James Hardie Industries Plc (ASX: JHX) shares are edging higher on Thursday.

At the time of writing, the building products stock is up 1.15% to $40.38, while the S&P/ASX 200 Index (ASX: XJO) is flat at 8,983 points.

It has already been a strong year for shareholders, with James Hardie shares up around 30% since the start of 2026.

The stock traded above $43 in August before giving back some ground over the past few weeks.

So, is there still some upside left?

Why Morgan Stanley is bullish

Morgan Stanley appears to think so.

According to The Australian, analyst Joseph Michael has James Hardie among the broker’s top Australian industrial picks following reporting season.

He believes the company can keep growing faster than the broader market, helped by the AZEK acquisition, cost savings, and stronger cash flow.

Morgan Stanley estimates James Hardie could deliver around 19% more earnings than current market expectations by 2029.

And yes, that’s a pretty bullish call, particularly while the US housing market remains soft.

The latest result also gave investors some reasons to be positive. First-quarter FY27 sales jumped 64% to US$1.47 billion, while adjusted EBITDA rose 79% to US$422 million.

On a pro-forma basis, which includes AZEK in the comparison period, sales still increased 12%.

Management also lifted its FY27 outlook and now expects pro-forma adjusted EBITDA growth of 7.4% to 13.7%.

Cash flow is heading higher

The balance sheet has been one of the key concerns since the AZEK acquisition.

But there were some encouraging signs in the last quarter.

Free cash flow more than doubled to US$254 million, and the company is still targeting at least US$500 million across FY27.

The planned $840 million Euro sale of Fermacell should also give the balance sheet a boost. Around US$600 million of the proceeds is expected to go towards paying down debt, which should help bring net leverage below 2 times.

James Hardie also announced a US$250 million share buyback alongside the sale.

Would I buy at $40?

I still like the look of James Hardie shares at these levels.

The stock has already had a strong run this year, so I would not expect another easy 30% gain from here.

In addition, broker sentiment is also positive. TipRanks shows 7 buy ratings and 4 holds, with an average price target of $44.84.

That’s around 11% above the current share price.

And if the company keeps delivering on its growth plans, I think there could be more upside over the longer term.

The post This ASX 200 stock is up 30% in 2026. Here’s why I’d still buy it 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 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.

Westpac Banking Corp (ASX: WBC) shares have been under pressure, falling around 9% over the past 12 months. At the current share price of $34.91, the $117 billion ASX bank stock is trading close to its 52-week low.

The pullback has made the valuation more appealing, but is it enough to make Westpac shares a buy? Let’s see what the experts think.

Solid financial results, but…

Westpac is certainly not a bad bank. It has millions of customers, a huge deposit base, and is one of Australia’s largest mortgage businesses. It is also investing in improving its technology and strengthening areas such as business banking.

The latest quarterly profit itself was reasonably solid. Westpac shares reported $1.8 billion of net profit excluding notable items, up 2% compared with the first-half quarterly average. Net interest margin was also steady at 1.89%.

However, there are some warning signs beneath the surface. Mortgage application volumes declined as competition intensified and borrowers continued to navigate interest-rate uncertainty. Westpac also expects margins to come under further pressure in the near term.

For a major bank whose profitability is heavily influenced by lending margins, that’s not exactly music to shareholders’ ears.

Westpac’s investor presentation showed mortgage applications slowing noticeably. Average monthly applications were around 29,000 during the third quarter, with the post-budget run rate dropping further to approximately 26,000.

That’s important because home lending is a huge part of Westpac’s business.

Concerns about the growth outlook

There is an upside for investors, though. Westpac shares trade at a lower price-to-earnings ratio than Commonwealth Bank of Australia (ASX: CBA) and offer a higher dividend yield. That could appeal to investors who prioritise income or want to pay a lower multiple for a major Australian bank.

The market’s hesitation appears to centre on the growth outlook. The key question is whether slowing lending growth and margin pressure can be offset by continued cost discipline and strong credit quality.

Westpac expects the operating environment to remain highly competitive, particularly in mortgages. Management will also be watching consumer spending, credit risks and regulatory changes closely.

What do analysts think?

TradingView data shows nine of 16 brokers rate Westpac shares as sell or strong sell, while six have a hold rating and just one has a strong buy rating. The average price target is $33.38, below the current share price.

The team at Red Leaf recently named Westpac shares as a sell. It highlights the increasingly competitive environment as a reason for caution, particularly given Westpac’s valuation. Red Leaf commented:

The bank remains well capitalised and continues to generate solid earnings, but the operating environment is becoming increasingly competitive. Mortgage pricing is aggressive, deposit competition remains intense and the scope for sustained margin expansion appears limited. Westpac’s dividend remains attractive, but investors should also consider opportunity cost. We believe there are more compelling opportunities on the ASX, which offer stronger structural growth or more attractive valuations.

Foolish takeaway

For income-focused investors, Westpac’s dividend and lower valuation could make the recent weakness in the share price interesting.

But with mortgage competition intensifying and margins under pressure, the case for buying the dip isn’t quite as clear-cut as the cheaper share price might suggest.

The post Westpac shares are under pressure: Is it time to buy the dip? appeared first on The Motley Fool Australia.

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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.

If you’re buying Zip Co Ltd (ASX: ZIP) shares, you’re likely aware that the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock is well-known for its significant volatility.

And that volatility was on clear display in August.

Zip shares closed on 31 July trading for $2.55. When the closing bell rang on 31 August, shares were changing hands for $2.50 apiece.

This put the share price down 2.0% over the month just past, underperforming the 1.1% gains posted by the ASX 200.

Now, I know a 2% monthly decline doesn’t sound particularly volatile.

But here’s the thing.

On 20 August, Zip stock rocketed 18.2%.

The following day, shares crashed 15.7% as profit-taking looks to have taken the lead.

It’s enough to have you reaching for your Dramamine.

Here’s what’s been happening.

What’s been sending Zip shares on a wild ride?

August saw a few headwinds pick up for the ASX 200 BNPL stock.

Among these were rising expectations that inflation in its two dominant markets, Australia and the United States, may take longer than hoped to bring down within those countries’ central bank target ranges.

That’s led to higher prospects of interest rate hikes from both the US Fed and the RBA. And BNPL stocks like Zip shares have proven highly sensitive to interest rate moves.

Investors also have high growth expectations for the company. Which Zip delivered on when it reported its FY 2026 results on 20 August.

What did Zip report for FY 2026?

If you’ve been paying attention, you’ll have noted that 20 August was the day that Zip shares surged 18.2%, closing the day at $3.05 apiece.

Investors were overheating their buy buttons after the company achieved some record-breaking results.

Over the 12 months, Zip increased its active customers by 3.7% from FY 2025, up to 6.5 million. And the company saw a 27.2% lift in its total transaction volume (TTV) to $16.7 billion, driving a 24.7% increase in full-year revenue to $1.34 billion.

Zip also achieved record cash earnings before taxes, depreciation and amortisation (EBTDA) of $268.9 million, up 57.9% year on year.

And with the BNPL stock’s operating margin increasing by 4.2% to 20% in FY 2026, Zip posted a net profit after tax (NPAT) of $116.4 million, up 45.7% from the prior year.

The company also expects to deliver more earnings growth in the current financial year, targeting cash EBTDA of $340 million in FY 2027, representing a 26% increase from FY 2026.

Commenting on the results that sent Zip shares flying on the day, CEO Cynthia Scott said:

Our focus on exceptional customer experiences is translating into stronger engagement. In the US, we achieved more than 40% growth in both TTV and revenue for a second consecutive year while adding new customers at scale.

In ANZ, we returned to revenue and Australian receivables growth, led by the continued success of our Zip Plus product.

The post Why Zip shares took investors on a wild ride in August 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.