Tag: Stock pick

There is a clear disconnect in Champion Iron Ltd (ASX: CIA) right now.

Champion Iron shares have fallen approximately 27% in 2026.

Yet the company produced 3.4 million wet metric tonnes of high-purity 66.2% iron ore in the March quarter, up 8% year on year.

Moreover, full-year revenues reached $1.77 billion, up $163.2 million on the prior year. That gap between operational performance and share price deserves a closer look.

Why the market is selling Champion Iron shares

The selling has centred on three concerns.

First, Champion Iron cut its dividend to preserve cash amid volatile market conditions.

This broke a track record of consistent semiannual payments, upsetting income investors.

Second, quarterly EBITDA came in at $114 million, down on the prior corresponding quarter.

That reflected weaker iron ore price realisations throughout the period.

Third, Bell Potter retained its hold rating and trimmed its price target to $4.85 from $5, stating:

CIA expect to ramp-up high-grade concentrate (DRPF grade) production from mid-2026. While we expect iron content price premiums for this product, full value-in-use premiums are unlikely to be realised until longer-term offtake is secured. Free cash flow should improve from FY27 as capex rolls off, supporting debt servicing and ongoing dividends. On valuation, we retain our Hold recommendation.

That hold rating, at a $4.85 target with Champion Iron shares trading near $4.45, implies modest near-term upside on Bell Potter’s numbers.

The bull case for Champion Iron shares

Nevertheless, the core long-term thesis has not changed.

Champion Iron operates the Bloom Lake mine in Quebec, Canada, producing high-purity iron ore at 66.2% Fe.

That already commands a premium to the standard 62% Fe benchmark.

Furthermore, the new DRPF plant is in its final commissioning stretch.

First commercial sales are expected before the end of June 2026.

Once operational, the plant will push purity toward 69% Fe direct reduction quality iron ore.

This product targets electric arc furnaces and hydrogen-based steelmaking, the two leading decarbonisation pathways in global steel production.

As a result, demand for ultra-high-grade iron ore like Champion’s should grow materially over the coming decade as steelmakers face rising pressure to cut emissions.

In addition, the US$300 million acquisition of Norway’s Rana Gruber, completed on 17 April 2026, adds a second high-purity operation in Europe.

This should diversify Champion’s customer base into the heart of the European green steel transition.

CEO David Cataford said at completion:

The closing of this transaction marks a defining milestone for Champion. Combining our businesses strengthens our leadership as a sustainable supplier of high-purity iron ore produced with a low-carbon footprint.

Meanwhile, Bell Potter acknowledges that free cash flow should improve materially from FY 2027 as DRPF capital expenditure rolls off and the Rana Gruber integration progresses.

Foolish Takeaway

Champion Iron shares are under pressure for reasons that look largely temporary.

The dividend cut, the soft quarterly result, and the time needed to realise DRPF premiums are all near-term headwinds.

However, the longer-term story remains intact.

Champion is a high-purity iron ore producer well-positioned to benefit from the global green steel transition.

For patient investors, the current entry point in Champion Iron shares could prove interesting once DRPF sales begin and free cash flow recovers in FY 2027.

The post Champion Iron shares: Why the pressure could be temporary appeared first on The Motley Fool Australia.

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• Why Champion Iron, IDP Education, Tuas, and Woodside shares are dropping today
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• Is this ASX materials stock a buy, hold or sell after sliding on earnings results?

Motley Fool contributor Mark Verhoeven 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 Pro Medicus Ltd (ASX: PME) share price could be on the move after the healthcare technology company announced a new 5-year, $28 million contract renewal with Allegheny Health Network and additional workflow integration.

What did Pro Medicus report?

• Signed a 5-year, A$28 million contract renewal with Allegheny Health Network (AHN)
• Contract includes the addition of Visage 7 Workflow with AHN
• Renewal features increased minimums and higher fee per transaction
• Brings total contract renewals for FY26 to A$125 million
• Ongoing transaction-based model with potential upside

What else do investors need to know?

Pro Medicus has maintained a strong relationship with AHN, one of the largest health networks in the Pittsburgh region, for over a decade. The inclusion of Visage 7 Workflow marks an expansion of the existing partnership, reflecting increasing demand for the company’s clinical imaging solutions.

The contract continues Pro Medicus’ international momentum, following consistent client retention and renewals throughout the financial year. The transaction-based model may offer further upside if imaging volumes increase.

What’s next for Pro Medicus?

Pro Medicus plans to continue expanding in the North American market, leveraging its Visage 7 platform and end-to-end imaging solutions. The company is focused on client retention and attracting new health networks, aiming to boost both financial and clinical impact.

Investor attention will likely remain on contract wins and recurring revenue growth, as Pro Medicus builds on its track record of renewals and long-term partnerships.

Pro Medicus share price snapshot

Over the past 12 months, the Pro Medicus shares have declined 53%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 4% over the same period.

View Original Announcement

The post Pro Medicus renews $28m contract with Allegheny Health Network appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.

Thanks to a strong finish to the month, the S&P/ASX 200 Index (ASX: XJO) recorded a 0.75% gain in May.

While this is positive, it pales in comparison to the gains that a number of ASX 200 shares posted for the period.

Here’s why these were the best-performing ASX 200 shares in May:

Megaport Ltd (ASX: MP1)

The Megaport share price was the best performer on the ASX 200 in May with a stunning 70% gain. Investors were buying the network solutions company’s shares after it announced another major contract win for its Latitude.sh business. Megaport has secured three major GPU, CPU, network, and storage contracts across two customers with a combined total contract value (TCV) of approximately US$182.9 million (A$254 million). The company’s CEO, Michael Reid, said: “We are at the forefront of an accelerating inflection point across the industry. As use cases shift from AI foundation models to inference and the edge, Megaport is becoming an essential platform for powering the applications of tomorrow with globally distributed, automated infrastructure.”

IperionX Ltd (ASX: IPX)

The IperionX share price was on form and raced 42% higher in May. One potential catalyst was the titanium alloys producer announcing the successful commissioning of a cutting-edge six-axis powder metallurgy press at its Titanium Manufacturing Campus. IperoinX’s CEO, Anastasios Arima, said: “Commissioning this advanced SACMI press is an important milestone for IperionX. It gives us greater titanium manufacturing capacity and more flexibility to manufacture a wider range of titanium components for customers in defense, aerospace and industrial markets.”

Capstone Copper Corp (ASX: CSC)

The Capstone Copper share price wasn’t too far behind with a gain of 30% over the month. This was despite there being no news out of the copper miner. However, it is worth noting that analysts at UBS put a buy rating and improved price target of $18.00 (from $15.00) on the ASX 200 share last month. Combined with strong copper prices, this may have given its shares a boost.

Sims Ltd (ASX: SGM)

The Sims share price was a strong performer and rose 30% in May. This may have been driven by the company’s appearance at a major investor conference last month. At the event, management spoke positively about its outlook and reaffirmed its guidance for FY 2026. It continues to expect group underlying EBIT of $350 million to $400 million for the 12 months. This will be at least double the underlying EBIT of $174.9 million that it recorded in FY 2025.

The post These were the best-performing ASX 200 shares in May appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Megaport. 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.

April was one of the worst months in the history of Cochlear Ltd (ASX: COH).

Cochlear shares crashed 41% in a single session on 22 April after the company delivered one of the most severe earnings downgrades in its listed history.

In May however, Cochlear shares were able to stage a modest comeback.

Here’s what happened.

Cochlear shares recovered approximately 7% in May

From that decade low of $90, Cochlear shares bounced to $100.50 by the end of May.

That represents a recovery of approximately 12% from the April lows.

However, Cochlear shares remain down 61.50% year to date and down approximately 63% in the last twelve months.  

The May recovery reflects a combination of bargain hunting from long-term investors and growing broker interest at the lower price level.

Indeed, Cochlear shares were starting to look more interesting after the market had already punished the stock heavily for the downgrade.

What drove the recovery in Cochlear shares

Three factors supported the partial recovery during May.

First, the broader healthcare sector stabilised somewhat after the brutal April rotation out of defensive stocks.

Second, broker commentary grew more constructive.

Jarden and Wilsons Advisory both see upside of more than 100% in COH shares over the next twelve months.

Third, CEO Dig Howitt continued to make the case that the volume weakness is temporary rather than permanent.

He said:

The clinical need for cochlear implants continues to grow, particularly for the adult and seniors segment. Cochlear implants are also associated with a lower incidence of dementia, with dementia rates lower than in hearing aid users and comparable to those with normal hearing.

The risks that remain

Nevertheless, Cochlear shares shares face near-term challenges.

Hospital capacity constraints and reduced referral activity from the hearing aid channel in the US and Europe have not yet resolved.

The $25 million after-tax foreign exchange headwind remains in place.

Middle East receivables continue to create uncertainty.

Moreover, the FY2026 earnings downgrade has shaken investor confidence in a way that typically takes several consecutive quarters of stable results to rebuild.

Morgans retained a hold rating but cut its price target in half to $107.17 from $214.93, stating:

COH has delivered a material downgrade to FY26 earnings, cutting guidance by c30% at the midpoint. This demonstrates that cochlear implant demand is more cyclical and macro-sensitive than previously assumed.

Meanwhile, Macquarie slashed its price target from $239 to $115, reflecting its view that the near-term earnings recovery will take longer than the market had anticipated.

Foolish takeaway

Cochlear shares bounced approximately 7% in May after touching decade lows.

That recovery is encouraging but tentative.

The fundamental demand picture for cochlear implants has not changed.

Cochlear still holds approximately 50% global market share in a market with just 3% penetration of an addressable patient population exceeding six million people in developed markets alone.

For patient investors with a multi-year time horizon, May may prove to have been an interesting entry point for Cochlear shares.

The post What happened to Cochlear shares in May? appeared first on The Motley Fool Australia.

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• 3 ASX shares that brokers tipped to soar in the next 12 months
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Motley Fool contributor Mark Verhoeven 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 Cochlear. The Motley Fool Australia has recommended Cochlear. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The PLS Group Ltd (ASX: PLS) share price has been one of the best performers in the S&P/ASX 200 Index (ASX: XJO) over the past year.

The ASX lithium share has risen close to 400% in the past year, as the below chart shows.

The ASX 200 has only gone up by 4% in the last 12 months, so PLS Group shares have delivered extraordinary returns compared to the ASX share market.

It has benefited enormously from the rise in the lithium price. In the company’s FY26 third quarter, it reported that its realised price for its commodity was US$1,867 per tonne – that was a rise of 61% compared to the three months to 31 December 2025.

It’ll be interesting to see what happens next with the lithium price, as it could be influential on the PLS Group share price in the coming 12 months.

Let’s see what experts think could happen with the ASX lithium share in the year ahead.

Price target for the PLS Group share price

A price target is where a broker thinks the share price could be in a year from now, based on how the business is growing (or not) and also assessing the current conditions.

According to CMC Invest, there have been 12 analyst ratings on the business in the last three months, with the average price target of those being $5.55. That suggests a possible decline of 14% within the next year.

The most optimistic price target is $6.70, suggesting a possible rise of just 4%.

The most pessimistic price target is $2.60. That implies a possible decline of 60%! A drop of that size would probably require a significant drop of the lithium price.

What else?

It’s important to remember that commodity prices can shift significantly in a relatively short space of time. There are arguments for the lithium price both going up and down.

Lithium demand is growing over the long-term with more electric vehicles and other types of batteries being built around the world. But, there could be a decline if an agreement is signed between the US and Iran (which hasn’t been signed at the time of writing).

PLS Group said that lithium market tightness is expected to persist, with constrained supply, strong demand and energy security support the long-term outlook.

The company has multiple project optionality that can help it expand its production in future years, such as P2000 which could double its production capacity.

According to the forecast on CMC Invest, the business is projected to generate 28.6 cents of earnings per share (EPS). It’s valued at more than 22x FY27’s estimated earnings, which I’d say is a high multiple for a miner. So, I’d rather look at other opportunities than PLS Group at this stage.

The post How much could the PLS Group share price rise in the next year? 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 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.

DroneShield Ltd (ASX: DRO) shares had a volatile month in May.

The counter-drone technology company’s shares ended April at $3.54, then climbed as high as $3.82 on 6 May.

However, the rally did not last. By 20 May, DroneShield shares had fallen to a monthly low of $2.83, before recovering to end the month at $3.39.

This means the popular stock finished May down approximately 4% from where it started.

So, what happened?

ASIC investigation weighs on DroneShield shares

One reason DroneShield shares came under pressure was an announcement released on 12 May.

The company advised that it had received a notice from ASIC requiring it to provide reasonable assistance in connection with an investigation under the Corporations Act.

DroneShield said the investigation relates to announcements and information provided to the ASX between 1 and 20 November 2025, as well as trading in DroneShield shares between 6 and 12 November 2025.

Management stated that it would cooperate fully with the investigation but that it was not clear what action, if any, may result.

Even without any finding of wrongdoing, announcements of this nature can weigh heavily on investor confidence. DroneShield has been one of the ASX’s most closely watched defence technology shares, so any uncertainty around disclosure, trading, or regulatory scrutiny was always likely to attract attention.

This helps explain why the share price lost momentum during the middle of the month.

AGM update helps spark a recovery

The final trading day of May brought a more positive update for investors.

At its annual general meeting, DroneShield highlighted the scale of the opportunity it is targeting and the momentum in its business.

The company highlighted its leadership position in counter-drone technology, with representation in more than 70 countries and deployments across conflict zones, airports, prisons, utilities, public safety operations, and major events.

It also pointed to strong committed revenue in FY 2026. As of 26 May, DroneShield had committed revenue of $161 million. This is up 61% on the prior corresponding period and equivalent to 74% of its total FY 2025 revenue.

Management also highlighted that recurring revenue represented 13% of FY 2026 committed revenue and that the company had a cash balance of $223 million with no debt.

Longer term, DroneShield continues to target revenue of $1 billion by 2030, with more than 30% coming from recurring revenue.

That update appears to have helped restore some confidence after the earlier selloff.

Middle East conflict

All this was happening with the ongoing Middle East conflict taking place in the background.

For companies like DroneShield, geopolitical uncertainty can cut both ways. Heightened conflict can increase interest in defence technology, particularly counter-drone systems. But any sign of easing tensions can also cool enthusiasm for defence-themed trades. This backdrop likely contributed to the volatility in May.

Overall, it was a choppy month for DroneShield shares. The ASIC investigation created uncertainty, while the AGM update reminded investors why the company remains one of the ASX’s most watched defence technology names.

The post What happened to DroneShield shares in May? appeared first on The Motley Fool Australia.

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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 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.

Brokers are being kept on their toes by today’s highly volatile market.

Fast-changing macroeconomic factors are causing sharp and frequent swings in the S&P/ASX 200 Index (ASX: XJO).

Many companies are issuing updates on how the global oil shock is impacting them ahead of their FY26 reports in August.

As things change with the companies they cover, brokers revise their ratings and 12-month share price targets.

Let’s take a look at three fresh buy, hold, and sell calls from the experts.

Mineral Resources Ltd (ASX: MIN)

The Mineral Resources share price has ripped 33% in the calendar year to date (YTD).

Bell Potter renewed its buy rating on Mineral Resources shares last week.

The broker raised its 12-month share price target from $75 to $80.50.

This implies potential capital growth of almost 10% over the next year.

Bell Potter’s note followed the miner’s Final Investment Decision (FID) for a flotation plant and underground development at Mt Marion.

This will extend Mt Marion’s life by six years and increase production capacity from 500ktpa to 600ktpa of lithium spodumene.

Bell Potter said:

Completion of the US$765m MIN-POSCO lithium transaction will accelerate balance sheet deleveraging paired with cash flows from persistent iron ore and lithium market prices.

MIN’s mining services platform delivers a stable earnings stream that is expected to expand with internal and third-party volume growth.

The company is well positioned to execute its next phase of growth with potential to reinstate fully franked dividends.

Mineral Resources shares are outperforming their peers in the ASX 200 materials sector this year.

The S&P/ASX 200 Materials Index (ASX: XMJ) has lifted 18% in 2026 as the new Australian mining boom continues.

IAG Australia Group Ltd (ASX: IAG)

The IAG share price has fallen 4% YTD.

Citi reiterated its hold rating on IAG shares on Friday.

The broker has a $8.50 price target, suggesting a potential 11% upside ahead.

IAG shares are outperforming their peers in the ASX 200 financial sector this year.

The S&P/ASX 200 Financials Index (ASX: XFJ) has fallen 2% in 2026.

Origin Energy Ltd (ASX: ORG)

The Origin Energy share price has weakened 4% YTD.

Ord Minnett downgraded Origin Energy shares from hold to lighten last week.

The broker shaved down its 12-month price target from $11 to $10.40.

This implies a small potential downside of 4% over the next 12 months.

In a new note, Ord Minnett explained its sell rating:

Ord Minnett sees increasing downside risk to AGL Energy and Origin Energy as electricity market transition dynamics evolve less favourably than had been anticipated.

Our central thesis is that battery capacity in the National Electricity Market (NEM) is being deployed materially faster than required in the absence of corresponding coal-fired generation retirements.

This excess flexibility is suppressing price volatility, reducing the earnings potential for batteries and other flexible generation assets such as gas peakers and hydro.

Origin Energy shares are underperforming their peers in the ASX 200 utilities sector this year.

The S&P/ASX 200 Utilities Index (ASX: XUJ) has increased 0.26% in 2026.

The post Buy, hold, sell: Mineral Resources, IAG, Origin Energy shares appeared first on The Motley Fool Australia.

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

It has been a brutal year for WiseTech Global Ltd (ASX: WTC).

WiseTech shares are down approximately 47% year to date and have crashed 66% over the past twelve months.

At $36 today, the stock trades near levels last seen in early 2022.

May was another poor month for WiseTech shares, with the stock down approximately 16%.

So what happened?

What drove the May selling in WiseTech shares

The selling in WiseTech shares in May reflected a toxic combination of two forces.

First, the most dramatic company-specific event was WiseTech’s announcement that it would cut approximately 2,000 jobs, as part of a two-year AI-linked restructuring program.

This is nearly a third of its total workforce.

The cuts triggered an urgent request for a meeting from an Australian trade union.

Furthermore, the company simultaneously faces a Fair Work Commission claim from an executive over her dismissal.

The handling of the layoffs attracted significant negative media coverage and raised questions about WiseTech’s workplace culture.

Second, WiseTech’s Q3 FY2026 quarterly update, published on 4 May 2026, added to investor unease rather than providing reassurance.

While the company reaffirmed its full-year FY2026 revenue guidance of US$1.39 billion to US$1.44 billion, it also confirmed that one-off integration costs related to the E2open acquisition would reach US$45 million to US$50 million in FY2026, materially compressing profit margins.

Furthermore, analysts have cut the consensus full-year FY2026 EPS forecast to approximately A$0.72 per share.

This is down from higher estimates earlier in the year, as the E2open integration costs and restructuring charges weigh on the bottom line.

With full-year results not due until August 2026, investors have had no earnings catalyst to offset the negative newsflow from the restructuring and integration cost overruns.

But the business keeps delivering

Look past the sentiment and WiseTech’s operational performance remains solid.

CargoWise is used by all of the world’s top 25 global freight forwarders.

And switching costs for WiseTech’s customers are enormous.

That gives WiseTech a revenue base that is considerably more resilient than the share price performance implies.

Moreover, the company has accelerated its AI integration roadmap.

The company is embedding AI tools directly into CargoWise to automate workflows, improve compliance, and reduce costs for customers.

What does the broker community think?

The broker picture on WiseTech shares is divided but broadly constructive.

UBS maintains a buy rating on WiseTech shares, stating the medium-term growth outlook remains intact and seeing the stock as attractively valued on a forward sales multiple basis.

The broker forecasts a compound annual growth rate of 27% in sales and 33% in EBITDA through FY2028.

Meanwhile, Bell Potter recently named WiseTech shares as a stock that could rise 150% from current levels.

The broker cited the deep competitive moat and the platform’s irreplaceable role in global freight forwarding.

Foolish takeaway

WiseTech shares have been through the wringer in May.

The near-term volatility is unlikely to disappear while governance uncertainty and sector rotation pressures persist.

However, the underlying business continues to grow at impressive rates, the CargoWise moat is intact, and at least two major brokers see substantial upside from current WiseTech shares levels.

For patient investors who can tolerate volatility, May may prove to be an interesting month to have paid attention.

The post What happened to WiseTech shares in May? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mark Verhoeven has a position in the stock mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ASX dividend stock Centuria Industrial REIT (ASX: CIP) has fallen 16% since November 2025 and it’s down 28% from December 2021, as the chart below shows.

The business describes itself as Australia’s largest domestic pure play industrial real estate investment trust (REIT).

It says it has a portfolio of high-quality industrial assets which are located in key metropolitan locations throughout Australia. It aims to offer investors a mixture of passive income and capital growth.

Higher interest rates are certainly a headwind for the business, but I think rates will only be this high for a certain period of time, so it looks like the right time to scan for opportunities in the REIT space. Centuria Industrial REIT looks like one of the best options to me.

Solid dividend yield

The business expects to pay a pleasing distribution for FY26 and I expect the FY27 payout will be a similar amount.

It expects to pay an annual distribution of 16.8 cents per unit in FY26, which would mean a 3% rise year-over-year. This guided payout translates into a distribution yield of 5.6%.

But, the current distribution yield is not the key reason why I think it’s a wonderful time to invest right now.

Cheap valuation

I love buying assets for less than they’re worth. Every six months, this ASX dividend stock tells investors about the underlying value of its business with the net tangible assets (NTA) – that takes into account the property values, the loans and other assets and liabilities.

At 31 December 2025, the business reported a NTA of $3.95. It’s trading at a 24% discount to that latest NTA update, so it looks very cheap.

It also noted in its FY26 third-quarter update, it enacted $188 million of divestments, achieving an average premium to book value of 18%. Since FY23, it has sold close to $460 million of assets at an average premium to book value of 12%.

So, not only is it trading at a large discount to the NTA, but that NTA may be understated as well.

Excellent rental tailwinds

I think the business has a very promising earnings growth future, which is absolutely key in my opinion.

Industrial properties are in high demand and there’s limited space to put more in across key metropolitan locations. This is helping drive the rental value of the existing real estate significantly.

Centuria Industrial REIT benefits from significant demand from areas like e-commerce and data centres. Plus, it’s seeing a big jump in rental income as contracts come up for renewal.

The fund manager of the REIT, Grant Nichols, explains the positive dynamic for the business:

Looking ahead, we foresee the domestic infill industrial market’s supply-demand imbalance to persist with limited construction of new warehouses coupled with consistently high occupier demand as tenants look to strengthen their delivery times and reduce transport costs. Current macroeconomic uncertainty, resultant of the Middle East conflicts and global oil constraints, is impacting inflation and construction price pressures. These factors are expected to curtail future industrial market supply. The value of high-quality, existing infill industrial assets is expected to increase as the disconnect to replacement cost continues to escalate.

Overall, the ASX dividend stock looks undervalued with an appealing future of earnings growth, which should help drive the rental income higher.

The post 1 ASX dividend stock down 28% I’d buy right now 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Friday, the S&P/ASX 200 Index (ASX: XJO) was on form and raced higher. The benchmark index jumped 1.6% to 8,731.7 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set for a subdued start to the week despite a decent finish to the last one on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 13 points or 0.15% lower. In the United States, the Dow Jones was up 0.7%, the S&P 500 rose 0.2%, and the Nasdaq climbed 0.2%.

Oil prices fall

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could start the week in the red after oil prices fell on Friday night. According to Bloomberg, the WTI crude oil price was down 1.75% to US$87.36 a barrel and the Brent crude oil price was down 1.7% to US$91.12 a barrel. This led to Brent crude oil posting its largest monthly loss in six years.

Buy Goodman shares

Bell Potter has named Goodman Group (ASX: GMG) shares as a buy this week. In its latest weekly REIT review, the broker has named the industrial property giant as a buy with a $36.45 price target. Based on its last close price of $31.67, this implies potential upside of 15% for investors over the next 12 months.

Gold price charges higher

ASX 200 gold shares including Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) could have a good start to the week after the gold price charged higher on Friday night. According to CNBC, the gold futures price was up 1.35% to US$4,593 an ounce. Traders were buying gold after oil prices pulled back on US-Iran ceasefire optimism.

Sell CBA shares

The team at Medallion Financial Group thinks Commonwealth Bank of Australia (ASX: CBA) shares are a sell. According to The Bull, it thinks CBA’s premium valuation is unjustified given tough trading conditions and fading earnings momentum. It said: “Australia’s largest bank carries a premium valuation. Slowing credit growth, sticky inflation and proposed property tax changes are headwinds for this mortgage heavy business. Sentiment took a material hit recently when the stock posted its largest single-day decline of about 10 per cent since listing in 1991 following a disappointing trading update. Earnings momentum is fading and the valuation is still trading at a significant premium to peers.”

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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