In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and slipped into the red. At the time of writing, the benchmark index is down slightly to 8,633.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

AIC Mines Ltd (ASX: A1M)

The AIC Mines share price is down almost 3% to 51.5 cents. This is despite the copper and gold miner releasing a drilling update this morning. AIC Mines has been exploring extension drilling at the Jericho copper deposit located in Northwest Queensland. Commenting on the results, AIC Mines’ managing director, Aaron Colleran, said: “These results highlight the quality of the Jericho system – its continuity at depth and its significant scale. It reinforces our confidence in the long-term growth potential of this asset.”

ASX Ltd (ASX: ASX)

The ASX share price is down a further 2% to $52.43. This stock exchange operator’s shares have fallen this week after it committed to a strategic package of actions with ASIC. The company revealed that these commitments address the findings contained in an interim report from the expert ASIC Inquiry Panel. They are designed to deliver confidence in ASX as a provider of critical market infrastructure. One action will see the company accumulate an additional $150 million of capital above net tangible asset (NTA) value by 30 June 2027. This will then be in place until agreed milestones in the revised accelerate program are completed to the satisfaction of ASIC.

Karoon Energy Ltd (ASX: KAR)

The Karoon Energy share price is down almost 3% to $1.59. This may have been driven by weakness in oil prices overnight. Traders were selling down oil in response to positive developments with respect to Russia and Ukraine peace talks. The latter has reportedly agreed to scrap its application to join NATO.

Life360 Inc (ASX: 360)

The Life360 share price is down almost 6% to $32.71. This is despite there being no news out of the location technology company. However, with tech stocks on Wall Street being sold off amid concerns over the AI bubble, the selling appears to have spread to the ASX boards. It isn’t just Life360 shares that are down today. The S&P/ASX All Technology Index is down by a disappointing 1.6% at the time of writing.

The post Why AIC Mines, ASX, Karoon Energy, and Life360 shares are falling today appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
• Why ASX, CSL, Galan Lithium, and NextDC shares are dropping today
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• Why are ASX 200 tech stocks like Xero shares taking a beating on Monday?

Motley Fool contributor James Mickleboro has positions in Life360. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Strategic minerals is a pretty broad term for everything from lithium to aluminium these days, but one thing many of these minerals have in common, as Bell Potter says in a recent report, is that their prices are sensitive to growing geopolitical and trade tensions.

This was thrown into sharp relief earlier this year when rare earths became a political hot button topic, with China tightening export controls on more of its own resources, sending the share prices of Australian producers and would-be producers higher.

In a recent research note to clients, Bell Potter has taken a tighter focus in terms of the strategic minerals companies it is forecasting will do well.

But as they said in their note, “geopolitical volatility and trade tensions are positive for strategic mineral and processing technology equities”.

They went on to say:

Western governments are increasingly seeking to reshore supply chains and manufacturing capabilities, particularly in high-technology and aerospace/ defence sectors. US defence spending as a percentage of GDP is at a cyclical low and is expected to lift over the coming decade. NATO members have recently announced increased spending commitments.

In terms of stocks they are recommending, they have focused in on high-tech production processes which could differentiate the companies.

Here are their picks:

Alpha HPA Ltd (ASX: A4N)

Bell Potter says this company’s proprietary process “produces ultra-high purity aluminium compounds with applications in technology growth sectors including semiconductors, lithium-ion batteries, LED displays/lighting, and direct lithium extraction”.

The analysts say the process is disruptive in terms of its low production costs, “ultra-high” product purity, and low emissions. Australian chemicals group Orica Ltd (ASX: ORI) is also a shareholder.

The broker has a speculative buy rating on the stock and a price target of $2 compared with 71 cents at the moment.

IperionX Ltd (ASX: IPX)

Bell Potter says IperionX “has the potential to disrupt the incumbent titanium supply chain through materially lowering production costs and manufacturing waste”.  

The analysts say the company started producing titanium on a large scale this year at its Virginia US site, and will now scale that up, “and progress commercial relationships with aerospace, automotive, luxury goods and government end users”.

As they said:

Titanium is a highly strategic metal given its applications across the defence and aerospace sectors, with around 95% of current US supply met through imports, predominantly from Japan. Russia and China account for more than 70% of global titanium supply.

Bell Potter has a speculative buy recommendation on the stock and a price target of $9.25 compared with $5.01 currently.

Titomic Ltd (ASX: TTT)

Three-D printing company Titomic has applications in the defence, aerospace, and natural resources markets Bell Potter says, with its technology bringing “unique manufacturing capabilities around material selection and component properties”.

We expect news flow relating to Titomic’s participation in US defence programs, new commercial agreements and non dilutive government-backed funding.

Bell Potter has a speculative buy recommendation on the stock and a 50 cent price target compared with 22 cents currently.

The post Looking for 100% gains? These strategic minerals companies might be worth a look, Bell Potter says appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

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.

The price of lithium has experienced a resurgence in recent months, with demand growth, inventory reduction, and regulatory tightening helping to fuel the rally.

And some leading ASX 200 mining stocks have been riding the wave.

For example, shares in Pilbara Minerals Ltd (ASX: PLS) have rocketed by 200% in the past six months.

Mineral Resources Ltd (ASX: MIN) shares have also more than doubled across the same timeframe.

And fellow Western Australian lithium miner Liontown Resources Ltd (ASX: LTR) has delivered a 104% return for its shareholders.

Looking ahead, this upbeat sentiment in the lithium sector could be set to continue, according to financial services firm Bell Potter.

The broker stated:

Lithium market supply-demand fundamentals are improving into 2026, supporting higher prices. Demand from Electric Vehicle take-up and Energy Stationary Storage continues to experience high rates of growth. While there is idled capacity on the lithium supply-side, we expect sustained higher prices will be required to support any production restarts.

And one ASX lithium stock could be set to benefit from this positive outlook.

Strategically important ASX lithium stock

Ioneer Ltd (ASX: INR) is advancing its wholly owned Rhyolite Ridge lithium and boron project in the US state of Nevada.

A recent economic evaluation pointed to annual production totalling more than 24,000 tonnes of lithium carbonate equivalent, alongside 135,000 tonnes of boric acid.

And according to Bell Potter, the project represents a strategically important source of future lithium supply in the US.

It noted:

In January 2025, Rhyolite Ridge received funding support from the US Department of Energy through a US$996m, 20-year loan. The company is currently running a project sell-down process, which we expect to materially de-risk the development’s remaining funding requirements. Project development should commence in 2026 to enable first production in 2029.

Not only that, but the prospect of boron production also appears to have caught the eye of Bell Potter analysts.

Critical mineral

Bell Potter noted that boron recently joined lithium on the US list of critical minerals.

In essence, boron is a rare mineral that plays a vital role in a wide range of sectors such as energy, defence, aerospace, and agriculture.

It also boasts everyday applications, including in cookware, consumer electronics, and medicine.

According to Ioneer, Turkey and the US account for about 80% of global boron production, including 30% supply coming from just the one mine in California.

It believes that Rhyolite Ridge could be the only construction-ready and fully permitted boron deposit in the US, and possibly the world.

Overall, boron is forecast to account for about 25% of the project’s future revenue.

Share price in focus for this ASX lithium stock

Ioneer shares have already jumped by 50% over the past six months, rising to $0.17 per share at the time of writing.

However, Bell Potter believes that this powerful rally could continue into 2026.

The broker has placed a speculative buy rating on the company, with a price target of $0.36 per share.

This equates to 112% upside potential for investors in this ASX mining stock.

The post Forget Pilbara Minerals! Expert says this ASX lithium stock could soar 112% appeared first on The Motley Fool Australia.

More reading

• Bell Potter names the best ASX critical minerals stocks to buy

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What’s unusual is that the Google parent was substantially smaller than the software giant until recently, when Alphabet pulled ahead. Considering that surge by Alphabet, is it the better investment among multitrillion-dollar companies in the AI realm, or should investors stick with Microsoft?

The case for Microsoft

Microsoft has long been a leading cloud company, but it stood out in the AI race because early on it took what is now a 27% ownership stake in OpenAI. Thus, upon the release of GPT-4, that partnership appeared to put Microsoft stock in a strong position as the frenzy around generative AI began to take hold.

To this end, it has developed its own AI engine, called Copilot, which stands out within Microsoft’s ecosystem. Still, Microsoft has likely drawn the most investor attention from its partnerships. Despite its OpenAI stake, both companies are free to partner with other AI companies. More recently, Microsoft made an agreement with Anthropic to scale Claude AI on Azure servers powered with Nvidia chips.

Microsoft can also afford such investments. Over the last 12 months, it generated almost $78 billion in free cash flow, and that does not include the $69 billion in capital expenditures (capex) invested over that time.

Moreover, with the earlier ties to OpenAI, Microsoft rose significantly in prior years, so year-to-date gains have slowed to about 14%. It also trades at a P/E ratio of 34, though it is not far above the S&P 500 average of 31. Ultimately, given its continued progress in AI, that slightly above-average valuation is unlikely to stop the steady rise of Microsoft stock.

Why investors might choose Alphabet

After ChatGPT came on the scene, investors began to question whether Alphabet’s Google Search engine was on the way to obsolescence. Its AI-enabled queries bypassed the ads that have long been the source of most of Alphabet’s income.

However, Alphabet launched Google Gemini to compete with ChatGPT. At first, it seemed like just another AI engine, but over the last few months, it has emerged as the site of choice for real-time information, video generation, and unstructured prompts thanks to the improvements in Gemini 3.

Additionally, even amid the skepticism, Alphabet’s revenue grew, and it continued to generate massive free cash flows. This has funded Gemini’s improvements, along with its other AI-related businesses, such as Google Cloud and the autonomous driving platform Waymo.

Furthermore, investors should expect continued improvements as the company plans to spend $91 billion to $93 billion on capex this year alone. Despite that spending, its free cash flow was just under $74 billion over the last 12 months, an indication it can afford these massive outlays.

Also, despite gaining around 70% so far this year, Alphabet stock trades at a 32 P/E ratio, close to the S&P 500 average. When one also factors in the increasing strength of its AI-related businesses, such conditions could make the Google parent an attractive choice.

Microsoft or Alphabet?

Both stocks have shown they are industry leaders in AI, and thus, it is likely that both stocks will continue moving higher. However, if you’re choosing between the two, Alphabet likely holds the edge.

Indeed, investors should commend Microsoft for its early moves in AI and its ability to make itself essential to more than one major AI engine.

Still, both the stock price and valuation seem to already reflect that growth. Conversely, Alphabet investors may still benefit from a delayed reaction to the Google parent’s AI.

Alphabet has spent more than Microsoft on capex, and it has overcome perceptions that AI was passing it by. When also considering its slightly lower valuation, Alphabet should remain in a stronger position to drive higher returns over time.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Better (almost) $4 trillion AI stock to buy now: Microsoft or Alphabet appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Will Healy 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 Alphabet, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is fighting hard to stay in positive territory. At the time of writing, the benchmark index is up 0.1% to 8,646.3 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are climbing:

4DMedical Ltd (ASX: 4DX)

The 4DMedical share price is up a further 15% to $2.82. Investors have been buying this respiratory imaging technology company’s shares this week following news that it has received regulatory approval in Canada for its CT:VQ product. It is the world’s first and only non-contrast, CT-based ventilation-perfusion imaging solution. 4DMedical highlights that this approval marks a significant expansion of 4DMedical’s presence in North America and allows immediate commercial deployment of CT:VQ across Canada through the company’s strategic partnership with electronics giant Philips.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is up 20% to $2.76. This morning, this counter drone technology company announced a new contract win valued at $49.6 million from an in-region European reseller on behalf of a European military end-customer. The contract is for handheld counter drone systems, associated accessories, and software updates. Over the past three years, DroneShield revealed that it has received a total of 15 contracts from this reseller worth over $86.5 million.

Electro Optic Systems Holdings Ltd (ASX: EOS)

The EOS share price is up a further 14% to $7.37. The catalyst for this was a big announcement from the defence and space company on Monday. That announcement revealed that EOS has signed a binding conditional contract worth $120 million to manufacture and supply a 100kW high energy laser weapon to a company in the Republic of Korea. This represents the second export order for a 100kW class laser defence system, following a first export order to a Western European customer earlier this year. In response, this morning Bell Potter reiterated its buy rating with an improved price target of $9.00.

Star Entertainment Group Ltd (ASX: SGR)

The Star Entertainment share price is up almost 5% to 11 cents. This morning, the struggling casino and resorts operator announced the exit of its CEO, Steve McCann, with immediate effect. Bruce Mathieson Jnr will take on additional duties as executive chair while a search for a permanent CEO is conducted. McCann said: “Now is the right time for new leadership to be put in place with the experience and passion to build on that momentum and take The Star forward.”

The post Why 4DMedical, DroneShield, EOS, and Star shares are rising today 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 and Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Resolute Mining Ltd (ASX: RSG) shares have jumped 3.65% higher in Tuesday morning trade. At the time of writing, the ASX mining stock’s shares are changing hands at $1.14 a piece.

It’s been a year of success for the African-focused gold mining company. Its shares have climbed 8.1% higher over the past month and are now up a huge 183.75% higher over the past year.

The ASX mining stock joined the ASX 200 index this month.

And just yesterday, the ASX gold miner released more good news. A major update on its Doropo Gold Project in Côte d’Ivoire has revealed that there is a significantly larger, longer-life, and more valuable project than previously outlined. The new Definitive Feasibility Study (DFS) findings has increased the site’s ore reserves by approximately 55% and lengthened the expected mine life to 13 years, from 10 years previously.

Following the latest update, analysts at Macquarie Group Ltd (ASX: MQG) have written a note to investors outlining their latest expectations for the ASX mining stock.

More upside ahead for Resolute Mining shares

In the note, the broker confirmed its outperform rating on Resolute Mining shares. It also raised its target price to $1.45 a piece, up from $1.35 earlier this month.

At the time of writing, the upgraded target price represents a potential 27.2% upside for investors over the next 12 months.

“Our NAV increases 12% following the incorporation of Doropo DFS due to the longer mine life and increased production which drives a TP increase of 7%/8% to A$1.45/£0.72. Our 50/50 blend of 1.0x NAV, 7x OCF methodology is also unchanged,” the broker said.

“Doropo will become RSG’s third operational asset and provides important geographical diversification outside Mali (Syama) and Senegal (Mako), opening up a third production asset in Côte d’Ivoire.”

What else did Macquarie have to say about the ASX mining stock?

Macquarie analysts said they have incorporated the DFS findings into their forecasts for Resolute Mining, with initial capital costs of US$516 million and life of mining (LOM) gold production expected at around 2.14Moz. 

The broker said it conservatively estimates operating costs to be around US$1,652 per oz, compared with the DFS guidelines of US$1,406 per oz.

“After incorporating the DFS into our forecasts, our NAV [net asset value] for Doropo has increased 51% to A$1,633m (~US$1,085m), and we calculate a post-tax IRR of 39% which compares to the DFS at US$1,457m and 49%, respectively. Doropo is now RSG’s highest value project and is responsible for ~51% of the NAV for RSG,” Macquarie’s analysts said.

The post This ASX mining stock surged 188% in a year, tipped to jump another 27% 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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Dicker Data Ltd (ASX: DDR) share price has been steady in recent months and currently trades around $10 apiece.

At this level, the company offers a dividend yield close to 5%, but what really sets it apart from most ASX 200 dividend stocks is the frequency of its payouts. Dicker Data pays dividends every 3 months, which is why income investors often pay close attention to it.

For someone building a passive income stream, getting paid quarterly instead of twice a year can be incredibly appealing.

A company with a strong dividend habit

Dicker Data is one of the largest IT distributors in Australia and New Zealand, supplying hardware, software, and cloud solutions from major global brands, including Cisco, Microsoft, Lenovo, HP, and Dell. Although it may not be a household name, it powers a significant portion of the country’s IT channel through thousands of reseller partners.

The company has also benefited from ongoing demand for cloud migration, AI infrastructure, and cybersecurity spending. These tailwinds have supported steady revenue growth across its FY25 results, helping strengthen its cash flow and dividend capacity.

In August, Dicker Data reported:

• Double-digit revenue growth driven by cloud and AI products
• Improved gross margins
• Strong operating cash flow
• A fully-franked dividend of 11 cents per share

And management has been clear that dividends remain a priority, noting that distributions will continue to reflect the company’s cash generation.

A quarterly dividend that feels like passive income

The company has paid 11 cents fully franked every 3 months for the last 12 months. This works out to be 44 cents annually. At today’s share price, that is close to a 5% fully-franked yield.

For a $10,000 investment, that would translate into roughly:

• $440 a year in dividends, or
• $572 a year, including franking credits

Is Dicker Data still growing?

Even as the company pays out regular dividends, it continues to invest heavily in expanding its distribution network, warehouses, and vendor partnerships. Its exposure to AI-related infrastructure has also been growing, which could be a meaningful driver over the next few years.

Macquarie and other brokers have highlighted Dicker Data as a beneficiary of the multi-year shift toward cloud services, device upgrades, and data centre growth.

Foolish Takeaway

Dicker Data is one of the rare ASX dividend stocks that pays its shareholders every 3 months. With a near 5% yield, fully franked dividends, and a business tied to long-term technology growth, it offers a mix of stability and income that is hard to find.

The post This 5% ASX dividend stock could pay me every quarter like clockwork 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 positions in and has recommended Dicker Data. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With further interest rate cuts almost certainly off the table, picking winners in the ASX retail sector might have become just that little bit much harder.

The team at Macquarie have done a deep dive into the sector, and believe they’ve come up with some solid picks which will generate impressive share price returns over the next 12 months.

Growth stories to dominate

Given the challenges the sector is facing, Macquarie has advised that rather than looking for value on an earnings basis, investors should look for a strong growth thematic from companies.

As they wrote in a note to clients:

In our view, investors looking to retain exposure to the consumer are best placed to focus on stocks with share growth stories and brand strength (i.e. quality) rather than value, given upcoming macro volatility into 2H26 (driven by potential interest rate increases).

In household retail, Macquarie’s least preferred sector, share prices in general have been under pressure, particularly for Temple & Webster Ltd (ASX: TPW) which was sold off heavily after a trading update recently.

Another company which has seen its share price decline has been Nick Scali Ltd (ASX: NCK) however the Macquarie team are bullish on the outlook for Nick Scali shares, saying that while potential rate increases will be a negative, “Nick Scali foot traffic data tracking gives us confidence in the trading outlook”.

Macquarie has an outperform rating on Nick Scali shares and a price target of $28.20 versus the current price of $21.49, indicating potential upside of 31.2%.

Coffee a growth market

The Macquarie team is even more bullish on the prospects for Breville Group Ltd (ASX: BRG) shares, with a price target of $39.20 versus the current price of $29.64. If that were to be achieved it would be a 32.2% gain.

Macquarie says consumer data indicates that discretionary retail spend was strong heading into the sales events such as Black Friday, and they are confident that companies such as Breville represent value at current prices.

We remain confident in the health of discretionary consumption after Black November, and into Christmas, implying low macroeconomic risks to the small-cap discretionary retail stocks under our coverage. Our analysis … gives us confidence in the health of the underlying consumer for discretionary retailers, heading into 2H26. Given consumer discretionary share prices have all declined YTD FY26 so far (except Baby Bunting (ASX: BBN)), we think this represents a valuation opportunity.  

Macquarie said Breville was among its top picks in the discretionary sector, with structural growth in the coffee market and new products and market expansion to drive growth.

In the medium to long term, the expansion of coffee across all key geographic areas continues to be a driver for Breville. We expect revenue to be driven from coffee, as the market continues to go through coffee ‘premiumisation’ and structural growth driven by higher penetration across North America, Europe and APAC.

The post Macquarie says these two ASX retail stocks are good buying at current levels 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 Temple & Webster Group. The Motley Fool Australia has recommended Nick Scali and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

We’re smack bang in the middle of the busiest retail season of the year, so what better time to have a look at what retail stocks are in favour?

Bell Potter has had a look at the big names in the sector and says while not all retailers are created equal, three in particular stand out as good buying at current levels.

Overall, the Bell Potter teams said retail has been “choppy as we’ve seen varying performance between discretionary categories with technology/electronics, wellness and sports and services such as cafes and recreation leading the suite while others such as mass apparel and lifestyle footwear and furniture and household goods lagging”.

They went on to say:

Looking ahead, while the pause in interest rate cuts in Australia limits catalysts for the consumer discretionary sector, we continue to prefer key beneficiaries from the rate cuts seen so far and category outperformers. We continue to look for retailers with differentiating customer value propositions and balance sheet strength and support names who may grow via market share expansion with more diverse customer demographics and category exposures.

So now, on to their retail stock picks for December.

Universal Store Holdings Ltd (ASX: UNI)

The Bell Potter team says Universal is a leading youth-focused streetwear retailer with 100 stores under its Universal Store flagship brand, as well as private label brands Perfect Stranger and Thrills.

With a price-to-earnings (P/E) ratio of about 18 times, the Bell Potter team says the company is trading at a discount to its S&P/ASX 300 Index (ASX: XKO) peer group “and see the multiple justified by the distinctive growth traits supporting consistent outperformance in a challenging broader category”.

There is a longer term opportunity with three brands to grow margins organically via private label product penetration, and Universal is expected to benefit as youth consumers prioritise on-trend streetwear.

Bell Potter has a price target of $10.50 on Universal Store Holdings compared with the current price of $7.99.

Harvey Norman Holdings Ltd (ASX: HVN)

Bell Potter says Harvey Norman is the most diversified retailer in terms of category exposure and regional presence, “while benefitting from both as a quasi-retailer/landlord and channel mix via company operated stores and franchising”.

Bell Potter has a price target of $8.30 on Harvey Norman shares compared with $7.06 currently, and said the current P/E ratio was justified considering “multiple catalysts” for growth in the near and mid-term.

Adore Beauty Group Ltd (ASX: ABY)

The Bell Potter team said Adore is an “omni-channel retailer” selling more than 15,000 third party products from more than 360 brands as well as its own private label brands.

The Bell Potter team said:

Key drivers for business growth are its continued store-rollout targeting a network of 25+ stores, along with its private label brands and high-margin retail media arm contributing to margin expansion and thus a strong earnings trajectory. We view ABY as well positioned to take advantage of the high performing beauty category within the Australian market.

Bell Potter has a price target of $1.25 on Adore Beauty shares compared with $1.20 currently.

The post Bell Potter names three retail stock picks for your Christmas hamper 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 recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Adore Beauty Group and Universal Store. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.