They’re two of Australia’s big 4 major banks and they’ve both enjoyed periods of great growth over the past 12 months. But when it comes to Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corporation (ASX: WBC) and their shares, one is expected to outpace the other over the next 12 months.

Are CBA shares a buy for 2026?

CBA shares are trading in the green on Wednesday afternoon. At the time of writing, the shares are 0.21% higher for the day at $152.56 a piece. But over the past month, the shares have tumbled 13.09%, dragging the price 3.31% lower than this time last year.

The share price crash in early-November followed the banking giant’s quarterly update. The bank reported a 1% increase in its quarterly cash net profit after tax and a strong CET1 ratio of 11.8%, above regulatory requirements. But the results disappointed investors and raised concerns about the bank’s premium share price valuation. Investors started hitting the sell button in panic in what I think signalled the beginning of the bank’s share price correction.

Analysts also seem to think the share price still looks expensive at current levels, with many expecting the stock’s value to shrink further in 2026. 

This month, Medallion Financial Group’s Stuart Bromley confirmed his sell recommendation on Australia’s biggest bank (courtesy of The Bull). He said that while CBA remains a solid business, the share price is too high. He pointed out that the bank is trading on a price-earnings (P/E) ratio of about 25 times and a modest dividend yield of about 3.15%. This means its valuation sits well above global peers.

Many other analysts seem to hold a similar view on the shares. Data shows that out of 15 analysts, 10 have a strong sell rating on CBA shares and another 3 have a sell rating. Some expect the bank’s share price to drop as low as $96.07, which implies a huge potential downside of 37% over the next 12 months.

Are Westpac shares a buy for 2026?

Westpac shares are also trading in the green at the time of writing, up 0.42% for the day at $37.28 each. Over the past month, Westpac shares have dropped 6.4%, but they’re still 10.89% higher over the year.

Like CBA shares, Westpac stock also tumbled after the bank released an unexciting  FY25 result in early November, however, the drop wasn’t anywhere near as dramatic. The bank’s  net profit after tax dropped 1% over the year. And after excluding notable items, net profit reduced by 2% year over year. But the bank hiked its full-year dividend to $1.53 per share, representing an increase of 2 cents per share.

I’m not sure now is the best time to buy Westpac shares, but I think 2026 will be a flat year for the banking giant, rather than a year marked by a significant share price drop. 

Analysts are also unsure about the stock. Out of 16 analysts, data shows 7 have a hold rating on Westpac shares. Another 4 have a sell rating and 5 have a strong sell rating. The average target price of $33.34 implies a potential 10.5% downside over the next 12 months. The lowest target price of $23.03, implies a potential downside of 38.2% at the time of writing. 

It’s not exactly positive news but when compared to CBA’s outlook, Westpac’s share price projection into 2026 is a little less… pessimistic.

The post Westpac versus CBA shares: Which bank is a better buy for 2026? appeared first on The Motley Fool Australia.

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• 5 most-traded Australian shares last week
• ANZ shares are lagging the other big banks: Here’s why
• Are CBA shares a good buy amid rising interest rates?
• Why does the CBA share price keep falling? – Expert

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are on the lookout for ASX stocks to buy, then read on.

That’s because analysts at Morgans have just upgraded these names to buy ratings with big return potential. Here’s why it is bullish on them:

Minerals 260 Ltd (ASX: MI6)

This gold developer’s shares could be in the buy zone according to Morgans following the release of the highly anticipated mineral resources estimate (MRE) update for its Bullabulling Gold Project.

The broker believes the MRE positions Bullabulling to become a ~200,000 ounces per annum operation over ~15 years.

In response, the broker has upgraded Minerals 260’s shares to a buy rating with a vastly improved price target of $1.10. This implies potential upside of 180% from current levels.

Commenting on the gold explorer, Morgans said:

MI6 has released the highly anticipated MRE update for its flagship Bullabulling Gold Project. Bullabulling now hosts 130Mt at 1.0g/t Au for 4.5Moz, a material beat on our prior upside case of 3.5Moz. Importantly, a high degree of the resource (3Moz or 67%) remains in the ‘indicated’ category and underpins our updated forecasts and future pre-feasibility studies (PFS) – due mid CY26.

Given the updated scale, we now see clear line-of-sight to a ~200kozpa operation over ~15 years (previously 160–170kozpa), which we model via a staged mill expansion from 5Mtpa to 7Mtpa. Bullabulling now positions MI6 as the largest single-asset, undeveloped gold resource in Australia outside the established producer cohort, and we view it as a must-own stock. We upgrade our rating to BUY (from SPECULATIVE BUY) and increase our price target to A$1.10ps (previously A$0.55ps).

NextDC Ltd (ASX: NXT)

Another ASX stock that Morgans has become bullish on is data centre operator NextDC.

In response to new contract wins and recent share price weakness, the broker has upgraded the company’s shares to a buy rating with a $19.00 price target. This suggests that upside of more than 40% is possible from current levels. It said:

NXT has announced that following recent customer contract wins, presumably including a large single customer contract win across multiple locations, its contracted utilisation has increased by 71MW to 316MW as at 1 December 2025. Further contract wins were, and remain in, our forecasts so this mostly underpins our expectations.

However, we upgrade our capex assumptions and lift our FY27/28 EBITDA forecasts by 5%. Our target price remains $19 per share. The share price has declined ~19% in the last three months and given a ~40% differential between the current share price and our $19 target price we upgrade our recommendation to BUY from ACCUMULATE.

The post Morgans just upgraded these ASX stocks to buy ratings (with huge upside!) appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Nextdc. 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.

Investors buying the Vanguard Australian Shares High Yield ETF (ASX: VHY) probably do so with the expectation of fat, and franked, dividends.

After all, it’s all in the name of this exchange-traded fund (ETF). Like most ASX ETFs, VHY holds an underlying portfolio of ASX shares. In this case, those shares number about 75, and are selected based on their past dividend performance, as well as their perceived ability to sustain those shareholder payments.

Some of this ASX ETF’s current top holdings include Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS).

With most blue-chip ASX dividend shares offering yields of between 3% and 5% today, you would expect this ETF to offer something similar.

But what might surprise investors is that VHY units are today trading on a trailing dividend yield of almost 9%.

Want proof? Well, VHY has paid out four dividend distributions over 2025, as is its norm. Those dividends, paid out in January, April, July, and October of this year, were worth $1.04, $2.43, $2, and $1.10 per unit, respectively.

Plugging that annual total of $6.57 per unit into the current VHY unit price of $77.24 (at the time of writing), we get a trailing yield of 8.97%.

That’s more than double what most blue-chip ASX 200 stocks currently have on the table.

So does this make VHY a screaming buy for dividends today?

Well, before investors rush off to buy this ASX ETF for that high income potential, let’s discuss a major caveat.

Is the VHY ETF a buy for that 9% dividend yield?

There are two ways an ETF can pay dividend distributions to its investors. The first is by passing through the dividend income it receives from its underlying portfolio. That has almost certainly funded part of VHY’s monstrous 2025 payout. But given the yields available on most major blue-chip shares right now that we discussed above, it’s also almost certainly not the only source of this income.

The other way ETFs fund dividend distributions is by ‘rebalancing’ their portfolios and distributing any resulting profits. Like most ETFs, VHY’s underlying index has rules that it operates under. According to Vanguard, these include “restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company”.

Adhering to these rules has likely resulted in the outsized dividends investors have enjoyed over 2025. Whilst this has been wonderful for existing investors, it also indicates that this is a one-off bonanza for 2025, not an indication of an ongoing trend.

We can see evidence of this in VHY’s past paouts. Although 2025 resulted in investors bagging $6.57 per unit in dividend distributions, 2024 saw investors receive a total of $3.98 in dividend distributions per share. In 2023, the total was just $3.43.

Instead of that 8.97% yield, those payouts would result in yields of 5.43% and 4.68% at today’s pricing. Those are clearly still hefty yields, but nothing close to 9%. That once again reiterates that 2025’s dividend distributions look like a lucky windfall more than anything else.

So yes, the near-9% yield on the Vanguard Australian Shares High Yield ETF is accurate. But it certainly doesn’t indicate that investors will actually get 9% on their money if they buy units today.

The post Does the Vanguard High Yield ETF (VHY) really have a 9% dividend yield right now? 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 positions in and has recommended Telstra Group. 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.

A new month is here and what better time to make some new additions to an investment portfolio.

But which ASX shares should you buy?

To narrow things down, let’s see how Morgans rates the three popular shares named below. Here’s what the broker is saying:

Collins Foods Ltd (ASX: CKF)

Morgans was pleased with this quick service restaurant operator’s performance during the first half.

It notes that its profits were a strong beat thanks to strong execution and a lower-than-expected depreciation charge and tax rate.

In response to its results, the broker has retained its accumulate rating with an improved price target of $12.40. It said:

CKF’s 1H26 NPAT was 12% higher than forecast and 30% up yoy. The strong headline beat was partly a function of solid operational execution and a return to positive LFL sales growth, but was significantly boosted by a lower-than-expected depreciation charge and tax rate. EBITDA was up 11% and 1% higher than forecast.

The value proposition inherent in the KFC brand has allowed it to outperform peers in a competitive and challenging QSR market in Australia and continental Europe. 1H26 margins improved, although we anticipate some downward pressure in Australia in the second half as commodity price inflation resumes. CKF upgraded its full year guidance. We have increased our NPAT estimates by 3% in each of the next three forecast years and our target price rises by 1% to $12.40.

Imdex Ltd (ASX: IMD)

This mining technology company has caught the eye of Morgans after announcing a couple of acquisitions.

And while it notes that these acquisitions may lead to earnings per share downgrades, the broker urges investors to not focus on this and instead to focus on the strength of the base business.

As a result, it has reaffirmed its accumulate rating with a $3.70 price target. It said:

The acquisition of two predominantly sensors businesses, in our view, is preferred against acquiring purely software businesses. IMD has paid a full price for ALT and MSI (~15x CY24 EBITDA), though with 55-60% exposed to mining exploration, both should be seeing substantial growth. Perhaps more importantly, IMD has now cleansed P&L costs below EBITDA which will likely trigger EPS downgrades. However, this disregards the strength of the base business, for which volumes have sequentially improved through 2Q, notwithstanding usual seasonal softness.

We cut our EPS forecasts by 5% in FY26 as we incorporate ALT and MSI and higher D&A, interest and tax. We also fully consolidate Datarock and Krux. In FY27 and FY28, cuts to our forecasts are marginal (1-2%) as we increase our revenue growth assumption in FY27 from +7% to +10%. Target price to $3.70 (from $3.80). Accumulate

Treasury Wine Estates Ltd (ASX: TWE)

This wine giant released an update this week which revealed that it was impairing the goodwill of its US assets.

While it was disappointed by this, it wasn’t overly surprised. In light of this, it has retained its hold rating and $6.10 price target and eagerly awaits a trading update later this month. It said:

TWE has announced that it expects to recognise a non-cash impairment of at least all the goodwill of its US based assets (A$697.4m). While this is disappointing, it isn’t a complete surprise given the company has new CEO and the US market remains challenging, in fact, category trends have deteriorated further. A further update on trading will be provided in mid-December.

We suspect that trading has been weaker than expected and wouldn’t be surprised if consensus is too high. The 1H26 result will be particularly weak. We have made large revisions to our forecasts and stress that earnings uncertainty remains high. Consequently, we maintain a HOLD rating.

The post Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares appeared first on The Motley Fool Australia.

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• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today
• Why Catapult, Collins Foods, Guzman Y Gomez, and Pantoro shares are falling today

Motley Fool contributor James Mickleboro has positions in Collins Foods and Treasury Wine Estates. 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 Imdex and Treasury Wine Estates. The Motley Fool Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When a takeover bid collapses, investors usually see it as bad news. But in the case of AUB Group Ltd (ASX: AUB) and its failed takeover by private equity suitors, it may actually be good news of sorts.

Macquarie’s latest research suggests that it might finally be back to business for the insurance broker network.

A few days ago, AUB confirmed that EQT and CVC had terminated discussions regarding a potential takeover. The suitors decided not to proceed with a binding proposal to buy the company for $45 per share.

For shareholders who were eyeing that $45 payout, it’s a hard one to take because AUB Group shares are currently trading at $31.40 per share.

The analysts at Macquarie, however, certainly seem to see an opportunity here.

Back to business

In a research note released immediately following the news, Macquarie maintained an outperform rating on AUB Group, assigning a 12-month price target of $37.40 to the shares.

Macquarie’s message is simple: it’s “back to business”.

Even without a takeover premium, Macquarie believes the fundamentals of AUB are rock solid. They note that AUB is executing well across multiple earnings growth opportunities and the company has a history of delivering consistent organic growth, supplemented by smart acquisitions.

Why Macquarie is bullish

There are three main reasons Macquarie thinks the stock is a buy at today’s prices:

1. The Valuation Gap: AUB is currently trading at a forward price-to-earnings (P/E) ratio of roughly 15.6x. That is significantly cheaper than its historical average of 18.3x and cheaper than its recent average of 19.6x. In short, the stock looks like a bargain compared to its own history.
2. Broking Strength: Despite fears that insurance premium rates might soften, AUB continues to grow. In the Australian broking segment, average income per client actually increased by 8.4% recently. They are squeezing more value out of existing relationships.
3. The International Opportunity: The Tysers (International) business is the sleeping giant here. Current EBIT margins are around 25%, but AUB is targeting 32% over the medium term. If they hit that target, it implies significant earnings upside that Macquarie feels isn’t fully baked into the current share price.

Risks

There are still risks, however, to investing in AUB Group, and Macquarie points out that poor M&A execution remains a key risk. When growth relies partly on buying other companies, you have to buy the right ones at the right price and integrate them well into your business. Additionally, if the premium rate cycle turns faster than expected, it could put pressure on earnings.

Foolish bottom line

The AUB Group takeover deal is dead, but the business is very much alive. With a price target of $37.40, offering a potential upside of approximately 19% from the current price, Macquarie suggests that AUB Group represents a good investment opportunity for patient investors.

The post Does Macquarie rate AUB Group shares a buy after the deal fell through? appeared first on The Motley Fool Australia.

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• This insurance company is a compelling buy, despite a takeover falling through, analysts say
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• AUB Group holds its AGM

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

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

Breville Group Ltd (ASX: BRG)

According to a note out of Macquarie, its analysts have retained their outperform rating and $39.20 price target on this appliance manufacturer’s shares. The broker highlights that the Macquarie Kitchen Benchmark and De’Longhi Revenue Index have delivered strong growth so far in the third quarter. And given how Breville has outperformed the benchmark by 11% per annum between 2018 and 2024, it believes this supports it forecast for 10%+ per annum revenue growth between FY 2025 and FY 2028. This is expected to be underpinned by its coffee segment, new market development, and its investment in new product development. The Breville share price is trading at $29.43 on Wednesday afternoon.

Collins Foods Ltd (ASX: CKF)

A note out of Citi reveals that its analysts have retained their buy rating on this KFC restaurant operator’s shares with a trimmed price target of $12.85. This follows the release of a half year result which came in ahead of expectations. In addition, Citi highlights that management has upgraded its profit guidance for the full year. It is now expecting profit growth of mid-to-high teens from low-to-mid teens previously. And while its sales growth rate is a touch behind expectations, the broker has only reduced its estimates by a touch. The Collins Foods share price is fetching $10.74 at the time of writing.

NextDC Ltd (ASX: NXT)

Analysts at Morgans have upgraded this data centre operator’s shares to a buy rating with a $19.00 price target. According to the note, the broker was pleased to see NextDC report new contract wins, which it believes includes a large single customer contract win across multiple locations. This has lifted its contracted utilisation by 71MW to 316MW, which is supportive of Morgans growth forecasts. In light of this and significant share price weakness over the past three months, the broker sees significant upside potential for investors between now and this time next year. The NextDC share price is trading at $13.55 on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Morgans just upgraded these ASX stocks to buy ratings (with huge upside!)
• Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares
• Why Block, Collins Foods, Perseus Mining, and Robex Resources shares are falling today
• Macquarie tips 28% upside for Breville shares
• ASX retail shares: 2 to buy and 1 to sell amid rising inflation

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Collins Foods and Nextdc. 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 Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.