Tag: Stock pick

After a lot of volatility for the stock market, there are a large number of opportunities out there that look like very cheap ASX shares, in my opinion.

We can’t control share prices, but we can control when we invest. When valuations are hitting, or close to, 52-week lows, I think there’s good chance to pick up a bargain.   

I think the two stocks below are excellent opportunities today.

Charter Hall Long WALE REIT (ASX: CLW)

The first business I want to highlight is a real estate investment trust (REIT) that’s invested across a range of commercial properties in different sectors.

It provides exposure to industrial and logistics, data centres, social infrastructure, offices, hotels, service stations and retail.

The prospect of even higher interest rates is acting as a headwind on the unit prices of REITs like Charter Hall Long WALE REIT. Over the past year, the Charter Hall Long WALE REIT unit price has dropped 27%, making it a lot cheaper.

The business is generating almost as much rental income as possible from its portfolio. Its occupancy rate was 99.9% at the end of FY26, with 99% leased to reliable blue-chip tenants. Pleasingly, it has a weighted average lease expiry (WALE) of around nine years, which means a lot of rental income has already been locked in for the years ahead.  

It’s a lot cheaper and it now looks very good value compared to its underlying balance sheet. It reported net tangible assets (NTA) of $4.71 as at June 2026, so it’s trading at an appealing 31% discount to that NTA.

One of the main reasons why I think it’s an obvious cheap ASX share pick is because it’s projected to pay an annual distribution of 25.5 cents per security in FY27. That means it could pay a distribution yield of 7.9%! I think that’s close to the best forward distribution yield investors could get from the REIT over the past decade.

Collins Foods Ltd (ASX: CKF)

Another ASX share that looks to me like it’s trading far too cheaply is Collins Foods, a KFC franchisee operator with operations in Australia and Europe.

As a consumer-facing business, the company may be viewed by some investors as being exposed to a potential downturn. The Collins Foods share price has fallen 27% over the past year, making it seem a lot cheaper.

But, the company’s financials don’t seem to show any sign of a downturn.

At the start of September, the company announced a trading update for the first 17 weeks, total company sales were up 6.6%, with 6.4% growth for Australian sales, 44% growth for Germany and a 2.5% decline in the Netherlands.

Management are optimistic that initiatives in Australia and Germany can continue to deliver solid performance in those two important markets. For example, it is trialling breakfast in Gold Coast restaurants.  

With plans to continue to expand its global restaurant network over time, I think the prospects look promising for both revenue and earnings growth for Collins Foods, so the sell-off makes this look like a very cheap ASX share to me.

Based on the projection on CMC Invest, the Collins Foods share price is now trading at under 15x FY27’s estimated earnings.

These aren’t the only two cheap ASX shares out there that look really good value to me, so I’d add other stocks to my watchlist, too.

The post 2 very cheap ASX shares near 52-week lows I’d buy today appeared first on The Motley Fool Australia.

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

At 2:30pm AEST, the S&P/ASX 200 Index (ASX: XJO) was up 0.1% at 8,687.5 points as investors awaited today’s interest rate decision.

Then the Reserve Bank of Australia (RBA) released that rate decision, and the ASX 200 promptly dropped 0.2% to 8,668.3 points.

With concerns over persistently high inflation rising, market expectations of an RBA interest rate increase had jumped to 92% prior to today’s announcement, according to the ASX’s RBA rate tracker.

And the market’s expectations proved to be spot on.

At its meeting today, the RBA board decided to increase the cash rate target by 0.25% to the new 4.60%.

This marks the fourth interest rate hike by Australia’s central bank this year. And it sees Australia’s official cash rate at the highest levels since October 2011.

When Aussies turned over the calendar onto 2026, the rate stood at 3.60%. And most analysts were forecasting rate cuts ahead.

Here’s why that’s not happening.

ASX 200 wobbles as RBA boosts interest rates again

Commenting on today’s decision, the RBA noted, “Inflation remains elevated and some of the upside risks flagged in August are materialising.”

And ASX 200 investors look to have both the fallout from the Iran war and the ongoing AI boom to thank for today’s interest rate boost.

According to the RBA:

The conflict in the Middle East has broadened and global energy prices are now much higher than had been assumed in the August forecasts. AI-related demand is driving rapid growth in global prices for technology-related goods.

As far as the domestic economy is going, the central bank cited “heightened” uncertainties about the outlook for Australia’s economic activity and inflation.

The RBA noted:

There are signs that growth in consumer spending is easing gradually as expected, although housing prices have fallen in most capital cities and new housing loans have declined noticeably. Labour market conditions have eased broadly as expected in recent months, and labour market leading indicators are broadly stable. Meanwhile, growth in business investment and debt is strong.

The board’s decision to lift interest rates today was unanimous.

What are the experts saying?

Commenting on today’s RBA interest rate decision that’s pressuring the ASX 200, Ronak Bhimjiani, real estate economist at JLL Australia, said, “While largely anticipated by markets, the move reflects a Board increasingly focused on persistent underlying inflation and stronger-than-expected economic growth.”

Bhimjiani added:

For real assets, higher borrowing costs will continue to sharpen investor discipline, with pricing and underwriting assumptions likely to remain conservative in the near term.

However, income resilience remains a defining theme. With inflation still tracking above the RBA’s target band, rental growth continues to provide a natural buffer, helping preserve real returns and supporting the appeal of well-leased assets relative to other investment classes.

The post ASX 200 slips as RBA boosts interest rates to 15-year highs appeared first on The Motley Fool Australia.

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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 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.

Dateline Resources Ltd (ASX: DTR) shares are rocketing higher again on Tuesday.

The Dateline share price is currently up 34.41% to 12.5 cents after climbing as high as 14 cents earlier in the session.

That follows Monday’s enormous 47.62% gain, when the gold and rare earths explorer jumped from 6.3 cents to 9.3 cents.

It’s been quite a turnaround after the stock traded near its 52-week low earlier this month.

In fact, anyone who invested $5,000 in Dateline shares just one week ago would already be sitting on a pretty impressive profit.

So, how much would that investment be worth today?

What would $5,000 be worth today?

Dateline shares finished last Tuesday 22 September at just 6.5 cents.

At that price, a $5,000 investment would have bought approximately 76,923 shares, excluding brokerage costs.

Fast forward one week and those shares are currently changing hands for 12.5 cents each.

That means the original $5,000 investment would now be worth approximately $9,615.

That’s a profit of around $4,615 in just one week, representing a return of roughly 92%.

And it could have been considerably more for anyone who managed to sell near today’s high.

At today’s intraday high, those shares would have been worth approximately $10,769.

That’s more than double the original investment in the space of a week.

So, what’s behind the incredible run?

Why are Dateline shares taking off?

The rally really picked up on Monday after Dateline provided another update on its Colosseum Gold and Rare Earths Project in California.

The Department of Justice has stepped in, asking the court to suspend the injunction that has stopped work at Colosseum.

The injunction has been in place since 10 August following legal action from environmental group, National Parks Conservation Association.

The US Government wants Dateline to be able to get back to work while the appeal continues.

It argues that keeping the project on hold is hurting US national security interests, particularly given Colosseum’s rare earth potential.

Where to from here?

After nearly doubling in a week, Dateline shares have certainly caught the market’s interest.

But there’s still a big hurdle ahead.

The court is scheduled to hear the applications to suspend the injunction on 26 October.

If successful, Dateline could get back to work at Colosseum while the appeal continues.

Until then, I’d expect plenty more movement in the Dateline share price as investors weigh up what could happen next.

The post Invested $5,000 in Dateline shares a week ago? Here’s how much you’d have now appeared first on The Motley Fool Australia.

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• Guess which ASX stock is rocketing 46% today

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.

As we approach the final few days of September, all eyes are on which shares could drive the share market higher next month.

Here’s the latest out of Fortescue Ltd (ASX: FMG), Westpac Banking Corporation Ltd (ASX: WBC), and CSL Ltd (ASX: CSL) shares, and what brokers expect for each of the stocks next.

Brokers rate CSL shares as a BUY

CSL shares rebounded strongly through August, and have continued climbing higher in September. Over the past month, the ASX biotech stock has climbed around 6% higher, and it’s now also up 6% for the year-to-date, having regained earlier losses shed in the first quarter of 2026. At the time of writing the shares are trading at $182.85.

The shares rebounded off the back of a strong FY26 result in August, when the company posted a total revenue and NPAT which came in way ahead of guidance. Management described FY26 as a ‘reset year’, with FY27 marking a return to growth.

This, combined with a sectorwide rotation back into ASX healthcare shares over the past month has helped reignite investor confidence back into the company and its potential for future growth.

The experts are still very optimistic too. TradingView data shows the majority of analysts (11 out of 19) have a buy/strong buy rating on the shares. But after the latest strong rally, the $182.85 target price is flat on where the shares are trading at the time of writing. 

Brokers rate Fortescue shares as a HOLD

Fortescue shares have slumped lower in September, continuing a run of losses shed since early-June. At the time of writing the shares are trading at $16.26, which is around 8% lower than a month ago and roughly 26% lower for the year-to-date.

The mining shares have been hit by headwinds from volatile iron ore prices, and conflict in the Middle East has also put downward pressure on the Fortescue share price. Last month, the miner posted a mixed FY26 result which didn’t help reignite confidence either.

Brokers are reserved about where the share price could go to next. TradingView data shows the majority of analysts have a hold rating on Fortescue shares. Although, after the latest share price slump, the $17.73 average target price implies the shares could still climb another 9% higher over the next 12 months, at the time of writing.

Brokers rate Westpac shares as a SELL

Westpac shares have had a mixed month. The ASX bank shares have swung between $35.04 and $33.85 throughout September as the market tries to come to terms with the latest inflation data, a weakening property market, and future interest rate increases.

At the time of writing, Westpac shares are trading for $34.92 a piece. They’ve climbed 1% over the past month but are still down around 10% for the year-to-date.

Westpac’s third-quarter FY26 update, posted last month, was good on the surface, but investors were spooked by the bank’s red flags around weaker mortgage demand. Westpac said mortgage application volumes declined through the period as competition intensified and borrowers continued to navigate interest rate uncertainty. It also said it expects mortgage growth will continue to be challenging.

TradingView data shows that the experts are bearish about the outlook for Westpac shares. The majority (nine out of 16) have a sell/strong sell rating on the shares. The average $33.42 target price implies a downside of around 4% at the time of writing.

The post Buy, hold, sell: Fortescue, Westpac, CSL shares appeared first on The Motley Fool Australia.

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

Appen Ltd (ASX: APX) shares are having a strong session on Tuesday.

The Appen share price is currently up 6.58% to $1.215, after closing yesterday at $1.14.

That takes the artificial intelligence (AI) data company’s gains to around 15% over the past week and more than 50% in 2026.

There doesn’t appear to be any new price-sensitive announcements from Appen today.

Instead, its shares look to be getting a lift from a big day across the tech sector.

So, let’s take a closer look.

Tech stocks rally

The S&P/ASX All Technology Index (ASX: XTX) is one of the best-performing areas of the market today, climbing around 2.2%.

That’s well ahead of the S&P/ASX 200 Index (ASX: XJO), which is trading basically flat at the time of writing.

Several big-name tech shares are also pushing higher, adding to the positive mood across the sector.

Appen’s exposure to AI could also be helping, particularly after another solid session for tech stocks in the US overnight.

But it’s also worth remembering that Appen shares can move around quite a bit.

The stock jumped more than 7% on 22 September and another 8% the following day, before giving back some of those gains later in the week.

What’s happening at Appen?

Away from today’s share price move, things have also been looking a bit better at Appen lately.

The company reported revenue of US$119.9 million for the first half, up 17.5% from a year earlier.

Underlying EBITDA before foreign exchange also improved by US$7.5 million to US$5.3 million.

China continues to do most of the heavy lifting.

Revenue from Appen China jumped 80.4% to US$76.2 million, helped by continued demand for AI-related data services.

The Global business hasn’t been as impressive, although things improved in the June quarter.

Revenue came in at US$23.8 million, up 20% from the March quarter.

Appen is still expecting FY26 revenue of between US$270 million and US$300 million.

It is also targeting an underlying EBITDA margin before foreign exchange of around 5% to 10%.

Where to from here?

After climbing more than 50% this year, Appen shares have certainly had a much better run in 2026.

And today’s 6% jump adds to what has already been a pretty good September.

For me, the next test will be whether Appen can deliver on its FY26 guidance and keep the recent improvement going.

There’s still a long way to go before the company returns to the levels seen a few years ago.

The post Why is the Appen share price jumping 6% today? appeared first on The Motley Fool Australia.

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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 Appen. 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.

S&P/ASX 200 Index (ASX: XJO) shares are just inside the green on Tuesday as the market awaits the next interest rate announcement at 2:30pm. 

Analysts are pricing in a 92% bet that the Reserve Bank of Australia (RBA) will lift the cash rate by 0.25% to 4.6%. 

Persistently high inflation, rising oil prices due to the Iran-US conflict, soaring bond yields to multi-decade highs, and rock-bottom productivity growth in Australia are among the reasons interest rates are expected to rise again.

Experts say there could even be another 0.25% bump in November, which would be the fifth in the 2026 calendar year. 

Meanwhile, experts offer their ratings and thoughts on three ASX 200 shares. 

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price is $31.21, down 1.8% today and up 33% over 12 months. 

John Athanasiou from Red Leaf Securities has a buy rating on this ASX 200 energy share. 

Athanasiou said (courtesy of The Bull): 

Woodside offers exposure to recent elevated global energy prices amid supply disruptions and continuing Middle East tensions.

Stronger realised prices should support near term cash flow and dividends.

A major risk is an easing of geopolitical tensions and a corresponding fall in crude oil prices.

However, the company delivered a solid interim result. Operating revenue of $7.446 billion in the first half of 2026 was up 13 per cent on the prior corresponding period. Underlying net profit after tax of $1.334 billion was up 7 per cent.

The Scarborough energy project is almost completed.

Ramsay Health Care Ltd (ASX: RHC)

The Ramsay Health Care share price is $55.77, up 0.4% today and up 77% over 12 months. 

Morgans has a hold rating on this ASX 200 healthcare share. 

The broker said: 

Ramsay Santé’s Capital Markets Day provided detail on its new “Connecting Care 2030” strategy ahead of the proposed demerger from RHC.

The strategy targets 2-3% revenue growth and stable EBITDA margins in FY27, followed by c3% revenue growth and gradual margin improvement to FY29.

While we view the strategy as credible, the outlook points to gradual rather than significant earnings growth, with tariff constraints remaining a key headwind.

For RHC shareholders, the proposed in-specie distribution should simplify the group and provide direct ownership of Santé through ASX-tradeable CDIs.

Life360 Inc (ASX: 360)

The Life360 share price is $18.95, down 1.9% today and down 64% over 12 months. 

Michael Gable from Fairmont Equities has a sell rating on this ASX 200 tech share. 

Gable commented: 

The company posted a 38 per cent increase in revenue in the second quarter of 2026 when compared to the prior corresponding period. Total subscription revenue was up 31 per cent.

However, the share price has fallen from $29.48 on August 10 to trade at $19.44 on September 24.

We believe the business is vulnerable to increasing competition. Any earnings disappointments moving forward may further pressure the share price.

Investors may want to consider cashing in some gains.

The post Buy, hold, sell: Woodside, Life360, Ramsay Health Care shares appeared first on The Motley Fool Australia.

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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 positions in and has recommended Life360. The Motley Fool Australia has positions in and has recommended Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX 200 Index (ASX: XJO) shares are just inside the green on Tuesday, up 0.04% to 8,683.4 points.

Among the 11 market sectors, technology is streaking ahead, up 4.4%, while energy is trailing the group, down 1.6%.

Let’s look at some new ratings from the experts (courtesy of The Bull).  

BHP Group Ltd (ASX: BHP)

The BHP share price is $60.36, up 0.9% today and up 44% over 12 months. 

Michael Gable from Fairmont Equities has a buy rating on this ASX mining share. 

Gable said: 

I believe commodities markets are in the early stages of a bull run, leaving BHP’s share price in a prime position to move higher.

Copper now generates most of BHP’s earnings after it produced almost 2 million tonnes in full year 2026. The company should also benefit from constrained global supplies of copper.

Iron ore is also a significant contributor to full year earnings. The company posted an attributable profit of $US9.8 billion in full year 2026, up 9 per cent on the prior corresponding period.

We view any share price dips as a buying opportunity.

JB Hi-Fi Ltd (ASX: JBH) 

The JB Hi-Fi share price is $66.95, up 1% today and down 43% over 12 months. 

Mark Gardner from MPC Markets has a hold rating on this ASX consumer discretionary share. 

Gardner said: 

JB Hi-Fi remains one of the better retailers on the ASX.

The consumer electronics giant delivered record sales of $11.06 billion in full year 2026, up 4.8 per cent on the prior corresponding period. Net profit after tax of $489.9 million was up 6 per cent. The total fully franked dividend of $3.37 was up 22.5 per cent.

A concern is momentum, as total sales growth for JB Hi-Fi Australia was down 0.5 per cent between July 1 and July 31, 2026.

Hold, but keep an eye on the news flow and numbers.

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price is $2.37, up 1.7% today and up 2% over 12 months. 

John Athanasiou from Red Leaf Securities has a sell rating on this ASX retail share. 

Athanasiou said: 

CTD reported improved underlying earnings in fiscal year 2026. However, in my view, questions remain around historical customer remediation, governance, financial controls and funding requirements.

In a company update on April 22, 2026, a review had found that UK customers were charged in excess of their contractual entitlement.

On September 1, 2026, the company noted about 78 per cent of customer refunds had been agreed or were nearing finalisation.

In my view, the near term risk-reward equation remains unattractive.  

The post Buy, hold, sell: Corporate Travel Management, JB Hi-Fi, BHP shares appeared first on The Motley Fool Australia.

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• BHP vs Coles: Which ASX share is better for passive income?
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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 positions in and has recommended Corporate Travel Management. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ResMed Inc. (ASX: RMD) share price is trading around $31.62 on Tuesday.

At that price, I think the sleep treatment company is starting to look cheap given the earnings growth expected over the next few years.

Here is why.

The earnings growth catches my attention

I think ResMed has a bright outlook that makes it worth considering today.

The company generated earnings per share (EPS) of $1.54 in FY26.

Consensus forecasts point to EPS increasing to $1.69 in FY27, $1.85 in FY28, and $2.02 in FY29.

That works out to annual earnings growth of roughly 9% to 10% across each of the next three years.

I think that is a very healthy pace for a business of ResMed’s size.

It means that at $31.62, the ResMed share price is trading on a PE ratio of roughly 18.7 times forecast FY27 earnings. That falls to around 17 times FY28 earnings and less than 16 times the FY29 estimate.

For a global healthcare company expected to compound earnings at close to double-digit rates, those numbers look quite reasonable to me.

Plenty of room to keep growing

The valuation is only attractive if the business has somewhere to go from here. I think ResMed does.

Sleep apnoea is a major global health problem with an estimated 1 billion+ sufferers, and a significant number of them remain undiagnosed or untreated.

That gives ResMed a substantial market opportunity as awareness improves and more patients enter the healthcare system.

The company is already one of the global leaders in sleep and respiratory care, with its devices helping patients manage obstructive sleep apnoea and other conditions.

That position means ResMed does not need to create an entirely new market. It can continue growing as diagnosis rates increase and treatment reaches a larger proportion of the people who could benefit from it.

I also think broader health trends support the long-term opportunity. Ageing populations and rising obesity rates can contribute to the prevalence of sleep apnoea, potentially increasing the number of people who require treatment over time.

So, is the ResMed share price cheap?

I think it is a cheap buy. A forward PE ratio below 19 times does not strike me as demanding when analysts expect earnings to grow at roughly 9% to 10% a year.

If ResMed reaches the FY29 EPS forecast of $2.02, today’s price would represent less than 16 times those earnings.

Of course, forecasts can change, and healthcare companies still need to execute well to turn market opportunity into earnings.

But at the current price, I think investors are getting a compelling risk/reward ratio.

Foolish takeaway

At $31.62, I think the ResMed share price looks cheap for the growth on offer.

With earnings expected to keep rising and the company still facing a large global market opportunity, I would be happy buying at current levels and holding for the long term.

The post Is the ResMed share price a cheap buy? appeared first on The Motley Fool Australia.

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• ASX 200 healthcare shares lead a weaker market amid 82% chance of a rate hike

Motley Fool contributor Grace Alvino 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 ResMed. The Motley Fool Australia has positions in and has recommended ResMed. 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 little changed on Tuesday.

After climbing as high as 8,697 points shortly after the open, the benchmark has since slipped back.

The ASX 200 is currently up just 0.04% at around 8,682 points, leaving it pretty much where it started the day.

It’s also a mixed session across the market, with 87 shares higher, 101 lower and 12 unchanged.

There are some big moves among individual shares, but investors also have one eye on this afternoon’s interest rate decision.

That could make things a lot more interesting later today.

So, let’s take a look at what’s happening.

Tech shares steal the show

The S&P/ASX 200 Information Technology Index (ASX: XIJ) is one of the strongest areas of the market today, up 2.41%.

Megaport Ltd (ASX: MP1) shares are 12% higher after announcing three new AI infrastructure contracts worth a combined $978.6 million.

The company also upgraded its FY27 revenue guidance to between $720 million and $810 million.

Codan Ltd (ASX: CDA) shares have also jumped around 18% to $60.84 after upgrading its earnings guidance.

Elsewhere, South32 Ltd (ASX: S32) shares are up 3.18% to $5.04, while QBE Insurance Group Ltd (ASX: QBE) has climbed 1.43% to $23.44.

However, those gains are being offset by weakness elsewhere in the market.

Banks weigh on the market

The major banks aren’t offering much support today, with all four trading lower.

Commonwealth Bank of Australia (ASX: CBA) shares are down 0.67% to $151.45, and National Australia Bank Ltd (ASX: NAB) has slipped 0.61% to $41.70.

Westpac Banking Corp (ASX: WBC) shares are down 0.50% to $38.15, with ANZ Group Holdings Ltd (ASX: ANZ) having fallen 0.62% to $37.04.

Wall Street falls overnight

Our share market also received a weak lead from Wall Street overnight.

The Dow Jones Industrial Average (DJX: .DJI) fell 0.67%, while the S&P 500 (SP: .INX) dropped 0.77%.

The Nasdaq Composite (NASDAQ: .IXIC) fell the most, down 0.92%.

US Treasury yields also moved higher, with the 10-year yield climbing above 5.2%.

All eyes on the RBA

The big event is still to come, with the RBA set to announce its latest interest rate decision at 2:30pm AEST.

The cash rate currently stands at 4.35% after three increases in 2026, with another rise widely expected today.

Investors also received new household spending figures this morning.

Spending was flat in August after climbing 1.1% in July, while annual growth remained at 6.8%.

The RBA decision, and what Governor Michele Bullock says afterwards, could have a much bigger say in where the market finishes today.

The post ASX 200 holds steady as investors brace for a big afternoon appeared first on The Motley Fool Australia.

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• This ASX tech company just surged past the $10 billion valuation mark after a major profit upgrade
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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.

When it comes to iron ore, BHP Group Ltd (ASX: BHP) and Rio Tinto Ltd (ASX: RIO) are the obvious names. However, if you’re looking for serious share price upside, junior companies can be worth a look.

ASX iron ore junior with potential

UBS has just initiated coverage of Champion Iron Ltd (ASX: CIA), and believes there is significant share price appreciation to be had over the next 12 months.

I’ll get to their specific share price target shortly. Firstly let’s have a look at why UBS likes the company.

The broker said broadly, they expect iron ore markets to remain balanced over the medium term, “with benchmark prices supported by cost inflation and resilient, albeit moderating, steel demand”.

With regards to Champion in particular, UBS said the company’s iron ore grades were the key differentiator.

The broker added:

Growing demand for premium steelmaking inputs, declining seaborne ore quality, and increasing blending requirements support structurally attractive economics for ultra high-grade iron ore producers. In our view, the market underappreciates CIA’s premium-grade product suite and the potential for improved premium capture as the Direct Reduction Pellet Feed (DRPF) facility ramps up.

UBS said the company’s pellet feed facility lifts the grade of its products from 66.2% to 69%, increasing the company’s exposure to premium markets.

The broker added:

Our CIA investment case rests on the market underestimating the scarcity value of CIA’s ultra-high-grade product suite, and the price realisation/earnings leverage from DRPF. As a result, we expect earnings to move above consensus from FY30.

UBS said Champion’s Bloom Lake mining operation, “benefits from a large, consistent orebody and established rail and port infrastructure, supporting reliable production and cost visibility”.

And they said the company was less vulnerable to price volatility due to the premium product being produced.

As they said:

Product quality and integrated logistics should underpin cash generation through the cycle, though fixed logistics costs reduce flexibility in weaker markets. Margin durability therefore remains tied to supportive high-grade premiums.

ASX iron ore shares looking cheap

UBS has a price target of $4.15 on Champion shares compared to $3.06 currently, and is also forecasting a 4% dividend yield.

Champion Iron is valued at $1.71 billion.

UBS recently raised its long-term iron ore forecast to US$93 per tonne from US$85 per tonne.

The broker said:

While consensus remains focused on Simandou’s supply addition and weaker Chinese construction activity, we believe the market is underestimating three structural supports to iron ore prices: resilient steel demand led by China’s manufacturing and export complex and the emergence of the Global South, a tighter iron-unit market balance once depletion and Fe grade decline are incorporated, and cost curve support that remains materially higher than in prior cycles.

The post This ASX iron ore junior could rise more than 33% UBS says 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.