Tag: Stock pick

The BHP Group Ltd (ASX: BHP) share price is $57.50, down 0.4% on Friday after a historically significant week for the miner.

The ASX 200’s largest mining share ascended above its previous all-time record of $54.55, set in mid-2021, on Monday.

From there, the share price kept climbing and has risen by almost 7% in the space of just five days, and on no news at all from the miner.

The BHP share price peaked this week at $58.29 during intraday trading on Thursday.

That is now the highest price the miner has ever traded at in its 140-year history as a listed company.

In the year to date, BHP shares have risen by just over 25%.

That’s 5x the rate of the S&P/ASX 200 Index (ASX: XJO), which is up 5%.

In short, BHP shares are on fire — and there’s another 20% growth to come, according to one analyst.

On Wednesday, Jason Fairclough of Bank of America put a 12-month price target of $68 on BHP shares.

What’s most exciting about this analyst’s tip is that the guy has form.

Last month, Fairclough was the first expert to suggest that BHP shares could go into the late $50s in 2026.

Look how that worked out.

BHP share price soars 25% in 2026

Here at The Fool, we’ve been closely tracking the BHP share price since the start of the new year (‘cos we’re nerdy like that).

Fairclough put out a note in mid-January tipping that BHP shares could rise to $56 within a year. His previous target had been $49.

At the time, five other analysts had also recently updated their price targets.

All of them, except Barclays, were tipping the late $40s range for the BHP share price. Barclays’ price target was $50.12.

Over ensuing weeks, Goldman Sachs raised its price target on BHP shares to $57.70, while Morgan Stanley increased it to $56.50.

And Fairclough went to $57.

BHP shares cracked the $50 mark for the first time in two years on 27 January.

Then the mining share hovered between $49 and $52 for a couple of weeks.

Then came BHP’s 1H FY26 report and a $4.3 billion silver streaming deal, both announced on 17 February, which added serious fuel to the mining stock’s fire.

1H FY26 result turbocharges share price

The ASX 200 iron ore and copper mining giant reported a 28% profit increase to US$5.64 billion for 1H FY26.

The news forced the brokers to go back to their models to update their price targets. Fairclough lifted his target to $60.

On Monday, the BHP share price surpassed its mid-2021 record to reach a new high of $54.75.

On Wednesday, we received news that Fairclough had reiterated his buy rating and lifted his 12-month target on BHP shares to $68.

Citi also updated its price target on Wednesday, lifting it from $49.60 to $53.41 while keeping a hold rating.

On Tuesday, Barclays lifted its target to $52.84 and maintained its hold rating.

According to TradingView, there are 16 analysts with 12-month targets on BHP shares, ranging from $35.43 to $67.89.

Since the day of the 1H FY26 report, the BHP share price has risen 14%.

Stay tuned for what happens next!

The post BHP share price has 20% more growth to come: expert appeared first on The Motley Fool Australia.

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• Game on! BHP retakes biggest ASX stock crown as CBA shares sink
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Citigroup is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Barclays Plc. The Motley Fool Australia has recommended BHP Group. 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 decline. The benchmark index is currently down slightly to 9,170 points.

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

Bapcor Ltd (ASX: BAP)

The Bapcor share price is down 47% to 90.5 cents. This morning, the auto parts retailer’s shares returned from a trading halt after completing the institutional component of its $200 million equity raising. The struggling retailer raised $157 million from institutional investors at a 65% discount of 60 cents per new share. The company’s new CEO, Chris Wilesmith, said: “Raising $200M of equity will improve our financial flexibility and business resilience in the current market conditions and provide headroom to focus on ‘getting the engine running’ to improve our operating performance and execution.” The retail component of the entitlement offer, which is fully underwritten, is expected to raise a further $43 million.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price is down 7% to 13 cents. Investors have been selling the embattled semiconductor company’s shares after it released its full-year results. Brainchip reported revenue of US$1.9 million for the 12 months and a massive operating loss of US$21.7 million. Brainchip’s founder and director, Peter van der Made, said: “We recognize that the ultimate measure of our strategy is commercial success. The foundations we continue to build in 2026 – from silicon validation to reference designs – are the essential drivers of our commercial success, and we are executing this strategy with full conviction. We remain deeply committed to the success of this Company and look forward to your continued engagement.”

Coles Group Ltd (ASX: COL)

The Coles share price is down 9% to $20.20. This follows the release of the supermarket giant’s half-year results. For the 27 weeks ended 4 January 2026, Coles reported a 2.5% lift in sales revenue to $23.6 billion and a 12.5% jump in profit after tax (excluding significant items) to $676 million. This was short of expectations. For example, Morgans was expecting a 3.5% increase in revenue and a 16.5% jump in underlying net profit after tax to $699 million.

Harvey Norman Holdings Ltd (ASX: HVN)

The Harvey Norman share price is down 8% to $5.81. This morning, this retail giant released its half-year results and reported a 6.9% increase in sales revenue to $5.16 billion and a 16.5% lift in profit after tax to $321.9 million. While this looks strong on paper, it was a touch short of consensus expectations.

The post Why Bapcor, Brainchip, Coles, and Harvey Norman shares are dropping today appeared first on The Motley Fool Australia.

More reading

• Everything you need to know about the latest Coles dividend
• Bapcor shares crash 49% after shock loss and $200m emergency capital raise
• Why is the Coles share price crashing 8% on Friday?
• Harvey Norman posts 1H26 result
• Coles Group shares: Profit jumps, Supermarkets excel

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

As most Australians would be aware, the cost of living has been a major issue in our economy for a few years now. Inflation, although seemingly dormant over much of 2024 and 2025, was historically high over 2022 and 2023. It has reared its ugly head again in 2026, as those struggling with the Reserve Bank of Australia (RBA)’s interest rate hike last month can attest. Yet despite all of this, the superannuation balance needed to supposedly fund a comfortable retirement has stayed static for three years.

Well, until now, that is.

The Association of Superannuation Funds of Australia (ASFA) is responsible for a widely used projection for how much superannuation the average Australian needs to fund a comfortable retirement. That phrase may sound generic, but it in fact refers to a specific set of criteria that has been determined to represent a dignified retirement that allows for freedom and a certain level of comfort. This criterion includes provisions for adequate levels of private health insurance, regular holidays, and reliable access to essential services such as electricity and internet.

ASFA takes into account that many retirees are able to use their superannuation balances in conjunction with either a part or full Age Pension to fund their retirements.

For the past three years, ASFA has decreed that the minimum super balance needed to hit ‘comfortable retirement’ status is $595,000 for singles, and $690,000 for couples. That assumes complete home ownership.

However, those figures are now outdated.

How much superannuation does the average Australian need for a comfortable retirement?

This week, ASFA announced that it had determined that the superannuation balance now required to meet that comfortable retirement threshold has risen to $630,000 for singles and $730,000 for couples. That represents a rise of 5.88% for singles and 5.8% for couples.

So why the increase? Well, ASFA CEO Mary Delahunty has blamed the Age Pension itself:

Retirees’ living costs have risen, and support from the Age Pension has not kept pace with this rise. This means retirees need higher super savings to maintain a comfortable lifestyle… Costs in the categories that retirees tend to spend most on have risen faster than general consumer price inflation. So that means even though the Age Pension is indexed, a greater burden is placed on retirees’ personal super savings.

However, it wasn’t all good news. Delahunty also made this argument:

The good news is that Australians are reaching retirement with larger super balances than ever before. The super system is working really well, securing Australians’ retirements… We also have the Superannuation Guarantee that has been steadily rising since 2020 and is now at 12%.

ASFA also pointed out that “a 30-year-old worker with $30,000 in super today and earning $80,000 throughout their career adjusted for inflation is on track to retire with $645,000″.

Not all bad news indeed.

The post The superannuation balance you’ll need for a comfortable retirement just went up appeared first on The Motley Fool Australia.

More reading

• Neuren shares dip after FY25 result. Here’s what stood out
• This major new silver project will pay itself back in under a year its proponents say
• Everything you need to know about the latest Coles dividend
• What is Morgans saying about Jumbo Interactive and Tabcorp shares?
• Why TPG shares are down on strong full-year results

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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares in Neuren Pharmaceuticals Ltd (ASX: NEU) are slightly lower on Friday after the company released its full-year results for 2025.

In early afternoon trade, the Neuren share price is down 0.37% to $13.39.

Let’s take a closer look at what Neuren reported for the financial year.

Underlying royalties rise but total income declines

For the 12 months to 31 December 2025, Neuren generated royalty income of $65 million from DAYBUE, up 15% from $56 million in 2024.

Interest income also increased to $12 million from $11 million.

However, total income fell to $85 million from $228 million in 2024. The prior year included significant one-off revenue, including a milestone payment and proceeds from the sale of a rare paediatric disease priority review voucher.

Research and development expenditure increased to $36 million, up from $33 million, reflecting investment in the Phase 3 Koala trial of NNZ-2591 in Phelan-McDermid syndrome.

Neuren reported profit before tax of $39 million and net profit after tax (NPAT) of $30 million. This compares with $142 million in net profit in 2024, which again included the benefit of one-off items.

Cash position strengthens as buybacks continue

Neuren finished the year with $296 million in cash and short-term investments as at 31 December 2025, up from $222 million a year earlier.

Net cash generated from operating activities totalled $125 million during the year.

The company completed a $50 million on-market share buyback during 2025 and has announced a further buyback to commence in early March 2026.

Management said that growing cash flows from DAYBUE continue to fund development programs across Phelan-McDermid syndrome, Pitt Hopkins syndrome, and hypoxic-ischaemic encephalopathy.

US sales growth drives higher royalty outlook

DAYBUE, marketed by partner Acadia Pharmaceuticals in the United States, delivered net sales of US$391 million in 2025, up 12% from 2024.

Neuren’s royalty income from DAYBUE reflects tiered royalty rates on those sales.

Patient numbers continued to trend higher during the year, with more than 1,000 patients receiving treatment in the fourth quarter. Persistence rates at 12 months were reported at approximately 55%.

In December 2025, the US Food and Drug Administration (FDA) approved a new powder formulation, DAYBUE STIX. The company said that a broader commercial launch is being targeted for sometime early this year.

Acadia has guided to 2026 net sales of US$460 million to US$490 million. Based on current exchange rates, Neuren expects royalty income of $70 million to $77 million in 2026.

Phase 3 trial underway

Neuren’s second drug candidate, NNZ-2591, made progress during the year.

The Phase 3 Koala study in Phelan-McDermid syndrome began dosing patients in early 2026. This followed agreement with the US FDA on the trial design and the key measures of success.

The program has also received Orphan Drug and Fast Track status in the United States.

Neuren is continuing development of NNZ-2591 in Pitt Hopkins syndrome and hypoxic-ischaemic encephalopathy, with discussions ongoing with regulators.

The post Neuren shares dip after FY25 result. Here’s what stood out appeared first on The Motley Fool Australia.

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• Why Neuren shares are edging lower on Thursday

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.

Investigator Silver Ltd (ASX: IVR) has released a definitive feasibility study (DFS) into its Paris silver project in South Australia, saying a mining operation would cost $260 million to build and pay itself back in just 11 months.

The ASX silver company said in a statement on Friday that the mine, on the Eyre Peninsula, would generate strong cash flow from an open-pit mine using contract mining operators.

Numbers looking strong

The 11-month payback was calculated using a spot price for silver of US$80 per ounce, while the current spot price is US$92.07.

Investigator said every US$1 increase in the spot price would translate into a $42 million increase in life of mine cash flows.

Investigator Managing Director Lachlan Wallace said the study indicated that the company had a solid project on its hands.

He said:

The feasibility study confirms Paris as a tier-one, high-margin, finance-ready silver development project with strong leverage to the silver price and a practical near-term pathway to silver production. The project is a conventional low-risk development – shallow open-pit, contract mining, and whole-ore leach to produce silver doré; prioritising operability, schedule certainty and a reliable ramp-up. Importantly, the study outcomes are underpinned by a staged mine plan designed to bring forward higher-grade, lower strip ore, build stockpiles and strengthen resilience through the funding and ramp-up period. The development funding estimate includes appropriate allowances and contingency to support a robust, fully-costed funding plan.

Mr Wallace said the company’s focus would now swing to development, taking the designs through detailed engineering and contracting, “to firm up execution certainty, progress permitting, and prepare for financing”.

This phase would also include a high-density drilling program targeting the first three years of mining, “to strengthen grade confidence in the early cash-flow window and support a faster lender process to deliver more competitive financing outcomes, which includes pricing, covenants and overall terms”.

Mr Wallace added:

Our objective is clear – move rapidly and methodically from study into development, tighten execution certainty, position Paris to be construction-ready and then look to hit the go-button on building our world-class asset into Australia’s leading, pure silver mine.

The DFS said the breakeven price for the mine was US$37.35 per ounce of silver, with the mine to operate for 11 years, including construction, mining 1.5 million tonnes of ore per annum under the current plan.

Shares in the ASX silver company were steady on Friday at 12 cents apiece. The company was valued at $238 million at the close of trade on Thursday.

The post This major new silver project will pay itself back in under a year its proponents say appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for the silver price?

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

Coles Group Ltd (ASX: COL) shares are under pressure on Friday.

At the time of writing, the supermarket giant’s shares are down a disappointing 9% to $20.21 following the release of its half-year results.

While the market appears disappointed with parts of the results, there is at least one piece of good news for income investors. That is a higher fully franked dividend.

The Coles dividend

Coles’ board declared a fully franked interim dividend of 41 cents per share, up from 37 cents a year ago.

This follows August’s fully franked final dividend of 32 cents per share. That means, on a trailing basis, Coles will have paid a total of 73 cents per share over the past 12 months (32 cents final + 41 cents interim).

Based on the current share price of $20.21, that equates to a trailing dividend yield of approximately 3.6%, fully franked.

Key dates investors need to know

The interim dividend has an ex-dividend date of 10 March. To be entitled to the 41 cents per share payout, investors must own Coles shares before that date.

Once shares trade ex-dividend, new buyers are no longer eligible for that upcoming payment.

But for those that are eligible, Coles has named its payment date as 30 March.

In addition, the company revealed that its dividend reinvestment plan (DRP) will operate with no discount for this dividend.

What did Coles report today?

For the 27 weeks ended 4 January 2026, Coles reported a 2.5% lift in sales revenue to $23.6 billion, a 10.2% increase in group EBIT (excluding significant items) to $1.231 billion, and a 12.5% jump in profit after tax (excluding significant items) to $676 million.

Supermarkets delivered EBIT growth of 14.6%, with margins improving to 5.8%.

However, reported net profit after tax fell 11.3% to $511 million due to a $235 million provision relating to the Federal Court judgment in the Fair Work Ombudsman proceedings.

How does this compare to expectations?

According to a note out of Morgans, its analysts were expecting a 3.5% increase in revenue and a 16.5% jump in underlying net profit after tax to $699 million.

As you can see, Coles has fallen short of this, which may explain why its shares are tumbling today.

And with Woolworths Group Ltd (ASX: WOW) reporting stronger sales growth earlier this week, it seems that Coles could be giving back market share to its key rival.

The post Everything you need to know about the latest Coles dividend appeared first on The Motley Fool Australia.

More reading

• Why is the Coles share price crashing 8% on Friday?
• Coles Group shares: Profit jumps, Supermarkets excel
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• Here’s the share price I would buy Coles stock at

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

S&P/ASX 300 Index (ASX: XJO) shares are 0.06% higher at 9,119.8 points on the final day of earnings season today.

The ASX 300 reached a new all-time high of 9,134.4 points in earlier trading.

Meanwhile, the brokers have been busy reviewing company reports and re-rating ASX 300 shares as buys, holds, or sells.

Let’s take a look at what Morgans thinks of these two ASX 300 companies following their 1H FY26 reports.

Jumbo Interactive Ltd (ASX: JIN)

The Jumbo Interactive share price is $9.91, up 2.2% on Friday.

This ASX 300 gaming share has fallen 14.2% over the past 12 months.

Jumbo Interactive reported revenue of $85.3 million, up 29%, and total transaction value of $524.1 million, up 15.6%, for 1H FY26.

Underlying EBITDA climbed 22.6% to $37.5 million, and underlying net profit after tax (NPAT) increased 22.6% to $22.8 million.

Statutory NPAT was $15.5 million, down 13.4%.

Jumbo Interactive shares will pay a fully-franked interim dividend of 12 cents per share.

Morgans maintained its buy rating on the ASX 300 gaming share, commenting:

Jumbo Interactive (JIN) reported a solid 1H26 result, with most headline metrics pre-released.

While Lottery Retailing was impacted by a softer jackpot cycle, offshore segments delivered encouraging growth and margin expansion.

Managed Services continues to build momentum, with Canada EBITDA guidance upgraded and the UK tracking nicely.

Underlying SaaS trends remain healthy ex-Lotterywest.

Following the update, we believe JIN can delever by FY27F, assuming a normalisation in Australian jackpot activity and continued offshore earnings growth.

The broker kept its 12-month share price target unchanged at $14.90.

Tabcorp Holdings Ltd (ASX: TAH)

The Tabcorp share price is $1.07, up 3.9% on Friday.

This ASX 300 gaming share has soared 47.9% over the past 12 months.

Tabcorp smashed expectations with a 61.5% increase in NPAT (before significant items) to $35.7 million for 1H FY26.

This led to a 21.3% surge in the Tabcorp share price on the day.

Group revenue was $1,344.9 million, up 1% year over year, and EBITDA (before significant items) was $217.4 million, up 14.3%.

Tabcorp shares will pay an unfranked interim dividend of 1.5 cents per share, up 50% on last year.

After reviewing the numbers, Morgans maintained its accumulate rating on this ASX 300 gaming share.

The broker said:

Tabcorp Holdings (TAH) reported a very strong 1H26 result, with resilient turnover, improved margins and disciplined cost control driving double-digit EBITDA growth despite a softer wagering yield environment through the Spring Carnival and Footy Finals period.

New and exclusive products resonated well, particularly with younger cohorts, with digital turnover among 18-24 year olds up +14%.

The broker increased its 12-month price target on Tabcorp shares from $1.07 to $1.20.

The post What is Morgans saying about Jumbo Interactive and Tabcorp shares? appeared first on The Motley Fool Australia.

More reading

• Are Tabcorp shares a buy after soaring 24% following its half-year result?
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• Tabcorp shares surge higher after net profit smashes expectations
• Tabcorp FY26 half-year result: Earnings grow, dividends rise
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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 positions in and has recommended Jumbo Interactive. The Motley Fool Australia has recommended Jumbo Interactive. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

TPG Telecom Ltd (ASX: TPG) shares slipped 3% to $3.93 during lunch hour trade. This followed the company’s release of its FY25 results. The market reaction suggests investors were hoping for a little more from the telco’s turnaround story.

Over the past 12 months, TPG shares have declined 13%. They are trailing the S&P/ASX 200 Index (ASX: XJO), which has jumped 11% higher over the same period.

Return to profitability

TPG Telecom is one of Australia’s largest telecommunications providers. In recent years, the company has reshaped itself into a leaner, mobile-focused operator.

For FY25, TPG Telecom delivered a return to profitability. The telco posted a $52 million net profit after tax (NPAT), compared with a $140 million loss in FY24.

Service revenue edged 2.2% higher to approximately $4.18 billion. The growth was driven by a 4.2% lift in mobile service revenue as subscriber growth gathered pace. EBITDA rose strongly with 18.4% to $1,660 million; on guidance basis, up 2.0% to $1,637 million.

Higher revenue per user

TPG Telecom pointed to its regional mobile network expansion as a key driver of its 2025 results. It managed to add 228,000 new mobile subscribers over the year.

Growth skewed heavily toward its digital-first brands and enterprise, government and wholesale (EGW) division. The average revenue per user edged higher to $35.5. That’s a sign the telco isn’t just adding customers but extracting more value from them.

The balance sheet saw a significant reset over the year. TPG Telecom repaid billions in borrowings. It also returned substantial capital to shareholders through dividends, with total ordinary dividends of 18 cents per share declared for FY25.

Simplified business paying dividends

There are clear strengths in TPG Telecom’s story. Mobile momentum is building, cash flow has improved substantially, and the simplified business model appears to be gaining traction.

CEO and Managing Director Iñaki Berroeta said:

2025 was a transformational year for TPG Telecom. We delivered another year of mobile subscriber growth, cementing our position as Australia’s leading challenger telco… We are well-positioned to unlock further value for customers and shareholders. We are targeting continued growth in our share of Mobile Service Revenue, growing EBITDA margins as we keep costs strongly under control, and ongoing growth in free cash flow, earnings per share and return on capital.

However, risks remain. Competition across mobile and broadband markets is intense, and TPG Telecom must continue executing well to defend margins. Any missteps in its mobile-led strategy could quickly weigh on earnings and the price of TPG shares.

What next for TPG shares?

Looking ahead, TPG Telecom has provided guidance for FY26 EBITDA of $1,665 million to $1,735 million, with capital expenditure of around $750 million. The company expects continued mobile growth and tight cost control to support these targets.

Management is also targeting dividend growth for TPG shares backed by sustainable profits and cash flow. It will also push ahead with further efficiencies as it streamlines the business.

The post Why TPG shares are down on strong full-year results appeared first on The Motley Fool Australia.

More reading

• TPG Telecom FY25 earnings: Mobile subscribers drive profit growth
• 35 ASX All Ords shares with ex-dividend dates next week
• 5 ASX dividend shares paying 4% a year on average in 2026!

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

Shares in Bapcor Ltd (ASX: BAP) have collapsed on Friday after the automotive parts retailer delivered a heavy first-half loss. The company also unveiled a deeply discounted $200 million equity raising to strengthen its balance sheet.

At the time of writing, the Bapcor share price is down a massive 48.69% to 88 cents, marking a record low for the company.

Here’s what spooked investors.

Profit slump and balance sheet pressure

For the 6 months to 31 December 2025, Bapcor reported statutory revenue of $973 million, down 3.9% year on year.

Underlying EBITDA fell 40.4% to $76.9 million, while underlying net profit after tax (NPAT) dropped 87.3% to just $5.5 million.

On a statutory basis, the company posted a loss of $104.8 million. That included $110.3 million of significant items, largely related to impairments, inventory write-downs, restructuring costs, and accounting adjustments following an internal review.

Net debt rose to $387.3 million, up from $304.5 million a year earlier. Net leverage ballooned to 3.39x EBITDA, compared with 1.65x previously.

Free cash flow was negative $5.3 million for the half.

The board has elected not to declare an interim dividend.

$200 million raising at a steep discount

Alongside the results, Bapcor announced a fully underwritten $200 million equity raising to shore up its balance sheet.

The offer price has been set at 60 cents per share.

That represents a 48.4% discount to the theoretical ex-rights price of $1.16 and a 65% discount to the last close of $1.715 on 18 February.

Approximately 333 million new shares will be issued, representing around 98% of existing shares on issue.

The raising comprises a $150 million accelerated non-renounceable entitlement offer and a $50 million institutional placement.

Management said the funds will improve financial flexibility and resilience, with pro forma leverage expected to reduce to around 2.13x at 31 December 2025.

Banking terms revised

Given the sharp deterioration in earnings, Bapcor has also secured temporary amendments to its banking covenants.

Lenders have agreed to lift the net leverage covenant to 3.5x for upcoming test periods and lower the interest cover requirement before it resets in 2027.

While management framed this as a proactive balance sheet reset, the need for covenant relief highlights the pressure the business is under.

January trading offered limited reassurance. Group like-for-like sales were down 0.9%, with trade sales falling 2.4%. Networks, retail, and New Zealand recorded modest growth.

Foolish Takeaway

Today’s sell-off points to concerns around earnings stability and balance sheet strength.

Issuing new shares equivalent to roughly 98% of existing stock is highly dilutive. Shareholders who don’t participate will see their ownership materially reduced.

The need to loosen leverage and interest cover tests suggests earnings have deteriorated faster than expected.

On the positive side, the $200 million raise reduces balance sheet risk and gives management breathing room to execute its turnaround plan.

At 88 cents, the stock may look cheap. But from here, management needs to prove that margins can recover and that cash flow can stabilise. Until that happens, the share price may struggle to turn around.

The post Bapcor shares crash 49% after shock loss and $200m emergency capital raise appeared first on The Motley Fool Australia.

More reading

• Down 50% from recent highs: Is it time to buy these ASX 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.

Block Inc (ASX: XYZ) shares are ending the week with a bang.

At the time of writing, the payments giant’s shares are up 30% to $96.60.

This follows the release of its fourth-quarter and full-year results this morning.

Block shares rocket on results day

For the three months ended 31 December, Block reported a 24% increase in gross profit to US$2.87 billion.

This was driven by a 33% lift in Cash App gross profit to US$1.83 billion and a 7% increase in Square gross profit to US$993 million.

For the 12 months, gross profit increased 17% to US$10.36 billion. This reflects a 21% jump in Cash App gross profit to US$6.34 billion and a 9% lift in Square gross profit to US$3.94 billion.

FY 2025 adjusted operating income came in at US$2.08 billion, representing a 20% margin.

But there was something else that gave Block shares a huge lift today. Job cuts.

What was announced?

Block has announced that AI tools are making it possible to undertake a major reduction in its head count. Block’s founder and CEO, Jack Dorsey, explained:

Today we shared a difficult decision with our team. We’re reducing Block by nearly half, from over 10,000 people to just under 6,000, which means that over 4,000 people are being asked to leave or entering into consultation. I want to use this letter to explain why I believe this is the right path for our company, and what Block looks like going forward.

The core thesis is simple. Intelligence tools have changed what it means to build and run a company. We’re already seeing it internally. A significantly smaller team, using the tools we’re building, can do more and do it better. And intelligence tool capabilities are compounding faster every week. I don’t think we’re early to this realization. I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively.

Outlook

Looking ahead, the company is guiding to gross profit of US$12.2 billion, which represents 18% annual growth.

This is expected to be achieved with an operating income margin of 26%.

The company’s COO and CFO, Amrita Ahuja, commented:

We’re executing well on our growth strategies across the business. At Investor Day we shared our preliminary view of gross profit for 2026, which called for 17% year-over-year gross profit growth. We now expect to deliver gross profit growth of 18% year over year in 2026, to $12.20 billion. We are focused on sustaining momentum and we plan to continue to invest in significant long term growth initiatives across our agentic AI infrastructure, proactive intelligence products, high ROI go to market expansion, Neighborhoods, and high return on capital lending products.

The post Why are Block shares rocketing 30% on Friday? 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 Block. 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.