Day: 2 March 2022

The Treasury Wine Estates Ltd (ASX: TWE) share price could be great value at the current level.

That’s the view of analysts at Morgans, who have retained their positive view on the wine company’s shares following its half year results.

What is Morgans saying about the Treasury Wine share price?

According to a recent note, the broker has retained its add rating but trimmed its price target on the company’s shares slightly to $13.93.

Based on the current Treasury Wine share price of $11.66, this implies potential upside of almost 20% for investors over the next 12 months.

In addition, the broker has pencilled in a fully franked 29 cents per share dividend in FY 2022. If you include this ~2.5% yield, the total potential return on offer increases to 22%.

Why is the broker positive?

Morgans notes that Treasury Wine outperformed its expectations during the first half.

It commented: “Treasury Wine Estates reported an impressive 1H22 result given it had to cycle China earnings and the divested US commercial wine portfolio. COVID also continued to impact some of its higher margin channels. The result materially beat our forecast but was in line with consensus expectations.”

Pleasingly, the broker expects this strong form to continue in the second half and in FY 2023.

In respect to the latter, the broker said: “In FY23, TWE’s earnings will benefit from the recovery of its higher margin channels, its new divisional operating model, Penfolds reallocation strategy, a full year of the FFV acquisition and the associated synergies and lower COGS, with management expecting to deliver cost savings of at least A$75m pa.”

In light of this and the attractive multiples that the Treasury Wine share price trades on compared to peers and historic averages, the broker sees the company as a great option for investors.

It concludes: “Following forecast changes, our SOTP valuation has fallen to $13.93. With over 18% [now 19.5%] upside to our new price target and the stock trading on an FY23 PE of only 21x (long-term average is 25x) and a material discount to other luxury brand owners, we remain buyers of this well managed company.”

The post Cheers! Broker tips 20% upside for the Treasury Wine (ASX:TWE) share price appeared first on The Motley Fool Australia.

More reading

• Why Treasury (ASX:TWE) shares could be a hidden dividend trove
• 3 of the best results on the ASX 200 last week
• Why CSL, Liontown, Nearmap, and Treasury Wine shares are storming higher
• ASX 200 (ASX:XJO) midday update: CSL upgrades guidance, Treasury Wine jumps
• Cheers! Treasury Wine (ASX:TWE) share price jumps 13% on half year results

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 Treasury Wine Estates 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/jPRCDk0

The Westpac Banking Corp (ASX: WBC) share price outperformed its peers last month, gaining 12.3% over February.

The next best performing big bank stock was that of National Australia Bank Ltd. (ASX: NAB). It gained 6.6% last month.

Meanwhile, the share prices of Commonwealth Bank of Australia (ASX: CBA), Australia and New Zealand Banking Group (ASX: ANZ), and Macquarie Group Ltd (ASX: MQG) fell between 0.2% and 1.9%.

As of the end of the month, the Westpac share price was $22.81.

Let’s take a look at what drove it to outperform its peers last month.

Why did the Westpac share price outperform in February?

The Westpac share price roared higher than its peers’ last month, likely helped along by the bank’s $3.5 billion off-market share buyback.

Its stock surged 4.8% the same day it released a non-price sensitive update on the completion of the buyback. However, being non-price sensitive, it’s hard to say if the buyback’s completion boosted the bank’s share price.

As part of the buyback, Westpac paid participating investors $20.90 per share, comprising an $11.34 capital component and a $9.56 dividend.

As The Motley Fool Australia’s James Mickleboro reported, that gave investors’ payout a tax value of $24.14 per share.

The buyback reduced Westpac’s outstanding shares by 4.6%.

The release of Westpac’s results for the 3 months ended 31 December likely also helped its performance last month. Over the quarter, the bank received $1.58 billion of earnings – a 74% increase.

The Westpac share price surged 2.2% the day its results were released.

Finally, Westpac has been undergoing a cost-cutting campaign this month. It plans to shave a potentially ambitious $8 billion off its costs by 2024.

Last month it announced it will soon wave goodbye to both David Stephen – its group chief risk officer – and Les Vance – its group executive, financial crime, compliance, and conduct.

Stephen and Vance’s respective roles will be joined to become the group chief risk officer position.

It might prove to be one of many role consolidations Westpac undergoes as it works to reduce the size of its corporate functions by around 20%.

Additionally, as The Motley Fool Australia’s Monica O’Shea recently reported, Westpac is rumoured to be cutting a fifth of positions in its market department – impacting 90 jobs.

The post Why did the Westpac (ASX:WBC) share price smash the other banks in February? appeared first on The Motley Fool Australia.

More reading

• What’s keeping this top broker neutral on Westpac (ASX:WBC) shares?
• Analysts name 3 ASX 200 shares with potential upside of 20%+
• Own Westpac (ASX:WBC) shares? Here’s the latest on the bank’s cost-cutting crusade
• Should you be buying ASX 200 bank shares in February?
• The Westpac (ASX:WBC) share price has gained less than $4 in 10 years. Have the dividends been worth it?

Motley Fool contributor Brooke Cooper 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 Macquarie Group Limited and Westpac Banking Corporation. 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/vkTugsM

The Woolworths Group Ltd (ASX: WOW) share price went up around 3% over February 2022 as the business told investors about its FY22 first half as well as giving a trading update.

Reporting season is the time that investors get an insight into how a business has performed over the last six or 12 months.

So, whilst the Woolworths share price is still down by 8% this year, it recovered some ground last month.

Let’s have a look at how good the HY22 result was.

Woolworths half-year result

Woolworths reported that in the first six months of FY22, it saw sales rise by 8% to $31.9 billion.

However, profitability reduced for group continuing operations before significant items. Underlying earnings before interest and tax (EBIT) fell 11% to $1.38 billion, underlying net profit after tax (NPAT) fell 6.5% to $795 million and earnings per share (EPS) dropped 5.1% to 64.3 cents.

Woolworths said that the far-reaching impacts of COVID resulted in one of the most challenging halves that it has experienced. The Omicron variant caused impacts, particularly in early January, like staff isolating and material supply chain and stock flow issues.

For the half-year, its profitability was hurt by the challenging operating environment with higher direct and indirect COVID-related costs and BIG W store closures. Profitability, and expectations and profit changes, can have an impact on the Woolworths share price.

However, e-commerce sales continued to boom in the first half, with growth of 48% year on year to $3.49 billion.

The Woolworths dividend was cut by 26.4% to $0.39 per share. Though, management said that if excluding the divested business Endeavour Group Ltd (ASX: EDV), the dividend was only supposedly cut by 2.5%.

What about the trading update?

Woolworths revealed that the impact of Omicron in Australia led to “strong” sales growth in the first seven weeks of the year in the Australian food division with sales growth of around 5%, though it hurt BIG W sales with a decline of 4%. New Zealand food sales were also up around 5%.

It’s expecting inflationary pressures to continue to intensify as industry-wide cost increases continue.

In the medium-term, in Australia, the ASX share is looking to open a net 10 to 25 new full range supermarkets per year and another 5 to 15 new Metro Food stores per year. In New Zealand it wants to open three to four new Countdown supermarkets annually.

Is the Woolworths share price a buy?

After seeing the result, Morgans rated the business as a hold with a price target of $37.15, thinking that Woolworths shares were fairly valued and didn’t have much room for growth.

However, Citi thinks that Woolworths is a buy, with a price target of $40.30 after seeing supermarket sales are going in the right direction.

Citi’s numbers put Woolworths shares at 28x FY22’s estimated earnings.

The post February was positive for the Woolworths (ASX:WOW) share price. Here’s why appeared first on The Motley Fool Australia.

More reading

• Here’s what you need to know about the Woolworths (ASX:WOW) dividend
• Should you buy Woolworths (ASX:WOW) shares now for the dividend yield?
• The oil price has just hit an 8-year high. What might this mean for ASX shares?
• Top brokers name 3 ASX shares to sell today
• Woolworths (ASX:WOW) share price defies selloff and pushes higher on broker upgrade

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/BXN1Zve

If you own Woodside Petroleum Ltd (ASX: WPL) shares you’ve likely been following news of its Western Australian Pluto LNG project.

The S&P/ASX 200 Index (ASX: XJO) energy giant’s $16.5 billion project is expected to provide 30 years of LNG exports. That’s upon its scheduled completion in 2026.

But that completion date, and indeed the future of the entire project, has remained uncertain as it’s faced legal challenges brought by the Conservation Council of Western Australia (CCWA).

Now the Supreme Court of Western Australia has made its ruling.

What did the court rule?

Woodside reported that in its decision, reached yesterday, the Supreme Court of Western Australia “dismissed the two proceedings brought against the Chairman of the Environmental Protection Authority challenging the Pluto LNG and Karratha Gas Plant environmental approvals made in 2019″.

The ASX 200 energy company said it was pleased with the decision and will continue to progress the projects.

CCWA was represented by the Environmental Defenders Office. As the Motley Fool reported at the time, the Environmental Defenders Office explained the basis of the case as such:

Our client will argue that a key approval for expansion of Woodside’s Pluto LNG facility – a major component of the Scarborough gas proposal – was unlawful, as it failed to properly consider and control the environmental harm generated by the development’s GHG emissions…

Governments and regulators should be doing everything in their power to properly assess and control any additional emissions to mitigate the risk of climate related extreme weather events to the Australian people.

In November, CCWA commenced separate proceedings in the Supreme Court challenging WA’s Pluto Train 2 project works approval. That hearing date isn’t set yet.

How have Woodside shares been tracking?

The Woodside share price closed up 0.5% yesterday, ending the day at $28.68 per share.

So far in 2022, Woodside shares have surged ahead, up around 30%. That compares to a year-to-date loss of 6.5% posted by the ASX 200.

The post Own Woodside (ASX:WPL) shares? Here’s the latest on the energy giant’s major court win appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• 3 ASX energy shares smashing 52-week highs today
• The Woodside (ASX:WPL) share price is a buy: broker
• 5 things to watch on the ASX 200 on Tuesday
• Why is the Woodside (ASX:WPL) share price having such a stellar start to the week?

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/es2tGfx

If you’re wanting to boost your income portfolio with some new dividend shares in March, then the two listed below could be worth considering.

Here’s what analysts are saying about these dividend shares right now:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to consider is Baby Bunting. It is a baby products retailer with a strong presence both online and through its growing collection of national superstores.

Citi is a fan of the company and recently reiterated its buy rating with a $6.22 price target. While it acknowledges that its shares trade on higher than average multiples, the broker believes its growth outlook justifies this.

It commented: “We see Baby Bunting well placed to outperform the broader small cap retail sector this year given the non-discretionary nature of its category. While the FY22 PE multiple of 24x (or 29x when adjusted for transformation costs) is not cheap, we forecast a FY21 to FY24 EPS CAGR of 17%, and see growth being driven by i) rollout, ii) ramp up of new stores, iii) margin expansion and iv) penetrating existing categories with low presence. Further, the stocks growth prospects are in some respects less risky than other high multiple retailers who are relying more on new markets and acquisitions.”

Citi is forecasting fully franked dividends per share of 16 cents in FY 2022 and 19 cents in FY 2023. Based on the current Baby Bunting share price of $4.84, this will mean yields of 3.3% and 3.9%, respectively.

GQG Partners Inc (ASX: GQG)

Another dividend share for investors to look at is this recently listed fund manager.

Analysts at Morgans were pleased with its performance in FY 2021, noting that it delivered a result in line with expectations.

In response, the broker has retained its add rating with a slightly trimmed price target of $2.27.

Morgans commented: “Against a volatile/weak market in CY22 to-date, GQG has delivered strong relative outperformance across its four strategies. This should help solidify the near-term flows outlook. 1Q22 has begun solidly, with US$2.2bn of inflows to-date. GQG has seen a valuation de-rate along with the broader sector, however we view it as unwarranted. Both relative investment performance and flows remain strong. We view GQG’s ~11x FY22 PE as attractive versus its diversity of earnings; current flows momentum; and expected growth. Add maintained.”

As for dividends, the broker is expecting dividends of 9 cents per share in FY 2022 and then 10 cents per share in FY 2023. Based on the current GQG share price of $1.44, this will mean yields of 6.25% and 6.95%, respectively.

The post Here’s why analysts rate these ASX dividend shares as buys appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in March 2022
• Analysts names 2 ASX value shares to buy with 20%+ upside potential
• Leading brokers name 3 ASX shares to buy today
• 2 high-yield ASX dividend shares for March 2022
• GQG (ASX:GQG) share price up 5% amid strong FY21 profit 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 Baby Bunting. 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/kRVOSpT

Diversify your portfolio, we hear constantly.

Having a variety of different ASX shares spreads out risk and helps you sleep at night, experts say.

However, it might surprise you to know those same professional investors don’t necessarily practise diversification themselves.

In fact, many will use their in-depth knowledge to put all their eggs in one or two ASX shares that they’re absolutely certain of winning on. 

Call it conviction, call it guts, call it what you will. 

But the writer has spoken to many fund managers who do this for their personal portfolios, which is completely the opposite of what they advise clients on how they run their fund.

Very few are willing to reveal this publicly though, for fear of burning vulnerable retail investors.

Turning $156,000 into $12 million

One expert who is quite happy to go on the record is Marcus Today founder Marcus Padley.

Padley has claimed more than once that diversification is a false idol.

“In the remote wilderness of portfolio construction, we have a lot of gurus — but there is one religion: it’s called diversification,” he said in a podcast last year.

“It underperforms in the good times, outperforms in the bad times, but it still doesn’t perform anyway.”

The Motley Fool reported last year that one of Padley’s followers had turned $156,000 into $12 million in just 3 years by putting it all in one ASX share.

Many might think this is risky, but Padley reckons it’s the opposite.

“It’s actually less risky because you’ve got your head in the game and you’ve only got one stock to focus on after all,” he said.

“If you were to buy one stock, you’re going to watch every move. You’ll go to every company presentation, get to know the CEO, get to know the other shareholders… You’re going to watch the drivers and pick up on anything that’s relevant to that stock.”

Practising what he preaches

To put his money where his mouth is, in a recent podcast Padley revealed that he himself only owns 2 ASX shares.

One of them is Poseidon Nickel Ltd (ASX: POS), which he has held for “a long time”.

“The CEO is godfather to one of my daughters, hence the faith in the man, who I know really well.”

That chief executive, Peter J Harold, has a track record of turning exploration businesses into producers, and Padley believes Poseidon would follow.

“Poseidon is sitting on a couple of projects that used to produce. It’s just a question of the nickel price rising high enough to make those viable,” he said.

“They expect to be back in production by December this year.”

The Poseidon share price has sunk more than 23% this year.

The second and final stock in Padley’s personal portfolio is Environmental Group Ltd (ASX: EGL).

Padley became interested in this environmental services provider when a trio of former Tox Free executives joined the firm.

“There is more cleanup to be done in Australia that EGL could possibly handle,” he said.

“This is just a question of getting around the technology. It’s not a question of finding things to do.”

Capital H Management founder and chief executive Harley Grosser told The Motley Fool earlier this month that he’s also a fan of EGL.

“The management team is A grade,” he said.

“They’ve done it before at Tox Free — a lot of the institutional fund managers know of [chief executive] Jason [Dixon] and his team, and the stock looks good value to us. So we’d expect it to do well this year.”

The EGL share price is down almost 18% for the year so far.

The post I personally only own 2 ASX shares: fund manager appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares loved by expert who averages 30% return per year

Motley Fool contributor Tony Yoo 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/w8560TR

On Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a positive start to the month. The benchmark index rose 0.7% to 7,096.5 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to fall heavily

The Australian share market looks set to fall heavily on Wednesday following a very poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 67 points or 1% lower this morning. In late trade in the United States, the Dow Jones is down 1.8%, the S&P 500 is down 1.5%, and the Nasdaq is down 1.4%.

CBA shares still a sell

Commonwealth Bank of Australia (ASX: CBA) shares are still a sell according to the team at Goldman Sachs. This morning the broker retained its sell rating with an $82.94 price target on the banking giant’s shares. While it sees the sale of a 10% share of Bank of Hangzhou for $1.8bn as a positive, it isn’t enough to change the broker’s view that CBA’s shares are vastly overvalued at the current level.

Oil prices hit 7-year highs

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a good day after oil prices surged higher. According to Bloomberg, the WTI crude oil price is up 7.5 % to US$103.00 a barrel and the Brent crude oil price has risen 6.8% to US$104.66 a barrel. Disruption to Russia’s supply has sparked fears of shortages.

Gold price higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 2.1% to US$1,940.7 an ounce. Demand for the safe haven asset has risen amid increased market volatility.

Telstra trades ex-dividend

The Telstra Corporation Ltd (ASX: TLS) share price is likely to trade lower on Wednesday. This is because the telco giant’s shares are trading ex-dividend this morning for its fully franked 8 cents per share interim dividend. Eligible shareholders can look forward to being paid this dividend on 1 April.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• 3 ASX energy shares smashing 52-week highs today
• ASX 200 shrugs off today’s RBA interest rate decision
• The Soul Pattinson (ASX:SOL) share price has lost 17% so far this year. Is it a buy?
• These 3 ASX 200 shares are topping the volume charts this Tuesday

from The Motley Fool Australia https://ift.tt/IiWkJ9r