Category: Stock Market

NextDC Ltd (ASX: NXT) is not an unfamiliar name, and it is one I have written about before.

But I think the setup looks a little different today.

With the ASX 200 growth stock still down around 20% from its 52-week high despite a recent rebound, I think it could be worth revisiting.

A business positioned at the centre of a structural shift

NextDC operates data centres, which are effectively the physical backbone of the digital economy.

As more businesses rely on cloud computing, artificial intelligence (AI), and data-heavy applications, the need for secure, high-performance infrastructure continues to grow.

I think what is important here is not just that demand is increasing, but how quickly it appears to be accelerating.

Recent updates point to a meaningful step-up in activity, with a sharp increase in contracted capacity and a growing pipeline of future demand.

To me, that suggests this is not a slow, steady trend. It is something that could build momentum over time.

The gap between demand and earnings

One of the challenges with NextDC is that the financials do not always reflect the underlying demand straight away.

The company signs contracts and builds capacity well ahead of when that capacity starts generating revenue. That creates a lag between investment and earnings.

For example, the business now has a large forward order book of contracted capacity that is expected to convert into revenue over the coming years.

If that contracted demand converts as expected, it could drive a step-change in revenue and earnings over time. But in the near term, the heavy investment required to build that capacity can weigh on reported results.

That mismatch can create periods where the market loses patience.

Record demand is changing the outlook

What jumps out to me from the latest update is just how strong demand appears to be right now.

Contracted utilisation has increased significantly in a short period, with a large increase driven by new customer wins.

That kind of move is not something you see every day. It points to a structural shift in how customers are using data infrastructure, particularly with the rise of AI and large-scale cloud deployments.

I think this is important because it changes the conversation. Instead of asking whether demand will show up, the question becomes whether NextDC can build fast enough to meet it.

Investment today, potential payoff later

There is no getting around the fact that this is a capital-intensive business.

NextDC is investing heavily in new capacity, and that can put pressure on cash flow and earnings in the short term. The ASX 200 growth stock has even increased its capital expenditure plans to keep up with demand.

That is the trade-off. Higher investment now in exchange for potential growth later.

I think investors need to be comfortable with that dynamic. This is not a story that plays out over a few quarters.

But if the demand trends continue, those investments could underpin a much larger business in the years ahead.

That said, this is not without risk. Execution matters. And there is always the possibility that demand does not materialise as expected or that returns take longer to come through.

Foolish takeaway

NextDC is not an ASX 200 growth stock I would buy expecting quick results.

But looking at where the business sits, and the demand trends it is exposed to, I think it has the potential to grow into something much larger over time.

So, with the share price down from its highs and demand showing signs of accelerating, this could be one of those situations where patience is rewarded.

The post This beaten-down ASX 200 growth stock could be one to watch appeared first on The Motley Fool Australia.

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• NextDC shares dip as retail offer opens. Here’s what you need to know
• NEXTDC opens $0.5 billion retail entitlement offer
• Top brokers name 3 ASX shares to buy next week
• NextDC just raised $750 million, here’s why the shares are climbing
• NEXTDC launches $750m wholesale notes to boost growth funding

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

Charter Hall Long WALE REIT (ASX: CLW) is an ASX dividend stalwart that every passive income investor should consider, in my view.

I believe it offers virtually everything a dividend-focused investor could want: a good yield, stability, diversification, good value and the potential for a bit of growth.

Let’s run through each of those positives.

Diversification

As its name suggests, the business is a real estate investment trust (REIT). It’s perhaps the most diversified REIT that’s listed on the ASX.

The ASX dividend stalwart is invested across numerous sectors including government properties (including Geoscience Australia), pubs, grocery and distribution, data centres, telecommunication exchanges, Bunnings properties, service stations, food manufacturing, waste and recycling, and more.

I like this strategy because this reduces the risk of being too overexposed to one particular sector. Plus, it means the REIT can look across the entire property landscape for opportunities.

Stability

I think of the most important aspects of being an ASX dividend stalwart is that it can provide stability for investors during economic uncertainty.

Charter Hall Long WALE REIT offers stability in a few different ways.

Firstly, as the name suggests, it has a long WALE. That’s not a giant sea creature, but the weighted average lease expiry. In other words, how long are its rental contracts for (and including the fact that some rental contracts generate more rental income than others).

Currently, it has a WALE of around nine years, which is one of the largest in the industry.

The business also has a portfolio occupancy of near 100%, with 99% leased to tenants that are either government, or leading ASX-listed, multinational or national businesses.

Some of the ASX tenants include Telstra Group Ltd (ASX: TLS), Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Endeavour Group Ltd (ASX: EDV).

A good yield

The ASX dividend stalwart pays out a distribution every three months, which is pleasingly regular for investors wanting passive income.

It’s expecting to pay an annual distribution per unit of 25.5 cents in the 2026 financial year, which represents a distribution yield of 7.3%. It hasn’t offered a distribution yield better than during most of the last six years.

Growth potential of the ASX dividend stalwart

I like saving cash in a bank account, but I’m not looking for a term deposit-style investment that offers fixed income and no growth.

Instead, I want to own things that can deliver earnings growth and distribution growth in the long-term, even if there’s a bit of disruption in the short-term.

Charter Hall Long WALE expects to grow its FY26 annual distribution by 2% to 25.5 cents amid the interest rate volatility.

I think longer-term growth looks likely thanks to rental growth – there are some properties with fixed annual increases and others with rental growth linked to inflation.

Overall, I think this business looks undervalued considering its latest stated net tangible assets (NTA) was $4.68 – much higher than the current unit price.

The post An ASX dividend stalwart every Australian should consider buying appeared first on The Motley Fool Australia.

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• Looking for long-term passive income? Try one of these ASX shares

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

The Australian share market is a great place to build a passive income.

But which ASX dividend shares could be in the buy zone right now? Let’s look at three that analysts are tipping as buys:

Cedar Woods Properties Limited (ASX: CWP)

The first ASX dividend share that could be a buy is Cedar Woods.

It is one of Australia’s leading property developers with a portfolio that is diversified by geography, price point, and product type. This includes subdivisions in emerging residential communities, high-density apartments, and townhouses in inner-city neighbourhoods.

Bell Potter believes the company is well-placed to benefit from Australia’s chronic housing shortage.

It expects this to underpin fully franked dividends per share of 39 cents in FY 2026 and then 41 cents in FY 2027. Based on its current share price of $7.19, this would mean dividend yields of 5.4% and 5.7%, respectively.

The broker has a buy rating and $10.20 price target on its shares.

Premier Investments Ltd (ASX: PMV)

Another ASX dividend share that is being tipped as a buy is Premier Investments.

It owns brands such as Smiggle and Peter Alexander and holds a significant investment portfolio. Like many retailers, it has faced a tough consumer environment, which has dampened near-term earnings expectations.

But analysts at Macquarie remain positive, largely due to the strength of the Peter Alexander brand.

They are expecting the company to pay fully franked dividends of 95.2 cents per share in FY 2026 and then 97.4 cents per share in FY 2027. Based on its current share price of $12.53, this would mean generous dividend yields of 7.6% and 7.8%, respectively.

Macquarie has an outperform rating and $16.90 price target on its shares.

Sonic Healthcare Ltd (ASX: SHL)

A third ASX dividend share that is rated as a buy by analysts is Sonic Healthcare.

It is one of the world’s leading healthcare providers with operations spanning laboratory medicine, pathology, radiology, and primary care medical services.

It has been going through a tough period, but analysts at Bell Potter believe the company is now positioned for sustainable growth.

This is expected to support partially franked dividends of $1.09 per share in FY 2026 and $1.11 per share in FY 2027. Based on its current share price of $19.93, this equates to dividend yields of 5.45% and 5.55%, respectively.

Bell Potter has a buy rating and $28.75 price target on its shares.

The post 3 ASX dividend shares to build a passive income appeared first on The Motley Fool Australia.

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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Premier Investments and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Wednesday, the S&P/ASX 200 Index (ASX: XJO) had another subdued session and dropped into the red. The benchmark index fell 0.25% to 8,687 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to sink

The Australian share market looks set for a tough session on Thursday following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 63 points or 0.7% lower this morning. In the United States, the Dow Jones was down 0.6%, the S&P 500 edged 0.05% lower, and the Nasdaq rose slightly.

Hold Codan shares

Codan Ltd (ASX: CDA) shares are fairly valued after jumping 15% on Wednesday. This morning, the team at Bell Potter has put a hold rating and improved price target of $41.30 (from $37.70) on the technology company’s shares. It said: “With relatively high levels of R&D spend strengthening CDA’s competitive advantages across its businesses, CDA is well positioned to benefit from increased demand for mission-critical connectivity solutions in both defence and public safety markets. We believe CDA shares trade at fair value on 33x FY26 EV / EBIT amidst improving operating momentum and improving outlook in both segments.”

Oil prices jump

ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) could have a strong session on Thursday after oil prices surged overnight. According to Bloomberg, the WTI crude oil price is up 8.2% to US$108.12 a barrel and the Brent crude oil price is up 7.8% to US$119.93 a barrel. This was driven by news that Donald Trump plans to blockade Iran until it agrees to a nuclear deal.

Fortescue shares rated as a sell

Fortescue Ltd (ASX: FMG) shares are overvalued according to analysts at Bell Potter. This morning, the broker has downgraded the iron ore giant’s shares to a sell rating with a reduced price target of $18.15. It said: “FMG’s core iron ore operations continue to perform very well and benefit from an elevated iron ore price. However, we anticipate higher costs to emerge in 2HCY26 as low-cost inventories are exhausted, putting pressure on earnings. We are wary of the “portfolio optimisation” review encompassing Iron Bridge. We drop our rating to Sell.”

Gold price drops

ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a poor session on Thursday after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.1% to US$4,557.6 an ounce. Traders appear to believe that soaring oil prices could lead to higher inflation and interest rate hikes.

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

More reading

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• Here are the top 10 ASX 200 shares today
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• Why 29Metals, Aurelia Metals, Codan, and oOhMedia shares are racing higher today
• Why Ramelius, Liontown and Woodside shares are making waves on Wednesday

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. 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.

Woodside Energy Group Ltd (ASX: WDS) shares are rising on Wednesday following the release of a first-quarter update from the energy giant.

This was not necessarily a blowout quarter, but I think there were a few important takeaways that reinforce the longer-term investment case.

Here is how I see it.

Reliability remains a real strength

One of the standout aspects of the update was just how reliable Woodside’s assets continue to be.

Key operations like Sangomar, Pluto LNG, and the North West Shelf all delivered reliability at or above 99% .

That might not sound exciting, but I think it matters more than it gets credit for.

In a business like energy, consistency drives cash flow. High reliability means assets are producing when they should, which supports earnings and helps smooth out volatility over time.

Even with some disruption from cyclones late in the quarter, the company was able to maintain strong operational performance overall.

For me, that reinforces the idea that Woodside’s asset base is high quality.

Production dipped, but pricing improved

Production volumes came in at 45.2 million barrels of oil equivalent, down 8% from the previous quarter .

That was largely due to seasonal weather impacts, which I do not see as a structural issue.

At the same time, pricing moved in the opposite direction. Woodside achieved an average realised price of US$63 per barrel of oil equivalent, up 11% from the prior quarter .

I think this balance is important. Energy companies are always dealing with a mix of volume and price. In this case, lower production was partly offset by stronger pricing, which helps support overall revenue.

It also highlights how sensitive earnings can be to commodity prices. If pricing remains firm, that can do a lot of the heavy lifting.

Growth projects are progressing well

For me, this was probably the most important takeaway.

Woodside continues to make strong progress on its major growth projects, particularly Scarborough, which is now 96% complete and on track for first LNG in the fourth quarter of 2026 .

Other projects like Trion and Louisiana LNG are also advancing and remain on budget. I think this is important because it underpins future production and cash flow growth.

These are long-life assets that can generate returns for years once they come online. Seeing them progress on time and on budget reduces a lot of execution risk.

It also gives investors more confidence in the medium-term outlook.

Are Woodside shares a buy?

I think they are. This update does not change the core story for me.

Woodside continues to operate a portfolio of high-quality assets, benefits from strong commodity pricing, and is steadily bringing major growth projects closer to completion.

There will always be volatility in energy markets. Production can move around, and prices can change quickly.

But when I look at the bigger picture, I think the combination of reliable operations, improving pricing, and a clear pipeline of projects puts the company in a strong position over time.

For investors looking for income and exposure to global energy demand, I believe Woodside shares still look like a solid option.

The post 3 key takeaways from Woodside’s first-quarter result appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why Ramelius, Liontown and Woodside shares are making waves on Wednesday
• Up 40% in 2026: Why are Woodside shares charging higher today?
• Woodside Q1 2026 earnings: Revenue grows, Scarborough and Trion progress
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

When I think about what drives long-term outperformance, I come back to a fairly simple idea. 

The businesses that tend to win over a decade are usually the ones with consistent demand, pricing power, and the ability to quietly grow earnings year after year.

That is why I think Woolworths Group Ltd (ASX: WOW) shares have a real chance to beat the market over the next 10 years.

A business built on everyday demand

Woolworths sits in one of the most resilient parts of the economy. People still need to buy groceries regardless of what interest rates are doing or how the broader market is performing.

That does not make it immune to short-term pressures. Margins can move around, and competition can pick up. But over long periods, this kind of demand tends to be stable and predictable.

That stability matters more than it might seem. It gives Woolworths a consistent base of revenue that can compound over time, even if growth is not explosive in any single year.

Scale that supports earnings growth

One of the key advantages Woolworths has is scale. It operates one of the largest supermarket networks in Australia, which gives it significant buying power and operational efficiency.

Over a 10-year period, even modest improvements in margins, combined with steady sales growth, can lead to meaningful earnings expansion.

A steady compounding profile

Woolworths is not the type of ASX share that typically delivers sudden, dramatic gains. But that is not really the point here.

What matters is consistency. If a business can grow earnings at a steady pace, reinvest into its network, and maintain strong market share, the compounding effect can become quite powerful over time.

It is also worth noting that Woolworths continues to be viewed as a high-quality defensive within portfolios, sitting alongside other stable names that can deliver dependable growth.

That kind of positioning tends to attract long-term capital, which can support valuation over time.

Why time is the key factor

Over shorter periods, Woolworths shares might lag the market. That can happen if growth stocks are leading or if defensive names fall out of favour.

But over a decade, the equation shifts. The combination of steady earnings, strong market position, and essential demand can add up in a way that is easy to underestimate.

For example, over the last 10 years, Woolworths shares have delivered an average total return of 9% per year.

This is not about trying to pick the fastest grower. It is about owning a business that can keep moving forward, year after year, with fewer surprises along the way.

Foolish takeaway

Woolworths is unlikely to be the most exciting share on the ASX. But over 10 years, it does not need to be.

If it continues to grow steadily, defend its market position, and benefit from its scale, I think it has a solid chance of delivering returns that quietly edge past the broader market.

The post Why I think Woolworths shares could beat the market over 10 years appeared first on The Motley Fool Australia.

More reading

• $250,000 to invest for passive income? Here’s how I would build a portfolio
• Is it time for investors to turn back to defensive ASX shares?
• If I had to build a simple ASX portfolio today, this is what I’d do
• Nervous investors turn to ASX 200 defensives as global energy shock drags on
• 5 ASX dividend shares I’d buy for a second income

Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.

When it comes to companies operating in the gaming and poker machine spaces Australia has a couple of the world majors, with Aristocrat Leisure Ltd (ASX: ALL) being one.

New broker report

RBC Capital Markets has just initiated coverage of the stock, and they have an outperform rating on it, as well as a bullish share price target which we’ll get to shortly.

Interestingly one of the characteristics of gaming spending over the past six weeks has been its resilience in the face of global uncertainty.

AS RBC’s Mark Wilson says in his report on Aristocrat:

Notwithstanding the Iran conflict and cost of living pressures, global gaming markets remain resilient as evidenced by recent gaming expenditure data. In 1Q26, US commercial gaming revenue was up 5% on the previous corresponding period with land-based casino gross gaming revenue (GGR) up 3% and iGaming GGR up 18%.

Mr Wilson said Aristocrat still has room to grow, despite already holding a commanding position in the market.

As he said:

Aristocrat’s recent game performance highlights that it is well-positioned to grow incremental market share, notwithstanding that it has a current 43% share of the North American Gaming Ops market and a 31% share of the Outright Sales market.

Mr Wilson said RBC believes there is upside risk to their earnings forecasts if the company’s Aristocrat Interactive division can achieve its revenue target of US$1 billion by FY29.

He went on to say:

The iGaming market is growing in excess of 20% pa and Aristocrat has just a 3.5% share of the iCasino market, ahead of the launch of Lightning Link.

More broadly Mr Wilson said the company’s balance sheet was in fine shape.

Given the strength of Aristocrat’s recurring revenue businesses, we expect Aristocrat will be able to generate free cashflow in excess of $1.7 billion per annum, which has been one of the key drivers of Aristocrat’s strong balance sheet. This provides the company the ability to seek acquisition opportunities as well as return surplus capital to shareholders via share buybacks. We expect these to be ongoing.

Capital management options

Mr Wilson’s report says the company has just $234 million remaining under its current $1.5 billion buyback program which is scheduled to run until March 2027, raising the prospect that a new buyback could be launched.

RBC Capital Markets has a share price target of $58 on Aristocrat shares, compared with the current price of $47, implying potential upside of 23%.

Aristocrat is valued at $27.86 billion, and pays a dividend yield of 2%.

The post This ASX gaming company could deliver 20%+ returns: RBC Capital Markets 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 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.

Building a passive income portfolio is not about chasing the highest dividend yield. For me, it is about finding a balance between reliable income today and the ability for that income to grow over time.

If I had $250,000 to invest for passive income, I would focus on a mix of high-quality ASX dividend shares and a couple of income-focused ASX ETFs to keep things diversified and simple.

Here is how I would approach it.

Start with a core of reliable income stocks

I would anchor the portfolio with a handful of large, established ASX shares that have a track record of paying dividends through different market conditions.

Commonwealth Bank of Australia (ASX: CBA) would be one of my starting points. The major banks are not cheap right now, but they remain some of the most consistent dividend payers on the ASX. CBA, in particular, has shown an ability to deliver relatively stable income, supported by its strong market position.

Telstra Group Ltd (ASX: TLS) would also be on my list. Telstra offers a relatively attractive dividend yield and benefits from recurring revenue through its core telecommunications business. It is not a fast grower, but for income, consistency matters.

Woolworths Group Ltd (ASX: WOW) adds a different layer. Its dividend yield is typically lower than banks or telcos, but the business is defensive. People still need groceries regardless of economic conditions, which can help support more stable earnings and dividends over time.

Add infrastructure for steady cash flows

Transurban Group (ASX: TCL) is another name I would include.

Infrastructure assets like toll roads tend to generate predictable, long-duration cash flows. Many of Transurban’s revenues are linked to traffic volumes and, in some cases, inflation, which can provide a degree of protection for income investors.

This type of exposure helps smooth out the portfolio, especially when more cyclical sectors become volatile.

Include resources for income and upside

BHP Group Ltd (ASX: BHP) would round out the core holdings.

Mining dividends can be more volatile because they depend on commodity prices. However, BHP has historically returned significant cash to shareholders during strong commodity cycles.

I would not rely on it for steady income every year, but it can provide a meaningful boost to portfolio income over time, along with exposure to global demand for resources.

Use ASX ETFs to diversify and simplify

To complement individual stocks, I would allocate part of the portfolio to income-focused exchange-traded funds (ETFs) like the Vanguard Australian Shares High Yield ETF (ASX: VHY) or the BetaShares S&P Australian Shares High Yield ETF (ASX: HYLD).

These ETFs provide exposure to a broader basket of dividend-paying companies, which can help reduce the risk of relying too heavily on any single stock.

They also make the portfolio easier to manage. Instead of needing to constantly adjust individual holdings, the ETF structure does some of that work in the background.

How I would split the $250,000

Rather than overcomplicating things, I would aim for a balanced allocation across these ideas.

Roughly speaking, I would divide the portfolio between core dividend stocks and ETFs. The individual holdings provide targeted exposure to high-quality businesses, while the ETFs add diversification and help smooth income.

The exact percentages would depend on personal preference, but the key idea is to avoid concentrating too much in any one sector, especially banks or resources.

Foolish takeaway

A $250,000 passive income portfolio does not need to be complicated to be effective.

By combining reliable dividend payers like Commonwealth Bank, Telstra, Woolworths, Transurban, and BHP with diversified ASX ETFs such as the VHY or HYLD ETFs, it is possible to build a portfolio that generates income today while still having room to grow over time.

The post $250,000 to invest for passive income? Here’s how I would build a portfolio appeared first on The Motley Fool Australia.

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• Should you buy CBA shares for their ‘consistent profitability’?
• Is it time for investors to turn back to defensive ASX shares?
• How to dollar-cost average your way to passive income with ETFs
• If I’d put $6K in this ASX mining stock 12 months ago I’d have over $20k now

Motley Fool contributor Grace Alvino has positions in Commonwealth Bank Of Australia and Transurban Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group, Transurban Group, and Woolworths Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The team at Ord Minnett has just released updated guidance on ASX 200 stock Aurizon Holdings Ltd (ASX: AZJ). 

The company is Australia’s largest rail freight operator. It hauls bulk commodities, largely coal, as well as iron ore and agricultural products.

The company owns one of the world’s largest coal rail networks. The network links around 50 mines to three major ports in Queensland.

The rail network, comprising 2,670 kilometres of lines under a 99-year lease from the Queensland government, accounts for the majority of Aurizon’s earnings.

In 2026, this ASX 200 stock has raced ahead of the broader market. 

Since January, it has risen just over 15%, compared to a flat return for the S&P/ASX 200 Index (ASX: XJO). 

At the time of writing on Wednesday afternoon, shares are trading at $4.14 each. 

What is Ord Minnett’s latest view?

In a note out of Ord Minnett, the broker seemed impressed by the half-year results. 

Aurizon Holdings posted a first-half FY26 net profit around 10% higher than market expectations, driven by lower-than-forecast unit costs and higher-than-anticipated yields from its above-rail coal operations, and launched another share buyback valued at $100 million.

The broker said the key positive from the result was an increase in its dividend payout ratio to 90% (previously 80%). 

Ord Minnett said this is a level the company aims to maintain into the future. 

FY guidance updated

Ord Minnett also highlighted that Aurizon reiterated guidance for FY26 group operating earnings (EBITDA) of $1.68–$1.75 billion, versus market expectation near the midpoint at $1.71 billion, with EBITDA from its network, coal and bulk divisions all “expected to be higher than FY25”.

Dividend guidance for FY26 was also upgraded to $0.22–$0.23 per share from $0.19–$0.20. 

We highlight that incorporating the new dividend guidance and the $250 million in share buybacks already launched in the current fiscal year shows Aurizon is offering a total distribution yield, i.e.dividends plus share buybacks, of circa 7–8% in FY26.

For FY27, incorporating Ord Minnett’s EPS estimates, a 90% dividend payout ratio, and our forecast for another $250 million share buyback given Aurizon has sufficient balance sheet capacity, the total distribution yield would rise to around 9–10%.

Hold recommendation on valuation grounds

Based on this guidance, Ord Minnett raised its earnings per share estimates by 2.7%, 3.5% and 0.9% for FY26, FY27 and FY28, respectively. 

These earnings upgrades led us to increase our target price on Aurizon to $3.50 from $3.10, although we maintained our Hold recommendation on valuation grounds.

Despite the target price increase, this ASX 200 stock is currently trading at $4.14 per share, which is 15% above Ord Minnett’s target. 

The post Is this ASX 200 stock a buy, hold or sell after rising 15% year to date? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today

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.

If you are looking to gain exposure to the beaten down tech sector, then it could be worth considering the two stocks in this article.

That’s because they have been named as buys and are tipped to rise strongly from current levels. Here’s what is being recommended:

Pro Medicus Ltd (ASX: PME)

The first ASX 200 tech stock that could be a buy is Pro Medicus.

It is a healthcare technology company with a specialised focus. Its Visage imaging platform is used by hospitals to process and analyse medical images quickly and efficiently.

The company has built a strong position in the United States, where it continues to win long-term contracts with major healthcare providers. These agreements provide visibility over future revenue and support high margins.

Demand for more efficient medical imaging is growing, particularly as data volumes increase in healthcare systems and radiologist shortages persist.

With a proven product and expanding customer base, Pro Medicus continues to show how specialised software can scale globally.

Morgans recently put a buy rating and $210.00 price target on its shares. Based on its current share price of $134.84, this implies potential upside of more than 55% over the next 12 months.

Putting that in context, a $10,000 investment in Pro Medicus shares would become approximately $15,500 if Morgans’ recommendation proves accurate.

Xero Ltd (ASX: XRO)

Another ASX 200 tech stock that could rise strongly is Xero.

It provides cloud-based accounting software to small and medium-sized businesses. Its platform sits at the centre of financial operations, making it a key tool for managing accounts, payroll, and payments.

The company’s growth opportunity remains significant. There are still many businesses globally that have yet to adopt cloud accounting solutions, and Xero continues to expand its presence in markets such as the United States.

It is also building out additional services, including payments and financial insights, which can increase revenue per user over time.

With a large market opportunity and multiple ways to grow, Xero remains well placed to expand over the long term.

UBS is bullish on this ASX 200 tech stock. The broker recently put a buy rating and $127.00 price target on Xero’s shares. Based on its current share price of $79.30, this implies potential upside of 60% for investors between now and this time next year.

To put that into context, a $10,000 investment would turn into approximately $16,000 if UBS is on the money with its recommendation.

The post These beaten down ASX 200 tech stocks could rise 55% to 60% appeared first on The Motley Fool Australia.

More reading

• 3 super cheap ASX 200 shares I’d buy right now
• 3 ASX healthcare shares to buy amid sector rout: experts
• 3 reasons to buy Pro Medicus shares today
• Could buying Xero shares at $80 make me rich?
• These ASX 200 shares could rise 25% to 70%

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