Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to jump

It looks set to be a day to remember for Aussie investors on Thursday following a strong night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 179 points or 2% higher this morning. In the United States, the Dow Jones rose 3.05%, the S&P 500 climbed 1.6%, and the Nasdaq jumped 1.45%.

NAB results

National Australia Bank Ltd (ASX: NAB) shares will be on watch today when the big four bank releases its FY 2026 results. The consensus estimate is for NAB to report a cash profit of $6.3 billion for the 12 months. Earnings per share are expected to be in the region of $2.38 to $2.46, supporting total dividends of $1.70 per share for FY 2026.

Oil prices crash

ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) could have a tough session after oil prices crashed overnight. According to Bloomberg, the WTI crude oil price is down 7.8% to US$88.60 a barrel and the Brent crude oil price is down 8.1% to US$95.18 a barrel. Traders appear to believe the US mid-term election results could encourage peace talks between the US and Iran.

REA update

REA Group Ltd (ASX: REA) shares will be in focus today. That's because the property listings company will be releasing its first-quarter update before the market open. The team at Citi is expecting REA Group to report revenue of $440 million (excluding India). This would be an increase of 8% on a continuing basis. EBITDA is forecast to also be up 8% to $284 million for the three months.

Gold price jumps

It could be a good session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) on Thursday after the gold price jumped overnight. According to CNBC, the gold futures price is up 3.4% to US$4,074.2 an ounce. Investors were bidding the precious metal higher after the US dollar weakened following the US mid-term elections.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 to tumble

The Australian share market is expected to fall on Wednesday following a mixed session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 41 points or 0.45% lower. In the United States, the Dow Jones fell 0.45%, but the S&P 500 climbed 0.35% and the Nasdaq rose 0.75%.

Oil prices mixed

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is up 0.2% to US$96.62 a barrel and the Brent crude oil price is down 0.55% to US$104.17 a barrel. Traders appear to be waiting for further developments in the Middle East.

Westpac shares given trim rating

Following its results release this week, the team at Morgans has told investors to trim their holdings in Australia's oldest bank and revised its price target of $32.32. Commenting on Westpac Banking Corp (ASX: WBC), the broker said: "2H26 EPS and DPS were flat vs 1H26 and below consensus expectations. FY27F EPS downgraded c.5%. Target price +2% to $32.32/sh. Achieving FY29 financial targets requires significant outperformance of our forecast. At current prices, potential TSR is -9%. Trading multiples remain stretched. Four-year equity IRR is c.3% pa, well below opportunity cost. TRIM overweight positions."

Gold price falls

It could be a poor session for ASX 200 gold shares Westgold Resources Ltd (ASX: WGX) and Northern Star Resources Ltd (ASX: NST) after the gold price fell overnight. According to CNBC, the gold futures price is down 1% to US$3,929.4 an ounce. This was driven by strength in bond yields and the US dollar.

Trim Boss Energy shares

The team at Morgans has also put a trim rating on Boss Energy Ltd (ASX: BOE) shares with a price target of $1.35. It was pleased with the company's quarterly update, but doesn't see enough value on offer for investors. Morgans said: "Honeymoon beats despite weather disruptions – Drummed production of 359klbs beat MorgansF (+8%) and Consensus (+17%), despite 19 lost production days from heavy rainfall during August. Record IX flow rates largely offset declining tenor, while FY27 guidance remains unchanged. Wide-spaced transition remains the key value driver – BOE commenced flushing at the first wide-spaced wellfield, with early results supporting BOE's confidence in the design."

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

Up until recently, gold beat both the S&P 500 Index (SP: .INX) and the S&P/ASX 200 Index (ASX: XJO) on most short and medium-term timeframes.

Unprecedented demand from central banks around the world, lower interest rates, geopolitical conflict, and a weaker US dollar, sent the gold price to an all-time high of US$5,379 per ounce in January.

Despite retreating from this level, gold remains ahead of both the S&P 500 and ASX 200 over the past 5 years. Since November 2021, the precious metal has risen more than 125%. This still handily beats the S&P 500's 61% gain and the ASX 200's 20% gain. 

However, gold has now fallen firmly behind these indices on a one year basis.

Last week, gold plummeted to US$3,885.70 a troy ounce. This was its lowest level since 3 October 2025. It's now down around 30% since its peak.

The cause? Persistently high energy prices and inflation, which strengthened expectations of another US interest rate hike. 

Higher interest rates have driven bond yields higher. In early October, the US 10-year bond yield surged to a 24-year high of 5.36%, pulling back below the 5% threshold. 

In Australia, the 10-year bond hit 5.4%, and currently sits at around 5.2%.

Higher interest rates (and bond yields) spell bad news for gold investors. Since gold pays no interest, it becomes a far less attractive investment.

Last week, artificial intelligence spending concerns also triggered a sharp sell-off in equities, giving investors another excuse to sell stocks and buy bonds.

Gold miners crater

In last Friday's overnight trade, major US gold miners Barrick Mining Corporation and Newmont Corporation suffered a beating in response, falling 4.3% and 4.6% respectively. 

This morning, the ASX followed suit with the S&P/ASX All Ordinaries Gold Index (ASX: XGD) opening approximately 2% lower.

Major ASX miners Northern Star Ltd (ASX: NST), Newmont Corporation CDI (ASX: NEM), which is dual-listed, and Evolution Mining Ltd (ASX: EVN) fell even further.

Newmont was the hardest hit, falling 3.5%, while Northern Star and Evolution Mining, are down 3% at the time of writing. 

So, has gold lost its shine, or is this sell-off a golden opportunity?

Gold's appeal remains strong

Many of the characteristics that drive investors to buy gold remain strong.

Gold has long been viewed as a safe haven. It has physical scarcity, along with a long-dated history of preserving purchasing power during challenging economic times. 

With wars in Ukraine and Iran continuing on, gold's safe haven appeal remains stronger than ever.

According to the World Gold Council, central banks also remained net buyers of gold in August. Recently, China, Uzbekistan, and Poland were among the largest institutional buyers. 

In the coming days, we will find out whether China remains a net buyer of gold.

Last week, investors were also reminded of the relative safety of hard commodities over digital assets after crypto platform Binance was hacked. While Binance has since announced that it will cover around 90% of the US$6.3 billion stolen, crypto investors may be re-evaluating their crypto holdings and weighing the merits of switching to gold. 

No doubt, many investors this week will be questioning where gold is headed next. Specifically, whether there is more pain to come or whether today's price presents opportunity.

However, an equally important question is how to hold it. 

Is it better to buy physical gold (either directly or through ASX gold ETFs) or to invest in ASX-listed gold miners?

Gold vs gold miners?

The last few years have produced many ASX gold miner multi-baggers, all of which have run well ahead of the gold price.

This includes ASX 200 stock PDI Gold Ltd (ASX: PDI), which is up 300% in 5 years, as well as smaller miners including Solstice Minerals Ltd (ASX: SLS), which has risen more than 800%.

However, for the average ASX investor out there, the odds of making a fortune on gold miners are slim. 

Last year, the Australian Financial Review, tracked the journey of 172 gold mining stocks that were listed on the ASX a decade ago. 

Out of 172, just 100 were still around.

Those who vanished were either taken over or ran out of money. 

Among those that remain, the average annual return was a dismal 3%.

Evidently, the gap between the most successful and the biggest failures is wide. 

When ASX gold miners do well, investors win big. 

Between 2015 and 2025, Capricorn Metals Ltd (ASX: CMM), Bellevue Gold (ASX: BGL), Beacon Minerals Ltd (ASX: BCN), and Genesis Minerals Ltd (ASX: GMD) all delivered at least a 47% average annual return. 

By most investors' standards, that's an astonishingly successful run. A $10,000 investment compounded at 47% for 10 years turns into $471,000. So, picking one of these winners can be truly life-changing. 

However, at the other end of the scale, roughly 40% of the ASX gold miners studied by the Australian Financial Review that are still around today have posted negative returns. 

Physical gold, on the other hand, has delivered around a 10% average annual return since 2000. 

While this is roughly in line with the stock market, gold has low correlation with equities, providing additional defensive qualities. 

Passive income

History suggests that the average ASX investor could be better off investing in physical gold than gold miners. 

However, as previously mentioned, gold pays no income. 

With the 2026 Australian Investor Study revealing that 31% of investors listed 'building a sustainable income stream' as their top investor goal, this could be a deal breaker for some investors.  

Those falling into this category may wish to consider high-yield ASX gold miners, including Regis Resources Ltd (ASX: REG) and Evolution Mining, which both offer yields above 3.6%.

The post Gold plunges to a 1-year low, triggering global sell-off. Time to buy gold or miners? appeared first on The Motley Fool Australia.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set for a subdued start to the week following a poor session on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 4 points lower. In the United States, the Dow Jones was down 1.1%, the S&P 500 fell 1.8%, and the Nasdaq tumbled 2.85% lower.

Oil prices rise

ASX 200 energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a good session after oil prices charged higher on Friday night. According to Bloomberg, the WTI crude oil price was up 2.1% to US$104.12 a barrel and the Brent crude oil price was up 2.6% to US$113.43 a barrel. Prices were driven higher by concerns about supply disruptions in the Middle East, including an attack on a tanker in the Strait of Hormuz.

Sell CSL shares

The team at Sanlam Private Wealth has named CSL Ltd (ASX: CSL) shares as a sell this week according to The Bull. It said: "The share price of this biotechnology giant has staged a strong recovery since it was priced at $92.24 on June 3. The shares were trading at $197.15 on October 29. The stock was recently trading about 10 per cent above global peers. Despite the company forecasting underlying profit growth of about 5 per cent in fiscal year 2027, we believe the solid outlook is more than factored in to recent price levels. In our view, the risk-return equation during the next 12 months is unfavourable at this point. The share price recovery at CSL provides an opportunity to take some profits in favour of companies offering brighter capital growth prospects."

Gold price tumbles

It could be a difficult start to the week for ASX 200 gold shares Capricorn Metals Ltd (ASX: CMM) and Northern Star Resources Ltd (ASX: NST) after the gold price tumbled on Friday night. According to CNBC, the gold futures price was down 3.3% to US$3,898.9 an ounce. The gold price hit a one-year low amid increased rate hike bets.

Tech shares on watch

A number of ASX 200 tech shares will be on watch today after a tech selloff on Wall Street on Friday. The worst performer was Intel Corp (NASDAQ: INTC), which sank almost 30%. This could mean the likes of WiseTech Global Ltd (ASX: WTC), Life360 Inc. (ASX: 360), and NextDC Ltd (ASX: NXT) have a difficult session on the ASX boards on Monday.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

Mining stocks have become Australia's proxy for the global artificial intelligence (AI) boom.

We don't have a big tech sector heavily involved in the AI build-out like the US market does.

But we have all the metals and minerals needed to build the world's data centres and power battery storage systems.

So, when US AI stocks get sold off, we see a sell-off in tech and copper and critical minerals miners.

That's what happened the week before last when ASX 200 tech stocks fell 5.11%, and materials dropped 7.69%.

Last week, US AI stocks recovered over a three-day run early in the week, and so did our mining and tech companies.

Meanwhile, the consumer discretionary and staples sectors took a hit.

Hotter-than-expected inflation data led the market to price in an 80% chance of a fifth interest rate hike for 2026 on Tuesday.

Meanwhile, the benchmark ASX 200 rose 1.28% to finish at 8,908.1 points.

Seven of the 11 market sectors finished in the green last week.

Let's recap.

ASX 200 materials and mining shares led the market

The BHP Group Ltd (ASX: BHP) share price jumped 4.56% to close at $57.56 on Friday.

The Mineral Resources Ltd (ASX: MIN) share price rose 4.08% to $44.09.

Rio Tinto Ltd (ASX: RIO) shares lifted 0.71% to $147.31 last week.

The Fortescue Ltd (ASX: FMG) share price finished steady at $14.27.

South32 Ltd (ASX: S32) shares increased 5.08% to $4.34.

ASX 200 copper pure-play Sandfire Resources Ltd (ASX: SFR) soared 9.16% to $20.14 per share.

Lithium shares struggled last week amid sluggish commodity prices.

The PLS Group Ltd (ASX: PLS) share price edged 0.76% higher to $2.64.

The Liontown Ltd (ASX: LTR) share price fell 3.13% to 62 cents.

How about ASX gold shares?

The Northern Star Resources Ltd (ASX: NST) share price ascended 4.59% to $25.27.

The Evolution Mining Ltd (ASX: EVN) share price rose 3.98% to $11.76.

Newmont Corporation CDI (ASX: NEM) shares lifted 0.7% to $156.12.

The gold price has fallen 7% in 2026 and broke below US$4,000 per ounce on Friday.

ASX 200 market sector snapshot

Here's how the 11 market sectors stacked up last week, according to CommSec data.

Over the five trading days:

The post ASX 200 mining shares rebounded while consumer stocks fell last week appeared first on The Motley Fool Australia.

The US PCE price index rose 0.5% in September, its biggest monthly rise since March, and annual inflation is 3.6%.

The data centre build-out and other new infrastructure spending contributed to US GDP rising to 3.4% annually.

The gold price is currently US$3,994.25 per ounce, down 0.7% today and down 4.4% over the past month.

In the calendar year to date (YTD), the gold price has declined 7.5% and is now close to where it was 12 months ago.

This contrasts with a 65% surge in the gold price in 2025, following a 24% increase in 2024.

The US inflation and economic data has reinforced the likelihood of another US rate hike this year.

The US Fed raised interest rates for the first time in three years in September.

The benchmark rate is now 3.75% to 4%.

The Fed kept interest rates on hold this week ahead of the US mid-term elections next week.

4 ASX gold shares to buy and why

ASX gold mining shares have followed the trajectory of the gold price in the YTD.

The S&P/ASX All Ords Gold Index (ASX: XGD) has fallen 7.6% since the start of the year.

On Friday, analysts at Trading Economics said:

Gold is on track to decline nearly 4% in October, potentially recording its second consecutive monthly loss.

Gold began a bull cycle in 2022 after Western authorities froze Russia's foreign exchange reserves after its invasion of Ukraine.

That led to central banks deciding to diversify their reserves away from the US and into the 'safe haven' of gold.

The gold price surge hit a snag in 2026 amid multiple headwinds, including a rush to liquidity after the US-Iran conflict began.

Bond yields rising to multi-year highs have also put a dampener on the gold price.

However, some experts think the gold price decline of 2026 has reached its floor.

Others point out that gold miners are still making a motza on the elevated gold price.

We've seen evidence of this with big dividend payouts from ASX gold mining shares this year.

So, if you're interested in ASX gold shares, here are some stock picks from the experts.

Minerals 260 Ltd (ASX: MI6)

The Minerals 260 share price is 78 cents, down 0.3% today and up 81% in 2026.

This mineral explorer is developing the Bullabulling project in Western Australia.

On The Bull this week, Jonathan Tacadena from MPC Markets explained his buy rating:

Minerals 260 is a fast growing gold developer with a clear path to production.

First production is targeted for the fourth quarter of calendar year 2028.

The $220 million Franco-Nevada funding deal supports development. We remain bullish on the outlook for gold given global debt.

MI6 may re-rate as it shifts from developer to producer. 

Northern Star Resources Ltd (ASX: NST)

The Northern Star Resources share price is $25.27, down 0.1% today and up 3% in 2026.

James Bills from Shaw and Partners describes the gold price environment as "supportive", despite the weakness this year.

Bills explained his buy recommendation on this ASX gold share:

The company operates a portfolio of high quality assets with a proven track record of operational delivery and disciplined capital management.

Recent production results have been solid, and ongoing investment in key projects should support future output growth.

With global economic uncertainty continuing to support demand for gold, Northern Star is well positioned to generate attractive shareholder returns.

Ramelius Resources Ltd (ASX: RMS)

The Ramelius Resources share price is $3.45, down 2.7% today and down 19% in 2026.

Michael Gable from Fairmont Equities says his buy call is partly based on the belief the gold price has bottomed.

Gable told The Bull last week:

The share prices of various gold mining stocks have held up well, and this sign of strength is bullish.

I'm expecting gold mining stock prices to rally higher from here as they follow potentially higher gold prices.

RMS is an Australian gold producer with no debt and strong free cash flow. It pays a fully franked dividend and has been buying back shares.

RMS is highly leveraged to an increasing gold price and the company's outlook is bright.

Genesis Minerals Ltd (ASX: GMD)

The Genesis Minerals share price is $6.55, down 2.3% today and down 10% in 2026.

Todd Lewis from Bell Potter has a buy call on this ASX gold mining share.

After reviewing the miner's 1Q FY27 report, Lewis raised his price target to $9.30.

This implies more than 40% potential upside over the next 12 months.

Lewis said: 

The quarter was solid on ounces and cash but softer on revenue and cost.

The revenue miss is largely price and sales timing, while the AISC step-up reflects lumpy sustaining capital rather than higher unit mining costs.

The post 4 ASX gold shares to buy as gold price breaks below US$4,000 per ounce: experts appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to rise

It looks set to be a good session for Australian investors following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 40 points or 0.45% higher this morning. In the United States, the Dow Jones rose 0.2%, the S&P 500 climbed 0.3%, and the Nasdaq jumped 0.3%.

Wesfarmers update

Wesfarmers Ltd (ASX: WES) shares will be on watch on Thursday when the conglomerate releases a trading update ahead of its annual general meeting. Investors will be looking for signs that Bunnings and Kmart are continuing to perform well in FY 2027. Also holding events today and likely to release updates are Challenger Ltd (ASX: CGF), JB Hi-Fi Ltd (ASX: JBH), Perpetual Ltd (ASX: PPT), and Super Retail Group Ltd (ASX: SUL).

Oil prices rise

ASX 200 energy shares including Woodside Energy Group Ltd (ASX: WDS)and Santos Ltd (ASX: STO) will be on watch today following a positive night for oil prices. According to Bloomberg, the WTI crude oil price is up 1.8% to US$101.69 a barrel and the Brent crude oil price is up 0.15% to US$114.03 a barrel. Traders were buying oil in response to reports that the US is planning strikes on Iran.

Buy Life360 shares

Life360 Inc. (ASX: 360) shares could be good value according to the team at Ord Minnett. The broker has resumed coverage on the location technology company's shares with a buy rating and $29.40 price target. Based on its current share price of $20.65, this implies potential upside of 42% for investors over the next 12 months. The broker is bullish on Life360's outlook, partly due to the potential growth of its advertising business.

Gold price rises

It could be a reasonably positive session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) on Thursday after the gold price edged higher overnight. According to CNBC, the gold futures price is up 0.2% to US$4,083.5 an ounce. This follows the US Federal Reserve's decision to keep interest rates on hold.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

The benchmark index has risen just 1.4% in the calendar year to date (YTD).

Meanwhile, global markets have significantly outperformed with the MSCI All Country World Index up 11%.

US stocks have done even better.

The S&P 500 Index (SP: .INX) is up 12% and the Nasdaq Composite Index (NASDAQ: .IXIC) is up 13%.

Here are some new buy, hold, and sell recommendations on ASX shares today (courtesy The Bull). 

Northern Star Resources Ltd (ASX: NST)

The Northern Star Resources share price is up 4% in 2026.

James Bills from Shaw and Partners has a buy rating on this ASX gold mining share. 

He commented: 

Northern Star remains one of Australia's leading gold producers, offering investors exposure to a supportive gold price environment.

The company operates a portfolio of high quality assets with a proven track record of operational delivery and disciplined capital management.

Recent production results have been solid, and ongoing investment in key projects should support future output growth.

With global economic uncertainty continuing to support demand for gold, Northern Star is well positioned to generate attractive shareholder returns.

Computershare Ltd (ASX: CPU)

The Computershare stock price has soared 26% in the YTD.

Bills has a hold rating on this ASX industrials share. 

He said: 

Computershare continues to benefit from its diversified earnings base and global market presence.

Higher interest rates have supported earnings in recent years, although that tailwind may moderate over time.

The business remains financially strong, with recurring revenue streams and a leading position in share registry and administration services.

While the valuation appears reasonable, a hold recommendation reflects a more balanced outlook as interest rate conditions evolve.

Sunrise Energy Metals Ltd (ASX: SRL)

The Sunrise Energy Metals share price has ripped 65% higher in 2026.

Joshua Baker from RaaS Group reckons it's time to take your money and run.

Baker has a sell recommendation on Sunrise Energy Metals shares.

He explained:

This metals company has enjoyed a strong run in calendar year 2026 as an opportunity in scandium has been accepted by the market, which was enhanced by the US Government committing conditional funding to the company.

On August 10, SRL announced the US Department of War's Office of Strategic Capital conditionally committed up to $US400 million in long term debt financing to support the development of Sunrise's 100 per cent owned Syerston Scandium project in New South Wales.

SRL shares have risen from $7.85 on January 2 to trade at $14.82 on October 22.

I believe a high level of success in the scandium market is priced in, so I would be inclined to cash in some gains at these levels.

The post Buy, hold, sell: Northern Star Resources, Computershare, Sunrise Energy shares appeared first on The Motley Fool Australia.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 to rise again

The Australian share market is expected to rise on Wednesday following a good session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.2% higher. In the United States, the Dow Jones rose slightly, the S&P 500 climbed 0.6%, and the Nasdaq jumped 1.2%.

ANZ shares given trim rating

The team at Morgans isn't overly positive on ANZ Group Holdings Ltd (ASX: ANZ) shares ahead of its results release next month. The broker has retained its trim rating with a slightly improved price target of $34.44 (from $33.53). It said: "We make 0-2% changes to FY26-28 forecasts ahead of the FY26 result, largely related to balance sheet growth and loan loss provisioning assumptions. Target price lifted to $34.44/sh, from $33.53/sh previously. TRIM retained, given potential TSR at current prices of c.-9%."

Oil prices ease

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a subdued session after oil prices eased overnight. According to Bloomberg, the WTI crude oil price is down 1.75% to US$99.97 a barrel and the Brent crude oil price is down 1.6% to US$113.96 a barrel. This was driven by Middle East peace hopes.

PLS update

All eyes will be on PLS Group Ltd (ASX: PLS) shares on Wednesday. That's because the lithium giant is scheduled to release its quarterly update this morning. With its shares down 25% since this time last month, investors will no doubt be looking to see how lithium prices are faring. In other news, Fortescue Ltd (ASX: FMG) shares will be on watch when the iron ore giant releases its annual general meeting update. And Woolworths Group Ltd (ASX: WOW) is releasing its Q1 update, with sales growth of 4.3% to $19.3 billion expected by analysts at UBS.

Gold price rises

ASX 200 gold shares Westgold Resources Ltd (ASX: WGX) and Northern Star Resources Ltd (ASX: NST) could have a good session after the gold price rose overnight. According to CNBC, the gold futures price is up 0.9% to US$4,074 an ounce. Softer oil prices eased US interest rate hike concerns.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

Here's what they are bullish on:

Northern Star Resources Ltd (ASX: NST)

The team at Shaw and Partners thinks Northern Star could be an ASX 200 share to buy.

The broker highlights the quality of the gold miner's portfolio and proven track record as reasons to buy. It said:

Northern Star remains one of Australia's leading gold producers, offering investors exposure to a supportive gold price environment. The company operates a portfolio of high quality assets with a proven track record of operational delivery and disciplined capital management. 

Recent production results have been solid, and ongoing investment in key projects should support future output growth. With global economic uncertainty continuing to support demand for gold, Northern Star is well positioned to generate attractive shareholder returns.

Telix Pharmaceuticals Ltd (ASX: TLX)

Another ASX 200 share that Shaw and Partners is positive on is radiopharmaceutical company Telix.

It likes the company due to its promising pipeline and expanding commercialisation opportunities in key global markets. The broker explains:

Telix continues to benefit from strong demand for its radiopharmaceutical products, particularly in prostate cancer imaging. The company has demonstrated impressive revenue growth and is advancing a promising pipeline across diagnostics and therapeutics. 

Recent updates highlight expanding commercialisation opportunities in key global markets, providing multiple avenues for future earnings growth. While the stock can be volatile, its strong industry position and exposure to a rapidly growing health care segment support a positive long term outlook.

Treasury Wine Estates Ltd (ASX: TWE)

Over at MPC Markets, its analysts are bullish on wine giant Treasury Wine and have named it as an ASX 200 share to buy this week.

After a difficult period, MPC Markets appears to believe a change could be coming. It said:

This global wine company reported a statutory net loss after tax of $1.1 billion in full year 2026, driven by a non-cash impairment of US assets. However, the company is transforming how it operates and is forecasting a brighter outlook. Leverage was reduced in the first quarter of 2027, driven by stronger operating cash flow. 

In China, the Penfolds brand grew depletions marginally ahead of plan, which was partially driven by increasing consumer demand. The company announced it was on track to realise $100 million a year in cost reductions by fiscal year 2029. The turnaround isn't a done deal, but we like the mix of disciplined asset sales, cost cutting and firming luxury demand. The shares have been enjoying favourable momentum since March.

The post Experts name 3 ASX 200 shares to buy appeared first on The Motley Fool Australia.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set for a poor start to the week following a disappointing session on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 43 points or 0.5% lower. In the United States, the Dow Jones was down 1.2%, the S&P 500 fell 0.5%, and the Nasdaq edged 0.2% lower.

Oil prices jump

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a strong start to the week after oil prices jumped on Friday night. According to Bloomberg, the WTI crude oil price was up 3.8% to US$103.27 a barrel and the Brent crude oil price was up 3.15% to US$116.72 a barrel. Oil prices hit a six-month high in response to escalating tensions in the Middle East.

Buy Telix shares

Telix Pharmaceuticals Ltd (ASX: TLX) shares could be in the buy zone according to analysts at Shaw and Partners. Courtesy of The Bull, the broker said: "Telix continues to benefit from strong demand for its radiopharmaceutical products, particularly in prostate cancer imaging. The company has demonstrated impressive revenue growth and is advancing a promising pipeline across diagnostics and therapeutics. Recent updates highlight expanding commercialisation opportunities in key global markets, providing multiple avenues for future earnings growth. While the stock can be volatile, its strong industry position and exposure to a rapidly growing health care segment support a positive long term outlook."

Gold price falls

It could be a poor start to the week for ASX 200 gold shares Capricorn Metals Ltd (ASX: CMM) and Northern Star Resources Ltd (ASX: NST) after the gold price fell on Friday night. According to CNBC, the gold futures price was down 1.3% to US$4,007.9 an ounce. Rising oil prices have boosted US Federal Reserve interest rate hike bets.

AGMs

A number of ASX shares are holding annual general meetings on Monday and could provide trading updates at their events. Among the companies holding meetings today are hearing solutions company Cochlear Ltd (ASX: COH) and furniture retailer Nick Scali Limited (ASX: NCK).

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

Have these updates been received well by analysts? Let's see what Morgans thinks of three of them.

Hub24 Ltd (ASX: HUB)

Morgans was pleased with this investment platform provider's performance during the first quarter.

It highlights that Hub24 delivered platform net flows that were down quarter on quarter but in line with expectations.

In response to this and recent share price weakness, the broker has upgraded Hub24 shares to a buy rating with an $86.00 price target. It said:

HUB's 1Q27 Platform net flows of A$4.0bn were in line with MorgF/VA consensus (A$3.97bn), -5% qoq (4Q26: A$4.2bn) and -23% yoy (1Q26: A$5.2bn was a 1Q flows record). Platform FUA closed at A$143.7bn (+3% qoq, +18% yoy) and Total FUA at A$168.6bn, both ~1.2% below VA consensus. Discretionary (IDPS) outflows persisted during the quarter, with IDPS gross & net inflows below a strong pcp; however, structural support from resilient Super flows remained evident. 

Adjusting for HUB's 1Q27 update, we trim our EPS by 1% in FY27-29F. HUB is now trading on an FY27F P/E of 38x (a ~17% / 1StDev discount to its 5yr average). Whilst cyclical headwinds are weighing on flows momentum in the near term, HUB remains strongly positioned to benefit from broader structural tailwinds. We see the pullback in the share price as an increasingly attractive entry point. We upgrade our recommendation to BUY (from ACCUMULATE), with a PT of A$86.00/sh.

Northern Star Resources Ltd (ASX: NST)

This gold miner also delivered a quarterly update that went down well with Morgans.

However, it isn't enough for a buy rating. Morgans has retained its hold rating and $25.00 price target on Northern Star shares. It said:

A solid start to FY27. Gold sold of 364koz beat MorgansF and consensus, and AISC of A$3,217/oz was 8% below consensus, led by KCGM and Yandal. Pogo was weak. FY27 guidance is unchanged and the KCGM ramp-up remains the key operational watch point. New CEO Suresh Vadnagra's plans for the portfolio are likely a few months away. In the meantime, market focus remains on a potential increase in the Gold Fields offer and KCGM commissioning performance.

Transurban Group (ASX: TCL)

Morgans believes this toll road operator could be negatively impacted by higher fuel costs and interest rates.

As a result, it has put a trim rating and $12.06 price target on its shares. It explains:

Alongside its AGM (where FY27 DPS guidance of 72 cps and Free Cash coverage slightly less than 95% were reaffirmed), TCL released its 1Q27 traffic data. We expect higher fuel costs and interest rates dampened Australian traffic growth (c.1% on pcp ex West Gate Tunnel). Dynamic pricing strength of the US Express Lanes continues to be terrific. Target price of $12.06/s (+3 cps) aligned to our DCF valuation. Potential TSR at current prices is -9% (including c.5.1% cash yield). TRIM into share price strength.

The post Should you buy Hub24, Northern Star, and Transurban shares? appeared first on The Motley Fool Australia.

Let's check out some new ratings from three experts today.

Xero Ltd (ASX: XRO)

The Xero share price is $63.25, down 1.8% today and down 59% over 12 months. 

Toby Grimm from Baker Young has a buy rating on this ASX 200 tech share. 

Grimm explained (courtesy The Bull):  

Xero is an accounting software provider. Concerns about future growth rates due to perceived competitive threats from AI tools remain.

But we believe the material decline in XRO's share price amid the company continuing to deliver operational performance inline or above market guidance has created a compelling value opportunity.

We believe small to medium sized firms handling critical financial information will continue using trusted third party suppliers rather than develop their own systems.

XRO's strong growth rates justify higher than average multiples, in our view.

We're comfortable building positions for longer term investors around current levels.

Northern Star Resources Ltd (ASX: NST)

The Northern Star Resources share price is $24.85, down 0.8% today and up 5% over 12 months. 

Morgans kept its hold rating in place on this ASX 200 gold share after reviewing the miner's 1Q FY27 results.

The broker has a 12-month share price target of $25 on Northern Star Resources shares.

Morgans said: 

A solid start to FY27. Gold sold of 364koz beat MorgansF and consensus, and AISC of A$3,217/oz was 8% below consensus, led by KCGM and Yandal. Pogo was weak.

FY27 guidance is unchanged and the KCGM ramp-up remains the key operational watch point.

New CEO Suresh Vadnagra's plans for the portfolio are likely a few months away.

In the meantime, market focus remains on a potential increase in the Gold Fields offer and KCGM commissioning performance.

JB Hi-Fi Ltd (ASX: JBH)

The JB Hi-Fi share price is $71.47, down 1.9% today and down 38% over 12 months. 

Michael Gable from Fairmont Equities reckons it's time to sell this ASX 200 consumer discretionary share. 

Gable said: 

We tipped this retailer as a sell in TheBull.com.au in early May in response to increasing interest rates and fuel prices pressuring discretionary retail stocks.

Since then, we've seen a Federal budget impacting consumer confidence and household wealth on top of more interest rate rises.

With consumer confidence near record low levels amid higher petrol prices, we don't see a path to recovery for retail stocks like JBH until later in 2027 when interest rates may finally be cut.

The post Buy, hold, sell: JB Hi-Fi, Xero, Northern Star Resources shares appeared first on The Motley Fool Australia.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to edge lower

It looks set to be a subdued session for Australian investors despite a good night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 1 point lower this morning. In the United States, the Dow Jones rose 0.7%, the S&P 500 climbed 0.6%, and the Nasdaq jumped 1.05%.

CSL appoints new CEO

CSL Ltd (ASX: CSL) shares will be on watch on Thursday after the biotech giant announced the appointment of its new CEO. Deborah Waterhouse will commence in the role from 1 February 2027. The company notes that the appointment was made following an extensive global search process. It highlights that Ms Waterhouse is a proven commercial leader with more than 25 years' experience managing complex global specialty pharmaceutical companies across the U.S., the UK, Europe, and Australia.

Oil prices mixed

ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS) and Santos Ltd (ASX: STO) will be on watch following a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is flat at US$97.82 a barrel and the Brent crude oil price is up 0.9% to US$109.74 a barrel. Traders appear undecided where next for oil prices following Middle East developments.

Accumulate BHP shares

BHP Group Ltd (ASX: BHP) shares could be good value according to analysts at Ord Minnett. In response to the mining giant's quarterly update, the broker has upgraded BHP shares to an accumulate rating (from hold) with a $63.00 price target. Based on its current share price of $58.54, this implies potential upside of approximately 8% for investors. Ord Minnett also expects a dividend yield of around 4.75%. 

Gold price rises

It could be a relatively positive session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) on Thursday after the gold price rose overnight. According to CNBC, the gold futures price is up 0.25% to US$4,152 an ounce. This saw the gold price recover from a one-week low.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

What did Northern Star Resources report?

• Gold sold: 363,891 ounces for the quarter
• All-in sustaining cost (AISC): A$3,217/oz (US$2,244/oz)
• Net mine cash flow: A$210 million (all three centres positive)
• Group underlying free cash flow: negative A$31 million (including A$113 million tax payments)
• Cash and bullion as at 30 September: A$1,200 million
• FY27 production guidance unchanged: 1,500–1,650koz gold sold at AISC of A$3,050–3,450/oz

What else do investors need to know?

Northern Star completed the KCGM mill tie-in during the September quarter, with commissioning of the expanded plant now underway. This milestone is key for the group's long-term production plans, though mill ramp-up affected grades and recoveries for the quarter.

All three production centres—Kalgoorlie, Yandal, and Pogo—delivered positive cash flow. The company invested A$56 million in exploration, while the Hemi Project studies are progressing to plan towards a final investment decision late in FY27.

Northern Star's balance sheet remains strong, with A$1.2 billion in cash and bullion and bank facilities in place. The company utilised A$500 million of these facilities post quarter-end to help maintain targeted cash levels ahead of a dividend payment.

What did Northern Star Resources management say?

Suresh Vadnagra, Managing Director & CEO, commented:

The September quarter has delivered another major milestone for Northern Star with completion of the KCGM mill tie-in and commencement of commissioning of the integrated plant. Commissioning is progressing in line with expectations for this early stage. We have also had a solid start to FY27 across our operations, with all sites delivering in line with plan. While I still have a lot to learn about our individual assets, we have a high-quality asset base and a strong foundation on which to grow. Consistent delivery will be fundamental to our success and will require strong operating discipline, clear accountability and a group-wide focus on costs, execution and capital discipline. My immediate priority is to understand the business in parallel with focusing on completing the KCGM mill expansion safely and efficiently as well as ensuring consistent delivery across the portfolio.

What's next for Northern Star Resources?

FY27 production guidance is unchanged, with the company aiming for up to 1.65 million ounces of gold sold at lower costs over the year. Production is expected to be weighted to the second half, as the expanded KCGM plant ramps up.

Northern Star is focused on cost discipline, capital management, and advancing its growth projects, including Stage II of the KCGM expansion and the Hemi Project. Management says a portion of FY27's capital expenditure remains discretionary, giving flexibility should operating conditions change.

Northern Star Resources share price snapshot

Over the past 12 months, Northern Star Resources shares have declined 5%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 3% over the same period.

View Original Announcement

The post Northern Star Resources posts production and commissioning update appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 to rebound

The Australian share market is expected to rise on Wednesday following a mixed session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 32 points or 0.35% higher. In the United States, the Dow Jones rose 1% and the S&P 500 climbed 0.3%, but the Nasdaq was down a fraction.

Oil prices fall

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a poor session after oil prices fell overnight. According to Bloomberg, the WTI crude oil price is down 2.5% to US$101.09 a barrel and the Brent crude oil price is down 0.5% to US$108.97 a barrel. Traders were selling oil amid optimism over diplomatic progress in the Middle East.

Sigma update

Sigma Healthcare Ltd (ASX: SIG) shares will be on watch on Wednesday when the Chemist Warehouse owner releases a trading update at its annual general meeting. Bell Potter is expecting the company to reveal that it started the financial year strongly. It said: "We expect 1Q27 network LFL network sales growth in the range of 12-13%."

Gold price falls

ASX 200 gold shares including Westgold Resources Ltd (ASX: WGX) and Northern Star Resources Ltd (ASX: NST) could have a subdued session after the gold price fell overnight. According to CNBC, the gold futures price is down 0.45% to US$4,141.3 an ounce. Traders were selling gold in response to rate hike fears.

Buy Pro Medicus shares

Pro Medicus Ltd (ASX: PME) shares could be a top pick for Aussie investors according to Morgans. It has upgraded the health imaging technology company's shares to a buy rating with a $230.00 price target. It said: "PME has announced a further seven-year, A$24m full stack cloud contract with Billings Clinic Logan Health, its third new community health system win in FY27 to date (A$72m TCV, A$10.3m new ARR). The FY27 wins are modest individually but consistent in size, term and scope, pointing to a repeatable mid-market playbook that broadens the pipeline beyond large Integrated Delivery Networks. Near-term focus shifts to RSNA in late November as the likely window for a larger deal, and to execution on a busy 1Q'CY27 go-live schedule underpinning FY28. We upgrade to a BUY (from Accumulate), with no change to our A$230 target price."

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set for a subdued start to the week following a poor session on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 11 points or 0.1% lower. In the United States, the Dow Jones was down 0.35%, the S&P 500 fell 1.1%, and the Nasdaq sank 2.15%.

Oil prices jump

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a strong start to the week after oil prices jumped on Friday night. According to Bloomberg, the WTI crude oil price was up 3.5% to US$101.41 a barrel and the Brent crude oil price was up 3.7% to US$109.86 a barrel. Increased Strait of Hormuz attacks and reports that Ukraine is vowing to hit Russian refineries were behind the rise.

Buy Mesoblast shares

Mesoblast Ltd (ASX: MSB) shares offer major upside according to Bell Potter. This morning, the broker has retained its buy rating and slightly trimmed price target of $4.40 on the biotech company's shares. It said: "The miss on September quarter revenues requires a downgrade to the forecast for FY27 Ryoncil revenues. The forecast is lowered by 18% ($243m to $203m) with the NPAT reduced by a similar quantum to $26.7m. The FY28 revenue forecast is reduced by 7%, however, there are no changes to the long-term outlook. Price target is reduced to $4.40."

Gold price edges higher

It could be a reasonable start to the week for ASX 200 gold shares such as Capricorn Metals Ltd (ASX: CMM) and Northern Star Resources Ltd (ASX: NST) after the gold price edged higher on Friday night. According to CNBC, the gold futures price was up 0.25% to US$4,181.1 an ounce. This couldn't stop the precious metal from recording a weekly decline following hotter-than-expected U.S. inflation data.

Buy PLS shares

The team at Bell Potter remains positive on PLS Group Ltd (ASX: PLS) shares following the final investment decision to double Pilgangoora nameplate spodumene concentrate capacity to 2Mtpa. In response, the broker has retained its buy rating on the lithium miner's shares with a trimmed price target of $4.10 (from $4.40). It said: "While P2000 introduces medium-term execution risk, completion will meaningfully strengthen PLS' long-term position as a large, low-cost hard-rock lithium producer. The company retains offtake optionality with ~50% of FY30 expected SC production of 2Mtpa uncontracted. Colina development studies are progressing, providing additional organic growth optionality in markets with strong underlying demand fundamentals from EV adoption and BESS deployment."

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to fall

It looks set to be a subdued session for Australian investors following a poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 18 points or 0.2% lower this morning. In the United States, the Dow Jones fell 0.1%, the S&P 500 dropped 1.1%, and the Nasdaq sank 1.9%.

Annual general meetings

A number of ASX 200 shares are holding their annual general meetings on Thursday and could provide trading updates. This includes 4×4 parts company ARB Corporation Ltd (ASX: ARB), mining giant South32 Ltd (ASX: S32), and wine leader Treasury Wine Estates Ltd (ASX: TWE).

Oil prices rise

ASX 200 energy shares Woodside Energy Group Ltd (ASX: WDS)and Santos Ltd (ASX: STO) could have a good session following a positive night for oil prices. According to Bloomberg, the WTI crude oil price is up 1.1% to US$95.15 a barrel and the Brent crude oil price is up 0.4% to US$106.09 a barrel. This follows news of the sinking of a container ship in the Strait of Hormuz.

Buy Megaport shares

Megaport Ltd (ASX: MP1) shares could have major upside potential according to Bell Potter. This morning, the broker has retained its buy rating on the cloud infrastructure provider's shares with a trimmed price target of $26.00. It said: "We continue to have a positive view on the stock due to valuation (FY28 EV/EBITDA of only 6x), strong forecast growth (which is fully funded), track record of execution, high visibility of earnings, AI exposure and differentiated business model (distributed inference)."

Gold price drops

It could be a tough session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) on Thursday after the gold price dropped overnight. According to CNBC, the gold futures price is down 1.35% to US$4,120.8 an ounce. A hotter than expected US inflation reading has sparked rate hike fears.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 to fall

The Australian share market is expected to fall on Wednesday following a poor session on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 30 points or 0.35% lower. In the United States, the Dow Jones fell 0.35%, the S&P 500 dropped slightly, and the Nasdaq was down 0.15%.

Oil prices mixed

ASX 200 energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) will be on watch on Wednesday after a mixed night for oil prices. According to Bloomberg, the WTI crude oil price is up 1% to US$94.69 a barrel and the Brent crude oil price is down 0.45% to US$106.16 a barrel. Traders are assessing the impacts of the Russian diesel supply deal and the Saudi-Houthi conflict.

Buy PLS shares

The team at Bell Potter has upgraded PLS Group Ltd (ASX: PLS) shares this morning following a period of weakness. Although the broker has reduced its lithium price forecasts, it remains positive and has upgraded PLS shares to a buy rating with a trimmed price target of $4.40 (from $5.20). It said: "We upgrade to a Buy recommendation on recent share price weakness. At current lithium market prices, PLS will generate substantial earnings and cash flow with the restart of the 200ktpa Ngungaju processing plant."

Gold price softens

ASX 200 gold shares Westgold Resources Ltd (ASX: WGX) and Northern Star Resources Ltd (ASX: NST) could have a subdued session on Wednesday after the gold price eased overnight. According to CNBC, the gold futures price is down 0.1% to US$4,187.2 an ounce. Traders were selling gold ahead of the release of US inflation data.

Rio Tinto update

Rio Tinto Ltd (ASX: RIO) shares will be on watch on Wednesday when the mining giant releases its quarterly update. Investors will no doubt be looking to see if Rio Tinto remains on course to achieve its guidance in 2026. It is targeting copper production of 800kt to 870kt and iron ore sales of 343Mt to 366Mt. Costs are expected to be US$23.5 to US$25 per tonne for iron ore and 30 US cents to 50 US cents per pound for copper. Elsewhere, Commonwealth Bank of Australia (ASX: CBA) is holding its annual general meeting today and will be worth watching.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

Sometimes a low valuation is simply the market recognising that earnings are about to fall. Other times, though, the share price does not seem to reflect just how much a business could be earning a few years from now.

That second group is what interests me.

I have found three ASX shares where the forward numbers look increasingly difficult to ignore. They operate in completely different industries and come with very different risks, but I think all three could be worth considerably more if current earnings expectations prove even broadly correct.

The first one is already reasonably priced today. Look another year or two ahead, though, and the valuation starts to look extraordinary.

Northern Star Resources Ltd (ASX: NST)

Northern Star shares are trading around $24.76 at the time of writing.

On FY27 earnings alone, I would not necessarily describe that price as dirt cheap.

Consensus estimates point to earnings per share (EPS) of $1.35, putting the gold miner on a forward price-to-earnings (P/E) ratio of around 18 times.

That looks reasonable enough for one of Australia's largest gold producers. But the investment case changes materially when I look further ahead.

Analysts expect EPS to jump to $2.41 in FY28 and $3.31 in FY29. At today's share price, those estimates imply P/E ratios of roughly 10 times and 7.5 times, respectively.

That is where Northern Star starts to look seriously undervalued to me.

The dividend outlook moves in the same direction. Consensus forecasts point to dividends per share of 51.6 cents in FY27, 73 cents in FY28, and 86.2 cents in FY29. At the current share price, the FY29 forecast would represent a dividend yield of around 3.5%.

Of course, there is an important reason the market may be reluctant to fully price those estimates in today. Northern Star sells gold, and the gold price will have a major influence on whether those earnings forecasts are achievable.

If the gold price remains higher for longer and production growth plans are delivered, I think it is very likely there will be a large increase in Northern Star's profits.

But it is important to acknowledge that if gold falls sharply instead, those EPS estimates could come down just as quickly.

That commodity sensitivity is the main risk I would keep in mind. But for investors who want gold exposure and are comfortable with that uncertainty, I think the potential reward is substantial.

An ASX share trading at around 7.5 times FY29 forecast earnings does not need everything to go perfectly to get my attention.

And Northern Star is only the first of my three picks.

Universal Store Holdings Ltd (ASX: UNI)

My second pick comes from a completely different corner of the market.

Universal Store shares are trading around $8.04 at the time of writing, and I think the current valuation leaves plenty of room for the business to keep delivering.

The retailer sits behind brands including Universal Store, Perfect Stranger, and Thrills, giving it exposure to younger consumers across fashion and lifestyle categories.

Consensus estimates currently point to EPS of 57.8 cents in FY27, rising to 63.2 cents in FY28, and 68.9 cents in FY29.

At $8.04, that puts the shares on roughly 14 times FY27 earnings, falling to around 13 times FY28 earnings and less than 12 times FY29 earnings. I think that is a low price to pay if Universal Store can continue growing profits at the rate analysts expect.

The dividend makes the valuation even more interesting. Consensus forecasts point to dividends of 45 cents per share in FY27, 48 cents in FY28, and 53 cents in FY29.

At today's price, the FY27 estimate represents a dividend yield of around 5.6%. By FY29, that potential yield rises to approximately 6.6%.

But retail shares obviously come with risks. Consumer spending can weaken, fashion preferences can change quickly, and a retailer still has to get its product, pricing, inventory, and store strategy right.

But at the current valuation I am not being asked to pay a growth-stock multiple for Universal Store. At around 14 times FY27 earnings, I think there is already a reasonable amount of caution built into the price.

If the company can keep lifting EPS towards 69 cents over the next few years while maintaining a strong dividend, I think the current share price could ultimately prove too low.

Zip Co Ltd (ASX: ZIP)

Zip is probably the highest-risk pick of these ASX shares, but it may also offer the most obvious valuation upside.

The shares are trading around $2.23 at the time of writing. Consensus forecasts point to EPS of 15 cents in FY27, 18 cents in FY28, and 22 cents in FY29. That means investors are paying around 15 times FY27 earnings today.

Already, I think that looks quite reasonable for a business expected to grow profits strongly.

But again, the outer years are where things become much more interesting. The P/E ratio falls to around 12.4 times FY28 earnings and just over 10 times FY29 earnings if the forecasts are achieved.

Meanwhile, EPS would increase by almost 47% between FY27 and FY29. That combination is what makes Zip look undervalued to me.

The company does still have plenty to prove. I want to see Zip continue taking a greater share of the payments market in the United States and Australia, while growing transaction volumes and its customer base.

Just as importantly, that growth needs to be disciplined. Adding users is not particularly valuable if bad debts rise too quickly alongside them. Credit quality needs to remain under control as the business gets larger.

If Zip can balance those two sides of the equation, growing payment volumes while maintaining sensible lending standards, I think the earnings forecasts become much easier to believe.

And if the company eventually earns 22 cents per share while continuing to grow, I struggle to see why investors would permanently value it at around 10 times earnings.

That does not mean the path will be smooth. Zip shares have been extremely volatile before, and sentiment towards buy now, pay later businesses can change quickly.

But at the current price, I think the valuation gives me enough room to accept that uncertainty.

Foolish takeaway

I think the market is being too cautious about what these businesses could earn over the next few years.

There is certainly some uncertainty surrounding all three, but I believe their growth prospects make the current valuations hard to ignore.

I'd be happy to buy at today's prices and give them time to prove their worth.

The post 3 dirt cheap ASX shares I think are undervalued today appeared first on The Motley Fool Australia.