Tag: Stock pick

The S&P/ASX 200 Index (ASX: XJO) is ending the week deep in the red. In afternoon trade, the benchmark index is down 1.35% to 8,437.1 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Accent Group Ltd (ASX: AX1)

The Accent share price is down over 12% to $1.05. Investors have been selling the footwear retailer’s shares following the release of guidance for FY 2026. Accent revealed that it expects first half earnings before interest and tax (EBIT) in the range of $55 million to $60 million. This is down sharply from $80.7 million in the first half of FY 2025. For the full year, EBIT in the range of $85 million to $95 million is expected. This will be down from $110.2 million in FY 2025. This has been driven by like for like sales weakness and margin pressure due to promotional activity.

DroneShield Ltd (ASX: DRO)

The DroneShield share price is down over 7% to $1.75. This could have been driven by news that the US is pushing for Ukraine and Russia to sign a peace deal. While peace would clearly be good news for the world, it could mean lower counter drone sales in the near term.

Lovisa Holdings Ltd (ASX: LOV)

The Lovisa share price is down almost 10% to $31.45. This follows the release of a trading update from the fashion jewellery retailer this morning. Despite what you might expect given the share price weakness, Lovisa has started FY 2026 in a very positive fashion. It revealed that it has increased its store network by 44 stores so far in FY 2026 to 1,075 stores across more than 50 markets. This means it is currently trading from 148 more stores than this time last year. In addition, it advised that global total sales for the first 20 weeks of FY 2026 were up 26.2% on the prior corresponding period. Management notes that it is “benefiting from the continued growth in the store network over the past year, with global comparable store sales up 3.5% on FY25 for this period.” This sales growth is ahead of consensus estimates.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is down almost 7% to $3.91. Investors have been selling lithium shares on Friday following a poor night of trade for their peers on Wall Street. It seems that with market volatility returning today, investors have been quick to hit the sell button on high risk investments and switch into safe haven assets.

The post Why Accent, DroneShield, Lovisa, and Pilbara Minerals shares are sinking today appeared first on The Motley Fool Australia.

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• Lovisa shares tank more than 10% on weaker than expected sales growth
• Why is this ASX 300 stock crashing 18% today?
• Lovisa holds AGM; provides a positive trading update
• 5 things to watch on the ASX 200 on Friday
• 3 ASX 200 shares I’m avoiding next week

Motley Fool contributor James Mickleboro has positions in Accent Group and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield and Lovisa. The Motley Fool Australia has recommended Accent Group and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Nvidia (NASDAQ: NVDA) are up 4.5% in Wednesday’s after-hours trading as of 5:57 p.m. ET, following the artificial intelligence (AI) tech leader’s release of its report for its third quarter of fiscal 2026 (ended Oct. 26, 2025).

Investors’ positive reaction is attributable to Q3 revenue and adjusted earnings per share both beating Wall Street’s estimates, and Q4 guidance for both the top and bottom lines also coming in higher than analysts had expected.

The strong guidance was probably the most significant catalyst for Nvidia stock’s upward move. It’s an indication that the outlook for the AI market in general remains robust.

In recent weeks, Nvidia and other AI stocks have been struggling. Investors have become increasingly concerned about AI stock valuations, fearing that an AI stock bubble may be forming. These struggles were in part caused by the Nov. 4 revelation that Michael Burry, now a former hedge fund manager, took bearish positions (by buying put options) on Nvidia and Palantir stocks in the third quarter. 

Nvidia’s key numbers

Generally accepted accounting principles (GAAP) numbers include one-time items. Investors should focus on the adjusted numbers, which exclude one-time items.

Wall Street was looking for adjusted EPS of $1.26 on revenue of $55.09 billion, so Nvidia exceeded both expectations. It also beat its own guidance, which was for adjusted EPS of $1.22 on revenue of $54 billion.

For the quarter, GAAP and adjusted gross margins were 73.4% and 73.6%, respectively.

Platform performance

The data center platform’s performance was driven by “three platform shifts — accelerated computing, powerful AI models, and agentic applications,” Colette Kress said in her CFO commentary. She added that “Blackwell Ultra is now our leading architecture across all customer categories while our prior Blackwell architecture saw continued strong demand.”

The 1% sequential slip in gaming revenue is no cause for concern. Kress said that distribution channels have reached “more normalized levels heading into the holiday season.”

Professional visualization had a strong quarter, driven by the launch of the company’s new DGX Spark (a compact AI supercomputer) and the growth of Blackwell sales.

Auto revenue growth was driven by the continued adoption of Nvidia’s self-driving platforms, which are widely adopted by car companies and others developing driverless technology and driverless vehicles.

What the CEO had to say

CEO Jensen Huang stated in the earnings release:

Blackwell sales are off the charts, and cloud [computing] GPUs [graphics processing units] are sold out. Compute demand keeps accelerating and compounding across training and inference — each growing exponentially. We’ve entered the virtuous cycle of AI. The AI ecosystem is scaling fast — with more new foundation model makers, more AI start-ups, across more industries, and in more countries. AI is going everywhere, doing everything, all at once.

Guidance for the fourth quarter

For Q4 of fiscal 2026, which ends in late January, management expects revenue of $65 billion, representing a year-over-year growth rate of 65%.

Management also guided (albeit indirectly, by providing several inputs) for adjusted EPS of $1.50, representing 69% growth.

Going into the report, Wall Street had been modeling for Q4 adjusted EPS of $1.43 on revenue of $61.84 billion, so the company’s outlook sprinted by both expectations.

Nvidia stock is not in a bubble

In short, Nvidia delivered yet another report with fantastic quarterly results and strong guidance.

Nvidia stock is not in a bubble. Shares were priced at 52 times trailing one-year earnings and 27 times forward one-year earnings at the close of Wednesday’s regular trading session. These are reasonable valuations for a company that has just grown its quarterly adjusted EPS by 60% and guided for adjusted EPS growth of 69% next quarter.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Nvidia stock in an AI bubble? The AI giant’s fantastic Q3 results and guidance should put that concern to rest appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Bitcoin price collapse leads US$1 trillion crypto crash
• Why are ASX 200 tech stocks getting smashed on Friday?
• AI bubble worries are rising. Nvidia’s $31.9 billion profit says otherwise.
• Where will Nvidia stock be in 3 years?
• Why DroneShield, GQG Partners, Origin Energy, and Worley shares are falling today

Beth McKenna has positions in Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P 500 Index (SP: .INX) took a tumble overnight.

Amid diminishing hopes for another US Fed interest rate cut in 2025, and mounting concerns over a potential AI bubble, the S&P 500 closed down 1.6% on Thursday, ending the day at 6,539 points.

This sees the benchmark US stock market index down 5.1% since notching its record closing high of 6,891 points on 28 October.

Taking a step back, however, the US index has still materially outperformed the S&P/ASX 200 Index (ASX: XJO).

Year to date, the ASX 200 is up 2.9% while the S&P 500 has gained 11.2% over this same period.

As for the year ahead, the team at Morgan Stanley forecasts a big uplift for the US markets.

We’ll look at one ASX ETF (exchange-traded fund) that stands to benefit from that bullish forecast below.

But first…

Why Morgan Stanley expects the S&P 500 to surge in 2026

“We believe a new bull market began in April with the end of a rolling recession and bear market,” Morgan Stanley chief US equity strategist Mike Wilson said on Wednesday. “Remember the S&P 500 was down 20% and the average S&P stock was down more than 30% into April.”

According to Wilson:

This narrative remains underappreciated, and we think there is significant upside in earnings over the next year as the recovery broadens and operating leverage returns with better volumes and pricing in many parts of the economy.

Our forecasts reflect this upside to earnings which is another reason why many stocks are not as expensive as they appear despite our acknowledgement that some areas of the market may appear somewhat frothy.

And Morgan Stanley expects the US index, and by extension, the ASX ETF we’ll examine below, to come roaring back.

“For the S&P 500, our 12-month target is now 7,800, which assumes 17% earnings growth next year and a very modest contraction in valuation from today’s levels,” Wilson said.

That target represents a 19.3% upside from current levels.

As for which stocks could lead the charge, Wilson added:

Our favourite sectors include Financials, Industrials, and Healthcare. We are also upgrading Consumer Discretionary to overweight and prefer Goods over Services for the first time since 2021.

How to mirror those outsized potential gains with one ASX ETF

If you’re looking to mimic the potential 19% plus gains Morgan Stanley expects from the S&P 500, you might want to have a look at the SPDR S&P 500 ETF Trust (ASX: SPY).

The ASX ETF provides you with exposure to 500 of the largest US-listed companies, with the goal of tracking the performance of the benchmark US index.

The ASX ETF’s largest four holdings are Nvidia Corp (NASDAQ: NVDA), Microsoft Corp (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), and Amazon.com Inc (NASDAQ: AMZN).

The post Why Morgan Stanley’s S&P 500 target forecasts a 19% gain for this top ASX ETF appeared first on The Motley Fool Australia.

More reading

• Bitcoin price collapse leads US$1 trillion crypto crash
• Why are ASX 200 tech stocks getting smashed on Friday?
• AI bubble worries are rising. Nvidia’s $31.9 billion profit says otherwise.
• Where will Nvidia stock be in 3 years?
• Why DroneShield, GQG Partners, Origin Energy, and Worley shares are falling today

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 positions in and has recommended Amazon, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Energy Index (ASX: XEJ) has dropped 1.39% at the time of writing on Friday morning. But both Ampol Ltd (ASX: ALD) and Viva Energy Group Ltd (ASX: VEA) shares are travelling in the opposite direction.

At the time of writing, Ampol shares are 0.13% higher, trading at $31.28 each. For the month, the shares are trading 4.79% higher, and they’re now 9.6% higher than this time last year.

Meanwhile, Viva Energy shares are trading 2.53% higher at the time of writing, at $2.02 a piece. Over the past month, the ASX 200 energy company’s shares have stormed 15.71% higher, but since January, the stock’s price has fallen 24.44%.

There has been no price-sensitive news out of either energy business this morning, but analysts at Macquarie Group Ltd (ASX: MQG) have written to investors about their improved outlook on both stocks.

Macquarie upgrades Ampol shares, target price raised

The broker has raised its outlook on the ASX 200 energy company’s shares to outperform from neutral. It has also raised its target price to $36, up from $32 last month.

At the time of writing, that implies a potential 15.1% upside for investors over the next 12 months.

“ALD executing well on M&A and non-refining (NZ had a tough 3Q, but improving). U-GO conversions add network resilience (but don’t all need to work successfully). Lytton ULSG project has been tough with delays and capex overruns, but ALD should now capture the cycle until its deferred FCCU turnaround (1H-2026, mainly impacting gasoline),” the broker said in its investor note. 

Macquarie has also raised Ampol‘s 2025 and 2026 estimated earnings per share (EPS) by 4% and 10% respectively, on stronger refining margins.

“Our TP is +12.5% to $36.00/sh (still based on 16x P/E rolling NTM) based on the earnings upgrades. We had hoped for a better re-entry point ahead of full year results, however with refining margins now surging into heating season we no longer expect this to occur.”

Macquarie’s revised outlook for Viva Energy shares shows robust upside

The broker has also raised its outlook on Viva Energy shares to outperform, up from neutral. It has raised its target price on the ASX 200 company’s shares to $3.20, up significantly from the $2 target price last month.

At the time of writing, this suggests a potential upside of 58.4% over the next 12 months.

“The CEXP & OTR acquisitions have disappointed on earnings runrate, high site conversion costs, progressive loss of tobacco business & culminating with head of C&M resigning. Market appears to be ignoring refining leverage that still exists at Geelong (far more material in an upcycle than C&M’s incremental growth could have been in same period),” the broker said.

Macquarie has raised Viva Energy’s estimated EPS for 2025 and 2026 by 17% and 33%, respectively, based on stronger refining margins.

“Our TP is +60% to $3.20/sh, factoring the earnings as well as a target P/E expansion (14x rolling NTM, was 12x), reflecting healthier cashflow and balance sheet (refining windfall helps to accelerate post-OTR deleveraging).”

What else did the broker have to say about the ASX 200 shares?

Macquarie’s analysts said that the refined product markets are tight, with constrained Russian product supply, relatively low inventories (particularly diesel), and surprisingly solid demand. 

They added that net capacity additions have slowed down versus recent years, given that major capacities are now in service, and China exports appear constrained. 

The analysts also commented that Russian sanctions and increased Ukrainian drone attacks are driving the risk premium. Some drivers, such as high refinery outages, are likely to be temporary, while others, like reduced Russian exports, are likely to be more structural.

The post Macquarie upgrades 2 ASX 200 energy stocks; suggests strong upside appeared first on The Motley Fool Australia.

More reading

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• Ampol successfully issues $500 million subordinated notes

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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and 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.

Northern Star Resources Ltd (ASX: NST) has been one of the standout performers on the ASX this year – and for obvious reasons. The ASX 200 gold company’s share price has increased by more than 65% in 2025.  

Global gold player

The Perth-based gold miner has grown into a $38 billion global producer. In FY 2025, Northern Star delivered very chunky results. It operates two world-class operations in Western Australia and Alaska and retained investors’ attention with acquisitions to add scale.

The gold producer recently acquired the Hemi development project in the Pilbara through its takeover of De Grey Mining. This offers Northern Star a future income stream. It also stepped up its investments in the expansion of the KCGM mill in Kalgoorlie.

Northern Star is a classic mid-to-large cap mining story. It has benefitted directly from an increasing gold price, managed to convert that tailwind into real cash flows and used scale to become a popular ASX 200 gold share for investors looking for gold exposure with a relatively mature operating base.

Familiar caveats

The caveats for Northern Star are familiar: commodity cyclicality and execution risk. Today’s share developments make that clear. At the time of writing, the ASX gold share is changing hands for $25.80 apiece, down 2.7%. The reason for the decline is the gold price that fell overnight.

The appeal of gold as a safe haven remains strong during times of geopolitical uncertainty and macroeconomic risk. America’s biggest bank, JPMorgan Chase & Co (NYSE: JPM), and French bank Societe Generale SA say the gold price could exceed US$5,000 per ounce next year. 

The current gold price dropped overnight by 0.35% to US$4,069 per ounce, so analysts believe there’s room to grow.

What do analysts think?

Despite this year’s dream run, most analysts still see Northern Star as a buy. Macquarie Group Ltd (ASX: MQG) has an outperform rating and a $30 price target on the ASX stock.

Based on its current share price, this implies potential upside of almost 17% for investors over the next 12 months. The broker is also forecasting a 2% dividend yield in FY 2026, boosting the total potential return to 19%.

Morgans also has an accumulate rating on Northern Star shares, but is a little less optimistic than the team at Macquarie.  

The broker expects the Northern Star Resources share price to lift to $27.41 by this time next year.

NST delivered a softer (but well flagged) quarterly result with unit costs surprising to the upside despite lower than forecast ounce production. FY26 guidance was reiterated, we expect production rates to continue to lift quarter on quarter.

The post Why this ASX 200 gold share is powering ahead appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Monday

JPMorgan Chase is an advertising partner of Motley Fool Money. 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 positions in and has recommended JPMorgan Chase and Macquarie Group. The Motley Fool Australia has positions in and 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.

Webjet Group Ltd (ASX: WJL) is now fielding two separate takeover bids, with BGH Capital joining Helloword Travel Ltd (ASX: HLO) in indicating it’s keen on buying out the company.

However, analysts at RBC Capital Markets believe that yet another bidder could enter the fray, potentially driving the price paid for the company even higher.

HelloWorld lobbed a potential bid for Webjet earlier this week, stating it would look to acquire the company for $0.90 per share, subject to due diligence and other conditions, including a unanimous recommendation from the Webjet board in favour of the deal.

This has been followed on Friday morning by a once again non-binding offer from BGH priced at 91 cents per share, which is also seeking a unanimous recommendation from the Webjet board.

The BGH bid follows a previous proposal put to Webjet in May this year to buy the company for 80 cents per share.

BGH already controls major stake

Webjet said in a statement to the ASX on Friday that BGH already had control over a significant proportion of the company’s issued capital.

As it told the ASX:

Pursuant to a co-operation agreement with Portfolio Services Pty Ltd, an entity associated with Ariadne Australia Ltd and Gary Weiss, BGH has a total relevant interest of 18.3% in Webjet ordinary shares.

Conditions associated with the BGH bid include that it attain control over at least 75% of Webjet shares and the required regulatory approvals.

Similar to the HelloWorld bid, the Webjet board will now allow BGH access to its books to conduct due diligence.

As the company said:

After carefully considering the revised BGH proposal, the Webjet board has agreed with BGH’s request to provide BGH with an opportunity to conduct due diligence, subject to the parties agreeing to a mutually acceptable non-disclosure agreement.

Webjet shares were trading at 91.5 cents on Friday morning, up 2.5 cents.

Analysts at RBC Capital Markets believe that the takeover tussle may intensify even further, as they said in a note issued to clients on Friday.

Two competing bidders, with the board granting both access to due diligence would indicate to us that Webjet is very much in play. We continue to believe Webjet possesses attributes (strong market position, brand awareness, cash generation and cash balance etc.) that would appeal to both trade and financial buyers alike. We do not consider it unreasonable that another bidder may enter the fray.

RBC has a price target of $1.10 on Webjet shares.

Solid first-half results

Webjet earlier this week reported its first-half results and declared an inaugural dividend of 2 cents per share.

The company announced on Wednesday that its first-half revenue totalled $67.9 million, representing a 1% decrease from the same period last year, while net profit increased to $6.2 million, a 41% rise.

Webjet said it was a “challenging trading environment for the group”, with bookings down 8% and total transaction volumes down 3%.

Domestic bookings were down by 10%, while international bookings were up 4% and made up 22% of total flight bookings.

The company will pay a 2-cent first-half dividend, equivalent to 100% of underlying net profit, “consistent with the announced intention of maximising the distribution of franking credits as they become available, including the payment of special dividends above the target ratio”.

Webjet said a proposed buyback program was on hold for now.

Webjet Managing Director Katrina Barry said the results were “broadly in line with expectations, demonstrating the resilience of our business, despite experiencing challenging market conditions”.

The post How high could the bidding war for Webjet go? appeared first on The Motley Fool Australia.

More reading

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• Why are Webjet shares getting smashed today?

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.

It’s a sea of red on the crypto boards today, with the Bitcoin (CRYPTO: BTC) price tumbling another 4.8% over the past 24 hours.

At time of writing in late morning trade on Friday, the world’s first and biggest digital token is trading for US$87,038 (AU$134,922). That gives it a market cap of US$1.73 trillion.

Now, that’s still a lofty valuation by longer-term standards. After all, only 10 years ago BTC was trading for just US$400.

But it’s certainly been a painful journey for crypto investors arriving late to the party.

As you may recall, it was only on 7 October that the Bitcoin price rocketed to a new record high of US$126,198, according to data from CoinMarketCap.

Meaning crypto investors who bought at those levels will currently be nursing losses of 31%.

And with the vast majority of major cryptos joining the sell-off, we’ve now seen more than US$1 trillion wiped from the global digital asset sector.

Why is the Bitcoin price falling so hard?

Following the past five weeks rout, the Bitcoin price is now down 8.0% since this time last year. That sees the token significantly underperforming the 1.5% gains delivered by the S&P/ASX 200 Index (ASX: XJO).

Not to mention the 84.9% one-year gains posted by the S&P/ASX All Ordinaries Gold Index (ASX: XGD). An unwelcome reminder, perhaps, to those who’ve lauded the token as ‘digital gold’.

The latest pressure on the Bitcoin price comes on several fronts.

First, investors are significantly paring back expectations of another interest rate cut from the US Fed this year. And Bitcoin has proven to be highly sensitive to interest rates.

Second, the token remains a risk asset. And with the Nasdaq Composite Index (NASDAQ: .IXIC) coming under pressure amid growing fears of a pending AI bubble burst, a lot of crypto investors look to be lightening their Bitcoin exposure, along with sending AI chip maker Nvidia Corporation (NASDAQ: NVDA) shares down 3.2% overnight.

Commenting on the US$1 trillion crypto collapse, said James Butterfill, head of research at CoinShares, said (quoted by Bloomberg), “Investors are stabbing in the dark a bit — they haven’t got any direction on macro, so all they can see is what on-chain whales are doing and they’re getting quite worried about it.”

Matthew Hougan, chief investment officer at Bitwise Asset Management, added:

I think we are closer to the end of the selling than the beginning, but markets are uncomfortable and crypto could have more downside here before it finds a base to recover from.

What about Ethereum?

As mentioned, the Bitcoin price is far from the only one getting hammered lately.

Ethereum (CRYPTO: ETH), the world second biggest crypto, is down 6.3% over 24 hours, currently trading for US$2,847.

The Ethereum price is now down 42.5% since the token notched its own record high of US$4,954 on 25 August.

The post Bitcoin price collapse leads US$1 trillion crypto crash appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 tech stocks getting smashed on Friday?
• AI bubble worries are rising. Nvidia’s $31.9 billion profit says otherwise.
• Where will Nvidia stock be in 3 years?
• Why DroneShield, GQG Partners, Origin Energy, and Worley shares are falling today
• 5 things to watch on the ASX 200 on Thursday

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 positions in and has recommended Bitcoin, Ethereum, and Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX small-cap stock Emeco Holdings Ltd (ASX: EHL) could be one of the most exciting names to invest in right now, based on what broker Macquarie is predicting for the business.

Macquarie describes Emeco as providing heavy equipment rental solutions and contract mining primarily for the mining industry. It has three different segments: rental, Pit n Portal, and workshops.

The rental segment provides earthmoving equipment to customers in Australia. Pit n Portal includes a range of mining services and related services in Australia. Workshops provides maintenance and component build services in Australia.

Let’s get into what’s appealing about the business.

What’s the appeal of the ASX small-cap stock?

Macquarie was pleased with the recent trading update from the business, which showed “solid momentum” as the business enters FY26 with a strengthened balance sheet.

The company is expecting “moderate earnings growth, significant free cash flow and substantial deleveraging”.

Macquarie forecasts the business could grow its operating profit (EBITDA) by 6% to $319 million in FY26.

In the update, Emeco’s FY26 guidance was largely unchanged, apart from the depreciation range being lifted to between $165 million to $170 million, up from $160 million to $165 million previously.

The broker noted that the ASX small-cap stock remains focused on improving the return on capital (ROC), targeting 20%. It finished FY25 with a ROC of 17% and the current run-rate is around 18%. The company is also focused on converting earnings into free cash flow.

Macquarie believes sustained equipment utilisation and operational improvements remain critical.

The broker pointed out that in FY26, Emeco will drive cost efficiencies and increase its focus on business development to support higher utilisation, expand market share through new project opportunities, and grow fully maintained projects through the Force business.

How is the mining industry performing?

As a business heavily involved in serving the mining industry, Emeco’s success is partly linked to the performance of the sector. Macquarie commented on the sector as a whole:

The outlook for FY26 remains positive. Australian mining production volumes are expected to remain buoyant, supported by continued demand for commodities. In particular, bulk commodities is forecast to remain robust (iron ore and coal), driving demand for large mining equipment and rental solutions. Strength in the gold sector, where EHL’s rental and maintenance solutions can drive improved production and returns for clients, also presents growth opportunities for the company.

How attractive is the ASX small-cap stock’s valuation?

Macquarie identifies several potential catalysts for the business, including ongoing deleveraging, margin improvements, generating free cash flow to reduce outstanding debt, and potential capital management initiatives (such as dividends and share buybacks). It’s expecting a capital management update after refinancing its debt facilities.

The broker has a price target of $1.40, implying a potential 12-month rise of 12% from its current level, as well as a possible annual dividend of 5 cents per share, which equates to a dividend yield of 4%. That implies a possible total return of 16% over the next 12 months.

The post Macquarie tips 16% upside for this ASX small-cap stock appeared first on The Motley Fool Australia.

More reading

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• Up 65% this year: Are Charter Hall Group shares still a buy?
• Macquarie tips 23% upside for this ASX 200 stock
• Why are ASX 200 tech stocks getting smashed on Friday?
• Does Macquarie rate a2 Milk shares a buy, hold, or sell?

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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and 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.

Charter Hall Group (ASX: CHC) shares have jumped to an all-time high of $23.92 a piece at the time of writing on Friday morning. Today’s 1.18% increase means the stock is now 4.59% higher over the month. It is also 64.97% higher than this time last year. 

The shares have spiked over 7% since yesterday afternoon. The share price spike was driven by the Australian property investment and funds management company upgrading its FY26 earning guidance.

Investors were thrilled that the group raised its FY26 OEPS guidance by 5.5% to 95 cents per security. The upgrade reflects a 16.7% increase over FY25. The move was driven by strong investment activities and rising revenues.

Charter Hall Group will announce its H1 FY26 Results on 19 February 2026. Its management expects demand for its property funds and further investment opportunities to continue across all core sectors.

Following Charter Hall Group’s announcement yesterday, analysts at Macquarie Group Ltd (ASX: MQG) have updated their outlook on the company’s shares.

Macquarie upgrades its rating on Charter Hall Group shares

In a note to investors, the broker said it has upgraded the company’s shares from underperform to neutral. The broker also raised its target price to $23.83, up from $19.01 previously.

At the time of writing that still represents a potential 0.37% downside for investors over the next 12 months.

“Valuation: TP +25% to $23.83 ($19.01 prior) driven by earnings changes and a higher multiple on FM (16x to 21x) to reflect the improving cycle,” Macquarie said in its note.

Upgrade to Neutral $23.83 TP. Operational metrics continue to improve, resulting in consistent earnings upgrades. However, valuation prevents us from getting more positive with CHC trading on 25x FY26 P/E (~17x LTA).

What did the broker have to say about Charter Hall Group’s earnings upgrade?

The company’s FY26 OEPS guidance is a 5.5% increase, implying 17% OEPS growth versus the prior corresponding period. The broker noted that the upgrade is driven by an acceleration in transaction volumes since June 2025. This has fuelled increased earnings across Property Investment, Development Investment and Funds Management revenue lines. 

The new FY26 OPES guidance of 95 cents is higher than previous market expectations and Macquarie estimates of 91.2 cents and 90 cents respectively.

[The] +5.5% upgrade vs our expectations follows a 3.0% beat when initial FY26 guidance was set and upgrades through FY25. CHC is trading on ~25x FY26 P/E, a peak multiple, which the market seems comfortable with currently. Whilst we are attracted to CHC’s 3-year OEPS CAGR forecast of 13% and prospects of further earnings upgrades, we struggle to justify the valuation from a bottom up perspective and get more positive, without reverting to relative value methods (e.g. PEG).

The post Up 65% this year: Are Charter Hall Group shares still a buy? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and 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.

Engineering firm Worley Ltd (ASX: WOR) has reiterated this week that it expects moderate growth in the current financial year, but if the team at Macquarie are to be believed, the stock is relatively cheap at current levels.

Speaking at the company’s annual general meeting held on Thursday this week, chief executive officer Chris Ashton said Worley had delivered a strong result in FY25, “in a complex global environment marked by economic and political shifts which impacted our customers’ investment decisions”.

He went on to say:

Our result reflects the fourth year of consistent growth in revenue, earnings and margin through the disciplined execution of our strategy.

Steady growth the target

The company’s strategy going forward, he said was defined by the three pillars of strengthen, expand and innovate.

Worley, Mr Ashton said, was also not seeking to chase large “lump-sum” projects, preferring to secure longer-term, sustainable work.

Our overall mix of work is anchored in lower-risk reimbursable contract models. This is deliberate. It supports our quality of earnings, protects downside and aligns our incentives with our customers’ success.

On the outlook for the current year, Mr Ashton said, as previously announced in August, the company was expecting “moderate growth”, with more work weighted to the second half of the year than was usual.

We’re targeting higher growth in revenue than FY25 and growth in underlying EBITA. Whilst we continue to operate in a challenging environment, we remain confident in the strength of our diversified business model, global scale and capability, and market trends which continue to support medium to long-term growth.

Shares looking cheap

The Macquarie team have had a look at Worley’s projections, and believe the shares look like good value buying at the moment.

The Macquarie analysts said it was encouraging that there were buoyant conditions flagged in the areas of resources and liquefied natural gas, and said “we think (the) US power sector is prospective and AI adoption could provide market upside”.

Macquarie now has a $15.75 price target for Worley shares (reduced from $16), compared with the close of $13.22 on Thursday.

Factoring in dividends this would equate to a total shareholder return of 22.8% if that share price were achieved.

Worley narrowly avoided recording a first strike vote against its remuneration report at Thursday’s AGM, with 20.3% of votes cast going against its adoption, where 25% equates to a first strike under Australia corporations law.

The post Macquarie tips 23% upside for this ASX 200 stock appeared first on The Motley Fool Australia.

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• Why DroneShield, GQG Partners, Origin Energy, and Worley shares are falling today
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• Macquarie tips 15% upside for this ASX 200 stock
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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 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.