The S&P/ASX 200 Index (ASX: XJO) closed 1.24% higher on Thursday afternoon. It was a welcome reprieve for investors after this week's sell-off. Over the past month the index is now down 5.96% and for the year it is 2.76% higher.
While the index rebounded yesterday, there are still some ASX 200 stocks I'm going to steer clear of next week.
Droneshield Limited (ASX: DRO)
It's been a big week for the AI-drone operator. Yesterday, its shares closed 4.06% lower at $1.89 a piece. The latest decline marks a nearly 60% decline over the past month wiping a big chunk of the company's impressive annual gains. Thankfully the shares are still trading nearly 160% higher than this time last year.
I still believe that the sharp sell-off of Droneshield shares is more about investor sentiment than a risk of overpricing or issues with the core business. The company also has robust growth plans ahead. But this week's flurry of company announcements, I'm staying clear until the dust has settled.
In a short statement to the ASX on Wednesday morning, the company said Matt McCrann, who joined the company in 2019 and who had been the US CEO since 2022, "has resigned from the business, effective immediately". There was no explanation for his departure.
The company also responded to an ASX Aware Letter this week. Droneshield was asked to explain recent share sales and the accidental release, and retraction, of a $7.6 million contract mistakenly announced as new.
Helia Group Ltd (ASX: HLI)
The Helia share price closed 0.17% lower on Thursday afternoon, to $5.86. Over the past month the shares have climbed 5.59% and over the year they're now an impressive 34.10% higher.
But, in a note to investors yesterday, analysts at Macquarie said they think the stock is about to start nosediving. The broker confirmed its underperform rating on Helia shares and reduced its target price to $3.95 per share. At the time of writing, this implies around 32% downside for investors over the next 12 months.
"While conditions are supportive near-term, at current valuations (~1.6x P/NTA), investors are both overpaying for the potential of capital returns, and have priced in favourable conditions indefinitely. Maintain Underperform," the broker said.
New Hope Corporation Ltd (ASX: NHC)
New Hope finished 0.5% lower yesterday to close at $4.02. The shares have climbed 3.61% over the past month but it's not enough to make up for the 15.19% slump over the year.
The latest decline follows the Australian thermal coal miner's quarterly production and earnings update earlier this week. New Hope achieved a 7.1% increase in saleable coal production and a 15.5% rise in underlying EBITDA, with coal sales and prices also improving. But the results were lower than market expectations. Analysts weren't pleased that the ASX 200 miner missed FY26 guidance.
Analysts overall seem divided about the stock. Ratings are split between buys, holds and strong sells and the average target price is $3.87, which represents nearly 4% downside for investors, according to Tradingview data at the time of writing.
