Category: Stock Market

The Zip Co Ltd (ASX: ZIP) share price is in focus today after the company posted record cash EBTDA of $65.1 million, up 41.5% year-on-year, and upgraded its FY26 guidance.

What did Zip Co report?

• Total transaction volume (TTV) rose 22.4% year-on-year to $4.0 billion.
• Total income increased 20.2% to $335.2 million.
• Operating margin expanded to 19.4% from 16.5% in the prior year.
• Net bad debts were stable at 1.9% of TTV, within management targets.
• Active customers grew 3.5% to 6.5 million at quarter end.
• FY26 group cash EBTDA guidance upgraded to no less than $260 million.

What else do investors need to know?

Zip’s US business delivered standout growth, with TTV and revenue each rising more than 43% year-on-year in local currency. Credit losses in the US remained within target ranges, and management expects these to fall below 1.75% of TTV in the fourth quarter.

In Australia and New Zealand, Zip launched ZMobile, a new capital-light revenue stream. The company also began an on-market share buy-back of up to $50 million in March, having already acquired $21 million of shares by the end of the quarter.

Zip continues to invest in AI capabilities, with 95% of employees using enterprise-grade tools. Funding remains in focus, highlighted by a successful $300 million note issue in Australia and ongoing refinancing work in the US.

What did Zip Co management say?

Group CEO and Managing Director Cynthia Scott said:

Zip’s resilient business model continues to drive increased profitability at scale, delivering record cash earnings of $65.1m, 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.

What’s next for Zip Co?

Following its strong third-quarter performance, Zip has upgraded its FY26 group cash EBTDA guidance to at least $260 million and reaffirmed all key target ranges for the year. US transaction volume is forecast to rise over 40% in FY26, while group operating margins are expected to remain above 18%.

Management will focus on balancing profitable growth, controlling credit losses, and building out new products like ZMobile. Zip also plans to continue leveraging its AI initiatives to improve customer experience and operational efficiency.

Zip Co share price snapshot

Over the past 12 months, Zip shares have risen 23%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 15% over the same period.

View Original Announcement

The post Zip Co posts record cash EBTDA and upgrades FY26 guidance 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.

While small-cap stocks come with increased volatility compared to blue-chip holdings, there can also be increased upside. 

Fresh analysis from Bell Potter has identified two ASX small-cap stocks that have plenty of potential in 2026. 

Let’s see what is behind the optimism. 

Black Pearl Group Ltd (ASX: BPG)

Blackpearl Group is a data technology platform that develops and operates a lead prospecting and marketing product suite via its proprietary Pearl Engine platform and augmented large language model developed by BPG in 2022. 

The company transforms anonymous, unstructured web visits and data layers into identifiable prospects to significantly increase efficacy for SME ad/marketing spend by targeting prospects with a high intent to buy. 

The company was only first listed on the ASX late last year.

It jumped 5% yesterday, however it is down roughly 20% since its initial listing and is currently trading for 68 cents.

Bell Potter is bullish this small-cap stock can rise. 

In a report yesterday, the broker said Black Pearl Group is set to release its 4Q26 update next week on Tuesday. 

We forecast +22% QoQ/+103% YoY growth in exit ARR to $25.3m, which would represent +$1.6m QoQ and +$12.8m growth YoY.

Bell Potter has retained its speculative buy recommendation, but reduced its price target to $1.76 (previously $1.91). 

From yesterday’s closing price, the updated target still indicates a potential upside of 160%. 

Kinatico Ltd (ASX: KYP)

The second small-cap stock drawing a positive recommendation is Kinatico. 

It is a technology company that helps employers manage their workforce and meet regulatory compliance needs. It operates an online screening and verification service. 

It has been under heavy selling pressure this year, falling almost 58%. 

This includes a 10% drop yesterday. 

Recently, the company provided a Q3 update. 

Bell Potter said SaaS revenue increased by 28% year-on-year and 5% quarter-on-quarter to $5.2 million, in line with expectations. 

Total revenue rose 5% year-on-year but declined 1% quarter-on-quarter to $8.5 million, slightly below the Bell Potter forecast of $8.9 million. 

EBITDA came in at $1.3 million, also marginally below the BPe estimate of $1.4 million.

We have downgraded our revenue forecasts by b/w 3-4% in each of FY26, FY27 and FY28 due predominantly to the current macro environment and the impact this is having on hiring (which impacts the legacy business) and sales cycles (which impacts the SaaS business).

Based on this guidance, Bell Potter has reduced its 12 month price target to 36 cents (previously 38 cents). 

However, from yesterday’s closing price, this still indicates an upside potential of 166%. 

The post 2 ASX small-cap stocks tipped to double in the next year appeared first on The Motley Fool Australia.

More reading

• Why this small-cap ASX share could double in value

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.

Fortunately for income investors, the Australian share market is filled to the brim with dividend shares.

But which ones could be buys in April?

Let’s look at three that analysts are currently recommending as buys to their clients. They are as follows:

Centuria Industrial REIT (ASX: CIP)

UBS thinks that Centuria Industrial REIT could be a top ASX dividend share to buy in April.

It is an industrial property company that owns a portfolio of high-quality industrial assets that is situated in urban infill locations throughout Australia and is underpinned by a quality and diverse tenant base.

UBS believes the company is positioned to pay dividends per share of 17 cents in FY 2026 and in FY 2027. Based on its current share price of $2.96, this would mean dividend yields of 5.75%.

The broker also sees 15% upside with its buy rating and $3.40 price target.

Sonic Healthcare Ltd (ASX: SHL)

Another ASX dividend share that could be a top buy in April is Sonic Healthcare.

It is a leading pathology and diagnostic imaging provider with operations across Australia, Europe, and the United States.

The team at Bell Potter is positive and thinks it could be a great option. This is based on its belief that the company’s performance is about to improve meaningfully. The broker highlights that this is expected to be “driven by right sizing the business, the impact of acquisitions in FY24 and normalising organic operations post COVID.”

With respect to dividends, Bell Potter is forecasting Sonic Healthcare to pay dividends per share of $1.09 in FY 2026 and then $1.11 in FY 2027. Based on its current share price of $20.53, this represents dividend yields of 5.3% and 5.4%, respectively.

Bell Potter has a buy rating and $28.75 price target on its shares, which implies potential upside of 40%.

Universal Store Holdings Ltd (ASX: UNI)

A third ASX dividend share that could be a top pick for income investors in April is Universal Store.

It is the youth fashion retailer behind the eponymous Universal Store brand, as well as Thrills and Perfect Stranger.

Morgans believes the company’s positive form can continue and expects this to underpin further dividend increases.

It is forecasting fully franked dividends of 41 cents per share in FY 2026 and 46 cents per share in FY 2027. Based on its current share price of $7.32, this equates to dividend yields of 5.6% and 6.3%, respectively.

Morgans has a buy rating and $10.60 price target on its shares. This implies potential upside of 45% for investors.

The post 3 cheap ASX dividend shares offering 5% to 6% yields (and major upside) appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Universal Store. 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 Sonic Healthcare and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Meridian Energy Ltd (ASX: MEZ) share price is in focus after the company’s March 2026 monthly report revealed retail sales volumes increased 11.4% year-on-year, while national electricity demand jumped 4.5% compared to March 2025.

What did Meridian Energy report?

• Retail sales volumes for March 2026 rose 11.4% year-on-year, with residential segment sales up 27.8%.
• Customer numbers increased 17.7% over the past year, reaching 464,985 connections.
• March generation was 30.7% higher than the same month last year, although average generation price fell by 51.5%.
• National hydro storage remained robust at 106% of historical average, despite monthly inflows at 74% of average.
• FY26 capital expenditure guidance revised down to $280–$310 million (from previous $330–$360 million).
• End of Q3 saw Waitaki catchment storage 39.9% above the previous year, supporting future supply.

What else do investors need to know?

The report highlights a continued fall in ASX electricity forward prices during Q3, reflecting the impact of increased renewable generation investment and new system security agreements. Meridian’s strong March and quarterly results included higher demand from New Zealand Aluminium Smelters (NZAS), whose average March load climbed to 575MW from 524MW last year.

Operating costs have increased 4.9% compared to Q3 last year, while capital expenditure year-to-date is up 182.6%, mainly due to substantial investments in ongoing projects. Meridian retains robust water storage levels ahead of winter, which positions the business well for seasonal shifts in demand.

What did Meridian Energy management say?

Meridian CEO Mike Roan said:

We’ve maintained momentum through the March quarter after a very strong half-year result and the lakes are looking really good as we get closer to winter. These things can change, however at this stage we have 40% more water than we did at the same time last year.

What’s next for Meridian Energy?

Looking ahead, management expects further benefits from ongoing investment across the renewables sector, which is already softening electricity prices for both Meridian and its customers. The company’s strong storage position and expanded customer base provide confidence as winter approaches, and Meridian is well placed to manage any seasonal volatility.

Guidance for FY26 capital expenditure has been revised to a lower range, reflecting tight cost management while progressing both operational and growth priorities. Investors can find regular lake level updates and explore Meridian’s operational data on its website.

Meridian Energy share price snapshot

Over the past 12 months, Meridian Energy shares have declined 14%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 15% over the same period.

View Original Announcement

The post Meridian Energy shares: Strong customer growth in March 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 gold mining stock Genesis Minerals Ltd (ASX: GMD) shares are in focus today after the company released updated results yesterday. 

Genesis is an Australian gold exploration and mine development company. It is focused on advancing its flagship Leonora Gold Project in Western Australia which covers its Ulysses, Admiral, Orient Well, and Puzzle deposits.

Like many other ASX gold mining stocks, the company rose significantly in 2025, but has since been sold-off. 

It remains more than 50% higher over the last 12 months, however has fallen close to 9% in 2026.

Yesterday, the company released its March Quarterly Activities Report. 

What did Genesis Minerals report?

Yesterday, the company reported: 

• Cash and equivalents increase A$196m to A$600m
• Production for nine months to March 31st of 214,636oz at an AISC of A$2,614/oz;
• Gold sales of 65,049oz at an average price of A$6,755/oz, generating revenue of A$439.4m
• Quarterly unaudited NPAT of A$145 – 155m
• FY26 growth capital and exploration outlook maintained at A$260 – 290m.

Speaking on the results, Executive Chair Raleigh Finlayson said:

We continue to generate exceptional free cashflow while also investing in the ongoing growth of our business. “This reflects an ideal combination of rising production from our mines, tight cost control, a robust gold price and no bank debt. “We are also laying the foundations for the next chapter of growth, including the start of site works at the Tower Hill project, and look forward to providing an update on our long-term plan in the September quarter.

Following the release, Genesis Minerals shares dropped close to 1% during yesterday’s trade.

What did Bell Potter have to say?

Following the results, the team at Bell Potter released updated guidance on this ASX gold mining stock.

The broker said the company’s gold revenue was $439m, which missed its estimate of $504m and consensus of $471m. 

Bell Potter also said Genesis Minerals has not experienced any interruption to its fuel supplies to date. 

However, there remains significant uncertainty going forward. According to the broker, both Laverton and Leonora Mills sites are gas powered, and GMD has >3.1Mt of ore stockpiles.

Buy rating retained for Genesis Minerals shares

After its fall so far this year, Bell Potter views Genesis Minerals shares as undervalued compared to other ASX gold mining stocks. 

Our Buy recommendation and $9.90/sh TP are unchanged. We see GMD as undervalued relative to peers, with significant growth potential. The 3Q result demonstrated cost discipline in a challenging environment.

From yesterday’s closing price of $6.67, the price target from Bell Potter indicates an upside potential of 48%. 

The post After a 9% decline, is this once high-flying ASX gold mining stock primed for a rebound? appeared first on The Motley Fool Australia.

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

S&P/ASX 200 Index (ASX: XJO) shares closed 0.3% lower yesterday as the US and Iran continued to mull a ceasefire extension.

The market was caught off-guard by news of a major fire at one of Australia’s two oil refineries yesterday.

This will undoubtedly add pressure to the fuel supply chain and potentially add to inflation and the chances of higher interest rates.

Amid the growing global fuel crisis, brokers have indicated continuing confidence in several ASX 200 shares.

These companies received renewed buy ratings this week.

Let’s review.

Rio Tinto Ltd (ASX: RIO)

The Rio Tinto share price closed at $172.60 on Thursday, down 0.7%.

Over the past month, the ASX mining giant has lifted 11.6%.

Macquarie reiterated its buy rating on Rio Tinto stock this week.

The broker raised its 12-month price target from $168 to $183.

ANZ Group Holdings Ltd (ASX: ANZ)

The ANZ share price finished the session at $37.73, down 1.3%.

Over the past month, this ASX 200 bank share has edged 0.75% higher.

Morgan Stanley maintained its buy rating on ANZ shares this week.

But the broker shaved its 12-month price target from $37.80 to $37.

Xero Ltd (ASX: XRO)

The Xero share price closed at $81.86 yesterday, up a whopping 9%.

In an apparent rebound for the entire tech sector, Xero shares have risen 16.1% since 30 March.

UBS reiterated its buy rating on Xero shares this week.

However, the broker slashed its 12-month target from $174 to $127.

Paladin Energy Ltd (ASX: PDN)

The Paladin Energy share price closed at $14.15, up 2.6% on Thursday.

Over the past month, this ASX 200 uranium share has rocketed 27.6%.

Morgan Stanley kept its buy rating in place with a $14.45 price target this week.

South32 Ltd (ASX: S32)

The South32 share price finished yesterday’s trading day at $4.62, down 0.2%.

Over the past month, this ASX 200 mining share has lifted 11.1%.

Morgan Stanley reiterated its buy recommendation this week.

The broker also lifted its share price target from $4.70 to $5.

Iluka Resources Ltd (ASX: ILU)

The Iluka Resources share price closed at $7.77, up 4%.

Over the past month, this ASX 200 mineral sands share has ripped 20.7%.

Morgan Stanley maintained a buy rating and raised its target from $6.70 to $7.90.

Zip Co Ltd (ASX: ZIP)

Zip was the third-strongest performer within the ASX 200 yesterday.

The Zip share price ripped 11.4% higher to $2.05 ahead of its quarterly update today.

Over the past month, this ASX 200 financial share has soared 28.1%.

Citi reiterated its buy rating on the buy now, pay later provider this week.

The broker has a $2.60 price target on Zip shares.

Coles Group Ltd (ASX: COL)

The Coles share price closed at $22.70, up 0.2%, yesterday.

Over the past month, this ASX 200 consumer staples share has lifted 9%.

Jefferies reiterated its buy rating this week.

The broker also raised its share price target on Coles from $23.50 to $25.50.

The post ASX 200 shares with renewed buy ratings this week appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• In the midst of economic turmoil, what does Morgan Stanley say the ASX banks are worth?
• Is the ASX 200 tech wreck over amid a 6% rise in shares today?
• ANZ, NAB, Westpac, and CBA shares: Analysts rate 3 to sell, and 1 to buy
• Why are Zip shares flying 9% higher today?

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor Bronwyn Allen has positions in Zip Co. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Jefferies Financial Group, Macquarie Group, and Xero. The Motley Fool Australia has positions in and has recommended Macquarie Group and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Thursday, the S&P/ASX 200 Index (ASX: XJO) had a subdued session and dropped into the red. The benchmark index fell 0.25% to 8,955 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to edge slightly lower on Friday despite a decent night in the United States. According to the latest SPI futures, the ASX 200 is expected to open 12 points or 0.15% lower this morning. On Wall Street, the Dow Jones was up 0.25%, the S&P 500 rose 0.25% and the Nasdaq climbed 0.35%.

Oil prices rise

It could be a good finish to the week for ASX 200 energy shares such as Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices rose overnight. According to Bloomberg, the WTI crude oil price is up 2.1% to US$93.19 a barrel and the Brent crude oil price is up 1.7% to US$89.65 a barrel. This was driven by concerns over Iran-US peace talks and the Strait of Hormuz.

Zip results

Zip Co Ltd (ASX: ZIP) shares will be on watch today when the buy now pay later provider releases its eagerly anticipated third-quarter update. According to a note out of Citi, its analysts are expecting Zip to announce an improved US net transaction margin despite rising bad debts as a percentage of total transaction value.

Gold price edges lower

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Newmont Corporation (ASX: NEM) could have a subdued finish to the week after the gold price edged lower overnight. According to CNBC, the gold futures price is down 0.25% to US$4,810.9 an ounce. Inflation and rate hike fears continue to weigh on the precious metal.

Buy Netwealth shares

Netwealth Group Ltd (ASX: NWL) shares could be good value according to Bell Potter. In response to the investment platform provider’s quarterly update, the broker has retained its buy rating and $30.00 price target on its shares. It said: “Following the update, we have downgraded our EPS estimates -1% contained within FY27 and driven by steadier average FUA balances and take-rates. Our Buy rating is unchanged. NWL has de-rated to trade on 28x forward EBITDA consistent with prior risk off environments and compares to 33x through-the-cycle. We would expect the earnings catalysts and sentiment exposure to drive enhanced shareholder returns.”

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

More reading

• 4 ASX 200 shares newly upgraded this week
• Is the ASX 200 tech wreck over amid a 6% rise in shares today?
• Why are Zip shares flying 9% higher today?
• Interest rate rise expectations firm on jobs data as Aussie dollar hits 4-year high
• This beaten-down ASX financial share is bouncing back fast today

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

If you want to know where serious money is flowing in ASX ETFs, the leaderboard hasn’t changed.

The same trio, that combined have over $50 billion in funds under management, continues to dominate: Vanguard Australian Shares Index ETF (ASX: VAS), Vanguard MSCI International Shares ETF (ASX: VGS), and iShares S&P 500 ETF (ASX: IVV).

Together, they form the backbone of countless portfolios, and they all gained roughly 16% in value over 12 months.

But after strong market moves and shifting global conditions, do these 3 ASX ETFs still deserve a place in your portfolio?

Let’s take a closer look.

Vanguard Australian Shares Index ETF

This Vanguard fund remains the king of the ASX ETF market, with around $24.2 billion in funds under management. It gives investors exposure to roughly 300 of Australia’s largest companies, offering low fees, high liquidity, and a steady stream of franked dividends.

Its biggest holdings tell the story. Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP) sit at the top, reflecting the heavy influence of banks and miners on the local market.

That’s both a strength and a weakness. You get reliable income and exposure to Australia’s economic engine, but also concentration risk. When banks or commodities wobble, this Vanguard ASX ETF feels it.

Vanguard MSCI International Shares ETF

Then there’s Vanguard MSCI International Shares ETF, with around $14.4 billion under management.

This is the classic “set-and-forget” global ASX ETF. It spreads your investment across developed markets like the US, Europe, and Japan, helping reduce the home bias that many Australian investors naturally have.

At its core are global giants like Microsoft Corp (NASDAQ: MSFT) and Alphabet Inc.(NASDAQ: GOOG). These companies sit at the centre of innovation in cloud computing, artificial intelligence, and digital infrastructure.

That’s the appeal. Instead of relying on local banks or commodity cycles, you tap into global growth across multiple sectors.

iShares S&P 500 ETF

Rounding out the trio is the iShares fund, with just over $12.3 billion in funds under management.

This ETF is the purest way to own the US market through the ASX. It tracks the S&P 500 Index, giving exposure to America’s blue chips.

And once again, the top holdings dominate. Apple Inc. (NASDAQ: AAPL) and Microsoft lead the charge, highlighting the heavy tilt towards mega-cap tech.

That concentration has been a tailwind in recent years, but it also means performance is closely tied to a handful of giants.

Foolish Takeaway

So, do these 3 ASX ETFs still deserve a place? For most long-term investors, the answer is yes.

Each ETF plays a distinct role. VAS delivers income and franking benefits. VGS provides broad global diversification. IVV adds concentrated exposure to the world’s most powerful market.

The real question isn’t whether to own them. It’s how to balance them.

Because when combined thoughtfully, this trio still forms one of the strongest core portfolio foundations on the ASX. It’s built for income, growth, and long-term resilience.

The post The biggest ASX ETFs revealed – are they still buys? appeared first on The Motley Fool Australia.

More reading

• 3 amazing ASX ETFs that are beginner-friendly
• How to build a $100,000 ASX share portfolio
• 3 ASX ETFs to buy and hold for the next decade
• Has the ASX 200 or S&P 500 been a better investment this year?
• 10 years to retirement? Here’s how to build a solid income

Motley Fool contributor Marc Van Dinther has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Apple, Microsoft, and iShares S&P 500 ETF and is short shares of Apple. The Motley Fool Australia has recommended Alphabet, Apple, BHP Group, Microsoft, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Morgan Stanley has recently run the ruler over the major ASX banks and, for three of the big four, has downgraded its price targets.

Time to tread carefully

In a recent research note sent to its clients, the broker said it had a “more cautious outlook” on the banks.

As they said:

We’ve adjusted our loan growth and loan loss forecasts to reflect the initial impact of a weaker economic outlook.

The broker was not ringing the alarm bells, adding that the next reporting season “should demonstrate a continuation of recent trends: good volume growth, stable margins, no surprises on costs, and sound credit quality”.

But they said a shift in operating conditions meant the outlook for loan growth and credit quality would be important.

Their note of caution related in part to the Reserve Bank of Australia (RBA) flagging the potential for a “stagflationary shock”, in which the economy experiences flat growth coupled with inflation.

Morgan Stanley said National Australia Bank Ltd (ASX: NAB) was the most vulnerable of the big four.

As they said:

In our view, NAB is the most vulnerable of the major banks to the shift in operating conditions. At the 1H26 result, we expect close scrutiny of outlook commentary, the business lending pipeline, credit quality lead indicators, collective provision coverage … capital buffers, and capital management decisions.

Morgan Stanley has marginally reduced its price target on NAB shares from $39.80 down to $39.30.

Economic factors weighing

Overall, Morgan Stanley is expecting slower loan growth, as it said:

We believe the combination of RBA rate hikes, higher fuel costs, softer consumer sentiment, and a deterioration in business conditions point to a slowdown in loan growth. Our Macro+ team’s lead indicators suggest that housing loan growth has peaked and that business loan growth will be weaker. We have downgraded our major bank Australian housing loan growth forecasts by about 1% in FY26 and about 0.5% in FY27.

Among the other banks, Morgan Stanley has reduced its price target on Commonwealth Bank of Australia Ltd (ASX: CBA) shares by just 20 cents to $131.

They are forecasting the third-quarter profit to come in at $2.74 billion, down 1.5% compared with the average of the past two quarters.

Morgan Stanley’s price target for ANZ Group Holdings Ltd (ASX: ANZ) shares has been reduced by 80 cents to $37, adding “we think investors are more cautious than consensus about margin trends and mortgage/SME loan growth”.

For Westpac Banking Corp (ASX: WBC), Morgan Stanley kept its price target stable at $34.40.

The post In the midst of economic turmoil, what does Morgan Stanley say the ASX banks are worth? appeared first on The Motley Fool Australia.

More reading

• Forget Westpac, this ASX financials share could have 30%+ upside
• ANZ, NAB, Westpac, and CBA shares: Analysts rate 3 to sell, and 1 to buy
• Why I’d buy these ASX 200 stocks if I were a beginner
• Buy, hold, sell: Bank of Queensland, Koala, and Westpac shares
• $5,000 invested in CBA shares two years ago is now worth…

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.

It’s been a volatile stretch for two of the most closely watched ASX stocks.

Pro Medicus Ltd (ASX: PME) surged 8% on Thursday, extending its five-day gain to 22%, while Aristocrat Leisure Ltd (ASX: ALL) added another 3%.

Yet despite the recent bounce, both remain firmly in the red for the year. Pro Medicus is still down around 33%, while Aristocrat has slipped 15%.

Hectic? Absolutely. But for long-term investors, the bigger question is simple: has the market created opportunity in two high-quality operators?

Let’s break it down.

Pro Medicus: high-margin healthcare tech with global reach

This ASX healthcare stock sits in a rare category on the ASX — a pure-play, high-margin healthcare technology company with global scale.

Its flagship Visage platform is used by major hospitals and medical institutions to rapidly process and interpret medical imaging. That might sound niche, but it’s exactly this focus that has created its competitive advantage.

High switching costs, long contracts, and deep integration into hospital systems make its revenue base sticky and highly scalable. Once embedded, customers rarely leave.

Despite recent volatility, analysts remain constructive. Bell Potter just retained its buy rating on Pro Medicus, albeit with a slightly reduced price target of $226 (from $240). At current levels around $148.88, that implies potential upside of roughly 52% over the next 12 months.

Of course, risks remain. Valuation sensitivity is high, and any slowdown in contract wins or hospital spending could quickly weigh on sentiment. But the long-term growth story — driven by digitisation of healthcare — remains firmly intact.

Aristocrat: gaming dominance with global scale

Aristocrat Leisure Ltd is another ASX heavyweight that has found itself under pressure this year.

But beneath the share price volatility, the core business continues to deliver.

Aristocrat generates strong earnings from gaming machines, digital gaming content, and its fast-growing online segment, particularly in the US. That mix gives it exposure to both traditional casino demand and the structural growth of digital entertainment.

Importantly, underlying demand trends in US gaming remain resilient, even as sentiment has cooled.

Macquarie remains bullish on the ASX stock. The broker has maintained its outperform rating and set a $63.00 price target, implying potential upside of around 28% from current levels.

In other words, the market may be underestimating the strength and consistency of Aristocrat’s earnings engine.

There are risks, of course. Gaming is cyclical, regulation can shift, and consumer spending can fluctuate. But Aristocrat’s scale, content pipeline, and global footprint help cushion those swings.

Foolish Takeaway

Both Pro Medicus and Aristocrat have been hit by volatility this year. But neither ASX stock has lost its competitive edge.

For investors willing to look beyond short-term noise, these two ASX leaders still offer something rare: high-quality businesses trading in less-than-perfect sentiment. And that’s often where long-term opportunities begin.

The post 2 high-quality ASX stocks to buy and hold long term appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. 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.