Many investors target ASX ETFs to track the returns of global indexes or niche themes. But there are also funds that specifically focus on generating high yields.

A new report from Betashares has shed light on the dwindling returns available from traditional ‘safe havens’ like term deposits and savings accounts. 

However, according to APRA, Australians hold over $1.4 trillion in bank deposits.

Betashares said this continues to grow despite falling interest rates. This suggests many Australians are content with accepting these lower returns. 

Research shows some of the highest interest rates available for savings accounts hover around 4% to 4.5%. 

What’s more important, is these often come with fees, deposit or withdrawal limits, or revert back to lower rates after introductory periods. 

As of December 2025, the best 1-year term deposit rate you can find at any Big Four bank is 4%. 

With those figures in mind, if you are considering parking cash in a savings account or term deposit, these ASX ETFs might offer better returns than what your bank is offering. 

BetaShares S&P 500 Yield Maximiser Fund (ASX: UMAX)

The objective of this ASX ETF is to generate attractive quarterly income and reduce the volatility of portfolio returns by implementing an equity income investment strategy over a portfolio of stocks comprising the S&P 500 Index. 

It uses a covered-call strategy over the 500 largest stocks on Wall Street.

The result is regular income distributions (paid quarterly) that can be significantly higher than the regular dividend yield of the S&P 500 index.

It has a 12 month distribution yield of 5.3%. 

BetaShares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX)

This ASX ETF is essentially the Australian focussed version of the previous fund. 

According to Betashares, the fund gives exposure to the top 20 ASX shares and sells covered call options on up to 100% of its shares to generate additional income from the option premiums.

It has a 12 mth distribution yield of 8.2% (paid quarterly). 

In terms of the portfolio, its largest exposure is to:

• Commonwealth Bank of Australia (ASX: CBA) – 16.3%
• BHP Group (ASX: BHP) – 13.6%. 

Vanguard Australian Shares High Yield ETF (ASX: VHY)

This is Vanguard’s ASX ETF focussed on high-dividends. 

According to Vanguard, the objective is to target companies that have higher forecast dividends relative to other ASX-listed companies.

It also has exposure to Australia’s largest blue-chip stocks like CBA and BHP.

The fund has historically provided a dividend yield around 5%.

The post 3 ASX ETFs that can generate more cash than your savings account appeared first on The Motley Fool Australia.

More reading

• Want to know how much CBA is expected to grow profit in FY26?
• What a rising Aussie dollar means for your ASX shares
• ASX 200 mining shares lead the market for a second week
• How much passive income could I earn with 1,000 BHP shares?
• $5,000 in CBA shares at the start of 2025 is now worth…

Motley Fool contributor Aaron Bell has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended BetaShares S&P 500 Yield Maximiser Fund. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are looking for outsized returns for your investment portfolio, then it could be worth considering Flight Centre Travel Group Ltd (ASX: FLT) shares.

That’s the view of analysts at Macquarie Group Ltd (ASX: MQG), which believe the travel agent could be good value.

What is the broker saying?

Macquarie was pleased with news that Flight Centre has agreed to acquire Iglu for 100 million British pounds (GBP). It is the UK’s leading online cruise agency, which commands ~15% of UK cruise bookings and upwards of 75% of online bookings.

The broker highlights that the deal opens up its addressable market materially. And given its strong balance sheet, it feels that there’s potential for further acquisitions in the industry. Macquarie said:

FLT to acquire Iglu for GBP100m upfront with earn outs up to GBP27m, that equates to 7.25x FY26e EBITDA (inc. synergies). Iglu is forecast to deliver pro forma FY26 TTV ~GBP450m & adj. EBITDA GBP14.8m. Iglu is the market leader in UK cruise, the world’s 3rd largest market. There is a strong cultural fit between the businesses, a critical component of FLT’s acquisitions. Iglu’s current CEO, David Gooch, will continue to lead the business post acquisition.

Significantly expands FLT footprint in cruise with scope for more M&A. After acquiring Iglu, FLT’s cruise related TTV will almost double to surpass $2b during FY26 with a stretch target of $3b TTV in FY28. Iglu adds an online cruise platform to its leisure portfolio that includes Flight Centre, Scott Dunn and Cruise Club UK, which should generate >$1.5b TTV during FY26, reducing leisure’s strong weighting to the Southern Hemisphere.

Macquarie highlights that the cruise market is an attractive one, with strong growth and margins. It said:

Cruise is an attractive market with strong growth & higher margins. Both FLT’s and Iglu’s cruise businesses are seeing sales grow at 15-20% yoy underpinned by a resilient customer base and supply chain that is investing heavily in new ships and partnerships. The margin profile of cruise is also attractive, with Iglu’s 3.1% FY25 EBITDA margin ~40% higher than the 2.2% in FLT’s leisure division.

Time to buy Flight Centre shares

According to the note, the broker has retained its outperform rating with an improved price target of $17.85.

Based on its current share price of $15.04, this implies potential upside of 19% for investors over the next 12 months.

And with the broker expecting a 2.9% dividend yield in FY 2026, this boosts the total potential return to almost 22%.

Commenting on its outperform recommendation, Macquarie said:

FLT is well on track to deliver FY26 guidance, with solid TTV growth across both segments. Corporate is seeing the early benefits from Prod Ops initiatives with strong TTV growth on lower FTEs. Valuation attractive, and we see material upside to the current share price over a 12m view.

The post Why Flight Centre shares could return 22% in just one year appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why did Macquarie just downgrade CSL shares?
• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy today

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

Commonwealth Bank of Australia (ASX: CBA) is making some of the biggest profits that corporate Australia has ever seen.

The ASX bank share is in a competitive industry yet it managed to make just over $10 billion of net profit in the 2025 financial year.

CBA reported in FY25 that statutory net profit grew by 7% year-over-year to $10.1 billion and cash net profit rose 4% to $10.25 billion.

The cash net profit increased a little further in the first quarter of FY26, being the three months to September 2025. Last quarter, the cash net profit of $2.6 billion represented a 2% year-over-year rise, while it was a 1% rise compared to the quarterly average of the FY25 second half.

Let’s take a look at how much profit Commonwealth Bank is predicted to make in FY26.

Profit prediction for CBA

How much a business makes in earnings is key for investors to decide on how much they’re going to value the business.

For example, if investors are willing to value a share price at 25x the earnings the business makes, a business growing its net profit from $1 billion to $1.1 billion could mean the market capitalisation can grow from $25 billion to $27.5 billion.

If CBA is able to grow its profit, then that could lead to an increase in the CBA share price over time.

The broker UBS is projecting that the ASX bank share could generate $10.76 billion of net profit in FY26. That represents a rise of in the mid-single-digits for both CBA’s cash net profit and statutory net profit.

After seeing those quarterly numbers, UBS wrote:

Quarterly results have historically been unpredictable, making it challenging to form a definitive view on this release due to limited information. However, the headline figures indicate that CBA is delivering results broadly in line with expectations for 1H 26, as reflected in consensus estimates and UBSe forecasts. The 6.1% QoQ increase in costs is somewhat surprising, even excluding notable items, as is the decline in the CET1 ratio to 11.75%, compared to the 1H 26 consensus estimate of 12.3%.

At the time, the CBA share price was trading at around $175, which led to the broker commenting:

Given the current valuation, it would appear perfection is implicitly expected.

However, the business has fallen to a CBA share price of $155 since then. This puts it at 24x FY26’s estimated earnings, according to UBS.

However, while it is cheaper, UBS still has a sell rating on the ASX bank share as it sees better value elsewhere in its coverage universe. The price target is $125, implying a possible fall of around 20% within the next year.

The post Want to know how much CBA is expected to grow profit in FY26? appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that can generate more cash than your savings account
• $5,000 in CBA shares at the start of 2025 is now worth…
• Why this fundie is backing ASX mining shares over banks in 2026
• How will interest rate hikes impact the big four ASX banks like CBA shares?
• 3 ASX 200 shares I’m avoiding this week

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.

Treasury Wine Estates (ASX:TWE), the ASX 200 company known Penfolds wine brand, has endured a difficult few years. After COVID-era disruptions, the collapse of China exports following tariffs, and now structural headwinds in the US wine market; confidence in the company has eroded significantly.

Tomorrow, investors will finally hear from new CEO Sam Fischer, who stepped into the role in October 2025 and is preparing to deliver his first major update.

The company has entered a trading halt until that announcement is released, indicating that meaningful news is coming. Whilst we don’t know exactly what will be announced, there are some clues so what should investors expect?

Clearing the decks

Just two weeks ago, Treasury Wines announced that its half year results will likely include a full impairment write-down of all its Americas goodwill (valued at $687 million) after the company applied more conservative assumptions to long-term US market growth. The impairment takes into account weakening US wine trends and softer category performance.

Equity analysts across the board interpreted this as the beginning of a broader earnings rebasing. J.P. Morgan noted that the impairment highlights earnings risks and expects further resets, especially across the Americas business. BofA Securities said the write-down was not surprising and reflects overly ambitious prior assumptions.

RBC Capital Markets on the other hand called the move consistent with new leadership reassessing structural issues and believes more demand headwinds will be highlighted. Morgan Stanley warned of “modest downside surprise” from the CEO’s update and sees potential for further consensus downgrades.

Its common for a new CEO to clear the decks and get the bad new out there first. The analyst comments above suggest that the new CEO Fischer is preparing to reset expectations and put all legacy issues on the table early in his tenure. Given this backdrop, tomorrow’s update could be part of a broader approach to start off with a clean slate.

US and China in focus

Treasury Wines has already said that the announcement will include a progress update on performance in China and the US, along with the new CEO’s initial observations.

These happen to be the two markets where the most uncertainty exists with the US market experiencing weakening category demand whilst the China market has challenges of grey-market leakage in addition to weaker demand.

Investors should be prepared for the possibility that Treasury Wines may announce expectations of ongoing cyclical and possibly structural challenges in both markets.

Foolish bottomline

Tomorrow’s announcement is shaping up to be one of the most consequential updates in years for Treasury Wine Estates. While the outlook may be challenging in the short term, it is standard for a new CEO to reset expectations early. Accelerated balance-sheet clean-ups, conservative assumptions, and a shift in strategy can lay the foundation for a genuine turnaround.

With Treasury Wines now trading at roughly half its long-term valuation multiples, according to several analysts, a thorough reset might ultimately position the company for recovery once underlying trends stabilise.

The post What can investors expect from Treasury Wines’ update tomorrow? appeared first on The Motley Fool Australia.

More reading

• Treasury Wine Estates shares halted ahead of investor update
• Over 51% down this year, how low can Treasury Wine shares go?
• Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares
• Macquarie names best and worst ASX stocks to buy in a rising interest rate environment
• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today

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

Medibank Private Ltd (ASX: MPL) stock may not receive a lot of investor attention for passive income, but today I’m going to outline why it looks like a solid and compelling choice.

The business is Australia’s largest private health insurer with its Medibank and AHM brands. It also has a growing portfolio of bolt-on healthcare businesses.

Healthcare is one of those categories that has typically defensive earnings – I’d imagine plenty of policyholders would want to hold onto their insurance even if Australia’s GDP was slightly declining rather than rising in a particular year.

With resilient earnings, the business can provide a consistently-growing dividend.

Is the dividend yield attractive?

Since it listed a decade ago, the business has increased its annual dividend per share every aside from the COVID-impacted year of 2020.

In FY25 it decided to hike the annual dividend per share by 8.4% to 18 cents. That translates into a trailing grossed-up dividend yield of 5.5% (which includes the franking credits).

But, last year’s dividends are history. Let’s take a look at how large analysts think the next payments could be.

The forecast on CMC Markets suggests the business could decide to hike its annual dividend per share to 19 cents per share, which would represent a year-over-year hike of 5.5%.

If owners of Medibank stock do receive that projected payout, it would represent a grossed-up dividend yield of 5.8% (which includes franking credits).

The projection on CMC Markets is another hike in FY27 to 20 cents per share.

Is this a good time to buy Medibank stock?

The company is working hard to diversify its earnings streams. It recently announced its FY30 aspirations for its Medibank health segment, with a goal to deliver segment earnings of at least $200 million by FY30.

Medibank also wants to grow its policyholder market share each year in a disciplined way to at least 26.8% by FY30.

The ASX healthcare share is regularly achieving growth in both Australian policyholders and international policyholders. In FY25, Medibank grew net resident policyholders by 27,900 (or 1.4%) and increased net non-resident policy units by 10,500 (or 3.1%).

That’s exactly the numbers I want to see – I think policyholder growth is the key for ongoing success as it boosts both revenue and operating leverage for the business.

According to CMC Markets, of the five analyst ratings it has information on, the average price target of $5.22. That implies a possible rise of more than 10% over the next year from where it is at the time of writing.

A double-digit rise of the Medibank share price combined with the dividend return would be a very pleasing result over the next 12 months, if those forecasts come true.

The post Is Medibank stock a buy for its 5.5% dividend yield? appeared first on The Motley Fool Australia.

More reading

• 2 ASX financial shares to sell and 1 to buy: experts
• Here are the top 10 ASX 200 shares today
• Buy, hold, sell: Medibank, Qantas, and Xero shares

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.

Owning Telstra Group Ltd (ASX: TLS) shares for dividends could be one of the smarter moves by income-focused investors looking at blue-chip shares.

There are plenty of businesses within the S&P/ASX 200 Index (ASX: XJO), but few offer as large a dividend as Telstra while also delivering payout growth.

The last few years have seen a regular, rising payout by the business and I expect this to continue in the coming years.

$30,000 investment in Telstra shares

I wouldn’t recommend that investors put all of their money into one business – having a diversified approach is a good idea.

But, I’d be more comfortable putting $30,000 into Telstra than ASX bank shares and ASX mining shares.

In terms of the passive income, in FY25, Telstra decided to pay an annual dividend per share of 19 cents. That represented a 5.6% year-over-year increase. At the current Telstra share price, that represents a dividend yield of 3.9% and a grossed-up dividend yield of 5.6%, including franking credits.

If someone owned $30,000 of Telstra shares, that would translate into an annual cash of $1,170, or $1,671 including the bonus of franking credits, based on the FY25 payout.

However, the payments from the 2025 financial year are history. The future dividends could be even bigger.

The forecast on CMC Markets suggests the business could deliver an annual dividend per share of 20 cents in FY26, implying a possible rise of more than 5% year over year in the current financial year.

If that’s what happens over the next 12 months, the investor with $30,000 in Telstra shares would receive $1,231 of a cash dividend and $1,759 of grossed-up dividend income, including the franking credits.

Why is the telco likely to grow its payout?

Telstra is the leading telecommunications business in Australia and it has built a reputation for having the best network.

This has given the business the ability to raise prices without much detrimental effect, helping boost the mobile division’s average revenue per user (ARPU) each year in recent years.

The attractiveness of the mobile network has also meant the business has been able to attract additional customers every year (including the wholesale customers that use the Telstra network through different brands).

I’m also hopeful that the business can win more wireless broadband customers because this should mean the company can deliver a higher profit margin on that customer, rather than losing a significant portion of it to the NBN.

At the current Telstra share price, it’s trading at 24x FY26’s estimated earnings, according to the forecast on Commsec. I think that’s a reasonable price to pay for a business with a good earnings outlook, given how Australia is becoming more technological.

The post $30,000 of Telstra shares can net me $1,671 of passive income! appeared first on The Motley Fool Australia.

More reading

• 3 excellent Australian dividend shares to buy with $1,000
• 2 Australian dividend giants that belong in any portfolio
• Up 24% in a year! The red-hot Telstra share price is smashing BHP, Westpac and Coles
• 2 ASX blue-chip shares offering big dividend yields
• The smart way to make a $25,000 passive income from ASX shares

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 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.

ASX small-cap stock Biome Australia Ltd (ASX: BIO) has drawn attention from analysts at Bell Potter after a big announcement. 

The company develops and commercialises clinically backed innovative live biotherapeutics (probiotics), marketing 18 products under the ‘Activated Probiotics’ brand.

Activated Probiotics is a range of live biotherapeutic products aimed to help prevent and support the management of various health concerns. 

Yesterday, the company announced the launch of its first human clinical trial. 

What is the trial?

The company is embarking on its first human clinical trial for its proprietary probiotic strain, Lactobacillus plantarum BMB18 (BMB18).

According to Biome Australia, the human clinical trial will investigate the efficacy of BMB18 in patients experiencing digestive symptoms (e.g. bloating, discomfort) and/or occasional sleep or mood disturbances, and examine its impact on digestive function, mood, sleep and quality of life.

According to the company, the strain demonstrated an ability to effectively modulate immune responses and inflammation. It also can reduce oxidative stress, and maintain intestinal barrier integrity. 

The trial follows positive outcomes with in vitro studies conducted by a BIO research partner, where the strain was shown to effectively modulate immune responses and inflammation, reduce oxidative stress, and maintain intestinal barrier integrity. 

The trial is expected to commence in February 2026, lasting 12 months, with the trial conducted by La Trobe University. 

Speaking on the trial, Biome Managing Director and Founder Blair Norfolk said:

The registration of our first human clinical trial on L.P. BMB18 represents years of dedicated research and development work by the Biome team. The strong positive outcomes from our in vitro studies provided the foundation for this next critical phase of clinical validation.

Why is this significant for Biome?

Following the announcement, Bell Potter released a new report on the ASX small-cap stock. 

It said Biome Australia is aiming to further differentiate itself in the gut health market through product innovation across its existing products and enabling new product launches.

According to the report, by owning its own strain, this ASX small-cap can enhance product yield and as strains form a substantial part of a products formulation, lower its costs of goods sold, thereby improving its gross margins. 

This drives improvement in BIO’s intrinsic value and qualitative elements. 

Bell Potter said this also provides future licensing opportunities to other operators.

Significant upside 

In yesterday’s report, Bell Potter maintained its buy recommendation on this ASX small-cap stock. 

It also maintained its price target of $1.00. 

From yesterday’s closing price of $0.395, this indicates an upside of more than 150%. 

BIO’s operating leverage is starting to come through, and we would expect to see EBITDA improve further through FY26. Building its own IP should enhance gross margins over time. Maintaining quality in its growth performance should eventually see BIO recognised by the market resulting in a re-rate.

The post The ASX small-cap stock that could double in value in 2026 appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that can generate more cash than your savings account
• Why Flight Centre shares could return 22% in just one year
• Want to know how much CBA is expected to grow profit in FY26?
• What can investors expect from Treasury Wines’ update tomorrow?
• Is Medibank stock a buy for its 5.5% dividend yield?

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.

The Lynas Rare Earths Ltd (ASX: LYC) share price has seen massive volatility over the last year. In the past 12 months, it’s up by almost 90%, as the chart below shows. That compares to a rise of less than 5% for the S&P/ASX 200 Index (ASX: XJO).

But the chart also shows that it has fallen 40% from that peak in mid-October.

After such a significant change in the Lynas share price, it’s definitely worthwhile asking whether it’s a beaten-up opportunity or if it’s overvalued at this level.

Let’s take a look at what experts from UBS are expecting from Lynas.

Buy rating on Lynas shares

The rare earth miner has been in the spotlight this year as China and the US tussle over access to rare earths, which are key materials for devices and other advanced technology.

The fact that Lynas is a producer of rare earths makes it a strategic player in the global economy.

UBS has a buy rating on Lynas shares. The broker says that it’s positive on Lynas based on both its position in the country and the broader value chain. The broker is positive on the business because UBS believes the business has strong IP and an economic moat when it comes to heavy rare earth separation, as well as supply scarcity within the global heavy rare earth sector.

The broker also notes that Lynas’ workforce is skilled and has a low level of turnover, with more than 70% employees having been at the Lynas LAMP facility in Malaysia for at least ten years. UBS suggests this is an understated advantage in a particularly complex field.

UBS also noted that the rare earth miner has reinvested back into Malaysia, which is an advantage considering the “delicate geopolitical backdrop”. The broker suggests the efforts to expand its heavy refining facility over the next couple of years will help earnings in the longer-term.

However, recent power disruptions at the Kalgoorlie facility has impacted production, with a loss of around 1 month in the second quarter of FY26.

UBS noted:

…inherent challenges faced by the grid (single transmission line, aging infrastructure, tough inland conditions) have impacted the entire region and in particular LYC where even a relatively small outage can have outsized impacts and has compelled LYC to look for other off-grid options even while it is still working with the government and electricity supplier Western Power in improving current availability.  

…From a broader market perspective, we remain alert to the still tenuous macro relationship between China and the USA, with recent U.S. policy expert feedback informing us that the move to decouple rare earths (and magnet) supply chains remains a priority despite the one-year hold on China rare earths controls.

Price target and earnings estimate

UBS forecasts that Lynas could deliver net profit of $288 million in FY26, $528 million in FY27 and $1.05 billion in FY28.

With that exciting forecast of earnings growth in the years ahead, the broker has a price target of $17.70 on the Lynas share price, suggesting it could rise by close to 40% over the next year.

The post Lynas shares: After a year of outperformance, is it still a buy? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Westgold unveils spin-out of non-core Reedy and Comet gold assets
• IperionX secures US Navy deal with Carver Pump order
• Neuren Pharmaceuticals wins DAYBUE STIX FDA approval
• Fortescue to acquire Alta Copper: What it means for investors

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 recommended Lynas Rare Earths Ltd. 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.

Harvey Norman Holdings (ASX: HVN) had a blistering run in 2025, with its share price zooming more than 50 per cent higher to $7.06 at the time of writing.  

Harvey Norman shares smashed expectations and delivered results that even surprised the most sceptical investor.

To put it in context, the S&P/ASX 200 Index (ASX: XJO) only gained 4% in value in the past 12 months.

What’s behind this dusty old Aussie retail heavyweight doing a sprint, and can it keep it up in 2026?

Stability through property

Harvey Norman is a multi-sided retailer that relies on three pillars: Australian franchise operations, 120 overseas stores, and a retail property portfolio comprising over 100 retail complexes.

The ASX retailer sets itself apart from the competition with its $4.4 billion property portfolio. This adds value but also provides the company and its shareholders with stability.

Harvey Norman’s results in 2025 have genuinely impressed. In August, the company reported a substantial increase in net income and earnings per share compared to the previous year, highlighting improved performance and stronger shareholder returns. The results exceeded analysts’ expectations.

More recently, aggregated sales in early FY26 are running hot, with figures showing around 9 per cent growth year-on-year. That’s not bad in a retail environment where consumers can be fickle.

Share buybacks and capital discipline

Harvey Norman hasn’t just sat back and watched its stock rally. The company actively puts its money where its mouth is. It extended a massive on-market share buyback program, aiming to repurchase up to 10% of its shares.

That’s the kind of move that gets investors going. Reducing float can help support the share price while signalling management’s confidence that Harvey Norman shares are undervalued or poised for more growth.

What next for Harvey Norman shares?

No retail stock is bulletproof, and Harvey Norman will face headwinds if consumer sentiment cools.

However, with solid sales momentum, shareholder-friendly capital moves, and ongoing supportive analyst views, the ingredients are on the table for Harvey Norman shares to keep climbing into 2026.

Analysts are positive on the outlook for the retailer. It looks like even after this year’s share price rally, any stock purchased right now can still benefit from a profit. 

TradingView data shows that most analysts recommend a hold or (strong) buy. Some expect the ASX 200 stock to climb as high as $8.40, which implies a 19% upside at the time of writing.

However, the average share price target for the next 12 months is $7.51. That still suggests a possible gain of almost 6.6%.   

Bell Potter believes Harvey Norman shares are undervalued based on its positive growth-outlook. It currently has a buy rating and $8.30 price target on its shares.

The post What could keep Harvey Norman shares climbing in 2026? appeared first on The Motley Fool Australia.

More reading

• What a rising Aussie dollar means for your ASX shares
• Want passive income? These ASX dividend stocks could help
• 5 things to watch on the ASX 200 on Monday
• Bell Potter names the best ASX retail stocks to buy
• Up 50% in 2025, should you buy Harvey Norman shares before Christmas?

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.