Tag: Stock pick

It’s been a volatile ride for Electro Optic Systems Holdings Ltd (ASX: EOS) shares so far in 2026. 

The share price has swung anywhere between $5.86 and an all-time high of $12.26 in early June.

At the time of writing, EOS shares are down around 4% on the day and trading at $10.56 each.

The latest fall means the shares are around 6% higher for the year to date and a huge 331% higher than this time last year.

What caused the huge share price rally over the past 12 months?

The Aussie defence company, which develops and produces advanced electro-optic technologies, benefited from surging demand for exposure to the defence sector in late 2025 and early 2026. 

Ongoing conflict in the Middle East and rising geopolitical tensions have led to an uptick in government defence spending. This includes the development of missiles or submarines, as well as technologies such as drones, AI, and electronic warfare.

As a result of strong demand for this defence technology, EOS has won several major contracts in 2026. This has helped to drive investor confidence and has sent the share price soaring.

The good news has flowed through to the middle of the calendar year. In late May, the defence company announced that two experienced and high-profile directors would join its board as non-Executive Directors.

At the end of last week, S&P Dow Jones Indices announced its quarterly rebalance of the S&P/ASX Indices. EOS will join the S&P/ASX 200 Index (ASX: XJO) on the 22nd of June.

While strong tailwinds have driven EOS shares higher, headwinds have also caused the share price to fluctuate.

What headwinds have pushed EOS shares lower?

News of significant insider selling late last year raised concerns about the valuation of the EOS share price. EOS announced that its CEO, CFO, and other senior Executives had exercised more than 3.4 million of share options with plans to sell a significant portion. The news caught investors off-guard, and the volume of shares being disposed of raised questions. 

In April, EOS also reported that it was issued a $4 million penalty in the Federal Court for failing “to disclose a materially significant downgrade to its 2022 revenue forecast to the market for approximately 14 weeks”.

In May, the company also raised $150 million through a fully underwritten institutional placement at $8 per new share. EOS also raised $40 million through a private placement to an entity related to Calidus. This is a major provider of defence equipment, technology, and services based in Abu Dhabi, United Arab Emirates. These funds will be used to acquire MARSS and increase balance sheet flexibility.

It’s been an action-packed year for EOS shares. But the question now is, what’s next?

Are EOS shares still a buy? Or have they reached their peak?

TradingView data shows that analysts have a strong buy consensus on EOS shares. The average $12.94 target price implies around a 24% upside at the time of writing. 

But some are even more bullish and think the defence shares have the potential to climb another 53% to $16 over the next 12 months.

The post Up 331% in a year. Can EOS shares keep storming higher? appeared first on The Motley Fool Australia.

More reading

• EOS and these ASX shares are joining the ASX 200 index this month
• Iran war impact on ASX defence shares and ETFs
• If you own this ASX 200 stock, here’s how to make a quick 38% return next week
• The SpaceX IPO is coming. Here’s how ASX investors can benefit from the excitement
• These ASX stocks have hit the ground running in June – can they keep rising?

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 positions in and has recommended Electro Optic Systems. 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 track to end the day lower. At the time of writing, the benchmark index is down 0.4% to 8,589.7 points.

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

Aeris Resources Ltd (ASX: AIS)

The Aeris Resources share price is down 7% to 38.5 cents. This appears to have been driven by broad weakness in the mining sector today, which has overshadowed a promising announcement this morning. Aeris Resources revealed that significant gold intersections continue at Golden Plateau. It achieved high-grade gold intersections from the Main, North and East lodes. Aeris’ executive chair, Andre Labuschagne, said “The consistent performance of our geological model continues to impress, with drill holes across the Main, North and East lodes intersecting mineralisation at their predicted positions and delivering some of our strongest results to date.”

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down almost 4% to $19.14. Investors have been selling gold stocks today following a pullback in the price of the precious metal. Traders appear to be betting on higher oil prices causing a spike in inflation, putting pressure on central banks to raise interest rates. The S&P/ASX All Ordinaries Gold index is down 4.5% at the time of writing.

REA Group Ltd (ASX: REA)

The REA Group share price is down almost 4% to $152.74. This may have been driven by a broker note out of Bell Potter this morning. According to the note, the broker has downgraded the property listings company’s shares to a sell rating (from buy) with a heavily reduced price target of $137.00 (from $217.00). Bell Potter said: “We downgrade our recommendation to Sell (prev. Buy). REA currently trades around 28x FY27e P/E, which is a level it has historically only traded at during EPS declines; VA consensus currently anticipates 14% EPS growth in FY27 (BPe: -2%). REA also appears expensive against other ASX classifieds on a FCF growth basis at 1.7x EV/FCFg in FY27e.”

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is down 8% to $6.95. This is despite there being no news out of the memory technology developer. However, it is worth noting that chip stocks were sold off on Wall Street on Friday. So, today’s selling of Weebit Nano shares could be a reflection of that weakness.

The post Why Aeris Resources, Northern Star, REA Group, and Weebit Nano shares are falling today appeared first on The Motley Fool Australia.

More reading

• Why did this major broker just do a backflip on REA Group shares?
• 5 things to watch on the ASX 200 on Tuesday
• How to become rich by investing in ASX shares
• Why IperionX, Northern Star, Opthea, and Superloop shares are tumbling today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has positions in REA 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 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.

Woodside Energy Group Ltd (ASX: WDS) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) energy stock closed on Friday trading for $30.91. At the time of writing (remember, markets were closed on Monday for the King’s Holiday), shares are swapping hands for $31.06 apiece, up 0.5%.

For some context, the ASX 200 is down 0.5% at this same time following lower expectations for US Federal Reserve interest rate relief and renewed fighting in the Middle East over the weekend.

That sees the Brent Crude oil price holding at US$94 per barrel, up 54% year to date.

Surging global energy prices, along with its own operational successes, have sent the Woodside share price up 31.3% in 2026, smashing the 1.7% year-to-date losses posted by the benchmark index.

And that’s not including the 83.5 cents per share fully-franked dividend that Woodside paid to eligible stockholders on 27 March. Woodside stock currently trades on a 5.4% fully-franked trailing dividend yield.

And looking ahead, MPC Markets’ Mark Gardner expects the Aussie oil and gas giant to be well-placed to keep outperforming (courtesy of The Bull).

Here’s why.

Should I buy Woodside shares today?

“Woodside is one of Australia’s leading oil and gas producers,” Gardner said. “The company remains leveraged to LNG demand from Asia.”

“Energy prices remain volatile, but gas continues to play an important role in regional energy security,” he noted.

Supporting his buy recommendation on Woodside shares, Gardner pointed to the company’s promising growth projects. That includes the Scarborough Energy project, located on and offshore in Western Australia.

According to Gardner:

The Scarborough Energy project is reportedly 96% complete and on track for first LNG cargoes in the fourth quarter of 2026. In our view, the market isn’t fully pricing in the production uplift from Woodside’s major growth projects.

While Woodside’s passive income payouts have come down from their peak levels of 2022 and 2023, Gardner remained bullish on the energy stock’s outlook.

“The dividend has been under pressure, but the balance sheet and asset base remain appealing for investors seeking energy exposure,” he concluded.

What’s the latest from the ASX 200 oil and gas stock?

Woodside reported its first-quarter results on 29 April.

Highlights included a 7% quarter-on-quarter increase in operating revenue, which reached US$3.26 billion.

As for the strong balance sheet Gardner mentioned above, Woodside reported liquidity of around US$8.3 billion as at 31 March.

And on the major projects front, recently appointed Woodside CEO Liz Westcott noted, “We continued disciplined delivery of major cash-generative growth projects.”

Atop the Scarborough Energy Project, the company’s Trion oil project was 56% complete, while its Louisiana LNG Project was 24% complete at the end of the quarter.

Woodside shares closed up 2% on the day of the results release.

The post Why Woodside shares just got a big buy call appeared first on The Motley Fool Australia.

More reading

• Why Coles and Woodside shares are being tipped as buys
• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Why DroneShield, Pro Medicus, SRG Global, and Woodside shares are charging higher today
• Top 10 ASX shares bought and sold by investors in May

Motley Fool contributor Bernd Struben 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 oOh!Media Ltd (ASX: OML) are trading up more than 8% after the company confirmed that a third potential takeover bidder was running the ruler over the company.

An article in the Australian Financial Review on Tuesday morning said that private equity company Bain Capital had made a non-binding offer to buy oOh!media about two weeks ago, and was still interested in an acquisition.

Another bidder in the mix

oOh!Media confirmed in a statement to the ASX on Tuesday that this was correct.

It added:

As disclosed to the market on 11 May 2026, in addition to progressing discussions with Pacific Equity Partners and I Squared Capital, oOh! is engaging with other parties regarding a potential change of control transaction. oOh! has received conditional non-binding indicative offers from Bain Capital and other financial sponsors which are consistent with the terms of the I Squared Capital proposal. oOh! does not intend to comment further on press speculation regarding change of control proposals. oOh! will continue to update the market in accordance with its continuous disclosure obligations.

oOh!Media shares were up 8.4% on the news to $1.36, which is still a discount to the $1.45 per share offered by I Squared Capital and the $1.40 per share from Pacific Equity Partners.

Bids priced too cheaply

oOH!Media Chair Tony Faure told the company’s annual general meeting in May that “the Board, together with our advisers, has considered and unanimously determined that they do not adequately reflect the intrinsic value of oOh!”.

He added:

However, we are prepared to engage with all parties to assess whether any proposal may emerge that is capable of being recommended by the Board. oOh! will provide parties with access to a limited amount of due diligence information to enable them to assess revised proposals that may be capable of the Board’s recommendation. We are committed to moving at pace as we evaluate the offers, with a firm focus on achieving the best outcome for shareholders.  

Company operations performing well

Also in May, the company said it was trading strongly and expected first-quarter revenue growth of 7% in Australia and 4% for the group, slightly ahead of projections from February.

oOh!Media said at the time that its Operational Excellence program and its exit from retail media delivered a 9% headcount reduction and $12 million in annualised savings from FY27.

The company said on the downside that first-half gross margins would be softer than anticipated.

oOh!Media Managing Director James Taylor said:

The Out of Home sector continues to benefit from strong structural growth, and we are executing our strategy to cement oOh!’s market leadership. The launch of MOVE is a growth catalyst, clearly demonstrating the superior quality and unmatched scale of our network to advertisers. Since February we have identified $12 million in annualised FY26 run rate pre-tax cash savings and an array of related operational benefits. This unlocks further value for our customers and shareholders. While we note some advertiser uncertainty given the broader macro environment, we are pleased with our overall outlook and look forward to updating shareholders at this morning’s AGM.

oOh!Media is valued at $662.9 million.

The post How high could the bidding war for this ASX 300 company go after a third takeover suitor emerges? appeared first on The Motley Fool Australia.

More reading

• Why 4DMedical, Eagers Automotive, IDP Education, and oOh!Media shares are charging higher today
• This takeover target is beating forecasts, sending shares in the ASX media company higher
• This ASX media company has attracted a second takeover offer. Let the bidding war begin

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.

The S&P/ASX 200 Index (ASX: XJO) is on course to start the shortened week with a decline. In afternoon trade, the benchmark index is down 0.5% to 8,581.9 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

4DMedical Ltd (ASX: 4DX)

The 4DMedical share price is up 2.5% to $4.06. This is despite there being no news out of the medical technology company. However, it is worth noting that Bell Potter is bullish on the company. Last week, the broker retained its speculative buy rating on 4DMedical’s shares with an improved price target of $6.00 (from $4.85). Bell Potter said: “The clinical data from the CLEAR study will provide the necessary evidence to further support broad adoption for diagnosis of PE [Pulmonary Embolism]. Outpatient reimbursement will continue under the existing category III CPTA codes paid at US$650/scan. TAM for this market is estimated at $2.5bn annually.”

Eagers Automotive Ltd (ASX: APE)

The Eagers Automotive share price is up 3% to $21.49. This also may have been driven by a broker note out of Bell Potter. This morning, the broker retained its buy rating on the automotive retailer with a slightly trimmed price target of $28.00 (from $28.75). It said: “In our view the stock looks reasonable value trading on PE ratios of c.20x and 17x in 2026 and 2027 where the latter is the first full year of the CanadaOne investment (so is the more relevant in our view). We also see the recent trading update at the AGM as effectively “cleansing” the market as the H1 result has now been largely flagged – so there should be no surprises.”

IDP Education Ltd (ASX: IEL)

The IDP Education share price is up 6% to $2.12. On Friday, S&P Dow Jones Indices revealed that the language testing and student placement company was being removed from the ASX 200 index at this month’s quarterly rebalance. While this is usually a negative for a stock, IDP Education is one of the most shorted shares on the local market. As some short sellers are only able to target ASX 200 shares, it is possible that they are buying shares today to close their sizeable positions. The rebalance will take place prior to the open of trading on 22 June.

oOh!Media Ltd (ASX: OML)

The oOh!Media share price is up 8% to $1.36. This morning, this out of home media company revealed that it has received a competing non-binding takeover offer from Bain Capital and other financial sponsors. It revealed that the offer is consistent with the terms of the I Squared Capital proposal. It concludes: “oOh! does not intend to comment further on press speculation regarding change of control proposals. oOh! will continue to update the market in accordance with its continuous disclosure obligations.”

The post Why 4DMedical, Eagers Automotive, IDP Education, and oOh!Media shares are charging higher today appeared first on The Motley Fool Australia.

More reading

• How high could the bidding war for this ASX 300 company go after a third takeover suitor emerges?
• Why this ASX 200 stock is climbing after a $2 million insider buy
• Buy, hold, sell: 4DMedical, Cochlear, Westpac shares
• Bell Potter just tipped 12% to 34% upside for these consumer discretionary stocks
• These shares are being dumped from the ASX 200 index

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

The ASX blue-chip share space is a great place to find high-quality opportunities that can provide stability and long-term growth. Some leading fund managers have revealed where they see opportunities.

The listed investment company (LIC) WAM Leaders Ltd (ASX: WLE) focuses on large ASX shares that are quality and can deliver good returns.

Let’s take a look at two ASX blue-chip shares that the Wilson Asset Management (WAM) team likes.

Rio Tinto Ltd (ASX: RIO)

The ASX mining share produces a range of commodities, including iron ore, copper, lithium, aluminium, and bauxite.

WAM noted that the miner continued to perform well with its release of “solid” quarterly production in the three months to March 2026.

The fund manager said that production across key commodities demonstrated resilience despite weather-related disruptions to Pilbara iron ore shipments.

WAM said there has been a broad improvement in global market sentiment towards the Chinese economy, alongside supportive policy signals from the Chinese government, which gave (and could give) tailwinds for the Rio Tinto share price.

China is a key importer of iron ore, so confidence in the Chinese economy and policy changes from its government are “significant” for ASX mining shares.

The investment team explained that Rio Tinto remains a core holding in the WAM Leaders portfolio for several reasons. Firstly, WAM believes the market could continue to see further improvements in confidence about China.

WAM thinks that the Rio Tinto share price remains attractive, with the implied iron ore price by the Rio Tinto share price (at the time of writing) “representing a meaningful discount to both current and longer-term average market prices.”

Goodman Group (ASX: GMG)

The other ASX blue-chip share that WAM highlighted was Goodman Group, a global industrial property owner and developer.

WAM noted that commercial negotiations with prospective customers across multiple development projects globally are progressing well, with formal contracts expected to be signed over the rest of the year.

The trajectory gives the market increased confidence that upcoming projects will begin generating earnings in the near term.

WAM Leaders then explained why this ASX blue-chip share is so appealing right now:

The WAM Leaders investment team continues to see significant runway ahead for Goodman Group, driven by the global infrastructure build-out needed to support artificial intelligence (AI) demand, and the company’s development platform that is difficult to replicate at scale.

Of course, these aren’t the only ASX shares out there that could be great buys.

The post Why these ASX blue-chip shares are strong buys right now appeared first on The Motley Fool Australia.

More reading

• Rio Tinto shares slump 7.5% from an all-time high: Buy, sell or hold?
• 3 top ASX mining shares for investors right now
• Are Fortescue or Rio Tinto shares the better buy?
• ASX 200 iron ore shares down 5%: Should you buy the dip?
• 3 ASX 200 mining shares to buy: experts

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

Rio Tinto Ltd (ASX: RIO) shares have fallen into the red in Tuesday’s lunchtime trade.

At the time of writing, the miner’s shares are down around 2.5% to $180.07 a piece. The latest fall means the share price has now fallen around 7.5% since spiking to an all-time high of $194.47 earlier this month. At one point this morning, the shares were trading as low as $178.18 each.

Rio Tinto shares have enjoyed a strong rally so far in 2026, up around 22% year to date and 65% higher than a year ago.

This year’s gains have put Rio Tinto in 8th place on the S&P/ASX 200 Index (ASX: XJO) by market capitalisation.

What has driven Rio Tinto shares higher this year?

Renewed confidence in the outlook for copper and iron ore – the two key commodities that Rio Tinto produces – has been a strong tailwind for the miner’s share price this year.

The price of iron ore climbed to a multi-year high in May, while copper spiked to an all-time high in early June.

Commodity prices aren’t the only thing driving the miner’s share price higher.

In April, Rio Tinto also posted impressive first-quarter FY26 production results, revealing a 9% year-on-year increase in copper equivalent production. 

Iron ore production in the Pilbara region also jumped 13%, making it the second-best Q1 production since 2018, despite weather disruptions and reduced shipments.

Rio Tinto also confirmed that it is focusing on expanding production volumes across its core commodity assets. 

Why is the share price falling today?

There isn’t any recent price-sensitive news out of Rio Tinto to explain today’s share sell-off. It’s likely a combination of softer commodity prices and investors taking their gains off the table after the latest rally.

According to Trading Economics data, copper futures are around US$6.3 per pound, down from a high of around US$6.7 per pound earlier this month. 

Meanwhile, iron ore has fallen below US$101 per tonne and is now around 9% lower than a month ago. 

The ongoing Middle East conflict continues to put pressure on commodities, thanks to higher supply chain costs and tighter global supply.

Over the long weekend, Israel and Iran exchanged strikes for the first time since an April ceasefire, raising fears of a broader regional conflict. The fighting has since ceased, but concerns about future attacks highlight ongoing volatility in the region. Investors are on the edge of their seats, waiting to see what happens next.

Are the shares a buy, sell, or hold now?

Market Index data shows that analysts are mostly split between hold and buy ratings, but the latest $172.97 target price implies a potential 3% downside for Rio Tinto shares.

TradingView data reflects something similar. Seven out of 16 analysts have a buy or strong buy rating on the shares. Another seven have a hold rating, and two have a strong sell rating on the miner’s stock.

The average $180.23 target price implies a potential 0.2% downside at the time of writing. Although the maximum $211.41 target price still implies Rio Tinto shares have the potential to climb another 17% over the next 12 months.

The post Rio Tinto shares slump 7.5% from an all-time high: Buy, sell or hold? appeared first on The Motley Fool Australia.

More reading

• Why these ASX blue-chip shares are strong buys right now
• 3 top ASX mining shares for investors right now
• Are Fortescue or Rio Tinto shares the better buy?
• ASX 200 iron ore shares down 5%: Should you buy the dip?
• 3 ASX 200 mining shares to buy: experts

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.

Eagers Automotive Ltd (ASX: APE) is back on investors’ radar on Tuesday after a fresh sign of confidence from a major insider.

At the time of writing, the Eagers Automotive share price is up 3.07% to $21.46.

The car dealership group has now gained around 5% over the past week and about 23% over the past year.

Today’s move gives investors another reason to look at a stock that has been quietly climbing again.

So, what has the market been interested in today?

Eagers Automotive extends its buyback

In a statement to the ASX, Eagers Automotive told investors it intends to continue its on-market share buyback for another 12 months.

The buyback is set to begin on 1 July 2026 and run until 30 June 2027, subject to market conditions.

Under the program, the company can buy back up to 10% of its issued share capital.

That represents up to 28.2 million shares.

A buyback can be attractive to investors because it reduces the number of shares on issue when completed.

All else being equal, that can lift earnings per share (EPS) and increase the ownership stake of remaining shareholders.

Of course, the final impact depends on how many shares are actually bought back and the price paid.

Eagers Automotive said the buyback reflects the board’s focus on capital management and the company’s strong balance sheet.

Insider buying adds interest

The buyback update also follows a recent share purchase from businessman Nick Politis.

Mr Politis, a non-Executive Director of Eagers Automotive, recently spent about $2 million buying another 100,000 shares.

That lifted his holding to around 79.4 million shares.

The timing is likely to draw some attention, especially given the stock’s strong gains over the past year.

Broker still sees upside

Brokers are also weighing in following the recent share price move.

Bell Potter has reportedly cut its price target on Eagers Automotive by 2.6% to $28 per share.

Keep in mind, a lower price target is not usually something investors cheer.

But in this case, the new target still sits well above where the stock is trading today.

Based on the current Eagers Automotive share price of $21.26, the target points to potential upside of almost 32%.

That may be one reason the market is looking past the small target cut.

However, there are still some things to watch.

At its AGM, Eagers Automotive has warned that supply constraints are creating near-term uncertainty heading into the second half.

All eyes will be on whether that pressure eases and how well the company keeps margins moving in the right direction.

The post Why this ASX 200 stock is climbing after a $2 million insider buy appeared first on The Motley Fool Australia.

More reading

• Why 4DMedical, Eagers Automotive, IDP Education, and oOh!Media shares are charging higher today
• Bell Potter just tipped 12% to 34% upside for these consumer discretionary stocks
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX 200 shares today
• Why did ASX 200 retail shares lead the market last week?

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

S&P/ASX 200 Index (ASX: XJO) shares have had a rough start to the short trading week.

In the first 15 minutes of trading on Tuesday, the ASX 200 fell 134 points or 1.55% to a near three-week low of 8,490.9 points.

However, the market has recovered more than half of that initial loss. ASX 200 shares are now down 0.7% to 8,565.1 points.  

Meanwhile, let’s check out 3 ASX 200 shares with new ratings from the experts on The Bull this week.

4DMedical Ltd (ASX: 4DX)

The 4D Medical share price is $4.10, up 3.3% today and down 10% in the calendar year to date (YTD).

The longer term view on this ASX 200 healthcare share is extraordinary.

The 4DMedical share price has soared 1,260% over 12 months and 191% over five years.

Mark Gardner from MPC Markets has a buy rating on the advanced respiratory imaging technology company.

Gardner explains:

The shares remain volatile, and the business is still in the early stages of converting partnerships into material revenue.

However, the company has a stronger funding position after its recent capital raise and a clearer commercial pathway than in prior years.

We believe the market is undervaluing the longer term opportunity at recent levels.

Cochlear Ltd (ASX: COH)

Cochlear shares are $103.14, up 2.7% today and down 60% YTD.

The Cochlear share price hit an 11-year low of $88.74 after the company downgraded its earnings guidance in April.

The hearing implant maker cited many headwinds afoot.

They include capacity constraints at hospitals, falling consumer confidence, cancellations in the Middle East amid the war in Iran, industrial action in Italy and Spain, and China cutting its reimbursements to patients.

Gardner has a hold rating on Cochlear shares, commenting:

Cochlear remains a global leader in hearing implants, but the investment case has become more balanced.

The shares have been under pressure after analysts re-assessed growth expectations and lowered revenue, margin and valuation assumptions.

The long term demand profile remains attractive, supported by ageing populations and continued adoption of implantable hearing technology.

However, the market will need evidence that procedure volumes and margins can recover before a stronger recommendation is warranted.

At these levels, investors can continue to hold, but should monitor earnings momentum and further analyst revisions.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is $34.31, down 1.4% today and down 12% YTD.

Gardner has a sell rating on this ASX 200 bank share.

He says Westpac has a strong retail franchise, but its valuation appears stretched.

For context, the Westpac share price hit a record high of $43.43 in February.

Gardner remarked:

Consensus targets imply downside from current levels.

The bank has made progress on simplifying its operations and cutting costs, but, in our view, earnings growth is still expected to lag the broader Australian market.

The bank is up against competitive pressures and the risk of softer credit conditions.

Investors may want to consider taking a profit at these levels.

The post Buy, hold, sell: 4DMedical, Cochlear, Westpac shares appeared first on The Motley Fool Australia.

More reading

• Why 4DMedical, Eagers Automotive, IDP Education, and oOh!Media shares are charging higher today
• BHP, CBA, and Westpac shares are sells this week: experts
• Which ASX bank stock is the best buy right now?
• Top brokers name 3 ASX shares to buy next week
• Why everyone selling Cochlear shares right now could regret it in 3 years

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

Following a stellar multi-year run, commencing in October 2023, Commonwealth Bank of Australia (ASX: CBA) shares have faced growing headwinds over the past months.

In late morning trade on Tuesday, shares in the S&P/ASX 200 Index (ASX: XJO) bank stock are down 0.2%, changing hands for $160.59 apiece.

Now, that outpaces the 1% losses posted by the ASX 200 at this same time today. But over the past 12 months, CBA shares have dropped 11.8% compared to the 0.4% one-year loss posted by the benchmark index.

Even if we add in CBA’s fully franked 3.1% trailing dividend yield, the big four Aussie bank has still underperformed.

Part of that pressure has stemmed from repeated analyst warnings about CBA’s premium valuations relative to peers, such as ANZ Group Holdings Ltd (ASX: ANZ), Westpac Banking Corp (ASX: WBC), and National Australia Bank Ltd (ASX: NAB).

Part of it has been driven by broader investor rotation into ASX mining shares such as BHP Group Ltd (ASX: BHP) amid booming global commodity prices.

And a growing part of the recent selling pressure stems from the deteriorating outlook for the Aussie economy, particularly its core housing market.

Which brings us to…

Why CBA shares just got a major downgrade

As if the ASX 200 banks didn’t have enough on their plates, the new Federal Budget property tax changes impacting negative gearing on residential homes look set to unleash further difficulties.

Indeed, on Friday, Morgan Stanley cautioned that the tax shakeup, combined with the three RBA interest rate hikes this calendar year, could see Aussie home prices tumble 10% by the end of 2027.

This could also see ASX 200 bank stocks facing a big increase in non-performing loans over the year ahead, even as their new housing loans face a decline.

According to Morgan Stanley analyst Richard Wiles (quoted by The Australian Financial Review):

Our channel checks suggest that there have already been changes in housing market sentiment, borrower behaviour and developer plans.

Auction clearance rates are falling, investors have stepped aside, new development signoffs are on hold, and price expectations are being revised…

Over the next year, we expect slower loan growth, emerging margin headwinds, rising loss rates, and greater scrutiny of capital buffers. This will lead to further downgrades and an ongoing de-rating.

In light of these concerns, Morgan Stanley cut its price target for CBA shares to $125. That represents a potential further downside of 22.2% from current levels.

As for the other big four ASX 200 bank stocks, the broker reduced its price target for NAB shares to $34.50, or 4.2% below current levels.

Morgan Stanley’s price forecast for ANZ was cut to $34, 0.8% above current levels.

And its price target for Westpac shares was cut to $31.50, 8.4% below current levels.

The post Why Morgan Stanley expects CBA shares to plunge another 22% appeared first on The Motley Fool Australia.

More reading

• Buy, hold, sell: Coles, BHP, CBA shares
• How to start investing in ASX shares with just $500
• BHP, CBA, and Westpac shares are sells this week: experts
• Which ASX bank stock is the best buy right now?
• Is the CBA share price a buy in June?

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