S&P/ASX 200 Index (ASX: XJO) stock Generation Development Group Limited (ASX: GDG) is on a tear.

Shares in the diversified financial services business closed up 0.5% on Monday, ending the day trading for $5.65 apiece.

While that’s down more than 25% from the stock’s all-time closing high of $7.60 a share, posted on 15 October, the Generation Development share price remains up 63% in 2025.

And investors who bought the ASX 200 stock five years ago will now be sitting on gains of 813% today.

If you don’t own shares yet, the good news is that, according to the team at Macquarie Group Ltd (ASX: MQG), Generation Development is well-placed to keep outperforming in 2026.

With “leading market positions in investment bonds, managed accounts, and research & ratings, GDG is delivering high growth rates across its three segments”, Macquarie said.

Indeed, at its full year FY 2025 results (for the 12 months to 30 June), the company reported a 191% year-on-year increase in revenue to $141.3 million. And on the bottom line, underlying net profit after tax (NPAT) of $30.2 million was up 170% from FY 2024.

ASX 200 stock tipped to deliver more outsized gains

Macquarie initiated coverage on Generation Development last Friday with an outperform rating.

Commenting on its bullish outlook for the ASX 200 stock, the broker said:

GDG has expanded to become a market leader in the high-growth managed account sector, through its acquisition of Evidentia and increased 100% ownership of Lonsec.

The managed account segment is set to drive the next stage of growth for GDG, with a TAM of $200bn+ and forecast FUM CAGR of 15% from 2024-30E. By consolidating Evidentia and Lonsec managed accounts, GDG has strengthened it market leading position in this highly fragmented market, with unparalleled distribution capability and further synergistic benefits to come as it increases scale.

Macquarie also expects further growth from Generation Development’s Generation Life segment.

According to the broker:

GDG’s Generation Life segment, providing investment bonds and annuities, benefits from tax reform and superannuation changes. We expect legislative tailwinds will drive structural growth in the industry. GenLife is well-positioned to capture a high share of inflows.

And there’s nothing like recurring revenue to give investors some peace of mind.

On that front, Macquarie noted:

GDG has a recurring revenue model across each of its segments with Evidentia and GenLife operating an asset based fee model with predictable recurring revenue streams from mgmt and admin fees. Lonsec research house also has ~96% recurring revenue derived from contracted research and subscription fees.

Concluding that the ASX 200 stock “is well positioned to rapidly grow earnings”, Macquarie said, “We believe there is further upside as GDG continues to invest for growth and execute well.”

The broker has a 12-month price target on Generation Development of $6.70 a share. That represents a potential upside of more than 18% above Monday’s closing price.

The post Up 813% in 5 years, why Macquarie expects this surging ASX 200 stock to keep outperforming in 2026 appeared first on The Motley Fool Australia.

More reading

• Why Flight Centre shares could return 22% in just one year
• Leading brokers name 3 ASX shares to buy today
• Why did Macquarie just downgrade CSL shares?
• 3 excellent Australian dividend shares to buy with $1,000
• 3 of the best ASX 200 stocks to buy in December

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

Some forces are simply too powerful to ignore. Digital transformation, automation, and electrification are reshaping the global economy, regardless of short-term market cycles or economic slowdowns.

For long-term investors, one way to harness these forces is through exchange-traded funds (ETFs) that provide diversified exposure to the stocks driving them.

Here are three ASX ETFs that tap directly into megatrends that look set to run for decades.

Betashares Cloud Computing ETF (ASX: CLDD)

The shift to the cloud is no longer a future trend, it is now core infrastructure for the global economy. Businesses are increasingly moving data storage, software, and computing power away from offline systems and into scalable, cloud-based platforms.

The Betashares Cloud Computing ETF provides exposure to companies enabling this transformation. Its holdings include cloud software and infrastructure leaders such as Microsoft Corp (NASDAQ: MSFT), ServiceNow (NYSE: NOW), and Shopify (NASDAQ: SHOP). These businesses sit at the centre of enterprise digitisation, e-commerce, and workflow automation.

As data usage grows and artificial intelligence (AI) workloads expand, demand for cloud services is likely to keep compounding over time, making the Betashares Cloud Computing ETF a pure-play way to access that structural shift. It was recently recommended by analysts at Betashares.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Automation and artificial intelligence are rapidly becoming essential productivity tools. Labour shortages, rising costs, and the need for efficiency are pushing companies to invest heavily in robotics and AI-driven systems.

The Betashares Global Robotics and Artificial Intelligence ETF targets businesses leading this transformation. Its portfolio includes Nvidia Corp (NASDAQ: NVDA), a key supplier of AI computing hardware, Intuitive Surgical (NASDAQ: ISRG), a pioneer in robotic-assisted surgery, and ABB Ltd (SWX: ABBN), a global leader in industrial automation.

This is a megatrend driven by necessity rather than hype. As economies digitise and industries modernise, robotics and AI adoption is likely to accelerate across healthcare, manufacturing, logistics, and services. It was also recently recommended by the team at Betashares.

Global X Battery Tech & Lithium ETF (ASX: ACDC)

Electrification is transforming transport, energy storage, and power generation, and batteries sit at the heart of that transition. The Global X Battery Tech & Lithium ETF provides exposure to the stocks building the supply chain behind electric vehicles and renewable energy storage.

Its holdings span miners, battery manufacturers, and technology leaders such as Tesla Inc (NASDAQ: TSLA), Albemarle Corp (NYSE: ALB), and Contemporary Amperex Technology Co Ltd (CATL). Together, they reflect the end-to-end ecosystem required to support the global shift away from fossil fuels.

With governments and consumers pushing toward cleaner energy solutions, and battery costs continue to fall, demand for battery technology and lithium materials could grow strongly for many years. This bodes well for the companies held by this fund.

The post 3 ASX ETFs that benefit from unavoidable megatrends appeared first on The Motley Fool Australia.

More reading

• Better Artificial Intelligence (AI) stock for 2026: Nvidia or AMD?
• 3 stocks that in 20 years have turned $5,000 into more than $1 million
• Will Nvidia crush the market again in 2026?
• The 3 smartest quantum computing stocks to buy with $1,000 in 2026
• Ranking the best “Magnificent Seven” stocks to buy for 2026. Here’s my No. 1 pick.

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 Abb, Intuitive Surgical, Microsoft, Nvidia, ServiceNow, Shopify, and Tesla. 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 Microsoft, Nvidia, ServiceNow, and Shopify. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a disappointing decline. The benchmark index fell 0.7% to 8,635 points.

Will the market be able to bounce back from this on Tuesday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to fall again on Tuesday following a poor start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 15 points or 0.2% lower. In late trade in the United States, the Dow Jones is down 0.1%, the S&P 500 is 0.1% lower, and the Nasdaq has fallen 0.4%.

Oil prices drop

It could be a poor session for ASX 200 energy shares Karoon Energy Ltd (ASX: KAR) and Santos Ltd (ASX: STO) after oil prices fell overnight. According to Bloomberg, the WTI crude oil price is down 1% to US$56.86 a barrel and the Brent crude oil price is down 0.85% to US$60.60 a barrel. This was driven by optimism over a Russia-Ukraine peace deal after the latter agreed to scrap its NATO membership application.

Orica AGM

Eyes will be on Orica Ltd (ASX: ORI) shares on Tuesday when the commercial explosives company holds its annual general meeting. There’s a chance the ASX 200 share will provide the market with a trading update ahead of the main event.

Gold price edges higher

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Ramelius Resources Ltd (ASX: RMS) could have a decent session on Tuesday after the gold price edged higher overnight. According to CNBC, the gold futures price is up 0.25% to US$4,339.2 an ounce. Traders were buying gold ahead of the release of US economic data.

Buy EOS shares

Electro Optic Systems Holdings Ltd (ASX: EOS) shares could be great value despite rising almost 400% this year. According to a note out of Bell Potter, this morning, its analysts have reiterated their buy rating on the space and defence company’s shares with an improved price target of $9.00 (from $8.10). It said: “EOS is positioned as a market leader in C-UAS solutions and is leveraged to increasing budget allocations to C-UAS technologies. We see positive news flow over the next 6 months stemming from CUAS and RWS contract awards.”

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• Lynas shares: After a year of outperformance, is it still a buy?
• Here are the top 10 ASX 200 shares today
• Why 4DMedical, EOS, Gorilla Gold, and Neuren shares are racing higher today
• Westgold unveils spin-out of non-core Reedy and Comet gold assets
• IperionX secures US Navy deal with Carver Pump order

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 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.

The Global X Fang+ ETF (ASX: FANG) is an exchange-traded fund (ETF) that aims to provide investors with exposure to companies that are “at the leading edge of next-generation technology that includes household names and newcomers”, according to provider Global X.

Warren Buffett, the legendary investor who has led Berkshire Hathaway to become one of the world’s largest and most diversified businesses, has regularly indicated that he wants to own wonderful companies (at fair prices).

Berkshire Hathaway has invested in names like Coca-Cola, American Express, Bank of America, Apple and Alphabet.

But, Global X Fang+ FANG ETF is a very tech-focused fund, which is something that Berkshire Hathaway hasn’t really leaned into over previous decades.

Let’s take a look at how the Global X Fang+ ETF has been constructed before my concluding thoughts on whether Buffett would invest.

Ten tech titans

The Global X Fang+ ETF has 10 holdings, which are ten of the largest tech businesses listed in the US.

Currently, those positions are: Alphabet, Broadcom, Apple, Crowdstrike, Nvidia, Amazon.com, Microsoft, ServiceNow, Meta Platforms and Netflix.

These businesses are from an array of technology sectors including smartphones, online advertising, AI, cybersecurity, advanced chips, e-commerce, office software, social media, video gaming, online video and cloud computing. These are areas that have changed or are changing our way of life the most.

The goal of the Global X Fang+ ETF is that roughly every position has an allocation of around 10% of the fund. These positions are regularly re-weighted to ensure they provide investors with equal exposure.

The annual management fee of the fund is 0.35%, which I think is fairly reasonable considering the specific exposure it provides.

It has performed very strongly, though past performance is not necessarily a reliable indicator of future performance. The Global X Fang+ ETF has impressively returned an average of 25.5% per year over the last five years. I’m not expecting the next five years to be as strong.

Would Warren Buffett be interested in the Global X Fang+ ETF?

It’s clear to me that this fund gives investors exposure to some of the best businesses in the world.

However, there are a couple of things to keep in mind. Firstly, these businesses are not trading at cheap prices – quite the opposite.

Second, they are generally investing heavily in AI and related expenditure. So far, it’s not very clear at this stage to me how they’re going to collectively generate the revenue and profit to justify this spending, which adds uncertainty.

Finally, when it comes to Warren Buffett, he likes to stay within his ‘circle of competence’, meaning only investing in businesses that he understands so that he can evaluate them properly. I think this point would be a key reason why Buffett himself would choose to invest in specific businesses such as Apple (as he has done) and perhaps Alphabet rather than the ETF as a whole.

For Aussies wanting exposure to the US tech sector, this is a very effective way to do it, though this doesn’t seem like an opportunistic time to invest. Some of the ASX’s leading companies do look a lot cheaper and better value.

The post Would Warren Buffett buy Global X Fang+ ETF (FANG) units? appeared first on The Motley Fool Australia.

More reading

• What Warren Buffett’s latest portfolio moves say about the market
• 1 reason now is a great time to buy Berkshire Hathaway stock
• Warren Buffett is sending a clear warning as 2026 approaches: 3 things investors should do
• Warren Buffett, weeks before his retirement, has a warning for Wall Street. History says this may happen in 2026.
• Is Warren Buffett sending a quiet warning to investors? Here’s what you need to know.

Bank of America is an advertising partner of Motley Fool Money. American Express is an advertising partner of Motley Fool Money. 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 positions in and has recommended Alphabet, Amazon, Apple, Berkshire Hathaway, CrowdStrike, Meta Platforms, Microsoft, Netflix, Nvidia, and ServiceNow. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Broadcom and 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, Apple, Berkshire Hathaway, CrowdStrike, Meta Platforms, Microsoft, Netflix, Nvidia, and ServiceNow. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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.