Tag: Stock pick

The Commonwealth Bank of Australia (ASX: CBA) share price is surging on Wednesday.

At the time of writing, the banking giant’s shares are up 8% to $171.40.

Investors have been buying the bank’s shares after it delivered a strong half-year result and lifted investor confidence with a solid dividend and resilient credit performance.

CBA share price jumps on solid profit and dividend increase

For the six months ended 31 December, CBA reported statutory net profit after tax of $5.41 billion, while cash net profit came in at $5.45 billion. The latter was up 6% on the prior corresponding period.

This strong half was supported by lending and deposit volume growth in its core businesses, which was partly offset by lower margins and higher operating expenses. The latter was primarily due to inflation and its continued investment in technology.

The bank’s net interest margin was 2.04%, down four basis points on the prior half, as home lending competition and lower Treasury income weighed.

Credit quality improved, with loan impairment expense flat at $319 million and home loan arrears declining. Importantly, 87% of home loan customers are now ahead of their scheduled repayments. Provision coverage remains strong, and the bank continues to hold a buffer of around $2.8 billion relative to expected losses under its central economic scenario.

In light of its solid profit growth during the half, the CBA board declared a fully franked interim dividend of $2.35 per share. This is up 4% year on year and represents a payout ratio of 74%.

Management commentary

Speaking about the half and current trading conditions, CBA’s CEO, Matt Comyn, said:

We have continued to execute our strategy with discipline, maintaining a strong focus on supporting customers while delivering sustainable outcomes for shareholders. A strong labour market and, until recently, easing interest rates, have provided some relief for borrowers, and our credit quality has improved. While conditions remain challenging for some customers, recent improvements in economic activity reinforce the resilience of the Australian economy.

Our history of long-term decision making has created a strong, resilient bank that supports our customers and communities and delivers for shareholders. This has allowed us to declare an interim dividend of $2.35 per share, fully franked.

Outlook

Looking ahead, CBA noted that economic growth strengthened during the half, but inflation is expected to remain above the Reserve Bank’s target band for some time, potentially placing upward pressure on interest rates.

Nevertheless, Comyn is feeling positive about the bank’s outlook. He said:

We are optimistic about the prospects for the economy and will play our part in building a brighter future for all.

The post CBA share price jumps 8% on strong half-year results appeared first on The Motley Fool Australia.

More reading

• Why AGL, CBA, Domino’s, and James Hardie shares are jumping today
• Here’s everything you need to know about the new CBA dividend
• CBA half-year results: profit lifts, dividend grows, tech spend ramps up
• Will BHP shares soar past $55 this year?
• With global valuations stretched here are 3 great income ASX ETFs

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 strong session on Wednesday. In afternoon trade, the benchmark index is up 1.45% to 8,995 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

ASX Ltd (ASX: ASX)

The ASX share price is down 4% to $54.14. Investors have been selling this stock exchange operator’s shares after it announced the exit of its CEO. The company advised that its CEO, Helen Lofthouse, will step down from the role in May. It also revealed that the CHESS project Release 1 is targeting go-live in April, just before she leaves.

CSL Ltd (ASX: CSL)

The CSL share price is down 6% to $160.54. This has been driven by the release of a soft half-year result and news that the biotech giant’s CEO, Dr Paul McKenzie, has resigned with immediate effect. With respect to the latter, CSL’s chair, Dr Brian McNamee AO, said: “Paul and the Board have determined that now is the right time for new leadership to continue to drive CSL’s strategic transformation and performance.” For the first half, CSL posted underlying NPATA of US$1.9 billion, which was down 7% on the prior corresponding period. One positive is that management has reaffirmed its guidance for FY 2026.

GQG Partners Inc (ASX: GQG)

The GQG share price is down 3.5% to $1.59. This follows the release of the fund manager’s latest funds under management (FUM) update. GQG Partners revealed that its FUM increased to US$165.7 billion (from US$163.9 billion) during January. However, this reflects a strong investment performance, which offset US$4.2 billion of net outflows.

Meteoric Resources NL (ASX: MEI)

The Meteoric Resources share price is down almost 5% to 20 cents. Investors have been selling the rare earths company’s shares despite a positive update on the production performance at its recently commissioned Mixed Rare Earth Carbonate (MREC) Pilot Plant at the Caldeira Rare Earth Project in Brazil. The company’s managing director, Stuart Gale, said: “Results achieved at the Pilot Plant to date have bettered the extensive test work conducted by ANSTO which is a great credit to our team who have spent significant time developing Meteoric’s understanding of the Caldeira Ionic Clay deposits.” Average magnet rare earth element recoveries were 70%. It is possible some investors were expecting stronger recoveries.

The post Why ASX, CSL, GQG, and Meteoric Resources shares are sinking today appeared first on The Motley Fool Australia.

More reading

• CSL shares crash 12% on half-year results and shock CEO exit
• Here’s everything you need to know about CSL’s upcoming dividend
• GQG Partners lifts FUM to US$165.7b in January update
• CSL half-year earnings: profit drops but guidance reaffirmed
• Why ASX leadership is back in focus ahead of results

Motley Fool contributor James Mickleboro has positions in CSL and Gqg Partners. 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 and Gqg Partners. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Listed investment fund WAM strategic Value Ltd (ASX: WAR) has boosted its dividend to a grossed up 8.1% following strong performance in its underlying investments.

The fund’s managers said in a statement to the ASX on Wednesday that its investment portfolio had increased in value by 14.9% for calendar 2025, and 9.8% for the second half of the year.

Profits looking good

WAM Strategic value also delivered a 158.6% increase in operating profit to $12.8 million after tax for the first half, while total shareholder return was 9.4%, or 10.7% including the value of franking credits.

Chairman and lead portfolio manager Geoff Wilson AO said:

The investment portfolio’s performance builds on the strong performance of 2023 and 2024, as the investment portfolio increased 15.9% per annum in the two-year period and 14.5% per annum over the three-year period, delivering shareholders consistent investment portfolio returns. One of our priorities is for the company’s share price to fully reflect its net tangible assets (NTA) value. We are confident that our experience in managing listed investment companies (LICs) will deliver this. Investing in undervalued asset plays can take time to be recognised by the market and we believe the portfolio is well positioned to capitalise on opportunities in 2026 and beyond.

The fund said its portfolio performance in the December half year was driven by holdings in listed investment companies with exposure to global equities including Regal Partners Global Investments Ltd (ASX: RG1), Pengana International Equities Ltd (ASX: PIA) and Regal Asian Investments Ltd (ASX: RG8).

The fund’s statement to the ASX went on to say:

In the six months to 31 December 2025, the investment portfolio’s allocation to equities was 82.7% at 31 December 2025, providing a weighted average return of 11.8% and the investment portfolio allocation to cash and cash equivalents was 17.3% at 31 December 2025.

The fund will pay a fully-franked dividend of 3.25 cents, up from 3c for the same period last year, which equates to a dividend yield of 5.7% or 8.1% when franking credits are included.

The ex-dividend date is May 1 with the dividend to be paid on May 29. The fund’s dividend reinvestment plan is in operation.

The fund said since inception, it has paid 18.75 cents per share in fully franked dividends to shareholders, and 26.8 cents per share when including the value of franking credits.

WAM Strategic value shares were changing hands for $1.16 on Wednesday morning, up 1.3%.

The fund said its net tangible asset backing was $1.30 per share as at December 31. WAM Strategic Value was valued at $206.2 million at the close of trade on Tuesday.

The post After a strong performance, this ASX listed fund is now paying a handy dividend yield appeared first on The Motley Fool Australia.

More reading

• CBA share price jumps 8% on strong half-year results
• Why ASX, CSL, GQG, and Meteoric Resources shares are sinking today
• Why Computershare shares are wobbling despite a solid half
• Why AGL, CBA, Domino’s, and James Hardie shares are jumping today
• Why I think this Vanguard ETF is a strong buy in 2026

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 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 Computershare Ltd (ASX: CPU) are seesawing on Tuesday after the company delivered its half-year FY26 results.

At the time of writing, the Computershare share price is down 0.28% to $32.21.

That leaves the stock around 6% lower so far in 2026, even after management upgraded guidance and lifted the interim dividend.

Let’s take a dive into what happened today.

A good result, but not enough to excite

For the six months ended 31 December 2025, Computershare delivered steady results in a lower interest rate environment.

Management revenue rose 3.9% to US$1.6 billion, while management earnings per share (EPS) increased by the same margin to 67.9 US cents. Excluding margin income, EBIT jumped 12% to US$190.8 million, with margins expanding by 70 basis points to 16%.

Return on invested capital climbed to a very healthy 36.1%, underlining the capital-light nature of the business.

The softer spot was margin income, which fell 5.4% to US$372.9 million. This was expected, given that cash rates sharply declined across key markets during the half.

The company said the net impact of lower interest rates was limited to around US$8 million, or just 1.5% of profit before tax, thanks to Computershare’s natural hedge.

Balance sheet strength shines through

One of the key takeaways was the strength of the balance sheet.

Net debt leverage was reduced to just 0.3 times EBITDA, giving the company plenty of flexibility. That strength supported a 22.2% increase in the interim dividend to 55 cents per share, 30% franked.

The group said buying back shares would currently be tax inefficient, signalling that dividends and reinvestment remain the preferred use of capital for now.

On the operations front, Issuer Services delivered the fastest revenue growth across the group, supported by new client wins and a recovery in corporate action activity. Corporate Trust also benefited from higher client balances, while Employee Share Plans posted solid growth, driven by higher client fees and transactional revenues.

Outlook lifted for FY26

Computershare upgraded its FY26 outlook, now expecting management EPS of around 144 US cents. That implies growth of roughly 6% year-on-year, an improvement on the initial guidance provided in August.

Lower interest rates are expected to support higher client balances in the second half, while cost discipline and operating leverage continue to support margins.

Management reiterated its focus on delivering consistent earnings growth and increasing shareholder returns through the cycle.

Foolish takeaway

Despite the upgraded outlook and dividend hike, the market response has been lukewarm.

After a strong run over recent years, expectations for Computershare remain high. With margin income still under pressure and broader equity markets volatile, some investors appear to be taking a wait and see approach.

That said, the result supports Computershare’s reputation as a high-quality, cash-generative business with a long-term growth track record.

The post Why Computershare shares are wobbling despite a solid half appeared first on The Motley Fool Australia.

More reading

• Computershare lifts outlook and dividend after solid 1H26 earnings
• 3 quality ASX shares to buy after hitting a 52-week low
• Where I’d invest in ASX shares if the RBA increases the interest rate
• Top brokers name 3 ASX shares to buy 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.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 1.4% to 8,994.1 points.

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

AGL Energy Limited (ASX: AGL)

The AGL Energy share price is up 9% to $9.65. Investors have been buying this energy giant’s shares following the release of its half-year results. Although AGL posted a decline in underlying net profit, it has updated its guidance for FY 2026. The company now expects full-year underlying EBITDA of $2.02 billion to $2.18 billion. This compares to its previous range of $1.92 billion to $2.22 billion. Its underlying net profit guidance was also tightened to $580 million to $680 million, from the previous range of $500 million to $700 million. This reflects improved consumer margins and lower than previously indicated operating costs due to disciplined cost management.

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price is up 8% to $171.38. This has been driven by the release of the banking giant’s half-year results this morning. CBA reported a 6% increase in cash net profit to $5,445 million and lifted its interim dividend by 4% to $2.35 per share. CBA’s CEO, Matt Comyn, said: “Economic growth strengthened during the half, driven by increases in consumer demand and rising investment in AI and energy infrastructure.”

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price is up 3% to $22.99. This follows news that the pizza chain operator has appointed its new CEO. Domino’s has named experienced global quick service restaurant executive Andrew Gregory as its incoming group CEO and managing director. The company notes that Mr Gregory will start with Domino’s once his obligations to his current employer have been discharged. This will be no later than 5 August 2026. He most recently served as McDonald’s senior vice president of global franchising, development and delivery in the US.

James Hardie Industries plc (ASX: JHX)

The James Hardie share price is up 12% to $37.20. Investors have been buying this building materials company’s shares following the release of its third-quarter update. The company reported a 30% jump in sales to US$1,239.8 million and a 26% lift in adjusted EBITDA to US$329.9 million. This growth was driven largely by the addition of the AZEK business following its recent acquisition. James Hardie’s CEO, Aaron Erter, said: “In the third-quarter, we achieved or exceeded each of our financial commitments despite a mixed macro backdrop. We are taking actions to address the current market environment, including optimizing our manufacturing footprint and better aligning our cost structure with the slower, but stabilizing, pace of demand.”

The post Why AGL, CBA, Domino’s, and James Hardie shares are jumping today appeared first on The Motley Fool Australia.

More reading

• CBA share price jumps 8% on strong half-year results
• Why Aussie Broadband shares are soaring 13% today
• Why AGL shares are jumping 8% on results day
• James Hardie shares rocket higher after earnings beat expectations
• Here’s everything you need to know about the new CBA dividend

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

When I look at where long-term wealth is likely to be created over the next decade, I keep coming back to one simple idea: owning the world’s best businesses, across many countries, at low cost, and holding them patiently.

That’s why I think the Vanguard MSCI Index International Shares ETF (ASX: VGS) is a particularly strong buy in 2026.

Rather than trying to guess which single country or sector will outperform, this exchange-traded fund (ETF) gives exposure to global growth engines that Australia simply doesn’t have in meaningful size.

This Vanguard ETF offers a genuinely global portfolio

The VGS ETF holds around 1,300 stocks across developed markets, excluding Australia. That means meaningful exposure to the US, Europe, Japan, the UK, Canada, and parts of Asia.

This matters because the Australian share market is heavily concentrated in banks and resources. This ETF fills the gaps by giving investors access to sectors like global technology, healthcare, industrial automation, and consumer brands that operate at enormous scale.

A look at its holdings

While the largest holdings include familiar US names like Apple and Microsoft, the depth of the portfolio is where the Vanguard MSCI Index International Shares ETF really shines. Many of its most interesting exposures sit outside the US.

One of the most strategically important companies inside the ETF is ASML Holding.

It is a Dutch company with a near-monopoly on extreme ultraviolet lithography machines, which are essential for producing the world’s most advanced semiconductors. These machines are so complex and specialised that no competitor has been able to replicate them at scale.

Every cutting-edge chip used in AI, high-performance computing, and advanced electronics relies on ASML’s technology. That gives it extraordinary pricing power, long-term visibility, and a competitive moat that is almost unmatched globally.

Another standout holding is Nestlé, the Swiss consumer giant.

Nestlé owns a vast portfolio of food, beverage, and nutrition brands that are embedded in daily life across the globe. Its strength isn’t just brand recognition, but distribution, scale, and pricing power across both developed and emerging markets.

What I like about Nestlé as part of the VGS ETF is how it balances growth and defensiveness. It may not deliver explosive returns in any single year, but it compounds steadily through economic cycles, which is exactly what you want inside a core ETF.

Why the VGS ETF works so well as a core holding

What makes this Vanguard ETF particularly attractive to me is that it doesn’t rely on any single theme working perfectly. It owns thousands of companies across regions, sectors, and economic conditions.

It also does this at very low cost, which quietly but powerfully boosts long-term returns. Over decades, minimising fees and staying invested often matters far more than trying to time markets or rotate between trends.

For investors building wealth in 2026 and beyond, VGS offers global diversification, exposure to world-class businesses, and a structure that rewards patience.

Foolish takeaway

I see Vanguard MSCI Index International Shares ETF as a cornerstone investment. It gives access to companies like ASML and Nestlé, alongside hundreds of other global leaders, in a single, low-cost ETF.

For anyone looking to grow wealth over the long term without overcomplicating things, I think this Vanguard ETF is a very strong buy in 2026.

The post Why I think this Vanguard ETF is a strong buy in 2026 appeared first on The Motley Fool Australia.

More reading

• How ETFs can help investors build significant passive income
• How I would aim to build a $500,000 ASX retirement portfolio
• 3 Vanguard ETFs I think deserve a spot in most portfolios
• How could I turn $500 a month into $50,000 with ASX shares?
• Passive income: How much do you need to invest to make $500 per month?

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 ASML, Apple, and Microsoft. The Motley Fool Australia has recommended ASML, Apple, Microsoft, and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

When I’m choosing high-conviction shares to back, I’m not looking for clever trades or short-term themes. I’m looking for businesses I feel genuinely comfortable owning, adding to, and holding through different market environments.

Right now, three ASX 200 shares sit firmly in that category for me. They operate in very different industries, but each stands out as a company with a clear strategy, strong execution, and the kind of business model I want exposure to over the long term.

Temple & Webster Group Ltd (ASX: TPW)

Temple & Webster strikes me as a business that has been quietly building while the spotlight has been elsewhere.

Yes, the broader housing and consumer backdrop hasn’t been ideal, but what stands out to me is how well positioned the company looks when conditions do improve. Temple & Webster operates a highly scalable, asset-light model that allows it to adapt quickly without the burden of physical store networks or heavy fixed costs.

Its brand is well established, its customer data is deep, and its technology-driven merchandising gives it a level of agility that traditional retailers simply can’t match. Rather than stretching for growth, management has focused on improving efficiency, margins, and execution, exactly what you want to see during a tougher cycle.

When housing turnover lifts and discretionary spending starts to flow again, Temple & Webster doesn’t need a major strategic reset. The platform is already there. It just needs demand to do what it naturally does over time.

From my perspective, this feels like a business that’s well placed to benefit disproportionately when conditions turn more favourable.

Catapult Sports Ltd (ASX: CAT)

Catapult is one of those ASX 200 shares where the product does most of the talking.

Elite sports teams don’t adopt performance analytics platforms lightly, and once they do, they rarely switch providers. Catapult’s technology is deeply embedded in how teams train, manage athlete workloads, and make tactical decisions. That creates a level of stickiness that isn’t always obvious from the share price alone.

What makes now interesting is the growing focus on profitability rather than just customer growth. Catapult has reached a scale where incremental revenue is starting to matter, and margins are becoming a bigger part of the conversation.

I see this as a business moving from proving the model to harvesting the model. When that transition happens smoothly, the market often re-rates the stock faster than expected.

Zip Co Ltd (ASX: ZIP)

Zip is a very different kind of opportunity. The buy now, pay later company has spent the last couple of years doing the unglamorous work of fixing its balance sheet, tightening credit standards, and exiting less attractive markets. That reset hasn’t been exciting, but it has been necessary.

What stands out to me now is that the ASX 200 share is not even being priced like a business that has turned a corner. Despite stabilising operations and improving unit economics, I believe the share price still reflects a lot of past fear.

Buy now, pay later isn’t disappearing. It’s evolving. And Zip’s leaner cost base and more disciplined approach leave it positioned for sustainable growth.

For investors willing to look past the scars of the last cycle, the risk-reward profile here feels far more balanced than the price suggests.

Foolish takeaway

For me, high-conviction investing is about identifying businesses I genuinely believe have strong long-term potential and backing them with patience.

Temple & Webster, Catapult, and Zip each stand out as companies with clear strategies, scalable models, and management teams focused on execution. They’re different businesses solving different problems, but all three strike me as stocks I’d be happy to own and add to from here, with a long-term mindset.

The post 3 of my high-conviction ASX 200 share picks for February appeared first on The Motley Fool Australia.

More reading

• Zip shares climb 10% higher this week. Can they keep going?
• Here are the top 10 ASX 200 shares today
• 3 reasons to buy Zip shares today
• 3 ASX 200 shares to buy: experts
• Bell Potter names the best ASX shares to buy in February

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

It’s fair to say investors weren’t too excited by Amotiv Ltd (ASX: AOV)’s results released earlier this week, with the company’s shares drifting lower since they were announced.

That might not be much of a surprise, as the results were fairly unremarkable: revenue grew just 3.3% for the half compared with the same period the previous year, and underlying net profit was 1.3% higher at $59.7 million.

In the 4WD accessories and trailering division, revenue was up 5.5% to $189.6 million, while underlying EBITDA fell 15.2% to $26.2 million.

The lighting, power and electrical division grew its profit by 9.4% to $37.1 million, while the powertrain and undercar division grew earnings by 6.7% to $39.9 million.

Where to from here?

On the all-important outlook, the company said its guidance was unchanged, with group revenue growth expected – albeit no specific figure given – and underlying EBITA of about $195 million, “in what is likely to remain a challenging environment”.

So what did the analysts think of the result? We’ve had a look at three research notes published since the results were announced, and they’re quietly confident that Amotiv shares will perform well over the next 12 months.

Firstly, UBS, which has a price target of $11.40 on the stock, upgraded from $11 following the results release.

UBS said it was a credible result, and “better than feared” given the challenging consumer environment and cost inflation.

They added:

New contract wins and geographic diversification, along with solid cost control (Amotiv Unified program) helped offset some 1H26 headwinds. Looking to 2H26, pricing increases and further cost benefits should help offset potentially more challenging conditions in 4WD. We see risk of further deterioration within new car sales (especially on further interest rate increases), which we have partly factored in.

They noted that management was also targeting a $5 million cost reduction program.

On the current share price, which was $7.62 at the time of writing this article, they said, “we continue to see valuation as undemanding”.

Over at Morgans, the analyst team has downgraded Amotiv from a buy rating to accumulate, noting that their profit report was in line with expectations.

They added:

Whilst we view the valuation as undemanding (about 9.5x PE), we see limited near-term catalysts for the stock to re-rate and expect patience will be required as offshore investments are realised.   

Morgans has a price target of $9.15 on the stock.

And finally, over at Macquarie, the team there has a bullish share price target of $11.90 on Amotiv shares.

They said the result was “solid despite soft new vehicle sales, which had created downside risk concerns in the market”.

They said they saw several tailwinds, especially out to FY27, “including further successful execution of the offshore growth strategy”.

The post Are Amotiv shares a buy, hold or sell following the company’s half-year results? appeared first on The Motley Fool Australia.

More reading

• Is this why Amotiv shares are stuck in neutral after today’s results?

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.

The Aussie Broadband Ltd (ASX: ABB) share price is rocketing on Wednesday after the company announced a transformational telco deal.

In late morning trade, the Aussie Broadband share price is up 13.25% to $5.13, making it one of the strongest performers on the ASX today.

Here is what investors need to know.

What was announced today

According to the release, Aussie Broadband has signed an agreement to acquire the AGL Energy Limited (ASX: AGL) Telco business. The transaction includes AGL’s broadband, mobile, and voice customer base, along with supporting systems and assets.

At completion, the deal is expected to add approximately 350,000 broadband and mobile connections to Aussie Broadband, along with approximately 46,000 voice services. The acquisition is expected to be completed in June 2026, with customer migration to follow during the first half of FY27.

As part of the arrangement, the 2 companies have also agreed to an exclusive long-term partnership. Under this structure, AGL will continue to market telecommunications services under the AGL brand, while Aussie Broadband will provide the network, services, and customer experience.

How the deal is being paid for

AGL will receive $115 million worth of Aussie Broadband shares on completion, based on the volume-weighted average price (VWAP) prior to the announcement.

A further up to $10 million in shares may be issued over time, subject to meeting agreed connection growth targets. These additional shares would be issued in tranches and are linked to performance outcomes.

Aussie Broadband said the acquisition is expected to be earnings per share (EPS) accretive in the first year after migration of customers.

Expected financial contribution

In the first full year after customer migration, the agreement is expected to deliver around $235 million in revenue and around $21 million in underlying EBITDA.

Over time, Aussie Broadband expects the number of AGL Telco connections, excluding voice services, to grow to more than 500,000 over 5 years. Management believes the transaction will strengthen its position as one of Australia’s largest NBN service providers.

About the business

Aussie Broadband provides broadband, mobile, and voice services to residential, business, and wholesale customers across Australia. The company is known for its Australian-based customer support and focus on service quality.

Following this transaction, Aussie Broadband expects to service close to 400,000 mobile connections across its segments once migration is complete.

What investors are watching next

Aussie Broadband is due to report its half-year results on Monday, 23 February 2026.

The update will be closely watched for earnings performance, guidance, and further details on integration plans.

The post Why Aussie Broadband shares are soaring 13% today appeared first on The Motley Fool Australia.

More reading

• Why AGL shares are jumping 8% on results day
• AGL Energy posts 1H26 profit and narrows FY26 earnings guidance
• 3 beaten-down ASX 200 shares to pick up in February
• 3 top ASX energy stocks dividend investors should watch
• Top Australian shares to buy right now with $2,000

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

Shares in Bravura Solutions Ltd (ASX: BVS) are down 1.7% today (at the time of writing) following the release of the company’s first-half results, but that modest pullback comes after a 31% surge earlier this week, triggered by the company’s surprise upgrade to FY26 guidance.

In that context, today’s move looks less like disappointment and more like consolidation after a sharp re-rating.

What did Bravura report?

For the half year ended 31 December 2025, Bravura announced a result that broadly validated the optimism in Monday’s guidance upgrade.

Key highlights included:

• Underlying revenue from customers of $140.0m, up 9.8% year on year
• Underlying Cash EBITDA of $34.2m, up $14.2m versus 1H25, equating to a 24.4% margin
• Underlying NPAT of $25.9m, more than double the prior period
• Cash balance of $64.5m, with no debt

All figures exclude the impact of the FY25 license agreement with Fidelity International.

Revenue growth was driven by pricing improvements and increased professional services activity across its existing client base. Meanwhile, operating costs were well controlled, allowing more of that revenue growth to flow through to profit.

Recurring revenue, which includes maintenance, support, and hosting income, remained a significant contributor to the business. This provides a level of stability that investors have been looking for after a more volatile period in prior years.

Bravura also declared an interim dividend of 5.77 cents per share and a special dividend of 4.46 cents per share, bringing total dividends for the half to 10.23 cents per share. The ordinary dividend represents 100% of underlying NPAT for the period.

Importantly, management reaffirmed the recently upgraded FY26 guidance. The midpoint of that guidance implies stronger profitability in the second half compared to the first, suggesting confidence in continued momentum.

Foolish bottom line

After a 31% rally earlier in the week, the market may have already priced in much of the good news, and today’s decline appears modest given the scale of the prior move.

The key takeaway is that Bravura’s improved guidance is now backed by solid first-half numbers. Revenue is growing, margins are expanding, cash generation is strong, and the balance sheet remains debt-free.

The next test will be delivery in the second half. If management can meet its upgraded targets, this week’s re-rating may prove justified.

The post Bravura shares ease after first-half result, but remain up 30% this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Kevin Gandiya has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bravura Solutions. 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.