Category: Stock Market

If you have a penchant for ASX 200 growth shares like I do, then keep reading!

That’s because listed below are two shares that analysts are bullish on and believe could be destined for big things in the future. Here’s why they are rated as buys:

Telix Pharmaceuticals Ltd (ASX: TLX)

The first ASX 200 growth share for investors to look at is Telix Pharmaceuticals.

It is a biotechnology company that specialises in radiopharmaceuticals. The company explains that using targeted radiation to combine therapeutic and diagnostic modalities, its technology is designed to deliver focused doses of radiation with precision, regardless of where the cancer or disease is in the body.

Its flagship product is Illuccix, which is already approved by regulators and generating strong sales in the US for prostate cancer imaging. But there is more than just that. The company is advancing a deep pipeline of new radiopharmaceutical candidates targeting kidney, brain, and other cancers.

Each of these has the potential to open multi-billion-dollar global markets, which means Telix has a long growth runway if everything goes to plan and approvals are received.

Bell Potter remains very positive on Telix. It has a buy rating and $23.00 price target on its shares. Based on its current share price, this implies potential upside of approximately 65% for investors over the next 12 months.

Xero Ltd (ASX: XRO)

Another ASX 200 growth share that could be a great option for Aussie investors is Xero.

It is one of the world’s leading providers of cloud-based accounting solutions for small and medium-sized enterprises (SMEs). Its easy-to-use platform is growing in popularity with businesses globally, and today serves over 4.6 million subscribers.

While Australia and New Zealand remain core markets, Xero has made big strides in the United Kingdom, North America, and Asia. Its expansion into payments, payroll, and third-party app integrations also creates multiple new revenue streams, making it more than just accounting software.

This expansion was bolstered recently with a game-changing agreement to acquire leading US based bill pay platform provider Melio for US$2.5 billion. The company believes it will help to create a market-leading accounting and payments offering in a market estimated to total 100 million SMEs.

The team at Macquarie remains bullish on the company. It recently put an outperform rating and $204.00 price target on its shares. Based on its current share price, this suggests that there is more than 100% upside between now and this time next year.

The post These exciting ASX 200 growth shares could rise 60% to 100% in 2026 appeared first on The Motley Fool Australia.

More reading

• 3 reasons to buy Xero shares today
• Insiders are buying Xero and these ASX shares this month
• Opportunity knocks? Broker ratings on 4 ASX shares at 52-week lows
• When a top ASX stock falls 30%, it gets my attention. Here’s why
• Buy, hold, sell: Medibank, Qantas, and Xero shares

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

The ASX dividend stock Universal Store Holdings Ltd (ASX: UNI) looks to me like one of the most compelling options Aussies can buy for passive income.

It may not get the same level of attention as a name like Commonwealth Bank of Australia (ASX: CBA) or BHP Group Ltd (ASX: BHP), but I think it actually offers far more growth potential than Australia’s largest businesses.

For readers who haven’t heard of this one before, the company says that it owns a portfolio of premium youth fashion brands, with both retail and wholesale businesses.

This includes Universal Store, Perfect Stranger and CTC (trading as THRILLS and Worship). It’s aiming to grow its premium youth fashion apparel brands and retail formats to deliver a “carefully curated selection of on-trend apparel products to target 16-35 year old fashion focused customers.”

Let’s get into why it’s such a great idea to buy right now.

Appealing ASX dividend stock credentials

For me, a key part of the appeal of an ASX dividend stock is a growing dividend. If a payout is growing then it’s not being cut.

Impressively, the business has increased its payout each year since it started paying a dividend to investors in FY21 (which is also the financial year it listed). There are not many businesses that can claim they’ve hiked their payout every year since they listed on the ASX.

The FY25 annual payout translates into a grossed-up dividend yield of 7%, including franking credits. This yield has been unlocked thanks to three key factors: a generous dividend payout ratio, a reasonable price/earnings (P/E) ratio and the recent decline of the Universal Store share price. It’s down 17% since 29 October 2025.

The company’s dividend is projected to increase in the coming years.

Excitingly, Universal Store’s annual dividend per share is forecast to increase to 39.4 cents per share in FY26 and then climb to 44.1 cents per share in FY27. At the time of writing that translates into future grossed-up dividend yields of 7.2% and 8% for FY26 and FY27, respectively, including franking credits.

Is this a good time to invest in Universal Store?

The business is growing strongly with both new stores and strong sales growth at existing stores.

At the latest count, it has 114 physical stores in Australia – it’s expecting to open 11 to 17 new stores in FY26 – the company said it’s maintaining “prudence in new store and renewal leases”.

The ASX dividend stock revealed that in the first quarter of FY26, group direct-to-customer (DTC) sales were up 13.7% year-over-year.

The Universal Store business saw total sales growth of 11.4% and like-for-like sales growth of 7.7%. Perfect Stranger’s total sales grew 40.5% with like-for-like sales growth of 13.9%. CTC total sales grew 14.1%, with like-for-like sales growth of 2.3%. Those like-for-like sales numbers say to me that customers are loving the products on offer.

Overall, I’m expecting the company to deliver ongoing earnings growth thanks to its initiatives and sales progress. According to CMC Markets, it’s trading at 15x FY26’s estimated earnings, which I think is considerably undervalued if it’s able to continue growing total sales in the double-digits for the foreseeable future.

The projections on CMC Markets suggest the business could deliver a grossed-up dividend yield of 6.2% in FY26 and 6.9% in FY27, including franking credits.

The post 1 ASX dividend stock down 17% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• ASX 200 mining shares lead the market for a second week
• How much passive income could I earn with 1,000 BHP shares?
• Bell Potter names the best ASX retail stocks to buy
• $5,000 in CBA shares at the start of 2025 is now worth…
• Why this fundie is backing ASX mining shares over banks in 2026

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 recommended BHP Group 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 CSL Ltd (ASX: CSL) share price has been one of the worst performers over the past year within the S&P/ASX 200 Index (ASX: XJO). It has dropped by approximately 30% in the last 12 months, as the below chart shows.

The business has lost some investor confidence, with reductions of forecasts of how much profit it could make for the foreseeable future, though the business is trying its best to reduce costs and put its money into compelling healthcare products.

Let’s take a look at what experts think may happen with the CSL share price over the next year.

Predictions for the CSL share price

A price target is where analysts think the business will trading in a year from now. Of course, a forecast is not necessarily going to play out as expected, but if analysts are very positive on the business, then it could indicate there’s an appealing opportunity staring us in the face.

According to CMC Markets, there are currently nine buy ratings and three hold ratings on the business. That’s a large number of positive ratings on the ASX healthcare share compared to most other ASX blue-chip shares.

CMC Markets has also collated the price targets for the CSL share price. A price target is where the analyst thinks the share price will be in 12 months from now.

According to CMC Markets, of the recent analyst views on the business, there is an average price target of $245.55. That implies a possible rise of 33% over the next year, which would very likely be a market-beating return, if it reached the price target.

That’s just the average price target for CSL. The highest price target for the CSL share price is $284.43, which suggests the ASX healthcare share could rise by around 50% from where it is today.

Even the lowest price target of $195.55 looks somewhat promising for the CSL share price, implying a rise of 6%.

Analysts seem to have a unanimous view that the business is undervalued.

Valuation

One of the brokers that likes CSL is UBS. The broker forecasts that CSL could generate US$3.46 billion of net profit in FY26, or US$7.13 in earnings per share (EPS) terms.

That means its currently trading at 17x FY26’s estimated earnings. The price/earnings (P/E) ratio is a lot cheaper than it has traded at over the last several years. Time will tell how undervalued the business is.

The post Here are the latest growth forecasts for the CSL share price appeared first on The Motley Fool Australia.

More reading

• Buy Australian: ASX stocks positioned to beat global markets next year
• 5 ASX 200 shares I’d buy with $10,000 this week
• Is the CSL share price a generational bargain at $180?
• 10 most-traded ASX shares last week
• Own CSL shares? Here are the key dates for 2026

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 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.

There are a lot of options out there for income investors to choose from on the Australian share market.

But which ASX dividend shares could be buys for investors this week?

Listed below are three that analysts are tipping as buys for income investors:

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. Among its developments are subdivisions in emerging residential communities, high-density apartments, and townhouses in inner-city neighbourhoods.

The team at Bell Potter is positive on Cedar Woods. This is due to Cedar Woods being well-positioned to benefit from Australia’s chronic housing shortage.

It is expecting this to underpin dividends per share of 34 cents in FY 2026 and then 38 cents in FY 2027. Based on its current share price of $8.08, this equates to 4.2% and 4.7% dividend yields, respectively.

Bell Potter has a buy rating and $9.70 price target on its shares.

HomeCo Daily Needs REIT (ASX: HDN)

Another property company that is highly rated by analysts is the HomeCo Daily Needs REIT.

It is a real estate investment trust (REIT) that focuses on convenience-based assets. This includes supermarkets, pharmacies, and medical clinics. The type of assets that tend to have stable tenants and long leases.

UBS is positive on the company. It believes it will reward shareholders with dividends of 8.6 cents per share in FY 2026 and then 8.7 cents per share FY 2027. Based on its current share price of $1.39, this would mean dividend yields of 6.2% and 6.3%, respectively.

The broker currently has a buy rating and $1.53 price target on its shares.

Jumbo Interactive Ltd (ASX: JIN)

A third ASX dividend share that gets the thumbs up from analysts is Jumbo Interactive.

It is an online lottery ticket seller and lottery platform provider, best known for its Oz Lotteries app and Powered by Jumbo platform.

The team at Morgan Stanley believes it is positioned to reward shareholders with fully franked dividends of 57.7 cents per share in FY 2026 and then 68.4 cents per share in FY 2027. Based on its current share price of $11.23, this would mean dividend yields of 5.1% and 6.1%, respectively.

The broker currently has an overweight rating and $16.80 price target on its shares.

The post These buy-rated ASX dividend shares offer 4% to 6% yields appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• HomeCo Daily Needs REIT announces dividend and DRP for December quarter
• HomeCo Daily Needs REIT posts $219m gain and refinances $810m debt
• These top ASX dividend shares offer 5% to 10% yields
• Here are the top 10 ASX 200 shares today

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

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

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

A defence business gaining serious momentum

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

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

• Revenue jumped 69% to $143.6 million

• Underlying EBITDA returned to profit at $17.3 million

• Operating cash flow came in at $26.4 million

• Cash on hand improved to $65 million

A contract pipeline that keeps growing

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

That includes:

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

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

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

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

Why I think the sell-off has gone too far

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

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

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

My take

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

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

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

More reading

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

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

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

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

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

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

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

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

Bell Potter initiates coverage

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

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

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

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

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

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

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

Emerging tailwinds 

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

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

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

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

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

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

More reading

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

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

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

ASX ETFs snapshot

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

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

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

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

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

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

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

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

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

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

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

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

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

It is now up 143.89% year to date. 

Betashares Energy Transition Metals Etf (ASX: XMET)

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

It rose 15.83% from November to December 1. 

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

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

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

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

This fund is now up almost 90% in 2025.

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

More reading

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

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

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

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

ASX 200 expected to tumble

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

Oil prices weaken

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

Buy Harvey Norman shares

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

Gold price rises

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

Buy Cedar Woods shares

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

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

More reading

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

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

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

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

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

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

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

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

Low valuation

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

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

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

Good core growth

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

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

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

Dividend income

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

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

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

More reading

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

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

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

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

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

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

Expert views on the ASX energy share

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

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

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

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

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

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

UBS said with its final thoughts:

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

Santos share price valuation

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

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

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

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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 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.