Magellan Financial Group Ltd (ASX: MFG) shares are in focus today after the company released important information in an ASX release yesterday.

The company is an Australian-based funds manager investing in global equities and global listed infrastructure.

The Funds Management segment provides investment research, administrative services, investment management, and sub-advisory services.

As The Motley Fool’s Laura Stewart reported yesterday, the company reported that total assets under management (AUM) dropped to $37.5 billion as at 31 March 2026, down from $39.9 billion at the end of 2025.

In a release yesterday, the company announced that both retail AUM declined from $15.8 billion to $14.1 billion and institutional AUM slipped to $23.4 billion, down from $24.1 billion. 

It seems investors are disappointed with this news as the stock price has opened 4% lower this morning. 

Despite this drop, the share price remains up 33% over the last year. 

For context, the S&P/ASX 200 Index (ASX: XJO) is up 22% in that same span. 

Following yesterday’s announcement, the team at Morgans provided updated guidance on Magellan Financial Group shares. 

Buy maintained despite announcement 

Morgans has retained its buy recommendation on Magellan Financial Group shares despite the AUM drop. 

MFG has given an end-to-March 2026 quarterly FUM update. FUM (A$37.5bn) was down 6% for the quarter due to a combination of outflows across most funds and market movements. 

Overall this was a softer quarter at the headline level, albeit some impacts from market volatility are unsurprising.

As a result, it has downgraded its earnings per share forecast by 1%-8% over FY26/FY27. 

Price target reduction for Magellan Financial Group

As a result of this downgrade, Morgans has reduced its price target to $11.99 (from $12.43). 

Whilst MFG’s Investment Management performance remains patchy, we think the Barrenjoey merger fundamentally changes MFG’s overall outlook, strengthening the business and providing additional pathways for growth. MFG also retains a strong balance sheet (~A$650m of liquidity, post deal).

From today’s current stock price of approximately $9.60, this updated price target indicates a potential upside of 25%. 

The post What is this broker’s view on Magellan Financial Group after yesterday’s disappointing results appeared first on The Motley Fool Australia.

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• Magellan Financial Group shares in focus after $20m share plan hits target
• Buy, hold, sell: Endeavour, Magellan, and Rio Tinto shares

Motley Fool contributor Aaron Bell 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.

Coles Group Ltd (ASX: COL) shares are trading in the green early on Thursday morning. At the time of writing the shares are up 1% to $22.20.

This morning’s price movement means the supermarket giant’s share price is now up 4% for the year-to-date and 7.6% over the past year.

It hasn’t been a slow and steady increase though. The past 12 months were filled with wild volatility and many sharp share price climbs and crashes. 

Coles shares rocketed 16% in August last year off the back of its FY25 financial results but then a slow and consistent decline saw the shares slump over 14% to early-January this year.

As Coles moved into 2026, the tide began turning, and positive sentiment saw the shares climb nearly 8% to mid-February before crashing again, this time just over 8%, and wiping out any 2026 gains, in early-March. 

This time the catalyst was the company’s FY26 results which revealed broadly strong growth figures, albeit below expectations, followed by its shares going ex-dividend.

As if that wasn’t enough, the seesaw has continued. Coles shares pivoted again, jumping 11% higher in the last two weeks of March before cooling down into April.

Investors can’t catch a break!

So if I invested $5,000 in Coles shares 10 days ago, what are they worth now?

On the 30th of March, Coles shares closed the day at $22.19 a piece. That’s a tiny 0.023% below the current trading price at the time of writing.

It means $5,000 invested in the supermarket giant’s shares 10 days ago is now worth $5,001.15! It’s not a big upside, but its a gain nonetheless.

What can we expect next out of the shares?

It’s been a very rocky past few months for Coles, and it could face some headwinds from renewed concerns about inflation this year. 

But the stock is still very defensive and the business is well-positioned to perform well under pressure. 

Its 2025 growth strategy has also paid off and its customer scores, sales growth, cost discipline and store execution are expected to remain solid. 

According to TradingView data, analysts are mostly very bullish on the outlook for Coles shares this year. Out of 18 analysts, 15 have a buy or strong buy rating and another two rate the shares as a hold. 

The average target price of $23.07, which implies a potential 4% upside at the time of writing. But some think the share price can climb over 12% to $24.90.

The post $5,000 invested in Coles shares 10 days ago is now worth… appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Coles, Endeavour, and Rio Tinto shares
• The reliable ASX dividend shares I’d buy with $10,000
• How did these ASX defensive shares hold up in March?
• Here are the top 10 ASX 200 shares today
• This ASX ETF is perfect for an uncertain world

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.

S&P/ASX 200 Index (ASX: XJO) gold stock West African Resources Ltd (ASX: WAF) is slipping today.

West African shares closed yesterday trading for $3.38. In morning trade on Thursday, shares are changing hands for $3.31 apiece, down 2.2%. That gives the gold miner a market cap of approximately $3.8 billion.

For some context, the ASX 200 is down 0.1% at this same time, while the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down a steeper 3.2% amid concerns that the nascent ceasefire in the Iran war may not hold for long.

That’s seen oil prices rebound and gold prices dip overnight, as a prolonged war will stoke inflation and likely lead to higher interest rates. Gold, and by connection ASX 200 gold stocks like West African Resources, tend to perform better in a low or falling interest rate environment.

Despite today’s dip, West African shares remain up an index smashing 59.1% since this time last year.

Here’s what else ASX investors are mulling over today.

ASX 200 gold stock on track to meet guidance

Before market open today, West African released a preliminary production update for the March quarter (Q1 2026). The update covers both its Sanbrado and Kiaka gold production centres, located in Burkina Faso.

Over the three months to 31 March, the ASX 200 gold stock reported total gold production of 107,728 ounces. The miner sold 104,145 ounces of gold during this period, receiving an average realised price of US$4,945 per ounce.

Breaking that down across its two centres, Sanbrado produced 42,024 ounces of gold, while Kiaka produced 65,704 ounces of gold.

Management said that open-pit mining at Sanbrado continued to ramp up during the quarter. And open-pit mining at Kiaka achieved an 18% increase in mined ounces compared to the December quarter.

West African shares may be outperforming the broader ASX gold sector today, with the miner reaffirming it is on track to achieve its full calendar-year 2026 production guidance of 430,000 to 490,000 ounces of gold.

What did West African Resources management say?

Commenting on the March results that have yet to lift the ASX 200 gold stock today, West African Resources CEO Richard Hyde said:

With quarterly production of 107,728 ounces gold from our two large low-cost gold production centres of Sanbrado and Kiaka in Burkina Faso, WAF is well on-track to achieve 2026 annual production guidance of 430,000 – 490,000 ounces of gold.

I look forward to releasing our full quarterly activities report in the coming weeks.

The post Up 59% in a year, why is this $3.8 billion ASX 200 gold stock sinking today? appeared first on The Motley Fool Australia.

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• After new production guidance, how high could this ASX gold stock go?
• Why Challenger, Magellan, Northern Star, and West African Resources shares are storming higher
• Guess which ASX 200 gold stock is lifting off today on record breaking news
• West African Resources: 2026 production guidance forecasts record gold output
• 2 ASX gold miners to buy for solid share price gains, according to Barrenjoey

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.

While it is disappointing to see ASX shares fall significantly from their highs, it can create opportunities for investors.

That does not mean every decline is a buying opportunity. Sometimes the market is reacting to real and lasting challenges.

But in other cases, I think sentiment can overshoot.

Here are three ASX shares that have been under pressure but could have the potential to rebound strongly over time.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster has seen its share price fall heavily over the past year, which reflects both a slowdown in consumer spending and changing expectations around growth.

The business operates in online furniture and homewares, which is naturally tied to housing activity and discretionary spending.

That creates some short-term uncertainty. But I think it is worth looking at the bigger picture.

The shift toward online retail is still playing out, and Temple & Webster remains one of the leading pure-play operators in that space in Australia.

If consumer conditions stabilise and housing-related activity improves, I think there is scope for the business to regain momentum.

Megaport Ltd (ASX: MP1)

Megaport is another name that has been through a significant reset.

Its share price has been volatile, reflecting both its growth profile and the challenges of scaling a global network business.

What I find interesting is the underlying role it plays. Megaport connects businesses to cloud infrastructure and data centres, which are becoming increasingly important as digital demand grows.

The company has also been expanding its offering, including moving into adjacent areas like compute and GPU services. That broadens its opportunity set.

If execution improves and growth continues, I think there is potential for sentiment to shift.

Lovisa Holdings Ltd (ASX: LOV)

Lovisa’s share price has also pulled back, despite the business continuing to expand globally.

This is a fast-fashion jewellery retailer with a strong track record of store rollout and international growth.

What stands out to me is the scalability. The company continues to open new stores across multiple regions, and its model has proven to be repeatable in different markets.

Short-term pressures, such as cost inflation or softer consumer spending, can weigh on performance.

But over a longer period, I think the growth opportunity remains significant.

Foolish Takeaway

Beaten-down ASX shares can be risky, but they can also offer meaningful upside if the underlying business remains intact.

Temple & Webster, Megaport, and Lovisa have seen sentiment weaken while still operating in areas with long-term potential.

For me, that is often where the possibility of a strong rebound begins.

The post 3 beaten-down ASX shares that I think could rebound strongly appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa, Megaport, and Temple & Webster Group. The Motley Fool Australia has recommended Lovisa and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Southern Cross Gold Consolidated Ltd (ASX: SX2) has extended the gold strike at its Sunday Creek gold and antimony project in Victoria to 460m below its last best exploration results.

Encouraging gold results

The company said in a statement to the ASX on Thursday that new exploration drilling had intersected mineralisation at a depth of about 1236m, with gold mineralisation present including an intersection of 0.9m at 5.4 grams per tonne gold equivalent.

The company added:

The hole extended approximately 460 m below the defined exploration target at Golden Dyke, materially expanding the potential depth extent of the deposit and confirming scale comparable to mineralization depths discovered at the Rising Sun prospect.

Southern Cross chief executive officer Michael Hudson said the results were significant.

He added:

This is a milestone hole for Sunday Creek. SDDSC194W1 was designed to answer a simple but critical question: does the system persist at depth well beyond our current exploration target? The answer is yes. In a bold step-out to untested depths, at 1,236 m below surface and 460 vertical metres below the last known mineralisation at Golden Dyke, we intersected 66 m of dyke and altered sediment with gold present. This is the deepest hole on the property to date. The thesis was to test whether the host sequence continued at depth – that thesis has been emphatically proven, and that we hit gold across a 28 m true thickness zone was an absolute bonus.

Mr Hudson said the geochemistry of the mineralisation was also encouraging.

The arsenic-to-antimony ratios we’re seeing at depth are exactly what the epizonal model predicts, the fluid chemistry signature is right, and it tells us we are still within the productive part of the plumbing system. We are well below the antimony zone and into the sulphosalt area within the brittle-ductile transition – exactly where we expect to find robust, deep gold systems in the Victorian orogenic gold province. That’s a powerful vectoring tool as we plan the next series of holes into this area.

More potential even deeper

Mr Hudson said adjacent deposits in Victoria were being tested at depths of more than 2km, and he was confident Sunday Creek could continue to more than 2km below the surface.

He added:

In this style of mineralisation, the veins form the rungs of a ladder, and drilling sub-parallel to those rungs can easily miss them entirely. The fact that we intersected a 28 m true thickness altered and veined zone with anomalous gold throughout confirms that the host sequence is thick, repeatable, and fertile at these depths. An exciting result.

Southern Cross Gold shares were 0.8% lower in nearly trade at $9.69. The company was valued at $2.53 billion at the close of trade on Wednesday.

The post This ASX gold company has reported ‘exciting’ new exploration results appeared first on The Motley Fool Australia.

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• This ASX gold and antimony developer has announced good drilling results at its Victorian project

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.

Bendigo and Adelaide Bank Ltd (ASX: BEN) shares are jumping on Thursday.

At the time of writing, the ASX bank stock is up 7.5% to $11.24.

Why is this ASX bank stock jumping?

Investors have been buying the regional bank’s shares today after it announced strategic partnerships and released a third-quarter trading update.

According to the release, Bendigo and Adelaide Bank has revealed the second phase of the Productivity Program to accelerate its progress towards its 2030 strategy.

It notes that it is evolving its operating model to be simpler and more efficient, accessing leading global capabilities to drive innovation for customers, and support operational excellence.

Following the Google partnership announced in November, it has now entered into two new strategic partnerships with leading providers of technology services and business operations.

The first is a seven-year technology service partnership with Infosys (NYSE: INFY), which will significantly improve its IT service delivery capability and provide access to enhanced capabilities, software engineering, and AI talent to deliver greater capacity to innovate.

The second is a six-year business operations partnership with Genpact (NYSE: G), which will bring deep expertise in process optimisation and delivery to drive greater productivity and support stronger risk management across the bank.

These changes are expected to result in an annual run rate expense benefit of approximately $65 million to $75 million, which will be realised by FY 2028. However, it also expects to incur upfront transition costs of approximately $85 million to $95 million. The majority of this will be incurred in FY 2027.

The ASX bank stock’s CEO and managing director, Richard Fennell, commented:

Decisions that impact our people are never easy. We acknowledge this will be a challenging time for our people and we are committed to lead these changes with care and respect. The operational efficiencies delivered through this change will support our previous stated guidance of business as usual expenses to be no higher than inflation through the cycle.

Trading update

The ASX bank stock also released a trading update this morning.

The bank revealed that it achieved unaudited cash earnings of $137.9 million during the third quarter. This is up 7.6% on the quarterly average during the first half.

Unaudited statutory net profit after tax was $109.4 million in the quarter.

This reflects a 6 basis points increase in its net interest margin to 1.98%, lending growth of 5.6%, and a 4.1% reduction in operating expenses to $305.1 million.

The post ASX bank stock jumps 7% on strategic partnerships and trading update appeared first on The Motley Fool Australia.

More reading

• Bendigo and Adelaide Bank lifts profit and launches strategic partnerships
• ASX bank stocks: Buy, sell, or hold?

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 Alphabet. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Orora Ltd (ASX: ORA) shares are on the slide on Thursday morning.

At the time of writing, the ASX 200 share is down 16% to $1.63.

Why is this ASX 200 share sinking today?

Investors have been selling the packaging company’s shares following the release of a trading update, which included a downgrade to earnings expectations for its Saverglass business.

According to the release, Orora now expects FY 2026 underlying EBIT for Saverglass to be in the range of 63 million euros to 68 million euros. This is down from previous guidance of broadly in line with FY 2025 EBIT of 79.2 million euros.

On a reported basis, EBIT is expected to fall further to between 52 million euros and 59 million euros.

Middle East conflict weighing on earnings

Management highlighted that the downgrade reflects both direct and indirect impacts from the ongoing Middle East conflict.

Directly, the company expects a 9 million euro to 11 million euro hit to second half earnings due to disruptions at its Ras al Khaimah (RAK) facility in the United Arab Emirates.

Shipping routes and overland access have been disrupted, forcing Orora to transition the facility into a closed-loop hot operation. This means the furnace is kept running, but no bottles are produced.

The RAK facility accounts for approximately 15% of Saverglass production capacity, with output now expected to shift to Mexico over time.

Softer demand and mix shift

In addition to the direct impact, Orora flagged weaker-than-expected trading conditions.

The company said volumes are now expected to be lower than previously forecast, with a shift in product mix also weighing on margins.

Specifically, there has been a greater-than-anticipated shift toward wine and champagne relative to premium spirits, alongside softer customer demand following the onset of the conflict.

This combination is expected to reduce earnings by a further 11 million euros to 16 million euros in the second half.

Other impacts

The ASX 200 share also noted that inventory levels have increased due to slower customer offtake and rising competitive pressures.

In response to the uncertainty, the company has decided to pause its on-market share buyback program while it monitors the situation.

Nevertheless, despite these challenges, management emphasised that the company’s balance sheet remains strong, with leverage expected to stay below 1.5 times by June 2026.

The post Why is this ASX 200 share sinking 16% today? appeared first on The Motley Fool Australia.

More reading

• Orora updates FY26 outlook as Saverglass earnings take a hit

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

DroneShield Ltd (ASX: DRO) shares are rebounding on Thursday after a sharp selloff in the previous session following news of leadership changes.

However, with the dust beginning to settle, investors appear to be refocusing on the company’s underlying fundamentals and long-term growth opportunity.

At time of writing, the counter-drone technology company’s shares are up 3% to $3.55.

A structural growth story that remains intact

After the market close on Wednesday. DroneShield released an investor update that has gone down well with investors.

The update reminded the market that the company operates in one of the fastest-growing areas of defence technology.

But more importantly, the size of the opportunity is significant. The global counter-drone market is estimated to exceed US$60 billion, spanning both defence and civilian applications. With drones now a core feature of modern warfare and increasingly used in civilian settings, demand for detection and mitigation technologies is accelerating.

This is being driven not just by conflict zones, but also by airports, infrastructure operators, and law enforcement agencies responding to evolving security risks.

Strong momentum and a massive pipeline

DroneShield’s recent performance has been impressive.

The company’s presentation reminded investors that it delivered record results in 2025 and has carried that momentum into 2026.

In the first quarter alone, it generated $62.6 million in revenue, up 88% year on year, alongside record customer cash receipts of $77.4 million.

Looking ahead, DroneShield has already secured $140 million in committed revenue for FY 2026 and boasts a $2.2 billion sales pipeline across 312 projects globally.

This pipeline is spread across regions including the United States, Europe, Asia, and the Middle East, providing diversification and visibility on future growth.

Technology edge and expanding product offering

A key part of the investment case is DroneShield’s technology advantage.

The company highlights that it offers an end-to-end suite of counter-drone solutions, combining hardware such as detection sensors and jamming devices with AI-powered software platforms.

Its DroneSentry system acts as a central command-and-control hub, integrating multiple detection and defence technologies into a single ecosystem.

Furthermore, DroneShield points out that it is increasing its focus on software and recurring revenue. SaaS offerings are expected to become a growing portion of revenue over time, supported by ongoing product upgrades and AI-driven capabilities.

A rebound with more to come?

The sharp selloff earlier this week appears to have been driven more by uncertainty than a deterioration in fundamentals.

With a large addressable market, strong revenue growth, a deep sales pipeline, and increasing exposure to high-margin software, DroneShield remains a compelling growth story.

If management can continue executing on its strategy, particularly around scaling production and converting its pipeline into revenue, the recent weakness could prove to have been a buying opportunity rather than the start of a longer-term decline.

The post DroneShield shares rebound on investor update appeared first on The Motley Fool Australia.

More reading

• DroneShield shares tumble 17% as CEO exit revives leadership fears
• Should you buy the 20% dip in the DroneShield share price?
• Why are DroneShield shares getting smashed today?
• DroneShield posts record revenue and unveils leadership changes
• Why I think BHP, CBA, and DroneShield shares are buys in April

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 DroneShield and is short shares of 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.

ASX small-cap industrials stock AMA Group Ltd (ASX: AMA) has had a rough year to date. 

The company operates in the wholesale vehicle aftercare and accessories market in Australia and New Zealand. 

Its operations include smash repair shops, automotive and electrical components, vehicle protection equipment, and servicing workshops for brakes and transmissions.

The Vehicle Collision Repairs segment is a major revenue driver for the company. It serves major insurance companies through more than 130 vehicle repair sites in all Australian states. 

For the to date, this ASX industrials stock has fallen roughly 34%. 

However, yesterday it recovered an impressive 8%. 

A new report from Bell Potter suggests this could be the beginning of a longer rally. 

Here’s what the broker had to say. 

Bell Potter expecting a good third quarter

In yesterday’s report from Bell Potter, the broker said it expects this ASX industrials stock to provide a Q3 update later this month. 

It said it continues to expect a good quarter with forecast normalised EBITDA pre-AASB 16 of $17.6m.

Importantly, however, our forecast is well above the Q2 result of $10.4m and reflects the typically seasonally stronger volumes in Q3 which we believe were not materially affected by the war in Iran and higher fuel prices.

Petrol prices a major factor

Bell Potter said higher petrol prices are not expected to materially impact Q3 earnings, with the company still on track to achieve around $17.6m in normalised EBITDA. 

However, there is some risk to Q4 forecasts if fuel prices remain elevated due to the ongoing Iran conflict, as this could reduce driving activity and, in turn, repair volumes.

Despite this risk, the company may still deliver EBITDA above $20m in Q4 if volumes hold up, as the prior corresponding period was affected by a one-off inventory provision. 

Overall, petrol prices are seen as a demand-side risk – affecting how much people drive – rather than a direct cost issue, and a decline in fuel prices would improve the earnings outlook.

Strong upside in tact 

Based on this guidance, Bell Potter has slightly reduced its price target to $1.200 (previously A$1.250). 

The broker has retained its buy recommendation.

Despite this slight decrease, this target indicates a potential upside of approximately 128% from yesterday’s closing price of $0.52. 

We have reduced the multiple we apply in the EV/EBITDA valuation from 6x to 5.5x and increased the WACC we apply in the DCF from 10.4% to 10.5% purely for conservatism. We note there is a large difference between the two valuations – $0.92 and $1.47 – but even the lower EV/EBITDA is still a significant premium to the share price. The net result is a 4% decrease in our target price to $1.20 and we retain the BUY recommendation.

The post This ASX industrials stock could be set to double according to one broker appeared first on The Motley Fool Australia.

More reading

• Bell Potter says this cheap ASX stock can rocket 100%

Motley Fool contributor Aaron Bell 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.

ASX materials stocks roared back to life yesterday as investors gobbled up shares on the back of positive negotiations in the Middle East. 

The S&P/ASX 200 Materials Index (ASX: XMJ) rose 4.4% yesterday. Investors will be cautiously optimistic the rally can continue.

It appears Morgans is optimistic about the sector bouncing back, as it has initiated coverage on two ASX materials stocks with buy recommendations. 

Here’s what the broker had to say. 

Many Peaks Minerals Ltd (ASX: MPK)

Many Peaks Minerals is an Australia-based mineral exploration company. The company focuses on advancing gold and copper projects and other mineral sector assets in West Africa.

Morgans has initiated coverage on the ASX materials stock with a speculative buy recommendation. 

The broker said the company is exploring the Ferke Gold Project (76.5%) in Cote d’Ivoire. 

Our modelling suggests the Ouarigue South system has already exceeded 1Moz Au ahead of an imminent Maiden MRE. 

At Ferke, our thesis is driven by geometry and early-stage economics rather than in-situ ounces.

Broad widths deliver favourable geometry supporting low strip ratios and unit costs, meaning scale doesn’t need to be excessive to deliver robust economics. Our mining scenario outlines an initial 7.5-year operation producing ~110kozpa at an AISC of ~A$2,525/oz, with underground and regional potential providing a clear runway for mine life extensions and project scale growth.

Morgans has placed a price target of $1.92 on the ASX materials stock assuming an effective 76.5% ownership, including government free carry. 

From yesterday’s closing price of $0.98, this indicates an upside potential of approximately 96%. 

Deterra Royalties Ltd (ASX: DRR)

This ASX materials stock manages a portfolio of mining royalty assets.

Morgans has just initiated coverage on the company with a buy rating and $4.85 target. 

DRR offers a rare capital-light exposure to tier-1 iron ore via a 1.232% Gross Revenue Royalty over BHP’s Mining Area C (a 45yr+ mine life asset with near-zero operating risk for the royalty holder) which delivers a 93% EBITDA margin. 

The Trident acquisition (Sep-24) added Thacker Pass, a 1.05% Gross Royalty Revenue (GRR) over a global-scale lithium deposit (85yr mine life, General Motors-backed). 

This provides genuine battery metals optionality worth A$0.40/share risked, diversifying the revenue base beyond iron ore. DRR trades at 9.7x FY27F EV/EBITDA, a 32-46% discount to global royalty peers (Franco-Nevada 19x, Wheaton 18x) that we believe is excessive given robust earnings platform, path to net cash, and emerging capital return optionality.

From yesterday’s closing price of $4.17, this price target indicates a potential upside of approximately 16%. 

The post Morgans just placed buy ratings on these ASX materials stocks appeared first on The Motley Fool Australia.

More reading

• This ASX gold company has reported ‘exciting’ new exploration results
• ASX bank stock jumps 7% on strategic partnerships and trading update
• Why is this ASX 200 share sinking 16% today?
• DroneShield shares rebound on investor update
• This ASX industrials stock could be set to double according to one broker

Motley Fool contributor Aaron Bell 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.