At the time of writing, the defence shipbuilder's shares are down 1.25% to $4.73. This leaves the stock down 20% over the past month and not far above its 52-week low of $4.04 reached during the March 2025 market sell-off.

Let's take a closer look at what has happened and whether Austal shares can turn the clock back.

A clear reset in expectations

The recent decline follows a material shift in expectations after Austal downgraded its FY26 earnings guidance.

The company revealed that its prior outlook had included an overstatement tied to incentives within its US operations. This resulted in EBIT guidance being reduced to approximately $110 million.

While the company still reported solid top-line growth in its most recent half, the downgrade has weighed on sentiment.

There are also ongoing pressures within the US business. Cost challenges and legacy contract issues continue to impact margins, even as revenue in that segment remains solid.

Share price trend remains weak

The trend in Austal shares is still pointing lower.

Over the past several months, the stock has formed a pattern of lower highs and lower lows. The recent move back toward the $4.70 range has reinforced that downward momentum.

In addition, the relative strength index (RSI) has been sitting in the lower range, pointing to weak buying interest. While it has not reached deeply oversold levels, it indicates the stock is still lacking strong support from buyers.

Key support appears near the $4 to $4.20 range, close to the previous 52-week low. On the upside, resistance may sit around $5.50, where the stock traded before the latest sell-off.

What could drive a turnaround?

Despite the recent weakness, Austal continues to operate in a sector supported by long-term demand.

The company has a $17.7 billion order book and remains exposed to rising defence spending, particularly in the United States and Australia.

In the near term, performance is likely to come down to execution rather than broader industry trends.

If the company delivers on its revised guidance and improves margins in its US operations, investor confidence may begin to recover.

Foolish Takeaway

Austal remains a sizeable defence contractor with a strong pipeline of work. However, recent events have shifted the focus back to its operational performance.

The downgrade has reset expectations, and the burden is now on management to deliver consistent results from here.

Until that happens, the market may remain hesitant.

The post Down 20% in a month, can this ASX defence stock make a turnaround? appeared first on The Motley Fool Australia.

After a brief dip into negative territory this morning, the ASX 200 spent the rest of the day in the green, closing up 0.31%. That leaves the index at 8,640.6 points.

The optimism that we saw on the local markets this Wednesday followed a similarly optimistic morning on the American markets.

The Dow Jones Industrial Average Index (DJX: .DJI) fared decently, gaining a timid 0.1%

The tech-heavy Nasdaq Composite Index (NASDAQ: .IXIC) was more decisive though, rising 0.47%.

But let's get back to the Australian markets now and check out what was happening amongst the different ASX sectors this session.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

Investors are scrambling to get in on the action, too. 

ASX defence stock superstars like Droneshield Ltd (ASX: DRO) and Electro Optic Systems Holdings Ltd (ASX: EOS) have seen their share prices skyrocket over the past 12 months.

Droneshield shares have jumped 293.2% over the past year alone. The counter drone technology company was one of the fastest-growing stocks on the planet last year. 

Meanwhile, EOS has secured several major contract wins recently, and its shares have risen 728% over the same 12-month period. 

The returns are impressive, and investor and analyst sentiment suggest the share prices of these ASX defence stocks could keep climbing higher this year.

But there are some other lesser-known ASX defence shares which could also experience a boom in value this year.

Titomic Ltd (ASX: TTT)

Titomic specialises in metal additive manufacturing (cold spray technology), which has applications in defence (and other markets). The company manufactures, repairs, and upgrades military equipment using advanced materials such as titanium. This can be done while the equipment is active in the field.

The company's quarterly update, posted in late January, revealed global expansion plans, new defence contracts, and strong cash reserves of $35.8 million as of 31st December 2025.

Titomic also recently announced plans to relocate its corporate headquarters to the US as part of its strategy to grow its defence and aerospace business. 

At the time of writing, the Titomic share price is up 2.27% to 22 cents. Over the past month, the shares have climbed 7.14%, but they're still 13.46% lower over the year.

Just yesterday, Bell Potter confirmed its speculative buy rating and 50 cents price target on the ASX defence stock. That implies a 122.22% upside at the time of writing. The broker said it thinks 2027 could be the year that Titomic's production really starts to kick off. 

Austal Ltd (ASX: ASB)

Austal is an Australian-based global shipbuilding company specialising in the design, construction, and support of defence and commercial vessels.

These include naval vessels, defence surface warfare combatants, and law enforcement patrol boats.

The company also installs and maintains vessel command and control systems, communication and radar technology, and information management systems.

At the time of writing, Austal shares are down 1.25% for the day to $4.75 each. Over the past month, the shares have fallen 18.49%, but they're still 24.98% higher than this time 12 months ago.

The company recently cut its earnings guidance for FY26, citing an accounting issue. The news spooked investors and triggered a sell-off.

Most analysts continue to hold a bullish stance on the ASX defence stock. Data shows three out of six analysts have a strong buy rating, two have a hold rating, and one has a strong sell rating.

The average target price is $6.70, which implies a potential 40.96% upside over the next 12 months, at the time of writing. Although some think the shares could jump 61.97% to $7.71 each.

The post These 2 lesser-known ASX defence stocks are tipped to soar appeared first on The Motley Fool Australia.

From market close on 30 January through to the closing bell on 27 February investors sent these five stocks tumbling 26% to 32%.

Here's what put these companies under heavy selling pressure.

Austal Ltd (ASX: ASB)

The Austal share price tumbled 25.9% in February.

Shares in the Aussie ship builder crashed 22.8% on 13 February after management revealed they had inadvertently overstated the ASX 200 stock's potential earnings.

Ahead of Austal's half-year results release, the company reported that a US$17.1 million "overstatement had been included in the Company's FY2026 EBIT guidance".

EBIT guidance for FY 2026 was subsequently lowered to approximately AU$110 million.

Austal shares closed down another 11.0% on 23 February following the release of the ship builder's half-year results.

Cochlear Ltd (ASX: COH)

The Cochlear share price also had a month to forget, closing down 26.1% in February.

Shares in the ASX 200 stock, which manufactures and sells cochlear implantable devices,

Much of that pain was delivered on 13 February. Cochlear shares slumped 18.9% on the day following the release of the company's half year results.

While sales revenue was up 1% year-on-year to $1.18 billion, revenue was down 2% in constant currency.

And investors were favouring their sell button's, with Cochlear reporting a 9% decline in underlying net profit to $194.8 million.

Zip Co Ltd (ASX: ZIP)

The third ASX 200 stock investors would have done well to avoid buying and holding in February is buy now, pay later (BNPL) company Zip.

Zip shares fell 27.9% over the month just past.

All of that pain, and then some, was delivered on 19 February. The Zip share price closed down 34.4% on the day after the company released its – you guessed it – half year results.

Investors punished the stock despite Zip achieved an 85.6% year-on-year increase in cash EBTDA to $124.3 million. As the Motley Fool's James Mickleboro pointed out on the day, that looked to be fuelled by concerns of moderating profit growth, with management flagging that H2 cash EBTDA is likely to be broadly in line with the first half earnings.

Pro Medicus Ltd (ASX: PME)

Pro Medicus shares also took a beating in February, shedding 29.4% of their value over the month.

Shares in the health imaging company tumbled 23.9% on 12 February after the company reported its own half-year results.

That sharp selloff came despite the ASX 200 stock reporting a 28.4% year-on-year increase in half year revenue to $124.8 million. And underlying profit before tax of $90.7 million was up 29.7%.

But investors look to have gotten swept up with rising concerns about the potential for AI to disrupt the global software industry.

Temple & Webster Group Ltd (ASX: TPW)

Rounding off the list with the biggest monthly loss is online furniture and homewares retailer Temple & Webster.

Temple & Webster shares crashed 31.6% in February, with the share price plunging 32.6% on 12 February.

I'm sure I don't need to tell you why.

Yep, the company reported its half-year results on the day.

The ASX 200 stock came under intense selling pressure despite achieving 20% year-on-year revenue growth to $376 million.

But investors were clearly not pleased with depreciation and amortisation costs, which saw Temple & Webster's net profit before tax for the six months decline 28% to $7.4 million.

The post The five worst performing ASX 200 stocks bought and held in February unmasked appeared first on The Motley Fool Australia.

Not all ASX 200 shares climbed with the market. For example, the four named below fell 20% or more during the month. Here's why:

Austal Ltd (ASX: ASB)

The Austal share price was out of form and sank 26% in February. This was driven by the release of a disappointing earnings guidance update from the ship builder. Austal advised that it previously overstated its potential earnings for the year after accidentally including incentives that had already been recognised in Austal USA's forecast. This meant there was a US$17.1 million overstatement included in its FY 2026 EBIT guidance. In light of this, Austal downgraded its EBIT guidance for FY 2026 to approximately A$110 million from A$135 million previously.

CSL Ltd (ASX: CSL)

The CSL share price was sold off and crashed almost 20%. This was driven by a combination of a soft half-year result from the biotech giant and news that its CEO, Dr Paul McKenzie, resigned out of the blue a day earlier. CSL's chair, Dr Brian McNamee AO, said: "Paul and the Board have determined that now is the right time for new leadership to continue to drive CSL's strategic transformation and performance." As for its results, CSL posted underlying NPATA of US$1.9 billion, which was down 7% on the prior corresponding period and short of expectations. However, it did reaffirm its guidance for FY 2026.

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price tumbled 29% in February. A good portion of this came after the health imaging technology company released its half-year results. Pro Medicus reported a 28.4% increase in revenue to $124.8 million and a 29.7% lift in underlying profit before tax to a record of $90.7 million. This was softer than some were expecting. Pro Medicus' CEO, Dr Sam Hupert, said: "Our profits continue to grow strongly even though our biggest implementation during the period in Trinity Cohort 1 went live towards the end of October so had limited impact on the half." In addition, concerns over AI disruption weighed heavily on software stocks last month.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price was a poor performer and sank 32% last month. This followed the release of the online furniture retailer's half-year results. The company reported a 19.8% increase in revenue to $375.9 million and a more modest 13% lift in EBITDA to $14.9 million. This ultimately led to Temple & Webster recording a net profit that was over 30% lower than consensus estimates.

The post These ASX 200 shares sank 20% or more in February appeared first on The Motley Fool Australia.

At this level, the shipbuilder is sitting at a 9-month low. The stock has also tumbled nearly 40% in just one month following its latest half-year results and guidance downgrade.

After doubling in 2025 and hitting a record high above $8 in January, investor confidence has deteriorated quickly. The key question now is whether the recent sell-off marks a bottom, or if further downside lies ahead.

What did Austal report?

For the 6 months ended 31 December 2025, Austal delivered solid top-line growth.

Revenue rose 34.4% to $1.1 billion. Earnings before interest and tax increased 41.3% to $60.3 million, with EBIT margins improving to 5.4%. Net profit after tax (NPAT) climbed 21% to $30.5 million.

Despite the strong growth, two issues weighed heavily on investor sentiment.

First, the company reduced its FY26 EBIT guidance to around $110 million, down from prior guidance of $135 million. Second, net cash fell to $241.4 million following significant capital expenditure to expand US manufacturing facilities.

While management highlighted a record $17.7 billion order book and stronger Australasian operations, the earnings downgrade ultimately overshadowed those positives.

Why the heavy selling?

The guidance reset came after Austal identified discrepancies related to incentives in its US T-ATS program. An estimated $11.7 million overstatement had been included in prior guidance.

In addition, US operations continue to face cost pressures and legacy contract issues. Although revenue in the US segment rose, EBIT declined year over year.

The change in guidance sparked heavy selling, with the shares dropping from $8 in January to the $4 range within a few weeks.

What are brokers saying?

Broker reactions have been mixed.

Bell Potter maintained a 'hold' rating and cut its price target to $6.30. Macquarie trimmed its target to around $7.55. Citi reportedly downgraded the stock to 'sell' following the result.

Even after those downgrades, most broker targets remain above the current $4.88 share price, suggesting potential upside if the company delivers on its plans.

Is this the bottom?

At current levels, Austal trades on materially lower expectations than just a month ago. The company still has a record order book, long-dated defence contracts, and exposure to higher global defence spending.

However, execution risk remains significant, particularly in the US business as it transitions to new shipbuilding programs and expands capacity.

If management delivers on its revised $110 million EBIT guidance and restores confidence in the reliability of its earnings, the recent sell-off may prove overdone.

Whether this is the bottom will likely depend less on defence tailwinds and more on Austal's ability to meet its targets.

The post Austal shares down almost 40% in a month. Is this the bottom? appeared first on The Motley Fool Australia.

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

ARB Corporation Ltd (ASX: ARB)

The ARB share price is down 15.5% to $20.76. This follows the release of the after-market automotive parts manufacturer's half-year results. ARB reported a 1% decline in sales revenue to $358 million and a 17.2% decline in profit after tax to $42.2 million. Looking ahead, management advised that it expects sales margins in the second half to be broadly in line with the prior corresponding period. It also advised that its order book remains healthy and investment in new stores and ecommerce continues.

Austal Ltd (ASX: ASB)

The Austal share price is down 11% to $5.00. This appears to have been driven by a broker out of Citi this morning. According to the note, the broker has downgraded this shipbuilder's shares to a sell rating with a reduced price target of $4.50 (from $6.90). Even after today's heavy decline, this still implies potential downside of 10% for investors over the next 12 months.

Mader Group Ltd (ASX: MAD)

The Mader share price is down 10% to $7.97. This follows the release of the specialist technical services provider's half-year results. Mader revealed net profit after tax of $30.5 million, which was an increase of 17% over the prior corresponding period. Despite this, the company decided to not pay a dividend in order to reduce debt. It said: "The Group has accelerated its pathway to a net cash position by deferring the 1H FY26 interim dividend, bringing forward achievement of its net cash target and strengthening liquidity to support a more aggressive approach to organic and inorganic growth opportunities."

Steadfast Group Ltd (ASX: SDF)

The Steadfast share price is down 4% to $4.26. Investors are selling the insurance broker network company's shares today after it revealed that its long-serving founder-CEO, Robert Kelly AM, is stepping down. Commenting on his exit, Mr Kelly said: "It has been a privilege to play a leadership role in the creation of Steadfast. I am extremely proud of the achievements of the Company; its strong track record clearly demonstrates the strength of the business model and positions the business to deliver sustainable value to our shareholders for many years to come." Mr Kelly co-founded Steadfast in 1996 and led the company's listing on the ASX in August 2013.

The post Why ARB, Austal, Mader, and Steadfast shares are dropping today appeared first on The Motley Fool Australia.

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.

Last week, the Australian shipbuilder was one of the big winners with a gain well over 25%. Austal shares have started this week completely different, as they have lost 10.6% at $5.64 during afternoon trade.

Let's have a closer look at how brokers see this wild stock.

Heavy defence spending

Over the past 12 months, defence stocks like Austal have been in the spotlight as global conflict and geopolitical risk have led to heavy defence spending.

Austal is an Australian shipbuilder that designs, builds, and supports defence and commercial vessels for customers worldwide. Its portfolio spans naval ships and surface combatants, high-speed military support vessels, patrol boats, offshore platforms, and passenger and vehicle ferries.

Investor sentiment has largely been positive on this sector. At the time of writing, Austal shares are 40% higher than a year ago, but they have fallen 15% so far in 2026.

The 12-month range, with the stock trading between $3.50 and $8.82, shows how volatile Austal shares have been over that period.

Good news, bad news

The company has had some good news in recent months, and the share price soared. In mid-December, it reported that it had been awarded a contract extension to build another two Evolved Cape Class patrol boats for the Australian Border Force.

Two weeks ago, the share price plunged. The company issued a brief statement to the ASX saying that, in preparation for publishing its half-year accounts, it had identified some discrepancies. Austal revealed that it had previously overstated its potential earnings for the year. 

In a statement to the ASX on Friday morning, the board of Austal shares said its Australian defence division had been awarded a $4 billion contract to build eight landing craft heavy (LCH) vessels. Austal said the construction would take place at its Henderson shipyard in Western Australia and would start in 2026 and carry on until 2038.

In reaction to the new contract, Austal shares surged over 5%, bringing the total plus for the week to 28%.

What next for Austal shares?

TradingView data show that most analysts are positive on Austal shares. Most of them see the ASX defence stock as a hold or strong buy with an average 12-month price target of $7.24. This points to a 28.5% upside at the time of writing.

Bell Potter is more cautious than most colleagues. In a recent report, the broker lowered its price target on Austal shares from $8 to $6.60. This target indicates roughly 17% upside from current levels. 

Bell Potter maintains its hold rating, saying:

When stripping out the MMF 3 earnings from future consensus forecasts, we observe that ASB trades in line with global peers on an EV/EBIT basis for FY26. Although ASB exhibits superior revenue growth, operational risks are relatively elevated as ASB transitions from legacy to new shipbuilding contracts in the USA. We retain Hold.

The post Are Austal shares a buy after weeks of heavy gains and losses? appeared first on The Motley Fool Australia.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

Here's why these three stocks have surged 22% to almost 29% this week.

ASX 200 shares lifting off this week

The first company making investors very happy this week is Netwealth Group Ltd (ASX: NWL).

Shares in the wealth management and technology company closed last Friday trading for $21.37. At the time of writing, shares are changing hands for $26.11 each. That sees this ASX 200 share up 22.1% for the week.

Netwealth shares closed up 13.6% on Wednesday, following the release of the company's half-year results (H1 FY 2026).

Highlights included a 24.7% year-on-year increase in revenue to $193.8 million. And with net profit after tax (NPAT) up 19.9% to $69 million, management boosted the fully-franked interim dividend by 20% to 21 cents per share.

Moving on to the second ASX 200 share shooting the lights out this week, we have Austal Ltd (ASX: ASB).

Shares in the Aussie shipbuilder closed last week trading for $4.87 and are currently trading at $6.25 each. This puts the Austal share price up 28.5% for the week.

The bulk of those gains were delivered on Monday, when Austal shares closed up 19.5%.

That big lift followed on an even steeper sell-down last Friday. Austal shares crashed 22.8% on 13 February after the company released an update downgrading its FY 2026 earnings guidance after uncovering an accounting error.

The shipbuilder reduced its full-year EBIT guidance to $110 million, down from prior guidance of $135 million. But on Monday, bargain hunters clearly swooped in.

Which brings us to…

Leading the charge

The top performing ASX 200 share on my list for this week is Hub24 Ltd (ASX: HUB).

Shares in the fintech company closed last Friday trading for $76.57. At the time of writing, shares are changing hands for $98.55 apiece, putting the Hub24 share price up 28.8% for the week.

Shares closed up 14.2% on Thursday following the company's half-year results report.

Investors piled into the ASX 200 share after Hub24 reported a 26% year-on-year increase in revenue to $245.9 million.

Underlying EBITDA of $104.9 million was up 35% on H1 FY 2025. And on the bottom line, the company achieved a 60% increase in NPAT to $68.3 million.

With profits up, management rewarded passive income investors with a fully-franked interim dividend of 36 cents per share, up 50% from last year's interim payout.

The post 3 ASX 200 shares storming 22% to 29% higher this week appeared first on The Motley Fool Australia.

In a statement to the ASX on Friday morning, the company said its Australian defence division had been awarded a contract to build eight landing craft heavy (LCH) vessels, under the Strategic Shipbuilding Agreement (SSA) with the Commonwealth of Australia.

Austal said the construction would take place at its Henderson shipyard in Western Australia and would start in 2026 and carry on until 2038.

A key defence partner

Austal Chief Executive Officer Paddy Gregg said the award of the contract reinforced the company's status as a trusted partner to the Australian Defence Force.

He went on to say:

This contract represents another significant investment in Australia's sovereign shipbuilding capability – and Austal Defence Australia is ready to deliver these highly capable vessels to support the ADF's operational requirements. Constructing the landing craft heavy vessels at Henderson will create and develop thousands of new, skilled jobs in Western Australia and provide further opportunities for the local defence industry supply chain. While Austal's US business has traditionally accounted for a large share of our defence order book in recent years, this contract reflects the growing strength and success of Austal's Australian operations — and Australian industry — within the national shipbuilding and sustainment enterprise. This LCH construction contract balances out the split and provides greater geographic diversity of earnings. It also provides earnings and employment stability for the next 12 years.

Racking up the wins

Austal said the contract was the second major award for the company under the SSA, following the $1.029 billion landing craft medium design and build contract awarded in December.

Austal Defence Australia Executive General Manager, strategic shipbuilding, Gavin Stewart, said the construction project would provide outstanding opportunities for people to work within the company and for its supply chain partners.

The newly contracted vessels will be about 100m in length, 16m wide, and have a crew of more than 200.

They can also carry either six Abrams tanks or nine Redback infantry fighting vehicles.

Austal also said that Austal USA was presently constructing up to 12 smaller Landing Craft Utility vessels for the US Navy at its Mobile, Alabama, US shipyard.

Austal shares were 5.4% higher at $6.29 on Friday morning.

The company was valued at $2.46 billion at the close of trade on Thursday.

The post Austal shares take off on new Aussie contract win appeared first on The Motley Fool Australia.

It was a strong rebound after the Austal share price fell significantly at the end of last week.

Austal shares are no stranger to volatility. They have ridden the waves of the emerging defence theme over the last year. 

The defence rollercoaster

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.

The company also installs and maintains vessel command and control systems, communication and radar technology, and information management systems.

Over the past 12 months, defence stocks like Austal have been heavily covered as global conflict and geopolitical risk has led to heavy defence spending.

Investor sentiment has largely been positive on this sector, with heavy gains for fellow ASX defence shares like Droneshield Ltd (ASX: DRO) and Electro Optic Systems Hldgs Ltd (ASX: EOS). 

At the time of writing, Austal shares are 61% higher than a year ago. 

However they have fallen 33% from yearly highs back in January. 

With such significant share price movement, it can be difficult for investors to pinpoint true value. 

However, a new report from Bell Potter has provided updated guidance on Austal shares. 

Here's what the broker had to say. 

No smooth sailing

Bell Potter highlighted that ASB has downgraded its EBIT guidance for FY26 to ~A$110m, an 18.5% downgrade from the original $135m provided in October 2025. 

It said the cause of the downgrade was due to the accidental double-counting of US$17.1m worth of incentives related to its T-ATS program. 

The error was discovered during the preparation of its 1H26 accounts.

This led to a downgraded outlook from the broker. 

We have revised EPS lower by a -19%/-7%/-5% over FY26/27/28e reflecting lower USA shipbuilding margin in FY26e, following the EBIT guide and lower EBIT margins in FY27/28e in line with new program ramp up. 

We downgrade our target price by 18% reflecting lower earnings and a higher WACC due to greater observed share price volatility.

Price target decline but upside remains

In yesterday's report, Bell Potter lowered its price target on Austal shares to $6.60 (previously $8.00). 

Despite the significant cut to its outlook, based on yesterday's closing price, there is still upside for Austal shares. 

Bell Potter's target indicates roughly 13% upside from current levels. 

However the hold rating suggests it's not all smooth sailing for this defence stock.

When stripping out the MMF 3 earnings from future consensus forecasts, we observe that ASB trades in line with global peers on an EV/EBIT basis for FY26. Although ASB exhibits superior revenue growth, operational risks are relatively elevated as ASB transitions from legacy to new shipbuilding contracts in the USA. We retain Hold.

The post Are Austal shares a buy, hold or sell after soaring 20% on Monday? appeared first on The Motley Fool Australia.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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

Austal Ltd (ASX: ASB)

The Austal share price is down 21% to $4.99. This follows the release of a disappointing earnings guidance update from the ship builder on Friday. Austal revealed that it had previously overstated its potential earnings for the year. Its previous guidance included incentives that had already been recognised in Austal USA's forecast. As a result, there was a US$17.1 million overstatement included in its FY 2026 EBIT guidance. This led to Austal updating its EBIT guidance for FY 2026 to approximately A$110 million from A$135 million previously.

Cochlear Ltd (ASX: COH)

The Cochlear share price is down 19% to $199.69. This morning, Cochlear released its half-year results and reported a 1% increase in sales revenue to $1.176 billion and a 9% decline in underlying net profit to $195 million. And while management has reaffirmed its earnings guidance for FY 2026, it expects to be at the lower end of its $435 million to $460 million range. A slower-than-expected rollout of the new Cochlear Nucleus Nexa system was largely to blame for the soft performance.

Nick Scali Limited (ASX: NCK)

The Nick Scali share price is down 19% to $19.31. This was despite the furniture retailer releasing its half-year results and reporting strong revenue and profit growth. Nick Scali's revenue was up 7.2% to $269.3 million and its net profit was up 36.4% to $41 million. Though, investors may be disappointed with the performance of its UK operations, which posted a loss of $5.6 million for the half.

WiseTech Global Ltd (ASX: WTC)

The WiseTech Global share price is down a further 10% to $42.61. This is despite there being no news out of the logistics solutions technology company. However, it is worth noting that most ASX tech stocks are falling heavily today. So much so, the S&P/ASX All Technology Index is down by almost 4% this afternoon. WiseTech shares are now down by approximately 38% since just the start of the year. Artificial intelligence disruption concerns have been weighing heavily on software stocks.

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Late on Thursday, the company issued a brief statement to the ASX saying that, in preparation for publishing its half-year accounts, it had identified some discrepancies.

As the company said:

Austal Limited advises that in preparation of its half year accounts, the company identified that some incentives related to its T-ATS program were recognised by its US subsidiary, Austal USA, in line with percentage of completion. These incentives had already been recognised in Austal USA's forecast at full value for the remaining part of the program. The US$17.1m (approx.) overstatement had been included in the Company's FY2026 EBIT guidance. As a result, Austal is updating its EBIT guidance for FY2026 to approximately A$110m.

Guidance well down on previous outlook

Austal had previously been guiding to earnings of $135 million, with that figure announced in October.

The company's shares plunged 22.9% on the news on Friday morning to be changing hands for $4.86.

The shares are trading near the lower end of their 12-month range, with the stock trading between $8.82 and $3.50 over that period.

The company has had some good news in recent months, saying in mid-December that it had been awarded a contract extension to build another two Evolved Cape Class patrol boats for the Australian Border Force.

As Austal said at the time:

This latest award, valued at over $135 million brings the total number of Evolved Cape-class Patrol Boats contracted to Austal to 14 vessels, reinforcing the long-standing partnership between Austal, the Australian Border Force and the Royal Australian Navy in delivering critical maritime capability for Australia's national security.

Austal Chief Executive Officer Paddy Gregg said the vessels would strengthen the maritime border command's operational reach.

He went on to say:

Over the past five years, the Evolved Cape-class Patrol Boats have proven themselves as highly capable, reliable assets for Australia's border protection missions," Mr Gregg said. "With nine Evolved Capes already delivered and performing exceptionally with the Royal Australian Navy, and two more already under construction for the Australian Border Force, this new order further enhances Australia's maritime surveillance and response capability across Northern Australia and our vast maritime domain.

Austal was valued at $2.66 billion at the close of trade on Thursday.

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For the year to date, the shares have fallen 13.05% but they're still 47.87% higher than what they were trading at this time last year. The shares spiked to an all-time high of $8.82 last month and have now crashed 32.65% to the current trading price.

What happened to Austal shares?

The Australian-based global shipbuilding company's shares have enjoyed a bumper price increase this year as tailwinds push ASX defence sector stocks higher. 

Austal specialises in the design, construction, and support of defence and commercial vessels globally. Its products include naval vessels, defence surface-warfare combatants, high-speed support vessels, law-enforcement patrol boats, offshore vessels, and passenger and vehicle ferries.

The company won a couple of new contracts in December. The shipbuilder was awarded a contract extension worth more than $135 million to build two new Evolved Cape-class Patrol Boats for the Australian Border Force, bringing the total contracted to 14 vessels. It was also awarded a $1.029 billion design and construct contract to build 18 Landing Craft Medium (LCM) vessels for the Australian Army under the Commonwealth's Strategic Shipbuilding Agreement.

In January, US President Donald Trump also said that the 2027 US defence budget should be US$1.5 trillion, well above the US$901 million so far approved. Other countries are also bolstering their defence spending.

There doesn't appear to be any price-sensitive news out of the company to explain the latest sell-off. So the decline is most likely investors cashing in the strong gains earned over the past month or so.

Are Austal shares a buy, sell, or hold this year?

I think demand for defence companies will continue to climb this year as spending around the globe continues to rise. US tensions with Venezuela and Greenland could influence some more spending in the sector, while ongoing tensions in the Middle East are also likely to supercharge growth. Nations worldwide are prioritising military strength this year.

Analysts are optimistic about the outlook for Austal shares. TradingView data shows that two analysts have a strong buy rating and another two have a hold rating on the defence stock. The maximum target price is $8.10, which implies a potential 36.82% upside at the time of writing. 

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Its share price has soared more than 148% in the last year. 

However, shares fell 5.85% yesterday despite no price-sensitive news from the company. 

This marks a significant drop after a red-hot start to the year. 

Is it an opportunity for new investors to buy the dip?

Let's find out. 

Defence stocks still booming

ASX defence stocks have been amongst the best-performing themes in the last 12 months. 

Investors have undoubtedly noticed the unbelievable stock price rise for Droneshield Ltd (ASX: DRO). 

This defence stock is up more than 600% in the last 12 months. 

But it isn't alone. 

Other defence stocks that have enjoyed big gains in the last year include: 

• Electro Optic Systems Holdings Ltd (ASX: EOS) is up 794.17%
• Elsight Ltd (ASX: ELS) is up 1,163.64% 
• Vaneck Global Defence ETF (ASX: DFND) is up 79.80%
• Betashares Global Defence ETF (ASX: ARMR) is up 62.66%

These defence stocks and funds have all risen amidst global political tension and conflict. 

This has increased government investment, funding, and development of technology such as drones, AI, or electronic warfare.

Where does Austal fit into this puzzle?

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, law enforcement patrol boats, offshore vessels, and passenger and vehicle ferries.

It has enjoyed a red-hot 12 months, amidst the same tailwinds pushing other defence stocks higher. 

Recently, it has signed key contracts which have bolstered investor confidence and long-term outlook. 

Is it still a buy?

Despite yesterday's sell-off, these ASX defence shares are still 18% higher year to date. 

The share price closed yesterday at $8.05. 

Based on ratings from analysts, it appears it is now priced close to fair value. 

Late last year, Macquarie had a price target of $8.10 on Austal shares. 

Meanwhile, TradingView has an average analyst target of $7.84. 

The current share price would indicate it is hovering close to fair value. 

However, for prospective investors, it is worth considering recent geopolitical events and their impact on defence shares. 

US tensions involving Greenland (Arctic security, NATO posture) and Venezuela (energy security and regional stability) could influence global defence spending and allied procurement priorities. 

These could impact defence companies through higher demand for surveillance, maritime, aerospace, and sustainment capabilities aligned with US and allied programs.

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