ASX property shares are underperforming on Thursday as earnings season continues and the market sets a new record.

The S&P/ASX 200 Real Estate Index (ASX: XPJ) is down 3.6% while the S&P/ASX 200 Index (ASX: XJO) is up 1.1%.

The ASX 200 hit a record 9,118.3 points in earlier trading, surpassing its previous record of 9,115.2 points on 21 October.

Stronger-than-expected jobs data released today has added to the case for further interest rate hikes in 2026.

Interest rate increases do not bode well for ASX real estate shares.

However, Morgans reckons there are three real estate stocks worth looking at following their latest earnings reports.

The broker gives all of them a buy rating.

Let’s find out why.

Dexus Industria REIT (ASX: DXI)

This ASX property share is trading at $2.53 apiece, down 1.4% today and 9.8% over the past 12 months.

Dexus Industria reported its 1H FY26 results last week.

Morgans said:

DXI continues to deliver strong operational results, with fixed/CPI rent escalators providing visibility for medium-term earnings growth, despite a normalisation in some industrial markets.

The balance sheet is a key differentiator, with gearing below the target range, and no near-term debt maturities, DXI is afforded the flexibility to pursue value-accretive developments such as the Jandakot.

Whilst these factors underpin DXI’s ability to grow income organically and recycle into higher-quality industrial assets, the current interest rate environment is likely to cap near-term valuation momentum across the A-REIT sector.

Morgans has an accumulate rating on this real estate investment trust (REIT) with a $2.80 price target.

The broker said:

On balance, DXI’s secure income, development-led value creation, and a 26% discount to NTA justify a stance more constructive than Hold, but rate-driven macro constraints prevent a Buy; we therefore retain an ACCUMULATE rating with a $2.80 price target.

Centuria Industrial REIT (ASX: CIP)

This ASX property share is trading at $3.20 apiece, up 0.16% today and 9.04% over the past 12 months.

Centuria Industrial REIT released its 1H FY26 results last week.

Morgans said:

The CIP portfolio continues to perform well, with +44% rental spreads and a further 20% under-renting to continue driving net property income growth over the medium term.

Offsetting the strong property fundamentals, higher interest costs continue to impact CIP (and peers).

Albeit, CIP’s debt book remains in good condition, benefiting from the recently issued exchangeable note ($350m at 3.5% coupon).

To this end, the prospect of higher rates will likely continue to weigh on the sector, offsetting some of the positive fundamentals.

Morgans kept its accumulate rating on this ASX property share with a $3.60 price target.

HomeCo Daily Needs REIT (ASX: HDN)

This ASX property share is trading at $1.31 apiece, down 0.2% today and up 8.4% over 12 months.

HomeCo Daily Needs REIT also reported its 1H FY26 earnings last week.

Morgans commented:

HDN delivered a consistent set of results, with property fundamentals seeing NOI growth at +4.6% (vs pcp) and NTA growth of 5.4% (vs Jun-25).

However, higher rates and increased debt saw FFO growing a more modest 2.8% – a trend we expect to continue as the business navigates potentially higher rates.

Given HDN is trading at a 17% discount to NTA, with a 6.7% distribution yield (FY26), there is cause to see value.

However, it appears FFO growth greater than inflation may remain elusive for the medium term.

Morgans retained its accumulate rating with a $1.40 per share price target.

The post 3 ASX property shares to buy appeared first on The Motley Fool Australia.

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• Invest $20,000 in these 4 ASX shares and get $1,000 passive income

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

I’ve never liked buying or investing in ASX mining shares like BHP Group Ltd (ASX: BHP).

As I’ve written about before, I don’t like the inherent cyclicality of mining companies and their limited ability to compound their earnings over long periods of time that results from it. There’s nothing wrong with investing in miners in principle. It has just never been for me.

However, after seeing BHP’s earnings report that was released earlier this week, I am reconsidering that bias.

As we covered on Tuesday, it was a stellar set of earnings that BHP dropped. The ‘Big Australian’ reported an 11% rise in revenues to US$27.9 billion. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were up 25% to US$15.46 billion, while the company’s underlying profits spiked 22% to US$6.2 billion.

This all enabled BHP to hike its 2026 interim dividend by a pleasing 46% to 73 US cents per share.

None of those figures prompted me to reconsider buying BHP shares, though. What did was where this miner’s earnings came from.

A few years ago, BHP was primarily an iron ore miner, with some other operations providing supplemental earnings. Today, the company is a different beast. Over the six months to 31 December 2025, BHP made more money from its copper operations than from iron ore. BHP reported underlying earnings (EBITDA) worth US$7.5 billion from its iron ore division over that period, behind its copper division’s US$7.95 billion.

That copper division is firing on all cylinders, with that US$7.95 billion up from US$5.01 billion over the same period in 2024.

Why I might buy BHP shares in 2026

Even more pleasingly, BHP’s copper expansion has given the company a windfall of other commodities. Copper mining is a process that tends to produce significant byproducts. Alongside copper, BHP reported a big increase in production of gold, silver, and uranium over the back half of last year. Its South Australian copper mines produce 400,000 ounces of gold over the period alone, putting it in the top five ASX producers. It also contributed 5% of the entire global supply of uranium over the period.

BHP is turning itself into one of the world’s most diversified miners. Additionally, it focuses on commodities that will be essential to future-facing technologies like electrification and nuclear power generation.

It’s likely that these commodities will see sustained demand over the decades ahead. And BHP is positioning itself to be at the forefront of this trend. As such, I am rethinking my general distaste for ASX mining shares on these latest numbers. And if I had to pick an ASX miner to invest in today, it would probably be BHP shares.

The post I never thought I’d buy BHP shares, but I’m reconsidering. Here’s why appeared first on The Motley Fool Australia.

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

The team at Morgans has been busy running the rule over a number of ASX shares this week following the release of updates.

Let’s take a closer look at three and see if the broker rates them as buys, holds, or sells. Here’s what you need to know:

A2 Milk Company Ltd (ASX: A2M)

This infant formula company delivered a stronger than expected half-year result this week. In addition, Morgans notes that management has upgraded its FY 2026 guidance again.

While the broker is a fan of A2 Milk, it thinks its shares are fairly valued now. As a result, it has put a hold rating and $9.50 price target on them. It said:

A2M’s 1H26 result was stronger than expected. The beat for us reflected stronger than expected Other Nutritionals and Liquid Milk sales. FY26 guidance was upgraded once again. NPAT growth should accelerate in FY27 given A2 Pokeno is expected to breakeven and new China label (CL) IF products will be launched. While we rate the company and its management team highly, we believe that the stock is trading on fair multiples (FY27 PE of 29.3x and PEG of 1.9x). We maintain a Hold rating with a new price target of A$9.50 (previously $9.40).

Capstone Copper Corp (ASX: CSC)

This copper miner disappointed with its production guidance earlier this week. It notes that its production volumes were softer than expected and its costs were higher.

Nevertheless, the broker remains positive and sees plenty of value in Capstone shares. This has seen Morgans retain its buy rating with a trimmed price target of $16.60. It said:

CY26 production guidance is well below expectations with higher costs and capex reflecting lower grades at Pinto Valley and Mantos Blancos, and strike and tie-in impacts at Mantoverde driving likely near-term earnings revisions. CY26 headwinds are largely sequencing and one-off in nature, with MV-O ramp-up and higher grades positioning CSC for volume growth and lower unit costs from CY27 onward. Maintain BUY with a A$16.60ps target price (previously A$17.40).

Judo Capital Holdings Ltd (ASX: JDO)

Finally, Morgans has downgraded this small business lender’s shares to an accumulate rating (from buy) with a $2.09 price target. The broker made the move on valuation grounds following a sizeable rise in the Judo share price in response to a strong half-year result. It said:

Strong 1H26 profit growth provided evidence of improving operating leverage. Forecast NPAT changes across FY26-28F are within +3% to -4% on a mildly higher revenue and costs scenario than previously assumed. 12 month target price lifted to $2.09/sh mostly on valuation roll-forward. Rating moved down from BUY to ACCUMULATE given recent share price strength.

The post Buy, hold, sell: A2 Milk, Capstone Copper, and Judo Capital shares appeared first on The Motley Fool Australia.

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

Hub24 Ltd (ASX: HUB) shares have stormed higher today following the company’s half-year results announcement this morning. The increase has helped push the S&P/ASX 200 Index (ASX: XJO) to a new all-time high in lunchtime trade.

At the time of writing, Hub24 shares are up 12.15% to $96.71 a piece. The latest uptick means the diversified financial services company’s shares are now 0.89% higher year-to-date and 13.13% higher than their trading price this time last year.

Investors are flocking to the stock after the company posted a significant increase across the board. 

In its announcement ahead of the ASX open this morning, Hub24 reported a 26% hike in revenue for the six months ended 31st December 2025. It also reported a huge 60% increase in its group underlying net profit after tax (NPAT), an 80% increase in statutory NPAT, and a 35% rise in its group underlying EBITDA.

The strong results meant the company was able to hike its full-franked interim dividend payment 50% higher to 36 cents per share.

The result beat market estimates across nearly every metric.

And investors are thrilled.

The good news comes on the back of record Q2 FY26 inflows, which the company posted last month.

So, are the shares a buy, sell or hold following the result?

Here’s what analysts think of the Hub24 shares for 2026

Analysts were already bullish on Hub24 shares, and we will likely see many of them confirm or adjust their positions on the stock in the coming days. 

Even after today’s upswing, analysts think there is plenty more room for the shares to run this year.

At the time of writing, 10 out of 17 analysts have a buy or strong buy rating on Hub24 shares. The average target price is $112.58 per share, implying a potential 16.97% upside for investors. 

But some analysts are even more optimistic about the stock this year. The maximum target price is $138.10 a piece, implying the shares could soar 43.93% over the next 12 months from the current trading price.

Earlier this week, the team at Bell Potter said it believes Hub24 is well-positioned for strong growth this year, thanks to structural tailwinds and the quality of its platform.

Hub24 also upgraded its FY27 Platform FUA target to $160 billion to $170 billion (excluding PARS FUA), up from the previous target of $148 billion to $162 billion. However, this is mostly in line with current analyst estimates. 

The post HUB24 shares jump 12% higher. Are the shares still a buy for 2026? 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 Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX shares are in focus right now as we near the end of the third week of earnings season. The All Ordinaries Index (ASX: XAO) is 1.01% higher at the time of writing in early-afternoon trade on Thursday, and it’s tipped to keep climbing. 

There are some ASX shares that analysts think will hugely outpace the index this year, rising 50% higher, or even more.

IDP Education Ltd (ASX: IEL) 

It was one of the worst-performing shares on the S&P/ASX 200 Index (ASX: XJO) in 2025. Its performance saw the stock crash out and exit the index amid a reshuffle in September.

Unfortunately, the company’s lacklustre share price performance translated through to early-2026 too. At the time of writing, the shares are 0.99% higher at $5.08 a piece. Despite the increase, the shares are down 11.65% year to date and 58.56% year over year.

While there hasn’t been much good news out of the international education services business over the past year, it looks like the company could stage a turnaround in 2026.

Some analysts think visa caps and declines in student volume may have peaked, particularly in key markets like Canada and Australia. This means the volume of student placements could start rebounding, and it could drag revenue and the company’s share price up with it. 

Analysts are mostly positive on the stock, with five out of eight holding a buy or strong buy rating. The average target price is $7.30, and the maximum is $11.50. That implies the shares could soar 43.98% to 126.82% higher over the next 12 months, at the time of writing.

IPH Ltd (ASX: IPH)

Shares in the intellectual property provider are storming higher today off the back of its latest results. This morning, IPH reported a 6.5% increase in revenue for the six months ended 31st December 2025.

The company also declared an interim dividend of 19 cents per share, up 11.8% on the prior period.

Investors are clearly happy with the result. Its shares are 13.31% higher at the time of writing to $3.83 a piece. The uplift means the shares are now 6.69% higher for the year to date but 20.04% below where they were last year.

Analysts think there is plenty more to come, too. Out of six analysts, five have a buy or strong buy rating on the ASX company and its shares. The average target price is $5.03, and the maximum is $6.05. That implies a potential upside of 30.60% to 57.14% over the next 12 months, at the time of writing.

The post 2 ASX shares tipped to soar 50% (or more) higher in 2026 appeared first on The Motley Fool Australia.

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

Whitehaven Coal Ltd (ASX: WHC) shares are lower on Thursday after the company released its half-year FY26 results and confirmed its latest dividend.

At the time of writing, the Whitehaven share price is down 5.57% to $7.97. By comparison, the S&P/ASX 200 Index (ASX: XJO) is currently 1.1% higher.

Although profits fell on weaker coal prices, income investors will focus on Whitehaven’s latest dividend and buyback announcement.

Here’s what you need to know.

Whitehaven’s dividend at a glance

Whitehaven has declared a fully franked interim dividend of 4 cents per share.

Key dates for investors are:

• Ex-dividend date: 26 February 2026

• Record date: 27 February 2026

• Payment date: 13 March 2026

The dividend represents a cash outlay of around $32 million.

In addition, Whitehaven intends to allocate up to $32 million to an on-market share buyback. This takes the potential total capital returns for the half to about $64 million.

Why were profits weaker?

The softer result was mainly due to lower coal prices, which weighed on earnings. Benchmark thermal and metallurgical coal prices have eased significantly from the highs of the past 2 years.

For the half, Whitehaven reported:

• Revenue of $2.5 billion

• Underlying EBITDA of $446 million, down from $960 million a year ago

• Average coal price of $189 per tonne, down 19%

Production volumes were broadly steady. However, lower realised prices squeezed margins and reduced profit compared to last year.

Whitehaven also reported an underlying net loss after tax of $19 million. After including certain one-off items, statutory net profit came in at $69 million.

The balance sheet remains strong

Even with lower prices, Whitehaven’s financial position still looks healthy.

At 31 December 2025, the company had:

• $1.09 billion in cash

• $1.5 billion in total available liquidity

• Net debt of $710 million

• Gearing of 11%

It also generated $387 million in operating cash flow during the half.

Whitehaven has a solid cash buffer and manageable debt. That puts it in a position to keep returning money to shareholders, even if coal prices remain lower for a period.

What investors should take away?

Whitehaven aims to return between 40% and 60% of underlying profit to shareholders across the cycle. In the first half, capital returns were above that target range.

The share price fall today suggests investors may have expected stronger earnings or a larger dividend.

Still, the company has delivered a fully franked dividend and signalled further support through a buyback. Future payouts will depend heavily on coal prices.

The post Whitehaven shares tumble 5% after results. Here’s what investors need to know about its dividend 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Lovisa Holdings Ltd (ASX: LOV) are the second-worst performer on the S&P/ASX 200 Index (ASX: XJO) on Thursday after a profit result that missed analysts’ expectations by a wide margin.

The question is, are the shares still worth buying, or is the bad news only going to get worse?

In terms of the longer-term share price outlook, it’s fair to say analysts are split.

Mixed profit result

But first, let’s look at the results.

Lovisa, in a statement to the ASX on Thursday morning, said revenue was up 23.3% to $500.7 million, with comparable store sales up 2.2%.

The company’s underlying net profit came in at $69.6 million, up 21.5%, while the net profit including one-offs was $58.4 million.

The company also boosted its interim dividend to 53 cents, 50% franked, up from 50 cents.

Global Chief Executive Officer John Cheston said regarding the result:

Lovisa has once again been able to deliver strong growth in the underlying global Lovisa business, with the highlight another exceptional gross margin performance and the continued momentum in the store rollout through the period. I would like to share my appreciation to the global team for their hard work in delivering these outstanding results.

Tarnished result

While the company’s numbers look good on the face of it, it gave little prominence to the loss made by its Jewells division, which posted an EBIT loss of $10.8 million for the half, with this detail published only as a footnote to the profit report.

The company said Jewells was in the start-up phase, and hence the underlying results did not include its contributions.

Lovisa said its balance sheet was strong and its cash flow was good.

The company went on to say:

Lovisa generated cash from operations before interest and tax of $183.8m and is in a strong position to deliver future store growth. The strong cash flow and balance sheet position has enabled the Board to announce an interim dividend of 53.0 cents, 50% franked, representing 100% distribution of first half reported earnings. The Board will continue to assess dividend levels each half year and determine the appropriate level of dividend based on profitability, cash flow and future growth capex requirements of the company and the structure of the balance sheet.

Lovisa opened 85 new stores in the half, bringing the total number to 1095 in more than 50 markets.

Commenting on trading so far this calendar year, the company said comparable store sales were up 1.6%.

Analysts’ views mixed

We canvassed the views of three brokers, and they have widely differing price targets on Lovisa shares.

What they did agree on was that the first half result was a wide miss to consensus estimates, with Jarden saying net profit was 14% below consensus, including the Jewells losses.

Jarden has maintained an overweight rating on the shares and a $40.90 price target compared with $27.64 on Thursday, down 10.9%.

UBS has a price target of $33 on the shares, while RBC Capital Markets has an underperform rating on the stock and a price target of $26.

The RBC team said removing the Jewells results from underlying results might be viewed cynically by investors, given its financials were included in previous results.  

The post Lovisa shares are getting hammered on a profit miss, but is the stock still a buy? 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 Lovisa. 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.

Goodman Group (ASX: GMG) shares are under a lot of pressure on Thursday.

In afternoon trade, the industrial property giant’s shares are down 7% to $28.88.

Why are Goodman shares sinking today?

Investors have been selling the company’s shares today following the release of its half-year results.

For the six months ended 31 December, Goodman reported a 1.5% decline in operating profit to $1.2 billion and an 8.3% decline in operating earnings per share (OEPS) to 58.5 cents.

What else did it report?

A key theme of the result was accelerating data centre activity.

Work in progress (WIP) rose to $14.4 billion across 51 projects, with data centres now accounting for 73% of total development WIP. Goodman’s global power bank increased to 6.0 GW across 16 major cities, with around 0.5 GW of power expected to be in development by June 2026.

Management advised that it expects WIP to increase to approximately $18 billion by the end of FY 2026, reflecting growing customer demand for digital infrastructure.

However, management noted that development earnings are expected to be skewed toward the second half of FY 2026. That timing could be weighing on sentiment and Goodman shares today.

Why the market reaction?

While the result was operationally solid, a few factors may be behind the decline.

Firstly, Goodman has a habit of upgrading its guidance as the financial year progresses. It is possible that the market was anticipating an upgrade today.

However, there was no upgrade to its FY 2026 OEPS guidance. Management continues to expect OEPS growth of 9%.

Furthermore, with its OEPS down 8.3% in the first half, the market may not even be confident that Goodman will be able to achieve its current guidance, let alone upgrade it.

Nevertheless, the company’s CEO, Greg Goodman, remains confident. He said:

Demand for digital infrastructure in our markets is expected to materially exceed supply over the foreseeable future. Goodman has a significant opportunity to develop into this strong demand, given our metropolitan sites, significant power bank, strong capital position and expertise in complex infrastructure. The scale and locations of our powered land bank is rare. Construction-ready powered sites take many years to acquire, plan, secure power, undertake infrastructure works, and ultimately deliver.

Demand for logistics is increasing, with commencements expected to accelerate over the next 12 months. Together these are expected to drive our growing development activity. The Group is targeting FY26 operating EPS growth of 9.0%.

The post Why are Goodman shares sinking 7% today? appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor James Mickleboro has positions in Goodman Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goodman Group. 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.

Buying ASX shares and concerned about the impact of potentially further increases in interest rates?

You’re not alone.

Though it’s worth noting that the All Ordinaries Index (ASX: XAO) has gained 2.9% since 2 February, the day before the Reserve Bank of Australia increased the official cash rate.

As you’re likely aware, on 3 February, the RBA pulled the trigger and lifted the benchmark interest rate by 0.25% to 3.85%.

That marked the first tightening since 8 November 2023, when the central bank boosted the cash rate to 4.35% to tamp down hot-running inflation.

But, after delivering three rate cuts in 2025, the RBA reversed course at its maiden meeting in 2026 amid resurgent inflation.

Commenting on its decision on the day, the RBA noted:

The board has been closely monitoring the economy and judges that some of the increase in inflation reflects greater capacity pressures. As a result, the board considers that inflation is likely to remain above target for some time.

Which brings us back to our headline question.

Should investors buying ASX shares do so with expectations of more rate hikes ahead?

What should ASX investors expect from interest rates in 2026?

Nomura’s Andrew Ticehurst said the three rate cuts in 2025 helped to boost the recent strong jobs figures and stoked the uptick in inflation.

Ticehurst believes ASX investors should expect one more interest rate hike from the RBA in 2026 before the central bank holds steady (courtesy of The Australian Financial Review).

According to Ticehurst:

Monetary policy is now tighter, fiscal policy is likely to be tightened a little bit, and the Australian dollar has risen as well. They’re all moving in a way which is going to cause growth momentum to slow this year.

The RBA is talking hawkishly now … we’ve seen them change tack quite quickly over the past six months, but if the data does soften up a little bit over the next three or four months, you’ll see their language change again.

Jarden’s Micaela Fuchila, on the other hand, believes that ASX investors have seen the last RBA interest rate boost of the current cycle.

Fuchila said the jump in the Aussie dollar and increasing bond yields should help to keep inflation in the 2.7% to 2.9% range, within the RBA’s 2% to 3% target band.

As for this month’s rate hike, Fuchila noted:

There were fundamental changes around the consumer in particular. We had things that we hadn’t seen in a long time, a lot of savings in consumers’ balance sheets. 2025 was a year when we had a Goldilocks scenario for the consumer for the first time.

The post Buying ASX shares? Here’s what these top analysts expect from interest rates in 2026 appeared first on The Motley Fool Australia.

More reading

• Lovisa shares are getting hammered on a profit miss, but is the stock still a buy?
• Why are Goodman shares sinking 7% today?
• The analysts are in agreement, this tech company’s shares are a buy
• ASX 200 lifts to record high amid strong earnings and new jobs data
• Why Goodman, Lovisa, Medibank, and Zip shares are falling today

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.

Shares in Superloop Ltd (ASX: SLC) piled on the gains this week after the company announced a solid profit result as well as a $165 million acquisition.

But despite the shares piling on more than 10% gains after the company’s announcements, the three analysts we’ve canvassed all agree there’s more upside to this stock.

Firstly, let’s look at what the company announced this week.

Solid earnings jump

On the numbers, Superloop announced that its underlying EBITDA jumped 46% to $55.8 million, while net profit was $5.1 million, compared with a loss of $7.8 million for the same period last year.

The company added 74,000 new customers in the half, a 21% gain, bringing total customers to 805,000.

Superloop also upgraded its underlying EBITDA outlook for the full year to $112 to $120 million, up from $109 to $117 million.

Managing Director Paul Tyler said regarding the results:

Superloop has delivered fantastic results for the first of half of FY26, including record organic Consumer customer growth, an increase in revenue of 23%, and an increase of 46% in underlying EBITDA to $55.8 million, leading to net profit after tax of $5.1 million for the half. Both the Consumer segment and the Wholesale segment achieved strong revenue growth, 29% and 28% respectively. Consumer added a record 49,000 customers during the half, and Wholesale experienced accelerated growth in the last two months, setting the business up for a strong second half.   

New acquisition

The other news the company announced was the purchase of last mile internet provider Lightning Broadband, with that deal bringing with it a fibre to the premises network of 24,000 built lots nationally and a further 30,000 contracted lots.

Superloop said it expected synergies of $5 million to be achieved within three years, and the buyout was priced at 15 times Lightning’s estimated 2027 earnings.

Mr Tyler said the deal was a crucial step in building out Superloop’s “smart communities” asset base.

He added:

The combination of Lightning Broadband with Superloop’s existing Smart Communities portfolio, including the acquisition of Frontier Networks during the first half, creates a serious challenger to incumbents. With a combined built and contracted book of approximately 170,000 lots, we have clear visibility of long-term sustainable growth.” “Lightning Broadband’s strength in multi-dwelling units complements our expertise in broadacre, build-to-rent and Purpose-Built Student Accommodation. Our existing fibre network, including 2,500km of metropolitan footprint, enables direct connection to Lightning Broadband buildings, driving cost synergies and increasing network resilience.

Shares looking cheap

So what do the analysts think of all this?

We looked at research notes published by Macquarie, Morgan Stanley, and UBS, and they’re all in agreement.

Both Macquarie and UBS have a 12-month price target of $3.50 on Superloop shares, while Morgan Stanley has a price target of $3.60.

This compares with just $2.85 currently.

Morgan Stanley said they were attracted to the company “as the low-cost operator, especially in selling a commoditised but essential service like broadband”.

They added:

Given the high incremental margins outlined above, we feel Superloop is well positioned to respond to any price competition.

UBS said the first half result was “pleasing”, beating consensus estimates across the board.

Meanwhile, Macquarie said the company “materially outperformed market expectations” in its consumer and wholesale businesses.

The post The analysts are in agreement, this tech company’s shares are a buy 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 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.