Tag: Stock pick

The ANZ Group Holdings Ltd (ASX: ANZ) share price is down 1% to $38.07 at the time of writing on Wednesday afternoon.

It’s been a pretty volatile start to the year for the Australian banking giant.

ANZ shares were relatively flat between early-December and early-February, but they jumped over 11% off the back of the banking giant’s stronger-than-expected quarterly update. 

The bank reported a first-quarter cash profit of $1.94 billion, which was up a whopping 75% on the second-half average of FY25 and came in ahead of expectations.

After a couple of ups and downs the shares ended the month 9% higher before crashing over 10% throughout March. ANZ wasn’t alone here though. ASX bank stocks slumped across the board as geopolitical tensions, ongoing conflict in the Middle East, soaring fuel prices, and interest rate growth caused concerns about an economic slowdown.

It wasn’t long until the ANZ share price took another turn, climbing 5.9% in the first couple of weeks of April. Shares are also up 4.5% for the year to date and 37.8% higher than 12 months ago.

Why is the ANZ share price being so volatile?

There are a few reasons.

April has been a good month for the banking sector as a whole. ASX bank shares have rallied after macro fears eased. These were driven by geopolitical tensions in the Middle East, oil shocks, and trade uncertainties.

Expectations that the US and Iran could soon reach a peace agreement to end the war is also helping to boost markets.

At the same time, economists are not predicting higher and sustained interest rate levels. ANZ economists anticipate that the Reserve Bank will hike interest rates in May. 

Banks like ANZ benefit from interest rate increases over the short term because higher net interest markets help to support earnings levels.

Meanwhile, ANZ’s stable earnings, predictable cash flow, and diversified portfolio mean that it looks better value versus its peers. It’s likely some investors could have been rotating into the stock in the dip.

But why are the shares tumbling again this week?

There isn’t any price-sensitive news out of ANZ to explain the latest share price tumble, so its likely to be the result of investors taking gains after a jump earlier this month, combined with some softening across the sector.

What do brokers expect out of the ANZ share price this year?

Brokers are undecided about the outlook for ANZ shares over the next 12 months. Out of 16 analysts, six have a buy or strong buy rating, and six have a hold rating. Another four have a sell or strong sell rating on the bank’s shares.

The average target price of $36.43 implies a potential 4.2% downside at the time of writing. But the maximum target price is $43, which represents a potential 13% upside from here.

For context, brokers hold a sell or strong sell rating on all the other big four major Aussie banks. 

The post What’s going on with the ANZ share price? appeared first on The Motley Fool Australia.

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• ASX 200 shares rip with financials leading a remarkable recovery last week
• How I’d invest $100,000 for retirement income on the ASX right now
• 3 reasons to buy ANZ shares today
• 3 top ASX dividend shares for retirement income in 2026
• Buy, hold, sell: ANZ, Breville, and Macquarie shares

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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 busy running the rule over a number of ASX shares this week.

Three that the broker has been looking at are named below. Let’s see if it is bullish on these:

A2 Milk Company Ltd (ASX: A2M)

Morgans was disappointed to see this infant formula company downgrade its guidance this week. However, it acknowledges that the reasons for the downgrade were out of A2 Milk’s control.

And with concerns that the issues could linger, the broker has trimmed its forecasts. Nevertheless, due to share price weakness, Morgans has upgraded A2 Milk’s shares to an accumulate rating with an $8.70 price target. It said:

A2M’s FY26 earnings downgrade was due to factors largely out of its own control, being higher freight/supply chain costs associated with the conflict in the Middle East and delays getting product released (enhanced testing and customs clearance) following peer recalls. Importantly, the demand for its products is strong. Guidance has been revised due to supply constraints (lower sales and product mix issues dilute margins) and higher costs.

We have revised our forecasts. In our view, while some of the issues are one-off in nature, increased costs associated with the conflict are likely to continue into FY27. Despite this, we still expect strong growth in FY27 given A2 Pokeno is expected to break even and new China label (CL) IF products will be launched. Following material share price weakness, we upgrade to an ACCUMULATE recommendation with a new price target of A$8.70 (was A$9.50).

BMC Minerals Ltd (ASX: BMC)

Morgans notes that this mineral exploration company has received a major boost from authorities in Yukon, Canada.

This has de-risked the Kudz Ze Kayah Project, leaving it well-placed to benefit from strong precious metal prices. As a result, it has retained its speculative buy rating with an improved price target of $5.70. It said:

BMC has received a positive Decision Document from the Government of Yukon for development of the ABM deposit at the Kudz Ze Kayah (KZK) Project. This represents the key de-risking milestone for KZK, addressing what has historically been the primary development headwind.

We maintain our SPECULATIVE BUY rating and A$5.70ps price target (previously A$4.90), with the uplift driven by refreshed precious metals price assumptions and reduced permitting risk. The recent de-risking supports our assumption of future equity funding at 0.7x NAV (previously 0.6x NAV), resulting in lower dilution and a reduced forecast SOI.

Cleanaway Waste Management Ltd (ASX: CWY)

The broker highlights that this waste management company has downgraded its guidance due to negative impacts from the war in the Middle East.

While the broker has downgraded its forecasts to reflect this, it remains positive and has put a buy rating and $2.95 price target on its shares. It commented:

CWY has revised down its FY26 EBIT guidance as a result of the impacts of the war in the Middle East. We have updated our forecasts for the EBIT guidance downgrade and higher interest rate environment.

EBITDA downgrades are relatively small but EPS downgrades are material in the short term given the funding and depreciation costs of CWY’s asset base. Target price $2.95/sh. BUY retained. Potential upside catalyst is next Tuesday’s strategy briefing.

The post What is Morgans saying about A2 Milk and these ASX shares? appeared first on The Motley Fool Australia.

More reading

• What does this broker have to say about Cleanaway Waste Management and Capstone Copper shares?
• Why is this $5 billion ASX stock sliding to a 52-week low today?
• Should you buy the dip on A2 Milk shares today?
• Why Westpac, Cleanaway and Qantas shares are catching ASX investor interest on Tuesday
• What is Bell Potter saying about A2 Milk shares after the selloff?

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.

In the last 6 months, there have been three new ASX ETFs launched by Global X. 

Global X has carved out a portfolio of available ETFs, with many of them existing as thematic options. 

Thematic ASX ETFs focus investing according to a certain sector or focus.

There are no hard-and-fast rules as to what themes qualify, but they tend to focus on future changes such as disruptions, new technologies and megatrends, sustainability, founder-led companies, or subsectors like electric vehicles and cybersecurity.

In the last 6 months, Global X has introduced three such funds that focus on humanoid robotics, silver miners, and Japanese equities. 

Let’s see how they are performing. 

Global X Japan Topix 100 Etf (ASX: J100)

Late last year Global X released this Japanese focused ASX ETF. 

This fund tracks the Topix 100 Total Return Index, which is a subset of the broader TOPIX (Tokyo Stock Price Index) and represents the 100 largest and most liquid companies on the Tokyo Stock Exchange.

According to Global X, after years of lying relatively quiet, the perception is beginning to shift on Japanese stocks. 

Global X believes the economic environment in Japan is starting to shift for a few reasons: 

• Japanese inflation is normalising
• Reforms driven by the Tokyo Stock Exchange and regulators are pushing companies to repurpose excess cash, increase dividends, and engage in buybacks
• Blue-chip firms are engaged in global megatrends like AI, EVs, and energy transition

Despite these emerging tailwinds, this ASX ETF has only risen 0.8% since its inception late last year. 

Global X Silver Miners ETF (ASX: SLVM)

This ASX ETF includes a basket of roughly 39 diversified silver miners. 

It first listed on the ASX in January this year. 

According to Global X, silver’s increased industrial usage, including in photovoltaics, grid expansion, and semiconductor manufacturing, has reshaped investor perceptions and underpins a more structural, long-term investment case.

However, since its inception, global silver prices have fallen, leading to a 10% drop for this ASX ETF. 

Global X Humanoid Robotics ETF (ASX: HMND)

The newest ASX ETF from Global X is this thematic fund focused on investing in companies across the humanoid robotics value chain, including robot developers and the key components that enable movement, sensing, and control.

According to Global X, it provides diversified exposure across builders, components, and enablers required to scale embodied AI systems.

At the time of writing, it includes a total of 30 holdings. 

Since its inception late last month, it has already risen more than 6%. 

The post How have these new ASX ETFs been performing since inception? appeared first on The Motley Fool Australia.

More reading

• Why Boss Energy, Telix, Woodside, and Yancoal shares are falling today
• What does this broker have to say about Cleanaway Waste Management and Capstone Copper shares?
• Why Evolution Mining, Mesoblast, Nufarm, and Virgin Australia shares are storming higher today
• 2 undervalued ASX shares to buy that experts think could deliver strong returns
• Why this ASX biotech stock just rocketed 89% today

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

The S&P/ASX 200 Index (ASX: XJO) is having a relatively positive session on Wednesday. In afternoon trade, the benchmark index is up 0.1% to 8,982 points.

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

Boss Energy Ltd (ASX: BOE)

The Boss Energy share price is down 11% to $1.54. Investors have been selling the uranium producer’s shares after it downgraded its guidance. Boss Energy now expects FY 2026 production for the Honeymoon operation to be between 1.40 million and 1.45 million pounds of U3O8. This is down from previous guidance of 1.6 million pounds. The company’s managing director, Matthew Dusci, said: “We recognise this downgrade is disappointing, particularly after maintaining guidance as recently as March. At that time, our expectation was that site access and reagent deliveries would normalise during the month. Subsequent unexpected rainfall, combined with the degraded baseline condition of access roads, extended disruption materially beyond that assumption. This has impacted both production and the timing of commissioning critical infrastructure during ramp-up.”

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix Pharmaceuticals share price is down 6% to $14.50. This has been driven by news that the radiopharmaceuticals company is raising US$600 million through a convertible bonds offering. The bonds are expected to carry a relatively low coupon of between 1.50% and 1.75% and will be issued with a conversion price of US$13.85 (~A$19.55). This is a premium of approximately 37.5% to the current share price. Telix’s managing director and group CEO, Dr. Christian Behrenbruch, said: “The successful completion of the convertible bonds refinance is in line with our capital management strategy and provides financial flexibility for Telix. We are pleased with the support we have received from both existing and new investors as part of the concurrent repurchase and new issue of convertible bonds.”

Woodside Energy Group Ltd (ASX: WDS)

The Woodside Energy share price is down 2.5% to $33.13. Investors have been selling the energy producer’s shares today in response to reports that the US and Iran have re-entered peace talks. This caused oil prices to tumble overnight. It isn’t just Woodside shares that are falling. The S&P/ASX 200 Energy index is down 2% at the time of writing.

Yancoal Australia Ltd (ASX: YAL)

The Yancoal Australia share price is down 2.5% to $7.06. This is despite the coal miner announcing a major acquisition today. Yancoal revealed that it has agreed to acquire an 80% interest in the Kestrel coal mine in Queensland’s Bowen Basin for up to US$2.4 billion. This includes an upfront payment of US$1.85 billion, as well as contingent payments of up to US$550 million that are linked to future coal prices.

The post Why Boss Energy, Telix, Woodside, and Yancoal shares are falling today appeared first on The Motley Fool Australia.

More reading

• Why are Telix shares sinking 7.5% today?
• Why are Boss Energy shares crashing 14% today?
• ASX 200 coal stock higher on US$2.4 billion deal
• Telix Pharmaceuticals upsizes convertible bonds to US$600 million
• Yancoal Australia announces $2.4bn Kestrel Coal Mine acquisition

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. 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 have updated their outlook on ASX shares Cleanaway Waste Management Ltd (ASX: CWY) and Capstone Copper Corp (ASX: CSC). 

Both ASX shares have fallen so far in 2026, but the broker is confident these companies can rebound.

Buy rating retained for Cleanaway Waste Management

Cleanaway Waste Management is Australia’s largest waste management business, with a national footprint. Its services span collection, midstream waste processing, treatment, recycling, and downstream waste disposal.

Its share price is down 13% year to date.

Yesterday, the company released a trading update due to the impacts of the conflict in the Middle East. 

The company said the war has increased fuel, supplier, and logistics costs, reduced Middle East Contract Resources activity, and created uncertainty, especially in projects. 

Cleanaway expects to recover much of the fuel cost increases over time but is closely monitoring impacts. The combined effect is an estimated ~$20 million reduction in FY26 EBIT, with revised guidance of $460 to $480 million (down from $480 to $500 million).

In response, the team at Morgans updated its forecasts for the EBIT guidance downgrade and higher interest rate environment. 

EBITDA downgrades are relatively small but EPS downgrades are material in the short term given the funding and depreciation costs of CWY’s asset base. Target price $2.95/sh. BUY retained. Potential upside catalyst is next Tuesday’s strategy briefing.

From the current share price of approximately $2.26, the price target from Morgans indicates an upside potential of 30%. 

Capstone Copper Corp still a buy

Capstone Copper shares also received updated guidance from the team at Morgans. 

The company operates as a copper producer with a diversified portfolio of operating assets focused in the Americas, with an extensive pipeline of near-term organic growth opportunities.

In 2026, its share price has fallen roughly 11.5%. 

However over the last 12 months, it has benefited from rising global copper prices and its stock price is up more than 80% in that span. 

Today, its share price has climbed approximately 1.4%. 

The team at Morgans slightly reduced its share price target for Capstone Copper shares. 

We have adjusted our CY26 production forecasts to better reflect the phasing of maintenance across assets and a revised production mix between cathode and sulphide output at Mantos Blancos and Mantoverde. Net these changes our target price moves to A$15.40ps (previously A$16ps) and we maintain our BUY rating.

From today’s share price of $12.84, the updated price target indicates an upside potential of approximately 20%. 

The post What does this broker have to say about Cleanaway Waste Management and Capstone Copper shares? appeared first on The Motley Fool Australia.

More reading

• Why is this $5 billion ASX stock sliding to a 52-week low today?
• Why Westpac, Cleanaway and Qantas shares are catching ASX investor interest on Tuesday
• Cleanaway Waste Management trims FY26 outlook on fuel challenges
• Buy, hold, or sell? South32, Capstone Copper, and BHP shares
• 3 reasons to buy Capstone Copper shares today

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

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small gain. At the time of writing, the benchmark index is up 0.15% to 8,983.3 points.

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

Evolution Mining Ltd (ASX: EVN)

The Evolution Mining share price is up 7% to $14.16. Investors have been buying the gold miner’s shares following the release of its quarterly update. The company reported March quarterly gold production of 170,000 ounces and copper production of 11,000 tonnes. This was achieved with an all-in sustaining cost (AISC) of $2,220 per ounce, which underpinned record quarterly net mine cash flows. At Mungari it generated $175 million and at Red Lake it generated $104 million in net mine cash flow. Evolution Mining’s CEO, Lawrie Conway, said: “Evolution continues to generate significant cash flows from consistent operational delivery and disciplined capital allocation. We have rapidly deleveraged by more than 31% in just over two years, reaching a net cash position by the end of March.”

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is up 8% to $2.17. This morning, the biotechnology company announced the acquisition of an exclusive worldwide license to a patented chimeric antigen receptor (CAR) technology platform for precision-enhanced augmentation of therapeutic mesenchymal lineage stromal cell (MSC) products. Mesoblast advised that it plans to incorporate the engineered CARs to further boost effectiveness of its products, with the goal of enhancing the target specificity and augmenting inherent properties of immunomodulation and tissue regeneration.

Nufarm Ltd (ASX: NUF)

The Nufarm share price is up almost 13% to $2.50. This follows the release of a trading update from the agricultural chemicals company this morning. Nufarm revealed that it expects first-half underlying EBITDA to come in between $239 million and $244 million. At the midpoint, that represents 17% growth on the prior corresponding period. This is being driven by better margins in Crop Protection, growth in Hybrid Seeds, and improved contributions from its omega-3 and bioenergy platforms.

Virgin Australia Holdings Ltd (ASX: VGN)

The Virgin Australia share price is up 8% to $2.54. This has been driven by the release of an update from the airline operator today. Virgin Australia advised that its FY 2026 financial guidance remains unchanged, with underlying EBIT and EBIT margin expected to improve in the second half despite a surge in fuel prices. While higher fuel costs are impacting its business, its hedging has helped offset much of the impact. It said: “For the remainder of 2HFY26, the Group is hedged 92% for Brent crude oil and 71% for refining margins. […]  This is expected to result in an increase of fuel costs for 2HFY26 of approximately $30-40m compared to previous expectations.”

The post Why Evolution Mining, Mesoblast, Nufarm, and Virgin Australia shares are storming higher today appeared first on The Motley Fool Australia.

More reading

• Here’s why Virgin Australia shares are flying 7% higher today
• Why is this $25 billion ASX mining stock charging higher today?
• Why Nufarm shares just exploded higher on Wednesday
• Virgin Australia’s FY26 update: Hedging cushions rising fuel costs
• Evolution Mining delivers record cash flow and moves to net cash

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 ASX share market is full of a wide variety of businesses that are of different sizes and operate across various industries.

Businesses with smaller market capitalisations could be compelling businesses to look at because they may have longer-term growth potential and the market hasn’t priced in their long-term potential.

Fund managers from Wilson Asset Management (WAM) have picked out two businesses from the WAM Active Ltd (ASX: WAA) portfolio that could deliver good returns.

EchoIQ Ltd (ASX: EIQ)

WAM describes Echo IQ as an Australian medical technology company focused on improving decision-making in cardiology by using artificial intelligence (AI) to detect structural heart disease from echocardiograms.

The fund manager noted that the company received US Food and Drug Administration (FDA) approval for severe aortic stenosis, with additional FDA clearance for heart failure detection expected in the near term.

WAM pointed out that the EchoIQ share price rose by 47% in March after an announcement of an expanded resale and distribution agreement with the Mayo Clinic for EchoSolv HF. The fund manager said that the agreement provides “meaningful clinical validation and materially de-risks the FDA pathway”.

The investment team expects further FDA clearance for the ASX share in the coming weeks, which would significantly expand EchoIQ’s US addressable market and support early revenue generation.

WAM concluded:

We believe additional hospital signings and strategic partnership discussions with multiple Australian and US-based parties remain key near-term catalysts for further share price re-ratings.

Forrestania Resources Ltd (ASX: FRS)

The other ASX share that WAM highlighted from the WAM Active portfolio was Forrestania Resources, a Perth-based mineral exploration company targeting gold, lithium, nickel, and copper deposits, primarily in Western Australia’s Eastern Goldfields, Forrestania, and Southern Cross greenstone belts.

WAM noted that the Forrestania Resources share price declined in March amid a 10% decline for the gold price.

The wider mining sector saw weakness during the month amid forced liquidations and broader macroeconomic volatility, including rising Treasury yields and a stronger Australian dollar.

WAM said it still owns this ASX share in its portfolio because it views recent events as “macro-driven dislocations, rather than a deterioration” of its investment thesis.

The fund manager decided to increase its stake in the ASX share during the March sell-off.

WAM’s investment team concluded its thoughts on the business with the following:

Forrestania Resources remains a compelling, undiscovered gold opportunity on the ASX, led by David Geraghty, who spent 21 years at Mineral Resources Ltd (ASX: MIN) and played a key role in its success. With minimal institutional coverage and broker sponsorship, we see potential for a share price re-rating as near-term catalysts emerge.

The post 2 undervalued ASX shares to buy that experts think could deliver strong returns appeared first on The Motley Fool Australia.

More reading

• Why BHP, EchoIQ, Life360, and Qantas shares are racing higher today
• Which ASX biotech’s shares are rocketing higher on big US news?

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.

Immutep Ltd (ASX: IMM) shares are having a rare breakout session on Wednesday.

After spending most of the year under relentless selling pressure, the biotech stock has suddenly sprung back to life.

At the time of writing, Immutep shares are rocketing 89.74% to 7.4 cents in afternoon trade.

Trading volumes have also lifted well above recent averages, showing how quickly sentiment has shifted on the update.

The rebound looks even more significant because the shares had still been down about 82% in 2026 before today’s rally.

That leaves this as one of the market’s biggest turnarounds of the week.

Here’s what got investors moving back into the stock.

FDA grants a valuable rare disease designation

According to the release, Immutep has received Orphan Drug Designation from the US Food and Drug Administration (FDA) for eftilagimod alfa in soft tissue sarcoma.

Soft tissue sarcoma is a rare cancer with limited treatment options, which makes this a positive step for its long-term commercial potential.

The FDA program offers regulatory support, tax credits, fee waivers, and up to seven years of US exclusivity if approved.

The FDA’s decision was backed by positive Phase II trial results, where efti was used with radiotherapy and Merck’s Keytruda in soft tissue sarcoma patients.

The trial’s 38 evaluable patients delivered a 51.5% major pathological response rate. That was comfortably ahead of the 35% target set by the study and well above historical benchmarks.

Chief executive Marc Voigt said the designation could help support a direct move into a late-stage study after the company completes its ongoing review of the discontinued TACTI-004 program.

Why the rally is so aggressive

The share price reaction makes more sense in the context of what happened last month.

Immutep shares were smashed after its flagship Phase III lung cancer trial was discontinued following an interim futility review.

That update effectively wiped out the company’s biggest near-term value driver and crushed confidence in the lead program.

With investor sentiment already heavily damaged, today’s update has been enough to trigger a strong rebound.

Investors now have another pathway to focus on, while the orphan designation also strengthens the sarcoma program’s long-term commercial appeal.

Foolish takeaway

I think today’s move shows the market had pushed Immutep too low after the lung cancer setback.

The sarcoma program now gives investors a new reason to stay interested, especially with FDA support making the commercial upside more attractive.

The key from here is whether management can turn this momentum into a credible late-stage development pathway.

The post Why this ASX biotech stock just rocketed 89% today appeared first on The Motley Fool Australia.

More reading

• Down 87% since Thursday, why is this ASX 300 healthcare stock sliding again today?
• How does Bell Potter rate these ASX healthcare stocks?

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.

ASX consumer discretionary stocks have been largely underperforming in 2026.

Rising interest rates, inflation and subdued consumer confidence have all weighed heavily on investor sentiment. 

When economic headwinds like these hit at once, it can be difficult for discretionary shares to see growth. 

However, the team at Morgans have identified one consumer discretionary stock that is bucking the trend.

The broker has a buy recommendation on The Koala Company Ltd (ASX: KOA). 

Company overview

The Koala Co., Ltd. engages in the retail furniture business. The firm offers sitting furniture, mattresses and bedroom furniture, living room furniture, kitchen and dining furniture, outdoor furniture, and related products. 

The consumer discretionary stock was initially listed on the ASX in late March. 

Its stock price has hovered around the IPO price of $3.80 and is exchanging hands today for roughly $3.75. 

The company is forecasting FY26 revenue of $332 million and net profit of $12.3 million.

In its initial prospectus, Chair Michael Gordon said the company was well-placed for growth.

As a furniture company, Koala is exposed to the global furniture market, which benefits from tailwinds including the growth of e‑commerce, increased time spent at home due to the shift to remote work, a desire to maximise the utilisation of living spaces, a growing emphasis on convenience, premiumisation, and the demand for more sustainable products. The business has a significant opportunity before it to grow in Koala’s established markets, scale its presence in newer markets and enter into additional markets over time to grow the business.

Morgans initiates coverage with a buy

In a note out of the team at Morgans, the broker has initiated coverage on this ASX consumer discretionary stock with a buy recommendation. 

We initiate coverage on Koala Company with a BUY recommendation and $5.13 target price. We think there is a degree of conservatism embedded in both our forecasts and valuation, with the balance of risk skewed to the upside. 

Koala offers an attractive growth profile, underpinned by strong sales growth, margin expansion and significant NPAT growth. The stock screens cheap on a multiple basis, trading on 18.5x FY27 PER versus the peer set average at 27.0x, despite offering one of the strongest growth profiles.

From today’s share price of $3.75, the price target from Morgans indicates a potential upside of almost 37% for this consumer discretionary stock.

The post Morgans just initiated coverage on this consumer discretionary stock with a buy rating appeared first on The Motley Fool Australia.

More reading

• Virgin Australia’s FY26 update: Hedging cushions rising fuel costs
• National Storage REIT: Scheme meetings confirm buyout pathway
• Evolution Mining delivers record cash flow and moves to net cash
• Telix Pharmaceuticals upsizes convertible bonds to US$600 million
• Yancoal Australia announces $2.4bn Kestrel Coal Mine acquisition

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

Virgin Australia Holdings Ltd (ASX: VGN) shares are back in the air. The airline’s share price has jumped 7% to $2.52 during early afternoon trade on Wednesday, as investors cheered an update that suggests the worst may not be ahead after all.

It’s a welcome reprieve for Virgin Australia shares.

Over the past month, the stock had fallen 9%, and it’s still down a steep 28% year to date. That’s a sharp underperformance compared to the S&P/ASX 200 Index (ASX: XJO), which has slipped just 3.1% in 2026.

Financial guidance intact

So what’s changed? Virgin Australia confirmed on Wednesday that its FY26 financial guidance remains intact, despite a surge in fuel prices that has rattled the aviation sector. The airline still expects underlying EBIT and margins to improve in the second half of FY26.

That was the reassurance investors were looking for. Fuel costs are the biggest swing factor for airlines, and recent volatility has been intense. Jet fuel prices have more than doubled since late February, a move that would normally put serious pressure on earnings.

Fuel hedging strategy

But Virgin Australia isn’t exposed in the way many feared. The airline has leaned heavily on its fuel hedging strategy, and it’s paying off. Around 92% of its Brent crude exposure and 71% of refining margin exposure are hedged for the remainder of FY26. That provides a significant buffer against rising costs.

As a result, the expected increase in fuel costs for the second half is now estimated at $30–40 million above earlier forecasts. That’s manageable, not catastrophic.

Fine-tuning fares and capacity

And the company isn’t standing still. Virgin has been actively adjusting fares and fine-tuning capacity to respond to market conditions. Domestic capacity is now expected to rise 1% in the second half, although it will dip slightly in the fourth quarter as the airline stays flexible. That ability to adapt is key.

Importantly, the company also confirmed it has continued fuel supply assurance through to May, easing concerns about potential disruptions during a volatile period.

What next for Virgin Australia shares?

Looking ahead, the outlook remains steady, at least for now.

Virgin says its FY26 expectations hold, assuming no major shocks to demand, fuel prices, or supply. For early FY27, hedging remains strong on crude exposure, though less so on refining margins, and management is keeping a close eye on conditions.

If volatility persists, capacity adjustments remain on the table.

Foolish Takeaway

Today’s rally is all about relief. Investors in Virgin Australia shares were bracing for worse. Instead, they got confirmation that Virgin Australia is managing through the turbulence, with hedging, pricing power, and operational flexibility all playing a role.

After a tough run, that was enough to send the shares flying higher.

The post Here’s why Virgin Australia shares are flying 7% higher today appeared first on The Motley Fool Australia.

More reading

• Why Evolution Mining, Mesoblast, Nufarm, and Virgin Australia shares are storming higher today
• Virgin Australia’s FY26 update: Hedging cushions rising fuel costs
• Down 34% in 2026, are Virgin Australia shares a good buy today?
• Buy, hold, sell: Northern Star, Telix, and Virgin Australia shares
• Virgin Australia shares fly 13% higher: Is this the start of the rebound we’ve all been waiting for?

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.