Category: Stock Market

Cochlear Ltd (ASX: COH) shares have gone into freefall in 2026 after a brutal earnings downgrade stunned investors.

The ASX healthcare stock is down roughly 62% year to date, wiping billions from its market value and leaving many shareholders nursing heavy losses.

Things look even worse for investors who bought near the peak.

Damage is real

Back in late July last year, Cochlear shares were trading just below $320. At the time of writing, they have crashed to $99.89.

That represents a staggering decline of almost 69% in just nine months.

For investors, the damage is very real.

A $10,000 investment at $319.50 per share would have bought roughly 31 Cochlear shares in July. Today, those same shares would be worth approximately $3,126.

That’s a painful capital loss of more than $6,870 in a very short time.

What triggered the collapse?

The sell-off accelerated after Cochlear released a disappointing trading update on 22 April.

Cohlear shares plunged from around $168 to near $90 within days — an extraordinary 46% wipeout for a blue-chip healthcare company.

Although the share price has since recovered slightly, the broader damage remains significant.

Cochlear, which controls roughly 50% of the global cochlear implant market, sharply downgraded its FY26 underlying net profit guidance to between $290 million and $330 million.

That was a major cut from its previous guidance range of $435 million to $460 million. For a company long viewed as one of the ASX’s most reliable healthcare performers, the downgrade rattled confidence badly.

Management of the ASX healthcare stock pointed to weaker demand across key developed markets, with fewer hearing implant procedures taking place than expected. The company also flagged disruptions in the Middle East, where ongoing conflict has contributed to cancelled orders and delayed deliveries.

At the same time, some patients appear to be postponing surgeries, with referrals slowing and procedures being pushed back.

Is this temporary?

Importantly, the long-term investment case may not be broken.

Cochlear remains the global leader in implantable hearing technology and continues investing heavily in research and development, reinvesting around 13% of revenue into innovation.

Cochlear shares also continue benefiting from a large and growing pool of patients with hearing loss, particularly as populations age globally. Management still believes there is a “significant, unmet and addressable clinical need” supporting long-term growth.

That suggests the current weakness could be more cyclical than structural.

Analysts remain divided

Even so, uncertainty remains high.

At current prices, Cochlear shares are trading on a little over 19 times FY26 earnings, a valuation level rarely seen for a company previously considered a premium healthcare stock.

That has divided broker opinion sharply. Jarden currently has a $169 price target on Cochlear shares, implying potential upside of almost 70% if conditions improve.

On the other hand, Macquarie has slashed its valuation target from $239 to $115.

Morgans sits somewhere in the middle, maintaining a hold rating and a $107.17 target price.

For now, the sharp divergence in analyst forecasts highlights just how uncertain Cochlear’s near-term outlook has become.

The post $10,000 invested in Cochlear shares in July is now worth… appeared first on The Motley Fool Australia.

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

Australian household spending fell for the first time in over a year in February 2026.

The RBA, in its May Statement on Monetary Policy, also alluded to this drop in consumer spending:

The response on consumption to lower real household incomes is assumed to be faster than the typical historical experience, given the share declines we have seen in consumer sentiment.

With this somewhat gloomy backdrop, it’s time to assess what the implications could be for some beloved Aussie stocks.

Coles Group Ltd (ASX: COL)

Coles is the most defensive name on this list, given its focus on supermarket retail.

As one of Australia’s largest supermarkets, Coles benefits from defensive consumer spending. After all, consumers will always need to eat regardless of the prevailing economic conditions.

90% of Coles’ revenue comes from its supermarket business, which may help protect it from a major economic slowdown.

However, Coles remains exposed to reduced consumer spending, which can negatively affect margins.

What’s more, the ACCC’s ongoing court case alleging illusory Down Down discounts, set to be resolved in May 2026, has increased regulatory risks, and Coles reported lower profit in its first half of fiscal 2026 despite higher sales revenue.

A sustained consumer pullback could further erode margins and profitability, leaving Coles uniquely exposed to any noticeable decline in consumer spending.

Woolworths Group Ltd (ASX: WOW)

One key difference between Woolworths and Coles is Woolworths’ ownership of BIG W.

BIG W meaningfully increases Woolworths’ exposure to consumer spending habits outside of supermarket retail.

In 2025, the unit posted an EBIT loss of $63 million, squeezed by clearance activity, soft discretionary spending, and operational complexity.

More recently, Bell Potter downgraded Woolworths shares to hold with a reduced price target of $35.50 (from $38.25), citing supply chain cost pressures.

Reduced consumer spending within this unit may lead to even more pain for Woolworths in the short-to-medium term.

Qantas Airways Ltd (ASX: QAN)

Australians tend to cut holidays and flights first when mortgage repayments bite.

Qantas, as Australia’s flag carrier, is on the frontline of this reduced spending.

Analysts identify an economic downturn as a key risk that could cause corporate clients to cut travel budgets, directly hitting Qantas’ most profitable customer base.

What’s more, jet fuel costs have more than doubled since February 2026, which is set to hit Qantas earnings directly.

Qantas’ loyalty program and domestic duopoly may provide some buffer, but be ready for Qantas’ earnings to potentially be hit by macroeconomic issues.

Foolish Takeaway

None of these companies is in crisis, but they are exposed to a sustained drop-off in consumer spending.

Investors may want to consider diversifying into companies that service businesses or governments with sticky long-term contracts.

In the meantime, investors would do well to keep a close eye on discretionary spending data in the months ahead.

The post 3 ASX retail shares exposed to a drop in consumer spending appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven 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.

The Dyno Nobel Ltd (ASX: DNL) share price was in focus on Monday after the company reaffirmed its full-year earnings guidance, highlighting robust underlying growth in its global explosives business and a sharp lift in first-half earnings.

What did Dyno Nobel report?

• Statutory net profit after tax (NPAT): $20 million (1H25: $7 million)
• NPAT excluding individually material items (IMIs): $161 million, up 83% (1H25: $88 million)
• EBIT excluding IMIs: $243 million, up 39% (1H25: $174 million)
• EBITDA excluding IMIs: $378 million, up 17% (1H25: $323 million)
• Interim dividend: 4.6 cents per share (unfranked), 50% payout ratio
• Return on Invested Capital: 9.5% (1H25: 6.1%)

What else do investors need to know?

Dyno Nobel completed the strategic separation of its Fertilisers business during the first half, signing a binding agreement for the sale of the Phosphate Hill facility. This move positions the company clearly as a standalone explosives business, aligning with its long-term growth and sustainability strategy.

In terms of capital management, $558 million of the $900 million on-market share buyback program has been completed, and the buyback is set to resume following the trading blackout ending. The company also reported improved financial metrics, including stronger interest cover (12.5x) and a net debt to EBITDA ratio of 1.3x, comfortably within policy limits.

What did Dyno Nobel management say?

CEO and Managing Director Mauro Neves commented:

“1H26 marks the beginning of a new era for Dyno Nobel as we concluded our separation from the Fertilisers business and move forward as a pureplay global explosives leader. We continued the successful execution of our transformation program, and our explosives business delivered robust underlying earnings growth, driven by the strong operating performance of our privileged assets.

Safety always remains our number one priority, and while I’m disappointed to record an increase in our total recordable injury frequency rate, no incidents were classified as serious harm and we saw an overall reduction in injury severity. We will continue our focus on field leadership and proactive hazard identification, with targeted explosives risk reviews at our key manufacturing facilities.

Highlighting the resilience of our business in the volatile global landscape, I am pleased to report we remain on track to deliver both our FY26 EBIT guidance of $460m – $500m and our FY28 EBIT ambition of $600m as our transformation program continues to yield results.

Looking ahead, our gas backed manufacturing facilities, high vertical integration and consistent earnings growth with low volatility position Dyno Nobel as an increasingly compelling investment proposition.”

What’s next for Dyno Nobel?

Dyno Nobel has reaffirmed its FY26 EBIT guidance for the explosives business at $460 million to $500 million, with its transformation program progressing as planned. The group now expects lower capital expenditure in the $250 million to $300 million range for FY26, as some growth investment shifts into FY27.

The successful sale of the Fertilisers business reduces operational and environmental commitments, reinforcing Dyno Nobel’s focus on global explosives and blasting services. Management expects to benefit from stable, vertically integrated operations and continued momentum from its transformation program.

Dyno Nobel share price snapshot

Over the past 12 months, Dyno Nobel shares have risen 27%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Dyno Nobel posts higher earnings as explosives transformation accelerates appeared first on The Motley Fool Australia.

More reading

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• Metcash shares: FY26 earnings highlight portfolio resilience and cost discipline
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• 5 things to watch on the ASX 200 on Monday

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 Inghams Group Ltd (ASX: ING) share price is in focus today after the company reaffirmed its FY26 EBITDA guidance and reported higher group poultry volumes and selling prices for the first nine months of the year.

What did Inghams Group report?

• Reaffirmed FY26 guidance for Underlying EBITDA (pre AASB 16) of $180 million to $200 million
• For the first nine months of FY26, group core poultry volumes rose 1.1% versus prior comparable period (PCP)
• Group core poultry net selling prices increased 1.1% versus PCP
• Annualised cost savings initiatives expected to deliver $60–80 million
• Revised capital expenditure guidance of approximately $80 million for FY26

What else do investors need to know?

Inghams continues to make operational improvements, with stronger performance reported in areas such as yield, labour, and inventory management. The company reduced its frozen inventory by $25 million, which has helped restore system balance and improve cash flows.

Cost pressures remain a focus, particularly feed, diesel fuel, and packaging. The company noted a net $7–10 million impact expected from higher fuel costs in FY26, partially offset by pricing actions and efficiency gains. Feed costs are presently well covered for the year, though higher costs are expected in FY27.

What did Inghams Group management say?

Chief Executive Officer and Managing Director said Ed Alexander said:

We are seeing improved operational performance and positive momentum from initiatives already delivered, while reaffirming our FY26 guidance in a challenging environment.

What’s next for Inghams Group?

Inghams says it will maintain its focus on stabilising the business, optimising assets, and growing value per bird. The company’s ongoing operational improvements and cost controls are expected to support further earnings and return growth, even as it navigates uncertainties in input costs.

Growth priorities include expanding ingredients and higher value product segments, leveraging recent investments, and scaling new business initiatives like launching the Bostocks brand in Australia.

Inghams Group share price snapshot

Over the past 12 months, Inghams Group shares have declined 55%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Inghams Group boosts FY26 guidance as poultry volumes and prices rise appeared first on The Motley Fool Australia.

More reading

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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 Metcash Ltd (ASX: MTS) share price is in focus today after the company announced an underlying profit after tax of $268–270 million for FY26, supported by revenue growth of 0.7% and resilient performances across Food, Liquor, and Hardware.

What did Metcash report?

• Underlying NPAT expected at $268–270 million
• Group revenue up 0.7% year-on-year (+3.8% excluding tobacco)
• Liquor EBIT margin recovered in the second half
• Hardware & Tools revenue rose 4.3%, with improved sales momentum
• Strong cashflow and disciplined capital expenditure, at ~$170 million (about $30 million below guidance)
• Ongoing cost initiatives targeting at least ~$25 million annualised savings in FY27

What else do investors need to know?

Metcash’s Food segment saw supermarkets remain competitive, helped by promotional programs like Extra Specials, while Foodservice & Convenience grew strongly on the back of new customer wins. The group’s Liquor division continued to gain market share, fuelled by a multi-channel approach and a return to long-term EBIT margins in the second half.

Despite challenging conditions in the Trade market, the Hardware & Tools business improved its sales momentum in the latter half, benefiting from pricing and range initiatives. Cash realisation outperformed targets, helping keep the company’s debt leverage at the lower end of its guided range.

What did Metcash management say?

Metcash Group CEO Doug Jones said:

We have delivered a solid result supported by the resilience of our Food and Liquor businesses, our diversified portfolio and disciplined execution.

Hardware & Tools maintained share in a soft Trade market, with improved second half sales momentum. We have taken further action to strengthen the business and position the Group for sustained performance.

Cashflow remained strong, with cash realisation above guidance and leverage at the low end of our target range.

What’s next for Metcash?

Looking ahead, Metcash is focusing on structural cost reductions, with new programs projected to yield at least $25 million in annual savings by FY27. These efforts target labour and non-trade procurement savings and are set to further support profit margins, particularly in Hardware & Tools.

The company is also closely monitoring global uncertainties—like those affecting freight and product supply—by maintaining higher inventory levels as a precaution. Management continues to proactively support customers and prioritise efficient operations in a changing market.

Metcash share price snapshot

Over the past 12 months, Metcash shares have declined 18%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

View Original Announcement

The post Metcash shares: FY26 earnings highlight portfolio resilience and cost discipline appeared first on The Motley Fool Australia.

More reading

• Dyno Nobel posts higher earnings as explosives transformation accelerates
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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 CSL Ltd (ASX: CSL) share price is in focus today after the company delivered a 90-day interim CEO review and financial update, revealing revised, lower FY26 earnings guidance and plans for around $5 billion in additional asset impairments.

What did CSL report?

• FY26 revenue expected to be around $15.2 billion (constant currency).
• FY26 NPATA (excluding restructuring costs and impairments) forecast at approximately $3.1 billion.
• Additional non-cash, pre-tax asset impairments of around $5 billion expected across FY26 and FY27, mostly relating to CSL Vifor intangibles and under-used assets.
• US Immunoglobulin revenue to take a $300 million impact due to inventory normalisation.
• Albumin in China revenue down by $200 million from market value decline, despite increases in volume and market share.
• Other headwinds, including Middle East conflict and product competition, expected to weigh by about $150 million.

What else do investors need to know?

CSL says its core business in plasma collection and influenza vaccines remains strong, with ongoing demand growth in key markets. The transformation and efficiency program continues, targeting $500–$550 million in annual savings by FY28 as the business works to simplify operations and focus capital on value-adding growth.

While US Immunoglobulin and Albumin product segments are both seeing stable or rising demand, short-term revenue has been impacted by price pressure and changes in market dynamics. CSL Seqirus is tracking moderately ahead of earlier forecasts for the year.

Leadership changes are also underway, with a global search for a permanent CEO progressing and commercial leadership transitioning to Diego Sacristan from 1 July 2026.

What did CSL management say?

Interim Chief Executive Officer and Managing Director Gordon Naylor said:

Our growth initiatives are working, but the financial benefits will take longer than previously anticipated to materialise. As a result, we have now revised down our 2026 financial year guidance. CSL’s culture and people continue to be first class, the industry is stable and growing and the company has evident strengths in plasma collections and influenza vaccines. I am confident that the company can be returned to profitable growth and my work is to position the business and the next CEO for success.

What’s next for CSL?

CSL expects to see revenue growth in its CSL Behring division in the second half of FY26, underpinned by commercial execution and its cost transformation initiatives. Seqirus is also anticipated to outperform previous forecasts.

Management is focused on driving sustainable value through portfolio growth, operational efficiencies, and disciplined capital allocation. The company is streamlining the organisation and accelerating its transformation program. A further update will be provided with CSL’s full-year results in August 2026.

CSL share price snapshot

Over the past 12 months, CSL shares have declined 49%, trailing the S&P/ASX 200 Index (ASX: XJO) which had risen 6% over the same period.

View Original Announcement

The post CSL cuts FY26 guidance, flags $5bn in impairments appeared first on The Motley Fool Australia.

More reading

• Dyno Nobel posts higher earnings as explosives transformation accelerates
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• Metcash shares: FY26 earnings highlight portfolio resilience and cost discipline
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• Why I’d buy CSL shares at their 52-week low

Motley Fool contributor Laura Stewart has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. 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 healthcare shares have endured a brutal run in 2026, making the sector one of the market’s weakest performers this year.

At the time of writing, shares in ResMed Inc (ASX: RMD) are down 21% this year, while Mesoblast Ltd (ASX: MSB) has fallen 26%. Meanwhile, Pro Medicus Ltd (ASX: PME) has slumped an even steeper 41%.

The sector is facing several major headwinds. Currency pressures, rising labour costs, and uncertainty around potential US tariffs have all weighed on investor sentiment, particularly for companies with large offshore operations.

The weakness has become so widespread that the S&P/ASX 200 Health Care Index (ASX: XHJ) is at an 8-year low, with many ASX healthcare shares trading near 52-week lows.

But while sentiment remains fragile, some brokers believe the sector-wide sell-off has created compelling buying opportunities for long-term investors.

ResMed: Steady earnings growth

ResMed remains one of the ASX’s largest and most established healthcare companies, specialising in sleep apnoea treatment and respiratory care devices.

The company benefits from strong recurring revenue streams, global market leadership, and growing long-term demand driven by ageing populations and increasing awareness of sleep disorders.

However, ResMed still faces challenges. Currency movements can impact earnings translation, while ongoing cost pressures and uncertainty around US healthcare policy remain key risks.

Despite this, analysts still see meaningful upside ahead. Morgans currently has an add rating and a $41.72 price target on the ASX healthcare share. That implies potential upside of around 46% from current levels.

If ResMed can continue delivering steady earnings growth while healthcare sentiment improves, the recent share price weakness could prove temporary.

Mesoblast: Elevated risks

Mesoblast is one of the ASX’s most speculative healthcare shares, but it also offers potentially enormous upside if its cell therapy treatments continue progressing commercially.

Investor interest in Mesoblast has largely centred around its regenerative medicine pipeline and opportunities in inflammatory disease treatment.

Biotech investing always carries elevated risks, particularly around regulatory approvals, commercial execution, and funding requirements. Share price volatility can also be extreme.

Even so, some brokers remain highly optimistic. Bell Potter recently reaffirmed its speculative buy rating on Mesoblast shares and maintained a $4.45 price target on the company. That target suggests the stock could more than double over the next year if momentum improves and clinical progress continues.

For investors comfortable with higher risk, Mesoblast may offer significant upside leverage to positive developments.

Pro Medicus: Valuation concerns

Pro Medicus has long been considered one of the ASX’s premier healthcare technology companies thanks to its globally respected medical imaging software platform.

The company has built a strong reputation for securing major hospital contracts in the US and delivering high-margin recurring revenue growth.

However, the Pro Medicus share price has deteriorated sharply in recent months as broader healthcare weakness and valuation concerns hit investor confidence.

Despite the sell-off, some analysts still remain bullish on the company’s long-term outlook. Morgan Stanley currently maintains a buy rating on Pro Medicus shares with a 12-month price target of $200. That valuation implies potential upside of roughly 55% from current levels.

For investors seeking exposure to healthcare technology and long-term structural growth, Pro Medicus may now look far more attractive after its substantial decline.

The post 3 ASX healthcare shares to buy while they’re on sale appeared first on The Motley Fool Australia.

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

The Xero Ltd (ASX: XRO) share price has been one of the hardest hit on the ASX within the past year. It’s down 57% from 24 June 2025, as the chart below shows.

Xero is one of the largest cloud accounting software businesses in the world, with a sizeable market position in a number of countries including Australia, New Zealand, the UK, South Africa, the USA, Singapore and plenty more.

The ASX tech share has suffered due to market concern about what impact AI could have on software companies. But, some experts believe the Xero share price could be ready to recover significant ground in the months ahead. Let’s take a look at the predictions.

Expert projections about the Xero share price

According to CMC Invest, there are multiple analysts that currently think the ASX tech share is an attractive buy.

Of the analysts that CMC Invest tracks, there have been six buy ratings and one hold rating in the last three months.

The average price target across those seven ratings is $121.78, which implies a possible rise of around 45% in the year ahead.

The most optimistic price target on the Xero share price is $165. If that happened over the next year, it’d be a rise of 97%. However, the most pessimistic price target is $86.80, suggesting a small rise over the next year.

Price targets are not guarantees of what’s going to happen, of course.

The main thing that could help justify a higher Xero share price is delivering ongoing earnings growth.

Strong earnings growth

The latest result from the business was the FY26 half-year result.

Subscribers increased by 10% to 4.6 million, showing the ongoing global success of attracting more customers who want its efficiency and time-saving tools. The company also achieved a 15% increase in the average revenue per user (ARPU) to $49.63, which was significantly assisted by price increases.

The above factors helped the business achieve 20% operating revenue growth to NZ$1.19 billion, operating profit (EBITDA) rose 21% to NZ$378 million, net profit after tax (NPAT) jumped 42% to NZ$135 million and free cash flow soared 54% to NZ$321 million.

We can’t know for sure what Xero’s FY27 profit growth will be, but if it continues growing at a strong double-digit rate, then it will help give investors confidence that it will be unaffected in this AI era.

The post How much could the Xero share price rise in the next year? appeared first on The Motley Fool Australia.

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

If you have a high tolerance for risk, then it could be worth checking out the speculative ASX share in this article.

It has been recommended by analysts at Bell Potter, who believe it has the potential to rocket 80% from current levels.

Which ASX share?

The small cap share that Bell Potter is bullish on is ImpediMed Ltd (ASX: IPD).

It manufactures and sells a medical device employing a technology known as bioimpedance spectroscopy (BIS). This is used in a non-invasive clinical assessment and monitoring of fluid status and tissue composition of patients.

Bell Potter notes that ImpediMed has undertaken a major capital raising and announced a cost reduction plan. The broker feels the cost reductions are credible and leaves the ASX share positioned for break-even if revenue picks up. It said:

As part of the capital raising, IPD advise it is implementing a $5m cost out programme, which reflects a combination of headcount, relocating some roles from the US to Australia, and general cost reductions. While encouraging, the gap to breakeven remains with the revenue side of the ledger. IPD requires c.$12m in additional annual revenue, c.80% of which is expected to be sourced from BCRL [breast cancer-related lymphoedema] in the US, implying that Heart Failure and Body Composition require a longer gestation period. Approx. 40% of the BCRL 350-unit target is expected to come from existing customers.

The BCRL target infers a simple average of 50 units / qtr over the next seven quarters, although IPD is more likely to escalate sales volume from the current 30 units incrementally and one would expect IPD to achieving more than 50 units / qtr by 2Q28. Given IPD’s current sales profile and investment in building SOZO’s value proposition, the assumptions seem credible, but execution is the risk, given past performance.

Big potential returns

If everything goes to plan, Bell Potter believes this ASX share could deliver very big returns.

According to the note, the broker has retained its speculative buy rating with a reduced price target of 1.5 cents. Based on its current share price, this implies potential upside of 87% for investors.

Commenting on the speculative stock, Bell Potter said:

Assuming all options are exercised, the dilution to the share count is material with a potential tripling of the SOI to c.6.6b. This swamps any benefit from the cost reductions, and results in our DCF valuation halving to $0.015/sh. Our WACC is a conservative 17%. Should IPD achieve breakeven and the current risk profile unwinds, a lower and normalised WACC of c.10.5% could be justified which would provide upside potential to $0.045/sh fully diluted.

The post This speculative ASX share is being tipped to rocket 80% 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 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.

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

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

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

• Domino’s Pizza Enterprises Ltd (ASX: DMP) has become the most shorted ASX share again after its short interest rose to 15.9%. A poor update from the Domino’s US business has cast further doubt on this pizza chain operator’s turnaround.
• Telix Pharmaceuticals Ltd (ASX: TLX) has seen its short interest ease to 15.6%. Short sellers have been targeting this radiopharmaceuticals company this year amid US FDA approval challenges.
• Lotus Resources Ltd (ASX: LOT) has short interest of 15.1%, which is up sharply week on week. Short sellers have been loading up on this uranium producer’s shares following a disastrous March quarter which saw weak production and a sizeable cash burn. This has many in the market expecting another capital raising later this year.
• Polynovo Ltd (ASX: PNV) has 14.3% of its shares held short, which is flat week on week. It is possible that short sellers think this medical device company’s shares are overvalued due to their premium valuation.
• Guzman Y Gomez Ltd (ASX: GYG) has short interest of 14%, which is up week on week. Short sellers appear to be targeting the quick service restaurant operator due to the underperformance of its US operations.
• Boss Energy Ltd (ASX: BOE) has short interest of 13.3%, which is up since last week. The market is concerned about this uranium miner’s production outlook beyond 2026.
• Treasury Wine Estates Ltd (ASX: TWE) has 12.5% of its shares held short, which is down week on week. Short sellers have been closing positions after the struggling wine giant released an encouraging trading update.
• Zip Co Ltd (ASX: ZIP) has 11.9% of its shares held short. This is up slightly since last week. This is despite the buy now pay later provider delivering both a strong quarterly update last month and an equally strong trading update last week.
• DroneShield Ltd (ASX: DRO) has 10.8% of its shares held short, which is down since last week. This may be due to valuation concerns.
• Flight Centre Travel Group Ltd (ASX: FLT) has short interest of 10.7%, which is down week on week. A stronger than expected trading update from the travel agent appears to have discouraged short sellers.

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

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