Tag: Stock pick

If you are on the hunt for big returns for your portfolio, then it could be worth checking out the two S&P/ASX 200 Index (ASX: XJO) shares listed below.

That’s because they have been named as buys and tipped to rise up to 45%. Here’s what is being recommended:

Megaport Ltd (ASX: MP1)

This network services company could be an ASX 200 share with significant upside potential according to Morgans.

It was impressed with its performance in FY 2026 and its guidance for the year ahead. As a result, it recently put a buy rating and $25.00 price target on Megaport’s shares. This implies potential upside of approximately 45% from current levels.

Commenting on its recommendation, the broker said:

MP1’s FY26 underlying EBITDA and FY27 EBITDA guidance were above market expectations. Both Network and Compute delivered record growth. At first glance, simple maths suggests MP1’s funding position looks tight. However, there is nearly $500m of additional funding that got lost in translation. We think MP1 ends FY27 with nearly $600m of surplus liquidity (assuming no new deals get signed).

Deals already contracted deliver $620m of annualised contracted EBITDA which means after EBITDA lifts 3x YoY in FY27, it will more than double into FY28, based on deals already signed. We upgrade to a Buy recommendation and $25 target price.

Monadelphous Group Ltd (ASX: MND)

Morgans also sees potential for this ASX 200 share to deliver market-beating returns over the next 12 months.

In response to its results last month, the broker retained its buy rating and $35.80 price target on Monadelphous shares. Based on its current share price of $29.01, this implies potential upside of 23% for investors. It commented:

FY26 was strong with EBITDA +49% YoY and NPAT +60%. Management seemed comfortable talking up the outlook more generally – across iron ore, energy, gold, rare earths and lithium – however expectations for FY27 were tempered by framing it as a consolidation year. While we acknowledge that the 1H27 comp will be difficult (1H26 revenue +45% YoY), the key lead indicators suggest that strong growth will continue into FY27 and beyond, as the E&C order book has more than doubled YoY to nearly $1.2bn (from $570m at FY25). 

MND’s E&C business has never been better positioned to start the year and can capture more of the value chain during this development cycle (civils, NPI, fabrication), with the mega-projects still to be awarded (Nolans, P2000, Hemi and Mt Holland). We maintain our BUY recommendation. Target price unchanged at $35.80.

The post 2 top ASX 200 shares tipped to return 23% to 45% appeared first on The Motley Fool Australia.

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• Xero and Megaport: 2 ASX tech shares the market can’t agree on
• UBS names its 10 top ASX picks for the next 3-6 months
• Buy, hold, sell: Megaport, Xero, AMP shares
• A 50% upside? This ASX 200 tech stock is back on my buy list
• Why these ASX shares are worth watching closely today

Motley Fool contributor James Mickleboro has positions in Megaport. 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.

The Westgold Resources Ltd (ASX: WGX) share price is in focus as the company released its FY27 guidance and updated Three-Year Outlook, aiming to lift gold production to around 500,000 ounces by FY29 while lowering costs.

What did Westgold Resources report?

• FY27 gold production guidance: 385,000–425,000 ounces at an All-In Sustaining Cost (AISC) of $2,980–$3,380 per ounce
• Growth capital investment planned at $450 million–$480 million in FY27
• Exploration and resource definition spend: $50 million–$75 million in FY27
• Three-year outlook (3YO): FY29 production targeted at 460,000–510,000 ounces at a reduced AISC of $2,640–$3,000/oz
• Group processing capacity expected to rise above 7 million tonnes per annum by FY29 through brownfield expansions
• Over $150 million planned investment into exploration and resource definition across the outlook period

What else do investors need to know?

Westgold’s growth plan is fully funded and mainly driven by increased ore availability from the Murchison, brownfield expansions at the Cue and Meekatharra hubs, and development at the company’s largest mines. The plan assumes higher production and improved mill utilisation, resulting in lower unit costs and stronger cash flows by FY29.

Importantly, the Fletcher Zone at Beta Hunt, seen as Westgold’s largest organic growth opportunity, is excluded from this three-year base case while studies continue. Management indicates Fletcher could add around 140,000 ounces per year once developed, potentially pushing group production past 600,000 ounces annually.

The company’s strategy also includes maintaining shareholder capital returns, with support for its dividends and broader capital return policy even through periods of elevated investment.

What did Westgold Resources management say?

Wayne Bramwell, Managing Director & CEO 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… Importantly, Westgold’s growth is organic and not coming at the expense of shareholder returns. Our business is now more resilient and has the capacity to internally fund growth while continuing to support our Shareholder Capital Returns Policy, dividends and ongoing capital returns.

What’s next for Westgold Resources?

Westgold plans to focus capital investment in the Murchison region, rolling out processing hub expansions at Cue and Meekatharra through FY27 and FY28. The group is aiming for steady production growth, improved mill utilisation and flexible production driven by higher confidence in ore reserves and enhanced mining fronts.

Looking further ahead, Westgold’s ongoing exploration and development studies, especially in the Fletcher Zone at Beta Hunt, remain watch points for potential upside beyond the current outlook. The company expects 3YO capital spend to decline after the initial peak, with benefits flowing through higher production and free cash flow.

Westgold Resources share price snapshot

Over the past 12 months, Westgold Resources shares have risen 73%, outperforming the S&P/ASX 200 Index (ASX: XJO), which has risen 1% over the same period.

View Original Announcement

The post Westgold Resources outlines three-year growth plan and FY27 guidance appeared first on The Motley Fool Australia.

More reading

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

Motley Fool contributor Laura Stewart 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. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Dividend income may seem increasingly attractive these days following the Australian Federal budget tax changes. Dividend yields above 8% could be particularly attractive.

Some investors may want a lot of passive income, with capital growth now seeming less appealing than it used to be.

I’m going to talk about two names with particularly high dividend yields that could be compelling long-term buys.

WAM Leaders Ltd (ASX: WLE)

WAM Leaders is a listed investment companies (LICs) that targets ASX blue-chip shares. It is one of the leading LICs on the ASX, in my view.

The Wilson Asset Management investment team actively look for undervalued businesses at the larger end of the ASX’s market capitalisation list.

Some of the businesses it has actively invested in include Stockland Corporation Ltd (ASX: SGP), Rio Tinto Ltd (ASX: RIO), James Hardie Industries plc (ASX: JHX), Mirvac Group (ASX: MGR) and South32 Ltd (ASX: S32).

The portfolio has performed solidly over the long-term – since inception in May 2016 it has returned an average of 12.2% per year to August 2026, before fees and expenses and taxes. That return has been almost 3% better per annum than the S&P/ASX 200 Accumulation Index (ASX: XJOA).

By generating good investment returns, a LIC like WAM Leaders can pay dividends in both good years and tough years.

WAM Leaders has increased its annual payout per share each year since FY17, meaning it has delivered around a decade of ongoing dividend growth for shareholders.  

Its FY26 payout was 9.6 cents per share, which translates into a grossed-up dividend yield of 10.4%, including franking credits, at the time of writing.

Future Generation Australia Ltd (ASX: FGX)

Future Generation Australia is another LIC. I think that structure is very effective for being able to pay regular dividends to investors from investment returns generated over the long-term.

While many fund managers charge sizeable investment fees (and performance fees), there are no management costs in relation to this particular LIC.

Future Generation Australia is invested in the funds of more than a dozen fund managers who all work for free so that the LIC can donate 1% of its net assets each year to youth-focused charities.

By having such a diversified portfolio, giving exposure to hundreds of underlying ASX shares, I think Future Generation Australia can be a great addition to Aussies who don’t want such a focus on ASX mining shares and ASX bank shares. The S&P/ASX 200 Index (ASX: XJO) is dominated by banking and miners, whereas the Future Generation Australia portfolio is significantly invested in smaller ASX shares (with more growth potential).

The ASX share has increased its annual dividend per share each year since 2015 – that’s more than a decade of consistent payout growth. It plans to pay an annual dividend per share of 7.6 cents for 2026, which translates into a grossed-up dividend yield of 8.04%, including franking credits, at the time of writing.

I think these are two of the most compelling ASX share ideas for passive income.

The post 2 ASX shares with dividend yields above 8% appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
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• How much do I need to retire on $80,000 a year at 50?
• Here are the top 10 ASX 200 shares today
• The ASX 200 has dropped to a 3-day low. Here’s what’s happening

Motley Fool contributor Tristan Harrison has positions in Future Generation Australia. 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.

There are plenty of ASX exchange traded funds (ETFs) for investors to choose from on the local bourse.

But some stand out because they provide exposure to areas of the market that could grow strongly over the next decade.

Three such examples are named below. Here’s why they could be worth watching:

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The first ASX ETF to consider is the Betashares Asia Technology Tigers ETF.

This fund gives investors exposure to leading technology companies across Asia. Its portfolio includes businesses involved in semiconductors, ecommerce, gaming, online platforms, and other areas of the digital economy. Holdings include WeChat owner Tencent and search giant Baidu.

This could be an attractive part of the market to be exposed to. Asia is home to some of the world’s most important technology companies, as well as huge consumer markets that continue to become more digital.

The fund also gives investors technology exposure away from the United States, which could be useful for anyone already holding US-focused ETFs.

There will be volatility along the way, particularly given the geopolitical and regulatory risks in the region. But over the long term, Asia’s technology sector has plenty of room to grow.

Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

Another exciting ASX ETF to watch is the Betashares Global Robotics and Artificial Intelligence ETF.

This fund invests in companies involved in robotics, automation, artificial intelligence (AI), drones, and other related technologies.

The long-term opportunity here is significant. Businesses around the world are looking for ways to improve productivity, reduce costs, and automate more tasks.

This is already happening in factories, warehouses, hospitals, farms, and logistics networks. As robotics technology improves and becomes cheaper, it could be used in more industries and for increasingly complex jobs.

That could create a very long growth runway for the companies held by the Betashares Global Robotics and Artificial Intelligence ETF.

Global X Artificial Intelligence ETF (ASX: GXAI)

A final ASX ETF for investors to watch is the Global X Artificial Intelligence ETF.

As its name implies, this fund provides exposure to companies that are benefiting from the growth of AI.

This means businesses involved in areas such as semiconductors, software, cloud computing, data infrastructure, and automation. Holdings include Palantir (NASDAQ: PLTR), Microsoft (NASDAQ: MSFT), and Tesla (NASDAQ: TSLA).

AI has already started changing how companies operate, but we could still be relatively early in its development.

Over the next decade, it could become embedded in everything from healthcare and financial services to manufacturing, advertising, and everyday software.

Picking the individual winners could be difficult. But investors don’t have to when this ETF offers a simple way to gain exposure to the broader AI opportunity.

The post 3 very exciting ASX ETFs for investors to watch appeared first on The Motley Fool Australia.

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• How much could $10,000 invested in these AI focussed ETFs be worth in a year?
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• Want to invest in AI shares? Here’s how to do it on the ASX
• 3 exciting ASX ETFs to watch

Motley Fool contributor James Mickleboro has positions in Betashares Capital – Asia Technology Tigers Etf. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Baidu, Microsoft, Palantir Technologies, Tencent, and Tesla. The Motley Fool Australia has recommended Microsoft. 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 Index (ASX: XJO) has stagnated over the past month, falling over 3%. 

However, some pockets are gaining strong momentum. 

There are several themes and sectors capturing strong tailwinds in the back half of 2026. 

Here are some ASX ETFs ignoring the broader market downturn and charging ahead. 

Cybersecurity ASX ETFs

One theme that is outperforming right now is cybersecurity. 

The strong rise in cybersecurity-related stocks over the past six months reflects a broader shift in how investors view the impact of AI on the sector.

Initially, there were concerns that AI would make cybersecurity less valuable by automating vulnerability detection and reducing the need for traditional security solutions. 

However, the market has increasingly recognised that AI is also making cyberattacks more sophisticated, scalable and difficult to defend against, creating greater demand for cybersecurity products and services. 

The rapid adoption of AI, cloud computing and digital infrastructure is expanding the potential attack surface for businesses, while growing cyber threats are encouraging companies and governments to increase security spending. 

This has strengthened expectations for long-term revenue and earnings growth across the cybersecurity industry, particularly among leading providers, and has driven a significant re-rating of the sector. 

Two beneficiaries of this trend are BetaShares Global Cybersecurity ETF (ASX: HACK) and Global X Cybersecurity ETF (ASX: BUGG). 

These funds have risen by 37% and 47% in the last 6 months and could be set up for long-term success if these tailwinds continue. 

Global healthcare and biotech ASX ETFs

The healthcare and biotechnology sector has benefited from a combination of strong innovation, improving investor sentiment and the potential for significant new markets. 

Advances in areas such as obesity treatments, oncology, gene therapy and precision medicine are creating opportunities for companies to develop new therapies with very large commercial markets, while the rapid adoption of AI in drug discovery and clinical development is raising expectations that medicines can be developed more efficiently.

These tailwinds have benefited ASX ETFs BetaShares Global Healthcare ETF – Currency Hedged (ASX: DRUG) and Global X S&P Biotech ETF (ASX: CURE). 

Both have enjoyed significant momentum in recent months, and could be top buys heading into the back part of 2026. 

Gaming and Esports 

After a rough first 6 months of the year, another ASX ETF harnessing strong momentum is Betashares Video Games And Esports ETF (ASX: GAME). 

It has risen 13% since late July thanks to renewed investor confidence in the long-term growth of interactive entertainment.

The industry continues to benefit from the shift towards digital distribution, recurring revenue through subscriptions and in-game purchases, and the growing global audience for gaming, while major new game releases can create significant bursts of revenue and engagement.

At the same time, the sector is increasingly benefiting from advances in AI, which have the potential to reduce development costs, improve game creation and enable more personalised and dynamic gaming experiences.

The post These ASX ETFs are generating big momentum in the second half of 2026 appeared first on The Motley Fool Australia.

More reading

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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 BetaShares Global Cybersecurity ETF. 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.

Finding ASX growth shares trading at half their broker targets is unusual, but right now there are several doing just that.

Earnings season has ended and analysts have refreshed their price targets across hundreds of companies.

The three below have all fallen heavily over the past year.

All three are still growing earnings, which is what makes the gap interesting.

Why these ASX growth shares were sold off

The cause is the same in each case.

Interest rate expectations have moved sharply, with all four major banks now forecasting another rise this year.

Higher rates hit companies valued on distant earnings hardest, and they hit companies funding growth with debt harder still.

None of these three fell because of a downgrade.

Each of them reported growth in FY26.

1. NEXTDC Ltd (ASX: NXT)

NEXTDC closed Tuesday at $12.52 after falling 14% in a month.

UBS has a buy rating with a $23.45 target, implying 88% upside.

The FY26 result was a record.

Net revenue rose 16% to $405.0 million and underlying EBITDA rose 15% to $248.8 million, both above guidance.

Contracted utilisation surged 202% to 740.1 megawatts and statutory net profit turned positive at $82.1 million.

FY27 guidance points to net revenue of $615 million to $640 million, growth above 50%.

The catch is the capital expenditure required to deliver it, guided at $5.25 billion to $5.75 billion.

2. Nine Entertainment Co Holdings Ltd (ASX: NEC)

Nine Entertainment is the cheapest and most contrarian of the three.

Shares closed at 86 cents, down 48.19% over twelve months and barely above a 52-week low of 83.5 cents.

Morgan Stanley has a buy rating with a $1.40 target, implying 63% upside.

FY26 revenue rose 3% to $2.19 billion on a continuing business basis and group EBITDA jumped 17% to $379 million.

Net profit after tax increased 7% to $142.4 million and earnings per share before amortisation rose 11% to 9.3 cents.

The QMS Outdoor acquisition contributed $55 million of EBITDA in its first three months.

Similarly, digital subscription revenue grew 12%, and Nine has signed content licensing deals for AI applications including one with Microsoft.

Chief executive Matt Stanton explained the reshaping of the portfolio.

Over the past 12 months, we have made material changes to our business portfolio, focusing on growth and digital assets whilst reducing our exposure to structurally challenged and smaller assets. These transactions add to our operational scale and create a higher growth and more resilient Nine, better positioned to create long term sustainable value for our shareholders.

The final dividend of 3.0 cents is unfranked, and management expects that to continue.

3. Zip Co Ltd (ASX: ZIP)

Zip has the most bullish coverage on the ASX.

All twelve analysts covering the company rate it a buy or strong buy, with an average target of $4.56 against a $2.31 share price.

That implies roughly 95% upside, with the most optimistic target at $6.03.

FY26 cash EBTDA rose 57.9% to $268.9 million and revenue climbed 24.7% to $1,336.1 million.

Net profit after tax increased 45.7% to $116.4 million and the operating margin expanded from 15.8% to 20.0%.

Management has guided FY27 cash EBTDA to $340 million, up around 26%.

The United States now produces about two-thirds of revenue, and that is where the growth is coming from.

Foolish takeaway

Broker targets are opinions, not forecasts, and a 90% implied upside usually means high uncertainty rather than free money.

What these three ASX growth shares share is a market that has repriced their respective multiples.

I would rather buy a company growing revenue at 16% to 25% after a 50% fall than chase one already compounding.

The post 3 ASX growth shares experts think could double appeared first on The Motley Fool Australia.

More reading

• NextDC shares have fallen 14% in a month. Is the AI data centre boom over?
• Can Zip shares recover? Here’s what the experts have to say
• 6 ASX shares tipped by brokers to rise 34% to 87%
• Experts tip battered Zip shares to deliver over 90% returns
• These are the 10 most shorted ASX shares

Motley Fool contributor Mark Verhoeven 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 Microsoft. The Motley Fool Australia has recommended Microsoft and Nine Entertainment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

September could be a good time to put some fresh money to work on the S&P/ASX 200 index (ASX: XJO).

But where should you invest? 

I would be looking for high-quality businesses with strong market positions and plenty of room to grow over the long term.

With that in mind, here are three ASX 200 shares I think could be top buys this month.

Goodman Group (ASX: GMG)

Goodman could be one of the best ASX 200 shares to buy in September.

The integrated property company has built a global platform around industrial real estate, with warehouses, logistics facilities, and large-scale development sites across major markets.

That alone is a strong business. But arguably the most exciting part of the story is what Goodman is doing with data centres.

Artificial intelligence (AI) and cloud computing are driving huge demand for computing infrastructure, and data centres need land, power, planning approvals, and access to major population centres.

These are all areas where Goodman has an advantage. The company already has deep customer relationships, a strong development pipeline, and experience working with large industrial sites.

I think that gives Goodman a good chance of becoming an even more important infrastructure player over the next decade.

ResMed Inc (ASX: RMD)

ResMed is another ASX 200 share I would consider buying this month.

It is a global medical device leader with a focus on treating sleep apnoea and other respiratory conditions through masks, software, and connected healthcare products.

The long-term opportunity remains extremely large. Millions of people around the world suffer from sleep-related breathing problems, and many have not yet been diagnosed or treated.

In fact, the company estimates that there are over 1 billion people suffering from sleep apnoea, potentially giving ResMed a multi-decade growth runway.

Xero Ltd (ASX: XRO)

A third ASX 200 share to buy in September could be cloud accounting software company Xero.

It has built a platform that helps small businesses and accountants manage invoicing, payroll, reporting, bank feeds, payments, and other financial tasks.

And while AI may change how accounting work is done, Xero is not a narrow tool that can be easily replaced by one feature. Instead, AI could help automate more of the work already taking place across its platform.

Xero also has a large opportunity in markets such as the United States, where its market share remains low.

Its shares can be volatile, but I think the company has a very strong long-term growth outlook.

The post Top 3 ASX 200 shares to buy in September appeared first on The Motley Fool Australia.

More reading

• NextDC shares have fallen 14% in a month. Is the AI data centre boom over?
• Forget CSL shares. 3 ASX healthcare stocks with bigger upside
• Xero and Megaport: 2 ASX tech shares the market can’t agree on
• Which ASX shares win when the Aussie dollar is strong?
• Home values decline for a 5th straight month – what does it mean for ASX real estate shares?

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

NextDC Ltd (ASX: NXT) shares have fallen 14% over the past month, a strange result for a company that just tripled its contracted capacity.

The stock closed Tuesday at $12.52, down 23.28% over twelve months.

Goodman Group (ASX: GMG) has done no better, falling 19.03% over the same period.

Why NextDC shares have fallen while demand has not

Westpac moved its cash rate forecast to a November rise this week. One reason cited was the scale of investment in data centres and the renewable electricity they need.

That is an unusual situation.

The boom is now considered inflationary enough to justify tighter policy, yet the two ASX shares most exposed to it have been sold down hard.

That is because building data centres consumes enormous amounts of money before it produces any, and higher rates raise the cost of that money.

What NEXTDC actually reported

The FY26 result was the biggest in the company’s history.

Total revenue rose 16% to $496.5 million and net revenue rose 16% to $405.0 million, above guidance.

Underlying EBITDA lifted 15% to $248.8 million, also above guidance.

Statutory net profit swung to a positive $82.1 million from a $60.5 million loss.

The forward-looking numbers are the striking part.

Contracted utilisation surged 202% to 740.1 megawatts.

The forward order book stands at 565.1 megawatts, more than three times current billing utilisation.

Capital expenditure hit a record $3,397 million and pro forma liquidity rose 58% to $8.7 billion.

Chief executive Craig Scroggie set out what happens next.

FY26 was the largest contracting year in NEXTDC’s history. Contracted utilisation tripled to 740.1MW on a pro forma basis, and we exceeded guidance on both net revenue and Underlying EBITDA. Our Forward Order Book of 565MW is now more than 3.2 times our billing utilisation, and our focus is on delivering that capacity and converting it into revenue and cash inflow.

FY27 guidance calls for net revenue of $615 million to $640 million and underlying EBITDA of $385 million to $410 million.

That is growth above 50%.

But it also requires capital expenditure of $5.25 billion to $5.75 billion, which is the number that unsettles people.

Goodman is telling the same story

Goodman Group reported FY26 operating profit up 15.7% to $2.67 billion and operating earnings per security up 10.1% to 129.9 cents.

Work in progress reached $19.7 billion, and data centres now make up 78% of it.

Gearing is at just 6.5% with $6.4 billion of liquidity.

Group chief executive Greg Goodman described a market still short of supply.

Demand is structural across both logistics and data centres. Automation and robotics continue to drive logistics requirements while scarcity of power and land remains the key constraint on AI and cloud growth supporting data centre demand. Hyperscaler capex expectations continue to rise, with many customers facing undersupply into 2027 and 2028.

Goodman is targeting 9% operating earnings per security growth in FY27.

What I’d do with NextDC shares now

UBS has a buy rating on NextDC with a $23.45 target, implying 88% upside.

That is enormous upside, but it depends entirely on the company converting contracted megawatts into billed revenue on schedule.

The bear case is straightforward.

NextDC pays no dividend, trades on a price-to-earnings ratio above 100, and needs to spend more than $5 billion next year.

Goodman is the lower-risk way to own the same theme, with real earnings, a distribution and almost no debt.

Foolish takeaway

The AI data centre boom is not over, and the contracted numbers make that difficult to argue.

What has changed is the price investors will pay for growth funded by borrowed money.

I would own Goodman for the theme and NextDC only with a long investment horizon.

The post NextDC shares have fallen 14% in a month. Is the AI data centre boom over? appeared first on The Motley Fool Australia.

More reading

• 3 ASX growth shares experts think could double
• Top 3 ASX 200 shares to buy in September
• 6 ASX shares tipped by brokers to rise 34% to 87%
• Home values decline for a 5th straight month – what does it mean for ASX real estate shares?
• 4 high conviction ASX stock picks from Canaccord Genuity

Motley Fool contributor Mark Verhoeven 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 Goodman Group. The Motley Fool Australia has recommended Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Reporting season is all but over, which means the brokers have had plenty of time to mull over the results and reassess which companies they think are undervalued at current prices.

I’ve selected three major companies that brokers have put a buy rating on over the past week or so.

Let’s see who they like.

Qantas Ltd (ASX: QAN)

The team at Morgan Stanley liked what they saw from the Qantas result and believes the national carrier can continue to perform.

They have called the pick one of their “highest conviction Australian industrials ideas”, with a bullish price target to go along with it.

Why do they like the stock? In their own words:

The FY26 result reinforced our view that QAN can offset near term fuel pressure through pricing and capacity actions, while International earnings potential remains underappreciated. We see improving earnings quality, resilient demand and a clearer path to higher International margins.

Morgan Stanely said the airline was trading below the valuation level of its international peers by about 20%, despite its high returns.

The broker noted that there was some risk that jet fuel prices would remain elevated and fares would fail to offset the increase.

Morgan Stanely has a price target of $12.80 on Qantas shares.

Brambles Ltd (ASX: BXB)

UBS has had a look at information such as Nielsen data on fast-moving consumer goods sales to get a handle on the sort of demand Brambles might be enjoying.

The data is mixed, with US food and beverage sales down less than 1% from June to August, while European volumes were up 5% year on year in July.

In terms of the impact on Brambles’ CHEP business, volumes were up 1% in the second half of FY26, “with -2% like-for-like volume more than offset by net new business wins”.

UBS said Brambles is currently trading at a discount to the ASX industrials, not including health and financials.

The broker’s price target on Brambles is $24.50.

Pexa Group Ltd (ASX: PXA)

Property sales compliance platform Pexa is likely to be affected by the decline in property transactions resulting from the Federal Government’s changes to capital gains tax and negative gearing rules.

Macquarie’s recent research report on Pexa indicates that settlement activity in New South Wales and Queensland did indeed fall sharply in August compared with the same month a year ago.

The broker has not changed its price target on Pexa, however, meaning recent share price weakness theoretically means more upside for investors.

Macquarie’s price target on Pexa is $13.90. Pexa is currently valued at $1.33 billion.

The post 3 ASX 200 shares tipped to return 27% to 87% 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.

The Westpac-Melbourne Institute Index of Consumer Sentiment fell 5.2% in September to 84.4.

Any reading below 100 means pessimists outnumber optimists.

However, some ASX shares actually do better when households run out of confidence.

Why consumer sentiment is important for ASX shares

Assessments of family finances dropped 9.2%, and among homeowners the fall reached 13%.

Nearly two-thirds of consumers now expect mortgage rates to rise within twelve months.

The report stated the following of the cause:

The fall takes sentiment back towards the deeply pessimistic levels seen earlier in the year. Both fuel prices and interest rates again look to be driving the move.

Consumer discretionary shares were the worst sector on the ASX on Tuesday, falling 1.88%.

Trouble right? Well, the businesses that sell things households cannot easily cancel are in a different position entirely.

Woolworths sells everyday fundamentals

Woolworths Group Ltd (ASX: WOW) is the most obvious beneficiary on the market.

People trade down within a supermarket, but they do not stop buying groceries.

FY26 showed this phenomenon in action.

Group sales rose 3.6% to $71.54 billion and earnings before interest and tax before significant items climbed 12.7% to $3.11 billion.

Net profit before significant items jumped 15.4% to $1.60 billion.

The Australian Food business lifted sales 4.6% and EBIT 8.5%, while BIG W returned to profit after a loss.

Group eCommerce sales grew 15.9% to $10.6 billion and the final fully franked dividend rose 15.6% to 52 cents.

Chief executive Amanda Bardwell was clear about the challenges facing the company:

Looking ahead, while we expect the challenging economic environment to continue with household budgets remaining under pressure, our strategy to deliver low prices and the best range and convenience gives us confidence we can be first choice for customers while delivering for our team and shareholders in the year ahead.

Telstra sells the second last thing to be cut

Telstra Group Ltd (ASX: TLS) is on the same side of the coin.

That is because nobody cancels their mobile plan because the Reserve Bank raised rates.

FY26 revenue actually fell 0.8% to $22.94 billion, which sounds unimpressive until you look further down.

Underlying net profit after tax rose 4.9% to $2.5 billion and cash earnings per share climbed 14% to 25.5 cents.

Underlying EBITDA after leases increased 4% to $8.3 billion, and management guided FY27 to between $8.5 billion and $8.8 billion.

Mobile income grew 3% to $11.4 billion.

The dividend is the attraction here.

Telstra lifted its full-year payout 10.5% to 21 cents and announced a buyback of up to $1 billion.

At $4.79 that is a yield of about 4.4%, or roughly 6% once franking credits are counted.

Foolish takeaway

Defensive ASX shares are not exciting, and they are not supposed to be.

But what they do is keep earning while the discretionary end of the market repriced 1.88% lower in a single session.

I find Telstra the better value of the two today, purely because Woolworths has already been rerated.

The mistake would be buying either one expecting them to rise when sentiment recovers.

The post Consumer sentiment is low. These ASX shares stand to benefit appeared first on The Motley Fool Australia.

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• How much do I need to retire on $80,000 a year at 50?
• Is the Telstra share price a buy for its 6.25% dividend yield?
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• How much passive income could a $500,000 superannuation balance generate?

Motley Fool contributor Mark Verhoeven 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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.