Copper shares are leading the falls on the ASX on Friday, after doubts were raised about the US imposing tariffs on the vital industrial metal.

Tariffs fears have been boosting prices

The copper price has been hitting record highs recently amid fears the US will impose tariffs in a bid to promote more home-grown mining and production.

Reports indicate that traders have been importing copper into the US and building up stockpiles ahead of the rumoured tariffs, helping push prices higher.

But a report from Reuters overnight suggested that the White House was still weighing up the higher costs tariffs could impose on the US’ manufacturing sector against the benefits of encouraging more domestic mining.

Reuters quoted a White House official as saying all options remained on the table.

They said:

The administration continues to ​evaluate all options to reshore copper and other critical manufacturing back to the United States.

This has been interpreted by market watchers as suggesting tariffs may not be imposed, leading to sharp falls in the share prices of copper miners.

Among the Australian-listed producers, shares in Develop Global Ltd (ASX: DVP) fell 9.6%, Capstone Copper Corp (ASX: CSC) fell 7.8%, and Sandfire Resources Ltd (ASX: SFR) fell 6.7%.

Shares in BHP Group Ltd (ASX: BHP), which now derives more than half of its earnings from copper, fell 3.7%, while Rio Tinto Ltd (ASX: RIO) shares were off 2.7%.

“No tariff” decision could ease prices

Morgan Stanley said the Reuters report gave slightly more weight to a “no tariff” scenario.  

They added:

Today’s article does not constitute a decision but it arguably has driven the market to give slightly more weight to the “no tariff” scenario than before. Copper prices are up around 15% YTD with both benchmarks hitting all time highs in recent days, with much of this year’s strength arguably attributable to strong US import demand ahead of potential tariffs. We estimate US excess imports have now exceeded 450 kt YTD, or 2.5-3% of global refined copper demand when annualised. However, if those imports were to slow down, the copper market would feel substantially looser in our view.

Morgan Stanley said the proposed tariffs would be 15% on refined copper from the start of January 2027, potentially rising to 30% in 2028.

The Reuters article confirmed that an update report on the US copper market, due on June 30, had been given to the US President.

Copper demand is expected to remain strong in coming years as the electrification of the economy gains pace.

The post Down almost 10%! Why are ASX copper shares tanking? 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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.