Tag: Stock pick

The long-suffering shareholders in Ebos Group Ltd (ASX: EBO) might be very happy to know that, as far as the team at Macquarie is concerned, the company’s shares are quite undervalued at the moment.

The shares in the company, which has divisions across human and animal healthcare, are trading at $22.30 at the moment, not far off their 12-month lows of $21.61, and well below their highs over the period of $38.23.

The company’s shares took a tumble around the time of their full-year results release last year.

Since then, they have drifted lower, despite some optimistic remarks from management at the annual general meeting in late October.

Reset underway

Chair Elizabeth Coutts pointed out at the time that the company “operate(s) in attractive markets with supportive megatrends across both our healthcare and animal care segments and EBOS’ diversified portfolio positions us well for long term growth”.

She added:

Having said that, we are operating in an environment influenced by near-term macro pressures which we do need to work through.

Ms Coutts said the company was “a leading pharmaceutical wholesaler in Australia, and the largest in New Zealand, and one of New Zealand and Australia’s largest healthcare-focussed contract logistics providers”.

We are New Zealand and Australia’s largest hospital medicines wholesaler, and one of the largest independent medical technology distributors across New Zealand, Australia, and Southeast Asia. In Animal Care, we operate New Zealand and Australia’s largest dry dog food brand by volume in the pet specialty category, and leading vet wholesale businesses in both countries.

But Ms Coutts warned that after a solid result in FY25, “the current financial year is set to be a year of transition, as we manage the near-term macro pressures”.

She added:

We will focus on positioning our business for the future by making considered and disciplined investments and achieving operational efficiencies from our investments, enabling us to continue to meet market growth and gain market share. As we then look to FY27 and outer years, we will see the benefits of our distribution centre renewal program which will be substantially completed this year.

Shares looking cheap

Macquarie has issued a research note on the business ahead of its results on February 25, and the analyst team said they believed the company was well-placed to pleasantly surprise the market.

The Macquarie team said risks around catalysts were “skewed to the upside”, and benefits from investments in distribution centres would begin to flow in the current half year.

Macquarie has a price target of NZ$39.78 ($34.16) for the dual-listed company’s shares, and, when combined with a dividend yield of 5%, they expect a total shareholder return of 60.5%.

The post Ahead of its earnings results, Macquarie reckons this healthcare company is severely undervalued appeared first on The Motley Fool Australia.

More reading

• Can these 2 ASX 200 shares rebound after reaching record lows?

Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group. The Motley Fool Australia has 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.

Shares in Maas Group Holdings Ltd (ASX: MGH) have been absolutely smashed on Wednesday after the company unveiled a major strategic overhaul.

The Maas share price is down a brutal 23.57% to $4.28, wiping hundreds of millions off its market value as investors fled the stock.

That sell-off comes despite Maas announcing a transformational transaction that will fundamentally reshape the business.

Let’s dive right in!

What did Maas announce?

Maas revealed it has agreed to sell its Construction Materials division to Heidelberg Materials Australia for $1.703 billion.

The consideration includes $120 million in contingent payments, linked to the achievement of agreed post-completion, operational, and commercial milestones.

The assets being sold include Maas’ quarries, concrete, asphalt, and related construction materials operations. Certain freehold land will be retained by Maas and leased back to Heidelberg under long-term commercial arrangements.

The transaction is expected to complete in the second half of CY2026. However, it is still subject to regulatory approvals, including ACCC and FIRB, along with shareholder approval.

Why investors hit the sell button

On paper, the deal looks attractive. Management highlighted that the sale price represents a premium to Maas’ trading multiple and sits above comparable construction materials transactions.

However, the market appears to be focused on what Maas is giving up.

Construction Materials has been a large, stable earnings engine for the group, delivering reliable cash flows through multiple infrastructure cycles. Selling it significantly changes the earnings profile of the business.

Investors are also grappling with uncertainty around capital redeployment. While Maas has outlined its priorities, the exact timing, scale, and returns of future investments remain unknown.

How Maas plans to reset the business

Following the transaction, Maas plans to reposition the business for its next phase of growth.

Proceeds are expected to be used to reduce net debt, strengthen the balance sheet, and fund expansion across electrification, digital infrastructure, and industrial services.

As part of this shift, Maas announced a $100 million minority investment in Firmus, an AI and digital infrastructure platform developer.

Maas will hold an approximate 1.7% equity interest, providing exposure to AI infrastructure without taking on operational control.

Management says this approach reflects disciplined capital recycling rather than a wholesale bet on unproven assets.

Foolish Takeaway

Maas is reshaping the business by exiting a mature, cash-generative division and freeing up significant capital.

Today’s sell-off suggests investors are uneasy about the gap between selling the asset and seeing where the proceeds are ultimately deployed.

From here, the share price will depend on execution and how quickly management can deliver returns from the next phase.

The post This ASX stock just crashed 24% after a $1.7bn deal. Here’s what spooked investors appeared first on The Motley Fool Australia.

More reading

• Why Beach Energy, Elders, Maas, and Neuren shares are dropping today
• This ASX 300 company has just inked a $1.7 billion asset sale to fund a pivot to digital
• This ASX stock is edging lower today after a shareholder friendly move
• 2 ASX shares these experts rate as a buy right now

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.

Seek Ltd (ASX: SEK) shares have re-emerged as one of the most talked-about ASX names in recent weeks. The price swings of Seek shares have pulled investors back into the debate.

On Thursday afternoon the ASX shares lifted 2.54% to $19.75. However, in 2026 Seek still has lost 15% of its value to $6.88 billion at the time of writing.

Seek shares are back in the spotlight because the company sits at the crossroads of a recovering jobs market and a long-term digital growth story. That mix of opportunity and risk is exactly what’s fuelling the sudden surge in attention.

Let’s take a closer look.

Stabilising ad volumes

The immediate catalyst has been evidence that job ad volumes are stabilising after a tough period. While hiring activity remains below peak levels, the pace of decline has eased. This has sparked optimism that Seek’s core Australian and New Zealand markets are finding a floor.

The stabilising job market has coincided with management reaffirming guidance and pointing to improving operating leverage as conditions normalise. For a stock that is closely tied to labour market sentiment, even modest signs of improvement can move the needle quickly.

Australian go-to jobs platform

One of Seek’s key strengths is its dominant market position. It remains the go-to platform for employers and jobseekers across Australia, with additional scale in Asia and emerging markets. That reach gives it pricing power and strong cash generation when volumes recover.

Seek has also been investing heavily in its unified platform and AI-driven job matching, aiming to lift yield per ad and improve outcomes for both recruiters and candidates.

Solid cash flow

Another positive for investors in Seek shares is the balance sheet and capital management. Seek continues to generate solid free cash flow and has shown a willingness to return value to shareholders through dividends, while still funding growth initiatives.

If hiring trends improve even modestly, margins could rebound faster than revenues thanks to the company’s cost base.

On the flip side, the risks remain real. Seek shares are still highly exposed to economic cycles, and any renewed weakness in employment would hit ad volumes quickly.

The stock also trades on relatively high valuation multiples compared to many industrial peers, leaving little room for disappointment if growth stalls. Competition from global platforms and alternative hiring models also means Seek must continue innovating to defend its moat.

What’s next for Seek shares?

Looking ahead, analyst sentiment is broadly constructive but cautious. Many see upside if job markets continue to stabilise and Seek executes on its technology and yield strategy.

Trading View data show that most brokers see Seek shares as a strong buy. The average 12-month price target is $29.31, a potential upside of 49%.

The post Why is everyone talking about Seek shares all of a sudden? appeared first on The Motley Fool Australia.

More reading

• 2 Australian stocks I would buy in 2026

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.

The team at Morgans has been looking at a number of ASX shares this week.

Two that have fared well and been given buy ratings are named below. Here’s why the broker is bullish on them:

Amcor (ASX: AMC)

Morgans notes that this packaging giant delivered a softer than expected half-year update this week with positives and negatives.

One positive was that Amcor delivered synergy benefits at the high-end of its guidance range during the second quarter. Offsetting this somewhat was the performance of the ASX share’s non-core businesses. It explains:

AMC’s 1H26 operating performance was slightly softer than expected. However, underlying EPS was largely in line with forecasts and fell within management’s guidance range. EPS benefited from a more favourable tax rate, which offset weaker results from the non-core portfolio. A key positive was the delivery of Berry synergy benefits of US$55m in 2Q26, which was at the top end of management’s guidance range of US$50-55m. Synergy targets for FY26-28 were reiterated.

A key negative was the performance of the non-core businesses, with volumes down high-single digit percentages during 2Q26. However, following the renegotiation of several customer contracts on better terms, segment performance should improve in 2H26. AMC also noted that discussions around portfolio optimisation are progressing well, and we view any future announcement in this area as a potential positive catalyst for the stock.

In response to the update, the broker has reaffirmed its buy rating with a trimmed price target of $75.80.

Jumbo Interactive Ltd (ASX: JIN)

Another ASX share that Morgans rates as a buy is online lottery ticket seller Jumbo Interactive.

The broker notes that the Oz Lotteries owner delivered slightly softer than expected revenue in the first half but operating earnings largely in line with its estimates. It said:

We have updated our estimates following JIN’s preliminary release of headline numbers ahead of the 1H26 result. Group revenue increased 29% yoy to $85.3m, modestly below our expectations due to weaker Lottery Retailing TTV. Underlying group EBITDA of $37.5m rose 22% on the pcp and was in line with our forecasts. Overall, our topline and earnings assumptions remain broadly unchanged. Our FY26-27F NPAT and EPS forecasts increase by 4% and 2% respectively, driven primarily by lower amortisation of acquired intangibles.

Morgans thinks that recent share price weakness has created a buying opportunity. Especially given its positive earnings growth outlook. It adds:

We view the 5% share price decline today as an opportunity to build a position in a company capable of delivering >15% EPS CAGR over the next three years. JIN is trading on an undemanding forward EV/EBITDA multiple of ~6x.

Morgans has retained its buy rating with a trimmed price target of $14.90.

The post Morgans names 2 ASX shares to buy now appeared first on The Motley Fool Australia.

More reading

• Why Amcor, Lovisa, Regal Partners, and SKS shares are pushing higher today
• Is this ASX consumer discretionary stock a buy after yesterday’s crash?
• Brokers reiterate their buy recommendations following Amcor’s result
• Why Amcor, Brazilian Rare Earths, Northern Star, and Pinnacle shares are racing higher today
• Why Hot Chili, Jumbo, PYC, and Xero shares are sinking today

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

Shares in OFX Group Ltd (ASX: OFX) have racked up double-digit gains after the company said it would kick off a strategic review into the future of the business.

The company, in a statement lodged with the ASX on Thursday, said it had started a “strategic review to explore a range of organic and inorganic options seeking to maximise value for shareholders”.

The company went on to say:

As a pioneer of cross border payments, OFX has regularly been in discussion with industry participants about the shape of the industry, trends and opportunities, including inorganic opportunities. OFX’s acquisition of Firma originated from such dialogue. Recently, OFX has received an increasing level of inbound inorganic interest. The Board has determined that it is in the best interests of shareholders to comprehensively consider any approaches through a structured review process, and compare them to OFX’s organic growth opportunities.

We’re worth more, board says

The company said the board did not believe the value of OFX was reflected in the current share price, “noting OFX’s robust and well established global operating infrastructure, strong cash generation and growth prospects through execution of its 2.0 strategy that plays into a very large potential global total addressable market”.

The company added:

OFX has appointed Goldman Sachs Australia as its financial advisor in relation to the Strategic Review to support the Board and management team in assessing the value that could be created under various strategic options, including a potential sale. OFX will seek to carry out the Strategic Review in an efficient manner that minimises operational distraction from the continued execution of the OFX 2.0 strategy.

The company also provided a trading update for the current quarter to date, saying revenue for the quarter was expected to be 11.5% lower at $29.4 million, compared with the same period last year.

Exec on the move

The company also announced on Thursday that its Chief Financial Officer, Selena Verth, was leaving after more than eight years with the group.

The company said:

A search for a new CFO has commenced and Ms Verth will remain with OFX until 30 June 2026 to support the continued execution of the 2.0 strategy, as well as the Strategic Review process and an effective handover.

OFX Group shares were 13.5% higher in afternoon trade at 54.5 cents. The shares are well down on their 12-month high of $1.47 and not far off their low for the period of 46 cents.

The company was valued at $111.2 million at Wednesday’s close.

The post OFX shares jump as it says it’s officially on the market appeared first on The Motley Fool Australia.

More reading

• Silver’s record run hits turbulence as prices slide 13%
• Ahead of its earnings results, Macquarie reckons this healthcare company is severely undervalued
• This ASX stock just crashed 24% after a $1.7bn deal. Here’s what spooked investors
• Why is everyone talking about Seek shares all of a sudden?
• Morgans names 2 ASX shares to buy now

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 Goldman Sachs Group. 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.

One of the things I find most useful when reviewing broker research isn’t the target price itself. It’s understanding why analysts are confident that a business can do better than the market expects. 

When multiple things line up, strong execution, clear growth drivers, and supportive industry trends, I’m much more inclined to lean bullish.

These are three buy-rated ASX shares where I think the underlying case stacks up well in February.

Life360 Inc (ASX: 360)

Life360 is a company I continue to find compelling, and Bell Potter’s latest commentary reinforces why.

The broker was impressed by Life360’s recent quarterly update, which came in ahead of both guidance and its own forecasts. It highlighted that year-end monthly active users (MAU) reached 95.8 million, comfortably above expectations, with strength across both the US and international markets. Paying circles also exceeded forecasts, pointing to improving monetisation alongside user growth.

What really stands out to me is the outlook. Management guided to 20% MAU growth in 2026, which implies roughly 19 million new users in a single year. That’s a big number, and it suggests the platform is still very much in expansion mode rather than maturity.

Bell Potter has a buy recommendation and a $45 target price. With the shares trading around $26.18, the broker sees meaningful upside. I agree with the underlying logic. A business growing users, revenue, and EBITDA faster than expected, while still early in its monetisation journey, deserves close attention.

DroneShield Ltd (ASX: DRO)

DroneShield is another ASX share where broker optimism makes sense to me, even after a strong run.

Bell Potter believes the company has a market-leading radio frequency detect and defeat capability, built on years of battlefield experience and sustained investment in R&D. It sees 2026 as a potential inflection point for the counter-drone industry, with governments poised to significantly increase spending as defence budgets roll over.

What I find most interesting is the sales pipeline. Bell Potter points to a $2.1 billion potential pipeline and expects material contracts to flow over the next three to six months. That kind of visibility is rare in defence technology, especially for a company of DroneShield’s size.

The broker has a buy recommendation and a $5 target price, noting that the stock trades at a discount to global drone peers despite stronger growth prospects. For me, that combination of structural tailwinds and valuation support is something I find compelling.

Catapult Sports Ltd (ASX: CAT)

Catapult is a name that doesn’t always get the attention it deserves, but Morgans’ recent initiation of coverage puts a spotlight on the long-term opportunity.

The broker sees Catapult as a global leader in sports performance technology, offering an all-in-one platform spanning wearables, analytics, coaching, and athlete management. Importantly, it believes Catapult’s expansion beyond wearables has opened up a much larger addressable market of around 20,000 teams globally.

Morgans is forecasting strong top-line growth, with an estimated 20% annual contract value CAGR over the next three years. It also expects Catapult to reach the so-called Rule of 40 by FY27, reflecting a combination of growth and profitability that many SaaS investors look for.

On the back of this, Morgans has initiated with a buy recommendation and a $6.25 target price, implying lots of upside from current levels. I like the fact that this thesis is built around scalability and improving SaaS economics rather than a single short-term catalyst.

The post Why I’m bullish on these buy-rated ASX shares in February appeared first on The Motley Fool Australia.

More reading

• How low can Droneshield shares go?
• 3 ASX shares I’d buy with $10,000 today
• Could buying these ASX shares make me rich?
• 10 most traded ASX shares among 1 million Aussie investors last year
• These ASX 200 shares could rise 50% to 80%

Motley Fool contributor Grace Alvino has positions in DroneShield. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Catapult Sports, DroneShield, and Life360. The Motley Fool Australia has positions in and has recommended Catapult Sports and Life360. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Droneshield Ltd (ASX: DRO) shares have fallen sharply over the past fortnight. After last year’s explosive rally, investor confidence now appears to be fading.

The share price is down almost 20% over the past week and has dropped another 7.18% to $3.23 today. That leaves the stock down roughly 27% from its late January highs near $4.50, and only about 6% higher for the year.

Let’s take a closer look at whether this is just a temporary pullback or the start of a deeper downtrend.

Why the quarterly update disappointed the market

The selling pressure intensified after Droneshield released its fourth-quarter update on 27 January.

While management again highlighted strong long-term demand for counter-drone technology, the update brought few surprises on the financial front.

Cash receipts remained modest, contract momentum stalled, and revenue growth showed little sign of improvement.

At the same time, operating costs stayed elevated as the company continues to invest heavily in expansion. Free cash flow remained negative, reinforcing concerns that profitability is still some distance away.

Overall, the update did little to support the stock’s premium valuation, prompting investors to start taking profits after a strong run.

Valuation pressure is hard to ignore

Even after the recent sell-off, Droneshield’s valuation still looks stretched.

At the current share price, the company has a market capitalisation of roughly $3 billion. That compares with annual revenue of around $100 million, based on its recent disclosures.

Investors are still valuing Droneshield at close to 30 times its annual sales, a very high price for a business that is not yet profitable and continues to spend heavily to grow.

The sell-off is starting to bite

The technical picture has also deteriorated.

The share price has broken below several short-term moving averages, and momentum indicators continue to weaken. The relative strength index (RSI) has fallen into the low 40s, suggesting sellers remain in control rather than buyers stepping in aggressively.

The $3 level now looks like a key line in the sand. If that support fails, there is limited technical protection until the $2.50 to $2.70 range, where the stock last found sustained buying interest.

On the upside, the former support zone around $3.80 to $4 has now become a clear ceiling, meaning rallies may struggle to gain traction.

Foolish bottom line

Droneshield is positioned in a growing defence niche, but the recent share price weakness shows the market is becoming more demanding.

With a $3 billion valuation, relatively modest current sales, and ongoing cash burn, investors are now looking for clearer proof that growth is accelerating.

If meaningful contract wins and stronger revenue momentum do not emerge, the recent sell-off may turn into a broader reset rather than a short-term pullback.

The post How low can Droneshield shares go? appeared first on The Motley Fool Australia.

More reading

• Why I’m bullish on these buy-rated ASX shares in February
• Could buying these ASX shares make me rich?
• 10 most traded ASX shares among 1 million Aussie investors last year
• Here are the top 10 ASX 200 shares today
• How DroneShield shares soared ahead of the benchmark in January

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 DroneShield. 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.

Mineral Resources Ltd (ASX: MIN) shares are sliding today.

Shares in the S&P/ASX 200 Index (ASX: XJO) lithium miner and diversified resources producer closed yesterday trading for $55.65. In afternoon trade on Thursday, shares are swapping hands for $54.53 apiece, down 2.0%.

For some context, the ASX 200 is down 0.2% at this same time.

Last week, on 27 January, Mineral Resources shares hit one-year-plus highs, closing the day trading for $63.98.

Not coincidentally, that high-water mark coincided with lithium carbonate prices notching their own two-year highs.

However, amid concerns that Chinese lithium demand may not be as robust as assumed, lithium prices have slumped 15% since 26 January. Though it’s worth noting that lithium carbonate prices are still above the levels we saw throughout 2024 and 2025.

As you’d expect, this recent sharp retrace in lithium prices has thrown up headwinds for most every ASX lithium stock. Indeed, Mineral Resources shares are down 14.7% since 27 January.

Despite that slide, though, shares in the ASX 200 mining stock remain up 278.7% since plumbing a multi-year closing low on 9 April.

Which brings us back to our headline question.

Should you buy Mineral Resources shares today?

Morgans’ Damien Nguyen recently ran his slide rule over the ASX 200 mining stock (courtesy of The Bull).

“MIN is a diversified resources company in Western Australia. It has extensive operations in lithium, iron ore, energy and mining services,” he said.

“Mineral Resources enters 2026 with improved stability after a volatile period, supported by progress at Onslow Iron.,” Nguyen added.

Commenting on the company’s December quarter update, he noted:

On January 29, 2026, the company upgraded lithium volume guidance and maintained cost guidance at both operations. It reduced net debt to about $4.9 billion as at December 31, 2025.

Explaining his current hold recommendation on Mineral Resources shares, Nguyen concluded:

We remain confident management can successfully execute its strategy and expect strong earnings growth in the current commodity price environment. The shares have risen from $14.40 on April 9, 2025 to trade at $61.18 on January 29, 2026.

At this point, we believe the stock is fully valued.

What’s the latest from the ASX 200 lithium stock?

Mineral Resources shares closed down 3.9% on 29 January, with the release of the miner’s solid December quarter update unable to outweigh negative market sentiment from the sinking lithium price on the day.

As Nguyen mentioned above, the company upgraded its FY 2026 lithium volume guidance at its Wodgina project to the range of 260,000 dry metric tonnes (dmt) to 280,000 dmt SC6, up from the prior 220,000 dmt to 240,000 dmt.

Mineral Resources also upgraded FY 2026 lithium volume guidance at Mt Marion to 190,000 dmt to 210,000 dmt, up from previous guidance of 160,000 dmt to 180,000 dmt.

The post Up 288% since April, are Mineral Resources shares still a good buy today? appeared first on The Motley Fool Australia.

More reading

• 10 most traded ASX shares among 1 million Aussie investors last year
• Buy, hold, sell: IAG, Mineral Resources, and Westpac shares
• Buy, hold, sell: Life360, Liontown, and Mineral Resources shares
• Brokers name 3 ASX shares to buy today
• 4 ASX mining shares just re-rated by Morgans

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.

All eyes will be on Commonwealth Bank of Australia (ASX: CBA) shares when it reports its half-year result later this month.

That is because CommBank is the only one of the big four banks due to report an interim result this month, which means its numbers are likely to shape sentiment across the entire banking sector during reporting season.

According to investment firm Wilsons, the upcoming result is expected to confirm that underlying sector fundamentals remain in good shape, even if it does little to change the valuation debate surrounding CBA’s shares.

Sector fundamentals still look sound

Wilsons expects Commonwealth Bank’s result to reinforce that conditions across the banking sector remain relatively healthy. It said:

We expect the result to confirm that sector fundamentals remain sound, with continued solid credit growth, robust capital buffers and benign bad debt trends.

In other words, there is no expectation of stress emerging in the loan book or balance sheet. From a risk perspective, the bank appears well positioned.

The upgrade question looms large

The investment company notes that a key disappointment for some investors was that CBA failed to deliver an upgrade at its FY 2025 full-year result.

As a result, bullish investors will now be looking for signs that the bank can re-enter an upgrade cycle this reporting season. However, the broker is sceptical that this will happen. It adds:

After CBA failed to deliver an upgrade at its FY25 full year result, CBA bulls will be looking for a resumption of the bank’s upgrade cycle this reporting season. A key focus specifically will be on costs, after CBA’s OPEX was worse than expected in FY25 due to greater tech spend, rising staff costs and workforce mix changes.

Valuation remains a key issue

While Wilsons expects the result to confirm solid fundamentals, it does not see meaningful upside to consensus earnings estimates.

If CBA falls short, or merely meets consensus, the broker believes the rotation out of the stock is likely to continue. That is largely due to valuation. It explains:

[W]e don’t see meaningful upside to consensus EPS estimates. If CBA’s result meets or falls short of consensus, as we expect, the rotation out of the stock is likely to continue. In that scenario, bank sector performance should continue to broaden, given CBA remains on a material valuation premium to the sector (at a ~40% P/E premium to peers). This is despite CBA offering only comparable (~3-4%) EPS growth to peers in FY26, while being the only bank not currently in an earnings upgrade cycle.

The post What to expect from the Commonwealth Bank half-year result appeared first on The Motley Fool Australia.

More reading

• ASX bank shares: One I’d buy and one I’d avoid
• The best Australian dividend stocks to buy and hold forever
• Don’t buy CBA shares until this happens
• What should you do with your CBA shares in 2026?
• 3 ASX dividend stocks I’m excited to see the payouts of this reporting season

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 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 subdued session on Thursday. In afternoon trade, the benchmark index is down 0.5% to 8,882.3 points.

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

Beach Energy Ltd (ASX: BPT)

The Beach Energy share price is down over 4% to $1.20. This follows the release of the energy producer’s half-year results. Beach Energy reported a 1% decline in sales revenue to $981.7 million and a 32% drop in net profit after tax to $150.2 million. This reflects a combination of production declines and weaker oil and liquids prices. Beach Energy’s CEO, Brett Woods, spoke positively about the second half. He said: “Our steady financial footing and safe operational performance through a challenging half positions Beach for an active second half, particularly as Waitsia ramps up and offshore campaigns progress.”

Elders Ltd (ASX: ELD)

The Elders share price is down 4% to $7.04. Investors have been selling this agribusiness company’s shares after it announced a change of leadership. Elders has named Rene Dedoncker as its new CEO, commencing 1 October 2026. He will be replacing long-serving CEO, Mark Allison. Elders’ chair, Glenn Davis, said: “We are delighted to welcome Rene as our next CEO. He brings deep agricultural roots and outstanding leadership experience to Elders. He has proven expertise from his years with Fonterra and Mars, where he drove operational excellence and strategic growth on a global scale. The Board has great confidence in his ability to lead Elders into its next phase of success.”

Maas Group Holdings Ltd (ASX: MGH)

The Maas Group share price is down 23% to $4.30. This has been driven by news that the construction materials, equipment and service provider is selling its construction business for $1.7 billion. The company believes the deal will help fund a strategic shift into digital assets. It said: “Just as the Group positioned itself early into renewables-related infrastructure, MGH is now positioning to participate in the next wave of infrastructure investment, combining digital, AI, and electrification opportunities. The Australian data-centre and electrification markets present scalable, high-value opportunities aligned with MGH’s execution DNA, integrated capabilities, and program-based delivery.”

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren share price is down 10% to $13.19. This follows the release of an update on its NNZ-2591 product candidate. While the US FDA has given Neuren a pathway forward for advancing NNZ-2591 in two rare neurological conditions, some additional work will be required. This could mean it takes longer than expected for approval.

The post Why Beach Energy, Elders, Maas, and Neuren shares are dropping today appeared first on The Motley Fool Australia.

More reading

• Are Beach Energy shares a good buy for passive income today?
• ASX 200 healthcare stock sinks 9% on FDA update
• Guess which ASX 200 stock is falling on CEO news
• This ASX 300 company has just inked a $1.7 billion asset sale to fund a pivot to digital
• Elders appoints René Dedoncker as next CEO in planned succession

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