Month: May 2022

Shares of Invictus Energy Ltd (ASX: IVZ) have had a horror week and now trade 25% in the red at 20.5 cents apiece.

Selling pressure has continued in today’s session, with shares trading more than 2% down at the time of writing.

In broader market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) has climbed around 160 basis points into the green today.

What’s up with the Invictus Energy share price?

After the company entered a trading halt last week, it later confirmed a $12 million private placement to new and existing institutional and sophisticated investors.

The company issued around 60 million fully-paid ordinary shares at an issue price of 20 cents per share. At the time, that represented a 27.3% discount to Invictus’ closing price of 24.5 cents on 18 May.

Those involved with the placement also received options giving the right to two Invictus shares at an exercise price of 35 cents.

Investors ran for the hills following the announcement and dumped their Invictus shares along the way seeing as the placement is set to dilute existing shareholders by a considerable amount.

Since the company release, trading volume of Invictus shares surged, albeit tilted towards the sell-side. Today’s volume is also at 91% of the 4-week average of 6.3 million shares – roughly 1% of the company’s entire float.

News Invictus had “executed a binding well services contract with Baker Hughes for its basin opening drilling campaign in the Muzarabani-Mbire area of Zimbabwe” wasn’t enough to entice investors to jump back aboard the gravy train yesterday either.

The contract is scheduled to commence at the end of July 2022, Invictus says, however it appears to be a bittersweet note for those shareholders currently diluted to the tune of 60 million shares.

In the last 12 months, the Invictus Energy share price has soared well into the green having clipped a 33% gain in the time.

This year to date, the stock has shown its teeth even more but has reversed course sharply on more than two occasions following market-sensitive updates.

It now trades 30% below its former highs in May.

The post Why has the Invictus Energy share price dumped 29% this week? appeared first on The Motley Fool Australia.

More reading

• The Invictus share price just tanked 12%. Here’s why

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 Scott Phillips.

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Energy shares are boosting the S&P/ASX 200 Index (ASX: XJO) into the green on Friday.

At the time of writing, the S&P/ASX 200 Energy Index (ASX: XEJ) has lifted 1.86%, helping the broader index to boast a 0.77% gain.

Let’s take a look at why ASX 200 energy shares are ending the week on a high.

ASX 200 energy shares lead the market on Friday

ASX 200 energy shares are among the market’s top performers today amid commodity price movements.

Interestingly, the sector is currently led by the share price of uranium producer Paladin Energy Ltd (ASX: PDN). It’s 5.6% higher, trading at 76 cents.

The uptick comes after the price of uranium tumbled to its lowest point in three months this week. However, it lifted slightly overnight.

Right now, the nuclear-necessity is trading for US$47.65 a pound, according to Trading Economics. That’s down from April’s 10-year high of around US$65 a pound.

It’s easier to explain the gains posted by oil and gas producers Beach Energy Ltd (ASX: BPT), Woodside Energy Group Ltd (ASX: WDS), and Santos Ltd (ASX: STO). Their share prices are currently up 3.9%, 3.4%, and 0.4% respectively.

The stocks are likely rallying on the back of surging oil prices. The Brent crude oil price lifted 3% to reach US$117.40 a barrel overnight and the US Nymex crude oil price gained 3.4% to hit US$114.09 a barrel, reports CommSec.

The commodity’s surge is said to have been inspired by data released on Wednesday. It showed US gasoline stockpiles have fallen to their lowest seasonal level since 2014.

Finally, ASX 200 coal shares such as Whitehaven Coal Ltd (ASX: WHC) are also outperforming today as the price of the black rock nears its all-time high.

The commodity is currently trading at US$403 a tonne – just 7.9% lower than the record high of US$435 it hit in March.

The coal giant’s stock is swapping hands for $5.17 on Friday, representing a 2.6% gain.

The post TGIF: Here’s why ASX 200 energy shares are outperforming today appeared first on The Motley Fool Australia.

More reading

• ‘We’re close to the bottom’: Expert flags share market sectors to buy before the rally
• 5 things to watch on the ASX 200 on Friday
• Here are the 3 most traded ASX 200 shares on Thursday
• Why Catapult, Costa, Endeavour, and Whitehaven Coal shares are dropping
• Why are ASX coal shares sliding today?

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 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 Scott Phillips.

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The Sayona Mining Ltd (ASX: SYA) share price has returned to trading following the company’s latest capital raise.

At the time of writing, the lithium explorer’s shares are swapping hands at 21.75 cents, up 6.1%.

Sayona Mining shares resume trading

Investors are buying Sayona Mining shares following the company’s successful institutional placement.

In a release to the ASX today, Sayona Mining advised it has received firm commitments to raise $190 million from global institutional, professional and sophisticated investors.

Approximately 1 billion new ordinary shares will be issued at a price of 18 cents each to participating investors. The offer represents a discount of 12.2% on the last closing price of 20.5 cents per share.

The company said most of the placement proceeds would be used to fund its North American Lithium (NAL) operation in Québec, Canada. Sayona has allocated around $100 million to restart spodumene concentrate production.

Management stated that the NAL remained on schedule for its first spodumene concentrate production in the first quarter of 2023. NAL concentrator commissioning is forecasted for late in the third quarter to early in the fourth quarter of 2022.

The remaining funds will be applied to the following:

• Authier development ($35 million);
• Moblan evaluation and feasibility study update ($25 million);
• Exploration and project evaluation ($15 million);
• Working capital and offer costs ($15 million).

In addition, Sayona Mining’s recent pre‐feasibility study for NAL demonstrated the operation’s technical and financial viability. This will form the basis of a Definitive Feasibility Study (DFS) sometime in the second half of 2022.

Sayona Mining managing director Brett Lynch commented:

This placement is a major vote of confidence in our ability to transform NAL into a sustainable and profitable producer of key battery metals.

I would like to thank all our investors, both existing and new, for backing Sayona as we advance towards becoming the first local producer of spodumene in North America and ultimately moving downstream to capture even greater value‐add from our expanding lithium resource base.

About the Sayona Mining share price

Despite sinking 40% in a month, the Sayona Mining share price is up by 378% over the past 12 months.

Year to date, its shares have zipped 65% higher following investor hype around the lithium space.

Sayona Mining presides a market capitalisation of roughly $1.47 billion and has more than 7.18 billion shares on its registry.

The post Here’s why the Sayona Mining share price is leaping 6% today appeared first on The Motley Fool Australia.

More reading

• Why is the Sayona Mining share price in a trading halt?
• Why investors are saying sayonara to Sayona Mining shares this week
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• Why is the Sayona Mining share price crashing 21% today?

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 Scott Phillips.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is in the green today, up 0.47% to $25.65 per share.

That will be welcomed by shareholders who’ve watched the big bank slide this calendar year. The only of the big 4 to be in the red year-to-date.

The Commonwealth Bank of Australia (ASX: CBA) share price has gained 4.0% in 2022; the National Australia Bank Ltd (ASX: NAB) has gained 8.1%; and Westpac Banking Corp (ASX: WBC) shares are up 11.1% year-to-date.

As for the ANZ share price, it’s down 8.3% this year.

With shares slipping, ANZ is also trading at the lowest price to earnings (P/E) ratio of any of its peers.

ANZ trades at a P/E ratio of 11.9 times.

By comparison, NAB trades at a P/E ratio of 20.5 times; Westpac trades at a P/E ratio of 14.6 times; and Australia’s biggest bank, CBA, trades at a P/E ratio of 2.5 times.

Then there’s Macquarie Group Ltd (ASX: MQG), which trades at a P/E ratio of 14.5 times.

So, is this big discount in the ANZ share price justified?

Keep a sharp eye on the bank’s operational performance

For some insight into that question, we defer to Joseph Koh, portfolio manager at Schroders.

Speaking to Livewire, Koh said that overall, the Aussie banking sector “is not particularly cheap”. He pointed out that banking counterparts in the United Kingdom trade of absolute P/E multiples of roughly half the Aussie banks.

He said that due to divergent performance between the big banks “the split between the higher-rated CBA, Macquarie and NAB against ANZ and Westpac is as large as it has ever been”.

Koh pointed out that only a few years ago, NAB shares were in a similar position to the discounted ANZ share price today:

Ross McEwen has done a wonderful job of restoring NAB’s fortunes in the three years since his appointment as CEO.

However, it is telling that the turnaround in performance and multiple has occurred in this relatively short timeframe, with NAB being the lowest-rated major bank when he joined. This position is currently assumed by ANZ, with their discount to the sector peers being as large as that of any major bank through recent decades.

Why has the ANZ share price come under pressure?

ANZ is struggling to match its competitors.

According to Koh:

Operationally, ANZ is currently in a world of pain, with domestic market share losses in mortgages arising due to cumbersome systems and processes, and poor productivity; almost the identical set of issues which confronted NAB three years ago.

He credited NAB’s rapid upwards rerating on its simplifying processes “especially those related to mortgage processing”, adding that “leadership matters, a lot, even in sectors that are superficially commoditised”.

What could shareholders expect if ANZ lifts its game?

Koh stresses there are no guarantees, but should the bank get its operational performance back on track, there could be some big upside for the ANZ share price.

“Should ANZ restore its operational performance to NAB’s level and be rerated accordingly, there is a 40% relative performance prize on offer on a price to book basis, or circa $30 billion in market capitalisation,” he said.

Koh added:

We are not assuming this occurs, and nor do many, given ANZ is trading at its largest discount to its peers in 15 years.

However, nor were many assuming it for NAB three years ago, before the rerating which delivered $35 billion in relative alpha for NAB shareholders. For this reason, any improvements in ANZ’s operational performance warrant close attention.

ANZ share price snapshot

The ANZ share price is down 10% over the past year, compared to a 1% 12-month gain posted by the S&P/ASX 200 Index (ASX: XJO).

The post The ANZ share price is ‘trading at its largest discount to its peers in 15 years’: Is this justified? appeared first on The Motley Fool Australia.

More reading

• Where next for the Westpac share price?
• Here are 2 ASX 200 dividend shares rated as buys by brokers
• 5 things to watch on the ASX 200 on Friday
• What’s the outlook for ASX 200 dividend shares in the second half of 2022?
• ASX 200 midday update: Appen rockets, Westpac super update

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 Scott Phillips.

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Is the current investment environment a good time to start investing in ASX shares?

I believe that investing in shares is one of the best things that people can do for their wealth over the long-term. Beginners don’t need $50,000 to start investing in ASX shares. People can invest with as little as $500. But when should investors start?

Readers may have seen a lot of news in recent months about how share markets are seeing volatility. That’s in response to strong inflation and central banks around the world, like the Reserve Bank of Australia (RBA), deciding to raise interest rates to reduce inflation.

Interest rates act like gravity on asset prices. When interest rates go higher, it theoretically ‘pulls’ down the asset price.

So that explains why share prices are lower – investors are ‘pricing in’ the interest rates that are expected this year.

Is now a good time to start investing?

A key part of investing is buying opportunities at a good price. If nearly everything is cheaper, I think it makes sense to look at ASX shares.

Warren Buffett, one of the best and wisest investors in the world, once explained whether he sees lower prices as an opportunity:

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

If you already own shares, then it can be tough seeing your shares drop. But hopefully, if you’ve chosen well, they can recover and reach new heights over time. Global share markets have seen some tough times during the GFC and COVID-19, but they eventually have recovered.

That’s why I’m looking at ASX shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW), Airtasker Ltd (ASX: ART), Volpara Health Technologies Ltd (ASX: VHT) and Temple & Webster Group Ltd (ASX: TPW)

Should investors wait for an even lower price?

No one knows what is going to happen next with ASX shares, or any asset price.

It’s impossible to know whether the current share market decline is the bottom. Shares could drop another 10% in June. Or rise 10%. Or shares could end the month at the same price as the start.

Unless you have a crystal ball, which I certainly don’t, it’s impossible to be certain. That’s one of the reasons why share markets are so volatile – everything is uncertain.

But over the long-term, I think the share market has shown it’s worth investing (and staying invested) through the difficult times. Over the decades, the share market has returned an average of 10% per annum. That’s an average – some years are much better. Some years are like the GFC (really bad!).

Those returns have happened despite the financial crashes, wars, politicians, policies, COVID-19 and so on.

So, while I think it’s a good time to start investing right now, I wouldn’t say it’s a good idea to wait in case we’ve already seen the worst of the fall.

And then keep investing regularly in good ASX shares for the long-term.

The post Could now be a great time to start investing in ASX shares? appeared first on The Motley Fool Australia.

More reading

• Volpara share price up on record full-year results
• This is the top ASX 200 share I wish I’d bought when starting out
• 2 ASX dividend shares I’d buy for passive income
• Here’s why the Airtasker share price is leaping 8% on Wednesday
• Is it reasonable to expect share price growth AND reliable dividends from ASX shares?

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Temple & Webster Group Ltd, VOLPARA FPO NZ, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has positions in and has recommended Brickworks, VOLPARA FPO NZ, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

What happened

Ahead of the upcoming “merge” that will combine the Ethereum (CRYPTO: ETH) proof-of-stake Beacon Chain with its existing network, anticipated for August, investors have yet another headwind to grapple with today. As of 9:30 a.m. ET, Ethereum is the worst performer among the top 10 cryptocurrencies by market capitalization, dropping 10% over the past 24 hours.

This move was driven by a seven-block reorganization, or reorg, yesterday. Ethereum’s Beacon Chain effectively forked, providing investors with concerns that this form was the result of a malicious actor, network failure, or bug.

Key Ethereum developers took to Twitter to theorize that this reorg was the result of some miners using outdated versions of mining software. However, the reorg has implied to many that the previous August timeline for the Ethereum merge may be delayed, once again.

So what

A reorg takes place when miners attempt to add blocks of transactions simultaneously on the blockchain. This can duplicate the blockchain, creating a fork, which can result in blocks of transactions being lost or duplicated. For any blockchain, this is a serious event.

However, the number of blocks of transactions that are ultimately dropped is a key determinant of the severity of such a fork. In this case, seven blocks of transactions (each with around 200-300 individual transactions) were dropped, equivalent to approximately 14 ETH (or around $26,000) of duplicated transactions. Malicious actors looking to duplicate assets, also called a “double spend” attack, can do so by forcing a fork in the chain.

While it appears this wasn’t the case, a seven-block reorg is out of the ordinary. Typically, one or two block reorgs can take place due to network latency. However, longer reorgs are possible if the stars all align in an improper way.

Now what

Putting aside the idea that Ethereum’s network was compromised in a serious way, which many are having difficulty doing right now, it’s clear the Beacon Chain may need more work before its ultimate merge. If these sorts of issues aren’t resolved ahead of time, investors may worry that rushing this massive upgrade could risk the integrity of the network. Today, investors appear to be concerned that this seven-block reorg may be emblematic of more issues under the surface.

Perhaps it’s just bad luck. Could be. However, in this bear market, it’s clear that investors aren’t necessarily willing to buy the dip as they have in the past on such issues. Accordingly, Ethereum will certainly be an interesting token to watch from here.

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

The post Ethereum sinks 10% on 7-block reorg — Here’s what to know appeared first on The Motley Fool Australia.

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Chris MacDonald has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum and Twitter. 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 Scott Phillips.

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

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Shares of Vulcan Energy Resources Ltd (ASX: VUL) surged 6% in early trade on Friday.

Investors bid the Vulcan share price as high as $7.64 this morning with the stock today trading at its highest level in around three weeks.

Shares in the lithium miner are trading slightly lower at $7.54 apiece at the time of writing.

In broader market moves, the S&P/ASX 200 Energy Index (ASX: XEJ) has spiked 180 basis points into the green as well.

What’s up with the Vulcan share price?

Whilst it’s been quiet from Vulcan’s camp this month, the price of battery metal lithium continues to remain buoyant near record highs.

Lithium carbonate now rests at 458,500 yuan/tonne having slipped from record highs of 496,500 yuan per tonne in early April.

According to Trading Economics, lithium carbonate traded sideways during May along the lowest level since February amid “stronger supply projections while strict lockdowns in Shanghai eased the metal’s surging demand”. It added:

Fresh figures showed that lithium carbonate production in China rose by 2% on the month and 30% on the year during April, while supply is projected to further increase in May as COVID lockdowns are expected to recede and capacity is set to rebound for manufacturers.

Lower activity due to the lockdowns also dented demand, as sales of new energy passenger vehicles plummeted 40% on the month in China, with Tesla purchases falling the most.

Motley Fool Australia recently reported: “While Vulcan is not yet producing lithium, the value of its future cash flow is reliant on the commodity’s value,” adding that “… the premise of Vulcan Energy’s goal is to produce lithium at a substantially lower cost than is traditional…”

While news has been quiet on Vulcan’s front with the price of lithium remaining top-heavy near its record highs, investors appear to be still looking favourably on such ASX stocks today.

Vulcan share price snapshot

The Vulcan share price has clipped a 3% gain in the last 12 months but has slipped 27% into the red this year to date.

The post Up 6%, why has the Vulcan share price surged higher today? appeared first on The Motley Fool Australia.

More reading

• Do Vulcan Energy shares pay dividends?
• Who wants to be a millionaire? If only you’d invested $10,000 in these ASX shares 10 years ago
• Why has the Vulcan share price tumbled 25% in a month?
• Vulcan share price pops 5% on future lithium expectations
• Here’s why ASX lithium stocks are rocketing higher today

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 Scott Phillips.

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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is pushing higher. The benchmark index is currently up 0.9% to 7,169.7 points.

Here’s what is happening on the ASX 200 today:

Appen share price crashes after takeover offer withdrawn

The Appen Ltd (ASX: APX) share price is crashing on Friday after Telus International withdrew its takeover approach. The offer was withdrawn without comment but appears to have been triggered either by the leak to the media or a poor trading update. Appen is currently holding a fiery annual general meeting and could receive a second strike to its remuneration report.

Battery materials shares rise

The battery materials sector has been performing strongly on Friday after risk sentiment improved. For example, the likes of Liontown Resources Limited (ASX: LTR) and Pilbara Minerals Ltd (ASX: PLS) are both recording gains of almost 5% at the time of writing.

Billionaire coal magnate exits Novonix board

The rampant buying in the battery materials sector has allowed the Novonix Ltd (ASX: NVX) share price to push higher despite the company announcing the exit of a key board member. Billionaire coal magnate Trevor St Baker AO has retired from the Novonix board with immediate effect. He is exiting the role due to excessive company board representations on behalf of the St Baker Energy Innovation Fund.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Pointsbet Holdings Ltd (ASX: PBH) share price with an 8% gain. This follows a strong session for tech shares on the Nasdaq overnight. Going the other way, the Appen share price is the worst performer with a 21% decline. This has been driven by its takeover collapse.

The post ASX 200 midday update: Appen crashes, lithum shares jump appeared first on The Motley Fool Australia.

More reading

• Appen share price crashes 25% after Telus withdraws takeover offer
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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 positions in and has recommended Appen Ltd and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Galileo Mining Ltd (ASX: GAL) share price is soaring again today.

Shares in the ASX resource explorer closed yesterday at $1.41 and touched an all-time high of $1.95 this morning. At the time of writing, shares are trading for $1.92, up 36.2%.

This comes on the back of a stellar week, with the Galileo share price up 88% since Monday’s close on the back of a series of exciting drill results.

ASX investor interest looked to be piqued again today, by the report of more promising assays.

What new drill results were reported?

The Galileo Mining share price is off to the races once more after the company reported assays from a drill hole at its Callisto project in Western Australia had intercepted rhodium.

Rhodium is one of the most precious, and priciest, metals in the world. The current spot price is in the range of US$15,450 per ounce. And demand for the corrosion-resistant metal is expected to increase amid its use in vehicle pollution control systems.

According to the release, the assays at Callisto returned rhodium values up to 0.094 grams per tonne with average values across the 33-metre interval of 0.05 grams per tonne.

Callisto is the same project that sent the Galileo share price soaring yesterday when the company reported that six drill holes of its exploration campaign had confirmed the presence of palladium, platinum, gold, copper, and nickel.

Commenting on the latest positive results, Galileo’s managing director, Brad Underwood said:

The rhodium assays confirm the presence of this valuable metal within the Callisto mineralised system. With step out drilling expected to commence next week we will now be including rhodium in the assay suite for any further sulphide rich intersections…

We are excited to be starting drilling again so soon after the recent discovery announcement and look forward to updating the market with results as they become available.

The explorer plans to continue reverse circulation (RC) drilling on 2 June, weather permitting. It intends to drill 200 holes for approximately 4,000 metres of drilling.

Galileo Mining share price snapshot

The Galileo share price has rocketed an eye-popping 780% over the past month. Over that same month, the S&P/ASX 200 Index (ASX: XJO) slipped 1.2% lower.

The post Up 700% in 2022, why the Galileo Mining share price is leaping another 36% today appeared first on The Motley Fool Australia.

More reading

• 3 ASX mining shares going gangbusters on Thursday
• Galileo Mining share price surges another 25% on ‘very important’ drill results
• The Galileo Mining share price has been on a tear, but now it’s halted. What’s happening?
• Here’s why the Galileo Mining share price is up 13% today and 125% this week
• The Galileo Mining share price has rocketed 380% in a week. But this billionaire is still buying up big

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 Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price is pushing higher on Friday.

In morning trade, the banking giant’s shares are up almost 1% to $24.10.

Where next for the Westpac share price?

According to a note out of Goldman Sachs, while its analysts aren’t recommending the bank’s shares as a buy, they do see significant upside potential for them.

The note reveals that this morning the broker has retained its neutral rating and $27.29 price target.

Based on the current Westpac share price, this implies potential upside of 13% for investors. And if you include dividends, the return stretches to approximately 18%.

What did the broker say?

Goldman highlights that Westpac has agreed to merge its BT Fund Management’s personal and corporate superannuation funds with Mercer Super Trust and sell its Advance Asset Management business.

The broker notes that these transactions are consistent with its simplification strategy and expect them to boost its CET1 ratio. It said:

We view these transactions as entirely consistent with WBC’s strategy of simplifying the overall group, and we note that at the time of its 1H22 result, WBC noted other assets sales that have been announced but not yet finalized would add a further 16 bp to WBC’s CET1 ratio.

Post this transaction, operations that remain within the Specialist business and are under review to potentially being sold include the platforms business (i.e. Panorama) and Westpac Pacific, the latter which WBC had previously attempted to sell (proposed sale on 7-Dec-20) but had been blocked by regulators.

The broker concluded:

We are Neutral-rated on WBC. Our 12-month TP of A$27.29 is based on a 50%/50% blend of our DCF / ROTE vs. P/NTA valuations. Upside risks: higher interest rates, outperformance on NIM management, better than expected performance on cost management. Downside risks: Slower-than-expected housing growth, risk of higher investment spend, higher exposure to NSW property market.

The post Where next for the Westpac share price? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• What’s the outlook for ASX 200 dividend shares in the second half of 2022?
• ASX 200 midday update: Appen rockets, Westpac super update
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Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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