Stock Tips: Analysts tilt toward quality as market rotation picks up pace
It’s no easy gig analysing share prices and company performance but somebody’s got to do it. Every week two experts from our Stock Tips columnist pool give us their recommendations.
It’s no easy gig analysing share prices and company performance but somebody’s got to do it. Every week two experts from our Share Tips columnist pool give us their recommendations.
Tony Paterno – Ord Minnett
BUY
Pinnacle’s recent business update was ahead of expectations, highlighted by an $18bn increase in FUM. This was driven by a strong net flow inflow number, $13.3bn including $6.4bn of Aust. Insto flows.
Aussie Broadband has issued a positive AGM update. Segment momentum points to a blockbuster FY27. We have upgraded valuation based on improved earnings visibility and upside risk to subscriber forecasts
HOLD
TNE is one of the higher quality software businesses on the ASX, however, at 60x PER, this is reflected fairly in the price.
The stock appears fairly valued for a company with a challenging outlook. We acknowledge this outlook could quickly change subject to strategic developments involving HLO and/or WJL.
SELL
We recognise the major downturn in mineral sands but maintain a forward focus. Current issues mean ILU must manage cashflows, which it is doing. However, ILU is pricey at these levels.
Despite the recent REO hype, LYC’s REO prices remain subdued, being tied to the China index. While the share price has recently retreated, it remains too rich.
Chris Watt – Bell Potter Securities
BUY
Woolworths appears to be turning a corner, with early 2Q26 trading showing momentum returning in core Australian Food. After two years of earnings downgrades, the business looks to have stabilised. Compared to peers, WOW now screens attractively, with upside potential as operational improvements take hold.
Select Harvests has bounced back strongly, supported by firm almond pricing and improved cash generation. Production volumes are solid, debt has materially reduced, and management is actively addressing cost pressures. With global almond demand lifting, SHV remains well positioned for continued recovery.
HOLD
DRO continues to secure meaningful contracts, underpinned by growing global defence demand. However, recent governance concerns and management share sales have raised investor scrutiny. Long-term prospects remain solid, but near-term volatility is likely.
Treasury Wine Estates (ASX:TWE)
TWE offers exposure to premium wine markets and potential China upside. Yet recent softness in volumes and margin pressures warrant patience.
SELL
Lithium markets remain weak, and PLS’s earnings have deteriorated sharply. Near-term outlook remains challenged. We believe the current share price implies much higher lithium prices compared to spot prices.
Despite strong past performance, slowing premium growth and rising claims risks limit further upside.
Bell Potter Securities disclaimer: The company and analyst may have long or short positions on these stocks. These stock tips don't take into account individual financial situations. They are summaries only and readers should obtain copies of the full research reports and disclosures and seek financial advice before investing.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead.
Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.
Originally published as Stock Tips: Analysts tilt toward quality as market rotation picks up pace
