Category: Stock Market

Flight Centre Travel Group Ltd (ASX: FLT) updated its profit guidance earlier this week, with the probably unsurprising news that earnings would be lower than previously expected due to the conflict in the Middle East.

Weak fourth quarter takes the shine off

The travel company said that underlying profit before tax (UPBT) was now expected to be in the range of $275 to $295 million, down from previous guidance of $310 to $345 million.

The company said the underlying business was performing well, as evidenced by 10% underlying earnings growth across the first three quarters of the year, before the Middle East conflict broke out.

And given that a peace agreement appears to have been brokered this week, Flight Centre was predicting a “significant earnings tailwind” which would bolster FY27 results.

To take the sting out of the profit downgrade, the company also announced a $200 million share buyback, “reflecting strong belief in FLT’s recovery and outlook”.

Flight Centre Managing Director Graham Turner said regarding the update:

The change in our short-term expectations reflects a temporary, conflict-driven headwind layered over what was shaping as a very solid year. It has been driven by an external shock – the Middle East conflict disrupting peak leisure travel – not by a deterioration in our underlying business. Group-wide, the company delivered almost 10% UPBT growth across the first three quarters of FY26, accelerating to ~20% growth during Q3. Even after absorbing Q4 disruption, the group still expects an underlying profit broadly in line with FY25. Looking ahead, we have strong foundations and growth prospects in both the leisure and corporate sectors. This is reflected in the Board’s decision to launch a new up-to-$200m buy-back – which clearly signals that we see our shares as undervalued at current levels.

Flight Centre shares a good buy

The analysts at Macquarie said in a note to clients this week that the earnings downgrade was expected while the quantum was previously unclear.

They said the Australian Government’s recent downgrading of travel warnings for the Middle East was a positive, as was Flight Centre’s good momentum in corporate travel.

Macquarie has a price target of $14.45 on Flight Centre shares compared to $12.44 currently.

The analyst team at Morgans said they believed the first half of FY27 would still be challenging for Flight Centre, but they are predicting a strong recovery later in the year.

They added:

If it wasn’t for this conflict, FLT would have had a great year given its results for the first nine months were strong. We are buyers of FLT because when operating conditions ultimately improve, both its earnings and share price will be materially higher.  

Morgans has a price target of $14.80 on Flight Centre shares.

The post How high could Flight Centre shares fly according to brokers? 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 Macquarie Group. The Motley Fool Australia has recommended Flight Centre Travel Group and Macquarie Group. 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) has gained 5.1% over the last year, but this ASX All Ords mining stock has raced ahead of those returns.

The outperforming miner in question is Meteoric Resources (ASX: MEI). The rare earths stock has gained 37.5% over the past 12 months. That’s despite today’s retrace.

In morning trade on Thursday, Meteoric shares are down 5.7%, changing hands for 16.5 cents apiece. For some context, the All Ords is up 0.1% at this same time.

Meteoric shares are under pressure today, despite the miner releasing a promising progress update on the performance of the Pilot Plant at its Caldeira Rare Earth Project, located in Brazil.

Here’s what’s happening.

ASX All Ords mining stock targeting critical minerals

Meteoric commissioned the Pilot Plant in late 2025. Inclusive of a ramp-up period, the company reported on the performance results for the first five months of the plant’s operations.

The ASX All Ords mining stock said that over this period, the plant has processed approximately 43 tonnes of ore from the Capao do Mel (CDM) starter pit. And it’s achieved the targeted throughput rate of 600 kilograms per day.

Management highlighted that the Mixed Rare Earth Carbonate (MREC) production from this throughput has consistently averaged higher than the forecast 2 kilograms per day.

Magnet rare earth oxide (MREO) recoveries have been averaging 71% in MREC.

MREO recoveries jumped to 80% during May, which the miner credits to ongoing process optimisation, iterative flowsheet improvements, and ore quality.

To date, the ASX All Ords mining stock has provided more than 200 kilograms of MREC to existing and potential offtake partners in the United States, Europe, and Asia for product qualification.

The company has also provided MREC to be used in studies for development of oxide separation in Brazil.

What did Meteoric Resources management say?

Commenting on the progress that should support the ASX All Ords mining stock over the longer term, Meteoric CEO Stuart Gale said, “Results from our first five months of Pilot Plant operation have been excellent and exceed our expectations.”

Gale added, “It has validated the investment Meteoric has made in metallurgical and process testwork, along with the assumptions made in our studies to date.”

Looking ahead, Gale said:

The exceptionally high NdPr and DyTb combined recovery of 80% in the past month gives us encouragement that we may ultimately be able to exceed our targeted MREO recoveries by applying the learnings of the piloting program and capitalising on our +4,000ppm reserve material.

In addition to the strong MREO recoveries, rare earths on the United States critical minerals list like yttrium, samarium, gadolinium and ytterbium are all recovering well.

The post Up 38% in a year, ASX All Ords mining stock reports rare earths progress 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.

DroneShield Ltd (ASX: DRO) shares are on the move on Thursday.

In morning trade, the counter-drone technology company’s shares are up 1% to $2.86.

What’s behind the move?

It is unclear what is moving DroneShield shares today, but there has been news out of the company this week.

Yesterday, the company announced a strategic partnership with Defenture to accelerate joint commercial opportunities for mobile counter-UAS capability.

Defenture is an innovation-driven company specialising in tactical mobility solutions.

According to the release, a memorandum of understanding (MOU) signing ceremony was held at Eurosatory 2026, which is a global tradeshow for defence and security that brings together key stakeholders from the international ecosystem.

It notes that the MOU will combine DroneShield’s counter-UAS hardware, software, command-and-control, and operational support capabilities with Defenture’s on-the-move vehicle platform expertise.

The two companies aim to progress a coordinated market deployment roadmap for an air defence and counter-UAS command-and-control solution suited to modern operational environments.

Furthermore, under the MOU, the two parties intend to jointly define, prioritise, and pursue commercial activities, including coordinated go-to-market initiatives, customer engagement, testing activities, interoperability milestones, and selected joint opportunities.

It advised that this includes offering DroneShield’s current and next generation counter-UAS systems across Defenture platforms, such as the Mammoth and GRF, as well as the development of layered on-the-move counter-UAS concepts for future customer engagement.

Overall, it believes that as military and security operators across Europe continue to prioritise counter-UAS capabilities, this MOU will provide a pathway for DroneShield and Defenture to pursue joint opportunities that bring together mobility, interoperability, and operational effectiveness in response to evolving drone threats.

Management commentary

DroneShield’s chief commercial officer, Louis Gamarra, commented:

Many military customers are looking for scalable and mobile counter-UAS solutions, that can be deployed quickly and operate effectively in dynamic environments. DroneShield’s new partnership with Defenture brings together complementary strengths to support that requirement and create a pathway for joint opportunities in key markets.

Speaking about the partnership, Defenture’s board member, Roderick Toutenhoofd, said:

By combining Defenture’s mobile platform capability with DroneShield’s proven counter-UAS technologies, we are better placed to support customers seeking agile, layered protection against evolving drone threats. The evolution of modern drone warfare has made clear that traditional platforms now require UAS protection, and partnering with DroneShield allows us to bring that capability to market in a way that is practical, mobile, and operationally relevant.

The post Own DroneShield shares? Here’s some 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 positions in and has recommended 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.

Commonwealth Bank of Australia (ASX: CBA) is one of the highest-quality companies on the ASX.

But it is also a very large and mature bank. That means its future earnings growth is likely to be shaped by credit growth, competition, bad debts, funding costs, and movements in margins.

For investors wanting stronger long-term growth prospects, it could be worth looking beyond the banking giant.

Here are three ASX shares that may offer more exciting growth potential.

Breville Group Ltd (ASX: BRG)

The first ASX share to look at instead of CBA is Breville.

It has turned kitchen appliances into a global growth story. Its products sit in categories such as coffee machines, food preparation, cooking, and home appliances, where design, quality, and brand trust can matter as much as price.

The company is still much smaller than the global opportunity in front of it. That is what makes the investment case interesting. Breville does not need to reinvent the business every year. It needs to keep building brand awareness, expanding distribution, and launching products that consumers are willing to pay a premium for.

Its coffee machines are a good example. The at-home coffee trend has given Breville a way to move deeper into everyday household routines, rather than relying only on one-off appliance purchases.

Consumer spending can be uneven, particularly when households are under pressure from higher interest rates. But Breville’s long-term growth runway across overseas markets gives it far more expansion potential than a mature domestic bank.

Goodman Group (ASX: GMG)

Another ASX share with stronger growth prospects is Goodman.

It is an industrial property company that owns, develops, and manages logistics and industrial assets in key global locations. These properties are used by businesses that need efficient supply chains, fast delivery networks, and access to major population centres.

That demand is being shaped by ecommerce, automation, reshoring, and the need for more resilient supply chains.

On top of this, Goodman has become increasingly exposed to data centres. That gives it a powerful link to cloud computing, artificial intelligence, and the digital infrastructure required to support modern technology.

The company still faces property market risks, including interest rates, construction costs, and tenant demand. But its landbank, power bank, development expertise, and global customer base could support growth for many years.

Xero Ltd (ASX: XRO)

A third ASX share to consider instead of Australia’s largest bank is Xero.

Xero has built a cloud accounting platform used by small businesses, accountants, and bookkeepers around the world.

But the bigger opportunity is not just accounting. Xero is becoming more deeply connected to the way small businesses manage money, payroll, invoicing, compliance, bank feeds, payments, reporting, and adviser relationships.

That is important because once a business has built its financial workflows around a platform, switching can become inconvenient and disruptive. This gives Xero a strong foundation for growth.

It can grow by winning new customers, increasing revenue per user, adding more services, and using automation and artificial intelligence to make the platform more valuable.

Xero shares can be volatile, and its valuation often reflects high expectations. But for long-term growth potential, Xero offers a very different profile from CBA.

The post Forget CBA: 3 ASX shares with better growth prospects appeared first on The Motley Fool Australia.

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

Washington H. Soul Pattinson and Company Ltd (ASX: SOL) shares are edging higher on Thursday after the investment group announced a major property transaction.

At the time of writing, the Soul Patts share price is up 0.95% to $44.52.

The stock has now gained almost 20% since the start of 2026 and is trading close to the upper end of its 52-week range.

So, what has Soul Patts announced?

Former Brickworks assets change hands

In a statement to the ASX, Soul Patts said it has signed a binding agreement with Goodman Australia Industrial Partnership and other Goodman Group (ASX: GMG) entities.

Under the deal, Soul Patts will sell its interests in several industrial property trusts that were previously held through Brickworks.

The company expects to receive around $1.89 billion after Brickworks’ share of the trust debt and transaction costs are paid.

Soul Patts said the sale price was in line with the property values used when it combined with Brickworks last year.

Notably, the transaction has brought the two companies together and ended a cross-shareholding arrangement that had been in place for decades.

It also gave Soul Patts direct ownership of Brickworks’ building products operations and a stake in its industrial property portfolio.

Why is the company selling?

The sale will give Soul Patts more cash to put towards other investments.

Managing director and CEO Todd Barlow said the company plans to use the money on opportunities in Australia and overseas.

He also said the extra cash would give Soul Patts more flexibility in the current market.

The company already invests across listed shares, private businesses, credit, property and other real assets, so the sale should give it more room to move when new opportunities come up.

However, Soul Patts is not completely stepping away from its partnership with Goodman.

Both companies will remain joint venture partners in the Brickworks Manufacturing Trust, which was set up in 2022. Soul Patts will continue to own 50.1% of that portfolio.

When will the sale be completed?

The sale is expected to be completed in late June, with no conditions left to be met.

The parties are still working through the final steps, but Soul Patts shareholders will not need to vote or take any action.

Once the money comes through, investors will be watching where the company decides to put it next.

Interestingly, the $1.89 billion is equal to more than 11% of Soul Patts’ current market value, giving management plenty of money to invest elsewhere.

The post Why are Soul Patts shares pushing higher again on Thursday? 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 positions in and has recommended Goodman Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Boss Energy Ltd (ASX: BOE) and Paladin Energy Ltd (ASX: PDN) shares are popular options when it comes to ASX uranium stocks.

But they are not the only options.

One under the radar uranium stock that has caught the eye of the team at Bell Potter is in this article.

Let’s see what the broker is saying about this one.

Which ASX uranium stock?

The stock that Bell Potter has initiated coverage on today is Devex Resources Ltd (ASX: DEV).

It is a Perth-based uranium company focused on the Alligator Rivers Uranium Province (ARUP) on the north-western margin of the Northern Territory’s McArthur Basin.

Bell Potter notes that the ASX uranium stock has consolidated a district-scale land position with over 50km of highly prospective fault corridors which host existing uranium discoveries.

Its systematic exploration program will target unconformity-type uranium deposits, with the McArthur Basin analogous to Canada’s highly fertile Athabasca Basin, which is a region responsible for around one quarter of the world’s uranium supply. The broker also expects the company to be active in further consolidating the uranium industry.

Should you invest?

If you have a high tolerance for risk, then this could be an ASX uranium stock to buy according to Bell Potter.

This morning, the broker has initiated coverage on Devex Resources shares with a speculative buy rating and 41 cents price target.

Based on its current share price of 25.5 cents, this implies potential upside of 60% for investors over the next 12 months.

Bell Potter believes the company is well-placed to benefit from growing demand for uranium from electrification, energy security, and AI-related power requirements.

Commenting on its investment thesis for the stock, the broker said:

The key value catalysts for DEV include uranium market fundamentals, exploration results and M&A-led growth. We have a positive medium- to long-term outlook for the uranium market, supported by barriers to new supply and demand growth linked to electrification, energy security and AI-related power requirements.

DEV is about to embark on a systematic exploration program across a district-scale consolidated landholding in a historical but underexplored uranium province analogous to Canada’s Athabasca Basin, a region responsible for around one quarter of the world’s uranium supply. We expect DEV to be disciplined in further consolidating uranium assets in support of its ambitious growth targets.

The post Bull alert! Bell Potter just put a buy rating on this ASX uranium stock 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.

If you want exposure to renewable energy, then it could be worth looking at the ASX share in this article.

That’s because Bell Potter is very positive on its outlook and believes it could be a top option for investors with a high tolerance for risk.

Which ASX renewable energy share?

The share that Bell Potter is recommending to clients is Frontier Energy Ltd (ASX: FHE).

It is developing the Waroona Renewable Energy Project on 830ha of freehold land that is 120km south of Perth.

Bell Potter notes that a key strategic advantage is the project’s proximity (500 metres) to the Landwehr terminal, which is a 330kV grid connection point on one of the strongest transmission corridors in the SWIS.

All major approvals, permits, and access to network connections are in place.

Commenting on the ASX renewable energy share, the broker said:

Stage One, consisting of a 132MWdc solar farm with an integrated 81.5MW 6.9-hour battery, will begin construction in 2H 2026. The hybrid facility will take advantage of higher intraday prices during peak demand periods. WA’s unique Reserve Capacity Mechanism provides guaranteed revenue of $32m pa till 2032 (before moving to a floating price per MW) and the Federal Government’s Capacity Investment Scheme mitigates any downside revenue risk.

Major expansion plans would see overall solar generation lift to ~1GW paired with a ~650MW battery. With ~1.7GW of thermal generation expected to exit the Wholesale Electricity Market over the next 5 years, WA is forecasted to be in a shortfall during peak demand periods.

Should you invest?

According to the note, Bell Potter has put a speculative buy rating and 35 cents price target on Frontier Energy’s shares.

Based on its current share price of 24 cents, this implies potential upside of 46% for investors over the next 12 months.

Speaking about its recommendation, Bell Potter said:

We transfer coverage on FHE and maintain our Buy (Speculative) recommendation. Our Valuation is reduced to $0.35/sh as we incorporate dilution from a $110m equity raise. FHE owns a strategically important site crucial to WA’s energy transition. Significant investment in generation and storage are required to offset power station retirements and demand growth in WA.

As supply exits the market, we expect peak prices to rise noting that ~70% of peak period generation is still supplied by thermal energy. FHE’s operating model benefits from these higher pricing outcomes whilst also receiving State and Federal Government revenue support.

The post Is this ASX renewable energy share a buy? 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.

ASX wine stock Treasury Wine Estates Ltd (ASX: TWE) has endured a difficult period. It is down almost 40% over the past 12 months, as investors have grappled with uneven consumer demand, a slower-than-expected recovery in China, and broader concerns about discretionary spending.

However, sentiment appears to be improving. Treasury Wine shares have climbed approximately 14% over the past month, suggesting some investors may be starting to look beyond the current challenges.

While conditions remain far from perfect, Treasury Wine doesn’t need everything to go right immediately. It simply needs its premium brands, distribution network, and key markets to strengthen over time. If that happens, some market experts believe today’s share price could prove attractive in hindsight.

Why Treasury Wine could bounce back

Treasury Wine owns some of the world’s most recognised wine brands, including Penfolds, 19 Crimes, Wolf Blass, Lindeman’s, and Squealing Pig.

The company’s strategy is increasingly focused on premium and luxury wines, which generally deliver stronger margins and are less exposed to volume fluctuations than lower-priced products.

China also remains an important long-term opportunity for the ASX wine stock. The removal of Chinese tariffs on Australian wine reopened a major export market, though demand has taken time to rebuild. If sales momentum improves, it could provide a meaningful earnings tailwind in the coming years for the ASX wine stock.

In addition, Treasury Wine’s global distribution footprint gives it exposure to multiple markets, reducing reliance on any single region.

Uneven consumer demand

Of course, risks still surround the ASX wine stock.

Consumer demand remains uneven across several markets as households contend with cost-of-living pressures. Premium wine sales can also be sensitive to changes in consumer confidence and spending habits.

Competition across the global wine industry remains intense, and Treasury Wine must continue to execute successfully on its premiumisation strategy.

Investors will also be watching closely to see whether the recovery in China gathers pace. A slower-than-expected rebound could weigh on earnings growth and investor sentiment.

What analysts think

Analysts remain optimistic despite the challenges.

Citi continues to rate Treasury Wine as a buy. The broker recently retained its buy rating and $5.50 price target on the company’s shares.

Based on the current share price of $4.83, this implies potential upside of approximately 14%.

The team at Morgans is also bullish on the premium ASX wine stock following its recent investor day update.

Morgans reiterated its buy rating and lifted its price target to $5.95 per share. That valuation suggests upside potential of around 23% over the next 12 months.

While Treasury Wine still faces near-term headwinds, analysts appear to believe the market may be underestimating the long-term value of its premium brand portfolio and growth opportunities.

The post This crushed ASX wine stock could surprise investors appeared first on The Motley Fool Australia.

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

Buying into resources companies as they’re progressing their projects towards production can be a solid strategy for impressive share price gains, as long as the execution is a success.

The analyst team at Macquarie has this week published research notes on two companies, both in the critical minerals sector, which they believe have the potential for strong gains based around this very thesis.

Let’s have a look at who they like.

Meteoric Resources Ltd (ASX: MEI)

This rare earths project developer recently provided an update on its Caldeira project pilot plant, saying it was delivering “exceptional performance” with magnetic rare earth oxide (MREO) recoveries of 80% during May.

The pilot plant was commissioned in late 2025 the company said, and MREO recoveries had been improving over that time.

The company added:

Recoveries to mixed rare earth carbonate (MREC) for the lite MREO – neodymium and praseodymium (NdPr) and heavy MREO – dysprosium and terbium (DyTb) have averaged 71% over the operational period. This is in line with the May 2025 Pre-Feasibility Study estimate which was based on detailed testwork and piloting completed at the Australian Nuclear Science and Technology Organisation (ANSTO). Total rare earth oxide (TREO) recovery of 61% is materially above the PFS estimate. Exceptional recoveries of 80% for MREO and 74% for TREO were achieved over the last month, reflecting ongoing process optimisation, iterative flowsheet improvements and ore quality.

The company said that bulk MREC samples had been supplied to a range of groups for separation test work including existing partners Neo Performance Materials in Europe, and Ucore and MTM in the United States.

The Macquarie team said in their report to clients this week that the performance of the pilot plant was at better than nameplate capacity, and the rare earth recoveries were above their forecasts.

They added:

MEI continues to execute its development plan with steady progress. We see value in the company, which is currently trading at an implied NdPr price of US$70/kg, 36% below our base-case assumption of US$110/kg and 31% below spot price of US$103/kg.

Macquarie has a target price of 45 cents on Meteoric Resources shares compared to 17.5 cents currently. If achieved this would be a 157.1% return.

Wildcat Resources Ltd (ASX: WC8)

Shares in Wildcat Resources have appreciated about 310% over the past 12 months, but the Macquarie team thinks they still have a way to go.

The company is currently working on a definitive feasibility study for its Tabba Tabba lithium project in Western Australia’s Pilbara region, and said in May there was strong interest in offtake agreements for the mine’s products.

Wildcat Project Director James Dornan said at the time:

We are close to finalising the Definitive Feasibility Study for the Tabba Tabba Project. Mine planning and metallurgical test work is being progressed across the entire life of mine, with material from Years 1-2 of open pit operations achieving a spodumene concentrate grade of 5.65% Li2O with low iron and excellent recoveries, providing confidence for the commissioning and ramp up phases of the Project.

The Macquarie team said the company stands out because of its large resource base and favourable mining geometry.

They added:

Beyond Tabba Tabba, the Bolt Cutter discovery provides incremental upside, in our view, with drilling supporting an expanding spodumene footprint proximal to existing infrastructure. This has the potential to enhance overall project scale, improve development flexibility and extend mine life over time.

Macquarie has a price target of 90 cents on Wildcat shares compared to 55.5 cents currently. If achieved this would be a return of 62.2%.

The post These 2 ASX resources companies could deliver better than 60% returns, Macquarie says 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 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.

Accent Group Ltd (ASX: AX1) shares have been on fire this week.

Since this time last week, the ASX share has risen 17%.

The catalyst for this has been a low-ball takeover offer from one of the footwear retailer’s shareholders.

Is it too late to invest? Let’s see what analysts at Bell Potter are saying.

Is this ASX takeover target a buy?

Commenting on the takeover offer, Bell Potter said:

Accent Group (AX1)’s major shareholder with a 22.9% holding (as last reported), UK based Frasers Group (FRAS) made an on-market takeover bid on Monday morning. The current takeover bid represents no premium to the last close of $0.65 at the time and below the levels FRAS last acquired AX1 shares in Jan/Feb-26 at $0.90- 0.95/share. We see this as an opportunistic bid at a time when AX1 navigates cyclical low macroeconomic conditions especially in its key lifestyle footwear market (~60% of the group) with the broader category trending flat to negative in Australia and multiple earnings downgrades resulted from weak market conditions & poor performance from non-core businesses.

The broker has been looking into how much it thinks Accent shares are worth and has concluded that fair value is 80 cents per share. It explains:

Our previous 12-month based price target was A$0.60/share. We now utilise a terminal value-based price target for AX1, based on a terminal earnings base (historically last seen in FY23), in addition to cost cuts needed to achieve this level of earnings from our current low level of earnings base in FY27e. Thereafter we factor in a discount for the potential removal of certain brands within the poor performing lifestyle footwear division in reaching a fair value for AX1 shares. Our valuation of A$0.80/share sees ~23% upside from the present bid from FRAS.

Should you invest?

According to the note, Bell Potter has retained its hold rating on the ASX takeover target with an improved price target of 80 cents. This implies potential upside of 6.7% for investors from current levels.

In addition, it is forecasting fully franked dividend yields of 5.3% in FY 2026 and then 4.6% in FY 2027.

Commenting on its recommendation, the broker said:

There are no changes in our forecasts as we’ve recently downgraded our estimates (published on 20-May-26), however we revise down our expectations on forward dividend payments (BPe forward dividend payout of 62-64% vs prev. 72-74%). Our PT increases by ~33% to $0.80/share (prev. $0.60/share) as we consider a terminal valuation for the stock. Maintain HOLD.

The post Is the ASX takeover target a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Accent 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 recommended Accent Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.