for the months ahead.”

Gold price rises

ASX 200 gold shares such as Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price pushed higher on Friday night. According to CNBC, the gold futures price was up 0.35% to US$4,328.3 an ounce. This saw the precious metal climb to a seven-week high.

Buy Cedar Woods shares

Bell Potter thinks that Cedar Woods Properties Ltd (ASX: CWP) shares are in the buy zone. This morning, the broker has reaffirmed its buy rating and $9.70 price target on its shares. This implies potential upside of 18% for investors over the next 12 months. The broker has named the residential property developer as one of its key picks in the real estate sector.

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

More reading

• Why these brokers are bullish on the Santos share price
• ASX 200 mining shares lead the market for a second week
• Bell Potter names the best ASX retail stocks to buy
• Here are the top 10 ASX 200 shares today
• Goodman Group declares 15c unfranked interim distribution for H1 FY26

Motley Fool contributor James Mickleboro has positions in Woodside Energy 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 positions in and has recommended Harvey Norman. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX small-cap stock Kelsian Group Ltd (ASX: KLS) has the potential to deliver very pleasing returns to investors, and I think it’s a solid buy for the long-term.

The fact that its share price has slipped 18% since 7 October 2025 makes it even more appealing buy, in my opinion.

Kelsian describes itself as a leading global operator of bus, motorcoach and marine services, which has been contracted by governments and private clients to deliver safe, reliable and sustainable passenger transport solutions.

The business has operations across Australia, the UK, Singapore, the USA and the Channel Islands. The ASX small-cap stock operates one of Australia’s largest public bus operators, the second largest motorcoach business in the USA and bus franchising in the UK and Singapore. It also has significant marine operations, providing ferry services for commuters, tourism and regional communities.

Overall, the company operates more than 5,800 buses, 124 vessels and 24 light rail vehicles, enabling 383 million customer journeys over the past year.

Let me outline some of the positives about the ASX small-cap stock.

Low valuation

At a time when many of the most appealing investments globally are trading at expensive prices, Kelsian looks like it’s trading on a cheap price/earnings (P/E) ratio.

According to the forecast on CMC Markets, the business is expected to make earnings per share (EPS) of 36.4 cents in FY26. That means it’s currently valued at under 12x FY26’s estimated earnings.

That P/E ratio looks cheap considering the business is projected to grow its EPS by another 10% in FY27, which I believe looks very promising.

Good core growth

Over the last year or so, the ASX small-cap stock has focused on addressing underperforming assets, divesting non-core assets (such as tourism assets), ensuring its debt levels are appropriate and improving communication about capital allocation.

The company says that it has strong market positions with a pipeline of opportunities that “will drive organic growth” across its markets. Kelsian said that its focus remains on capitalising on those opportunities.

It highlighted that in the first quarter of FY26 it won its first bus public transport contract in Queensland, the Ipswich and Logan bus improvement package.

Dividend income

The final thing I’ll highlight is that the business is rewarding investors with a solid level of passive income each year. It’s pleasing to be rewarded as a shareholder just for owning shares over time. Hopefully, the company can deliver capital growth too, resulting in solid overall total shareholder returns.

The ASX small-cap stock is expected to pay a grossed-up dividend yield of 6.2% in FY26 and 6.9% in FY27, including franking credits, according to the projection on CMC Markets.

The post Why I think this ASX small-cap stock is a bargain at $4.26 appeared first on The Motley Fool Australia.

More reading

• After falling 50%, this under-the-radar growth stock looks like brilliant value to me
• Bell Potter just initiated coverage with a buy recommendation for this ASX technology stock
• These two ASX ETFs soared in the month of November
• 5 things to watch on the ASX 200 on Monday
• Why these brokers are bullish on the Santos share price

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.

The Santos Ltd (ASX: STO) share price has fallen by more than 20% from August 2025, as the chart below shows. A key question is whether the ASX energy share is good value at this level.

A decline in valuation could be an attractive buying opportunity because of the cyclical nature of energy prices. It can be useful to buy cyclical businesses after they’ve gone through a period of weakness.

At the moment, there are multiple analysts that rate the business as a buy. At the time of writing, there are currently nine buy ratings on the business, according to a Commsec collation of analyst opinions on the company.

Let’s take a look at what brokers are seeing with the ASX energy share.

Expert views on the ASX energy share

UBS is one of the brokers that rates the Santos share price as a buy, with a price target of $8.10. That implies the broker expects a possible rise of almost 30% within the next year. I think that’s likely to be a market-beating return, if it eventuates.

The broker noted that the company’s quarterly production for the three months to September 2025 saw production and sales revenue was slightly weaker than analyst estimates because of the impact of flooding in the Cooper basis, a slower ramp-up of production at Fairview from the drilling program under way (within GLNG) and a marginally slower ramp-up from the new Barossa gas project.

This led to Santos trimming its 2025 production and sales volume guidance, leading to a modest reduction of projected earnings per share (EPS) over the next two to three years.

Successful commissioning of Barossa provides a “material de-risking” of the Santos investment thesis and should support the Santos share price.

UBS commented that the oil outlook faces a number of supply and demand uncertainties, but the broker believes Santos’ fundamentals are solid. The broker thinks the ASX energy share is on the cusp of “material deleveraging” and a “step change” in free cash flow, making Santos shares its preferred pick in the Australia energy sector.

The broker also suggests that the business could decide to lift its distribution payout ratio from more than 40% of free cash flow excluding major growth to more than 60% of all-in free cash flow.

UBS said with its final thoughts:

We also believe the ADNOC process has revealed that other strategic competitors see considerable value in STO’s undeveloped asset portfolio, presenting STO numerous options for asset recycling, growth funding & improving shareholder returns. Following the resignation of the CFO and recognising that the CEO’s long-term performance rights vest from 2026, we think executive succession planning must become a key focus of the board.

Santos share price valuation

UBS projects the business could generate US$1.5 billion of net profit in FY26 and US$1.7 billion in FY28.

That means the Santos share price is valued at 9x FY26’s estimated earnings and 8x FY28’s estimated earnings. That certainly is a cheap price/earnings (P/E) ratio.

The post Why these brokers are bullish on the Santos share price appeared first on The Motley Fool Australia.

More reading

• Dividend investors: Premier ASX energy shares to buy in December
• Looking for strong dividend yields? Look no further than these energy stocks
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

AMD is starting to see real momentum in its product offering, and may start competing with Nvidia on a more level playing field in the near future. A shift in the landscape could make AMD a better investment than Nvidia for 2026.

So, which am I picking for 2026? Let’s find out.

AMD’s key weakness is starting to improve

From a product offering standpoint, Nvidia has owned the data center space since the artificial intelligence (AI) buildout began in 2023. Nvidia’s technology stack, plus its leading software, made it the no-brainer choice to train AI models on, but AMD has improved its offering.

Thanks to a handful of acquisitions and partnerships, AMD’s ROCm software has improved to become a more competitive offering with CUDA (Nvidia’s software). During its recent financial analyst day, AMD noted that ROCm downloads have increased 10x year over year, showcasing that this software may be gaining traction in the AI community.

If AMD can offer a similar level of performance to Nvidia, Nvidia may be in trouble. It’s no secret that Nvidia’s hardware is far more expensive than AMD’s, and this shows up in the two companies’ margins.

AMD Gross Profit Margin data by YCharts

Nvidia’s gross margin and net income margin are far greater than AMD’s, which shows that a huge chunk of the cost of Nvidia GPUs goes to paying its profits. With a greater scrutiny on how much money AI hyperscalers are spending on their data center capital expenditures, turning to cheaper alternatives like AMD in exchange for some performance decrease may be a smart move.

As of right now, I doubt this will happen. Companies are fairly locked into the Nvidia ecosystem, and Nvidia CEO Jensen Huang noted the company was “sold out” of cloud GPUs right now. This wouldn’t be the case if Nvidia were losing market share to cheaper alternatives, but this could open the door for AMD.

If potential customers are trying to obtain more computing power in a short time frame and Nvidia doesn’t have the capacity, those companies may go to AMD to fulfill their needs. If those clients find that AMD’s hardware is comparable, they could start moving more business from Nvidia to AMD.

We’ll see if that thesis plays out, but the reality is there is plenty of room for both these companies to thrive.

The AI computing market is massive

Nvidia believes that global data center capital expenditures will rise to $3 trillion to $4 trillion by 2030, up from $600 billion in 2025. AMD is also bullish on this space and believes there will be a $1 trillion compute market by 2030. These two projections are fairly similar, as Nvidia’s projections include all data center costs, while AMD’s focuses on just compute.

If both companies are right on the market opportunity, there is a massive growth runway, which is why AMD told investors to expect a 60% compounded annual growth rate (CAGR) in its data center division. Nvidia likely expects a similar growth rate, making both stocks genius investments for 2026 if the 2030 projections from each company pan out.

Currently, Nvidia is the far cheaper stock, trading at 25 times next year’s earnings versus 34 for AMD.

AMD PE Ratio (Forward 1y) data by YCharts

That’s a significant premium that investors must pay to own AMD, which hasn’t been as successful in its AI endeavors.

As a result, I think Nvidia is the better stock pick over AMD, as there are fewer expectations priced in. However, if AMD starts to deliver on its growth projections, don’t be surprised if AMD outperforms Nvidia in 2026. Both companies are valid investments, and I won’t be surprised when either beats the market in 2026.

 The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Better Artificial Intelligence (AI) stock for 2026: Nvidia or AMD? appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 stocks that in 20 years have turned $5,000 into more than $1 million
• Will Nvidia crush the market again in 2026?
• The 3 smartest quantum computing stocks to buy with $1,000 in 2026
• Should you invest $1,000 in Nvidia right now?
• Nvidia stock price slumped 12.6% in November. What’s next for the artificial intelligence (AI) behemoth?

Keithen Drury has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Advanced Micro Devices and Nvidia. The Motley Fool Australia has recommended Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

These 2 ASX 200 retail shares are quiet achievers. Both companies generate strong, repeatable cash flows, which fuel fully franked dividends.

Investors hunting for both growth and income might want to have a closer look at these 2 ASX 200 retail shares, which currently happen to be trading well below their recent peaks.

JB Hi-Fi Ltd (ASX: JBH)

JB Hi-Fi has a knack for proving sceptics wrong. Just when analysts wonder how much more a bricks-and-mortar electronics chain can squeeze out of Australian shoppers, JB Hi-Fi finds another margin to defend, another cost to trim and another store to outperform.

That consistency is exactly why the stock keeps popping up on “growth and income” shortlists. This might be a good time to jump in, as the ASX share has tumbled 17.5% in the past 6 months to $91.81.

Then there’s the income. JB Hi-Fi remains one of the ASX’s most reliable dividend generators. Investors get a fully franked yield that often looks better than term deposits, with the bonus of capital growth potential.

The company decided to increase its dividend payout ratio from 65% to a range of between 70% to 80% of net profit from FY26, suggesting larger dividends are likely in the coming years.

The ASX 200 retailer also decided to increase its annual dividend per share to $2.75, representing a 5.4% increase year-over-year. At the current JB Hi-Fi share price, that represents a grossed-up dividend yield of 3.2%, including franking credits. It also declared a special dividend of $1 per share in FY25.

RBC Capital Markets is positive on the company’s outlook, saying the company has an “industry-best cost base efficiency”.

RBC just set a price target of $101 for the next 12 months on JB Hi-Fi shares, which points to an 11% upside.

Premier Investments Ltd (ASX: PMV)

Premier Investments isn’t the kind of retailer that shouts for attention. Its portfolio includes Smiggle, Peter Alexander and a string of high-performing apparel brands.

The ASX 200 share has managed to carve out a rare position. It offers dependable income and could offer genuine growth potential at its current level. At the time of writing, it’s at a 52-week low of $14.17, a loss of 56% for the year.

Premier’s magic ingredient is control. Premier Investments runs tight operations, squeezes every dollar out of its store network and has a habit of turning niche brands into category killers. Peter Alexander remains Premier’s crown jewel, clocking strong sales and enviable margins thanks to its cult-like following and premium pricing.

Cash generation is where Premier Investments quietly flexes its muscles. The company’s balance sheet is robust, dividends flow consistently and a strong franking profile makes payout days even sweeter for investors seeking income.

Analysts expect attractive dividend income in the years ahead. CMC Markets forecasts the business could pay an annual dividend per share of 79 cents in FY26. That translates into a potential grossed-up dividend yield of 6.5%, including franking credits.

Last week, the ASX retail share got smashed after a trading update highlighted weaker discretionary spending in 1H FY26.

Macquarie responded by retaining its neutral rating on Premier Investments but reduced its 12-month price target on Premier Investments from $20.80 to $16.20 per share.

This implies a potential upside of 14% in the new year.

The post Buy these 2 ASX 200 retail shares for growth and income appeared first on The Motley Fool Australia.

More reading

• Opportunity knocks? Broker ratings on 4 ASX shares at 52-week lows
• Why Chalice Mining, Predictive Discovery, Premier Investments, and St Barbara shares are sinking today
• 5 things to watch on the ASX 200 on Thursday
• How high does RBC Capital think JB Hi-Fi shares can go?
• Macquarie names its top ASX consumer staples and consumer discretionary stock picks

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

Treasury Wine Estates Ltd (ASX: TWE) shares are limping through a brutal year. The ASX 200 shares have been under constant pressure as investors digest softer sales and a procession of downgrades.

Treasury Wine shares are trading at $5.49 apiece at the time of writing. That sees the stock down 51.4% this year and at levels that remain at 10-year lows.

For some context, the S&P/ASX 200 Index (ASX: XJO) gained 6.6% in 2025.

Structural headwinds in China and US

The drop is painful for a prestigious 68-year-old company that is known for premium wine labels such as Penfolds, 19 Crimes and Lindeman’s, which are sold in more than 70 countries around the world.

Treasury Wines’ fall reflects not just short-term noise but structural headwinds. The company’s board has flagged distribution challenges in key markets, such as the US.

Another strategically important market, China, has recovered more slowly than expected despite the easing of trade hurdles in 2024. Trade and geopolitical shifts, particularly in the US, add to the company’s challenges.  

Paused buyback program

Those setbacks have led to earnings downgrades, the withdrawal of formal earnings guidance from the company and a pause to the company’s $200 million buyback program.

These moves have shaken investor confidence, and as a result, the share price has suffered significantly.

The 40 cents per share in partly franked dividends that Treasury Wine paid over the full year will only compensate its shareholders modestly for their share price losses. At the current share price, Treasury Wine shares trade on a dividend yield of 7.3%.

What next for Treasury Wine shares?

Analysts have responded with varying degrees of caution, and recent broker notes show some downgrades. However, most analysts see Treasury Wine shares as positive, with a ‘hold’, ‘buy’ or even ‘strong buy’ recommendation. 

TradingView data shows that the most optimistic analysts expect Treasury Wine shares to climb as high as $9.90, which implies 80% upside at the time of writing. The average share price target for the next 12 months is $7.37 and that still suggests a possible gain of almost 17%.   

Analysts at Morgans recently retained the hold rating for the wine stock and set a $6.10 price target for the next 12 months.

The broker noted:

We suspect that trading has been weaker than expected and wouldn’t be surprised if consensus is too high. The 1H26 result will be particularly weak. We have made large revisions to our forecasts and stress that earnings uncertainty remains high. Consequently, we maintain a HOLD rating.

The post Over 51% down this year, how low can Treasury Wine shares go? appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares
• Macquarie names best and worst ASX stocks to buy in a rising interest rate environment
• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today
• Down 50% in a year, why are Treasury Wine shares sinking on Monday?
• Why today’s cheap ASX shares could double my money during the next bull market

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

Buy-and-hold investing with ASX shares makes a lot of sense because it allows compounding to work its magic for a long period of time.

Lower turnover means fewer opportunities to lose some of the portfolio value to the ATO because of capital gains tax.

But, I’d only want to own great investments for a long time, not mediocre businesses. I’d expect strong companies to deliver better returns over time thanks to the above-average profit growth.

The two ideas below are high-quality ones that I’ve bought for my own portfolio and I’m excited about.

TechnologyOne Ltd (ASX: TNE)

The world is rapidly changing in some areas, including AI. Having the right technology for organisational operations is important, which is what TechnologyOne offers. It provides enterprise resource planning (ERP) software to governments, local councils, businesses and universities.

TechnologyOne invests around a quarter of its revenue each year into research and development (R&D), ensuring that it can continue to provide customers with the best (and improving) software. This initiative is also helping the ASX share unlock more revenue from subscribers as they pay for more features.

The company is aiming for a net revenue retention (NRR) of 115%, implying 15% growth of revenue from its existing customer base each year. At that pace, revenue would double in five years.

With the business targeting large addressable markets, such as the UK and education sector, I think it has a very attractive future. This ASX share is a great candidate for a buy and hold strategy. When also considering its rising dividend and growing profit margins, it’s a very appealing investment.

According to the forecast on CMC Markets, the TechnologyOne share price is valued at 46x FY27’s estimated earnings. In a decade, I’m expecting the company’s annual recurring revenue (ARR) to be well over $1 billion.  

VanEck MSCI International Quality ETF (ASX: QUAL)

This is one of the exchange-traded funds (ETFs) that I’m putting my long-term retirement money into.

I’m a big believer that Australians should allocate a significant portion of their portfolio to international shares directly or indirectly because of how many great businesses are listed overseas.

But, we don’t necessarily need to own a piece of thousands of companies, just the best ones. That’s what the QUAL ETF is trying to provide – it owns 300 of the highest-quality global businesses from across various countries and sectors.

There are a few factors that all of the businesses inside of the QUAL ETF need to have. It’s this combination of factors that makes them appealing.

Firstly, they must have a high return on equity (ROE). In other words, they make a high level of profit on how much shareholder funds are retained within the business.

Second, they have stable earnings. That means profits aren’t going backwards – they’re usually going upwards!

Finally, the companies must have low leverage. They should have low levels of debt for their size, making them more sustainable businesses. By utilising this quality-focused strategy, the QUAL ETF has managed to deliver an average return per year of 15.75% over the prior five years, outperforming many ASX shares in that time.

The post 2 ASX shares to buy and hold for the next decade appeared first on The Motley Fool Australia.

More reading

• The best Australian stocks to buy today and not check again until 2035
• Buy Australian: ASX stocks positioned to beat global markets next year
• If a 30-year-old invests $1,500 a month in ASX stocks, here’s what they could have by retirement
• Top Australian stocks to buy right now with $2,000
• 2 ASX shares to buy and hold for the next decade

Motley Fool contributor Tristan Harrison has positions in Technology One and VanEck Msci International Quality ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.