Shares in Westgold Resources Ltd (ASX: WGX) are up more than 40% over a 12-month period, but according to the analysts at Macquarie, there’s further upside in the stock yet.

Organic growth locked in for the medium term

Westgold recently released its FY27 production guidance and an updated outlook for the next three years.

The company said in that release that it was fully funded to increase its gold production from 385,000 to 425,000 ounces in FY27 to 460,000 to 510,000 ounces in FY29.

The company added:

The plan is underpinned by increased Murchison ore availability, expansion of the Cue and Meekatharra processing hubs and investment in Westgold’s largest mines. This investment is expected to lift production, improve mill utilisation and reduce all-in sustaining costs to $2,640–$3,000/oz by FY29 on an FY27 real-cost basis.

Westgold said the outlook was a base case, with potential material upside from opportunities not factored in at this stage.

Foremost among these was the Fletcher Zone at the Beta Hunt mine, which the company said was the largest organic growth opportunity.

The company added:

Once developed, and supported by a larger Southern Goldfields processing hub, current internal conceptual studies indicate Fletcher could add approximately 140kozpa to Group production and position Westgold to deliver more than 600,000ozpa

Westgold said it would be investing $50 to $75 million into exploration and resource definition drilling in FY27, and more than $150 million over three years.

Westgold Managing Director Wayne Bramwell said:

Westgold’s updated 3YO is a high confidence, executable organic growth plan lifting Group production towards 500,000 oz in FY29. This plan is fully funded with Group All-In Sustaining costs forecast to fall as the benefits of higher-grade ore availability and expansion of key Murchison mines and processing capacity to >7Mtpa are realised, delivering enhanced Group cashflow. The capital program reflects a deliberate decision to prioritise Murchison investment and utilise Westgold’s strong balance sheet, improving reserve confidence and growing mining inventories to invest ahead of production.

Westgold Resources shares looking cheap

Macquarie said in a research note to clients that Westgold’s capital expenditure over the three-year outlook came in at 36% higher than consensus estimates.

They said on the positive side of the ledger, the growth plans were underpinned by solid ore reserves, “and WGX has the balance sheet to undertake the mine development and mill expansions”.

Macquarie has a price target of $7 on Westgold shares compared to the current share price of $5.50.

If achieved, this would constitute a return of 27.3%, not including dividends.

Westgold is valued at $5.83 billion.

The post How high could Westgold Resources shares go? 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 recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Electro Optic Systems Holdings Ltd (ASX: EOS) is one of the ASX defence stocks I think could surprise investors before the end of the year.

The shares are down 2.12% to $9.22 on Friday, leaving them around 27% below their August high of $12.58.

But I’m not too bothered by the recent weakness.

What interests me more is how quickly this stock can move when the company gives investors something new to get excited about.

At today’s price, EOS would need to gain around 41% to trade above $13.

Normally, that would sound ambitious over just a few months.

With EOS, I don’t think it is.

We’ve already seen how quickly EOS can move

Back in August last year, EOS announced its first export order for a 100kW high-energy laser weapon.

The roughly $125 million contract, was placed by a European NATO member state. EOS shares jumped more than 40% on the day.

That’s the type of move investors need to remember with this stock.

We saw something similar after last month’s half-year result. EOS shares jumped 23% on 25 August and traded as high as $11.98 just 2 days later.

EOS has also added some very large defence orders, including a US$124 million Slinger counter-drone contract announced in June.

If another big one drops before Christmas, I think the shares could move very quickly again and put $13 back in sight.

The business is starting to deliver

The big difference today is that EOS is no longer relying mainly on future potential.

First-half revenue surged 283% to $168.8 million, while underlying EBITDA swung from a $14.9 million loss a year earlier to a $21.6 million profit.

The order book also reached a record $846 million, which gives the company plenty of work already locked in.

Management has since lifted FY26 revenue guidance to between $360 million and $400 million.

Chief executive Andreas Schwer also said this week that he expects the order book to grow again before the end of the year.

If that happens, I think investors will have even more reason to get excited about where EOS shares could go next.

Could EOS shares reach $13?

I think they can.

TipRanks shows 3 current buy ratings, with an average price target of $13.40. Canaccord Genuity is the most bullish at $15, while Ord Minnett and Bell Potter have targets of $12.50 and $12.60, respectively.

That means the brokers are already looking at levels around where I think EOS shares could trade before Christmas.

With a record order book, and management expecting more orders before year-end, I think the setup looks very strong.

The post Could this ASX defence stock rocket back above $13 before Christmas? 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 positions in and has recommended Electro Optic Systems. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Mortgage holders and ASX share investors alike could be facing not one, but two more RBA interest rate hikes this calendar year.

That’s according to Citi analyst Faraz Syed, who believes that ongoing inflationary headwinds Down Under will force the central bank’s hand.

What’s been happening with interest rates?

When Australians kicked off the New Year, the official cash rate stood at 3.60%. A level many hoped would be the medium-term peak.

Those hopes were dashed, however, as inflation began to pick back up even before the onset of the Iran war. And with that conflict adding fuel to the inflationary fire, predominantly by sending global oil prices skyrocketing, the RBA has already increased interest rates three time in 2026 to the current 4.35% level.

While some ASX shares have outperformed in this environment, pressure is beginning to show across the wider market.

Down 1.1% today at 8,727 points, the S&P/ASX 200 Index (ASX: XJO) is trading right where it was on 2 January and down 0.9% over 12 months.

And ASX 200 tech stocks, which tend to be much more sensitive to interest rate moves, have fared far worse.

Indeed, the S&P/ASX 200 Information Technology Index (ASX: XIJ) is down 22.8% in 2026 and has plunged 43.6% since this time last year.

Why borrowing costs are expected to keep rising in 2026

At its last meeting on 11 August, the RBA opted to keep rates on hold.

But the board cautioned:

While the impact of the Middle East conflict on inflation has so far been less than expected, headline inflation is still too high. Trimmed mean inflation also remains elevated and is little changed from the March quarter.

Fast forward to today, and the Brent crude oil price just topped US$109 per barrel as the Middle East conflict looks to be heating back up rather than cooling down.

Commenting on why he expects the RBA to increase interest rates two more times in 2026, lifting the cash rate to 4.85% by year end, Cit’s Syed said (quoted by The Australian Financial Review):

This view is driven by a two-speed economy, where a deepening housing correction is offset by an AI-related investment boom that is adding to capacity constraints.

Anaemic productivity, a tight labour market, and elevated oil prices likely mean inflation will remain stubbornly high, with our Q3 trimmed-mean CPI forecast at 1 per cent.

In our view, the RBA needs to hike further to get on the front foot of inflation, though a dovish Board could delay action. Consequently, we push our first rate cut forecast out to Q4 2027.

CreditorWatch chief economist Ivan Colhoun also believes mortgage holders and ASX share investors should prepare for higher interest rates. Though he expects the RBA will hike rates just once more, followed by an extended pause.

“Over the past month and following the release of the very high July CPI, many economists have changed their view back to the view that the RBA has not finished tightening,” he said.

Colhoun added:

With input and labour costs continuing to rise at rates well above those consistent with the return of inflation to target, this suggests the Board will need to make the unpopular decision to tighten interest rates again in September as the upside inflation risks it has been discussing materialise.

The good news is that interest rates will likely remain on hold for a considerable time afterwards.

The RBA will report its next interest rate decision on 29 September.

The post Brace for impact! Why Citi forecasts 2 more RBA interest rate hikes in 2026 appeared first on The Motley Fool Australia.

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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.