Following earnings results, the team at Ord Minnett is projecting big upside for Megaport Ltd (ASX: MP1). 

Megaport provides on-demand data and network interconnection services across multiple continents. 

It released full-year results on August 20. 

Results exceeded expectations

In yesterday’s report, Ord Minnett said Megaport’s FY26 earnings and FY27 guidance exceeded consensus estimates. 

The company also announced three contract wins, together valued at $506 million. 

These contracts will deliver annual recurring revenue of $129 million and start contributing in FY27. 

For FY26, total revenues rose 37% to $312 million, in-line with consensus of $313 million, and within the provided guidance range of $307-315 million. 

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 24% to $77 million, ahead of consensus at $72 million, and guidance of $64.5-75.5 million. 

Guidance is for FY27 revenue of $620-$730 million (consensus: $619 million) and an EBITDA margin of 38-40%, which implies EBITDA in the range of $ 236- $ 292 million (consensus: $242 million). 

Soft market reaction 

Despite the positive results, Megaport shares actually fell significantly following the results. 

Ord Minnett suggested this may have been influenced by several factors: 

Some parts of the investment community had been expecting contract wins already, or more of a guidance uplift in guidance from GPU Pool monetisation. 

We see guidance as prudent, and the EBITDA target is achievable purely on a conservative ramp-up of contracts without GPU Pool monetisation. EBITDA of over $300 million is possible with some GPU Pool monetisation on our analysis.

‍MP1 renegotiated two strategic contracts due to supply constraints. Despite this, the outcomes appear more favourable for MP1 given the alternative arrangements include providing higher-grade graphic processing units (GPU). This has increased total contract values in aggregate by US$87.1 million with no material change in aggregate annual recurring revenue or capex requirements.

Big upside remains for Megaport shares

The recent dip may have created a strong opportunity for value investors. 

The team at Ord Minnett placed an accumulate rating and $22 price target on Megaport shares following results. 

From yesterday’s closing price, this indicates an upside potential of approximately 33%. 

Our EBITDA estimates fall by 11.2% in FY27 on higher expenses but increase 22.6% in FY28 on higher revenues from contract wins. Our target price is revised to $22.We have an Accumulate recommendation. Catalysts for the shares include upgrades to FY27 guidance and more contract wins.

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The post This broker is tipping 33% upside for Megaport shares appeared first on The Motley Fool Australia.

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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 positions in and has recommended Megaport. 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.

WiseTech Global Ltd (ASX: WTC) shares gave investors a wild ride in August. The ASX tech stock finished Monday 0.6% lower at $40.38, bringing its monthly gain to 11%.

That offered some relief after a brutal year. WiseTech shares remain down 41% year to date and 60% over the past 12 months. The big question now is whether September can extend the shaky rebound.

Hitting the accelerator, then slamming the brakes

For much of August, it looked like WiseTech shares couldn’t be stopped. During the first three weeks, the tech stock surged 25%, reaching $45.47 on 25 August. Then came the FY26 result and the rally quickly lost momentum.

Since that result, WiseTech shares have fallen around 11%, leaving them a long way from the $100 level reached almost a year ago.

The numbers themselves were hardly disastrous. WiseTech reported a 46% increase in EBITDA to US$558.4 million for the year to 30 June. That landed within management’s US$550 million to US$585 million guidance range, although it fell slightly short of the US$569.5 million market forecast.

For FY27, management expects total revenue growth of 6% to 10%, reaching US$1.48 billion to US$1.54 billion. Underlying EBITDA is forecast to grow 12% to 21%, with margins improving to 49% to 51%.

The business hasn’t fallen apart

That’s important because the collapse in WiseTech shares hasn’t simply been about deteriorating demand.

WiseTech’s CargoWise platform remains a major logistics software system, used by the world’s top 25 freight forwarders, including Toll and DHL. It helps freight forwarders, customs brokers and supply-chain operators manage increasingly complicated global trade.

That gives WiseTech exposure to powerful long-term trends, particularly the digitalisation of global trade and rising demand for sophisticated logistics technology.

The bigger problems have been investor confidence, governance concerns and regulatory issues.

What do brokers think about WiseTech shares?

Several brokers remain firmly in the bullish camp.

Morgans retained its buy rating with a trimmed $62.50 price target, while Morgan Stanley maintained its buy rating and $70 target. That points to a 73% upside. Bell Potter also remains bullish, despite cutting its target from $71.75 to $65.

Citi lifted its target from $55.05 to $58.75, while UBS reduced its target from $65 to $56 but retained its buy recommendation. Macquarie nudged its target up to $48.20 and also retained a buy rating.

But there is plenty of scepticism. Jefferies downgraded WiseTech shares to hold with a $45 target, while JPMorgan also has a hold rating, with a $40 target.

At $40.38, the huge gap between those valuations tells investors something important: the market remains deeply divided over WiseTech’s recovery.

The August rebound is encouraging. But after such a bruising decline, Wisetech shares still have plenty to prove before investors can confidently declare the turnaround complete.

The post WiseTech shares enjoy best month in over a year. More to come? appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Van Dinther has positions in WiseTech Global. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

There are a lot of options for investors to choose from on the ASX.

So, to narrow things down, let’s see what analysts at Morgans are saying about the three popular ASX shares listed below.

Here’s how the broker rates these shares:

Boss Energy Ltd (ASX: BOE)

Morgans was disappointed with this uranium producer’s guidance for FY 2027, which revealed weaker than expected production and higher than expected costs.

In response to the update, the broker has downgraded Boss Energy shares to a sell rating with a $1.30 price target. It said:

Guidance rest and expectations move lower – FY27 guidance implies a ~15% production downgrade versus consensus even at the top end of the range, while C1 costs and AISC are ~15-18% above market expectations. While FY26 was broadly in line, FY27 guidance is likely to drive a reset in earnings expectations. 

Honeymoon new feasibility study – The updated feasibility study outlines a more achievable development pathway with improved unit economics and lower sustaining capital intensity; however, the 13.8Mlb production profile sits below the ~15.1Mlb assumed by consensus, shifting the debate towards whether improved margins can offset lower volumes. Following material downgrades to our forecasts, we move to a SELL (previously ACCUMULATE) with a reduced-price target of A$1.30ps (previously A$1.40ps).

Magellan Financial Group Ltd (ASX: MFG)

The broker was relatively pleased with Magellan’s performance in FY 2026. Although its profits were down year on year, they were above consensus estimates.

And while there are headwinds in FY 2027, Morgans remains positive on its medium term growth outlook. As a result, it has an accumulate rating and $10.25 price target on Magellan’s shares. It said:

MFG’s group operating profit after tax (A$145m) was down 9% on the pcp (A$159m) and 2% above consensus (A$142m). Guidance was the main factor weighing on the result, with management flagging numerous headwinds for FY27 – which shapes up as a consolidation year – alongside signs of a slowdown in Barrenjoey growth in 2H26 (despite otherwise impressive overall numbers). 

We downgrade our MFG FY27F/FY28F EPS by ~10-20%, reflecting disclosed guidance impacts to earnings and greater conservatism in our Barrenjoey growth forecasts. Our price target falls from A$11.26 to A$10.25. While MFG faces some near-term pressures, we continue to believe the company is well positioned to drive medium-term growth. With >10% upside to our price target, we maintain our ACCUMULATE call.

NextDC Ltd (ASX: NXT)

Finally, this data centre operator impressed with its FY 2026 results and guidance for FY 2027. 

However, Morgans hasn’t seen quite enough to recommend it as a buy. So, for now, the broker has moved to a hold rating with a $15.00 price target. It explains:

NXT’s FY26 and FY27 outlook were both above expectations. Customer demand remains insatiable and NXT is on a glide path to materially higher EBITDA. We lift our EBITDA forecasts materially on a faster ramp-up of contracted MW. 

We see the value creation from substantial FY26 deals but cannot avoid the investment markets reasonable fixation on the funding envelop. We think, until NXT delivers more steps along the path to a capital recycling program, the stock could lack marginal buyers. We move to a Hold recommendation, for now.

The post Buy, hold, sell: Boss Energy, Magellan, and NextDC shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Nextdc. 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.