There are a lot of shares to choose from on the Australian share market.

To narrow things down, listed below are two ASX shares that are highly rated by analysts.

Here’s what they are saying about them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator’s shares have been having a tough year. Weakness in Japan and concerns over inflationary pressures have been weighing on investor sentiment.

The team at Morgans remains positive on the company and believes recent share price weakness is a buying opportunity.

It said: “We upgraded to ADD after the result and, although inflationary pressures have worsened since then, we continue to believe there is meaningful upside to the current share price over the next 12 months.”

Morgans has an add rating and $100 price target on the company’s shares.

Lifestyle Communities Limited (ASX: LIC)

Goldman Sachs is a fan of this retirement communities company.

The broker believes Lifestyle Communities is well-placed to benefit from Australia’s ageing population and the structural growth in land lease living.

It explained: “We believe LIC is well positioned to benefit from shifting demographic trends, as its business helps address some critical emerging social issues. Its core business is to provide affordable housing to an ageing population, addressing a key social issue that is becoming more prevalent as the proportion of over 50’s increases. We expect as this population cohort continues to grow, this should deliver structural growth for the industry; we expect demand to far outpace supply at current build rates.”

Goldman has a conviction buy rating and $21.60 price target on its shares.

The post Why analysts say investors should buy these top ASX shares 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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that investors might want to hear about are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Citi, its analysts have retained their sell rating and $90.75 price target on this banking giant’s shares. Citi has been reviewing the banking sector ahead of potential rate hikes by the Reserve Bank. While the broker believes cash rate increases could support stronger than expected net interest margins in the near future, it isn’t enough for a more positive rating on CBA. Citi continues to see its shares as expensive at the current level and believes there are better options in the sector. The CBA share price was trading at $106.50 on Thursday.

Fortescue Metals Group Limited (ASX: FMG)

A note out of Goldman Sachs reveals that its analysts have retained their sell rating but lifted their price target on this mining giant’s shares to $15.20. The broker believes Fortescue’s shares are overvalued compared to its peers. Goldman also has concerns with capex and execution risks for the Iron Bridge and Fortescue Future Industries businesses. The Fortescue share price was fetching $21.61 at Thursday’s close.

Pro Medicus Limited (ASX: PME)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $44.80 price target on this health imaging technology company’s shares. This follows news that Pro Medicus has signed a major $32 million eight-year deal with Inova Health System. Although Goldman was pleased with the deal and is a fan of the company, it believes its shares are expensive at over 50x earnings. This is especially the case given that the company does not have sufficient visibility to know if recent win-rates can be sustained. The Pro Medicus share price ended the week at $48.63.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to sell today
• The CBA share price has leapt 14% since February. Too late to buy?
• How do you value the Fortescue share price in April 2022?
• Here are the top 10 ASX mining companies by market cap
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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 Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Stock splits can be exciting events, right? They certainly draw attention to the splitting company, even if they don’t necessarily move the stock price up.

Consider the fates of two would-be splitters, Tesla (NASDAQ: TSLA) and GameStop (NYSE: GME). Since announcing their respective share divisions in late March, the share prices of both have declined (GameStop by 13.2% and Tesla by 9.6%).

But softening share prices can often make companies more attractive. Let’s see which of these contenders is the better buy opportunity right now.

A tale of two splitters

Tesla and GameStop aren’t directly comparable as businesses, but they do share some similarities. Both have been criticized for the way they operate in the past and both have come close to bankruptcy at various points in their histories. The two companies are also the subject of constant, and sometimes frenzied, online discussion. This somewhat distorts the value of their stocks, as chatter and noise can knock a company’s price around quite a bit.

Let’s cut through the static and look at the fundamentals of the pair. Both operate in relatively high-cost and low-margin environments. Tesla cars require thousands of components, some rather expensive, and GameStop has to maintain a decent level of inventory and operate and staff brick-and-mortar stores. Earning a buck for the two companies, then, has been a challenge at times.

Electrifying growth for Tesla

Tesla is a recent arrival to the profit garage. Its bottom line has only recently been consistently in the black. It’s managed to do this with a laser focus not only on EVs exclusively — unlike slower-moving, auto-making competitors who are still beholden to the traditional internal-combustion engine — but also because the “cool factor” is nicely baked into its vehicles. This is especially true with the popular, higher-end offerings such as the Model X SUV.

This is a business model expertly practised by Apple, whose iPhone line of products is still the premium smartphone line of choice for many consumers after 15 years. The beauty of this approach is that quality premium products command higher prices and, all things being equal, produce higher margins for their makers. That was a key factor in Tesla’s dramatic lurch into profitability.

This success is combined with heady top-line growth. People want to own next-generation cars and desire to own Teslas. Demand continues to be bodybuilder strong and has helped lift revenue higher. Tesla’s full-year 2021 sales were nearly $54 billion, a sky-high 71% improvement year over year.

Is it game on or off for GameStop?

During the coronavirus pandemic, GameStop grew to prominence because of the many online denizens posting feverishly about the company. For a time (and still to some extent these days), it was the company that personified the new term “meme stocks,” with the outcome of entire trading days dependent on the tone of online discussions.

This kicked off in late 2020 with the most famous short squeeze in recent history. The shorts were ultimately routed, and GameStop began the roller-coaster ride it’s still on today.

To be blunt, it’s not a good investment based on the business fundamentals. While GameStop hasn’t done badly squeezing out sales growth (18% in full-year 2021) lately, it’s a retail dinosaur that usually loses money. Over the past four years, its annual loss has ranged from just under $215 million to nearly $800 million. Zooming in, the past three quarters have seen the flailing company slide increasingly deeper into the red on the bottom line.

And the winner is…

In one corner, we have Tesla as the highest-profitable operator in a red-hot segment in which demand shows no sign of cooling. In the opposite corner stands wobbly GameStop, weakened by a legacy business model that’s hard to succeed with today and tough to pivot from. The company’s also not a hot prospect to excel with behind-the-trend ventures, such as its recently announced non-fungible token (NFT) platform.

I suppose some argument could be made in favor of GameStop being far cheaper on certain, highly selected valuations. The company’s price-to-sales ratio, for instance, stands at less than two, while that of ever-expensive Tesla is a bloated 24-plus.

Then again, Tesla is a zeitgeist company with its best years in front of it. GameStop is a gossip-prone, volatile stock fronting a money-losing business.

There’s no real competition here. Admittedly, Tesla’s valuations give me pause to think and its top management is a bit flaky for my taste, but it’s built a powerful brand and will continue to be a leader in its segment. The EV specialist is unhesitatingly my pick in this contest.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Better stock-split buy: Tesla vs. GameStop appeared first on The Motley Fool Australia.

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Eric Volkman owns Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Apple and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Shares in National Australia Bank Ltd. (ASX: NAB) finished trading on Thursday at $32.85 apiece in afternoon trade.

NAB shares have thrust to 52-week highs in recent months after surging off low points in December, February and then again in March.

In the past month, its share price has jumped 10% and is now up 14% for the year to date.

Is NAB a buy?

Analysts at Morgan Stanley recently noted that NAB could increase its FY22 cost guidance, but that could very well be offset if the bank meets its revenue growth targets.

It is neutral on NAB shares and values the company at $31.50 apiece, slightly below the consensus valuation of $32.46 per share.

Analysts at Bloomberg reckon there could be more to the NAB story when digging a little deeper. They rank NAB as Australia’s “top green lender” after committing to an “environmental-finance target of A$70 billion and committed funding of A$56 billion.”

“It’s also Australia’s leading renewables lender and its lending carbon-intensity is well below peers. It hit its 2025 emission target last year and disclosure is among the best of Australian financials.”

That’s something worth thinking about particularly for ESG and/or sustainability minded investors.

Meanwhile, JP Morgan analysts are bullish on the bank and reckon it is set to outstrip peers in revenue growth and capital management this year.

“We have an overweight recommendation on NAB reflecting stronger-than-peer revenue growth prospects, likely sound cost control, and ongoing capital management,” it said in a recent note.

“The stronger revenue profile reflects NAB’s tilt towards small business banking, which should insulate it from ROE pressures in retail banking, as well as strong execution in its market leading SME franchise where it continues to take market share,” it added.

“While we think it possible that NAB walks away from its cost targets, this is already factored into our forecasts and still we see NAB’s pre-provision profit growth outstripping peers.”

It rates NAB a buy and values the bank at $33.50 per share, slightly above consensus.

In the last 12 months, the NAB share price has held gains and is up 23% in that time after a period of rough volatility.

The post Should investors buy the NAB share price at its 52-week highs? appeared first on The Motley Fool Australia.

More reading

• NAB share price lifts again to hit new 4-year high
• Do CBA shares offer the highest big bank dividend yield?
• Why are ASX 200 bank shares having such a stellar start to the week?
• 3 ASX 200 shares starting the week with new 52-week highs
• Is the NAB share price entering a ‘sweet spot’?

Motley Fool contributor Zach Bristow 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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