Stock Tips: Energy, property and F1-fuelled momentum drive this week’s picks

 It’s no easy gig analysing share prices and company performance but somebody’s got to do it. Every week two experts from our Share Tips columnist pool give us their recommendations. 

Toby Grimm – Baker Young Limited

BUY

Dexus (ASX:DXS)

Prospects for an Office property market recovery leave the stock looking attractively priced some 10% below Net Tangible Asset backing ($8.81) and a near 5% distribution yield.

PWR (ASX:PWH)

With management and factory disruptions overcome, the global cooling technology leader appears set to return to growth underpinned by new F1 contracts and expansion in defence and aviation sectors.

HOLD

Pilbara Minerals (ASX:PLS)

PLS is comfortably profitable at current Lithium prices with significant expansion potential should the Lithium recovery continue as expected.

Iluka Resources (ASX:ILU)

While market conditions for Iluka’s Mineral Sands business remain challenging, its strategic $1.6bn Eneabba Rare Earth Project is well advanced and offers upside offsetting Mineral Sands weakness.

SELL

Codan (ASX:CDA)

Rising defense spending and record gold prices have driven strong sales growth for Codan’s divisions, however, share price gains far exceed profit growth rates, and we feel investors are becoming overly optimistic.

Newmont Corporation (ASX:NEM)

We view the recent spike in gold prices as unlikely to be sustainable in the longer term and would be locking in part profits on Newmont following a mixed quarterly update last week.

Abigail Cowley – Bell Potter Securities

BUY

Santos (ASX:STO)

Santos Limited is currently trading at an approximate 20% discount to its net asset value, largely due to recent governance concerns and the collapse of the proposed takeover by the XRG Consortium. The company has two major developments, Barossa LNG and the Pikka Oil project in Alaska expected to significantly increase production and EBITDA over the next two financial years.

Harvey Norman Holdings (ASX:HVN)

Harvey Norman Limited presents a solid buying opportunity should interest rates continues to ease, and consumer sentiment increases. It trades at a relative discount to peers such as Wesfarmers and JB-Hi-Fi and has a strong balance sheet allowing the company to maintain a fully franked dividend yield of approximately 3.7%.

HOLD

CSL (ASX:CSL)

This week, CSL Limited released an earnings guidance downgrade at its AGM, due to lowering US vaccination rates. FY26 revenue was downgraded by 2%, FY27 and FY28 earnings were also downgraded. The US vaccination market presents continued uncertainty.

Eagers Automotive (ASX:APE)

Eagers Automotive has been a strong performer in the last 6 months but is now trading approximately in line with its net asset value. It’s acquisition of CanadaOne expects modest growth synergies in 2027 and beyond.

SELL

Wesfarmers (ASX:WES)

Wesfarmers Limited has a slower growth outlook over the next three years, the imbalance between current valuation and earnings guidance is significant, therefore a share price correction of approximately 10% is expected.

Bank of Queensland (ASX:BOQ)

Bank of Queensland Limited has experienced competitive pressures which has led to poor share price performance. Home lending has been particularly difficult; BOQ is minimising their low return mortgage book which may limit future growth.

The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead.

Stockhead does not provide, endorse or otherwise assume responsibility for any financial advice contained in this article.