ASX Midday Sector Update: Consumer Discretionary Stocks Gain, Energy Slides

-- Consumer discretionary stocks were rising 1% to lead gainers in midday trading Monday.

Wesfarmers (ASX:WES) was advancing nearly 2% and Lottery Corp. (ALX:TLC) almost 1%.

On the flip side, energy stocks were shedding almost 3% as oil prices gained amid renewed uncertainty surrounding the passage of ships through the Strait of Hormuz and a potential second round of talks between the US and Iran.

Viva Energy Group (ASX:VEA) was down more than 5% after saying its fire-hit Geelong refinery is expected to produce diesel and jet fuel at about 80% of capacity and petrol at roughly 60% of capacity in the short term. The company also reported a 5.1% year-over-year increase in first-quarter sales volume.

Research Alert: CFRA Maintains Buy Rating On Shares Of Quest Diagnostics

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We keep our 12-month price target at $235. This is based on a forward P/E of 21.9x our 2026 EPS estimate, a premium to DGX's three-year forward average of 16.8x due to our view of strengthening sales and earnings growth, backed by higher health care utilization trends and some regulatory relief due to postponement of lab reimbursement cuts until at least 2027. We think lab testing providers remain a relatively well-positioned area within health care given lower policy risks, supportive testing demand, and attractive earnings growth potential. On a compounded annual basis from 2025-2028, we expect near 8% EPS growth, raising our 2026 EPS to $10.73 from $10.60 and 2027 EPS to $11.50 from $11.42. We also anticipate additional smaller M&A opportunities, along with healthy dividend increases (recent 7.5% boost; shares yield 1.7%) as cash flow generation remains supportive over the near term.

$DGX

Research Alert: Pega: Q1 Results Miss, But Strength In Pega Cloud Offsets

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:PEGA reported total revenue of $430M, missing consensus by $37.2M and declining 10% Y/Y, while non-GAAP EPS of $0.46 missed by $0.23 and fell 39% Y/Y. However, Pega Cloud revenue surged 36% Y/Y to $205M, now representing 47.7% of total revenue and validating the cloud transition thesis. Pega Cloud annual contract value (ACV) acceleration remains the standout metric, growing 29% Y/Y to $906.7M and accelerating from 23% growth in Q1, demonstrating continued strong demand for the company's AI workflow automation platform. Total ACV grew 12% Y/Y to $1.62B, with backlog increasing 16% Y/Y to $2.01B providing revenue visibility. We believe the robust cash flow generation of $206.5M in free cash flow and a solid balance sheet with $474M in cash provides financial flexibility for continued AI investment. Despite near-term profitability pressure, we expect the sustained Pega Cloud momentum and strong ACV growth to support the business transformation.

$PEGA

ASX Midday Sector Update: Consumer Discretionary Stocks Gain, Energy Slides

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Research Alert: CFRA Maintains Buy Rating On Shares Of Quest Diagnostics

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