Tag: Stock pick

The Australian share market has had its fair share of volatility this year, but one thing hasn’t changed.

That is that innovation still creates long-term value for investors.

So, with a number of innovators trading sharply lower than their highs, now could be an opportune time to snap up their shares. Here are three that analysts rate as buys:

Telix Pharmaceuticals Ltd (ASX: TLX)

Telix is rapidly becoming one of Australia’s most exciting biotechnology stories.

Its flagship product, Illuccix, which is a radiopharmaceutical imaging agent for prostate cancer, has seen explosive global uptake. The company is now generating strong revenue growth and reinvesting heavily into its pipeline of diagnostic and therapeutic cancer treatments.

With these products progressing through clinical trials, Telix has multiple shots on goal, and each one comes with transformative commercial potential. And while its failure to gain FDA approval at the first application has dented investor sentiment this year, most analysts believe it is a case of when and not if approval is given.

Bell Potter remains very positive and has put an buy rating and $23.00 price target on its shares.

Pro Medicus Ltd (ASX: PME)

Another ASX innovator that could be a buy is Pro Medicus. It is one of the ASX’s most impressive growth stories.

Pro Medicus’ Visage imaging platform is used by leading hospitals and radiology groups across the United States, providing ultra-fast image viewing and analysis for radiologists.

The company’s margins are exceptional, its revenue is highly recurring, and its contract wins are becoming larger and more frequent. Many medical centres are still in the early stages of moving to cloud-based imaging, which gives Pro Medicus a long runway of structural growth.

With a capital-light business model, expanding market share, and deep competitive moats, Pro Medicus is uniquely positioned to benefit from the global demand for faster, smarter, AI-assisted medical imaging.

Bell Potter is also bullish on this one and has a buy rating and $320.00 price target on its shares.

WiseTech Global Ltd (ASX: WTC)

A third ASX innovator to look at is WiseTech.

It is a software provider for global logistics companies, with its CargoWise platform deeply embedded into freight forwarding, customs, and shipping operations worldwide.

Despite recent share price weakness, WiseTech continues to grow revenue, integrate acquisitions, and win major enterprise customers. Global supply chains are becoming more digitised, and regulatory environments are getting more complex. This is a trend that strengthens the need for WiseTech’s mission-critical software and positions its for growth over the long term.

UBS is bullish on this ASX stock and has put a buy rating and $130.00 price target on its shares.

The post These ASX innovators could be the market’s next big winners appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Forget Zip shares: Here’s why Xero and WiseTech are better tech bets for 2026
• 5 most-traded Australian shares last week
• 2 ASX 200 tech stocks racing higher on big news
• These are the 10 most shorted ASX shares

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

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There are few names in the investing world that have as much of an impact as Warren Buffett, so when the stock market mogul speaks, it often pays to listen.

Some investors have noted that Buffett’s holding company, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), has been stockpiling cash in recent years. In fact, in the third quarter of 2025, the company’s cash holdings reached a record high of nearly $382 billion. That figure has ballooned over the last year, leading some investors to worry that Buffett is predicting a market crash.

Should investors exit the market now? Or is it safe to keep investing? Here’s what you need to know. 

Why is Buffett stockpiling cash right now?

On the surface, Berkshire’s significant cash holdings may seem to suggest that the market is overvalued. Some investors may take it a step further and assume that a serious market downturn is looming. But there are many reasons why a company may hold a substantial amount in cash.

BRK.B Cash and Short Term Investments (Quarterly) data by YCharts

The market as a whole has earned record-breaking returns over the last few years, and it’s not uncommon for investors to rebalance their portfolio or engage in some profit-taking by selling a portion of their shares at these high prices — leading to greater cash holdings.

At the same time, there’s a good chance that Berkshire is simply waiting for the right investment. Buffett has famously rigid standards when making investment decisions, so stockpiling cash likely has less to do with general market uncertainty and more to do with the fact that there are fewer appealing investment options available right now.

“The one problem with the investment business is that things don’t come along in an orderly fashion, and they never will,” Buffett noted in Berkshire’s 2025 annual meeting when asked about the company’s cash stockpile. “We’d spend $100 billion, and those decisions are not tough to make, if something is offered that makes sense to us and that we understand and offers good value.”

What does this mean for you?

Perhaps the biggest takeaway from Buffett’s investing strategy is to focus less on how the market will impact your portfolio and more on being choosy about where you buy.

There’s never a wrong time to invest in the stock market as long as you’re investing in the right places. If a company has solid fundamentals, offers value, and has room for growth, now can be a fantastic time to buy — no matter what the market does in the coming weeks or months. Those stocks are always out there; it’s just a matter of finding them.

This approach is more important now than ever. Many stocks may be overvalued at the moment, and sometimes, even weak companies can see their stock prices soar when the market is surging. Those investments may look appealing on paper, but if they don’t have healthy foundations, they’re likely to stumble hard during the next correction or bear market.

“[F]ears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.” — Warren Buffett, The New York Times, 2008

Strong companies will very likely bounce back from whatever the market throws at them, going on to experience long-term growth. The more of these stocks you own, the less you’ll need to worry about the next market downturn.

Berkshire Hathaway’s enormous cash pile may be worrying to investors concerned about a stock market crash, but Buffett himself is not sounding any alarms. Rather, his timeless advice to invest only in companies that provide value and have potential for long-term growth can make it easier to navigate these uncertain times. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Warren Buffett sending a quiet warning to investors? Here’s what you need to know. appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

Not everyone enjoys researching stocks, comparing valuations, or tracking market announcements.

And the good news is you don’t have to.

Thanks to a handful of high-quality ETFs on the ASX, you can build a globally diversified portfolio in minutes, without picking a single stock.

If you want a simple, long-term investment strategy that essentially runs itself, these three ASX ETFs could be all you ever need.

BetaShares Diversified All Growth ETF (ASX: DHHF)

If there is one ETF built specifically for people who never want to think about asset allocation again, it is the BetaShares Diversified All Growth ETF.

This fund is a fully diversified, growth-focused portfolio wrapped into a single ETF. It spreads your money across over 8,000 stocks worldwide through underlying index exposures.

Inside the fund’s underlying holdings, you will find global giants like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Tesla (NASDAQ: TSLA), along with broad exposure to the Australian market and other developed economies. It is designed for long-term compounding, with no need to rebalance or manage the portfolio.

For investors who want a simple, set-and-forget strategy, this ASX ETF is about as close as it gets to a complete, all-in-one solution. It was recently recommended by analysts at Betashares.

iShares S&P 500 ETF (ASX: IVV)

For those wanting exposure to the world’s most influential share market, the iShares S&P 500 ETF is hard to beat. It tracks the S&P 500 Index, which includes the 500 largest and most dominant companies in the United States.

These include global powerhouses such as Nvidia (NASDAQ: NVDA), Alphabet (NASDAQ: GOOGL), and McDonald’s (NYSE: MCD). Together, they represent many of the world’s most profitable, innovative, and globally competitive corporations.

The S&P 500 has delivered strong long-term returns for decades. By simply holding this fund, investors automatically participate in the growth of world-leading stocks without ever needing to choose between them.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF gives you exposure to more than 1,200 international stocks across Europe, Asia, and North America, but excluding Australia. This means it offers deep diversification.

Its holdings include giants from a range of industries like Nestlé (SWX: NESN), Toyota Motor Corp (TYO: 7203), and ASML Holding (NASDAQ: ASML).

This broad global footprint helps smooth out volatility and ensures your portfolio isn’t overly concentrated in a single market. Overall, it could be a great long term option for investors that don’t want to pick stocks.

The post 3 excellent ASX ETFs for investors who never want to pick stocks 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 ASML, Alphabet, Apple, Microsoft, Nvidia, Tesla, and iShares S&P 500 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nestlé and has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended ASML, Alphabet, Apple, Microsoft, Nvidia, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 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.

They’re two of Australia’s big 4 major banks and they’ve both enjoyed periods of great growth over the past 12 months. But when it comes to Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corporation (ASX: WBC) and their shares, one is expected to outpace the other over the next 12 months.

Are CBA shares a buy for 2026?

CBA shares are trading in the green on Wednesday afternoon. At the time of writing, the shares are 0.21% higher for the day at $152.56 a piece. But over the past month, the shares have tumbled 13.09%, dragging the price 3.31% lower than this time last year.

The share price crash in early-November followed the banking giant’s quarterly update. The bank reported a 1% increase in its quarterly cash net profit after tax and a strong CET1 ratio of 11.8%, above regulatory requirements. But the results disappointed investors and raised concerns about the bank’s premium share price valuation. Investors started hitting the sell button in panic in what I think signalled the beginning of the bank’s share price correction.

Analysts also seem to think the share price still looks expensive at current levels, with many expecting the stock’s value to shrink further in 2026. 

This month, Medallion Financial Group’s Stuart Bromley confirmed his sell recommendation on Australia’s biggest bank (courtesy of The Bull). He said that while CBA remains a solid business, the share price is too high. He pointed out that the bank is trading on a price-earnings (P/E) ratio of about 25 times and a modest dividend yield of about 3.15%. This means its valuation sits well above global peers.

Many other analysts seem to hold a similar view on the shares. Data shows that out of 15 analysts, 10 have a strong sell rating on CBA shares and another 3 have a sell rating. Some expect the bank’s share price to drop as low as $96.07, which implies a huge potential downside of 37% over the next 12 months.

Are Westpac shares a buy for 2026?

Westpac shares are also trading in the green at the time of writing, up 0.42% for the day at $37.28 each. Over the past month, Westpac shares have dropped 6.4%, but they’re still 10.89% higher over the year.

Like CBA shares, Westpac stock also tumbled after the bank released an unexciting  FY25 result in early November, however, the drop wasn’t anywhere near as dramatic. The bank’s  net profit after tax dropped 1% over the year. And after excluding notable items, net profit reduced by 2% year over year. But the bank hiked its full-year dividend to $1.53 per share, representing an increase of 2 cents per share.

I’m not sure now is the best time to buy Westpac shares, but I think 2026 will be a flat year for the banking giant, rather than a year marked by a significant share price drop. 

Analysts are also unsure about the stock. Out of 16 analysts, data shows 7 have a hold rating on Westpac shares. Another 4 have a sell rating and 5 have a strong sell rating. The average target price of $33.34 implies a potential 10.5% downside over the next 12 months. The lowest target price of $23.03, implies a potential downside of 38.2% at the time of writing. 

It’s not exactly positive news but when compared to CBA’s outlook, Westpac’s share price projection into 2026 is a little less… pessimistic.

The post Westpac versus CBA shares: Which bank is a better buy for 2026? appeared first on The Motley Fool Australia.

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• Analysts rate CBA and these popular ASX shares as sells
• 5 most-traded Australian shares last week
• ANZ shares are lagging the other big banks: Here’s why
• Are CBA shares a good buy amid rising interest rates?
• Why does the CBA share price keep falling? – Expert

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.

If you are on the lookout for ASX stocks to buy, then read on.

That’s because analysts at Morgans have just upgraded these names to buy ratings with big return potential. Here’s why it is bullish on them:

Minerals 260 Ltd (ASX: MI6)

This gold developer’s shares could be in the buy zone according to Morgans following the release of the highly anticipated mineral resources estimate (MRE) update for its Bullabulling Gold Project.

The broker believes the MRE positions Bullabulling to become a ~200,000 ounces per annum operation over ~15 years.

In response, the broker has upgraded Minerals 260’s shares to a buy rating with a vastly improved price target of $1.10. This implies potential upside of 180% from current levels.

Commenting on the gold explorer, Morgans said:

MI6 has released the highly anticipated MRE update for its flagship Bullabulling Gold Project. Bullabulling now hosts 130Mt at 1.0g/t Au for 4.5Moz, a material beat on our prior upside case of 3.5Moz. Importantly, a high degree of the resource (3Moz or 67%) remains in the ‘indicated’ category and underpins our updated forecasts and future pre-feasibility studies (PFS) – due mid CY26.

Given the updated scale, we now see clear line-of-sight to a ~200kozpa operation over ~15 years (previously 160–170kozpa), which we model via a staged mill expansion from 5Mtpa to 7Mtpa. Bullabulling now positions MI6 as the largest single-asset, undeveloped gold resource in Australia outside the established producer cohort, and we view it as a must-own stock. We upgrade our rating to BUY (from SPECULATIVE BUY) and increase our price target to A$1.10ps (previously A$0.55ps).

NextDC Ltd (ASX: NXT)

Another ASX stock that Morgans has become bullish on is data centre operator NextDC.

In response to new contract wins and recent share price weakness, the broker has upgraded the company’s shares to a buy rating with a $19.00 price target. This suggests that upside of more than 40% is possible from current levels. It said:

NXT has announced that following recent customer contract wins, presumably including a large single customer contract win across multiple locations, its contracted utilisation has increased by 71MW to 316MW as at 1 December 2025. Further contract wins were, and remain in, our forecasts so this mostly underpins our expectations.

However, we upgrade our capex assumptions and lift our FY27/28 EBITDA forecasts by 5%. Our target price remains $19 per share. The share price has declined ~19% in the last three months and given a ~40% differential between the current share price and our $19 target price we upgrade our recommendation to BUY from ACCUMULATE.

The post Morgans just upgraded these ASX stocks to buy ratings (with huge upside!) appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Nextdc. 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.

Investors buying the Vanguard Australian Shares High Yield ETF (ASX: VHY) probably do so with the expectation of fat, and franked, dividends.

After all, it’s all in the name of this exchange-traded fund (ETF). Like most ASX ETFs, VHY holds an underlying portfolio of ASX shares. In this case, those shares number about 75, and are selected based on their past dividend performance, as well as their perceived ability to sustain those shareholder payments.

Some of this ASX ETF’s current top holdings include Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), BHP Group Ltd (ASX: BHP), and Telstra Group Ltd (ASX: TLS).

With most blue-chip ASX dividend shares offering yields of between 3% and 5% today, you would expect this ETF to offer something similar.

But what might surprise investors is that VHY units are today trading on a trailing dividend yield of almost 9%.

Want proof? Well, VHY has paid out four dividend distributions over 2025, as is its norm. Those dividends, paid out in January, April, July, and October of this year, were worth $1.04, $2.43, $2, and $1.10 per unit, respectively.

Plugging that annual total of $6.57 per unit into the current VHY unit price of $77.24 (at the time of writing), we get a trailing yield of 8.97%.

That’s more than double what most blue-chip ASX 200 stocks currently have on the table.

So does this make VHY a screaming buy for dividends today?

Well, before investors rush off to buy this ASX ETF for that high income potential, let’s discuss a major caveat.

Is the VHY ETF a buy for that 9% dividend yield?

There are two ways an ETF can pay dividend distributions to its investors. The first is by passing through the dividend income it receives from its underlying portfolio. That has almost certainly funded part of VHY’s monstrous 2025 payout. But given the yields available on most major blue-chip shares right now that we discussed above, it’s also almost certainly not the only source of this income.

The other way ETFs fund dividend distributions is by ‘rebalancing’ their portfolios and distributing any resulting profits. Like most ETFs, VHY’s underlying index has rules that it operates under. According to Vanguard, these include “restricting the proportion invested in any one industry to 40% of the total ETF and 10% for any one company”.

Adhering to these rules has likely resulted in the outsized dividends investors have enjoyed over 2025. Whilst this has been wonderful for existing investors, it also indicates that this is a one-off bonanza for 2025, not an indication of an ongoing trend.

We can see evidence of this in VHY’s past paouts. Although 2025 resulted in investors bagging $6.57 per unit in dividend distributions, 2024 saw investors receive a total of $3.98 in dividend distributions per share. In 2023, the total was just $3.43.

Instead of that 8.97% yield, those payouts would result in yields of 5.43% and 4.68% at today’s pricing. Those are clearly still hefty yields, but nothing close to 9%. That once again reiterates that 2025’s dividend distributions look like a lucky windfall more than anything else.

So yes, the near-9% yield on the Vanguard Australian Shares High Yield ETF is accurate. But it certainly doesn’t indicate that investors will actually get 9% on their money if they buy units today.

The post Does the Vanguard High Yield ETF (VHY) really have a 9% dividend yield right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen 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 positions in and has recommended Telstra Group. The Motley Fool Australia has recommended BHP Group and Vanguard Australian Shares High Yield ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A new month is here and what better time to make some new additions to an investment portfolio.

But which ASX shares should you buy?

To narrow things down, let’s see how Morgans rates the three popular shares named below. Here’s what the broker is saying:

Collins Foods Ltd (ASX: CKF)

Morgans was pleased with this quick service restaurant operator’s performance during the first half.

It notes that its profits were a strong beat thanks to strong execution and a lower-than-expected depreciation charge and tax rate.

In response to its results, the broker has retained its accumulate rating with an improved price target of $12.40. It said:

CKF’s 1H26 NPAT was 12% higher than forecast and 30% up yoy. The strong headline beat was partly a function of solid operational execution and a return to positive LFL sales growth, but was significantly boosted by a lower-than-expected depreciation charge and tax rate. EBITDA was up 11% and 1% higher than forecast.

The value proposition inherent in the KFC brand has allowed it to outperform peers in a competitive and challenging QSR market in Australia and continental Europe. 1H26 margins improved, although we anticipate some downward pressure in Australia in the second half as commodity price inflation resumes. CKF upgraded its full year guidance. We have increased our NPAT estimates by 3% in each of the next three forecast years and our target price rises by 1% to $12.40.

Imdex Ltd (ASX: IMD)

This mining technology company has caught the eye of Morgans after announcing a couple of acquisitions.

And while it notes that these acquisitions may lead to earnings per share downgrades, the broker urges investors to not focus on this and instead to focus on the strength of the base business.

As a result, it has reaffirmed its accumulate rating with a $3.70 price target. It said:

The acquisition of two predominantly sensors businesses, in our view, is preferred against acquiring purely software businesses. IMD has paid a full price for ALT and MSI (~15x CY24 EBITDA), though with 55-60% exposed to mining exploration, both should be seeing substantial growth. Perhaps more importantly, IMD has now cleansed P&L costs below EBITDA which will likely trigger EPS downgrades. However, this disregards the strength of the base business, for which volumes have sequentially improved through 2Q, notwithstanding usual seasonal softness.

We cut our EPS forecasts by 5% in FY26 as we incorporate ALT and MSI and higher D&A, interest and tax. We also fully consolidate Datarock and Krux. In FY27 and FY28, cuts to our forecasts are marginal (1-2%) as we increase our revenue growth assumption in FY27 from +7% to +10%. Target price to $3.70 (from $3.80). Accumulate

Treasury Wine Estates Ltd (ASX: TWE)

This wine giant released an update this week which revealed that it was impairing the goodwill of its US assets.

While it was disappointed by this, it wasn’t overly surprised. In light of this, it has retained its hold rating and $6.10 price target and eagerly awaits a trading update later this month. It said:

TWE has announced that it expects to recognise a non-cash impairment of at least all the goodwill of its US based assets (A$697.4m). While this is disappointing, it isn’t a complete surprise given the company has new CEO and the US market remains challenging, in fact, category trends have deteriorated further. A further update on trading will be provided in mid-December.

We suspect that trading has been weaker than expected and wouldn’t be surprised if consensus is too high. The 1H26 result will be particularly weak. We have made large revisions to our forecasts and stress that earnings uncertainty remains high. Consequently, we maintain a HOLD rating.

The post Buy, hold, sell: Collins Foods, Imdex, Treasury Wine shares appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
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• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today
• Why Catapult, Collins Foods, Guzman Y Gomez, and Pantoro shares are falling today

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

When a takeover bid collapses, investors usually see it as bad news. But in the case of AUB Group Ltd (ASX: AUB) and its failed takeover by private equity suitors, it may actually be good news of sorts.

Macquarie’s latest research suggests that it might finally be back to business for the insurance broker network.

A few days ago, AUB confirmed that EQT and CVC had terminated discussions regarding a potential takeover. The suitors decided not to proceed with a binding proposal to buy the company for $45 per share.

For shareholders who were eyeing that $45 payout, it’s a hard one to take because AUB Group shares are currently trading at $31.40 per share.

The analysts at Macquarie, however, certainly seem to see an opportunity here.

Back to business

In a research note released immediately following the news, Macquarie maintained an outperform rating on AUB Group, assigning a 12-month price target of $37.40 to the shares.

Macquarie’s message is simple: it’s “back to business”.

Even without a takeover premium, Macquarie believes the fundamentals of AUB are rock solid. They note that AUB is executing well across multiple earnings growth opportunities and the company has a history of delivering consistent organic growth, supplemented by smart acquisitions.

Why Macquarie is bullish

There are three main reasons Macquarie thinks the stock is a buy at today’s prices:

1. The Valuation Gap: AUB is currently trading at a forward price-to-earnings (P/E) ratio of roughly 15.6x. That is significantly cheaper than its historical average of 18.3x and cheaper than its recent average of 19.6x. In short, the stock looks like a bargain compared to its own history.
2. Broking Strength: Despite fears that insurance premium rates might soften, AUB continues to grow. In the Australian broking segment, average income per client actually increased by 8.4% recently. They are squeezing more value out of existing relationships.
3. The International Opportunity: The Tysers (International) business is the sleeping giant here. Current EBIT margins are around 25%, but AUB is targeting 32% over the medium term. If they hit that target, it implies significant earnings upside that Macquarie feels isn’t fully baked into the current share price.

Risks

There are still risks, however, to investing in AUB Group, and Macquarie points out that poor M&A execution remains a key risk. When growth relies partly on buying other companies, you have to buy the right ones at the right price and integrate them well into your business. Additionally, if the premium rate cycle turns faster than expected, it could put pressure on earnings.

Foolish bottom line

The AUB Group takeover deal is dead, but the business is very much alive. With a price target of $37.40, offering a potential upside of approximately 19% from the current price, Macquarie suggests that AUB Group represents a good investment opportunity for patient investors.

The post Does Macquarie rate AUB Group shares a buy after the deal fell through? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why AUB, Titomic, Treasury Wine, and Woodside shares are rising today
• This insurance company is a compelling buy, despite a takeover falling through, analysts say
• Why ASX, AUB, Dyno Nobel, and HMC shares are sinking today
• AUB Group holds its AGM

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

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

Breville Group Ltd (ASX: BRG)

According to a note out of Macquarie, its analysts have retained their outperform rating and $39.20 price target on this appliance manufacturer’s shares. The broker highlights that the Macquarie Kitchen Benchmark and De’Longhi Revenue Index have delivered strong growth so far in the third quarter. And given how Breville has outperformed the benchmark by 11% per annum between 2018 and 2024, it believes this supports it forecast for 10%+ per annum revenue growth between FY 2025 and FY 2028. This is expected to be underpinned by its coffee segment, new market development, and its investment in new product development. The Breville share price is trading at $29.43 on Wednesday afternoon.

Collins Foods Ltd (ASX: CKF)

A note out of Citi reveals that its analysts have retained their buy rating on this KFC restaurant operator’s shares with a trimmed price target of $12.85. This follows the release of a half year result which came in ahead of expectations. In addition, Citi highlights that management has upgraded its profit guidance for the full year. It is now expecting profit growth of mid-to-high teens from low-to-mid teens previously. And while its sales growth rate is a touch behind expectations, the broker has only reduced its estimates by a touch. The Collins Foods share price is fetching $10.74 at the time of writing.

NextDC Ltd (ASX: NXT)

Analysts at Morgans have upgraded this data centre operator’s shares to a buy rating with a $19.00 price target. According to the note, the broker was pleased to see NextDC report new contract wins, which it believes includes a large single customer contract win across multiple locations. This has lifted its contracted utilisation by 71MW to 316MW, which is supportive of Morgans growth forecasts. In light of this and significant share price weakness over the past three months, the broker sees significant upside potential for investors between now and this time next year. The NextDC share price is trading at $13.55 on Wednesday.

The post Top brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

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• Macquarie tips 28% upside for Breville shares
• ASX retail shares: 2 to buy and 1 to sell amid rising inflation

Citigroup is an advertising partner of Motley Fool Money. Motley Fool contributor James Mickleboro has positions in Collins Foods and Nextdc. 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 Australia has recommended Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.