Austal Ltd (ASX: ASB) shares are heading north on Monday after the defence shipbuilder released its FY26 results.

At the time of writing, the Austal share price is up 3.42% to $4.24.

That is despite the company reporting a statutory net loss of $53.6 million, compared with an $89.7 million profit a year earlier.

So, why are investors buying up the shares?

Revenue tops $2 billion

Austal reported FY26 revenue of $2.03 billion, up 11% from $1.82 billion last year.

However, earnings were hit hard by problems within its US business.

Group EBIT swung from a $113.4 million profit in FY25 to a $125.2 million loss, largely due to provisions linked to several loss-making US contracts.

Operating cash flow also dropped to $62.5 million from $406.3 million, while net cash finished the year at $186.3 million.

The company did not declare a dividend as it continues investing heavily in new production capacity.

Australasia is doing the heavy lifting

Austal’s Australasian business delivered revenue of $650.7 million, up 49% from the previous year.

EBIT climbed 137% to a record $85.3 million, with the EBIT margin increasing to 13.1%.

That growth was helped by higher shipbuilding activity and the ramp-up of major Australian defence programs.

Austal’s Australasian defence order book has also jumped to around $5.6 billion, compared with just $700 million a year earlier.

That includes work under the strategic shipbuilding agreement, along with the landing craft medium and landing craft heavy programs.

Austal Chief Executive Paddy Gregg said the existing and expected contract pipeline gives the company a path to potentially double Australasian revenue over the next 5 years.

A huge order book could be supporting the shares

Another number that stands out is Austal’s overall order book.

The company finished FY26 with around $16.5 billion of work, including options, across its Australian and US operations.

Its US order backlog alone is around $10.9 billion, while Austal continues expanding its submarine module manufacturing capacity.

Management is also targeting around $500 million of support and sustainment revenue in FY27.

The company said it expects to return to profitability in FY27 as it works through the issues affecting its US contracts.

What happens next?

Investors will also be watching the proposed sale of Austal USA.

South Korea’s Hanwha Defence has submitted an indicative offer valuing the US business at between US$1.05 billion and US$1.2 billion.

Hanwha has been granted due diligence, although there’s no guarantee a deal will go ahead.

Nonetheless, a sale at that level would leave Austal with a much stronger balance sheet.

The post Austal shares jump despite a $54 million loss. Here’s why investors are buying 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.

S&P/ASX 200 Index (ASX: XJO) shares are up 0.03% at 9,095.2 points on the final day of reporting season.

Hundreds of companies have revealed their earnings this season.

Brokers have reviewed the reports and updated their ratings and 12-month price targets accordingly.

Here are five buy-rated ASX 200 shares with significant upside potential ahead, according to the experts.

NextDC Ltd (ASX: NXT)

The NextDC share price is $13.63, down 1.7% today and down 17% over 12 months.

UBS renewed its buy rating on NextDC shares, with a $22.55 target after reviewing the company’s FY26 earnings.

This implies potential capital growth of 61% over the next year.

WiseTech Global Ltd (ASX: WTC)

The WiseTech share price is $41.39, up 1.9% today and down 58% over 12 months.

Morgans reiterated its buy rating on this ASX 200 tech share after the company’s FY26 results.

The broker reduced its 12-month price target from $67 to $62.50.

However, this still implies a healthy potential upside of 52%.

Droneshield Ltd (ASX: DRO)

The Droneshield share price is $1.74, down 0.7% today and down 46% over 12 months.

Bell Potter renewed its buy rating on this ASX 200 industrials share after its 1H FY26 results.

The broker trimmed its 12-month price target from $2.50 to $2.40.

This suggests a potential 35% upside ahead.

Qantas Airways Ltd (ASX: QAN)

The Qantas share price is $9.56, down 0.3% today and down 17% over 12 months. 

Morgan Stanley kept its buy call in place on Qantas shares following the airline’s FY26 results.

The broker raised its target on the ASX 200 industrials share from $12.50 to $12.80.

This suggests a potential 33% upside ahead.

Objective Corporation Ltd (ASX: OCL)

The Objective Corporation share price is $6.40, down 5.9% today and down 69% over 12 months. 

Morgans maintained its buy recommendation on this ASX 200 tech share after the company’s FY26 results.

The broker has a revised 12-month price target of $8.50, implying a potential 33% upside ahead.

OCL’s FY26 result was largely in line with expectations. The result came however with more sticker shock in the form of another legacy contract loss leading to a further $3.2m ARR reduction.

OCL enters FY27 with ARR of $114.1m. Despite this softening & FX headwinds during the year, OCL continued to see strong underlying SaaS growth momentum and progress of a number of strategic milestones (including the launch of Build Australia), which is key to ARR momentum and FY27+ outlook.

Rebasing our forecasts for OCL’s revised FY27 ARR and guidance sees our NPAT estimates reduce by ~18-21% in FY27-28F.

Following these revisions OCL is trading on FY27F P/E of 24x, with a share price near 5 years lows.

The post 5 ASX 200 shares with 33% to 61% upside post-results: experts appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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, Objective, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Objective and WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX healthcare share Sonic Healthcare Ltd (ASX: SHL) could be one of the best picks within the S&P/ASX 200 Index (ASX: XJO) for retirees wanting dividends.

Sonic Healthcare describes itself as one of the world’s leading medical diagnostic companies. It operates in nine countries, including Australia, the UK, Germany, the US, and Switzerland, with 330 laboratories and 47,000 employees. Impressively, it’s the number one player in six countries.

For multiple reasons, I think it’s a great option for retirees.

Defensive earnings

Healthcare is a defensive sector because of the nature of the types of services it provides.

People don’t choose when to become sick or injured – healthcare demand doesn’t change like discretionary spending does. I’d imagine most people (and governments) would prioritise spending on health over most other categories.

Sonic Healthcare provides an essential service in the healthcare process, so I think its earnings are very defensive.

The ASX healthcare share reported an impressive set of numbers in FY26, considering the economic uncertainty.

Revenue grew 13% to $10.9 billion, underlying operating earnings (EBITDA) climbed 11% to $1.9 billion, and underlying earnings per share (EPS) grew 14% to $1.256.

Profit growth is key for a business to deliver a stable and rising dividend because profit pays for passive income. Therefore, even retiree passive income investors need to look at the earnings outlook.

Good dividend credentials

The ASX healthcare share has paid dividends since 1994. It has increased its dividend almost every year since 1994, except in 2011 and 2012, when it maintained it.

There are very few ASX businesses out there that have increased their payout as consistently over the last 25 years.

I expect the business will be able to continue growing its payout for the foreseeable future.

In the 2026 financial year, Sonic Healthcare continued its progressive dividend policy, hiking the payout by 1 cent per share to $1.08. That translates into a dividend yield of 5.4% excluding franking credits and around 7% including franking credits.  

That’s a really attractive starting yield for retirees, in my opinion.

The ASX healthcare share has earnings tailwinds

I expect the business will be able to increase its payout in the coming years because its earnings could grow materially.

Demand for its services could grow for the foreseeable future, driven by the ageing and growing population in the company’s core markets.

Another way that the company can grow its earnings is by making the occasional acquisition. Its focus in recent times has been Europe. This tactic gives the business a much stronger scale in that market, boosting profit margins.

Over time, I think this business can continue to grow its profits and dividends, making it a compelling pick for investors.

The post Why this ASX healthcare share is a retiree’s dream for FY27 appeared first on The Motley Fool Australia.

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• Buy, hold, sell: Super Retail, APA, Sonic Healthcare 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 recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.