It has been a brutal 12 months for DroneShield Ltd (ASX: DRO) shares.

The DroneShield share price is down another 1.09% to $1.59 today and is now sitting around its 52-week low.

The stock has fallen more than 50% over the past year and almost 49% in 2026.

But at this price, I think the risk-reward is becoming much more interesting.

I certainly wouldn’t make DroneShield one of my biggest holdings. But as part of a diversified portfolio, I’d be happy to buy some shares around these levels.

Here’s why.

The demand is there

The biggest reason I remain bullish is simple. Drones aren’t going away.

They are playing a bigger role in modern warfare, border security and the protection of critical infrastructure.

That means governments and defence customers need systems that can detect, track and stop them.

DroneShield is already turning that demand into revenue.

Its latest update showed FY26 committed revenue had reached $251 million, while another $46 million was committed for FY27 and beyond.

First-half revenue jumped 74% to $125.8 million, and recurring revenue climbed 229% to $11.5 million.

The company has also received its first order for the new RfRecon product from an existing Western European military customer.

To me, that is exactly what I want to see. If those orders keep building, I think the current share price could end up looking pretty cheap.

Could short sellers send the shares higher?

This is another part of the setup I find very interesting.

The latest short-selling data shows 15.46% of DroneShield shares are currently sold short, making it the second-most shorted stock on the ASX.

That’s a huge number of investors betting against the company.

Of course, short interest is there for a reason. DroneShield is still loss-making, with first-half underlying EBITDA of $12.4 million in the red and a statutory loss of $32.2 million.

But keep in mind, heavy short interest can work both ways.

If DroneShield announces a large new contract, some short sellers may decide they no longer want to stay in the trade.

Buying shares back to close those positions could add extra demand at the same time other investors are buying the news.

And with short interest this high, I think a genuinely good announcement could send the share price higher very quickly.

Would I buy today?

At $1.59, I would.

TipRanks shows 4 ranked analysts covering the stock, with 2 buys and 2 sells. The average 12-month price target is $1.98, about 25% above the current price.

Bell Potter sits at $2.40 and Canaccord Genuity at $2.60.

Yes, there are still plenty of risks, particularly around profitability, margins and execution.

That is why I’d keep the position relatively small.

But I think the potential upside makes the risk worthwhile.

The post DroneShield shares have crashed 51% in a year. Here’s why I’d buy them today appeared first on The Motley Fool Australia.

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• $10,000 invested in DroneShield and Core Lithium shares 3 years ago is now worth…
• DroneShield shares are down 75%. Could this huge short bet backfire?
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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 DroneShield. 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.

Santos Ltd (ASX: STO) shares closed at a fresh multi-year high of $8.70 on Monday afternoon.

The shares have slid around 1.5% in lunchtime trade today, to $8.60 a piece. But even after today’s decline, they’re still up 40% for the year-to-date and are 12% higher than a year ago.

Why are Santos shares flying higher in 2026?

The ASX energy shares have jumped higher in 2026 off the back of ongoing conflict between the US and Iran. Volatility in the region has fuelled significant concerns about tighter global oil supply and rising prices.

Santos shares spiked in February and March, around the time news first broke that conflict had escalated between the two nations. The shares continued climbing in value as the war heated up.

They cooled again in June off the back of news that the two nations could soon reach a peace agreement, but strikes recently resumed, throwing the market back into chaos and creating a strong tailwind for Santos.

According to the latest update and data from Trading Economics, Saudi Arabia’s East-West pipeline, which provides an alternative oil shipping route to the Strait of Hormuz, continues to remain shut following recent drone attacks. 

Meanwhile, a meeting between Iran and the Gulf Arab states to discuss Hormuz has also been postponed.

The price of crude oil has now jumped to around US$103 per barrel at the time of writing, a 22% increase over the past months alone. 

And it looks like prices could keep climbing higher still. 

Investment bank Goldman Sachs said they think crude oil could rise above US$120 if production stays well below pre-conflict levels. The bank estimates average output next year could still be around 4 million barrels per day below pre-war levels.

If oil stays above US$100 a barrel, oil and gas giants like Santos could benefit from higher realised prices.

Santos’ share price rally has also been supported by its strong half-year FY26 results announcement, which it posted last month.

The company reported a 2% year-on-year increase in sales revenue and a 1.7% increase in production volumes. The company also generated free cash flow from operations, driven by strong base business performance.

Can Santos shares keep climbing higher?

The oil and gas business is well placed to keep increasing its production in the coming reporting periods, which could help boost its earnings for FY27.

The experts are bullish about the outlook for Santos shares over the next 12 months, too.

Market Index data shows that all brokers have a strong buy rating on the stock. But after the latest rally, the $8.57 average target price is practically flat against the $8.60 target price at the time of writing.

Sentiment is also very positive on TradingView. Out of 15 analysts, 13 have a buy/strong buy rating on Santos shares. Meanwhile, one analyst rates it a hold, and one rates the energy share a sell. 

The average $8.95 target price implies a potential 4% upside ahead, at the time of writing. But some expect the shares to jump around 25% to $10.68 within the next 12 months.

The post Santos shares slide from fresh multi-year high: What’s next for the ASX energy stock? appeared first on The Motley Fool Australia.

More reading

• Santos shares are up 40% in 2026. Here’s why I’d still buy them today
• Goldman Sachs says oil could surge past US$120. Could this be the next big market shock?
• Why I’d buy Santos and Woodside shares today
• 5 things to watch on the ASX 200 on Monday
• $10,000 invested in Santos and Woodside shares 3 years ago is now worth…

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.

Woodside Energy Group Ltd (ASX: WDS) shares have fallen into the red in Tuesday lunchtime trade.

At the time of writing the Australian petrol exploration and production company’s shares are down around 1% and are changing hands for $32.62 each.

But the increase barely dents the gains the shares have made recently. Even after today’s dip, the shares are still 38% higher for the year-to-date and 35% higher than 12 months ago.

Why are Woodside shares flying higher this year?

The oil and gas giant’s shares have enjoyed an incredible rally throughout most of 2026 so far.

Conflict in the Middle East and the consequential major oil supply concerns and ongoing volatility have been a key driver so far this year.

Every time the US and Iran show new signs of reaching a potential agreement, volatility reignites in the region and markets are thrown back into chaos. The situation is highly volatile, and the movement of oil from the area will continue to be uncertain until a final resolution is reached. 

Shipping disruptions and production cuts pushed crude oil prices to a multi-year high of around US$113 per barrel in April, according to Trading Economics data. While the price of oil softened in June and early July, it has now flown higher again, to around US$103 per barrel at the time of writing.

According to Trading Economics: “Saudi Arabia’s East-West pipeline, which provides an alternative route to the Strait of Hormuz, remains shut following drone attacks, with no clear indication of when operations will resume. A diplomatic meeting between Iran and the Gulf Arab states to discuss the situation in Hormuz was also abruptly postponed.”

Investment bank Goldman Sachs said they think crude oil could rise above US$120 if production stays well below pre-conflict levels.The bank estimates average output next year could still be around 4 million barrels per day below pre-war levels.

And what is bad news for markets is good news for ASX energy shares like Woodside. If oil stays above US$100 a barrel, Woodside could benefit from higher realised prices.

But it’s not only geopolitical tensions which have driven the company’s share price higher this year. Woodside has also posted strong results recently which has rallied even more investor attention.

What did the company report last month?

Woodside posted its first-half FY26 results in late-August, including a 13% increase in operating revenue, a 27% increase in NPAT, a 7% increase in underlying NPAT, and a huge increase in free cash flow to US$352 million.

The strong result saw management declare a fully-franked interim dividend of 57 US cents per share.

Woodside also reaffirmed its full-year FY26 production and capital expenditure guidance. The company expects to complete key projects, including Scarborough, Trion, and Louisiana LNG, in line with previously announced timelines.

Are Woodside shares a buy, sell or hold?

After the latest rally, it looks like the oil major’s shares are now trading around (or even above) fair value. 

Market Index data shows all brokers have a hold rating on Woodside shares. But the $28.51 average target price now implies a potential 12% downside ahead, at the time of writing.

TradingView data shows something similar. Out of 17 analysts, six have a buy/strong buy rating, eight have a hold rating, and three rate the stock as a sell.

But the average $33.25 target price implies a potential 2% upside, at the time of writing. 

But the difference between the maximum and minimum target price is huge. Some forecast the shares to climb about 36% to $44.28 over the next 12 months. But others think Woodside shares have the potential to fall up to 22% to $25.44, at the time of writing.

The post Woodside shares up 38% in 2026: Here’s what brokers tip next appeared first on The Motley Fool Australia.

More reading

• Goldman Sachs says oil could surge past US$120. Could this be the next big market shock?
• Why I’d buy Santos and Woodside shares today
• If I buy $4,000 of Woodside shares, how much dividend income will I receive?
• 5 things to watch on the ASX 200 on Monday
• Energy shares rose while the ASX 200 slumped last week. Here’s why

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.