Big returns could be on the cards for buyers of PEXA Group Ltd (ASX: PXA) shares.

That’s the view of analysts at Macquarie Group Ltd (ASX: MQG), which are feeling positive about this ASX tech stock.

What is the broker saying?

Macquarie has been looking at recent housing market data that could impact this property settlements technology company.

It highlights that settlement activity has been growing at a solid rate in recent months, albeit with NSW volumes softening in November. The broker said:

NSW settlement activity was up +4.4% on pcp in Nov-25, a deterioration vs Oct-25 (+17.6%) and Sep-25 (+12.9%), while QLD activity in Oct-25 (latest available) was up +8.2% on pcp ahead of Sep-25 (+3.8%). By applying 75/25% weighting to NSW and QLD data (reflecting the number of dwellings in NSW/VIC vs QLD), total estimated national activity was up +15.5% in Oct-25, the strongest month of activity in 18 months. Our weighted average index is >95% correlated with PXA reported market volumes and is tracking at +7.1% YTD26 vs MRE +2.8% in 1H26E.

Transfer activity (on a weighted avg basis) was up +16.6% in Oct-25, the strongest month since Jul-24 (+19.4%). Refinancing activity remains robust at +15.1% in Oct-25, albeit weaker than the prior month at +24.9% and the last 6 months at +21.6%.

Big potential returns

In light of the above, Macquarie remains positive on this ASX tech stock and believes it is positioned to achieve its earnings estimates in FY 2026.

According to the note, the broker is forecasting revenue of $426.1 million and an adjusted net profit of $13.8 million in FY 2026, and then an increase to $470.8 million and $25.4 million, respectively, in FY 2027.

As a result, Macquarie has reaffirmed its outperform rating and $19.10 price target on Pexa’s shares.

Based on its current share price of $14.31, this implies potential upside of almost 35% for investors over the next 12 months.

Commenting on its outperform recommendation, the broker said:

Reiterate Outperform. Formal commitment from additional Tier-1 lenders is likely to incentivise the other four Tier-1 lenders to onboard with PXA quickly, driving rapid market share gains.

Valuation: Our TP of $19.10 remains unchanged and is based on the blended average of DCF, PE Relative and SOTP valuations. Catalysts: Tier-1 lender commitments, Digital strategic review, NatWest onboarding 2H26, IPART pricing review 2H26.

The post Macquarie tips almost 35% upside for Pexa shares appeared first on The Motley Fool Australia.

More reading

• Brokers rate these 3 top ASX shares as buys in November
• Macquarie says this ‘key pick’ in the real estate sector can deliver strong double-digit gains
• Here’s what REA Group and PEXA’s Q1 results say about the state of the property market
• Here are the top 10 ASX 200 shares today
• Why Macquarie expects Pexa shares to surge 29%

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

ASX gold stock African Gold Limited (ASX: A1G) is on fire today.

African Gold shares closed yesterday trading for 31.5 cents. In late morning trade on Tuesday, shares are changing hands for 52 cents apiece, up 65.1%.

For some context, the All Ordinaries Index (ASX: XAO) is up 0.1% at this same time.

Today’s outperformance is par for the course for African Gold shares, which are now up a blistering 940% since this time last year.

And investors who bought the ASX gold stock in June 2024, when it was trading for a mere 2 cents per share, will now be sitting on 10-bagger plus gains of 2,525%.

Yep, that’s no typo.

Atop the soaring gold price (at US$4,225 per ounce, the yellow metal is up 60% in 12 months), here’s what’s grabbing ASX investor interest today.

ASX gold stock rips higher on takeover news

The African Gold share price is rocketing after the company announced it has entered into a binding scheme implementation deed with Canadian-based gold miner, Montage Gold Corp (TSE: MAU).

Under the agreement, Montage will acquire 100% of the shares in the ASX gold stock that it does not already hold. In exchange, African Gold shareholders will receive 0.0628 new Montage shares for every African Gold share held on the record date of the share scheme.

The scheme has an implied value of approximately 50 cents per African Gold share. With shares having risen to 52 cents apiece today, investors may be thinking that an even sweeter deal could be on the horizon.

Montage is currently the largest shareholder of the ASX gold stock, holding 17.3% of all shares.

African Gold’s independent directors unanimously support the scheme and recommend that African Gold shareholders and African Gold option holders vote in favour.

Under the deal, African Gold option holders will receive 0.0628 Montage options for every African Gold option they hold.

What is management saying?

Commenting on the takeover bid for the ASX gold stock, African Gold CEO Adam Oehlman said: “This transaction represents a compelling outcome for African Gold shareholders at this stage of the company’s evolution.”

Oehlman continued:

It validates the scale, quality and strategic positioning of the Didievi Gold Project and provides our shareholders with continued exposure to the upside through ownership in a larger, well-capitalised Côte d’Ivoire-focused gold company.

The board believes this proposed combination delivers scale, balance sheet strength and development expertise that materially de-risks Didievi and enhances its path toward production.

Montage CEO Martino De Ciccio added:

This significantly accretive transaction builds on the momentum generated thus far to advance our strategy of creating a premier African gold producer and delivering value for both Montage and African Gold stakeholders.

The post Guess which 10-bagger ASX gold stock is surging 65% today on takeover news appeared first on The Motley Fool Australia.

More reading

• Own IAG shares? Here are the dividend dates for 2026
• Macquarie tips almost 35% upside for Pexa shares
• This gold developer’s shares are hitting record highs, up 300% for the year. Find out why
• What are the 5 top artificial intelligence (AI) stocks to buy right now?
• Are CBA shares a good buy amid rising interest rates?

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 gold project developer Minerals 260 Ltd (ASX: MI6) hit a record high on Tuesday after the company shed new light on the size of its Western Australian gold project this week.

The stock has more than quadrupled over the past year, hitting 43.5 cents in early trade on Tuesday, up from a 12-month low of just 10 cents, with the shares trading at low levels until about the start of September.

Project shaping up well

The company published an updated minerals resource for its BullaBulling gold project, 25km west of Koolgardie in WA, on Monday, with the amount of contained gold doubling to 4.5 million ounces.

The company said the mineral resource estimate of 4.5 million ounces was at a grade of 1 gram per tonne of ore, and had more than doubled from the previous estimate of 2.2 million ounces.

The company also said exploration drilling had confirmed extensions of the mineral resources at depth across four deposits, “supporting an increased depth of about 100m in some areas of the pit shell”.

The mineral resource was calculated using a gold price of $4500 per ounce of gold and a cut-off grade of 0.4 grams per tonne.

The company said it would continue drilling at the project “to target mineralisation at depth and along strike with a further mineral resource estimate planned in calendar year 2026”.

More growth targeted

Minerals 260 Managing Director Luke McFadyen said the upgrade was pleasing.

This is an exceptional outcome for the company and our shareholders, just seven months after acquiring BullaBulling. When we acquired the asset, we believed there was a significant opportunity to grow the mineral resource estimate through an aggressive drilling campaign and improving the understanding of the geology. By doing this we have been able to add 2.2 million ounces and validate the previous mineral resource estimate, doubling the mineral resource estimate to 4.5 million ounces and establishing Bullabulling as one of the leading gold projects in Australia.

Mr McFadyen said the company had a pre-feasibility study underway, which was on track for completion next year.

The company had also recently employed new Chief Operating and Development Officers, and the engagement of an engineering contractor was “imminent”, he said.

Mr McFayden added:

Minerals 260 is building significant momentum towards its goal of becoming a major gold producer, targeting first production in late-2028.

In more positive news for the company, Bell Potter recently issued a research note putting a speculative target price of 57 cents on the shares.

Minerals 260 was valued at $892.5 million at the close of trade on Monday.

The post This gold developer’s shares are hitting record highs, up 300% for the year. Find out why appeared first on The Motley Fool Australia.

More reading

• This speculative ASX gold stock could rise 65%+

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.

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

It seems the artificial intelligence (AI) race has escalated once again following President Donald Trump’s announcement that he has issued an executive order to launch Project Genesis. The administration compared its significance to the famous Manhattan Project, the World War 2 initiative to develop the atomic bomb. 

Project Genesis aims to develop an artificial intelligence platform utilizing supercomputers and data from various government agencies to accelerate America’s efforts in advanced manufacturing, national security, and other key areas. While it’s still early and the executive order didn’t detail any specific funding, a federal AI initiative makes it all the more likely that the leading technology companies will continue to benefit from strong AI tailwinds that have made them such lucrative investments over the past few years.

Here are the top AI stocks to buy right now. 

1. Alphabet

Google’s parent company Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) surged recently following the release of its well-received AI model, Gemini 3. Notably, Alphabet trained Gemini 3 on its own Tensor Processing Unit (TPU) chips, which are purpose-built for its machine-learning workloads. Alphabet’s TPUs have gained enough attention that Meta Platforms is reportedly considering implementing them in its data centers.

Alphabet’s stock has soared over the past few weeks as the market recognized that it owns all the components of an AI ecosystem, including data centers, AI models, a cloud platform, and vast amounts of user data to train its models. Despite the stock’s hot momentum, it’s still trading at a reasonable price/earnings-to-growth ratio (PEG) of 1.8, a solid buying point for long-term investors today.

2. Nvidia

As the current leader in AI chip technology, Nvidia (NASDAQ: NVDA) has enjoyed a significant market share in the data center chip market, estimated to be as high as 92%. The company probably doesn’t like seeing reports that its customers (Meta Platforms) are looking at other chips. However, Project Genesis is the latest signal that the AI market will ultimately be massive, perhaps too large for any single company to supply all the chips.

Nvidia’s cutting-edge graphics processing units (GPUs) and CUDA programming arguably make it the fundamental AI company, as virtually every AI hyperscaler is using its chips. Nvidia will also likely receive numerous opportunities as the government ramps up its AI plans.

Eventually, Nvidia could expand beyond data centers into other AI applications, such as robotics and autonomous driving. It already has its eyes on both industries.

3. Taiwan Semiconductor

Which company is fabricating all of these AI chips? It’s probably Taiwan Semiconductor (NYSE: TSM), the world’s leading foundry (a company that manufactures chips). Taiwan Semiconductor’s advanced manufacturing technology and capacity to produce mass quantities of high-end chips have enabled it to increase its market share in the AI era.

Today, Taiwan Semiconductor accounts for approximately 71% of the global foundry services market, measured as revenue share. Considering AI’s thirst for computing power and the fact that all chip roads essentially lead to Taiwan Semiconductor, it’s basically the ultimate pick-and-shovel AI play. The stock’s PEG ratio of 1 is enticing for buyers.

4. Amazon

E-commerce giant Amazon (NASDAQ: AMZN) is a sneaky AI stock because it also operates the world’s largest cloud computing platform in Amazon Web Services (AWS). AI, like most software today, runs in the cloud, giving Amazon a front-row seat to the AI growth opportunity. It has also developed a close partnership with Anthropic, one of the leading AI developers and a potential benefactor of Project Genesis.

Amazon and Anthropic just launched one of the world’s largest AI chip clusters, which will have nearly 1 million of Amazon’s custom AI chips by the end of this year. It could be a preview of what’s to come as the government invests in AI infrastructure.

Much of this AI demand could flow to AWS, producing a windfall for Amazon. The stock is attractively priced now, with a PEG ratio below 1.6.

5. Microsoft

Diversified tech-giant Microsoft (NASDAQ: MSFT) operates Azure, the world’s second-leading cloud computing platform. However, investors may want to own Microsoft for its close ties with OpenAI, the leading AI developer behind ChatGPT. Many view OpenAI as an AI pioneer, so it’s hard to see Project Genesis not producing opportunities for OpenAI along the way.

Microsoft is tied to OpenAI through 2032 via a newly announced agreement, and the two companies are pooling their knowledge and resources to develop custom AI chips. Microsoft’s large size and diverse businesses probably make it the slow-and-steady name on this list.

That may not be a bad thing, considering how unpredictable the AI boom has already proven to be. The company’s PEG ratio of 1.8 is a reasonable valuation to pay for the stock.

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

The post What are the 5 top artificial intelligence (AI) stocks to buy right now? 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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Justin Pope has positions in Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. 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, Amazon, Meta Platforms, Microsoft, and Nvidia. 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) shares are pushing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank stock closed yesterday trading for $151.64. In morning trade on Tuesday, shares are swapping hands for $152.26 apiece, up 0.4%.

For some context, the ASX 200 is up 0.4% at this same time.

After a stellar 20-month run, which saw CBA shares gain 90% between October 2023 and June this year, the ASX 200 bank stock has come under selling pressure since notching its $191.40 a share record closing high on 25 June.

But with inflation in Australia on the rise again, economists are now increasingly expecting that rather than delivering two more cuts this cycle, the Reserve Bank of Australia may be forced to increase interest rates in 2026 from the current 3.60%.

That could benefit CommBank and its rivals by enabling them to improve their net interest margin (NIM). But, depending on the impact to households and businesses, it could also increase bad debts and see a reduction in borrowing.

So, what’s an investor to do?

CBA shares: Buy, hold or sell?

Despite the recent pull back in the share price, it’s still hard to find analysts that believe CBA shares present good value at their current levels.

Medallion Financial Group’s Stuart Bromley, for one, has a sell recommendation on Australia’s biggest bank (courtesy of The Bull).

“While the CBA remains a solid business over the long term, the share price looks expensive at current levels,” Bromley said.

“Recently trading on a price/earnings ratio of about 25 times and a modest dividend yield of about 3.15%, its valuation sits well above global peers,” he added.

And Bromley pointed to CBA’s poorly received first quarter (Q1 FY 2026) as reason for concern. He noted:

Also, the company recently suffered its worst sell-off in four years following the release of first quarter results in fiscal year 2026, which flagged higher operating costs, a weaker net interest margin (NIM) and a lower-than-expected common equity tier 1 capital ratio of 11.8%, which is still above the Australia Prudential Regulation Authority minimum of 10.25%.

But don’t sell your CBA shares just yet, counters Red Leaf Securities’ John Athanasiou (also in The Bull).

“CBA remains a high quality, profitable bank with strong capital ratios and a solid dividend, providing stability in a competitive sector,” said Athanasiou, who has a hold recommendation on the ASX 200 bank stock.

As for the spectre of rising interest rates in Australia, he added:

Upside is limited by an expensive valuation, margin pressure and economic risks, including elevated household debt and potential loan defaults. Retail and lending growth may slow amid a cooling housing market and possible rising interest rates. Fundamentals are intact, but these headwinds suggest caution.

Athanasiou concluded, “Holding CBA provides exposure to reliable earnings and dividends. We suggest investors monitor credit conditions and market trends.”

As for that passive income, CBA shares delivered $4.85 in fully franked dividends over the past 12 months.

The post Are CBA shares a good buy amid rising interest rates? appeared first on The Motley Fool Australia.

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• Why these ASX 200 shares crashed 10%+ in November
• 5 ASX 200 large-cap shares re-rated by Morgans

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.

The share price of this ASX-listed stock has increased by 44% this year. That makes Orica Ltd (ASX: ORI) one of the top-performing shares on the S&P/ASX 200 Index (ASX: XJO) in 2025.

For some context, the ASX 200 is up 1.4% over the same period.

The rise of the shares in the mining and infrastructure solutions provider has been a consistent one. In the past six months, the ASX stock added 27% value to the share price, while in the past month, it has gained another 7.2%.

Shares in the ASX 200 stock trade for $23.92 apiece at the time of writing.

Strategic chemicals acquisitions

All the signals seem to be on green for Orica. The $11 billion ASX stock is a global mining services company and operates in more than 100 countries. It specialises in the manufacture and supply of commercial explosives, (digital) blasting systems, mining chemicals, and mine optimisation technologies.

The Melbourne-based business has shifted from being a pure explosives supplier to a broader, more diversified provider. Strategic acquisitions in specialty chemicals businesses and the roll-out of digital blasting platforms are generating higher-margin, repeatable revenue rather than one-off explosives sales.

On 13 November, the mining services company reported its highest profit in 13 years, reporting EBIT of $992 million and strong growth across all segments. In FY 2026, the ASX stock expects further EBIT growth across the three divisions. The Orica board is focusing on margin, product mix, and commercial discipline in Blasting, while anticipating higher adoption and recurring revenue in Digital Solutions.

Record dividend payout

Another reason why this ASX stock has been popular this year is its improving dividend policy. Orica recently rewarded shareholders with a final dividend of 32 cents per share, taking the full-year payout to 57 cents. That’s up 21% from last year’s 47 cents. This total payout yields a dividend of 2.2% for the ASX stock.

That’s the highest annual dividend since 2012 and a sign that management is confident in the company’s cash generation and outlook. Management also increased the ongoing share buy-back program by $100 million, bringing the total value of the program to $500 million.

Broadly bullish

Analyst sentiment is broadly bullish on the ASX stock. According to aggregated estimates, the 12-month price target range spans roughly from $22.30 to $29.80.

Broker Ord Minnett recently upgraded its price target to $26 and raised EPS estimates. This updated price target indicates an upside of 9.1%. 

It has also maintained its buy recommendation. Ord Minnett notes: 

Post the result, we have raised our EPS estimates by 2.1%, 2.3% and 8.5% for FY26, FY27 and FY28, respectively, to incorporate higher earnings assumptions for the specialty chemicals and blasting solutions divisions, which leads us to raise our target price to $26.00 from $23.00.

The post How much higher can this explosive ASX stock go? appeared first on The Motley Fool Australia.

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• Ord Minnett just raised its price target on this soaring ASX 200 stock
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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 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.

Corporate Travel Management Ltd (ASX: CTD) shares have been out of action for some time now.

Unfortunately, it looks like they will remain suspended until at least the end of the year.

When they do return to action, should you be buying them? Let’s see what Macquarie Group Ltd (ASX: MQG) is saying about the corporate travel specialist.

What is the broker saying about Corporate Travel Management shares?

Macquarie notes that a forensic review of the company’s accounts is taking place. So far, it has found significant items that will need to be refunded to certain customers. As it is unknown just how much will need to be refunded, the broker points out that there are risks to consider. It said:

Refunds. CTD has begun reviewing impacted customers to determine refund amounts for Concluded Customer Contracts, with the process ongoing into 2026 and no amount specified yet.

Cash impact. The cash impact of refunds and prior year adjustments is still unquantified and remains a downside risk to future earnings and valuation. As of 31-Oct-25, CTD’s cash is >A$148.3m (including A$18.2m restricted), with no debt drawn.

There are also significant restatements that will be undertaken. It said:

Significant restatements are required to reverse up to £58.2m of previously recognised revenue for Concluded Customer Contracts in FY23-24, also resulting in financial liabilities for any customer refunds.

FY25 impact. FY25 revenue reversal adjustments of up to £19.4m are expected due to refunds and contractual uncertainty, with previous FY25 guidance from May-25 now withdrawn. CTD will also book additional provisions of A$13.9m in FY25 for expected credit losses on 2022-24 ANZ receivables (unrelated to European issues).

Should you invest?

In light of the above, the broker has downgraded Corporate Travel Management shares to an underperform rating with a heavily reduced price target of $11.50.

Based on its last traded price of $16.07, this implies potential downside of 28% for investors over the next 12 months.

Commenting on its downgrade, Macquarie said:

Today’s new details significantly increase uncertainty about the impact of accounting issues and customer overcharging on CTD’s operations, which we need to reflect in our val. and rec., hence we downgrade to Underperform (from Neutral).

Catalysts: Finalisation of review & accounts, reinstated to ASX, customer retention. Downside risks: potential ASX 200 removal, loss of existing customers & tenders, higher cash outflows, extra costs post review.

The post What does Macquarie think Corporate Travel Management shares are worth? 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 Corporate Travel Management and Macquarie Group. The Motley Fool Australia has positions in and has recommended Corporate Travel Management and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) shares are higher on Tuesday at 8,599.7 points, up 0.4%.

Over the year, ASX 200 consumer discretionary shares have underperformed the broader market.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has risen 3.68% versus 4.69% for the benchmark index.

Let’s take a look at the latest ratings and 12-month price targets on the three largest ASX 200 consumer discretionary stocks.

ASX 200 consumer discretionary shares: Buy, hold, or sell?

Here’s what the analysts at Morgans think of these sector leaders.

1. Wesfarmers Ltd (ASX: WES)

Wesfarmers is the largest ASX 200 consumer discretionary share with a market capitalisation of $93 billion.

The Wesfarmers share price is $81.51, down 0.6% on Tuesday and up 14% in the year to date.

In a recent trading update, Wesfarmers said consumers remained cautious amid higher prices and paused interest rate cuts.

The company noted good sales momentum for Bunnings, Kmart Group, and Officeworks but flagged that 1H FY26 earnings for Officeworks will be impacted by lower operating margins and restructuring costs.

Morgans said:

WES is also experiencing pressure across its divisions in relation to supply chain, labour, energy, and regulatory costs. On the back of the trading update, we decrease FY26-28F group EBIT by 1%, largely due to downgrades to Officeworks earnings forecasts.

While we continue to view WES as a core long-term portfolio holding with a diversified group of well-known retail and industrial brands, a healthy balance sheet, and an experienced leadership team with a strong track record of growth, trading on 35x FY26F PE we see the stock as overvalued in the short term.

The broker maintained a trim rating on Wesfarmers and cut its share price target from $83.20 to $79.30.

2. Aristocrat Leisure Ltd (ASX: ALL)

Aristocrat is the second-largest ASX 200 consumer discretionary share with a market cap of $36 billion.

The Aristocrat share price is $57.99, down 0.7% today and down 16% for 2025.

Aristocrat released its FY25 results last month. The company reported an 11% increase in revenue to $6,297 million.

Morgans commented:

Headline numbers were broadly in line with both our and market expectations, though a few soft spots emerged beneath the surface.

Interactive (online casino-style games) was weaker than expected and punished, given it’s a smaller, faster growing segment, core to longer-term growth plans. Gaming Operations in North America (NA) were also soft, with only 4.1k net adds and lower-than-expected fee-per-day metrics weighing on performance.

Encouragingly, management expects the business to return to its normalised growth range moving forward.

Morgans raised its rating on Aristocrat shares from accumulate to buy but reduced its 12-month price target from $77 to $73.

3. Light & Wonder Inc. CDI (ASX: LNW)

Light & Wonder is the third-largest ASX 200 consumer discretionary share with a market cap of $12 billion.

The Light & Wonder share price is $150.49, down 1.5% on Tuesday and up 8% in the year to date.

Morgans said Light & Wonder delivered a strong 3Q FY25 result that alleviated market concerns about FY25 guidance delivery.

The broker said:

LNW delivered record margin expansion across all three segments, with iGaming operating leverage the standout performer, while land-based margins surprised on favourable product mix as Grover scales and premium installed base momentum continues.

Morgans has a buy rating on Light & Wonder shares with a price target of $175.

The post Here’s how Morgans rates the 3 biggest ASX 200 consumer discretionary shares appeared first on The Motley Fool Australia.

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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 positions in and has recommended Light & Wonder Inc and Wesfarmers. The Motley Fool Australia has recommended Light & Wonder Inc and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.