Tag: Stock pick

Tabcorp Holdings Ltd (ASX: TAH) shares are being hammered on Thursday after the wagering group released a serious update.

At the time of writing, the Tabcorp share price is down 24.78% to 86.5 cents, wiping out a large chunk of the stock’s recent recovery.

Despite today’s sell-off, Tabcorp shares are still up around 28% over the past 12 months. But with the stock now down about 13% in 2026, investors are clearly worried about what comes next.

Here’s what investors are reacting to.

AUSTRAC opens an enforcement investigation

According to the release, Tabcorp advised it has received a letter from AUSTRAC in relation to a compliance assessment.

AUSTRAC is Australia’s financial crimes watchdog. Its role includes monitoring compliance with anti-money laundering and counter-terrorism financing rules.

Tabcorp said AUSTRAC has raised serious concerns with the company’s ability to identify, mitigate, and manage money laundering and terrorism financing risks.

As a result, AUSTRAC has started an enforcement investigation.

The investigation will initially look at whether Tabcorp is complying with its obligations under the AML/CTF Act. It will also assess whether the company has a compliant AML/CTF program, whether it follows that program, and how it monitors customers.

Investors are pricing in the unknown

Tabcorp noted that AUSTRAC’s investigation is still at an early stage.

The company also said all potential outcomes remain open. That includes the possibility that no further enforcement action is taken.

But that has not settled investor nerves, and the share price reaction shows they are not treating this as a minor update.

Keep in mind that regulatory issues can be hard to price because the final outcome is uncertain. There may be no further action, or there may be penalties, extra costs, and more scrutiny.

The update also brings back older concerns. In 2017, Tabcorp paid a $45 million civil penalty after breaching AML/CTF laws on 108 occasions over more than 5 years.

What management is saying

Tabcorp Chairman Brett Chenoweth said the company takes its anti-money laundering and counter-terrorism financing obligations very seriously.

Managing Director and Chief Executive Gillon McLachlan said he is committed to leading a compliant and safe company.

He also said lifting risk capability has been an ongoing part of the company’s transformation.

That may be true, but the market wants evidence that the risks are under control.

Foolish Takeaway

I can understand why investors are selling first and asking questions later.

Tabcorp has had a strong 12-month run, so major regulatory uncertainty was always likely to test that momentum.

The issue here is not just the investigation itself. It is the lack of clarity around where this goes next.

I would want to see more detail from AUSTRAC before taking a closer look.

The post Tabcorp shares crash 25% as watchdog probe hits appeared first on The Motley Fool Australia.

More reading

• Tabcorp faces AUSTRAC compliance probe
• Why is everyone buying Tabcorp shares this week?
• Here are the top 10 ASX 200 shares today
• Guess which ASX stock is closing in on its multi-year high

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Amcor Plc (ASX: AMC) are trading more than 4% higher after the company boosted its dividend on strong earnings results.

Strong sales figures

The packaging company said net sales for the third quarter came in at US$5.91 billion, up 77%, driven by the company’s acquisition of Berry, which was finalised in April last year.

Net income was US$278 million, and adjusted EBITDA was US492 million, up 87%.

Amcor said synergies from the Berry deal came in at US$77 million, “at the upper end of expectations”.

Amcor Chief Executive Peter Konieczny said regarding the result:

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. Over the past year, we have executed a smooth integration, built a strong leadership structure, and made meaningful progress on synergy delivery and portfolio optimization. While we continue to operate in a challenging market environment, our global scale, diversified portfolio, and strong customer and supplier partnerships position us well.

Mr Konieczny said the company was pricing responsibly to offset inflation and it had “clear visibility to additional synergy benefits”.

Amcor, he said, had a proven ability to navigate volatility and “we are confident in our outlook and the continued strength of our business”.

While the company’s financial results were stronger, Amcor estimated that volumes were about 1.5% lower than for the combined Amcor and Berry businesses in the March quarter last year.

Amcor said regarding its dividend:

The Board’s confidence in Amcor’s near and long term growth opportunities and ability to generate significant free cash flow is reflected in today’s declaration of a quarterly cash dividend of 65.0 cents per share, compared with 63.75 cents per share in the same quarter last year, declared as 12.75 cents per share before adjusting for the 1-for-5 reverse stock split effected on January 14, 2026. Holders of CDIs trading on the ASX will receive an unfranked dividend of 91.0 Australian cents per share.

The ex-dividend date is May 27.

Cash flow downgrade

Amcor downgraded its free cash flow outlook for the full year to the end of June from the previous US$1.8 to US$1.9 billion to US$1.5 to US$1.6 billion, which “reflects higher inventory levels at higher cost to secure customer service levels given the impact of the Middle East conflict”.

Amcor shares traded as high as $55.45 early on Thursday before settling to be 4.1% higher at $54.54.

Amcor is valued at $24.13 billion.

The post Why are Amcor shares surging higher today? appeared first on The Motley Fool Australia.

More reading

• Amcor earnings surge on Berry acquisition
• CSL and Wesfarmers among scores of ASX shares hitting fresh 52-week lows
• 5 ASX shares scoring upgraded ratings this week
• Macquarie names 3 ASX shares to buy
• What’s this broker’s updated view on this ASX materials stock following a 25% fall?

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 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.

The Superloop Ltd (ASX:SLC) share price is in focus today following its latest Macquarie Conference update, which highlighted a 21.2% increase in customers and a 23.3% lift in revenue compared to the prior year.

What did Superloop report?

• Revenue grew 23.3% year-over-year to $317.6 million in FY26
• Customer numbers up 21.2% to 805,000 as at June 2026
• Underlying EBITDA rose 45.9% to $55.8 million in FY26
• EBITDA margin improved to 17.6% from 16.9% last year
• Operating expenses to revenue ratio reduced further to 13.4%

What else do investors need to know?

Superloop reported disciplined operating cost management, supported by digital and AI investment, which has improved operating leverage as the customer base expands. The company continues to focus on scaling up its infrastructure-on-demand platform, supporting both retail and wholesale growth across its consumer, business, and wholesale market segments.

A notable development is Superloop’s agreement to acquire Lightning Broadband, anticipated to add 54,000 contracted FTTP lots and accelerate Superloop’s presence in the fibre-to-the-premise market. The acquisition is expected to complete in the fourth quarter of FY26, pending regulatory approvals.

What’s next for Superloop?

Looking ahead, Superloop is prioritising the expansion of its Smart Communities portfolio and leveraging its enhanced metro fibre footprint. The integration of Lightning Broadband will bolster its scale and annuity revenue base, enabling it to reach more homes and businesses.

Management remains optimistic about continuing to grow market share through product innovation, sustained investment in AI and digital tools, and focused cost discipline as Superloop seeks to solidify its place amongst Australia’s leading internet providers.

Superloop share price snapshot

Over the 12 months, Superloop shares have risen 34%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post Superloop lifts revenue and customer base appeared first on The Motley Fool Australia.

More reading

• BWP Group announces successful entitlement offer
• Tabcorp faces AUSTRAC compliance probe
• Orica posts record first-half earnings and higher dividend
• NEXTDC wraps up $1.7bn hybrid offer, lifts liquidity
• Generation Development Group completes $1.8bn client migration

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.

Light & Wonder Inc (ASX: LNW) shares are having a tough session on Thursday.

At the time of writing, the ASX 200 gaming stock is down 11% to $100.08.

What is weighing on Light & Wonder shares?

The catalyst for the selling has been the release of a mixed first-quarter result.

According to the release, Light & Wonder reported revenue of US$790 million for the quarter, up 2% on the prior corresponding period.

Also growing was its consolidated adjusted EBITDA, which rose 5% to US$327 million, while adjusted NPATA per share increased 7% to US$1.45.

Reported profit falls

Despite the adjusted earnings growth, statutory earnings were significantly weaker.

Net income fell 37% to US$52 million, while diluted net income per share declined 30% to US$0.66.

Management attributed the decline largely to approximately US$50 million in legal reserve contingencies associated with legacy legal matters.

This appears to be one reason the market is reacting negatively today.

Gaming machine sales disappoint

There were also signs of weakness in parts of the Gaming division.

While Gaming revenue increased 3% to US$512 million, Gaming machine sales revenue fell 25%. Management advised that this reflects the timing of international and North American video lottery terminal shipments in the prior year period.

Gaming Systems revenue also declined 14%, mainly due to lower hardware sales.

The ASX 200 stock also revealed that the SciPlay business remains under pressure.

Revenue fell 7% to US$187 million, driven by continued weakness in JACKPOT PARTY Casino.

Management notes that the mature social casino market remains challenging, although SciPlay did deliver higher adjusted EBITDA and margin expansion.

Management commentary

The ASX 200 stock’s CEO, Matt Wilson, was pleased with the quarter. He said:

The first quarter of 2026 marks the beginning of the next phase of the Company’s growth trajectory: one defined by our content-centric operating model, deepening customer relationships, disciplined execution, expanding margins and enhanced capital structure. We are seeing the benefits of our continued investment in studios and content, as our franchises drive strong game performance across the portfolio.

Gaming momentum remained robust, with our North American premium installed base growing for the 23rd consecutive quarter, and Grover continued its expansion into the recently legalized Indiana market. iGaming delivered another double-digit growth quarter in both revenue and AEBITDA, while SciPlay continued to expand its DTC revenue.

Cash flow a brighter spot

On the positive side, adjusted free cash flow increased 86% to US$207 million, reflecting strong underlying cash generation.

The company also maintained its net debt leverage ratio within its target range and reiterated its intention to reduce leverage below 3.0 times during the first half of 2027.

Outlook

Light & Wonder expects full year consolidated adjusted EBITDA growth in the mid to high single digits.

However, management warned of ongoing macroeconomic and geopolitical uncertainty, including tariff-related cost pressures and a pending increase in UK iGaming gambling duties.

Wilson concludes:

Looking ahead, we remain focused on investing in product innovation and talent to further strengthen our recurring revenue model and enhance our global competitive position as we progress toward our 2028 financial targets.

The post Why are Light & Wonder shares sinking 11% today? appeared first on The Motley Fool Australia.

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• Down 16% year to date, Bell Potter thinks now is the time to buy low on this ASX 200 stock
• Have beaten-down ASX gaming stocks finally hit a bottom?
• Three ASX 200 shares the Jarden team says are a buy right now
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The BWP Trust (ASX: BWP) share price is in focus following its announcement of a successful $122 million institutional entitlement offer and strong 98% take-up by institutional investors.

What did BWP Group report?

• Raised approximately $122 million via the Institutional Entitlement Offer at $3.77 per new security
• Offer was fully underwritten, part of a total $228 million capital raising
• Wesfarmers took up its full $53 million entitlement
• Approximately 32 million new securities to be issued
• New securities will rank equally with existing BWP securities

What else do investors need to know?

BWP Group completed the institutional component of its 1 for 12 pro rata entitlement offer, showing continued support from large shareholders. Any shortfall was quickly picked up by other existing and new institutional investors.

Trading in BWP securities resumed today. The new securities issued are set to begin trading on 18 May 2026, offering increased liquidity and access for investors.

The retail entitlement offer, which aims to raise an additional $106 million, opens for eligible retail investors on 12 May 2026, closing on 22 May 2026.

What’s next for BWP Group?

Attention now turns to the retail entitlement offer, giving eligible investors a chance to participate on the same terms as institutional investors. The proceeds from the capital raising are expected to support BWP Group’s ongoing investment strategy and strengthen its balance sheet.

Management will be sharing more details in the upcoming retail offer booklet and is providing a dedicated support line for shareholder queries.

BWP Group share price snapshot

Over the past 12 months, BWP Group shares have risen 4%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post BWP Group announces successful entitlement offer appeared first on The Motley Fool Australia.

More reading

• Superloop lifts revenue and customer base
• Tabcorp faces AUSTRAC compliance probe
• Orica posts record first-half earnings and higher dividend
• NEXTDC wraps up $1.7bn hybrid offer, lifts liquidity
• Generation Development Group completes $1.8bn client migration

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.

Zip Co Ltd (ASX: ZIP) shares are charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) buy now, pay later (BNPL) stock closed yesterday trading for $2.52. In early morning trade on Thursday, shares are changing hands for $2.64 apiece, up 4.8%.

For some context, the ASX 200 is up 1.1% at this same time.

Here’s what’s catching investor interest.

Zip shares lift on strong April performance

Zip shares are jumping higher following the company’s presentation at the annual Macquarie Group Ltd (ASX: MQG) Conference.

That presentation included a trading update for April.

Investors are reacting positively after Zip reported ongoing strong growth in April.

In its core growth market of the United States, the ASX 200 BNPL company reported a year-on-year total transaction volume (TTV) increase in April of more than 40% (in US dollar terms).

And management said that Zip’s US credit outcomes have been performing in line with expectations and are on track to be at least 1.75% of TTV for Q4 FY 2026.

And in its Australia and New Zealand segment, Zip said it now serves 1.9 million “highly engaged customers”, which the company noted represents some 10% of the Australian adult population.

Zip shares also look to be getting support today, with the company reaffirming its full-year FY 2026 guidance.

Zip expects to achieve full-year cash earnings before taxes, depreciation and amortisation (EBTDA) of $260 million, with at least 40% TTV growth in its US markets (in US dollar terms). The company expects an operating margin of 18% and a revenue margin of 8%.

As for bad debts, the company forecasts its fourth-quarter losses will be around 1.75% of TTV.

How has the ASX 200 BNPL share been tracking in FY 2026?

Zip shares closed up 13.7% on 17 April following the release of the company’s third-quarter results.

Highlights for the three months included record cash EBTDA of $65.1 million, up 41.5% year on year. And TTV of $4.0 billion was up 22.4%.

At the end of the quarter, Zip had 6.5 million active customers, up 3.5% year on year. And the number of merchants on Zip’s platforms increased by 12.7% to 93,900.

Commenting on the quarterly results, Zip CEO and managing director Cynthia Scott said:

Zip’s resilient business model continues to drive increased profitability at scale, delivering record cash earnings of $65.1 million, up 41.5% year on year. Operating margin expanded 292bps to 19.4%, reflecting strong unit economics and significant operating leverage.

Momentum continued across both markets, underpinned by deepened customer engagement and disciplined execution.

The post Why are Zip shares storming higher on Thursday? appeared first on The Motley Fool Australia.

More reading

• Why Zip shares rocketed 55% in April (and could keep rising)
• These are the 10 most shorted ASX shares
• These ASX financial stocks are bouncing, is it just the start?
• The five best ASX 200 stocks to buy and hold in April revealed
• Why these ASX shares jumped 15%+ in April

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 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.

Super Retail Group Ltd (ASX: SUL) shares are under pressure on Thursday morning.

At the time of writing, the ASX 200 stock is down 13% to a 52-week low of $10.08.

Why are Super Retail shares crashing?

Investors have been selling the retailer’s shares this morning following the release of a trading update after the market close on Wednesday.

Investors appear to be reacting to softer trading momentum across the group and a lift in expected corporate costs.

According to the update, group like-for-like sales growth was just 0.4% for the first 18 weeks of the second half. Total sales growth for the same period was 1.9%.

Management revealed that sales momentum across all four brands was impacted by the onset of the Middle East conflict, with inflationary pressures, higher fuel prices, rising interest rates, and concerns around fuel availability weighing on consumer sentiment.

The impact was most pronounced over the key Easter trading period.

BCF hit hardest

The weakest performer in the second half has been the BCF brand, which reported a 3.3% decline in like-for-like sales for the half to date.

Management said BCF was the brand most affected by elevated fuel prices and fuel supply constraints, particularly in regional areas.

This reduced customer participation in outdoor activities during the Easter and school holiday period.

The ASX 200 stock also noted that trading was hurt by the unfavourable calendar caused by the separation of Easter and Anzac Day.

Mixed performance across other brands

Supercheap Auto delivered like-for-like sales growth of 1.6% for the second half to date, but management noted that trading conditions in the auto category moderated through March and April.

Discretionary categories such as power tools were weaker, though this was partly offset by increased demand in fuel-related and DIY categories.

The Rebel brand posted 1.4% like-for-like sales growth and gained market share despite weaker category sales through March and April.

Finally, Macpac recorded 2.5% like-for-like growth, but its momentum was also affected by reduced outdoor activity in March and April as it prepared for the key winter trading period.

Margins and costs

Also weighing on the ASX 200 stock on Thursday is news of margin pressure.

Super Retail advised that group gross margin for the second half to date is modestly below the prior comparable period.

In addition, total group and unallocated costs for FY 2026 are now expected to be $66 million, up from the previous estimate of $60 million.

This includes project costs related to the transition to a new Victorian distribution centre and implementation of a new HR Core and Payroll system.

The post Why are Super Retail shares crashing 13% today? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Super Retail Group provides a trading update
• CSL and Wesfarmers among scores of ASX shares hitting fresh 52-week lows
• These 3 ASX 200 stocks hit a 52-week low: Buy, sell or hold?

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

The Tabcorp Holdings Ltd (ASX: TAH) share price is under the spotlight today as the company revealed it is the subject of an AUSTRAC enforcement investigation related to anti-money laundering and counter-terrorism financing (AML/CTF) compliance.

What did Tabcorp report?

• Tabcorp has received a formal notification from AUSTRAC regarding a compliance assessment.
• AUSTRAC expressed serious concerns about Tabcorp’s money laundering and terrorism financing risk management controls.
• An enforcement investigation has commenced, focusing on the effectiveness of Tabcorp’s AML/CTF program and customer monitoring processes.
• The review is currently at an early stage, with all potential outcomes still open—including the possibility of no further enforcement action.

What else do investors need to know?

While the investigation is still in its early days, AUSTRAC’s concerns relate to Tabcorp’s ability to identify and manage risks around money laundering and terrorism financing. The focus will be on compliance with legal obligations and the effectiveness of current policies and monitoring systems.

Tabcorp’s Board and management say they are committed to full cooperation with AUSTRAC, highlighting that ongoing improvements to risk management have been a priority as part of the company’s transformation. There is no indication yet of financial penalties or operational restrictions, but investigations of this type may involve significant scrutiny and resources.

What’s next for Tabcorp?

Tabcorp will work closely with AUSTRAC as the investigation unfolds, with management reaffirming their commitment to raising risk management standards across the business. Shareholders will be keenly watching for further updates from the company or AUSTRAC as more information becomes available over the coming months.

There are no changes to ongoing operations at this stage, but regulatory compliance and the results of the investigation will remain key investor watchpoints in the near term.

Tabcorp share price snapshot

Over the past 12 months, Tabcorp shares have risen 72%, outperforming the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post Tabcorp faces AUSTRAC compliance probe appeared first on The Motley Fool Australia.

More reading

• Superloop lifts revenue and customer base
• BWP Group announces successful entitlement offer
• Orica posts record first-half earnings and higher dividend
• NEXTDC wraps up $1.7bn hybrid offer, lifts liquidity
• Generation Development Group completes $1.8bn client migration

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.

ASX materials stock Imdex Ltd (ASX: IMD) is in focus today after another big jump during yesterday’s trade. 

It is an Australian mining equipment and technology company operating globally.

Its technology includes drilling optimisation products, cloud-connected rock knowledge sensors, and data and analytics to improve the process of identifying and extracting mineral resources.

Yesterday, it rose another 3%, which takes it to a 9% gain over just the last week. 

It is now up 28% year to date and 62% over the last year. 

Investors monitoring this soaring ASX materials stock may be wondering if there is any upside left. 

The team at Bell Potter have provided updated guidance on this rocketing ASX stock. 

It seems the broker believes there’s still plenty of room to run. 

3Q FY26 Business Update

In the recent report, Bell Potter said Imdex’s Business Update was headlined by quarterly revenue of $123m (BPe $122m), up 23% YoY (29% CCY), and a bullish outlook.

The company reported: 

• Quarterly revenue was $123m, up 23% YoY (BPe $122m; up 29% CCY)
• Sensors, services, and software revenue contribution grew to 70% of Group revenue, up from 68% in 1H FY26, partly reflecting the 33% uplift in tools on hire (vs PcP)
• Regionally, the Americas and APAC led revenue growth at 27% and 28%, respectively, with strong demand for sensors and field services, and minimal impacts from the Middle East conflict noted

Bell Potter said these results helped improve the long-term outlook for this ASX materials stock. 

We are encouraged by the significant expansion in CY26 gold and copper Major and Intermediate exploration budgets, suggesting robust uptake of IMD drilling products, tools and software in the shortterm. Together, with greater Junior exploration activity, as a record wave of recently raised equity is increasingly deployed, IMD is well positioned to deliver strong revenue growth and operating leverage over the next twelve months.

Price target increase

Based on this guidance, the team at Bell Potter have increased their share price target to $5.10 (previously $4.60). 

From yesterday’s closing price of $4.43, this indicates a further upside potential of approximately 15%. 

It’s worth noting that opinions appear mixed on the further potential for this ASX materials stock. 

Based off 10 forecasts from analysts via TradingView, price targets range from a low of $3.60 per share, to highs of $5.15. 

Online brokerage platform Selfwealth indicates this ASX materials stock is trading close to fair value.

The post Can this red hot ASX materials stock keep charging higher? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• This ASX materials stock could rise 20% according to this broker

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.

Earlier this week, Regis Resources Ltd (ASX: RRL) announced a game-changing merger with Vault Minerals Ltd (ASX: VAU).

If the proposal goes ahead, it is expected to create a gold giant with a pro forma market capitalisation of about $10.7 billion and combined anticipated gold production of over 700,000 ounces per year.

Does this make Regis Resources shares a buy? Let’s see what Bell Potter is saying about the proposed merger.

What is the broker saying?

Bell Potter is positive on the deal and believes it creates meaningful scale, production diversification, and greater relevance to global investors. It explains:

We view this deal as a positive for shareholders and as carrying strategic merit. With no cash component, we look to relative equity valuations and find, based on VA consensus, RRL and VAU trading on similar forward P/E and EV/EBITDA multiples. Forecast EBITDA margins for both are in the 50%-60% range. From a free cash flow perspective, RRL is stronger in both yield terms and absolute dollars, but as VAU completes a major mill expansion at Leonora it catches up over FY28-FY29. We see this as complementary: Leonora will be lifting to an expanded steady state in the next 2 years as RRL potentially increases underground investment and the Tropicana open-pit passes peak production.

In the short-term, as a 700kozpa producer with five operating mines, the combination creates meaningful scale and greater relevance to global investors. It offers genuine diversification of production and spreads the development risk of McPhillamys and Sugar Zone. A debt-free balance sheet with $1.9 billion cash is extremely strong and improves access to capital. In the long-term, we see a more powerful growth platform with potential to compete for genuine top-quality assets. The company will be unhedged, offering full gold price exposure.

Should you buy Regis Resources shares?

According to the note, Bell Potter has responded to the news by retaining its buy rating and $9.45 price target on the gold miner’s shares.

Based on its current share price of $6.51, this implies potential upside of 45% for investors over the next 12 months.

It also expects 5% dividend yields in FY 2026 and FY 2027, which boosts the total potential return to 50%.

The broker concludes:

We make no changes to our forecasts with this update. RRL continues to offer strong free cash generation, dividends and unhedged, debt free gold exposure. Retain Buy.

The post Are Regis Resources shares a buy amid its mega gold merger with Vault Minerals appeared first on The Motley Fool Australia.

More reading

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• Why Appen, Gentrack, Magellan, and Regis Resources shares are falling today
• Why Flight Centre, Sigma Healthcare, Vault Minerals, and WiseTech shares are storming higher today
• Big ASX 200 gold stock news! Regis Resources and Vault Minerals announce $11 billion merger
• Regis and Vault to combine, creating new ASX gold powerhouse