Category: Stock Market

The turnaround in CSL Ltd (ASX: CSL) shares has been sharp.

From the nine-year low struck on 3 June 2026, CSL has surged approximately 35% to $122.89.

The question is not whether the bounce has happened. It clearly has.

The question is what is driving it, whether those drivers are durable, and what the August FY26 result will need to show to confirm this is more than a sentiment swing.

What has driven the 35% rebound in CSL shares

The honest answer is that the recovery has been driven primarily by sector rotation and valuation recognition rather than new positive company-specific news.

Healthcare was the worst-performing sector of all eleven ASX 200 market sectors in FY26. The S&P/ASX 200 Health Care Index (ASX: XHJ) fell 39% over twelve months to hit a nine-year low on 3 June.

When a sector falls that far that fast, it tends to attract bargain-hunting institutional investors at the start of a new financial year. This is even more true when those same investors have just locked in large profits in resources and energy shares.

The underlying business has not changed materially in the six weeks since 3 June.

Management’s FY26 guidance of approximately US$15.2 billion in revenue and US$3.1 billion in NPATA on a constant currency basis remains unchanged.

The operational challenges, including US immunoglobulin supply constraints and China albumin pricing pressure, remain the same.

The case that the recovery is here to stay

At the 3 June low of approximately $91, CSL was trading at approximately 11 times forecast FY26 earnings. This was a valuation not seen in more than fifteen years for a business of this quality.

At $122.89, CSL trades at approximately 15.2 times forecast FY26 earnings, still a fraction of the 30 to 50 times multiple it commanded at its peak.

Morgans retains a buy rating with a price target of $147.59, implying upside of approximately 20% from the current price.

To support this thesis, management has also pointed to stronger Behring division revenue growth in the second half of FY26. Additionally, management expects moderately stronger-than-expected Seqirus vaccine performance.

These are all early signs that the operating recovery is beginning.

The case that it is just a temporary bounce

The more cautious reading is equally legitimate.

Eight of eighteen analysts covering CSL have a buy rating, while ten have a hold.

That split reflects the uncertainty around today’s share price.

Indeed, CSL has delivered a series of earnings disappointments over the past eighteen months. Each has been framed by management as temporary before proving more persistent than expected.

The FY26 result, due on 19 August, will be the most important test of whether the recovery has earnings support or is simply a valuation-driven sentiment swing.

If August delivers another round of guidance cuts, the 35% bounce could reverse quickly.

What the August result needs to show for CSL shares

Three things would confirm the recovery is real.

First, Behring division revenue growth in the second half of FY26 that confirms rather than falls short of management’s guidance.

Second, evidence that the immunoglobulin supply and pricing situation is moving in the right direction.

Third, confidence from the new CEO, expected to be named before the result, that the operational challenges have a visible resolution path.

If those three conditions are met on 19 August, CSL’s recovery from $91 to $122.89 will look like the early innings of something more sustained.

If they are not, investors who bought the bounce may face a difficult reassessment.

Foolish takeaway

CSL shares are up 35% since early June to $122.89, but remain down 49% over twelve months.

The recovery may be here to stay, reflecting an oversold valuation at the June lows.

It may also partly be a rotation bounce, driven by institutional new-year rebalancing rather than company-specific positive news.

The August FY26 result will separate those two explanations cleanly.

Until then, the honest answer to whether the recovery is real is: we do not yet know.

The post CSL shares are up 35% since early June. Is the recovery here to stay? appeared first on The Motley Fool Australia.

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• How to go from zero to $50,000 with ASX shares
• 3 ASX blue-chip shares that could be strong long-term value plays
• Up 36%: Can CSL shares keep rebounding?
• Which ASX 200 sectors paid the highest dividend yields in FY26?

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 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.

The S&P/ASX 200 Index (ASX: XJO) has been choppy and directionless for several weeks.

After the strong start to FY27 in the first week of July, the broader market has stalled around the 8,800 point level as investors weigh renewed Middle East tensions, rate uncertainty, and the approaching August reporting season.

Beneath that flat headline, however, something interesting is happening.

S&P/ASX 200 Consumer Staples (ASX: XSJ) shares are quietly surging. This sector has been one of the best-performing pockets of the ASX in recent sessions as investors rotate into defensive names ahead of earnings season volatility.

Here are three ASX consumer staples shares benefiting from this upswing.

Woolworths: resilience in a cautious consumer environment

Woolworths Group Ltd (ASX: WOW) has been one of the quiet achievers of the past month.

The company provides something most ASX shares cannot guarantee: recurring revenue regardless of economic conditions.

Australians keep buying groceries, cleaning products, and personal care items through every cycle.

This earnings visibility is what institutional investors rotate toward when uncertainty rises.

Catapult Wealth’s Blake Halligan recently assessed Woolworths’ defensive credentials, noting:

“Food retail sales were up 5.9% in the third quarter of 2026 when compared to the prior corresponding period.”

Coles Group: consistent dividends and a reporting season catalyst

Coles Group Ltd (ASX: COL) has been rising alongside Woolworths, benefiting from the same defensive rotation while adding its own catalyst.

Brokers retained a positive view on Coles this week, following a period where the supermarket’s competitive positioning had been a source of investor uncertainty.

Coles pays a consistent, partially franked dividend twice per year, giving income investors a meaningful yield alongside the stability of essential retail earnings.

The approach of August reporting season adds a specific near-term catalyst.

Coles’ FY26 full-year result will give investors the most current picture of how effectively management has navigated cost inflation, loyalty program investment, and competitive pricing pressure over the past twelve months.

Bega Cheese: the defensive with a turnaround story

Bega Cheese Ltd (ASX: BGA) is the least conventional of the three but arguably the most interesting from a value perspective.

The company is Australia’s largest branded consumer dairy company, with a portfolio that includes Bega, Vegemite, and Farmers Union brands.

Like Woolworths and Coles, Bega benefits from the essential nature of its product categories.

But unlike the supermarkets, Bega carries an additional earnings recovery story on top of the defensive characteristics.

The company has been navigating a difficult period of input cost inflation and margin compression over the past two years.

Investors are buying after the company lifted its profit outlook. This has sent shares higher from growing confidence that the earnings recovery management has been guiding toward is beginning to materialise.

The combination of an essential product portfolio, a recovering earnings trajectory, and a market environment rewarding defensives makes Bega one of the more interesting propositions in the sector right now.

Why ASX consumer staples shares are having their moment

The rotation into consumer staples reflects three specific forces converging in July 2026.

First, investors who rode materials and healthcare to strong FY26 and early FY27 gains are taking profits and redeploying into lower-volatility names.

Second, renewed Middle East escalation and its impact on oil prices is raising the spectre of further RBA rate hikes. This has historically favoured defensive sectors over rate-sensitive growth names.

Third, August reporting season is six weeks away. Investors are positioning themselves into companies with more predictable earnings outcome.

Consumer staples tick all three boxes: lower volatility, insulated from oil and rate sensitivity, and with relatively predictable earnings that reduce binary outcome risk.

Foolish takeaway for ASX consumer staples shares

Woolworths, Coles, and Bega Cheese are each different versions of the same defensive investment thesis.

The broader market is stalling. Consumer staples are moving.

For investors who want to reduce portfolio volatility heading into August reporting season while maintaining exposure to quality, income-producing businesses, the current rotation into consumer staples shares is worth paying attention to.

The post ASX consumer staples shares are quietly surging while the rest of the market stalls. Here is why. 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 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.

ASX lithium shares ran extraordinarily hard in FY26.

Spodumene prices surged approximately 196% over the twelve months to June 2026. This powered ASX lithium producers to among the strongest returns in the market.

Then came June.

Spodumene prices fell by around 12% in June, triggering a sharp, rapid reversal across the sector.

The question now is whether the cooling is temporary or the beginning of a more sustained retreat.

PLS Group: The largest ASX lithium share takes the hardest hit

PLS Group Ltd (ASX: PLS) has had the most dramatic ride of the three.

PLS shares reached a two-and-a-half-year high of $6.38 in May before retreating significantly since then.

The pullback reflects two forces operating at the same time.

Softer lithium futures prices flowed directly through to earnings expectations, while investors who rode PLS from below $2 a year ago have been taking profits after an extraordinary run.

Importantly, the underlying business remains solid.

PLS reported underlying EBITDA surging 241% to $253 million in the first half of FY26. Encouragingly, EBITDA margins expanded from 17% to 41%.

UBS downgraded PLS from buy to neutral with a $4.95 price target, reflecting the view that the easy gains from the initial recovery have been captured.

Liontown: Ramp-up risk compounds the price fall

Liontown Resources Ltd (ASX: LTR) carries the highest risk of the three because it is still ramping up its Kathleen Valley mine in Western Australia.

A 12% fall in the spodumene price compounds operational risk rather than simply reducing a profit margin on an established operation.

Liontown fell 30.2% in June to $1.69, the sharpest decline of the three.

Despite the sell-off, the longer-term picture remains positive for believers in Kathleen Valley.

UBS retained its buy rating on Liontown and raised its target to $2.20, citing the quality of the deposit and the improving ramp-up trajectory.

The current share price sits comfortably below that target, implying meaningful upside if lithium prices stabilise and the ramp-up continues on track.

IGO: Diversification provides some insulation

IGO Ltd (ASX: IGO) is the most operationally diversified of the three ASX lithium shares.

Lithium exposure is diversified through its share of Greenbushes and the Kwinana Lithium Hydroxide Refinery alongside nickel production from Nova.

That diversification provides some insulation from the spodumene price cooling that hit pure-play producers hardest.

IGO fell 23.1% in June to $7.37, a meaningful decline but less severe than Liontown’s.

The Kwinana Refinery showed strong improvement in the most recent quarter.

Production increased to 3,047 tonnes in Q3 FY26, up from 2,120 tonnes in Q2. This represented 51% of nameplate capacity, while Greenbushes delivered an EBITDA margin of 75% in the same period.

IGO’s positive operational trajectory is important because it demonstrates the lithium division is improving regardless of short-term spodumene pricing.

The bigger picture for ASX lithium shares

The June pullback is a reminder that lithium stocks are commodity stocks.

They are not immune to price cycles. A 12% monthly fall in spodumene is a direct headwind regardless of how strong the longer-term EV demand story is.

UBS previously raised its lithium price forecast by 74%, forecasting spodumene reaching US$3,131 per tonne over the medium term, well above current levels.

The structural demand drivers, including electric vehicle adoption and battery energy storage growth, have not changed.

But until that demand shows up more consistently in the monthly price data, volatility will remain the defining feature of this sector.

Foolish Takeaway

Lithium prices cooled sharply in June, and PLS, Liontown, and IGO all paid the price.

Each is still materially higher than twelve months ago, but June’s falls are a timely reminder that commodity leverage works in both directions.

For investors who believe the long-term lithium demand story remains intact, the recent pullback may be creating a more attractive entry point than was available at May’s peaks for these ASX lithium shares.

The post Lithium prices are cooling. Here’s what that means for these ASX lithium shares 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 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 Regis Resources Ltd (ASX: RRL) share price is in focus today after the company decided not to match Genesis Minerals Ltd’s (ASX: GMD) rival bid for Vault Minerals Ltd (ASX: VAU), and expects to receive a break fee of approximately A$50.7 million.

What did Regis Resources report?

• Regis will not submit a counteroffer to Genesis Minerals’ proposal for Vault Minerals.
• Regis expects to receive a break fee of about A$50.7 million from Vault.
• The company holds a debt-free balance sheet with $1.2 billion in cash and bullion.
• Strong free cash flow generation continues across its gold operating portfolio.
• Recently reinstated Ore Reserves at McPhillamys gold project following a completed Pre-Feasibility Study.

What else do investors need to know?

Regis Resources emphasised that its disciplined approach to acquisitions remains unchanged. The board determined that the terms needed to match Genesis’ offer for Vault Minerals did not meet its value and return thresholds.

By not raising its bid, Regis remains well-funded, allowing the company to focus on its current portfolio and organic growth pipeline. The recently reinstated Ore Reserves at McPhillamys mark a significant milestone for one of its development projects.

What’s next for Regis Resources?

Looking ahead, Regis is committed to developing its established portfolio of gold operations. The company continues to advance the McPhillamys gold project, as recently outlined in its Pre-Feasibility Study.

Management reaffirmed their strategy to prioritise disciplined growth and maintain a robust balance sheet, positioning Regis for future opportunities in the gold sector while focusing on delivering value to shareholders.

Regis Resources share price snapshot

Over the past 12 months, Regis Resources shares have risen 44%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has risen 3% over the same period.

View Original Announcement

The post Regis Resources steps back from Vault Minerals bid, secures break fee 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.

I think the best Vanguard exchange-traded funds (ETFs) for buy-and-hold investors are the ones that make long-term investing easier. 

They give investors broad exposure, keep the investment process simple, and allow time to do more of the work.

Three Vanguard ETFs I would consider buying and holding are in this article.

Vanguard S&P 500 US Shares Index ETF (ASX: V500)

The first Vanguard ETF I would look at gives investors exposure to one of the most powerful business markets in the world.

The V500 ETF tracks the S&P 500 index, which means investors get access to hundreds of large US companies through one ASX-listed fund.

I like this ETF because the US market has a rare mix of scale, ambition, innovation, and reinvestment. Many of the companies in the S&P 500 index have spent decades building global brands, deep customer relationships, and products used by businesses and consumers around the world.

I also like that the index can refresh itself over time. Businesses that grow in importance can become larger parts of the fund, while those that lose relevance can fade.

For investors who want a simple way to back US corporate strength over the long term, I think the V500 ETF is a strong option.

Vanguard Global Technology Index ETF (ASX: VTEK)

The second Vanguard ETF is more focused. The VTEK ETF gives investors access to global technology companies.

Technology investing can sometimes sound like chasing the latest trend, but I think the stronger long-term case is much more practical. Businesses want to automate more work, protect data, improve productivity, manage customers, process payments, analyse information, and use artificial intelligence more effectively.

Those needs are unlikely to disappear. The VTEK ETF provides exposure to the companies building the tools, platforms, chips, software, and digital infrastructure behind that shift.

This ETF can be more volatile than a broad market fund. Technology valuations can move quickly when expectations change. But for patient investors, I think that volatility can be worth accepting as part of a long-term growth allocation.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

I think this Vanguard ETF is one of the simplest long-term building blocks on the ASX.

It gives investors exposure to a large portfolio of developed-market shares outside Australia.

What I like about the VGS ETF is that it spreads money across many countries, industries, currencies, and business models. That can be useful for Australian investors who want their portfolio to reach beyond the local market.

I also think it can help investors avoid overthinking every decision. Instead of trying to pick which overseas company, country, or sector will perform best, investors can own a broad basket and let the market sort through the winners and losers over time.

Foolish takeaway

I think these three Vanguard ETFs could all earn a place in a long-term portfolio.

The combination gives investors access to US market strength, global technology growth, and broad developed-market diversification.

There will still be weak years. Even excellent ETFs can fall when markets become nervous.

But for investors who want simple buy-and-hold exposure to global wealth creation, I think these Vanguard ETFs are among the best options on the ASX.

The post The best Vanguard ETFs to buy and hold appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Woodside Energy Group Ltd (ASX: WDS) share price has seen plenty of volatility over the last few months, as the chart below shows. The recently-reduced valuation means the ASX energy share‘s dividend yield has received a big boost.

Woodside generates earnings from projects around the world in the Asia-Pacific, Africa, and North America regions. The recent events in the Middle East led to higher energy prices and lower supply. This period could help the business deliver strong profits and a great dividend.

The business is forecast to pay large payouts over the next couple of financial years.

Dividend projection

Woodside has been a solid dividend option over the years – oil and gas remain an important part of the global economy, so the company plays a significant role in everyday life.

Its projected net profit in the 2026 and 2027 financial year could allow the business to pay very pleasing passive income in the next couple of years.

The projection on Commsec suggests the business could pay an annual dividend per share of A$2.39 in FY26 and A$2.98 per share in FY27.

At the current Woodside share price, it could pay a grossed-up dividend yield of 11.8% in FY26 and 14.6% in FY27, including franking credits.

There are very few S&P/ASX 200 Index (ASX: XJO) shares that offer a double-digit dividend yield, while Woodside’s is expected to be well above 10%, according to analysts.

The average return of the ASX share market over the last 10 years has been 9%, so Woodside’s annual passive income over the next couple of financial years could outperform the entire ASX share market’s return.

Of course, dividends are not guaranteed – the projected amounts are just estimates. For me, an even more important question is whether the Woodside share price is a good buy.

Is the Woodside share price a buy?

Analysts are somewhat mixed on the business at the moment. There have been nine ratings on the business in the last three months. Of those ratings, two were a buy, six were a hold and one was a sell.

Of those recent ratings, the average price target was $31.02. That implies a possible rise of 6% from where it is at the time of writing. If that happened, combined with the dividend return, Woodside shares could deliver a strong return. It may depend on what happens in the Middle East and the supply of energy to the world.

The most optimistic price target is $36.50, while the most pessimistic price target is $24.75. It’ll be interesting to see what happens next.

Either way, there are plenty of ASX shares that are not exposed to changing energy prices like Woodside is, so some investors may prefer other opportunities.

The post Is the Woodside share price a buy for its 14% dividend yield? 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.

They say that “you’ve got to know when to hold ’em, know when to fold ’em.”

This poker advice rings equally true for investing. After all, holding ASX shares that keep falling can act as a major drag on an otherwise healthy portfolio.

With that in mind, let’s take a look at three big-name ASX 200 shares that experts have named as sells this week courtesy of The Bull. Here’s what they are bearish on:

Mineral Resources Ltd (ASX: MIN)

The team at Red Leaf Securities has named mining and mining services company Mineral Resources as an ASX 200 share to sell this week.

It thinks investors should stay away from the company until its earnings volatility and debt leverage are reduced. It said:

MIN is a diversified resources company, with extensive operations in lithium, iron ore, energy and mining services across Western Australia. The diversified model provides some cash flow stability via mining services, but overall earnings remain cyclical and exposed to volatile bulk commodity markets. 

Higher leverage amplifies downside risk during commodity downturns. Execution complexity across multiple divisions adds additional risk relative to simpler, more focused producers. While the company retains strategic asset value, earnings stability remains inconsistent, in our view. Until we see a reduction in leverage and earnings volatility, the stock remains a sell, or in the underweight category.

PLS Group Ltd (ASX: PLS)

Another ASX 200 share that Red Leaf Securities is bearish on is this lithium giant. 

Red Leaf has put a sell rating on PLS shares due to concerns over increasing lithium supply, which it appears to believe could weigh on spot prices. It explains:

PLS is a leading Australian lithium producer. Lithium remains structurally linked to electrification, but near term fundamentals are challenged by expanding supplies. While PLS asset quality remains strong, earnings are highly leveraged to spot prices, generating volatility through the cycle. Balance sheet strength provides a buffer, but doesn’t offset cyclical earnings pressure. 

PLS remains a high risk recovery trade dependent on the timing of lithium re-balancing, with limited near term visibility.

REA Group Ltd (ASX: REA)

Finally, DP Wealth Advisory has named REA Group shares as a sell this week.

This has been driven by concerns over the slowing housing market and increasing competition from rival Domain. DP Wealth explains:

REA is the dominant online property platform in Australia. But competitor Domain Holdings Australia, acquired by US listed company CoStar Group, is expected to provide fierce competition. Federal Budget changes to capital gains tax and negative gearing leaves property far less appealing to investors. 

The Australian property market is slowing, which could impact REA listing volumes moving forward. Auction clearance rates have been falling in Sydney and Melbourne. Other stocks appeal more at this stage of the cycle.

The post Experts name 3 big-name ASX 200 shares to sell appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in REA 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 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.

ASX bank share Commonwealth Bank of Australia (ASX: CBA) has seen plenty of volatility in the past year, as the chart below shows.

I think this is a good time to ask whether Australia’s largest bank is attractive or overvalued, considering it’s down 8% from mid-April.

For such a large business, that’s a significant reduction of the market capitalisation in dollar terms.

After everything that’s happened, let’s take a look and see if the ASX bank share is attractive according to experts.

Can the CBA share price rise from here?

The company has a long-term track record of delivering earnings growth, which is a great tailwind for share price gains.

Commonwealth Bank has managed to deliver good returns for investors through its connection with its customers. The bank has a high level of loans originating through proprietary channels, which helps its market share and net interest margin (NIM).

But being a high-performer may not necessarily help the CBA share price in the near-term, with headwinds like taxation changes and higher interest rates hurting potential loan demand.

Now let’s consider what could happen with the ASX bank share. Analysts sometimes put a price target on a business, which is where analysts think the business could be trading within 12 months.

According to CMC Invest, there have been eight analyst ratings on the business in the last three months. All of those ratings were a sell.

The average price target for CBA shares is $120.69 of those eight analysts, suggesting the business could fall by close to 30% within the next year. In other words, experts still think the ASX bank share is significantly overvalued.

The most optimistic price target is $144.40, implying a possible 14% decline. The most negative price target is $90, implying a potential decline of around 47% from its level at the time of writing.

Commonwealth Bank valuation

According to the projection on CMC Invest, the CBA share price is valued at 26x FY26’s estimated earnings.

The business is still forecast to grow earnings in both the 2027 financial years and 2028 financial year, but the pace of the earnings growth is expected to be slow.

In FY27, its net profit is only expected to rise by 5.4%. In FY28, the net profit is forecast to grow earnings by just 1.3%.

In terms of the dividend, the FY26 CBA grossed-up dividend yield could be 4.3%, including franking credits, at the time of writing.

I don’t think Commonwealth Bank shares are the best place to invest new cash right now; other opportunities seem more appealing.

The post How much could the CBA 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 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.

ASX dividend stock Nick Scali Ltd (ASX: NCK) has fallen 37% from its peak less than six months ago.

I love buying dividend-paying shares when their valuations decline because we can get a lower price and a higher dividend yield.

For example, if a business has a dividend yield of 5% and then the share price falls 10%, the dividend yield becomes 5.5%. That’s a noticeably better passive income return, just because we bought during a dip.

The Nick Scali share price is down 37% – investors can get a much better dividend yield now.

I think the ASX dividend stock is a great buy today for a few different reasons.

Opportunistic time to buy

It’s understandable that retail shares go through volatility because of how economic conditions can change, affecting consumer spending and investor confidence.

Higher interest rates may well mean that demand for mid-range furniture declines during this period, but I don’t think conditions will remain negative forever, which is why this could be a good time to invest opportunistically.

It’s not often that the business falls by more than a third, but those large declines have proven to be good times to buy for the longer-term as the business grows.

The company’s existing store network can see like-for-like sales grow in reasonable conditions, but the store network expansion is helping increase its underlying value as time goes by, even as the share price moves up and down.

Store expansion

As of December 2025, the business had 64 Nick Scali stores across Australia and New Zealand and 46 Plush stores in Australia.

The company says there’s a long-term opportunity to reach 86 Nick Scali stores in Australia and New Zealand, as well as between 90 to 100 Plush stores across Australia and New Zealand. In other words, its overall ANZ network could grow from 110 to up to between 180 to 200 stores.

On top of that, the company recently expanded into the UK after acquiring Fabb Furniture. It’s now rebranding those stores to Nick Scali. The UK has a much bigger population than Australia, so there’s plenty of room for growth there too.

For now, the ASX dividend stock has around 20 stores in the UK and the business has a long-term opportunity of between 60 to 70 UK stores. With how the business is selling Nick Scali furniture to UK stores, the UK segment’s gross profit margin is rapidly rising.

The UK business saw total January written sales of $6.7 million, with four refurbished stores achieving LFL store written sales growth of 32% compared to the prior corresponding period.

Better dividend yield

According to Commsec, for FY26, the business is projected to pay an annual dividend per share of 68.7 cents – that translates into a grossed-up dividend yield of 6.1%, including franking credits.

The dividend is forecast to grow even further by FY28, with a possible annual payout of 76.9 cents per share. That translates into a grossed-up dividend yield of 6.8%, including franking credits.

Overall, the future looks positive for dividend investors.

Cheaper valuation

It’s clear that the ASX dividend stock is cheaper – it has dropped by more than a third. But what earnings multiple is it now trading at?

According to the forecast on Commsec, the Nick Scali share price is valued at 19x FY26’s estimated earnings and 16x FY27’s estimated earnings.

I think this is a great time to invest in the ASX dividend stock, though it’s not the only ASX share that looks good value today.

The post 1 ASX dividend stock down 37% I’d buy right now appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Bell Potter names 3 Australian shares to buy
• 5 things to watch on the ASX 200 on Tuesday
• Morgans recommends these ASX shares as buys
• Broker names 3 ASX shares to buy now

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

Mesoblast Ltd (ASX: MSB) shares could be seriously undervalued.

That’s the view of the team at Bell Potter, which remains very bullish on the biotechnology company’s shares.

What is Bell Potter saying?

Bell Potter was pleased to see that Mesoblast’s Ryoncil product is building momentum. This saw Mesoblast report sales in line with the mid point of its guidance range. It said:

MSB has reported 4Q26 revenues of US$36m (+20% vs 3Q26) in line with our forecast. FY26 revenues for Ryoncil totalled US$115m which is the mid point of guidance (i.e. US$110m – $120m). The full year result represents an outstanding result considering the product was launched from a standing start in April 2025, prior to broad reimbursement availability. 

Commercial adoption has been exceptionally strong and has continued to grow as barriers to adoption have fallen away – particularly for reimbursement. We expect Group revenues for FY26 of US$121m inclusive of Temcel royalties (Japan).

Looking ahead, the good news is the broker continues to believe that sales will grow strongly in FY 2027. It adds:

Our forecast for FY27 Ryoncil sales remains bullish at US$275m relative to the annualised exit rate of US$144m. The implied quarterly growth rate is ~27% compounding. We continue to believe this is achievable given the progress in recent months on two key fronts: a) expansion of the key account manager team servicing this market – 6 additional FTEs being hired to service large markets in the north eastern US and California; and b) MSB has only recently begun to gain traction with the very largest transplant centres in the US, both on the east and west coast. 

The forecast also includes a small revenue stream from off label use amongst young adults, where some payers have reimbursed hospitals for off label use in isolated cases following patients failing on SOC for SR aGvHD. For these reasons, we retain our FY27 forecast.

Mesoblast shares tipped to double

According to the note, Bell Potter has effectively upgraded Mesoblast shares to a buy rating (from speculative buy) and held firm with its $4.45 price target. This is approximately double its current share price. It concludes:

MSB is expected to commence submission of the various modules of the Biological Licence Application for Rexlemestrocel-L in heart failure and commence recruitment of the adult study in GvHD (for Ryoncil). We expect MSB will also engage in preliminary discussions with distributors for Rexlemestrocel-L in the chronic lower back pain indication, ahead of the phase 3 readout in mid CY27. 

Investment thesis: TP $4.45 (unchanged) There are no changes to earnings and we retain our $4.45 target price and Buy rating. As MSB is generating strong revenue growth the Speculative risk rating is no longer warranted.

The post Why Mesoblast shares could double in value appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• Mesoblast shares: Q4 earnings top projections
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares with 50% to 100% upside in FY27

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.