Tag: Stock pick

If you are in the market for some new portfolio additions, then it could pay to listen to what Morgans is saying about the three ASX shares in this article.

Does it rate them as buys, holds, or sells? Here’s what you need to know:

Imdex Ltd (ASX: IMD)

Morgans was pleased with this mining technology company’s performance during the third quarter.

In response, the broker has retained its buy rating on Imdex shares with an improved price target of $5.00. It said:

The 3Q update was strong with constant FX organic revenue growth of +26% YoY. While we pare back our FY26 revenue forecast slightly on FX, we make negligible changes to our EBITDA forecast ($164m +3% vs VA consensus $160m) as mix benefits offset the lower revenue. For FY27-28, we increase our earnings forecasts on confirmation of strong volume growth and recent capital markets activity. While we see capacity for a slight beat in August, in our view, outer year upgrades will be the key driver of the share price from here.

JB Hi-Fi Ltd (ASX: JBH)

This retail giant delivered a “resilient” trading update according to Morgans.

However, it highlights that management appears somewhat cautious ahead of the important end of financial year (EOFY) period.

In response, the broker has retained its accumulate rating with a trimmed price target of $82.90. It said:

JBH provided a solid 3Q26 sales trading update, showing the ongoing resilience in demand for its product categories. Management did caution going into one of the key trading periods (EOFY), that they were seeing supplier component costs increases, stock availability shortages and ongoing heightened competitive activity. We see this as likely reflecting potential margin pressure in the 4Q. We have made minor revisions to earnings (<1%), and our valuation lowers to $82.90 (from $83.50). We maintain our ACCUMULATE recommendation.

Lottery Corporation Ltd (ASX: TLC)

Morgans was pleased to see this lotteries company secure a mammoth 40-year extension to its Victorian Public Lottery Licence.

It believes the deal is strategically positive but acknowledges that the debt taken on to pay for it will weigh on its earnings.

Nevertheless, the broker has upgraded Lottery Corp’s shares to an accumulate rating with an improved price target of $6.00. It said:

The Lottery Corporation (TLC) has secured a 40-year extension of its Victorian Public Lottery Licence to 30 June 2068, paying a $1.145bn upfront premium funded entirely by debt. The duration and timing of the renewal was a mild surprise given the licence was historically offered on 10-year terms and wasn’t expiring until June 2028.

We view the deal as strategically positive, but near-term earnings absorb the cost. Higher D&A and interest from the new debt drag our FY26/27/28F EPS estimates down 3%/13%/15% respectively, partially offset by a beta reduction reflecting materially lower licence renewal risk.

The post What is Morgans saying about Imdex, JB Hi-Fi, and Lottery Corp shares? appeared first on The Motley Fool Australia.

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• Can this red hot ASX materials stock keep charging higher?
• Down 40%: Are JB Hi-Fi shares a bargain buy?
• 2 top ASX dividend stocks on sale, are they buys today?
• The Aussie dollar just hit a 4-year high. Which ASX shares will benefit?
• Warning! Experts name 3 ASX 200 shares to sell

Motley Fool contributor James Mickleboro 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 The Lottery Corporation. The Motley Fool Australia has recommended The Lottery Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX 200 materials sector rose by 32% last year, largely due to surging share prices for mining companies.

This year, ASX mining shares have fluctuated due to a metals sell-off in late January and the global oil shock now underway.

But overall, the miners are still on an upward trajectory, with the materials sector up 14.15% so far this year.

This compares to a 1.7% lift for the benchmark S&P/ASX 200 Index (ASX: XJO).

While the oil shock created by the war in Iran is impacting miners, the bigger picture is that Australia is at the start of a new long-term mining boom.

A multi-decade green energy transition is underway, and this was the primary driver behind last year’s surge for ASX mining shares.

If you’re looking for investment opportunities, here are two ASX mining shares with buy ratings from the experts today.

Nickel Industries Ltd (ASX: NIC)

The Nickel Industries share price is $1.10, up 4.8% on Thursday, and up 75% over the past 12 months.

Bell Potter has a buy rating on this ASX nickel mining share with a 12-month price target of $1.45.

The broker was impressed with the miner’s 3Q FY26 report, commenting:

Combined with the re-start at Hengjaya, NIC delivered its best quarter of earnings since December 2023.

The broker elaborated:

Our key takeaway is the nickel price leverage demonstrated with this result. RKEF operations stood out, where EBITDA was up 145% from US$35m to US$86m, driven almost entirely by NPI pricing (up 19%) rather than volume (down 4%).

HNI and RNI, which were loss-making in December, both turned profitable in March.

HPAL margins lifted, with EBITDA per tonne up 20% on a 15% increase in price and after a 22% QoQ cost increase.

Catalyst Metals Ltd (ASX: CYL)

The Catalyst Metals share price is $5.36, up 4.1% today, and down 15% over the past 12 months.

Morgans has a buy rating on this ASX gold mining share with a 12-month target of $15.13.

After reviewing the miner’s 3Q FY26 report, Bell Potter said:

We maintain our BUY rating, with valuation supported by strong cash generation and a clear production growth pipeline, albeit with near-term cost pressures emerging.

Catalyst reported gold production of 26.1koz at an all-in sustaining cost (AISC) of A$2,901 per ounce.

Morgans said the miner generated solid operating cash flow of A$103 million at an average realised price of A$7,014 per ounce.

CYL continues to strengthen their balance sheet, adding A$39m during the quarter to close with A$277m in cash and bullion while reinvesting heavily across growth and exploration initiatives.

Growth momentum continues across the Plutonic Belt, with multiple new ore sources advancing (Trident, K2, Old Highway) alongside a high-grade discovery at Cinnamon, supports the pathway to c.200kozpa production.

The post 2 ASX mining shares to buy: experts appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• This ASX materials stock could be set to boom 40% or more
• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy right now
• Another broker just recommended this ASX materials stock

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 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.

The team at Morgans have run the ruler over two very different companies in the past few days and come out with a buy recommendation for each.

Let’s have a look at what stocks they like at the moment.

Polynovo Ltd (ASX: PNV)

This healthcare company sells its flagship product, NovoSorb, a biodegradable wound dressing that serves as a scaffold for wound regeneration.

In the first half of FY26, the company achieved revenue of $68.2 million from NovoSorb sales, up 26% on the same period the previous year, with strong sales momentum in offshore markets.

The company also has multiple products in its research and development pipeline, and is progressing its key product through regulatory pathways for wider use.

The Morgans team said it had reviewed its FY26 and FY27 forecasts for Polynovo, “and concluded the company is set to deliver a strong 2H26 and continue that growth trajectory into FY27”.

They note that the company will need a strong second half to meet its forecast revenue of $148 million, but they said, “We are confident PNV can deliver on our FY26 forecasts, noting we sit slightly below consensus”.

The Morgans team noted that Polynovo was among the most shorted stocks on the ASX, but they believe this could change.

As they said:

We believe that if PNV can achieve FY26 consensus and if FY27 consensus remains stable which currently has revenue growth of 22% and EBITDA more than doubling, the short position could be reduced materially. It is certainly one stock to watch coming into the August results.

Morgans has a price target of $1.56 on Polynovo shares, compared with the current share price of $1.04.

Digico Infrastructure REIT (ASX: DGT)

This cloud infrastructure provider recently sold a major asset in Chicago for US$750 million, which was a 5% premium to the purchase price.

This has allowed the company to reduce net debt from $1.5 billion to about $500 million and reduce its gearing from 36% to 17%.

The company said while announcing the sale this week:

Together, these initiatives materially strengthen the balance sheet, enhance securityholder returns, and provide financial flexibility to explore capital management initiatives, including returning any excess capital through enhanced distributions.

The company said it was also looking at monetising its LAX1 and LAX2 sites.

Morgans said the Chicago deal was positive as it derisked the company.

Morgans maintained its buy rating on the stock but increased its price target markedly, from $2.70 to $3.60.

The post Morgans names two ASX shares to buy right now for returns of 20% to 50% appeared first on The Motley Fool Australia.

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• DigiCo Infrastructure REIT slashes debt after Chicago asset sale
• These are the 10 most shorted ASX shares

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

The Cleanaway Waste Management Ltd (ASX: CWY) share price is in focus after the company reported a key Victorian Supreme Court decision relating to alleged underpayments of landfill levies at its Melbourne Regional Landfill, with a potential financial impact of $6.9 million for FY18.

What did Cleanaway Waste Management report?

• The Supreme Court has ruled in favour of the Environment Protection Authority (EPA) over a $6.9 million landfill levy underpayment claim for FY18.
• Additional EPA audits have highlighted further alleged underpayments of $4.7 million for FY19 and $7.2 million for FY22.
• These additional years are not yet subject to court proceedings and figures exclude costs and interest.
• Cleanaway has 42 days to consider an appeal against the Supreme Court’s decision.

What else do investors need to know?

The court case centres on landfill levies at the Melbourne Regional Landfill, linked to materials sourced by Cleanaway from the adjacent Boral quarry. The EPA argued these materials qualified as ‘waste’ and should attract a government landfill levy, while Cleanaway contended otherwise.

Further details on these proceedings, including potential financial implications, can be found in Note 33 of Cleanaway’s FY25 Financial Report. Cleanaway will review its options, which may include appealing against the ruling.

What’s next for Cleanaway Waste Management?

Cleanaway has 42 days to determine whether to appeal the Supreme Court’s decision. In the meantime, the company aims to continue engaging with stakeholders and maintain full compliance with environmental and regulatory obligations.

The financial impact of the decision, together with the possibility of further audits and proceedings, may affect future results and operational planning. Shareholders will be updated as developments arise.

Cleanaway Waste Management share price snapshot

Over the past 12 months, Cleanaway Waste Management shares have declined 17%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post Cleanaway Waste Management hit with landfill levy ruling appeared first on The Motley Fool Australia.

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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.

Megaport Ltd (ASX: MP1) shares are having another strong session on Thursday after the network services company released a fresh update.

At the time of writing, the Megaport share price is up 6.43% to $9.76.

That adds to a much stronger run over the past month, with the stock now up more than 40% over that period.

Here’s what investors are reacting to today.

Guidance stays in place

Megaport’s announcement this morning appeared to give investors a bit more certainty around the year ahead.

The company reaffirmed its FY26 combined group guidance, with revenue still expected to come in between $302 million and $317 million. It is also sticking with an EBITDA guidance of 21% to 24% of revenue, while capex is expected to land between $90 million and $100 million.

The update also follows a better run of news flow from the company. Late last month, Megaport announced a 3-year compute and storage contract worth about $35.4 million. The deal is expected to add around $11.8 million in annualised recurring revenue.

Why investors are taking another look

Megaport helps businesses connect to cloud providers, data centres, and network services through its platform.

Demand for that kind of infrastructure has grown as companies use more cloud services, data, AI workloads, and distributed systems.

Megaport has also expanded beyond its core network business through its acquisition of Latitude.sh. Latitude adds a compute layer to the business, including CPU, GPU, and storage services, giving Megaport a wider offer across network, compute, and storage.

The company said network annual recurring revenue reached $272 million at 31 March, up 23% on a constant currency basis. Compute ARR also rose 31% to US$58.7 million, excluding the recently announced contract.

New security product launched

Megaport also highlighted its new DDoS Protection product in the investor presentation.

DDoS attacks are designed to overwhelm a website, service, or network with large amounts of traffic. Megaport’s product is built to filter that malicious traffic inside its own network, rather than forcing customers to route it through a separate service.

Customers can protect their internet traffic while staying within Megaport’s existing platform.

Foolish Takeaway

Megaport has given investors a few things to work with today.

The reaffirmed guidance has helped settle some nerves, while the recent contract gives the market another reason to watch Latitude.sh.

But after a 40% rally in a month, I would not be rushing in at any price.

I’d rather see the next update and whether the revenue growth is flowing through to earnings.

The post Why Megaport shares are rocketing 40% in a month appeared first on The Motley Fool Australia.

More reading

• ASX 200 tech shares rebound 20% in 5 weeks: experts reveal stocks to buy
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• The five best ASX 200 stocks to buy and hold in April revealed
• 3 ASX shares benefiting from the rise of digital infrastructure

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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 S&P/ASX 200 Index (ASX: XJO) is having a strong session on Thursday. In afternoon trade, the benchmark index is up 0.75% to 8,861.5 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are pushing higher:

Amcor (ASX: AMC)

The Amcor share price is up 5% to $55.29. Investors have been buying this packaging company’s shares following the release of its quarterly results. The packaging giant reported a 77% jump in net sales to US$5.91 billion and an 87% increase in adjusted EBITDA to US$892 million. The key driver of this was the acquisition of Berry. Amcor’s CEO, Peter Konieczny, commented: “Third quarter results were in line with expectations and reflect the resilience of our business as we mark the first anniversary of bringing legacy Amcor and Berry together as One Amcor.”

Credit Corp Group Ltd (ASX: CCP)

The Credit Corp share price is up 10% to $12.06. This has been driven by the release of a market update from the debt collector this morning. Management revealed that it is on track to deliver record earnings in FY 2026. It is projecting net profit after tax of $100 million to $110 million, which will be up from $94 million in FY 2025. It also advised that its ledger investments will be higher than previously expected at $295 million to $330 million and gross lending is now expected to be higher at $420 million to $430 million.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price is up 5% to $12.97. This morning, Neuren advised that Q1 DAYBUE (trofinetide) net sales were US$101 million during the first quarter. This is up 20% from the prior corresponding period. Neuren’s CEO, Jon Pilcher, commented: “This was a strong start to the year for DAYBUE. I am very encouraged by the initial uptake and enthusiasm for DAYBUE STIX following the limited launch in Centers of Excellence (COEs) and I look forward to seeing the impact of the recent broader US launch.”

Zip Co Ltd (ASX: ZIP)

The Zip share price is up 4% to $2.63. This has been driven by a trading update from the buy now pay later provider. In the United States, Zip reported year-on-year total transaction volume (TTV) growth of over 40% in April. Pleasingly, this was achieved with strong credit outcomes. In addition, Zip reaffirmed that it expects to achieve full-year cash earnings before tax, depreciation and amortisation (EBTDA) of $260 million, with at least 40% TTV growth in the US market.

The post Why Amcor, Credit Corp, Neuren, and Zip shares are charging higher today appeared first on The Motley Fool Australia.

More reading

• Why Tabcorp, Light & Wonder and Amcor shares are making waves on Thursday
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• Why are Zip shares storming higher on Thursday?
• Amcor earnings surge on Berry acquisition
• CSL and Wesfarmers among scores of ASX shares hitting fresh 52-week lows

Motley Fool contributor James Mickleboro 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 Amcor Plc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This $10 billion ASX industrial stock jumped 6% to $22.19 on Thursday after Orica Ltd (ASX: ORI) delivered a strong first-half result.

The rally continues a solid recovery for the ASX industrial stock following its March dip. Orica shares are now up around 8% over the past month and roughly 32% over 12 months, comfortably outperforming the S&P/ASX 200 Index (ASX: XJO), which has gained about 8% over the same period.

So, what sparked today’s sharp move higher?

Scale and global footprint deliver

The ASX industrial stock is one of the world’s largest providers of commercial explosives and blasting systems used in mining and infrastructure projects. Orica also has growing exposure to mining technology, digital solutions, and chemical services.

Its strength lies in scale, long-term customer relationships, and its global manufacturing and supply network. And today’s results showed those advantages are still delivering.

The company posted record first-half EBIT of $512 million, up 5% year on year. Underlying net profit after tax rose 8% to $283.1 million, while earnings per share increased 12% to 60.7 cents.

Revenue slipped 1% to $3.88 billion, but investors appeared far more focused on profit growth and margin strength.

Record earnings

Demand remained strong for Orica’s premium blasting products and advanced technology offerings. Supportive gold and copper market conditions also helped drive earnings higher.

Managing Director and CEO Sanjeev Gandhi said:

We have delivered record earnings in the first half, driven by strong demand for premium products and advanced technology offerings, robust gold and copper markets and disciplined commercial execution. Despite a challenging environment, our first half EBIT was the highest in over 20 years and highlights the continued commitment of our people and the resilience and adaptability of Orica’s diversified portfolio, manufacturing asset base and global supply network in a market that continues to value quality, security of supply and technology-enabled outcomes.

Share buyback, explosives takeover

Investors in the ASX industrial stock also welcomed signs of disciplined capital management. Orica completed its $500 million share buyback during the period and resumed its Dividend Reinvestment Plan. That reinforces confidence in the balance sheet and cash generation.

The company was also active strategically. Management announced agreements to acquire Nelson Brothers’ explosives business in North America, as well as the Danafloat range, expanding Orica’s footprint in copper processing and mining chemicals.

At the same time, the business successfully navigated disruptions in ammonium nitrate supply and resolved major litigation issues in the United States.

What next for Orica?

Looking ahead, management expects full-year underlying EBIT growth across all business segments and regions, assuming no major external disruptions emerge.

The ASX industrial stock also plans to continue investing in supply chain security, premium product adoption, and digital technology offerings.

Cost reduction remains another major focus. Management is targeting at least $100 million in long-term savings, with most of the benefits expected to flow through from 2027 onwards.

Importantly, the balance sheet remains strong, with leverage sitting at the lower end of management’s target range. That gives Orica flexibility to continue investing in growth while supporting shareholder returns.

The post Why is this ASX industrial stock storming higher today? appeared first on The Motley Fool Australia.

More reading

• Orica posts record first-half earnings and higher dividend
• 7 ASX 200 shares just upgraded to strong buy ratings

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 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.

On Tuesday, the Reserve Bank of Australia (RBA) raised the official cash rate to 4.35%. 

As reported by Bernd Struben, Australia’s official interest rate is now back at its post-pandemic 2024 highs.

November 2011 was the last time rates were higher than the current level. 

The decision from the RBA was influenced by inflation and the ongoing conflict in the Middle East. 

The RBA said:

In addition, the conflict in the Middle East has resulted in sharply higher fuel and related commodity prices, which are already adding to inflation. There are early signs that many firms experiencing cost pressures are looking to increase prices of their goods and services. Short-term measures of inflation expectations have also risen.

Why this matters for investors 

As a quick refresher, the RBA cash rate acts as a benchmark for the Australian economy. 

When the cash rate rises, borrowing becomes more expensive for businesses and consumers. 

This can slow economic activity and reduce company profits, often putting downward pressure on share prices. 

On the flip side, when the cash rate falls, borrowing is cheaper. 

This can stimulate spending and investment, which can boost corporate earnings and generally support higher share prices. 

In this way, changes in the cash rate influence both company fundamentals and investor behaviour across the ASX.

For the everyday Aussie, changes in the cash rate affect how much they pay on mortgages, loans, and credit cards. 

This has a direct influence on spending power and the overall cost of living.

But it isn’t bad news for every ASX-listed company when interest rates are high. 

Here are some options for investors looking for companies that could stand to benefit from a high-interest-rate environment. 

Big banks

Banks make much of their profit from the difference between:

• the interest they charge borrowers (home loans, business loans), and
• the interest they pay depositors and wholesale lenders

This difference is called the net interest margin (NIM).

When the Reserve Bank of Australia raises rates, banks usually increase mortgage and business lending rates fairly quickly, but deposit rates often rise more slowly.

That can widen margins and increase profits.

This (not always) can mean bank shares like the big four can benefit in a high-interest-rate environment. 

Investors may choose to target these banks individually. However, another option is to target an ASX ETF that includes all the big four bank shares. 

One such option is the VanEck Australian Banks ETF (ASX: MVB). 

Insurance companies

Another subsector of the ASX that can outperform in high-rate environments is insurance shares. 

These companies can benefit from interest rate rises because they invest premiums and earn more when yields rise. 

Some options include: 

• QBE Insurance Group Ltd (ASX: QBE)
• Suncorp Group Ltd (ASX: SUN)
• Insurance Australia Group Ltd (ASX: IAG)

The post Where to invest with interest rates rising appeared first on The Motley Fool Australia.

More reading

• ANZ shares: Profit jumps in 2026 half-year earnings
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• What is Morgans saying about Stanmore Resources and Suncorp shares after results?
• 6 ASX 200 shares with strengthened buy ratings this week

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 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.

ASX 200 stock Dalrymple Bay Infrastructure Ltd (ASX: DBI) is in focus today as investors hastily exit their positions. 

Dalrymple Bay owns and operates the metallurgical coal export facility at Dalrymple Bay,  located at the Port of Hay Point, south of Mackay in Queensland. It is the world’s largest coal export facility, serving the coal-rich Bowen Basin and is an important link in the global steelmaking supply chain.

Today, its share price is down more than 3% despite the broader ASX 200 storming ahead. 

At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is a full 1% higher.

This comes after an investor update earlier this week.

What did Dalrymple Bay Infrastructure report?

• Funds From Operations (FFO) rose 10.6% year-on-year to $173.3 million
• EBITDA increased 5.2% to $294.3 million for FY-25
• Distributions per security lifted 11.9% to 24.625 cents
• Capital projects worth $429.6 million completed or underway as at 31 March 2026
• $1.07 billion in new debt financing executed during the period
• Zero serious injuries or illnesses recorded for FY-25

Despite these results, its share price has fallen almost 4%. 

After a volatile 2026 so far, its share price remains 6% higher than the start of the calendar year. 

What is Morgans saying about this ASX 200 stock?

The team at Morgans have released updated guidance on this ASX 200 stock following its investor presentation. 

The broker noted that this ASX 200 company’s share price has increased 17% since Morgan’s high conviction upgrade of the stock’s rating in March. 

However it seems the broker now views it as fully valued. 

We moderate from BUY to HOLD, given 12 month potential total return has compressed to c.3%. 12 month target price set at $5.31/sh, down -4cps from previously due to negligible forecast changes related to actual March CPI (used in the July annual escalation of TIC revenue), higher QCA-approved non-expansionary capex for inclusion in the asset base than previously indicated by DBI (also impacts July’s revenue escalation), and updated debt service forecasts. 

Limited upside

From today’s share price hovering around $5.26, this updated price target of $5.31 from Morgans indicates it is trading close to fair value. 

The broker said the next key event is this month’s AGM. 

We expect DBI to provide new DPS guidance for the next 12 months at or around that time and target 29.5cps.

It appears the broader market agrees there is limited upside for this ASX 200 stock.

Specifically, 8 analyst forecasts via TradingView place an average upside potential of roughly 5% on the company.

The post Why did this ASX 200 stock just get downgraded by Morgans? appeared first on The Motley Fool Australia.

More reading

• Highlights from Dalrymple Bay Infrastructure’s latest investor presentation

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 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.

Shares in Star Entertainment Group (ASX: SGR) are down around 4% today at the time of writing, with investors reacting cautiously after the company announced its latest financing update despite it appearing, at first glance, to resolve a key near-term risk.

Refinancing removes risk but raises new concerns

The likely catalyst for today’s decline is the company’s announcement that it has secured a new debt facility with WhiteHawk Capital Partners. The agreement will refinance Star’s existing debt in full, providing a US$390 million (approximately A$540 million) facility over a three-year term.

While this removes the immediate risk of a liquidity crunch, the terms of the deal suggest the company remains under significant financial pressure. The facility includes strict covenants, including minimum liquidity thresholds and minimum EBITDA requirements (from March 2027 onwards), which highlight how tight the company’s operating environment remains.

Following completion of the deal, Star expects to have around A$130 million in additional liquidity. This provides breathing room to continue operations and execute cost-cutting and strategic initiatives.

However, the structure of the facility includes an interest reserve requirement and ongoing amortisation obligations starting in 2027. There are also increasing liquidity thresholds over time, meaning the company must maintain higher cash buffers as the facility progresses.

In other words, while the refinancing buys time, it does not eliminate the underlying financial strain.

Market remains cautious on turnaround outlook

The broader issue weighing on the share price is uncertainty around Star’s turnaround. The company continues to face regulatory, operational, and earnings challenges following well-documented issues in recent years.

Even with refinancing secured, investors are questioning whether the business can generate sufficient earnings to comfortably meet its future obligations while also investing in growth.

Today’s news reinforces that Star remains in a recovery phase, with limited margin for error. Until there is clearer evidence of sustained earnings improvement and operational stability, sentiment toward the stock is likely to remain fragile.

Star Entertainment Group shares are down 35% so far in 2026.

The post Here’s why Star Entertainment Group shares are sinking lower today appeared first on The Motley Fool Australia.

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Motley Fool contributor Kevin Gandiya has no positions 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.