Brokers’ top stock picks for September

Investors have had their fill of beats, misses and market tantrums. The more interesting question now is how brokers are repositioning their portfolios for the months ahead.

Both Bell Potter and Macquarie have published their latest strategy notes, and the common thread is selectivity: cutting stocks that no longer justify premium valuations and doubling down on companies with visible cash returns and domestic earnings leverage.

Let’s dive into what the two brokers made of earnings season, and how they believe investors should position themselves ahead.

Bell Potter: trimming former darlings, adding quality

Reporting season proved one thing, according to Bell Potter:

“The forward-looking view is deteriorating. FY26 market-level earnings were downgraded by ~1%, and FY27 saw similar revisions.”

Yet despite the downgrades, the ASX 200 still climbed 4% in August and cracked the 9,000 milestone. Why?

“The market seems to be ignoring local fundamentals and taking its lead from global markets, especially the US. While the Australian market’s P/E discount to the US might look attractive, it’s not a like for like comparison,” the analysts note.

They pointed out that the US market’s higher multiple is underpinned by real earnings growth - “FY25: 10%, FY26: 13%” — and a very different sector mix.

“Australia lacks this growth story, making the recent run in valuations feel unjustified,” says Bell Potter.

Accordingly, they recommend focusing on quality companies that can deliver earnings growth at the right price.

Portfolio changes

• Added: Cedar Woods Properties (ASX: CWP), Harvey Norman (ASX: HVN), and Bega (ASX: BGA)
• Accumulating: WiseTech Global (WTC), Light & Wonder (LNW), Life360 (360), Worley (WOR), News Corp (NWS), APA Group (APA), Whitehaven Coal (WHC)
• Removed: CSL (CSL), James Hardie (JHX), Telix (TLX), and Eagers Automotive (APE)

Cedar Woods isn’t just another housing-cycle play. Bell Potter frames it as a clear beneficiary of Australia’s ongoing demand for housing supply, but importantly, one where management execution reduces risk.

"Crucially, its earnings profile is largely de-risked, with a massive $660m in presales on hand. This provides exceptional visibility, with approximately 75% of forecast FY26 revenue already secured," says Bell Potter.

On Harvey Norman, they argue the retailer is well positioned on multiple fronts: a housing recovery should buoy its furniture and bedding sales, while its electronics division is “set to capture the anticipated AI-driven tech upgrade and replacement cycle.” 

Harvey Norman also sits on a $4.5 billion global property portfolio and offers a 4.1% dividend yield - attractive support in a volatile market.

Bega is in the midst of a structural shift. Bell Potter highlights its pivot “from a diversified dairy and food company with exposure to volatile bulk commodity markets to a more focused, higher-margin branded consumer goods business.” The near-term catalyst is management’s decision to consolidate its Strathmerton cut-and-wrap operations into Ridge Street and wind down peanut processing.

“As management executes on its cost-out program and the benefits of a simplified structure become evident, we see significant potential for a re-rating of the stock, and add it to the core portfolio,” says Bell Potter.

Outside of industrial names, Bell Potter encourages investors to keep an eye on listed property securities.

"Our conviction in the REIT sector is strengthening as rate cuts provide a tailwind, with Net Tangible Asset (NTA) valuations now stabilising and beginning to trend upwards," they said.

Macquarie: A buy list built on margin discipline

Macquarie’s emerging leaders team summed up reporting season with a simple observation:

“Beats far exceeded in-lines with fewer misses.”

Domestic cyclicals stood out, with 89% delivering results that either beat or came in-line with consensus expectations. Importantly, more than 40% of small industrials exceeded EPS forecasts on the back of stronger margins.

That context shaped their reshaped buy list, which features 13 best picks across travel, retail, financials and infrastructure.

Key names include:

Macquarie went further on NRW, upgrading the company to "outperform" and setting a $4.45 target price following its acquisition of Fredon on 3 September:

“Fredon is a highly strategic acquisition that should drive upside risk to our earnings forecasts over the medium-term. Attractive multiple of 5.2x well below current sector peers.”

They noted Fredon expands NRW’s reach into new markets linked to energy transition, electrification, automation and digital innovation.

But some companies also had their ratings cut - Bravura (ASX: BVS), Codan (ASX: CDN) and Lovisa (ASX: LOV) may all have brand equity, but with execution risk, cyclical headwinds, or valuations stretched, they’re no longer rated buys.