Tag: Stock pick

The team at Morgans has been busy looking at its financial models for a number of ASX dividend stocks.

Two that have fared well and been given buy ratings following their results releases are named below. Here’s why Morgans remains bullish on these stocks:

IPH Ltd (ASX: IPH)

Morgans continues to recommend this intellectual property services company to clients.

In response to its half-year results, the broker has put a buy rating and $5.39 price target on the ASX dividend stock. It said:

IPH’s 1H26 result was broadly in line with consensus, reporting like-for-like (LFL) revenue and EBITDA growth at the group level. Whilst Canada and Asia showed growth, ANZ remains impacted by lower US PCT filings. IPH’s valuation is undemanding (<8x FY27F PE), however we note investor patience is required given the delivery of organic growth (and return of key US PCT’s) looks to be the catalyst for a sustained re-rating. Maintain Buy recommendation.

As for income, Morgans is forecasting fully franked dividends of 38 cents per share in FY 2026 and then 39 cents per share in FY 2027. Based on its current share price of $3.67, this equates to very generous dividend yields of 10.3% and 10.6%, respectively.

Sonic Healthcare Ltd (ASX: SHL)

Another ASX dividend stock that is rated highly by the team at Morgans is Sonic Healthcare.

It responded to its better than expected half-year results by retaining its buy rating with a trimmed price target of $28.64. It said:

1HFY26 result was better than expected, with underlying NPAT c4% ahead and organic revenue growth of 5%, demonstrating resilience across most regions. Underlying EBITDA was broadly in line, margins expanded and cost discipline remained evident. Importantly, FY26 guidance was maintained, an operational review of the US business is underway, and sale-and-leaseback activity introduces capital management optionality.

While structural growth remains moderate, we view the result as evidence that the market’s “broken core” narrative has been overstated. Execution now becomes the key driver, but at subdued trading levels, the risk/reward skews favourably. We adjust FY26-28 estimates (mainly FX related), with our target price decreasing to A$28.64. BUY.

With respect to income, the team at Morgans is expecting Sonic Healthcare to reward shareholders with dividends per share of $1.08 in FY 2026 and then $1.11 in FY 2027. Based on its current share price of $23.02, this would mean dividend yields of 4.7% and 4.8%, respectively.

The post Morgans says these buy-rated ASX dividend stocks offer yields up to 10% 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended IPH Ltd and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Australian share market may have hit a record high this month, but the gains have not been evenly spread.

Banks and miners have done much of the heavy lifting. Outside those sectors, a number of high-quality ASX shares are still well below their previous peaks. And that is where I think the opportunity may lie.

Warren Buffett has always made it clear that he is not interested in cheap stocks for the sake of it. He wants wonderful businesses at fair prices.

In my view, recent weakness in parts of the ASX has dragged some quality names lower than necessary. That does not make them guaranteed winners, but it may make the risk-reward more attractive than it has been in years.

Here are a few that stand out to me.

Goodman Group (ASX: GMG)

Goodman shares are down around 22% from their highs.

This is a global industrial property heavyweight with exposure to logistics, warehouses, and data-related infrastructure. It benefits from long-term structural trends such as ecommerce growth and supply chain modernisation.

I do not see Goodman as a cheap company in the traditional sense. It rarely trades at bargain valuations. But when sentiment cools and the share price pulls back meaningfully, I think it can offer a fair entry point into a high-quality platform with strong development capabilities and global reach.

That feels far more Buffett-like than chasing a low-quality stock just because its price-to-earnings (PE) ratio is low.

WiseTech Global Ltd (ASX: WTC)

WiseTech has fallen roughly 63% from its high. That is a dramatic re-rating.

The company still operates a mission-critical global logistics software platform. Its products are deeply embedded in customer workflows, and switching costs are significant. Those characteristics resemble the kind of durable competitive advantage Buffett often talks about.

Of course, high-growth software shares can be volatile, and expectations were stretched at the top. But after such a sharp decline, I think the conversation shifts from overhyped to whether the market is now too pessimistic.

If the business continues to execute and grow earnings over time, the current weakness could prove to be a compelling buying opportunity.

Treasury Wine Estates Ltd (ASX: TWE)

Treasury Wine shares are down almost 60% from their high.

This is a globally recognised wine business with premium brands and international distribution. It has faced challenges, including shifting demand and margin pressures, but I believe the underlying asset base still has value.

Buffett would likely ask whether the long-term earnings power of the business is impaired, or whether sentiment has simply overshot to the downside. If earnings can stabilise and grow from here, buying after such a large pullback could prove rewarding.

CSL Ltd (ASX: CSL)

CSL shares are down around 47% from their high.

This is one of Australia’s highest-quality global healthcare businesses. It has a long track record of innovation, strong margins, and disciplined capital allocation.

The recent de-rating reflects softer periods of performance and higher expectations resetting. But if you believe CSL can return to steady earnings growth over the coming years, then I think the lower share price may represent one of the best entry points that we have seen in some time.

Again, this is much closer to Buffett’s philosophy than simply buying something because it looks statistically cheap.

Foolish takeaway

The ASX may be at record highs, but that does not mean every share is expensive.

Banks and miners have led the charge. Meanwhile, several high-quality growth names are still 20% to 60% below their previous peaks. In my view, that is where investors should be looking.

I am not saying these are guaranteed buys. But if I am going to follow Buffett’s logic, I would rather buy strong businesses when sentiment is weak than chase sectors that are already at record valuations.

The post I’m listening to Warren Buffett and buying cheap ASX shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, Treasury Wine Estates, and WiseTech Global. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates and WiseTech Global. The Motley Fool Australia has recommended CSL and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The AUB Group Ltd (ASX: AUB) share price is in focus today after the company reported a 14% lift in underlying NPAT to $90.4 million and raised its FY26 profit guidance.

What did AUB Group report?

• Underlying NPAT rose 14% to $90.4 million (1HFY25: $79.3 million)
• Reported NPAT up to $35.3 million (1HFY25: $26.4 million)
• Underlying earnings per share: 77.54 cents (up from 68.07 cents)
• Fully franked interim dividend of 27.0 cents per share (1HFY25: 25.0 cps)
• FY26 underlying NPAT guidance upgraded to $220–230 million, representing 9.9%–14.9% growth over FY25

What else do investors need to know?

AUB Group reported strong profit growth across most divisions, especially in Australian broking (up 11.4%) and international operations (up 29%), thanks to acquisition activity and higher average commission income per client. However, New Zealand broking profit dipped 12.8% due to weak corporate market conditions and ongoing investment in gaining market share.

Capital management remains solid, with a leverage ratio of 2.49x and $143.5 million in accessible cash and undrawn debt at 31 December 2025. The interim dividend will be paid on 2 April 2026, but the dividend reinvestment plan is still suspended.

Nick Dryden has been appointed as Chief Financial Officer, having served previously as deputy CFO and interim CFO.

What did AUB Group management say?

AUB Group CEO and Managing Director, Michael Emmett, said:

The Group delivered another strong profit result in 1H26, with robust earnings growth in most Divisions. This was despite a disappointing performance in New Zealand and unfavourable currency headwinds from continued weakening of the US Dollar. I would like to thank our teams, member businesses and insurer partners for their commitment and execution. Above all, I thank our customers for their trust and their reliance on our advice for their insurance needs.

What’s next for AUB Group?

The company has upgraded its FY26 underlying NPAT guidance to between $220 million and $230 million, assuming the completion of its Prestige acquisition no later than 1 May 2026 and growth in AUB 360 and Pacific Indemnity. AUB Group expects ongoing profit and margin growth through bolt-on acquisitions and organic expansion.

Foreign exchange remains a watchpoint, but the company has certain hedges in place for the remainder of FY26. Strategic investments and careful capital management remain a focus for the year ahead.

AUB Group share price snapshot

Over the past 12 months, AUB Group shares have declined 12%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post AUB Group posts half-year profit, lifts FY26 guidance appeared first on The Motley Fool Australia.

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

The Mercury NZ Ltd (ASX: MCY) share price is in focus today after the company posted HY2026 results showing a 28% lift in EBITDAF to NZ$537 million and a 130% jump in net profit after tax (NPAT) to NZ$20 million, despite a 5% fall in total revenue.

What did Mercury NZ report?

• Revenue from continuing operations: NZ$1,664 million, down 5% from the prior period
• EBITDAF: NZ$537 million, up 28% on HY25
• Net profit after tax (NPAT): NZ$20 million, up 130% on HY25
• Interim dividend: 10 cents per share, up 4% on HY25 (record date 5 March, payment 1 April)
• Net tangible assets per share: $3.33, up from $3.26 a year ago

What else do investors need to know?

Mercury says it reinvested half of its HY26 earnings—around NZ$270 million—into new and existing generation assets, with all three of its major renewable projects progressing on schedule and within budget. The company’s new Ngā Tamariki Geothermal Station unit began operations in January, while the Kaiwera Downs Stage 2 and Kaiwaikawe wind farms are both expected to start generating during 2026 and 2027.

Mercury continues to focus on supporting its customers by helping them manage energy costs and offering targeted support where needed. The company’s Dividend Reinvestment Plan (DRP) remains open for shareholders, offering a 2% discount.

What did Mercury NZ management say?

Mercury Chief Executive Stew Hamilton said:

Our disciplined strategic execution is delivering a strong performance today, while enabling us to invest significantly in new renewable generation for New Zealand, helping meet future demand growth and build resilience.

What’s next for Mercury NZ?

Looking ahead, Mercury’s full-year EBITDAF guidance of NZ$1 billion remains on track, helped by higher renewable generation and cost management. The company also plans to invest NZ$590 million in hydro refurbishment over the next decade, building on the completed upgrade of the Karāpiro Hydro Station.

Mercury’s long-term strategy is to add 3.5 TWh of new renewable generation by 2030, supporting New Zealand’s transition and aiming to power an extra 430,000 homes. Management says the strong balance sheet and prudent risk settings underpin continued investment in high-quality renewable assets and sustainable shareholder returns.

Mercury NZ share price snapshot

Over the past 12 months, Mercury NZ shares have declined 6%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 9% over the same period.

View Original Announcement

The post Mercury NZ results: Profit and dividend up as renewables power HY26 appeared first on The Motley Fool Australia.

More reading

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

One of the best reasons to own Rio Tinto Ltd (ASX: RIO) shares each year is usually the passive income payments in the form of dividends.

The ASX mining share recently reported its annual result for the 2025 financial year and it came with another large dividend for shareholders.

In this article, we’re going to look at how large the upcoming dividend payments are projected to be, which could be quite sizeable. As a reminder, in the 2025 financial year, Rio Tinto’s board of directors declared an annual dividend per share of US$4.02.

Let’s see what’s expected next of the ASX mining share.

FY26

When looking at the FY25 figures, UBS said that the FY25 operating profit (EBITDA) and dividend (with a payout ratio of 60%) were in line with what market analysts were expecting, with a stronger contribution from copper and aluminium, while offsetting the softer contribution from iron ore.

UBS said that Rio Tinto’s track record continues to improve, with the ASX mining share’s guidance unchanged.

The broker noted that Rio Tinto is now focused on organic growth and cost savings.

UBS noted that Rio Tinto believes the iron ore price is weak due to soft fundamentals (with robust supply). There are expectations that high-cost miners will reduce production if the iron ore price trades at around US$90 per tonne. Rio Tinto’s own higher-cost trucked tonnes could be curtailed if it “makes sense”.

The African iron ore project Simandou is “ramping up broadly to plan”, with the first shipment from the port in December 2025.

Rio Tinto thinks it can deliver volume growth of a compound annual growth rate (CAGR) of 3% by 2030.

The ASX mining share thinks it can capitalise on productivity benefits – it has delivered $650 million by December 2025 (which will benefit FY26) and expects to materially increase this in 2026 and 2027. This is being driven by a leaner organisational structure with fewer management layers and a sharper focus on non-core asset closures (according to UBS), as well as a stronger discipline on efficiency (such as with contractors and maintenance).

UBS also said that the average unit of cost per copper tonne is on track for a CAGR of around 4% across the business between 2024 to 2030.

The broker predicts that Rio Tinto’s dividend per share could climb by more than US$1 per share in FY26 to US$5.07 per share, along with a large jump in profitability.

FY27

Earnings are predicted to rise again in the 2027 financial year for Rio Tinto, which bodes well for potential dividend payments.

UBS predicts that the Rio Tinto dividend per share could climb to US$5.85 in the 2027 financial year.

FY28

The dividend may have peaked for the rest of the decade in the 2027 financial year, though the payout could settle at a similar sort of level.

UBS suggests the annual dividend payout could be US$5.81 per Rio Tinto share in FY28.

FY29

Owners of Rio Tinto shares could see another solid year in the 2029 financial year, though earnings and the dividend are forecast to reduce a little in the year.

The annual payout is projected to be US$5.65 in FY29, according to UBS.

FY30

The last year of this series of projections could be a strong one for shareholders and an improvement on FY29.

The forecast from UBS suggests that Rio Tinto could pay an annual dividend per share of US$5.76 in the 2030 financial year.

In terms of UBS’ view on Rio Tinto shares, the broker said:

We maintain a Neutral rating and see the risk/reward as balanced with solid performance & volume growth offset by a muted iron ore price outlook.

It has a price target of $160 on the ASX mining share.

The post Here’s the dividend forecast out to 2030 for Rio Tinto shares appeared first on The Motley Fool Australia.

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

Austal Ltd (ASX: ASB) shares have experienced serious volatility so far in 2026. 

After doubling in 2025, Austal’s share price is now down more than 35% since it hit a 52-week high in January. 

It seems investors have had one foot in and one foot out amidst the broader defence tailwinds.

Austal shares snapshot

Austal is an Australian-based shipbuilder that specialises in the design, construction, and support of defence and commercial vessels globally.

Austal’s products include naval vessels, defence surface warfare combatants, high-speed support vessels, patrol boats for law enforcement, offshore vessels, as well as passenger and vehicle ferries.

In December last year, Austal shares surged on news of key contract wins for the company. 

In mid-January, the share price hit a record high of $8.82. 

However since then, it has been on a steady decline. This could be partly due to profit taking, as well as negative sentiment after the company released a statement noting it had overstated its potential earnings for the year.

It closed yesterday at $5.61 after a 10.95% intra-day fall.

Why did it close 11% lower yesterday?

Yesterday, Austal released its H1FY2026 half-year report. 

This included: 

• Revenue of $1.1 billion (FY2025 H1: $825.7 million), up 34.4% on positive contribution from both shipbuilding and support
• EBIT of $60.3 million (FY2025 H1: $42.7 million), up 41.3% with improved margins of 5.4% (FY2025 H1: 5.2%)
• Net Profit After Tax of $30.5 million (FY2025 H1 $25.1 million), up 21.4%. 

It seems investors were not thrilled with these results, as Austal shares fell 10.95% on Monday. 

With its share price now significantly lower than a month ago, is now the time to buy the dip?

A new report from Bell Potter following the financial results indicates investors should hold for the time being. 

Here’s what the broker had to say. 

Price target downgraded for Austal shares

In yesterday’s report, Bell Potter said Austal reported revenue of $1,109 million, representing a 34% year-on-year increase. This growth was supported by a 26% rise in revenue in the USA and a strong 60% increase in Australasia.

EBIT increased by 41% year-on-year to $60.3 million, driven primarily by the award of the Strategic Shipbuilding Agreement (SSA) programs. However, this was partially offset by ongoing onerous contracts that continued to impact the USA segment

Based on this guidance, the broker maintained its hold recommendation, and lowered its price target to $6.30 (previously $6.60). 

The broker said Austal trades in line with global peers on an EV/EBIT basis for FY26. 

Based on yesterday’s closing price of $5.61, the revised price target indicates an upside of 12.3%. 

Although ASB exhibits superior revenue growth, operational risks are relatively elevated as ASB transitions from legacy to new shipbuilding contracts in the USA.

The post Should you scoop up Austal shares after yesterday’s 11% crash? appeared first on The Motley Fool Australia.

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

It is fair to say the technology sector has been under significant pressure this year.

Concerns around artificial intelligence (AI) disruption, shifting software economics, and stretched valuations have created sharp swings across many tech-heavy portfolios. While some investors are happy to ride it out, others may prefer exposure to sectors less exposed to AI headlines.

Here are three ASX exchange traded funds (ETFs) that steer clear of heavy technology concentration and offer diversification into different parts of the global economy.

iShares Global Consumer Staples ETF (ASX: IXI)

Consumer staples are about as far from speculative tech as you can get.

The iShares Global Consumer Staples ETF invests in global household brands that sell everyday essentials. Its holdings include companies such as Procter & Gamble (NYSE: PG), Coca-Cola (NYSE: KO), and Walmart (NYSE: WMT).

These businesses generate revenue from products people buy regardless of market sentiment. Demand for groceries, beverages, cleaning products, and personal care items tends to remain steady through economic cycles.

In volatile markets, defensive earnings streams can provide stability. The iShares Global Consumer Staples ETF offers exposure to global brands with pricing power and resilient cash flows, without the heavy technology weighting seen in many broad market indices.

Betashares Global Defence ETF (ASX: ARMR)

Geopolitical tensions and rising defence budgets have pushed military spending higher across many developed nations.

The Betashares Global Defence ETF provides investors with exposure to global defence and aerospace companies such as Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and BAE Systems (LSE: BA).

These companies generate revenue from long-term government contracts and defence programs. Their earnings are influenced more by national security priorities than by developments in Silicon Valley.

While defence stocks can still experience volatility, their growth drivers are tied to structural government spending rather than consumer technology trends. This fund was recently recommended by analysts at Betashares.

Global X Battery Tech & Lithium ETF (ASX: ACDC)

The Global X Battery Tech & Lithium ETF focuses on stocks involved in lithium mining, battery production, and electric vehicle supply chains.

Holdings include Albemarle (NYSE: ALB), Tesla (NASDAQ: TSLA), and Contemporary Amperex Technology. The fund’s performance is driven primarily by demand for electric vehicles, energy storage systems, and battery materials.

Lithium prices have been strengthening again amid renewed demand, and the long-term electrification trend remains intact. This theme is more connected to energy transition and industrial demand than to software or AI disruption fears. This fund was recently recommended by the team at Global X.

The post 3 top ASX ETFs that avoid the tech wreck 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 Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BAE Systems and Lockheed Martin. The Motley Fool Australia has positions in and has recommended iShares International Equity ETFs – iShares Global Consumer Staples ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

With just a few days left in February, the ASX remains near record highs. But once again, those highs are being driven by a relatively narrow group of stocks.

Away from the banks and major miners, a number of quality names have been sold off heavily over the past year. In my view, some of that weakness looks overdone.

Here are five oversold ASX shares I would be looking at before the end of February.

Xero Ltd (ASX: XRO)

Xero has been caught up in the broader sell-off across global software stocks.

Concerns around valuation, artificial intelligence (AI) disruption, and slowing growth have weighed on sentiment. But when I look at the business itself, I still see a high-quality subscription model with sticky customers and strong recurring revenue.

Xero continues to expand internationally and improve margins. If earnings and subscriber growth continue, I think its share price could be due to a major re-rating.

Zip Co Ltd (ASX: ZIP)

Zip has had a volatile journey over the past few years.

After scaling aggressively during the buy now, pay later boom, the company has since tightened credit settings, exited weaker markets, and focused on profitability. The share price has reflected both extremes of sentiment.

To me, this now looks like a more disciplined business. If execution continues to improve and losses remain under control, I believe the market could reassess its long-term earnings potential.

Telix Pharmaceuticals Ltd (ASX: TLX)

Telix has delivered strong commercial growth, yet its share price has pulled back significantly from recent highs on US FDA product approval delays.

The company continues to expand its precision medicine franchise while investing heavily in its therapeutic pipeline. Revenue growth has been robust, and guidance for further growth in FY26 remains in place.

When a high-growth healthcare business with commercial traction trades below prior peaks, I start to pay attention. I think the recent weakness may offer an opportunity for patient investors.

Block Inc. (ASX: XYZ)

Block’s Australian-listed shares have also been sold off amid broader tech weakness.

Digital payments and fintech remain competitive and fast-evolving industries. But Block still has a strong ecosystem across payments, point-of-sale solutions, and consumer finance.

If growth stabilises and margins improve over time, the current share price could look overly pessimistic. For investors willing to accept some volatility, I see potential upside from here.

REA Group Ltd (ASX: REA)

REA has faced pressure due to softer property listings volumes, broader market caution, and AI disruption fears.

However, the company’s dominant position in Australian online property advertising remains intact. It has pricing power, strong brand recognition, and high-margin digital operations.

While short-term listing volumes can fluctuate, the long-term shift to digital property search is not reversing. If volumes recover even modestly, earnings could rebound more quickly than the market expects.

Foolish takeaway

Oversold does not automatically mean undervalued. Sometimes shares fall for good reasons.

But I think Xero, Zip, Telix, Block, and REA each represent cases where sentiment may have swung too far to the downside relative to long-term business quality.

The post 5 oversold ASX shares to buy before the end of February appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino 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, Telix Pharmaceuticals, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

As earnings season continues, brokers are adjusting their outlooks on ASX shares based on results. 

Here are three fresh ratings from the team out of Morgans.

Brambles Ltd (ASX: BXB)

Brambles is the world’s largest supplier of reusable wooden pallets and crates used for storing and transporting goods. 

According to Morgans, the company’s 1H26 earnings were better than expected, driven by supply chain and productivity improvements. 

The broker also said management has adjusted FY26 revenue growth guidance to between 3-4% (vs 3-5% previously) with underlying EBIT growth guidance maintained at between 8-11%. 

Free cash flow (before dividends) is now expected to be between US$950-$1100m (vs between US$850-950m previously) due mainly to lower pallet purchases. 

Based on this guidance, Morgans adjusted FY26/27/28F underlying EBIT by +2%/+1%/+0%. 

Our target price rises to $27.00 (from $25.70) and we move our rating to ACCUMULATE (from HOLD). Following another solid result, we believe BXB is well positioned to deliver earnings growth through continued conversion of white-wood pallets to pooling and further margin improvement driven by ongoing operational efficiencies, including enhanced use of its digital and data capabilities.

From yesterday’s closing price, this target indicates an upside of roughly 10%. 

PWR Holdings Ltd (ASX: PWH)

PWR Holdings is a designer, manufacturer, and supplier of cooling solutions for motorsports and the performance automotive industry.

According to Morgans, the 1H26 result was above expectations, driven by strong growth in Motorsports (new Formula 1 regulations) and Aerospace & Defence (delivery of most of a US government contract).

Our target price increases to $11.15 (from $8.50) due to a roll-forward of our model to FY27 forecasts. We continue to view PWH as a high-quality business, supported by a strong balance sheet, an experienced management team, and access to large addressable markets that offer significant growth potential. With the disruption from relocating to the new Australian manufacturing facility now behind it, we believe PWH is well positioned to embark on its next phase of growth.

Morgans maintained its accumulate rating on these ASX shares. 

From yesterday’s closing price of $9.75, there is a potential upside of 14.36%. 

MoneyMe Ltd (ASX: MME)

MoneyMe is a digital consumer credit business. The company touts its technology and AI as offering financial solutions targeted at younger people.

MME’s 1H26 was broadly per expectations, achieving gross revenue of ~A$117m, on a gross loan book of ~A$1.75bn. Momentum seen in originations growth (+18% to A$536m) continues to augur well for 2H26, and we expect MME to maintain a balance between profitability and growth as it seeks to benefit from scale. 

Our price target remains unchanged at A$0.21 and we maintain our Speculative Buy recommendation.

From yesterday’s closing price of $0.115, Morgans sees an upside potential of 82.6% for these ASX shares. 

The post 3 ASX shares that look cheap according to Morgans appeared first on The Motley Fool Australia.

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

Despite some headwinds, Ord Minnett has a positive view on ASX 300 companies Breville Group Ltd (ASX: BRG) and Electro Optic Systems Holdings Ltd (ASX: EOS). 

Here’s what the wealth and investment services firm had to say. 

Breville Group

This ASX 300 company has struggled since releasing half year results earlier this month. 

It is an Australian designer and distributor of small kitchen and home appliances to more than 70 countries.

According to Ord Minnett, Breville posted flat first-half FY26 earnings, which was a solid achievement in the face of significant US tariff headwinds. 

Having largely navigated its manufacturing transition, execution risks have diminished materially. 

Ord Minnett believes the company is well-positioned to return to double-digit earnings growth beginning in FY27.

In terms of outlook, the company expects a modest increase in earnings before interest and tax in FY26. Such guidance appears prudent to us given residual risk from the impact of tariffs and the transition to new manufacturing facilities. Overall, as transitional pressures subside, we forecast a return to double-digit earnings growth in FY27, and upgrade our recommendation to Accumulate from Hold.

Electro Optic Systems Holdings

Electro Optic Systems has been one of the hottest ASX 300 shares over the past year. 

It has benefited from global defence tailwinds and subsequently seen its share price rise 525% over the last 12 months. 

This included a big gain yesterday on the back of  FY25 results.

The ASX defence stock signed $424 million worth of contracts during FY25, compared to just $70 million in FY24.

The company engages in the development, manufacture, and sale of telescopes and dome enclosures, laser satellite tracking systems, and remote weapon systems.

The company recently faced a short-selling attack from US firm Grizzly Research, which EOS rejected as “misleading” and “manipulatory.” 

While Ord Minnett said EOS provided credible rebuttals to many of the claims, questions remain regarding its $120 million conditional Korean high-energy laser contract.

Ord Minnett notes that while EOS produced enough data and credible explanation to counter the Grizzly report, their response still leaves questions around the $120 million conditional Korean High Energy Laser Weapon (HELW) contract. 

Despite the recent upheaval, our investment thesis of increasing geopolitical tensions and defence expenditure on C-UAS, RWS, HELW and Space remains unchanged. As such, we maintain our Speculative Buy recommendation on EOS and our target price is unchanged at $12.72.

From yesterday’s closing price of $7.75, Ord Minnett’s price target indicates an upside of approximately 64%. 

The post Top broker sees upside for these ASX 300 shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has 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.