Category: Stock Market

As I imagine you’re aware by now, yesterday ASX investors and mortgage holders alike learned that interest rates Down Under are heading higher.

Again.

In afternoon trade on Tuesday, the Reserve Bank of Australia (RBA) announced a 0.25% increase in the cash rate target amid concerns over rising inflation. That’s partly due to ongoing strong domestic demand and partly driven by the global energy price spike amid the war in Iran.

This sees Australia’s official interest rate back up at 4.10%.

And it represents the second rate increase by the Aussie central bank in 2026, with the RBA also having hiked by 0.25% at its 3 February meeting.

Investors were not deterred, however. With the market having widely priced in another rate increase, the All Ordinaries Index (ASX: XAO) closed up 0.3% on Tuesday.

Now, here’s what the experts are saying about RBA interest rate hikes in 2026.

RBA triggers second interest rate increase in 2026

Commenting on Tuesday’s interest rate hike, eToro market analyst Josh Gilbert said:

This is clearly not a hike the RBA wanted to make, but with the board itself acknowledging inflation risks have tilted further to the upside, along with petrol prices climbing by the week, the board has been backed into a corner.

Geopolitical tensions didn’t create Australia’s present inflation problem, but they have certainly exacerbated it.

Gilbert added that households will find this a “bitter pill to swallow”. He noted:

Mortgage repayments are going up at the same time fuel and grocery bills are surging, and that squeeze is going to hit hard and fast. The rate relief many were counting on this year doesn’t just seem to be delayed, it looks to have disappeared.

As for what mortgage holders and ASX investors can expect from interest rates over the remainder of the year, Gilbert concluded:

If oil stays elevated, the view that another hike is on the table will only gain momentum… If the situation in the Middle East resolves and crude comes back to earth, today’s hike could be the last we see. Right now, though, that feels like wishful thinking rather than the base case.

Filip Tortevski, senior analyst at Wealth Within highlighted the risks the RBA is facing as it tightens in the current environment.

Tortevski said:

Higher rates can slow spending and economic activity, but they do little to directly control the price of oil. That leaves the RBA walking a fine line, trying to contain inflation without pushing an already fragile economy into a deeper slowdown

How much more will mortgage holders pay?

David Koch, economic director at Compare the Market, noted that the RBA’s 0.25% interest rate hike could add $116 to monthly repayments for a homeowner with a loan of $736,000. That’s $1,392 more a year.

“Nobody wants another rate hike – we’ve already had one this year – and that means millions of homeowners are spending thousands more on their repayments,” he said.

“But inflation is a prickly issue and that means it’s not one we can sit on. Every month we wait to act could be precious time lost in the fight against more expensive groceries, power bills and insurances,” Koch noted.

As for the prospect of further interest rate increases in 2026, Koch said:

There’s no meeting in April, but the RBA sits again in May and another six times this year. I don’t think we’re out of the woods yet…

I encourage homeowners to prepare for the possibility of more hikes this year. That means knowing your rate, and doing some leg work to make sure you’re not paying more than you need to.

The post Buying ASX shares or paying off a mortgage? Here’s what the experts are saying about RBA interest rate hikes in 2026 appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.

Commonwealth Bank of Australia (ASX: CBA) shares are 0.32% higher in early morning trade on Wednesday. At the time of writing, the ASX bank stock is changing hands for $176.69 a piece.

Today’s uptick/drop means CBA shares are now up 9.69% for the year to date and 22.57% higher over the year.

CBA’s strong share price growth looks promising, but if you’re looking to add the stock to your portfolio, here are some things to consider.

3 reasons to buy CBA shares

1. It’s a defensive stock 

CBA is a defensive stock, meaning it can remain stable in times of economic crisis. Australians will always need banking. From home loans to credit cards and even bank accounts. Banking is an essential service, rather than a discretionary spend.

2. Consistent operational performance

Because CBA is a defensive stock, its operational performance and earnings are mostly strong and consistent, even when markets are weaker. CBA posted its half-year results in mid-January, where it revealed a 6% increase in cash net profit to $5,445 million. The result was far better than the market expected and demonstrates ongoing core banking business growth. The bank has also continued to generate strong profitability and returns.

3. Reliable dividends

Another bonus for CBA shares is that, because of its defensive nature and consistent earnings and operational performance, it can pay a decent dividend to its investors. CBA has paid dividends twice per year consistently since 2006. The bank is due to pay a fully franked dividend of $2.35 per share to investors later this month. At the time of writing, this gives a yield of around 2.88%.

3 reasons to sell CBA shares

1. It’s overvalued

CBA’s share price is overvalued relative to its peers, and the bank’s bumper price tag isn’t supported by its earnings or business fundamentals. CBA’s current price-to-earnings (P/E) ratio, at the time of writing, is 27.62, which is much higher (and therefore more expensive) than that of other major banks.

2. Analysts are tipping a strong downside

Analysts are mostly bearish on the outlook for CBA shares, with consensus of a downturn ahead. TradingView data shows that 14 out of 16 analysts have a sell or strong sell rating on the stock. The average target price is $131.41, which implies a 25.55% upside at the time of writing. But some think the share price could crash 49.02% to $90 in the next 12 months.

3. There is better value elsewhere

The reality is, while CBA shares offer reliable passive income from a defensive stock with strong operational performance and potential for further growth, investors can also find this elsewhere at a lower price.

Other major banks, particularly the big four, offer dividends that are very similar, but their share prices are significantly lower.

The post CBA shares: 3 reasons to buy and 3 reasons to sell appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 All Ordinaries Index (ASX: XAO) is up 0.2% in morning trade today, with this ASX All Ords gold stock charging ahead of those gains.

The outperforming miner in question is Brightstar Resources Ltd (ASX: BTR).

Brightstar shares closed yesterday trading for 43.50 cents. In early morning trade on Wednesday, shares are changing hands for 44.25 cents apiece, up 1.7%.

Here’s what’s catching investor interest.

ASX All Ords gold stock gains on results

The Brightstar share price is marching higher after the miner announced a promising batch of results from its ongoing diamond and reverse circulation (RC) drilling programs at its Sandstone Gold Project, located in Western Australia.

Sandstone hosts a current Mineral Resource Estimate (MRE) of 2.4 million ounces at 1.5 grams of gold per tonne (2.4Moz at 1.5g/t Au).

The ASX All Ords gold stock said its diamond and RC drilling campaign targeted infill and extensions to key deposits at the Sandstone Hub, including Two Mile Hill-Shillington, Whistler, and Lord Nelson.

Brightstar sounded particularly optimistic about the Two Mile Hill deposit, noting it presents a potential bulk-tonnage underground mining operation. This could provide a higher-grade ore contribution within the miner’s proposed multi-ore source processing hub at Sandstone.

Among the top results at the deposit, the ASX All Ords gold stock reported an unconstrained intercept of 411.2 metres at 1.11g/t Au from 80 metres.

Two Mile Hill hosts a current MRE of 664koz at 1.6g/t Au, and it remains open at depth.

Brightstar has two RC rigs and two diamond drill rigs currently active at Sandstone.

The company said a Sandstone Mineral Resource upgrade is due in the June quarter, with the pre-feasibility study (PFS) targeted for delivery in the second half of calendar year 2026.

What did management say?

Commenting on the results helping boost the ASX All Ords gold stock today, Brightstar managing director Alex Rovira said, “The latest drill results from the Sandstone project clearly highlight how the potential scale is developing.”

Rovira added:

The Two Mile Hill-Shillington deposit is shaping up to be a significant contributor to a future Sandstone operating hub. With high grades zones within a lower grade halo up to 400m wide, the drilling illustrates the substantial extent of the mineralisation delineated to date.

Looking ahead, Rovira concluded:

With the addition of further results from Whistler and Lord Nelson, work at the Sandstone Hub continues to progress. The latest results, including 31m @ 5.17g/t Au at the Whistler Deposit, will flow into the upcoming MRE updates, due later this year, and the ongoing pre-feasibility study workstreams.

The post ASX All Ords gold stock lifts off on exploration success appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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.

Orthocell Ltd (ASX: OCC) shares are catching the eye on Wednesday morning.

In early trade, the ASX All Ords stock is up 5% to 82 cents.

Why are Orthocell shares rising today?

The company’s shares are pushing higher today following the release of an announcement that highlights the real-world use of its Remplir device in a conflict setting.

Remplir is a collagen nerve wrap used in the repair of peripheral nerve injuries. It provides compression-free protection to the nerve, generating an ideal microenvironment to aid nerve healing.

According to the release, the ASX All Ords stock’s Remplir product has been used in 23 surgical procedures on injured soldiers in Ukraine.

The company confirmed that the procedures followed a humanitarian delivery of the device to Ukraine in April 2025, with surgeons now successfully using Remplir in both primary and secondary nerve repair operations.

The good news is that feedback from surgeons has been positive, supporting the clinical utility of the device.

Real-world validation in challenging environments

Management highlighted that this deployment demonstrates the practicality of Remplir in demanding conditions such as conflict zones.

The device is designed to connect, protect, and cap severed nerves resulting from trauma. Its portability, ease of use, and ability to be stored at room temperature make it well suited for use in military and emergency environments.

Importantly, Orthocell was able to train Ukrainian surgeons remotely via video, supported by its key opinion leader and Australian orthopedic surgeon, Dr Alex O’Beirne. The successful adoption of the product following remote instruction highlights its accessibility and ease of implementation in the field.

Defence opportunity emerging

The ASX All Ords stock believes this experience could open the door to further opportunities with defence organisations globally.

Orthocell intends to continue working with Ukrainian surgeons to monitor patient outcomes and collect clinical data where possible. This data is expected to support future discussions with defence and medical organisations around the world.

Commenting on the development, the company’s managing director, Paul Anderson, said:

In a time where there are multiple global conflicts, the application of Remplir in trauma-related nerve injuries is highly relevant. The successful remote training of surgeons and subsequent use of the device across 23 patients reinforces its unique handling, transportability, and clinical utility as a leading collagen-based nerve repair solution.

The post Which exciting ASX All Ords stock is jumping on big news? appeared first on The Motley Fool Australia.

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

DroneShield Ltd (ASX: DRO) has announced a new partnership with Robin Radar Systems, which it says will further extend its radar interoperability and strengthen airspace awareness for its customers.

The Australian anti-drone company said Robin Radar Systems was recognised for its 360-degree, 3D radar technology, “designed to detect and track small airborne objects, including drones”.

Technology ecosystem expanded

DroneShield added in a statement released on Wednesday:

Its radars are engineered to deliver reliable detection and classification performance across complex environments.

DroneShield said its approach to counter-unmanned aircraft systems (UAS) was “ecosystem led”.

It said further:

Rather than offering a closed or static solution, the company has invested in building a scalable marketplace of interoperable third-party sensors. This model gives operators the flexibility to select the right sensing technologies for their specific environment, threat profile, and operational constraints, both today and as requirements evolve. By adding Robin Radar Systems to its ecosystem, DroneShield continues to expand the options available to customers seeking radar-based detection as part of a layered CUAS deployment. Radar can play a critical role in detecting and tracking airborne objects across wide areas and in challenging conditions, supporting persistent awareness and resilience.

DroneShield said at the centre of this ecosystem was its DroneSentry-C2 product, “which combines inputs from multiple sensor types to create a consolidated operational picture that reduces ambiguity and enhances decision confidence”.

DroneShield Chief Product Officer Angus Bean said operators needed systems that adapt to their mission, not the other way around.

By partnering with Robin Radar Systems and expanding our sensor marketplace, we give customers more freedom to design their airspace security architecture, while SensorFusionAI ensures that all sensor inputs are fused into insights that support decisive action.

Robi Radar Chief Commercial Officer Marcel Verdonk welcomed the agreement.

At Robin, we see ourselves as a new generation radar company – fast, adaptive, and built for integration. Our technology is designed to deliver seamless performance within broader security architectures. We’re pleased to be partnering with DroneShield to combine our market-leading IRIS 3D radar with their CUAS platform, enabling smarter, layered airspace protection worldwide.

Building on recent good news

DroneShield also recently announced that it had started manufacturing counter-drone armaments in the European Union under contract, marking a significant expansion into a key market.

DroneShield said the European manufacturing capability would enable it to bid more competitively for European contracts, “which increasingly prioritises sovereign capability, regional production, and resilient supply chains”.

DroneShield shares were 1.2% higher in early trade on Wednesday at $4.07. The company was valued at $3.71 billion at the close of trade on Tuesday.

The post Here’s why the Droneshield share price just jumped                appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield and is short shares of DroneShield. 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.

Brokers have been busy looking over a number of ASX shares this week.

Let’s see what they are saying about the three named below, which have released updates in recent days. Here’s what you need to know:

Clarity Pharmaceuticals Ltd (ASX: CU6)

Bell Potter has been pleased with recent study data relating to this radiopharmaceutical company’s 64Cu-SAR-bis-PSMA PET product. It highlights that it is significantly outperforming Ga-PSMA-11 PET in the detection of biochemical recurrence in men with very low PSA levels.

As a result, the broker has reaffirmed its speculative buy rating and $6.40 price target on its shares. It said:

The stage is now set for a readout from the approval study for 64Cu-SAR-bisPSMA (AMPLIFY) which has now ceased accepting new patient consents and is practically fully enrolled (n=220). The Co-PSMA data along with data from COBRA and anticipated findings from AMPLIFY will form the basis of submission of a new drug application to be submitted to the FDA.

CU6 has three fast track designations for the SAR-bisPSMA agent which includes patients with BCR of prostate cancer following definitive therapy. The company is well funded with cash in excess of $226m at 31 Dec 2025.

New Hope Corporation Ltd (ASX: NHC)

This coal miner disappointed analysts at Morgans with its half-year results. The broker highlights that its net profits were much softer than expected.

In light of this, the broker has retained its hold rating with a $5.00 price target. It said:

Overall result missed expectations, with underlying NPAT of A$54m materially below MorgansF (A$63m) and Visible Alpha consensus (A$78m), despite EBITDA of A$215m coming in line with expectations. NHC declared a fully franked 10c dividend, beating MorgansF (8c) and consensus (6c) estimates.

With an increasing production profile and material upside potential in coal prices, NHCs outlook remains positive. We maintain a HOLD rating with a target price of A$5.00ps.

Orica Ltd (ASX: ORI)

Morgans was pleased with this commercial explosives and blasting systems company’s trading update.

It was also pleased to see its CF Industries litigation settled and the strengthening of its US operations with an acquisition.

This has seen Morgans reiterate its buy rating with an improved price target of $25.35. It said:

ORI’s trading update was slightly stronger than we expected. It also announced the settlement of its litigation with CF Industries and the acquisition of its US explosives JV partner, Nelson Brothers, strengthening its US operations. Higher AUD and Indonesia’s coal production quotas have seen us make minor revisions to our FY26 forecasts but the acquisition has upgraded FY27/28.

With leverage to attractive industry fundamentals, market leading positions, solid earnings growth, proven management team and strong balance sheet, we reiterate our BUY rating with a new price target of A$25.35.

The post Buy, hold, sell: Clarity Pharmaceuticals, New Hope, and Orica shares 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.

The ASX dividend stalwart Centuria Industrial REIT (ASX: CIP) is a business that should be on every passive income investor’s watchlist. It’s certainly on mine!

As the name suggests, it’s a real estate investment trust (REIT), which means it’s a business that owns (commercial) property to lease to tenants. It’s Australia’s largest domestic pure-play industrial REIT, with high-quality industrial assets in key cities across Australia.

It has a quality, diverse tenant base leasing buildings such as distribution centres (42% of the portfolio value), manufacturing and production (24%), transport logistics (14%), data centres (12%), and cold storage (7%).

Let’s get into why this is such an appealing ASX dividend stalwart to own for the long term.  

Appealing distribution yield

The business has provided guidance for investors that it’s going to increase its 2026 financial year distribution by 3% year over year to 16.8 cents per unit.

That’s not the highest payout growth rate on the ASX, but it shows the business can increase its payments to investors, even when interest rates are relatively high.

If it does deliver on that payment, the ASX dividend stalwart can provide investors with a FY26 distribution yield of 5.5%.

The passive income increase will be funded by an increase in the funds from operations (FFO) per unit, which is essentially the net rental profit, of up to 6% to a possible 18.5 cents per unit.

If it does achieve that level of profitability, we’re talking about a distribution payout ratio of roughly 91%. That’s rewarding for shareholders while also retaining some of the net rental profit to invest in the business for stronger growth longer term.

Additionally, it’s useful to note that the business partially has such a sizeable distribution yield because it’s trading at a large discount to its underlying asset value. At 31 December 2025, its net asset value (NAV) was $3.95 – it’s priced at a 23% discount to this right now.

The ASX dividend stalwart has growth tailwinds

I’m expecting significant rental growth from the business in the coming years, which is one of the main reasons why I’m calling this an attractive ASX dividend stalwart.

According to the REIT, its portfolio is approximately 20% ‘under-rented’. This means that the current rent is significantly less than the market rent. As contracts come up for renewal, this will help boost the rental income.

The business is expecting net operating income (NOI) growth of 5% per year over the medium term, which is a strong tailwind for future distribution payouts. I doubt many REITs will grow their NOI at a faster pace than that organically.

It also has a development pipeline of around $250 million for the next two years, which should be a useful boost for rental earnings.

Actual demand for industrial space continues to grow thanks to a rising population, increasing e-commerce adoption, limited supply of warehouses, rising demand for cold storage for fresh food and pharmaceuticals, growing numbers of data centres, and the onshoring of supply chains.

Overall, the outlook seems very positive for long-term rental and distribution growth.

The post An ASX dividend stalwart every Australian should consider buying 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.

The Woodside Energy Group Ltd (ASX: WDS) share price is on the move today following the oil and gas producer’s latest announcement.

At the time of writing, the Woodside share price is edging slightly higher by 0.19% to $31.48 in early morning trade.

The gain comes after the company confirmed the appointment of a permanent Chief Executive.

Here’s everything investors need to know.

Woodside confirms new Chief Executive

According to the release, Woodside has appointed Elizabeth (Liz) Westcott as Chief Executive Officer and Managing Director.

Westcott has served as acting CEO since December 2025, following the departure of former Chief Executive Meg O’Neill.

She brings more than 30 years of experience in the global energy industry.

Westcott joined Woodside in 2023 as Executive Vice President for Australian Operations and was later promoted to Executive Vice President and Chief Operating Officer for Australia.

In those roles, she oversaw several key domestic assets and developments, including the Scarborough Energy Project and the Pluto Train 2 expansion.

Before joining Woodside, Westcott was Chief Operating Officer at Energy Australia, where she managed the company’s electricity generation portfolio.

Earlier in her career, she held senior roles at ExxonMobil, working across Australia, the United Kingdom, and Italy.

Woodside Chairman Richard Goyder noted that the appointment followed a comprehensive search process that considered both internal and external candidates.

Board highlights operational experience

Goyder said the board believes Westcott’s leadership and operational experience make her well-suited to lead the company.

He added that her background across large-scale energy projects and operations positions Woodside to continue delivering long-term value for shareholders.

Westcott said she was honoured to lead the business and plans to focus on disciplined execution and operational performance.

She also highlighted Woodside’s strong portfolio of projects and its long history of supplying energy to global markets.

Key projects remain central to growth plans

Woodside has grown in recent years, particularly after its merger with BHP Group Ltd (ASX: BHP)’s petroleum business in 2022. The deal created one of the largest independent oil and gas producers listed on the ASX.

The company is currently progressing several major developments. These include the Scarborough gas project and the Pluto Train 2 LNG expansion in Western Australia.

Both projects are expected to support Woodside’s future production and export volumes in the coming years.

The leadership appointment takes place as Woodside continues advancing a number of large projects across its global portfolio.

Attention will now turn to watching how the company progresses these developments under its newly appointed Chief Executive.

The post Woodside locks in new CEO as energy giant enters next phase appeared first on The Motley Fool Australia.

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

Sims Ltd (ASX: SGM) shares are on the rise and catching the eye on Wednesday morning.

In early trade, the ASX 200 stock is up 17% to $21.99.

Why is this ASX 200 stock rising today?

For those unfamiliar with Sims, it is a global leader in metal recycling and the provision of circular solutions for technology.

The company notes that it plays a vital role in helping increase circularity and decarbonisation by supplying recycled materials and re-purposed products.

The ASX 200 stock is pushing higher today following the release of a trading update outlining its expected FY 2026 financial performance.

According to the release, Sims expects FY 2026 underlying EBIT for the group to be in the range of $350 million to $400 million.

This will be at least double the underlying EBIT of $174.9 million that the company reported in FY 2025.

A key driver of this will be the company’s Sims Lifecycle Services (SLS) division, which is expected to deliver underlying EBIT between $165 million and $185 million. This reflects continued strength in DDR4 secondary market pricing and sustained hyperscaler activity.

Strong pricing tailwinds

Management highlighted that the ASX 200 stock is benefiting from continued price strength in both non-ferrous metals and memory chip markets.

Within its Metal business, strong non-ferrous prices and improved US domestic ferrous prices are helping to offset ongoing pressure from elevated Chinese steel exports, which continue to weigh on scrap prices in export and ANZ domestic markets.

Higher aluminium prices, driven by supply concerns, have also contributed to improved Zorba prices.

Second half improvement expected

Sims expects a materially stronger performance in the second half of FY 2026, particularly across its North America Metals (NAM) and Sims Asia Pacific (SAR) operations.

This follows what management anticipates will be a strong third quarter.

Based on management’s guidance, second-half underlying EBIT will be $228.9 million to $278.9 million, compared to $121.1 million in the first half.

However, the company cautioned that the outlook for ferrous prices in ANZ remains subdued in the near term.

Sims also noted that the operational impact from the Middle East conflict has been relatively limited to date, though it has led to higher shipping and fuel costs.

Following today’s move, this ASX 200 stock is now up 42% since this time last year.

The post Guess which ASX 200 stock is jumping 17% on strong FY26 guidance appeared first on The Motley Fool Australia.

More reading

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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.

Shares in Aristocrat Leisure Limited (ASX: ALL) have hit a rough patch.

The ASX share dropped to a new 52-week low of $44.76 on Tuesday and has now shed around 32.5% of its value this year.

To put it in perspective, the S&P/ASX 200 Index (ASX: XJO) has lost 1.15% so far in 2026.

What’s behind the slide?

The company’s latest results were uneven. Revenue came in below expectations, which spooked investors.

Even though Aristocrat reported record machine deployments and resilient recurring earnings from its digital gaming division, the market focused on the weaker spots.

Confidence slipped — and the price of the ASX share followed.

Strong core business

Despite the recent weakness, Aristocrat’s core business remains strong.

The gaming company operates across both land-based gaming machines and mobile and digital platforms. That diversification is a major advantage. As player behaviour shifts toward online and mobile gaming, the ASX share can adapt and capture growth in both segments.

Scale is another key strength. Aristocrat is a global leader with a deep library of gaming content and strong relationships with casinos worldwide. Few competitors can match its reach or product depth.

Disciplined capital management

There are also positives on the capital management front. Management has been disciplined, supporting share buybacks and working to reduce debt. That focus can improve earnings quality over time.

In addition, the company still has growth optionality. Expansion in online gaming and potential mergers and acquisitions could provide further upside if executed well.

Growth for the ASX share might also be coming from artificial intelligence (AI). This year AI has been a major overhang on gaming and software ASX shares.

But Aristocrat seems to be embracing AI, not avoiding it. if you look at Aristocrat’s recent annual general meeting update, management is using it to speed up development, improve content and quality, and get products to market faster.

Cyclical and regulatory risks

That said, risks remain.

Gaming revenue can be cyclical. When economic conditions weaken, discretionary spending — including gaming — can come under pressure.

Regulation is another key risk for the $28 billion ASX share. Governments can change rules around gaming, which can impact operations and profitability.

Currency movements can also affect reported earnings, given Aristocrat’s global footprint.

In short, investors should expect some volatility in the near term.

Analyst outlook

Even after the share price fall, analysts remain constructive on the ASX share.

Brokers generally see the recent sell-off as overdone, pointing to the company’s strong fundamentals and long-term growth potential.

The average 12-month price target sits around $66.47, implying potential upside of roughly 48% from current levels.

Macquarie sees a price target of around $63. That points to a gain of 41% from current levels.

The post Is this $28 billion ASX share a bargain after reaching new lows? 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 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.