Rudi’s View: Top Picks & Conviction Buys

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)

This story features SANDFIRE RESOURCES LIMITED, and other companies.
For more info SHARE ANALYSIS: SFR
The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

Top calls and sector favourites from strategists and analysts for when better times arrive for Australian equities.

By Rudi Filapek-Vandyck, Editor

With global equities dominated by the war in Iran and its impact on energy prices, a strong relief rally could well be triggered by any sign of cease-fire or negotiations taking place.

You can pick your preferred alternative too: the Iranian regime crumbles, an international alliance secures the safety of the Strait of Hormuz, Iran runs out of missiles, et cetera.

In case such a relief rally eventuates, Macquarie strategists‘ favourite strategy is to own stocks that have fallen by at least -10% since the dropping of the first bombs, but that should have been supported by upgrades to forecasts coming out of the February results season.

Among ASX100 companies, these characteristics belong to:

• Sandfire Resources ((SFR))
• ALS Ltd ((ALQ))
• James Hardie ((JHX))
• Hub24 ((HUB))
• Downer Edi ((DOW))
• Brambles ((BXB))
• Qantas Airways ((QAN))
• Charter Hall ((CHC))

Macquarie strategists do also warn the sudden change in energy pricing dynamics is already changing the context for central bank policies with rate hikes rather than rate cuts becoming more likely.

See also the RBA’s two recent meetings locally.

The strategy team at Macquarie has been among the more hawkish when it comes to central bank policies, on my observation.

Further out, such a change in general context will redirect money flows into defensives, Macquarie reminds.

Defensives that came out of February supported by positive momentum and EPS forecasts, include:

• Woolworths Group ((WOW))
• a2 Milk ((A2M))
• Ramsay Health Care ((RHC))
• Telstra ((TLS))
• Aurizon Holdings ((AZJ))

Another reminder from the same team: Value and Resources tend to outperform after rate hikes, but by less than they do before hikes. Gold, Utilities, Infrastructure & Energy often outperform after hikes start.

Technology is the number one underperformer.

Elsewhere, analysts at UBS have reminded investors if/when oil prices are now to remain above US$100/bbl there’s only one sector on the exchange that should see an increase in forecasts and sentiment, and that is the energy sector.

Sectors that should see no direct impact are Commercial Services & Supplies, Insurance, Media, Pharma, Real Estate, Software & Services, and Utilities.

Conviction Calls and Best Buys

Morgan Stanley‘s global strategy preference is to remain overweighted US equities, with emphasis on Quality, large caps over small caps, and cyclicals over defensives.

Fed policy (no hikes), corporate and consumer tax breaks (OBBBA), fading headwinds from tariffs, and more deregulation are all still seen supporting an acceleration in economic momentum for the US economy this year.

Morgan Stanley is equally expecting the first clear signs of AI productivity improvement to emanate from the corporate results season in May.

While ‘AI Bubble’ talk is keeping a lid on valuations, Big Tech could still have another good year in store, Morgan Stanley predicts.

****

Strategists at T Rowe Price has move modestly Overweight Australian equities on the belief that earnings momentum is improving.

They do acknowledge the price of oil is a risk.

Their allocation to US equities is Underweight as valuations continue to be assessed as ‘stretched’ in combination with risks around AI and inflation.

****

UBS‘s real estate analysts are worried a replay of 2022 might be on the cards as inflation is back on the rise and bond markets and central bankers are paying attention.

The good news is most REITs today are in a better position than back then.

UBS’s sector favourites are:

• Vicinity Centres ((VCX))
• Charter Hall ((CHC))
• Goodman Group ((GMG))
• Arena REIT ((ARF))
• Region Group ((RGN))
• Centuria Industrial REIT ((CIP))

Least preferred are:

• Scentre Group ((SCG))
• Charter Hall Long WALE REIT ((CLW))
• Dexus ((DXS))

****

Stockbroker Morgan‘s Key Buy picks among diversified financials are (in order of preference):

• MA Financial ((MAF))
• Pinnacle Investment Management ((PNI))
• Generation Development ((GDG))
• Tyro Payments ((TYR))

****

While the Australian banking sector is expected to sustain EPS upgrades this year, which may support continued outperformance of bank share prices in 2026, UBS‘ sector analysts retain a cautious stance, only preferring two Top Picks:

• National Australia Bank ((NAB))
• Macquarie Group ((MQG))

Sector analysts at Citi continue their preference for ANZ Bank ((ANZ)).

Their explanation:

“ANZ’s strong balance sheet further enhances its appeal in volatile market, while we think ongoing progress on costs and efficiency will help re-rate the stock in time.”

****

Retail sector analysts at Jarden believe 2026 is a bottom-up stock pickers market for that sector; those with the right product, right price, at the right time will come out on top.

Favourable themes are:

Defensive growth:

• Sigma Healthcare ((SIG))
• Woolworths Group ((WOW))
• Coles Group ((COL))

Tech & AI super cycle:

• Harvey Norman ((HVN))
• JB Hi-Fi ((JBH))

Structural growers:

• Sigma Healthcare
• Temple & Webster ((TPW))
• Flight Centre ((FLT))

Market share winners:

• Temple & Webster
• Beacon Lighting Group ((BLX))
• JB Hi-Fi
• Sigma Healthcare
• Helloworld ((HLO))

Jarden sees Quick Service Restaurants and liquor as most challenged due to structural decline in consumption and store growth outpacing demand.

****

Post the February 2026 reporting season, UBS‘s most preferred smaller cap stocks in Australia are:

• ARB Corp ((ARB))
• Collins Foods ((CKF))
• Dicker Data ((DDR))
• Hansen Technologies ((HSN))
• IDP Education ((IEL))
• Imdex ((IMD))
• Megaport ((MP1))
• NextDC ((NXT))
• SiteMinder ((SDR))
• Superloop ((SLC))
• Service Stream ((SSM))
• Web Travel Group ((WEB))

Only one prior inclusion was removed: Kelsian Group ((KLS)).

All of ARB Corp, Imdex, Megaport and Siteminder are new additions.

****

Analysts at Morgans are of the view that indiscriminate selling of SaaS and other technology companies before, during and after the February season has created opportunity for investors. Their favourites are:

Technology:

• WiseTech Global ((WTC))
• TechnologyOne ((TNE))
• NextDC ((NXT))
• Megaport ((MP1))

Media:

• REA Group ((REA))
• Car Group ((CAR))

Telecommunication

• TPG Telecom ((TPG))

****

Ord Minnett‘s Analysts’ Conviction List now consists of:

• Alkane Resources ((ALK))
• Brazilian Rare Earths ((BRE))
• Breville Group ((BRE))
• Cuscal ((CCL))
• Energy One ((EOL))
• Lindsay Australia ((LAU))
• Qoria ((QOR))
• Regis Healthcare ((REG))
• Service Stream ((SSM))
• Shape Australia ((SHA))
• SiteMinder ((SDR))
• Zip Co ((ZIP))

****

Finally, Canaccord Genuity‘s assessment of healthcare stocks post February has identified the following candidates poised for potential re-rating over the coming six months (goes without saying, this assessment dates from before the war in Iran):

• Pro Medicus ((PME))
• Telix Pharmaceuticals ((TLX))
• Cogstate ((CGS))

Candidates for potential re-rate over the next twelve months:

• ResMed ((RMD))
• Neuren ((NEU))
• Nanosonics ((NAN))

Other than that, pretty much all healthcare stocks under coverage are Buy-rated at Canaccord Genuity, with Alcidion Group ((ALC)) and Monash IVF ((MVF)) the only Hold ratings.

That’s probably an indication of how much this sector has been de-rated ever since the peak in covid-related lockdowns.

See also:

https://fnarena.com/index.php/2026/03/18/rudis-view-oil-inflation-growth-stagflation/

https://fnarena.com/index.php/2026/03/12/rudis-view-post-february-conviction-calls-2/

(Do note that, in line with all my analyses, appearances and presentations, all of the above names and calculations are provided for educational purposes only. Investors should always consult with their licensed investment advisor first, before making any decisions.)  

P.S. I – All paying members at FNArena are being reminded they can set an email alert for my Rudi’s View stories. Go to My Alerts (top bar of the website) and tick the box in front of ‘Rudi’s View’. You will receive an email alert every time a new Rudi’s View story has been published on the website. 

P.S. II – If you are reading this story through a third party distribution channel and you cannot see charts included, we apologise, but technical limitations are to blame.

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