Transurban Group (ASX: TCL) maybe a road toll operator, but will rising fuel prices impact the share price?

Transurban shares climbed 2% on Thursday to finish the day at $13.22.  For perspective, the S&P/ASX 200 Index (ASX: XJO) lifted 1.05%.

Let’s take a look at what is likely at play for the company.

Could rising petrol prices impact toll road revenue?

Transurban builds and operates toll roads in Sydney, Melbourne and Brisbane.

Oil prices have recently hit 13-year highs amid the Russian invasion of Ukraine. Brent crude oil prices reached nearly US$140 per barrel in early March. The international benchmark Brent Crude is priced at US$99.65 per barrel at the time of writing, according to Bloomberg.

However, broker Macquarie believes there is scant evidence fuel price increases will impact the road toll operator.

Macquarie has placed a $14.96 price target on the company’s shares. This is 13% higher than Thursday’s close.

Macquarie, quoted in the Financial Review, said:

Transurban has always remarked, in their experience, there is a very weak relationship to fuel price movements. This appears to be supported by academic research which cites elasticity of negative 0.04.

In October 2007, when fuel increased 18 per cent, M4 and M5 (Sydney motorways) traffic was either stable or higher. In theory, it should have fallen 0.7 per cent assuming the elasticity holds.

The team at Morgans also recently placed an add rating and $14.29 price target on the company’s shares, my Foolish colleague James reported. The company said:

We think TCL will continue to be attractive to investors given its market cap weighting (important for passive index tracking flows), the high quality of its assets, management team, balance sheet, and growth prospects. 

Transurban share price snapshot

The Transurban share price has lifted just 1% in the past 12 months, while it has lost 4% year to date.

In the past month, Transurban shares have gained nearly 3%, while they have soared nearly 6% in the past week

Transurban has a market capitalisation of about $40.6 billion based on its current share price.

The post Worried about how rising petrol prices might impact the Transurban (ASX:TCL) share price? Read this appeared first on The Motley Fool Australia.

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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. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking for ASX shares to buy and hold, then you may want to consider the two listed below.

Both have been named as buys and tipped for big things in the future. Here’s what analysts are saying:

Lovisa Holdings Limited (ASX: LOV)

The first ASX share to look at this fast-fashion jewellery retailer. Lovisa has been growing at a solid rate for a number of years and appears well-placed to continue this trend thanks to its global expansion.

The team at Morgans appear confident that this will be the case and are particularly bullish on Lovisa’s future. Especially after the release of a “remarkable” first half result last month.

In respect to the future, the broker said: “LOV may just prove to be one of the biggest success stories in Australian retail. With ambitious (and financially well-incentivised) new leadership in place, we think now is the time LOV steps up to become a global force. Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the returns could be stellar.”

Morgans has an add rating and $24.00 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX share to consider buying is Xero. It is a leading cloud-based business and accounting software provider which boasts over 3 million subscribers globally.

Xero’s shares have come under significant pressure this year after being caught up in the tech selloff. While this is disappointing, the team at Goldman Sachs sees this as a buying opportunity.

It commented: “The ASX All Tech index has largely fallen in line with increasing real yields, with sector valuation now below pre-COVID levels while fundamentals are arguably stronger given the pandemic accelerated cloud/ technology adoption.”

In fact, Goldman is forecasting a 24% compound annual growth rate for Xero’s gross profit between FY 2021 and FY 2025. It has also previously suggested that Xero has what it takes to deliver strong growth over multiple decades.

As a result, the broker is very positive on the future and recently retained its buy rating with a trimmed price target of $135.00.

The post Brokers name 2 excellent ASX shares to buy and hold appeared first on The Motley Fool Australia.

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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. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price was on the rebound today, posting its first gains in more than a week.

Shares in the world’s second-largest miner were swapping hands for $45.68, up 1.11% at the market close today.

What’s driving BHP shares higher?

There may be a few factors contributing to the BHP share price move into positive territory today.

Firstly, the ascent of iron ore prices is providing a strong support base for the company’s margins. This is particularly important given the majority of revenue come from the steelmaking ingredient, BHP’s key commodity.

Currently, the price of iron ore is fetching US$141.50 a tonne, up 3.66% in the past 24 hours.

It’s worth noting that in the financial year ending 31 December 2021, iron ore accounted for more than half of the total group revenue from BHP.

In addition, the S&P/ASX 200 Resources (ASX: XJR) index has also pushed ahead, advancing 0.97% to 5,534.1 points.

The sector represents 48 of the largest companies in the S&P/ASX 200 that are members of the energy, metals and mining industry.

A positive shift in investor sentiment toward the index is likely to have propelled BHP shares forward.

In addition, commodity prices spiked when Russia attacked Ukraine on 24 February.

Lastly, analysts at Macquarie updated their outlook on BHP shares last month. The broker raised the 12-month price target by 6% to $54 apiece, representing a potential upside of around 20%.

BHP share price summary

Despite remaining relatively unchanged for the past 12 months, BHP shares have stormed 10% higher in 2022.

Investors heavily sold off the company’s shares in August 2021 after reaching an all-time high of $54.55. Since then, its shares hit a 52-week low of $35.56, before surging to late August levels of around the $45 mark.

Based on today’s price, BHP presides a market capitalisation of roughly $231.09 billion and has approximately 5.06 billion shares outstanding.

The post BHP share price rebounds after 9-day slide. Here’s why appeared first on The Motley Fool Australia.

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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.

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Who will end up owning Australian Pharmaceutical Industries Ltd (ASX: API) has been one of the biggest questions on the markets over the past year or so. API, the company behind the Priceline chain of pharmacies, has been sought after by both Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW). Now, it looks as though it will be Wesfarmers shares that will end up with API alongside them.

The ASX 200 industrial and retail conglomerate has lobbed a series of bids API’s way over the past 12 months. The most recent (and perhaps winning) bid being $1.55 per API share. But these were turned into a bidding auction or sorts when Woolies entered the fray with a higher bid of $1.75 per share. But the grocery giant bowed out of the courtship at the start of this year. As such, this leaves Wesfarmers as the only company that looks like it will take API’s hand.

Wesfarmers shares looking set to take in API

This merger took another step forward today as well. Hence why the Wesfarmers share price was in focus. As revealed by the Australian Financial Review (AFR) today, 97% of the proxy votes received by both API and Wesfarmers thus far have been in affirmation of the takeover. The vote closes tomorrow. These positive votes included some major institutional investors. These included Investors Mutual. Investors Mutual has a 4.2% stake in API, so its vote has obvious sway.

Another major API investor in Australian Ethical Investments Ltd (ASX: AEF) has reportedly already given its own green light.

According to the report, API shareholders’ votes “were understood to be nearly 90 percent favouring [the] deal”. This, together with the already-mentioned blessings of Wesfarmers shareholders, “make the scheme irrevocable”.

So it looks as if Wesfarmers is set to add yet another retail business to its bulging portfolio of brands. Wesfarmers already owns K-Mart, OfficeWorks and (of course) Bunnings.

The Wesfarmers share price had a positive day today, recording a gain of 0.32% by market close at $50.64 a share. That gives this ASX 200 blue-chip share a market capitalisation of $57.42 billion, with a dividend yield of 3.36%. 

The post Wesfarmers (ASX:WES) shares in focus as API deal looks all but sealed appeared first on The Motley Fool Australia.

More reading

• Own Wesfarmers (ASX:WES) shares? Here’s how the numbers are looking in the API takeover vote
• Why my 2 biggest ASX shares are about to disappear: fund manager
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Motley Fool contributor Sebastian Bowen 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 owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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