If you have room for some new portfolio additions, then it could be worth considering the three ASX shares listed below.

Here’s why analysts at Morgans are bullish on these shares:

QBE Insurance Group (ASX: QBE)

Morgans is feeling positive about this insurance giant’s shares. It currently has an add rating and $13.70 price target on them.

The broker believes QBE’s shares are trading at an attractive level. Particularly given its balance sheet and the outlook for premium increases.

It said: “We see QBE as likely having positive underlying momentum into next year. QBE has been putting through top-line rate increases of around 9%, which should assist margin expansion into FY22. With QBE’s balance sheet recently reset, pricing tailwinds evident and the stock relatively inexpensive trading on ~12.9x FY22F PE.”

ResMed Inc (ASX: RMD)

Morgans is a fan of ResMed. Its analysts currently have an add rating and $40.80 price target on its shares.

The broker likes ResMed due to its very positive medium to long term outlook, which is being underpinned by its digital platform.

Morgans commented: “While we believe the next few quarters will likely be volatile, as COVID-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

Sonic Healthcare (ASX:SHL)

Finally, this healthcare share is another that Morgans rates highly. The broker currently has an add rating and $47.05 price target on its shares.

Morgans is positive on Sonic due largely to its belief that COVID testing will remain strong for the foreseeable future. It also notes that its strong balance sheet opens up M&A opportunities.

Its analysts explained: “We see COVID-19 testing continuing into the foreseeable future, with growth potential in COVID serology testing. SHL’s global base business is increasingly resilient, benefitting from geographical diversity. Strong B/S (gearing 21.6x; A$1.3bn headroom) opening the door to acquisitions, contracts and JVs [joint ventures].”

The post Why a leading broker is bullish on these 3 ASX shares appeared first on The Motley Fool Australia.

More reading

• Analysts name 2 fantastic ASX 200 shares to buy
• Analysts name 3 ASX shares to buy now
• Top brokers name 3 ASX shares to buy today
• Could it be time to consider buying QBE (ASX:QBE) shares in November?
• 2 ASX 200 shares that could be top buys for growth

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ResMed Inc. and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3rgp2iH

It is getting closer to Christmas. Could the Woolworths Group Ltd (ASX: WOW) share price be an opportunity in the leadup to the festive season?

Woolworths has been through a fairly volatile period over the last couple of years. There was the pantry stocking at the start of the COVID-19 pandemic. Long lockdowns in Victoria and NSW also led to elevated demand for supermarket food.

What do analysts think of the Woolworths share price?

Some analysts are felling pretty negative about the business at the moment.

A few weeks ago, Woolworths released its trading update for the first quarter of FY22.

Both Credit Suisse and UBS rate the supermarket business as a sell after seeing that update.

UBS thinks that there is a slowing down of conditions for the supermarket giants in Australia.

Both Credit Suisse and UBS thinks that costs are going to increase and this could impact profitability.

Price targets on the Woolworths share price

Of the two bearish brokers I’ve mentioned, UBS has a price target of $37 on Woolworths.

Credit Suisse is much more negative. Its price target is just $31.84 – that implies a possible decline of around 20% over the next year if the broker is right.

But not every broker is so negative on the business. Some brokers have price targets that are higher than where it’s currently trading at.

One of the most positive is Ord Minnett, which has a price target of $43 on the Woolworths share price – more than 6% higher than today. The broker still feels the medium-term looks solid for the company.

Differences in profit expectations

How much profit Woolworths is expected to make can lead to a big difference to how much analysts are prepared to say it is worth today and what the price target is.

Using those profit projections, Credit Suisse reckons that the Woolworths share price values it at 34x FY22’s estimated earnings and 31x FY23’s estimated earnings.

But Ord Minnett is much more optimistic, the broker puts Woolworths shares at 30x FY22’s estimated earnings and 26x FY23’s estimated earnings.

FY22 first quarter

We’ve heard what analysts think, but it’s a good idea to know about the actual numbers that Woolworths is reporting and what the company is saying.

In the 14 weeks to 3 October 2021, group sales were up 7.8% to $6.07 billion, whilst total e-commerce sales were up 53.5% to $1.88 billion.

There was quite a large difference in performance between the main divisions.

Australian food saw sales growth of 3.9% year on year. Australian ‘B2B’ (business to business) saw growth of 196.4%, which included the acquisition of PFD Food Services as well as the recognition of Endeavour Group (ASX: EDV) partnership revenue. New Zealand food, in Australian dollars, was up 12.9% and Big W sales were down 17.5%.

In October, Australian food sales had “slowed” as lockdown restrictions eased, but Big W sales had improved.

The post Is the Woolworths (ASX:WOW) share price a buy in the lead up to Christmas? appeared first on The Motley Fool Australia.

More reading

• What is the current Woolworths (ASX:WOW) dividend payout ratio?
• The Woolworths (ASX:WOW) share price is up 20% so far in 2021. Here’s why
• Why is the Woolworths (ASX:WOW) share price growing greener today?
• New report says Woolworths (ASX:WOW) ‘not taking climate risks seriously’
• These ASX 200 shares could be set to face fresh pressure over climate action

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3rd1fQz

A record number of investors are shorting BHP Group Ltd (ASX: BHP) shares following the company’s upcoming structural change. The world’s second-largest miner has seen its shares tank around 30% from an all-time high of $54.55 in August.

At Friday’s market close, BHP shares added further pain to investors finishing the day down 1.53% to $38.03.

Short-sellers weigh in on BHP shares

Short-sellers are cashing in on quick money as BHP is finding itself caught between the group’s dual-listed company structure.

As reported by the Australian Financial Review (AFR), investors are taking advantage of the company’s recently announced plan to end its United Kingdom-listed PLC (public limited company) shares.

The 20-year-old dual-listed company structure began when BHP Ltd merged with Billiton PLC. The corporate structure enabled both companies to amalgamate without legally acquiring or merging, creating a tax-efficient business structure.

Between the pair, the shares are not transferable. The dividend payment amount and voting rights are equal. However, the ASX and UK-listed shares trade differently. The Australian shares command a higher price. This is because of Australia’s much-loved franking credits available to BHP Ltd shareholders.

Since August, hedge funds have heavily shorted the ASX-listed BHP shares and picked up the group’s cheaper PLC shares. In fact, almost 210 million BHP shares, or 7.1% of its entire issued capital, are shorted.

The dual-listing company structure will eventually collapse, leading to a 1-for-1 swap of PLC shares to BHP shares. Undoubtedly, big firms such as UBS, Morgan Stanley and Credit Suisse will be booking huge profits following repatriation day.

About the BHP share price

Since the beginning of the year, results have been disappointing for BHP shareholders, the share price falling by more than 10%. The company’s share price trekked higher until August before plummeting to 2020 lows this month.

BHP presides a market capitalisation of roughly $113.93 billion, and has approximately 2.95 billion shares outstanding.

The post Why are BHP (ASX:BHP) shares more shorted right now than ever before? appeared first on The Motley Fool Australia.

More reading

• Morgans rates these ASX 200 shares as buys
• Is the BHP (ASX:BHP) share price great value today?
• Are BHP (ASX:BHP) shares a compelling opportunity in the decarbonisation era?
• Top brokers name 3 ASX shares to buy today
• These top brokers say the BHP (ASX:BHP) share price is a bargain buy

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3192RQj

The Rio Tinto Limited (ASX: RIO) share price could be one to watch in the near term. This comes as the mining giant’s CEO, Jakob Stausholm, attended a meeting with Mongolia’s Prime Minister Oyun-Erdene Luvsannamsrain.

At the closing bell on Friday, Rio Tinto shares finished down 2.25% to $94.46 apiece.

What happened?

In an effort to smooth tensions over Rio Tinto’s Oyu Tolgoi copper and gold mine, the 2 heads met together this week. The project has suffered major setbacks and cost overruns which have resulted in production delays.

Construction on the mine commenced back in 2010, touted as one of the world’s safest and most sustainable mines. The company leveraged new technologies and mechanical equipment to carry out more efficient mining operations.

First production was originally forecast to begin in late 2020, but geotechnical difficulties and COVID-19 pushed this date back. Rescheduled for October 2022, Rio Tinto has again moved the timeline to January 2023 because of cost blowouts.

The Mongolian government threatened to tear up the 2009 investment agreement, in which it has a considerable stake. An independent review rejected Rio Tinto’s explanation for the project’s delays and climbing costs.

Canadian-listed Turquoise Hill Resources, the other major shareholder in the project, advised it needed US$3.6 billion in further funding. Rio Tinto holds a 50.8% interest in the mineral exploration and development company.

However, the Mongolian government’s stance is that Rio Tinto should cover any additional costs.

Some believe that concessions could be made to the Mongolian government to reset relations and complete the project.

Once online, the mine will produce around 560,000 tonne of copper resources per year at full operational capacity. This is forecasted to occur sometime no earlier than 2025.

Should everything run according to plan, the Oyu Tolgoi project could be the world’s fourth-largest copper mine by 2030.

Rio Tinto share price summary

Over the past 12 months, Rio Tinto shares have fallen 8% despite hitting a 52-week low of $87.28 in mid-November. When looking at 2021 alone, its shares have plummeted by almost 20%.

Rio Tinto commands a market capitalisation of roughly $35.87 billion with approximately 371.22 million shares outstanding.

The post Own Rio Tinto (ASX:RIO) shares? Why the CEO met with the Mongolian Prime Minister this week appeared first on The Motley Fool Australia.

More reading

• 2 high quality ASX 200 blue chip shares with major upside potential
• 5 things to watch on the ASX 200 on Thursday
• Here’s why Macquarie sees 39% upside in the Rio Tinto (ASX:RIO) share price
• Only a few ASX 200 companies have received this honour and Scentre (ASX:SCG) just joined them
• Why this mining analyst is upbeat on the iron ore price forecast

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3HX6kT3