Market selloffs can be painful. But they also create opportunities.

For example, here are three ASX shares that have pulled back 25% or more and could be positioned for a strong rebound according to analysts. Here’s what they are recommending to their clients:

Lovisa Holdings Ltd (ASX: LOV)

The first ASX share that could roar back is Lovisa. The fashion jewellery retailer’s shares are down more than 45% from their 52-week high, with consumer weakness weighing on sentiment. Comparable store sales growth has slowed, and investors have become cautious toward discretionary retail.

However, the bigger picture remains compelling. Lovisa continues to expand aggressively across Europe and the Americas, growing its global store footprint at pace. It now operates in more than 50 markets and still sees significant room for further expansion.

Importantly, its gross margins remain exceptionally strong for a retailer, and the business continues to generate solid cash flow. When consumer confidence eventually improves, Lovisa’s scalable model could translate into accelerated earnings growth once again.

Morgans recently put a buy rating and $36.80 price target on its shares. This implies potential upside of over 55% for investors.

NextDC Ltd (ASX: NXT)

Another ASX share that has been caught in the recent market weakness is NextDC.

The data centre operator has seen its share price slide over 25% amid concerns about rising interest rates, capital intensity, and broader tech volatility.

Yet the structural drivers behind the business remain intact. Cloud adoption, artificial intelligence (AI) workloads, and enterprise digital transformation all require secure, high-performance data centre infrastructure. NextDC continues to expand its network across Australia and has a significant development pipeline.

In response to its half-year results last month, UBS put a buy rating and $22.55 price target on its shares. This suggests almost 70% upside is possible from current levels.

WiseTech Global Ltd (ASX: WTC)

A final ASX share that could stage a comeback is WiseTech Global.

WiseTech shares have fallen over 60% from their highs, weighed down by a combination of AI disruption concerns and company-specific issues. That has led to a significant reset in valuation.

However, WiseTech remains a global leader in logistics software through its CargoWise platform. International trade is complex and highly regulated, creating high switching costs for customers once systems are embedded.

The company continues to invest in product development and integration of acquisitions, which could support stronger earnings growth over the medium term. If growth reaccelerates and confidence stabilises, today’s discounted share price may look like an overreaction in hindsight.

Morgans sees significant value in WiseTech’s shares at current levels. Last month, it put a buy rating and $83.80 price target on its shares. This implies potential upside of 85% over the next 12 months.

The post 3 ASX shares down 25% or more that could roar back appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares to buy on the cheap right now
• How low can WiseTech shares go?
• Leading brokers name 3 ASX shares to buy today
• Follow Warren Buffett: 3 cheap ASX 200 shares worth a closer look
• 1 magnificent ASX dividend share down 45% to buy and hold for decades

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

ASX healthcare stock PYC Therapeutics Ltd (ASX: PYC) has risen 22% over the past year. 

It is a clinical-stage biotechnology company developing multiple drug candidates for rare inherited diseases. 

The company has its HQ, lab facilities, and majority of staff based in Perth, WA, as well as personnel based in the US for clinical, regulatory, and manufacturing functions.

This past years gain hasn’t come without volatility, as the healthcare stock has fluctuated considerably.

In just the past 6 months, it has swung between $0.80 per share and $1.70 per share.

However a new report from Bell Potter indicates it could be set to rise significantly in the next 12 months, supported a successful capital raise and healthy balance sheet.

Here’s what the broker had to say. 

Why this healthcare stock is a speculative buy

Bell Potter pointed out in yesterday’s report that  PYC Therapeutics are conducting one of the largest single capital raises for an Australian pre-revenue biotech, raising $600-653m at $1.50/share relative to the $933m market cap prior to the transaction (prior close was $1.60/share). 

Bell Potter said the transaction provides over four years of runway for the company to advance all four of its rare disease drug candidates through clinical development into CY30.

With the benefit of 4+ years of cash runway now at hand, the company has updated its latest development timeline expectations.

The broker also pointed out the company has a healthy balance sheet position of >$700m cash, 

According to the report, PYC Therapeutics can take a more stepwise approach to its clinical development activities than perhaps it would have otherwise.

We have updated our model for the capital raise and revised development timelines in line with the latest expectations. Previously assumed licensing income is pushed out considering the formidable cash position. PYC has always adopted an ambitious, multi-asset strategy, and now it has the balance sheet capacity to execute for several years.

Healthy upside in tact 

Based on these factors, Bell Potter has maintained its speculative buy recommendation on this ASX healthcare stock. 

It also has a 12 month price target of $2.30 per share. 

From yesterday’s closing price of $1.495, this indicates an upside of 54%. 

Elsewhere, the average one year price target from 4 analysts via TradingView is $3.70. 

That indicates an even greater upside of nearly 150%.

The post The cutting edge ASX healthcare stock that could rise 50% appeared first on The Motley Fool Australia.

More reading

• Why Hot Chili, Jumbo, PYC, and Xero shares are sinking today

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

Thematic investing has continued to rise as Aussies target specific trends. 

According to Betashares, one of the three overarching megatrends that’s shaping the future is climate change. 

Thematic investing is when an investor tries to identify long-term transformational trends. Investors can benefit if those trends play out.

According to Betashares, as a megatrend, climate change encapsulates:

• The impacts and resource scarcity caused by climate change and environmental degradation
• Policy initiatives designed to support decarbonisation and the climate transition
• Consumer and investor preferences for sustainability.

One way to target this megatrend is through ASX ETFs. 

There are several that aim to capture this theme, some of which have dropped to start 2026. 

This could make it an ideal time to initiate an investment in this theme.

Here are some climate positive ASX ETFs to consider. 

Betashares Climate Change Innovation ETF (ASX: ERTH)

ERTH ETF aims to track the performance of an index that comprises a portfolio of up to 100 leading global companies. These companies derive at least 50% of their revenues from products and services that help to address climate change and other environmental problems through the reduction or avoidance of CO2 emissions. 

This included clean energy providers and other leading companies tackling:

• Green transport
• Waste management
• Sustainable product development
• Improved energy efficiency and storage.

It has performed extremely well over the last 12 months relative to some other climate positive funds.

It is up 10.48% in that span. 

BetaShares Global Sustainability Leaders ETF (ASX: ETHI)

This fund aims to track the performance of an index (before fees and expenses) that includes a portfolio of large global stocks identified as “climate leaders.”

These companies have also passed screens to exclude companies with direct or significant exposure to fossil fuels or engaged in activities deemed inconsistent with responsible investment considerations.

At the time of writing it is made up of just over 200 international companies. Its largest exposure (73%) is to the United States. 

It has fallen 8% in 2026. 

SPDR S&P World Ex Australia Carbon Control Fund (ASX: WXOZ)

This ASX ETF combines roughly 1,000 companies outside Australia. 

It is designed to measure the performance of S&P Global ESG Score-screened companies within the S&P Developed ex Australia LargeMidCap Index and weighted to minimise carbon intensity in the portfolio. 

Essentially, the index is designed to support investors seeking to reduce their exposure to carbon intensity measured by weighted average carbon intensity.

It has fallen 5.4% year to date. 

iShares Core MSCI World All Cap ETF (ASX: IWLD)

IWLD ETF aims to provide investors with the performance of the MSCI World Ex Australia Custom ESG Leaders Index, before fees and expenses. 

The index is designed to measure the performance of global, developed market large and mid-capitalisation companies with better sustainability credentials relative to their sector peers.

At the time of writing it is made up of 655 holdings. The fund has fallen 5.3% for the year to date. 

The post Is now the time to buy climate focused ASX ETFs? appeared first on The Motley Fool Australia.

More reading

• Why this ASX gold stock could jump almost 90%
• 2 strong Australian stocks to buy now with $6,000
• 3 ASX shares down 25% or more that could roar back
• The cutting edge ASX healthcare stock that could rise 50%
• Here’s the dividend forecast out to 2030 for Fortescue shares

Motley Fool contributor Aaron Bell has positions in BetaShares Global Sustainability Leaders ETF. 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.

Owning Fortescue Ltd (ASX: FMG) shares has typically been a good decision for the level of passive income paid each year.

The recent FY26 half-year result was stronger than what investors may have expected several months ago, and the dividend was particularly pleasing for shareholders.

Fortescue announced that its net profit increased by 23% to US$1.9 billion for the first six months of FY26 and the interim dividend per share increased 24% to 62 cents.

Let’s see what experts think of the potential dividends.

FY26

The company’s financials are benefiting from a combination of a higher realised price for the iron ore it’s selling, as well as lower production costs per tonne.

Broker UBS said that the HY26 dividend of 62 cents per share was stronger than the market’s expectations with a dividend payout ratio of 65%, which UBS said was “sector-leading”.

Underlying operating profit (EBITDA) was around 5% stronger than expected, though earnings was a “slight miss” compared to market expectations reflecting higher depreciation and amortisation (D&A) on Fortescue’s growing asset base.

Broker UBS predicts that Fortescue could pay an annual dividend per share of $1.22. At the time of writing, that translates into a grossed-up dividend yield of 8.2%, including franking credits.

That’s a large payout, but it’s not expected to be as high in subsequent years because of a combination of a lower dividend payout ratio and a smaller net profit.  

FY27

Profit could struggle in the 2027 financial year. UBS predicts that the iron ore price could be around US$96 per tonne in the 2026 calendar year and then US$90 per tonne in 2027. The reduction is predicted because the new huge African iron ore project called Simandou (not owned by Fortescue) is going to ramp-up and add to global supply.

Negotiations by key Chinese iron ore buyer CMRG with iron ore miners are proving to be a challenge for the sector, and could hurt the iron ore price. But, Fortescue seems to have “encountered less scrutiny than peers”.

UBS predicts that owners of Fortescue shares could receive an annual dividend per share of 67 cents in FY27. The broker is modelling that the dividend payout ratio could fall to 50% in the medium-term as capital expenditure steps up against a muted iron ore price outlook.

While the dividend is expected to be lower, UBS predicts that the company’s net debt can steadily improve to a net cash position and continue strengthening in the following years.

FY28

The FY27 dividend is projected to be the lowest payout of the rest of this decade but then increase in dollar terms.

In the 2028 financial year, UBS is forecasting that Fortescue could pay an annual dividend per share of 77 cents.

FY29

The 2029 financial year could see an even larger dividend per share, with predictions that the profit could rise.

UBS suggests that the Fortescue dividend per share could rise to 81 cents per share in FY29.

FY30

The 2030 financial year could be the strongest dividend since FY26, according to the projections. Fortescue is forecast to deliver an annual dividend per share of 87 cents.

Interestingly, UBS highlighted that Fortescue could (further) expand in copper in the coming years:

Optionality: Alta Copper acquisition close and acceleration of studies toward FID at its Cañariaco project in Peru (2024 PEA: 158ktpa Cu annual average first 10yrs, 27yr LOM). Copper tenements in Kazakhstan and Canada are advancing toward drilling this year. Exploration strategy is to acquire tenements in world class terrain and aggressively drill out.

Overall, FY26 could be the best dividend we see for a while, but the dividends could get progressively better.

The post Here’s the dividend forecast out to 2030 for Fortescue shares appeared first on The Motley Fool Australia.

More reading

• No savings at 30? Here’s how I’d aim for an extra $24,600 a year in retirement boosting passive income buying ASX shares
• Why Brainchip, Fortescue, Qantas, and Westpac shares are dropping today
• Is the Fortescue share price a buy in March?
• 5 things to watch on the ASX 200 on Monday
• Which ASX 200 mining shares raised their dividends this earnings season?

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.

March is often a good time to reassess portfolios. Reporting season has just wrapped up, expectations have been reset, and we have a clearer view of how businesses are tracking into the second half of the year. 

That said, here are three ASX 200 stocks I’d consider buying in March.

Megaport Ltd (ASX: MP1)

Megaport operates a global network-as-a-service platform, helping businesses connect to cloud providers and data centres on demand. As enterprise workloads continue shifting to the cloud, flexible connectivity remains a strong structural tailwind.

What makes the story more compelling right now, in my view, is the Latitude.sh acquisition. Megaport described it as “highly strategic and financially compelling.” Latitude adds a compute-as-a-service capability, giving Megaport exposure to a US$13 billion compute market that is expected to grow at around 20% annually.

Importantly, Latitude was already profitable, with EBITDA margins of about 50% and annual recurring revenue growth above 50%. That adds a high-growth, high-margin layer to Megaport’s model.

I think this meaningfully broadens Megaport’s opportunity beyond connectivity and strengthens its long-term growth outlook without fundamentally changing its capital-light model.

Catapult Sports Ltd (ASX: CAT)

Catapult is an ASX 200 stock that is building a powerful position in sports performance technology.

Its platform provides elite and professional teams with data analytics, athlete monitoring, video analysis, and performance insights. Once embedded, these systems tend to become deeply integrated into coaching and operational workflows, creating sticky recurring revenue.

The company has been expanding into new verticals and broadening its product suite beyond its original wearable technology. As annual contract values grow and the platform scales globally, there is scope for margin expansion.

I see Catapult as a business that is still relatively early in monetising its full opportunity. If it continues executing well, I think it has the potential to deliver strong earnings growth over the next few years.

Netwealth Group Ltd (ASX: NWL)

Netwealth is another structural growth story, this time in financial services.

This ASX 200 stock operates a wealth management platform that benefits from long-term trends in superannuation growth and the increasing complexity of financial advice. As advisers and investors seek more sophisticated and transparent solutions, platforms like Netwealth continue to capture flows.

What I find attractive about Netwealth is the scalability of the model. As funds under administration grow, operating leverage can improve margins and earnings. The shift towards digital wealth platforms is not a short-term trend, it is a multi-decade structural shift.

For investors seeking exposure to the growing pool of Australian retirement savings, Netwealth offers a direct way to participate in that expansion.

Foolish takeaway

Megaport, Catapult, and Netwealth operate in very different industries, but they share a common theme: scalable business models with long-term growth drivers.

For investors looking to add growth exposure in March, I think these three ASX 200 stocks stand out as star performers in the making.

The post 3 star ASX 200 stocks to buy in March appeared first on The Motley Fool Australia.

More reading

• Follow Warren Buffett: 3 cheap ASX 200 shares worth a closer look
• 35 ASX All Ords shares with ex-dividend dates next week
• Why I think these growing ASX stocks could be strong buy-and-hold investments
• Here are the top 10 ASX 200 shares today
• Fund manager reveals views on Life360, Catapult, and Xero shares amid tech turmoil

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 positions in and has recommended Catapult Sports, Megaport, and Netwealth Group. The Motley Fool Australia has positions in and has recommended Catapult Sports and Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

February can be one of most volatile months for ASX 200 shares as investors and brokers react to earnings results.

But once the dust settles, it’s important to review buying opportunities from companies that were potentially oversold. 

It’s important to mention there’s no guarantee these shares bounce back, and there are reasons investors decided to move on.

However, on the flip side, those with a long term view could consider this an attractive entry point. 

With that in mind, here are some ASX 200 shares that could be undervalued right now after big sell-offs. 

REA Group Ltd (ASX: REA)

REA shares are down more than 13% over the last month and 32% over the last year. 

This included a crash after the company released H1 FY26 results in early February.

REA group has divided experts, as some have tipped a rebound due to AI fears being overblown, while others have warned to stay away.

For investors who are more confident in a bounceback due to the company’s market share, now could be an attractive time to buy. 

Bell Potter sees this as a possibility. The broker has a $211 price target on REA shares which indicates an upside of roughly 27%. 

Zip Co Ltd (ASX: ZIP)

For investors looking for ASX 200 shares that could be trading at a value, Zip could also be an option. 

Zip Co was another ASX 200 company that endured a crash on the back of earnings results. 

Its share price is now down more than 47% year to date. 

It’s worth noting that after earnings results, UBS confirmed a buy rating on Zip shares and a $4.50 target price. 

This is more than 150% higher from yesterday’s closing price. 

CSL Ltd (ASX: CSL)

CSL is the largest ASX 200 healthcare company by some margin. 

However it has been one of the worst performing amongst the sector lately. 

Its share price is down 14% year to date and almost 44% in the last 12 months. 

It reported half-year results on February 11, which led to a 12% share price crash.

The combination of poor results and a CEO exit weighed heavily on sentiment. 

However these ASX 200 shares might have been oversold. 

Ord Minnett cut its target price for the healthcare giant following results to $198.00. 

However that still indicates approximately 34% upside from current levels. 

WiseTech Global Ltd (ASX: WTC)

WiseTech shares actually jumped higher on earnings results late last month. 

However its share price is still down almost 34% year to date. 

It has been one of the many tech shares suffering from fears around AI.

Experts seem to be projecting a recovery. 

Bell Potter and UBS have price targets of $83.70 and $89 respectively. 

This would be an increase between 80% and 96%, however it is worth noting these targets are much lower than they had been previously. 

The post ASX 200 shares to buy on the cheap right now appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• 2 ASX 200 shares tipped to more than double in value
• How low can WiseTech shares go?
• Buy, hold, sell: CSL, TechnologyOne, and Woodside shares
• 2 battered ASX shares that look too cheap to ignore

Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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.

With February earnings season in the rear view mirror, analysts are adjusting their outlooks for the rest of 2026. 

Three ASX small-cap stocks just received updated guidance from the team at Bell Potter. 

Here is what the broker is tipping for these ASX small-cap companies. 

Titomic Ltd (ASX: TTT)

Titomic provides metal manufacturing as a service, offering end-to-end production, repair, and materials engineering through its proprietary Titomic Kinetic Fusion cold spray technology.

In a report out of Bell Potter yesterday, the broker said the recent financial results reflect expansion & qualification work. 

The broker also is optimistic about the year ahead. 

TTT provides leverage to the emerging application of its cold spray technology in Additive Manufacturing (AM) for defence, aerospace and natural resources markets. US defence spending as a percentage of GDP is growing off a cyclical low and is largely being driven by modernisation of its defence industrial base. TTT’s TKF technology has several advantages over traditional casting and forging manufacturing process including shorter lead-times and production cycles and improved material properties.

The broker has a speculative buy recommendation on this stock offering an entry into the defence sector.

Its price target of $0.50 indicates 117.4% upside from yesterday’s closing price. 

6K Additive Inc (ASX: 6KA)

6KA is a US-based manufacturer, upcycling metal scrap into premium metal powders and alloying additives.

The ASX small-cap stock is tipped to grow considerably this year according to guidance from Bell Potter. 

The broker has a speculative buy recommendation and $1.45 price target on the company. 

That indicates 73.7% upside.

In a report out of the broker yesterday, it said it is primed for US expansion. 

6KA has a competitive advantage in the production of high-value metal powders for the fast-growing global Additive Manufacturing sector. The company’s UniMelt® systems are energy efficient, high yield and accept recycled metal feedstock. 6KA is supporting US-based reshoring of critical metal supply.

Infotrust Ltd (ASX: ITS)

Infotrust is a leading provider of cyber security solutions and secure managed technology services to both small and medium businesses and enterprise customers in Australia.

In a recent report, Bell Potter said the 1HFY26 result was below expectations. 

1HFY26 underlying EBITDA (uEBITDA) was down 38% to $0.4m and only reflected the continuing operations of Cyber Security and Secure Managed Technology following the announced sale of the Cloud & Communications business (Nexgen).

The result was therefore incomparable to our forecasts though we had forecast improved underlying results for each of Cyber Security and Secure Managed Technology so the overall result was below our expectations.

Despite this, Bell Potter has maintained a buy recommendation on this ASX small-cap stock. 

It lowered its price target to $0.60, which still indicates 36.4% upside from current levels. 

The post What is Bell Potter’s view on these ASX small-cap stocks? appeared first on The Motley Fool Australia.

More reading

• 3 star ASX 200 stocks to buy in March
• ASX 200 shares to buy on the cheap right now
• 3 of the best ASX dividend shares to buy in March
• Can this $7 billion ASX retail stock stage a comeback?
• 3 reasons to buy Telstra shares right now

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

March is shaping up to be an important month for income investors.

With dividend guidance clearer and market volatility still creating pockets of value, this could be a good time to position a portfolio for reliable passive income through the rest of 2026.

Here are three of the best ASX dividend shares to consider this month.

APA Group (ASX: APA)

The first ASX dividend share to look at in March is APA Group.

APA owns and operates energy infrastructure assets across Australia. This includes gas transmission pipelines and renewable energy infrastructure. These are long-life assets that typically operate under contracted or regulated frameworks.

That structure gives APA strong visibility over future cash flows. It is not a business that relies on day-to-day consumer spending or short-term economic swings.

For FY 2026, APA is guiding to a dividend of 58 cents per share. Based on its current share price, this equates to a dividend yield of approximately 6.2%.

For investors seeking above-average yield backed by essential infrastructure assets, APA stands out as a best buy.

Rural Funds Group (ASX: RFF)

Another ASX dividend share that could be among the best to buy this month is Rural Funds Group.

It provides exposure to agricultural assets including cattle properties, almond orchards, vineyards, and cropping farms. Rather than farming directly, it typically leases these assets to experienced operators under long-term arrangements.

This model allows Rural Funds to generate rental-style income while benefiting from exposure to Australian agricultural land and food production.

The company is guiding to dividends of 11.7 cents per share in FY 2026. Based on its current share price, this represents an attractive dividend yield of around 5.5% at current levels.

Agriculture can have cyclical elements, but long-term demand for food production and land scarcity provide structural support for the sector.

Transurban Group (ASX: TCL)

A final ASX dividend share to consider in March is Transurban.

Transurban owns and operates toll roads across Australia and North America, including major urban motorway networks. These are critical transport links with high barriers to entry and long concession lives.

Traffic volumes can fluctuate slightly with economic conditions, but over time, population growth and urban expansion tend to drive higher usage.

For FY 2026, Transurban is guiding to a dividend of 69 cents per share. Based on its current share price, this equates to an attractive dividend yield of approximately 4.75%.

The post 3 of the best ASX dividend shares to buy in March appeared first on The Motley Fool Australia.

More reading

• How to make $25,000 of passive income a year
• ASX 200 at a record high? Here’s where I still see value
• If I had to build an ASX share portfolio from scratch today, here’s how I’d do it
• 3 strong ASX dividend stocks for retirees to buy
• With a yield of 6.4%, is this one of the best ASX shares to consider buying for passive income?

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 Transurban Group. The Motley Fool Australia has positions in and has recommended Apa Group, Rural Funds Group, and Transurban Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This ASX retail stock has been sliding steadily since hitting a 52-week high of $7.70 in October.

Since then, shares in ASX retail stock Harvey Norman Holdings Ltd (ASX: HVN) have tumbled 26%, wiping billions from its market value.

For a company long seen as a retail heavyweight, that’s a sharp pullback. So, what’s going on?

Softer than expected earnings

Last week’s half-year results of the ASX retail stock didn’t exactly inspire confidence. While the company remained profitable and cash generative, earnings came in slightly softer than many had hoped.

The owner of brands like Harvey Norman, Domayne, and Joyce Mayne reported a 6.9% increase in sales revenue to $5.16 billion and a 16.5% lift in net profit after tax to $321.9 million. Sales momentum was patchy across regions, and margins felt the squeeze from discounting and cautious consumers.

In short, it wasn’t a disaster — but it wasn’t a knockout either.

Strengths still matter

Harvey Norman isn’t a speculative small-cap. It’s a diversified retail group spanning furniture, bedding, electronics and appliances, with operations in Australia, New Zealand, Ireland and Asia.

Its franchise model helps limit capital intensity and supports steady cash flow. The company also owns a significant property portfolio. That’s a hidden asset that underpins its balance sheet and provides long-term flexibility.

Importantly, the $7 billion ASX retail stock has navigated retail cycles before. When consumer confidence rebounds and housing activity lifts, big-ticket categories like furniture and appliances tend to follow.

Eroding profits, delayed purchasing

But retail is tough right now. Higher interest rates and cost-of-living pressures have weighed on discretionary spending. Shoppers are trading down, delaying purchases, or hunting for deals.

Competition is intense, both from local rivals and global online players. Margin pressure can quickly erode profits if discounting ramps up.

There’s also the question of timing. Even if a recovery comes, it may take longer than bulls hope. Retail turnarounds rarely happen overnight.

What next for the ASX retail stock?

Broker views are mixed. Some analysts see value emerging after the recent pullback, arguing that much of the bad news is already priced in. They point to the company’s property backing, resilient balance sheet and potential upside if consumer conditions stabilise.

Others remain cautious, trimming earnings forecasts and price targets for the ASX retail stock after the latest result. For them, the near-term outlook is still cloudy, and clearer signs of sales momentum are needed before turning bullish.

Bell Potter has a buy rating and $8.30 price target on its shares, which implies 46% upside.

The broker is one of the more bullish market watchers. The average 12-month price target is $6.65, a potential gain of 17%.

The post Can this $7 billion ASX retail stock stage a comeback? appeared first on The Motley Fool Australia.

More reading

• Why Bapcor, Brainchip, Coles, and Harvey Norman shares are dropping today
• Harvey Norman posts 1H26 result
• 2 ASX dividend shares to buy for passive income
• Analysts say these ASX dividend shares are buys for income investors
• Which ASX 200 retail stock looks stronger: JB Hi-Fi or Harvey Norman?

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 positions in and has recommended Harvey Norman. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Telstra Group Ltd (ASX: TLS) is rarely the most exciting share on the ASX, but I think that is part of its appeal. It generates strong cash flow, operates in an essential industry, and has been executing well against its strategy.

Here are three reasons I would consider buying Telstra shares right now.

1. A growing and well-supported dividend

One of the biggest attractions of Telstra shares is income.

The company recently declared an interim dividend of 10.5 cents per share, which was up on the prior period and approximately 90% franked. If we annualise that interim payment, it suggests around 21 cents per share for the full year.

At a share price of $5.23, that implies a forward dividend yield of roughly 4%. That is not an extremely high yield, but it is better than a term deposit and reflects a payout that is comfortably supported by cash earnings. 

Telstra has also been disciplined with capital management, including buybacks, which support earnings per share and dividend per share growth over time by reducing the total number of shares outstanding.

For income-focused investors, that combination of a good dividend yield and growth potential is attractive.

2. Mobile momentum and pricing power

Telstra’s mobile business remains the engine of the group.

The company has continued to grow mobile services revenue, supported by higher average revenue per user and ongoing customer demand for its premium network. In a rational competitive environment, Telstra’s brand strength and network quality allow it to defend margins more effectively than many peers.

Telecommunications is an essential service. Even in slower economic periods, consumers and businesses prioritise connectivity. That defensive characteristic gives Telstra a level of earnings resilience that I value in a portfolio.

3. Clear strategy and disciplined execution

Telstra’s Connected Future 30 strategy is focused on driving sustainable earnings growth through cost discipline, operating leverage, and smarter capital allocation.

In recent periods, the company has delivered on this. That tells me management is focused on execution, not just ambition.

When I look at Telstra today, I see a simpler, more focused business compared to the past. It is concentrating on connectivity, infrastructure, and disciplined investment rather than chasing unrelated growth initiatives.

That clarity of direction gives me confidence in its medium-term outlook.

Foolish takeaway

Telstra shares may not deliver explosive growth, but I wouldn’t let that put you off.

At $5.23 per share, investors are getting a defensive business with mobile momentum, improving cost control, and a dividend yield of around 4% that is largely franked.

For those seeking steady income and moderate earnings growth rather than high volatility, I think Telstra shares look like a sensible buy right now.

The post 3 reasons to buy Telstra shares right now appeared first on The Motley Fool Australia.

More reading

• 5 top ASX 200 shares I’d buy in March
• The best ASX dividend stock to buy in March
• How to make $25,000 of passive income a year
• Why I’d buy CBA and these ASX 200 shares in March
• 3 ASX dividend stocks built to pay you year after year

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