Category: Stock Market

Light & Wonder Inc (ASX: LNW) shares are having a tough session on Thursday.

At the time of writing, the ASX 200 gaming stock is down 11% to $100.08.

What is weighing on Light & Wonder shares?

The catalyst for the selling has been the release of a mixed first-quarter result.

According to the release, Light & Wonder reported revenue of US$790 million for the quarter, up 2% on the prior corresponding period.

Also growing was its consolidated adjusted EBITDA, which rose 5% to US$327 million, while adjusted NPATA per share increased 7% to US$1.45.

Reported profit falls

Despite the adjusted earnings growth, statutory earnings were significantly weaker.

Net income fell 37% to US$52 million, while diluted net income per share declined 30% to US$0.66.

Management attributed the decline largely to approximately US$50 million in legal reserve contingencies associated with legacy legal matters.

This appears to be one reason the market is reacting negatively today.

Gaming machine sales disappoint

There were also signs of weakness in parts of the Gaming division.

While Gaming revenue increased 3% to US$512 million, Gaming machine sales revenue fell 25%. Management advised that this reflects the timing of international and North American video lottery terminal shipments in the prior year period.

Gaming Systems revenue also declined 14%, mainly due to lower hardware sales.

The ASX 200 stock also revealed that the SciPlay business remains under pressure.

Revenue fell 7% to US$187 million, driven by continued weakness in JACKPOT PARTY Casino.

Management notes that the mature social casino market remains challenging, although SciPlay did deliver higher adjusted EBITDA and margin expansion.

Management commentary

The ASX 200 stock’s CEO, Matt Wilson, was pleased with the quarter. He said:

The first quarter of 2026 marks the beginning of the next phase of the Company’s growth trajectory: one defined by our content-centric operating model, deepening customer relationships, disciplined execution, expanding margins and enhanced capital structure. We are seeing the benefits of our continued investment in studios and content, as our franchises drive strong game performance across the portfolio.

Gaming momentum remained robust, with our North American premium installed base growing for the 23rd consecutive quarter, and Grover continued its expansion into the recently legalized Indiana market. iGaming delivered another double-digit growth quarter in both revenue and AEBITDA, while SciPlay continued to expand its DTC revenue.

Cash flow a brighter spot

On the positive side, adjusted free cash flow increased 86% to US$207 million, reflecting strong underlying cash generation.

The company also maintained its net debt leverage ratio within its target range and reiterated its intention to reduce leverage below 3.0 times during the first half of 2027.

Outlook

Light & Wonder expects full year consolidated adjusted EBITDA growth in the mid to high single digits.

However, management warned of ongoing macroeconomic and geopolitical uncertainty, including tariff-related cost pressures and a pending increase in UK iGaming gambling duties.

Wilson concludes:

Looking ahead, we remain focused on investing in product innovation and talent to further strengthen our recurring revenue model and enhance our global competitive position as we progress toward our 2028 financial targets.

The post Why are Light & Wonder shares sinking 11% today? appeared first on The Motley Fool Australia.

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The BWP Trust (ASX: BWP) share price is in focus following its announcement of a successful $122 million institutional entitlement offer and strong 98% take-up by institutional investors.

What did BWP Group report?

• Raised approximately $122 million via the Institutional Entitlement Offer at $3.77 per new security
• Offer was fully underwritten, part of a total $228 million capital raising
• Wesfarmers took up its full $53 million entitlement
• Approximately 32 million new securities to be issued
• New securities will rank equally with existing BWP securities

What else do investors need to know?

BWP Group completed the institutional component of its 1 for 12 pro rata entitlement offer, showing continued support from large shareholders. Any shortfall was quickly picked up by other existing and new institutional investors.

Trading in BWP securities resumed today. The new securities issued are set to begin trading on 18 May 2026, offering increased liquidity and access for investors.

The retail entitlement offer, which aims to raise an additional $106 million, opens for eligible retail investors on 12 May 2026, closing on 22 May 2026.

What’s next for BWP Group?

Attention now turns to the retail entitlement offer, giving eligible investors a chance to participate on the same terms as institutional investors. The proceeds from the capital raising are expected to support BWP Group’s ongoing investment strategy and strengthen its balance sheet.

Management will be sharing more details in the upcoming retail offer booklet and is providing a dedicated support line for shareholder queries.

BWP Group share price snapshot

Over the past 12 months, BWP Group shares have risen 4%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post BWP Group announces successful entitlement offer appeared first on The Motley Fool Australia.

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• Generation Development Group completes $1.8bn client migration

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.

Zip Co Ltd (ASX: ZIP) shares are charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed yesterday trading for $2.52. In early morning trade on Thursday, shares are changing hands for $2.64 apiece, up 4.8%.

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

Here’s what’s catching investor interest.

Zip shares lift on strong April performance

Zip shares are jumping higher following the company’s presentation at the annual Macquarie Group Ltd (ASX: MQG) Conference.

That presentation included a trading update for April.

Investors are reacting positively after Zip reported ongoing strong growth in April.

In its core growth market of the United States, the ASX 200 BNPL company reported a year-on-year total transaction volume (TTV) increase in April of more than 40% (in US dollar terms).

And management said that Zip’s US credit outcomes have been performing in line with expectations and are on track to be at least 1.75% of TTV for Q4 FY 2026.

And in its Australia and New Zealand segment, Zip said it now serves 1.9 million “highly engaged customers”, which the company noted represents some 10% of the Australian adult population.

Zip shares also look to be getting support today, with the company reaffirming its full-year FY 2026 guidance.

Zip expects to achieve full-year cash earnings before taxes, depreciation and amortisation (EBTDA) of $260 million, with at least 40% TTV growth in its US markets (in US dollar terms). The company expects an operating margin of 18% and a revenue margin of 8%.

As for bad debts, the company forecasts its fourth-quarter losses will be around 1.75% of TTV.

How has the ASX 200 BNPL share been tracking in FY 2026?

Zip shares closed up 13.7% on 17 April following the release of the company’s third-quarter results.

Highlights for the three months included record cash EBTDA of $65.1 million, up 41.5% year on year. And TTV of $4.0 billion was up 22.4%.

At the end of the quarter, Zip had 6.5 million active customers, up 3.5% year on year. And the number of merchants on Zip’s platforms increased by 12.7% to 93,900.

Commenting on the quarterly results, Zip CEO and managing director Cynthia Scott said:

Zip’s resilient business model continues to drive increased profitability at scale, delivering record cash earnings of $65.1 million, up 41.5% year on year. Operating margin expanded 292bps to 19.4%, reflecting strong unit economics and significant operating leverage.

Momentum continued across both markets, underpinned by deepened customer engagement and disciplined execution.

The post Why are Zip shares storming higher on Thursday? appeared first on The Motley Fool Australia.

More reading

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• These are the 10 most shorted ASX shares
• These ASX financial stocks are bouncing, is it just the start?
• The five best ASX 200 stocks to buy and hold in April revealed
• Why these ASX shares jumped 15%+ in April

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

Super Retail Group Ltd (ASX: SUL) shares are under pressure on Thursday morning.

At the time of writing, the ASX 200 stock is down 13% to a 52-week low of $10.08.

Why are Super Retail shares crashing?

Investors have been selling the retailer’s shares this morning following the release of a trading update after the market close on Wednesday.

Investors appear to be reacting to softer trading momentum across the group and a lift in expected corporate costs.

According to the update, group like-for-like sales growth was just 0.4% for the first 18 weeks of the second half. Total sales growth for the same period was 1.9%.

Management revealed that sales momentum across all four brands was impacted by the onset of the Middle East conflict, with inflationary pressures, higher fuel prices, rising interest rates, and concerns around fuel availability weighing on consumer sentiment.

The impact was most pronounced over the key Easter trading period.

BCF hit hardest

The weakest performer in the second half has been the BCF brand, which reported a 3.3% decline in like-for-like sales for the half to date.

Management said BCF was the brand most affected by elevated fuel prices and fuel supply constraints, particularly in regional areas.

This reduced customer participation in outdoor activities during the Easter and school holiday period.

The ASX 200 stock also noted that trading was hurt by the unfavourable calendar caused by the separation of Easter and Anzac Day.

Mixed performance across other brands

Supercheap Auto delivered like-for-like sales growth of 1.6% for the second half to date, but management noted that trading conditions in the auto category moderated through March and April.

Discretionary categories such as power tools were weaker, though this was partly offset by increased demand in fuel-related and DIY categories.

The Rebel brand posted 1.4% like-for-like sales growth and gained market share despite weaker category sales through March and April.

Finally, Macpac recorded 2.5% like-for-like growth, but its momentum was also affected by reduced outdoor activity in March and April as it prepared for the key winter trading period.

Margins and costs

Also weighing on the ASX 200 stock on Thursday is news of margin pressure.

Super Retail advised that group gross margin for the second half to date is modestly below the prior comparable period.

In addition, total group and unallocated costs for FY 2026 are now expected to be $66 million, up from the previous estimate of $60 million.

This includes project costs related to the transition to a new Victorian distribution centre and implementation of a new HR Core and Payroll system.

The post Why are Super Retail shares crashing 13% today? 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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Tabcorp Holdings Ltd (ASX: TAH) share price is under the spotlight today as the company revealed it is the subject of an AUSTRAC enforcement investigation related to anti-money laundering and counter-terrorism financing (AML/CTF) compliance.

What did Tabcorp report?

• Tabcorp has received a formal notification from AUSTRAC regarding a compliance assessment.
• AUSTRAC expressed serious concerns about Tabcorp’s money laundering and terrorism financing risk management controls.
• An enforcement investigation has commenced, focusing on the effectiveness of Tabcorp’s AML/CTF program and customer monitoring processes.
• The review is currently at an early stage, with all potential outcomes still open—including the possibility of no further enforcement action.

What else do investors need to know?

While the investigation is still in its early days, AUSTRAC’s concerns relate to Tabcorp’s ability to identify and manage risks around money laundering and terrorism financing. The focus will be on compliance with legal obligations and the effectiveness of current policies and monitoring systems.

Tabcorp’s Board and management say they are committed to full cooperation with AUSTRAC, highlighting that ongoing improvements to risk management have been a priority as part of the company’s transformation. There is no indication yet of financial penalties or operational restrictions, but investigations of this type may involve significant scrutiny and resources.

What’s next for Tabcorp?

Tabcorp will work closely with AUSTRAC as the investigation unfolds, with management reaffirming their commitment to raising risk management standards across the business. Shareholders will be keenly watching for further updates from the company or AUSTRAC as more information becomes available over the coming months.

There are no changes to ongoing operations at this stage, but regulatory compliance and the results of the investigation will remain key investor watchpoints in the near term.

Tabcorp share price snapshot

Over the past 12 months, Tabcorp shares have risen 72%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post Tabcorp faces AUSTRAC compliance probe 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.

ASX materials stock Imdex Ltd (ASX: IMD) is in focus today after another big jump during yesterday’s trade. 

It is an Australian mining equipment and technology company operating globally.

Its technology includes drilling optimisation products, cloud-connected rock knowledge sensors, and data and analytics to improve the process of identifying and extracting mineral resources.

Yesterday, it rose another 3%, which takes it to a 9% gain over just the last week. 

It is now up 28% year to date and 62% over the last year. 

Investors monitoring this soaring ASX materials stock may be wondering if there is any upside left. 

The team at Bell Potter have provided updated guidance on this rocketing ASX stock. 

It seems the broker believes there’s still plenty of room to run. 

3Q FY26 Business Update

In the recent report, Bell Potter said Imdex’s Business Update was headlined by quarterly revenue of $123m (BPe $122m), up 23% YoY (29% CCY), and a bullish outlook.

The company reported: 

• Quarterly revenue was $123m, up 23% YoY (BPe $122m; up 29% CCY)
• Sensors, services, and software revenue contribution grew to 70% of Group revenue, up from 68% in 1H FY26, partly reflecting the 33% uplift in tools on hire (vs PcP)
• Regionally, the Americas and APAC led revenue growth at 27% and 28%, respectively, with strong demand for sensors and field services, and minimal impacts from the Middle East conflict noted

Bell Potter said these results helped improve the long-term outlook for this ASX materials stock. 

We are encouraged by the significant expansion in CY26 gold and copper Major and Intermediate exploration budgets, suggesting robust uptake of IMD drilling products, tools and software in the shortterm. Together, with greater Junior exploration activity, as a record wave of recently raised equity is increasingly deployed, IMD is well positioned to deliver strong revenue growth and operating leverage over the next twelve months.

Price target increase

Based on this guidance, the team at Bell Potter have increased their share price target to $5.10 (previously $4.60). 

From yesterday’s closing price of $4.43, this indicates a further upside potential of approximately 15%. 

It’s worth noting that opinions appear mixed on the further potential for this ASX materials stock. 

Based off 10 forecasts from analysts via TradingView, price targets range from a low of $3.60 per share, to highs of $5.15. 

Online brokerage platform Selfwealth indicates this ASX materials stock is trading close to fair value.

The post Can this red hot ASX materials stock keep charging higher? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• This ASX materials stock could rise 20% according to this broker

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.

Earlier this week, Regis Resources Ltd (ASX: RRL) announced a game-changing merger with Vault Minerals Ltd (ASX: VAU).

If the proposal goes ahead, it is expected to create a gold giant with a pro forma market capitalisation of about $10.7 billion and combined anticipated gold production of over 700,000 ounces per year.

Does this make Regis Resources shares a buy? Let’s see what Bell Potter is saying about the proposed merger.

What is the broker saying?

Bell Potter is positive on the deal and believes it creates meaningful scale, production diversification, and greater relevance to global investors. It explains:

We view this deal as a positive for shareholders and as carrying strategic merit. With no cash component, we look to relative equity valuations and find, based on VA consensus, RRL and VAU trading on similar forward P/E and EV/EBITDA multiples. Forecast EBITDA margins for both are in the 50%-60% range. From a free cash flow perspective, RRL is stronger in both yield terms and absolute dollars, but as VAU completes a major mill expansion at Leonora it catches up over FY28-FY29. We see this as complementary: Leonora will be lifting to an expanded steady state in the next 2 years as RRL potentially increases underground investment and the Tropicana open-pit passes peak production.

In the short-term, as a 700kozpa producer with five operating mines, the combination creates meaningful scale and greater relevance to global investors. It offers genuine diversification of production and spreads the development risk of McPhillamys and Sugar Zone. A debt-free balance sheet with $1.9 billion cash is extremely strong and improves access to capital. In the long-term, we see a more powerful growth platform with potential to compete for genuine top-quality assets. The company will be unhedged, offering full gold price exposure.

Should you buy Regis Resources shares?

According to the note, Bell Potter has responded to the news by retaining its buy rating and $9.45 price target on the gold miner’s shares.

Based on its current share price of $6.51, this implies potential upside of 45% for investors over the next 12 months.

It also expects 5% dividend yields in FY 2026 and FY 2027, which boosts the total potential return to 50%.

The broker concludes:

We make no changes to our forecasts with this update. RRL continues to offer strong free cash generation, dividends and unhedged, debt free gold exposure. Retain Buy.

The post Are Regis Resources shares a buy amid its mega gold merger with Vault Minerals appeared first on The Motley Fool Australia.

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The Orica Ltd (ASX: ORI) share price is in focus after the company reported record first-half EBIT of $512 million, up 5% year-on-year, and an 8% rise in underlying net profit after tax to $283.1 million.

What did Orica report?

• Sales revenue of $3,884.2 million, down 1% from the prior half
• EBIT of $512.0 million, up 5%
• Net Profit After Tax (pre-significant items) of $283.1 million, up 8%
• Earnings per share (pre-significant items) of 60.7 cents, up 12%
• Unfranked interim dividend of 28.5 cents per share, up 14%
• Return on Net Assets at 14.7%, the highest in 13 years
• $500 million on-market share buy-back completed

What else do investors need to know?

Orica continued to deliver strong underlying earnings, with solid demand for premium products, technology offerings and stable gold and copper market conditions. The company finalised its $500 million share buy-back and resumed the Dividend Reinvestment Plan, highlighting a focus on capital management.

Strategic moves included agreements to acquire Nelson Brothers’ explosives business in North America and the Danafloat range, expanding Orica’s reach into copper processing. The company also successfully managed disruptions in ammonium nitrate supply and settled major US litigation.

Orica reported no significant environmental incidents and achieved its 2026 near-term emissions reduction target, reaffirming its commitment to sustainability.

What did Orica management say?

Managing Director and CEO Sanjeev Gandhi said:

We have delivered record earnings in the first half, driven by strong demand for premium products and advanced technology offerings, robust gold and copper markets and disciplined commercial execution. Despite a challenging environment, our first half EBIT was the highest in over 20 years and highlights the continued commitment of our people and the resilience and adaptability of Orica’s diversified portfolio, manufacturing asset base and global supply network in a market that continues to value quality, security of supply and technology-enabled outcomes.

What’s next for Orica?

The company expects full-year underlying EBIT growth across all business segments and regions, provided there are no major new external disruptions. Orica plans to continue investing in supply chain security, growing premium product adoption, and expanding its digital offerings.

Management also reiterated its focus on cost reduction, targeting at least $100 million in enduring savings, with most benefits expected from 2027. The balance sheet remains strong, with leverage at the lower end of targets, supporting further growth initiatives and aiming for sustainable long-term returns to shareholders.

Orica share price snapshot

Over the past 12 months, Orica shares have risen 25%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 8% over the same period.

View Original Announcement

The post Orica posts record first-half earnings and higher dividend appeared first on The Motley Fool Australia.

More reading

• NEXTDC wraps up $1.7bn hybrid offer, lifts liquidity
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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

The Nextdc Ltd (ASX: NXT) share price is in focus after the company completed a major A$1.7 billion Hybrid Securities Offer, boosting its pro forma liquidity to approximately A$8.4 billion as at 30 June 2026.

What did NEXTDC report?

• Completed a wholesale subordinated Hybrid Securities Offer totaling A$1.7 billion
• Offer includes A$1.0 billion Initial Series and A$0.7 billion Delayed Draw Series
• La Caisse has committed to subscribing for the full offer amount
• Hybrid Securities are expected to be classified as debt for accounting and tax purposes
• Pro forma 30 June 2026 liquidity increases to around A$8.4 billion after new debt facilities

What else do investors need to know?

The Hybrid Securities are structured to rank junior to all senior debt, sitting outside the company’s senior debt covenants, without any equity conversion features. This means current shareholders are not facing dilution as a result of this raise.

NEXTDC expects settlement and issue of the Initial Series to occur on 15 May 2026, with the Delayed Draw Series available to be issued within the next 12 months, subject to customary conditions. Advisers on the transaction included Barrenjoey, Cadence Advisory, and Mallesons.

What’s next for NEXTDC?

NEXTDC is focused on scaling its infrastructure platform to support digital economy growth, using the enhanced liquidity to strengthen its balance sheet and invest in further expansion. With new senior debt facilities now in place, the company is well positioned to pursue its capital plan and ongoing operational excellence.

Management highlights the company’s commitment to operational sustainability and innovation in providing mission-critical data centre services for cloud providers, enterprises, and government clients.

NEXTDC share price snapshot

Over the past 12 months, NEXTDC shares have risen 7%, slightly trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 8% over the same period.

View Original Announcement

The post NEXTDC wraps up $1.7bn hybrid offer, lifts liquidity appeared first on The Motley Fool Australia.

More reading

• Orica posts record first-half earnings and higher dividend
• Generation Development Group completes $1.8bn client migration
• Amcor earnings surge on Berry acquisition
• 5 things to watch on the ASX 200 on Thursday
• Super Retail Group provides a trading update

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.

JB Hi-Fi Ltd (ASX: JBH) shares had a tough time on Wednesday.

The retail giant’s shares ended the day 7% lower following the release of a trading update.

This means its shares are now down 40% from their 52-week high of $121.00.

Does this make JB Hi-Fi shares a bargain buy? Let’s see what Bell Potter is saying.

Are JB Hi-Fi shares a bargain buy?

Bell Potter notes that JB Hi-Fi’s trading update suggests that the key JB Hi-Fi Australia business is performing in line with its expectations in FY 2026.

The same cannot be said for The Good Guys business, which “saw some easing in growth at 2.5% and came in slightly below BPe.”

In response, the broker has made some small revisions to its revenue and earnings expectations. It explains:

We make changes to our revenue assumptions factoring in the GG and e&s performance in the trading update and accounting for some easing within our JBH Aus comparable sales in meeting the current challenging 4Q26 comps. The key division would cycle +8.2% comparable sales during the seasonal quarter and our revised estimates see +1.8% for 4Q26e and +2% for 2H26e and +3% thereafter.

We also apply some conservatism through our FY27/28e forecasts to see market share retention offset by some investment in gross margins, hovering around the 22% level for the overall business and a broadly flat CODB % of sales, with operating margins improving from a low point in FY27e. The net result sees our NPAT forecasts -1%/- 3%/-3% for FY26/27/28e.

Should you invest?

Bell Potter continues to see value in JB Hi-Fi shares at current levels.

It has responded to the update by retaining its buy rating on the retailer’s shares with a trimmed price target of $87.00 (from $90.00).

Based on its current share price of $72.98, this implies potential upside of 19% for investors over the next 12 months.

In addition, the broker expects dividend yields of 4.5% in FY 2026, 4.6% in FY 2027, and 4.9% in FY 2028. This stretches the total potential return beyond 23%.

Bell Potter thinks JB Hi-Fi shares are good value at 17x estimated FY 2026 earnings. It said:

Our PT decreases by ~3% to $87.00 (prev. $90.00) driven by our modest earnings revisions (BPe below Cons), skewed to FY27/28e. While we expect the overall Consumer Discretionary sector to remain challenged through CY26, our preference for JBH is supported by our view as semi-discretionary characteristics seen in the name and ability to maintain market share over a longer-term vs smaller competitors as short term product challenges are mitigated through 4Q26. Trading at ~17x FY26/27e P/E (BPe), we see valuation support and maintain our BUY rating.

The post Down 40%: Are JB Hi-Fi shares a bargain buy? appeared first on The Motley Fool Australia.

More reading

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• Warning: JB Hi-Fi shares tumble as investors look past sales growth

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