Month: May 2022

At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher. The benchmark index is currently up 0.8% to 7,183.6 points.

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

BHP share price sinks

The BHP Group Ltd (ASX: BHP) share price has taken a big tumble on Wednesday. This has been driven by the Big Australian’s shares trading ex-dividend for its in-specie dividend. Eligible BHP shareholders can now look forward to receiving one new Woodside Energy Group Ltd (ASX: WDS) share for every 5.534 BHP shares they own when the demerger of BHP’s petroleum assets completes on June 1.

Pilbara Minerals shares fall following BMX auction

The Pilbara Minerals Ltd (ASX: PLS) share price is dropping today. This is despite the lithium miner releasing the results of the fifth Battery Material Exchange (BMX) auction. A cargo of 5,000 dmt at a target grade of ~5.5% lithia received a winning bid of US$5,955 per dry metric tonne. This was up from US$5,650 per tonne last month. While this came in 9% ahead of what Macquarie Group Ltd (ASX: MQG) was expecting, some investors appear to have been betting on even stronger pricing.

Worley wins two new contracts

The Worley Ltd (ASX: WOR) share price is charging higher today. This follows the announcement of two new contract wins. The first is the award of a contract for the fourth expansion of an integrated polyolefins complex in Ruwais, United Arab Emirates. The other is a contract by Heartwell Renewables for field engineering services for a greenfield renewable diesel plant in Hastings, Nebraska.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Nufarm Ltd (ASX: NUF) share price with a 5% gain. Bargain hunters appear to be swooping after recent weakness. Going the other way, the worst performer has been the BHP share price with an 8.5% decline. This has been driven by its shares trading ex-dividend this morning.

The post ASX 200 midday update: BHP and Pilbara Minerals shares tumble appeared first on The Motley Fool Australia.

More reading

• Do South32 shares have exposure to ‘green metals’?
• What exactly is the difference between Woodside Energy (WDS) and Woodside Petroleum (WPL)?
• Pilbara Minerals share price falls despite record BMX auction
• Why is the BHP share price sinking 10% today?
• 3 ‘disruptive’ ASX companies Aussies now can’t live without

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 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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South32 Ltd (ASX: S32) is one of the most diversified mining shares on the S&P/ASX 200 Index (ASX: XJO). Most miners tend to focus on one or two commodities. Take Fortescue Metals Group Limited (ASX: FMG). Despite its recent talk of expanding into hydrogen, Fortescue essentially remains a pure-play iron ore company today.

Fortescue’s fellow blue-chip miners in Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) are more diversified. But iron ore remains the most important commodity for these companies as well. Especially considering BHP has just finalised the sale of its petroleum assets to Woodside Energy Group Ltd (ASX: WDS).

But South32 is a different beast. It was spun out of BHP back in 2015. This was done to ensure BHP could streamline into its four most important commodities at the time – iron ore, oil, copper, and coal. Everything else that BHP owned got bundled into South32 and demerged.

So what does the South32 commodities portfolio look like today? And more importantly, do South32 shares give investors exposure to green metals?

Well, that’s a good question. And it largely rides on what you might define as a ‘green metal’. Obvious candidates like lithium can be ruled out. South32 is not a lithium miner and has no exposure to this quintessential green metal. But it does have some exposure to some other future-facing metals.

Is South32 an ASX green metals share?

Let’s start with the main ones. South32 has major operations in aluminium. It produces aluminium, as well as alumina and the ore bauxite, through its facilities in Africa. However, while aluminium is an important metal in our economy, it can’t really be described as a green metal. South32’s metallurgical coal operations are also a non-starter when it comes to green metals.

South32 also produces lead, manganese, and zinc. Again, these are essential base metals. But not what a typical investor might get too excited about when it comes to environmental impacts.

But we get a little warmer when examining South32’s silver operations. The company owns the Cannington mine in North Queensland, which is a world-leading source of silver. While silver’s applications remain tilted towards jewellery and electronics, silver is also a key ingredient in making solar panels.

But perhaps South32’s ‘greenest’ commodities come in the form of copper and nickel. These two metals have been used for thousands of years, including in countless applications today. However, both nickel and copper are essential ingredients in electric motors and batteries – the kind you will find in the next generation of electric cars and vehicles. These we can call ‘green metals’ for most intents and purposes.

So, all in all, South32 shares provide an investor with exposure to a wide range of minerals and metals. Some of these can be considered green, others less so.

At the current South32 share price, this ASX 200 miner has a market capitalisation of $21.94 billion, with a dividend yield of 3.53%.

The post Do South32 shares have exposure to ‘green metals’? appeared first on The Motley Fool Australia.

More reading

• 3 ‘disruptive’ ASX companies Aussies now can’t live without
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• What does AFIC’s ASX share portfolio look like?
• Here are the 3 most traded ASX 200 shares on Tuesday

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 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 S&P/ASX 200 Health Care Index (ASX: XHJ) is in the red today, but one ASX biotech share is beating the trend.

The Vectus Biosystems Ltd (ASX: VBS) share price is soaring 13.6%, currently trading at $1.25. In contrast, the ASX 200 Health Care Index is down 0.57% at the time of writing.

So why is this ASX biotech share having such a good day?

Human trial success

Vectus is working on treatments for fibrosis and high blood pressure to combat heart, kidney and liver diseases.

The company’s lead compound is VB0004 to treat high blood pressure and hardening functional tissue.

In today’s news, the company reported the results of the Single Ascending Dose Study for a human clinical trial. Five doses of VB0004 were administered with no adverse events to date. The 300mg dose significantly added to the therapeutic safety margin for VB0004.

Pharmacokinetic analysis showed the plasma half-life is 17 to 17.5 hours and maximal concentration after dosing takes place at six to eight hours. Vectus said this showed VB0004 was responsive to one dose per day.

A Multiple Ascending Dose (MAD) study involving the daily doses of 10mg for 14 days of VB004 to patients also showed no adverse events. A second group of people will now be involved in the MAD study, with three people already enrolled.

The results were reviewed by the Trial Safety Review Committee.

Vectus chair Ron Shiner said:

This is an exciting development in Vectus’ journey of validating an orally-dosable anti-fibrotic, which could not just slow down disease progression, but in fact, potentially provide clinical reversal of existing damage in a truly transformational agent.

Vectus share price snapshot

Vectus shares have rocketed nearly 29% in the past 12 months, but they are down 11% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has climbed 2% during the past year.

The ASX biotech share has a market capitalisation of about $45 million based on its current share price.

The post Why is this ASX biotech share leaping 14% today? appeared first on The Motley Fool Australia.

More reading

• Is Telstra an ASX 200 share worth owning right now?
• Tabcorp share price slumps another 7% following demerger
• What’s happening with ASX 200 tech shares today?
• The Galileo Mining share price has been on a tear, but now it’s halted. What’s happening?
• Why Snap stock cratered on Tuesday

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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Could Telstra Corporation Ltd (ASX: TLS) be one of the best ASX blue-chip shares to own?

The telco is certainly one of the biggest businesses in the S&P/ASX 200 Index (ASX: XJO) with a market capitalisation of $45 billion, according to the ASX.

But simply being a large business doesn’t mean it’s a good option. There is more to it than that.

The prospect of growing earnings could be one of the more important things to look for. Let’s start with the prospect of profit rising.

T25 strategy

Telstra is just finishing up its T22 strategy, and now it’s going to work on its T25 strategy for the next few years.

The thought is that Telstra’s T25 strategy will deliver “growth, exceptional customer experiences and continued network and tech leadership”.

The blue-chip ASX share expects to achieve a compound annual growth rate (CAGR) of mid-single digits for the underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to FY25. Telstra is also expecting a high-teen CAGR of underlying earnings per share (EPS) to FY25.

Part of that growth will come from the plan to reduce net fixed costs by another $500 million between FY23 and FY25.

Telstra also plans to ‘win’ with 5G by expanding its 5G network coverage to 95% of the population. Australian-based contact centres will support this expansion.

The company expects 80% of all mobile traffic to be on 5G by FY25. It’s already thinking about 6G, saying early planning will “clearly” be on the agenda by the end of T25.

Dividends

One of the things that many Aussies seem to want from their ASX blue-chip shares are dividends.

Telstra has committed to maximising its fully-franked dividends for shareholders and looks to grow them as cash flow, profit, and franking credits allow.

The telco has continued to pay an annual dividend of 16 cents per share, which translates into a grossed-up dividend yield of 5.9%.

Diversification

Some businesses have multiple earnings streams rather than having all the profit ‘eggs’ in one basket.

While Telstra earns most of its profit from providing telecommunications services in Australia, it is growing in other areas.

It is increasing its earnings presence in Asia (including the acquisition of Digicel Pacific). That deal made the ASX blue-chip share a leading provider of telecommunication services across Papua New Guinea, Fiji, Nauru, Samoa, Tonga and Vanuatu.

The business also has growing exposure to healthcare with its Telstra Health division. It expanded this by buying MedicalDirector.

Is the Telstra share price a buy?

The broker Morgan Stanley certainly thinks so, with a buy rating on the telco. The price target is $4.60, implying a possible rise of around 20% over the next year.

Morgan Stanley thinks that the success achieved by international peers with fixed wireless broadband is a good sign for Telstra. Fixed wireless comes with a higher profit margin than a connection through the NBN (National Broadband Network).

Just before midday on Wednesday the Telstra share price is climbing by 1.16% to $3.92.

The post Is Telstra an ASX 200 share worth owning right now? appeared first on The Motley Fool Australia.

More reading

• ASX shares paid out a record $98b in dividends in the 12 months to March. Which are the star performers?
• Analysts rate these ASX 200 dividend shares as buys
• Why has the Telstra share price lagged the ASX 200 over the past week?
• Here are the 3 most traded ASX 200 shares on Friday
• These 3 shares are topping the ASX 200 volume charts on Thursday

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 positions in and has recommended Telstra Corporation Limited. 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 Tabcorp Holdings Limited (ASX: TAH) share price has continued its slide on Wednesday.

In morning trade, the wagering and media and gaming services company’s shares are down a further 7.5% to 97.5 cents.

This means the Tabcorp share price is now down 82% over the last couple of sessions.

What’s going on with the Tabcorp share price?

The weakness in the Tabcorp share price this week has been driven by the demerger of the company’s Lotteries and Keno businesses on Tuesday. These businesses have been spun off and listed separately as The Lottery Corporation Limited (ASX: TLC).

Given that this happened yesterday, investors may be wondering why its shares have continued to slide today.

This weakness appears to have been driven by investors trying to find a fair valuation for the Tabcorp business now that its more attractive Lotteries and Keno businesses have been taken away.

What is new Tabcorp worth?

According to a note out of Credit Suisse, it believes that fair value for the Tabcorp share price is notably higher than where it trades today.

The note reveals that its analysts have slapped an outperform rating and $1.25 price target on the company’s shares.

However, analysts at Macquarie Group Ltd (ASX: MQG) are feeling a little less positive. They have put a neutral rating and $1.00 price target on Tabcorp’s shares.

Macquarie prefers the spun off Lottery Corporation business and has an outperform rating and $5.00 price target on its shares. This is despite the broker acknowledging that demerged shares often underperform initially in Australia.

It commented: “When examining the behavior of stocks post the demerger implementation the child entity typically underperforms the market for the first six months. […] This has been longer and larger in more recent transactions. The short-term underperformance in the child is eventually reversed, with strong longer-term performance.”

The post Tabcorp share price slumps another 7% following demerger appeared first on The Motley Fool Australia.

More reading

• Why Nufarm, Sayona Mining, Tabcorp, and TechnologyOne shares are falling
• Here are the 3 most traded ASX 200 shares on Tuesday
• Here’s what you need to know about the Tabcorp demerger
• The Lottery Corporation share price debuts on the ASX boards
• ASX 200 midday update: Nufarm, Tabcorp and TechnologyOne tumble

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 Macquarie Group Limited. 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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S&P/ASX 200 Index (ASX: XJO) tech shares are off to a poor start in early trade today.

While the ASX 200 is up 0.5% the S&P/ASX All Technology Index (ASX: XTX), which also contains some companies outside of the top 200 by market cap, is going the other way.

At the time of writing the All Tech index is down 2.1%.

Some of the heavier losses among ASX 200 tech shares are being posted by global payments giant, Block Inc (ASX: SQ2). The Block share price is down 5.9% to $108.80. This comes after its US listed shares tumbled 9% yesterday (overnight Aussie time).

Also in the red is accounting software provider Xero Limited (ASX: XRO), down 1.1%.

And WiseTech Global Ltd (ASX: WTC), which provides cloud-based software solutions for the logistics sector, is down 2.9% to $39.98 per share.

So why are tech companies coming under pressure?

What’s happening with the technology sector?

ASX 200 tech shares look to be following the lead of the Nasdaq.

The tech-heavy US index fell 2.4% yesterday, taking its year-to-date losses to 29.8%.

Growth shares the world over have come under pressure in 2022 amid rising interest rates and fears of a recession in the United States, the world’s biggest economy.

Yesterday’s hit to US tech shares was driven by a global social media provider, Snap Inc (NYSE: SNAP). Snap reported that macroeconomic conditions were deteriorating and lowered its profit forecast with its digital advertising revenue likely to come under pressure.

The Snap share price crashed 43% by market close.

Ouch.

The carnage at Snap hit most every big US tech share, with Alphabet (NASDAQ: GOOGL) – or Google if you prefer – dropping 5%.

And now ASX 200 tech shares are feeling the headwinds.

How have ASX 200 tech shares done in 2022?

With the RBA and central banks in many other nations lifting their benchmark interest rates for the first time in a decade this year, with more rate hikes flagged, growth stocks like ASX 200 tech shares have largely lost ground.

Year to date the All Tech index is down 32.8%, compared to a loss of 5.3% posted by the ASX 200.

The post What’s happening with ASX 200 tech shares today? appeared first on The Motley Fool Australia.

More reading

• Why Snap stock cratered on Tuesday
• Here’s why ASX 200 tech shares are under pressure on Tuesday
• Snapchat share price dives 30% pulling Nasdaq futures lower
• Do experts think the Xero share price is a buy?
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and Xero. The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). 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 isn’t going anywhere on Wednesday.

This comes after the mineral exploration and development company requested a trading halt before market open.

As such, the Galileo Mining share price is currently frozen at 94.5 cents apiece. It’s worth noting that the company’s shares have rocketed by 285% over the past month.

Why are Galileo Mining shares in a trading halt?

The Galileo Mining share price was placed in a trading halt this morning pending an important market announcement.

In the brief description provided, the company revealed it will release the material drill assay results from its Callisto discovery.

The trading halt is expected to be lifted on Friday 27 May or by the release of the company’s announcement – whichever comes earlier.

No doubt, investors will be keeping a close watch on Galileo Mining’s latest update. This will give a clearer understanding of what lies underground at the Callisto discovery of the Norseman Project.

More on the Galileo Mining

Based in Western Australia, Galileo Mining is an explorer and developer of nickel, palladium, copper, and cobalt resources.

The company holds tenements near Norseman with more than 26,000 tonnes of contained cobalt, and 122,000 tonnes of contained nickel.

Earlier this month, management revealed a drill hole returning significant palladium-platinum-gold-copper-nickel mineralisation at the Callisto discovery.

Galileo Mining previously noted it had $8.2 million at the end of the March quarter to fund its exploration programs.

About the Galileo Mining share price

Galileo Mining shares were on a slow and gradual decline over the past 12 months, before shooting up this month.

Positive investor sentiment after the Callisto discovery led the company’s share price to rise sharply in May, enabling the miner to post a gain of 320% in 2022.

Based on today’s price, Galileo Mining presides a market capitalisation of roughly $159 million.

The post The Galileo Mining share price has been on a tear, but now it’s halted. What’s happening? appeared first on The Motley Fool Australia.

More reading

• 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
• Why is the Galileo Mining share price jumping 42% today?
• Why did the Galileo Mining share price tumble 18% in early trading on Thursday?
• Galileo Mining share price explodes 150% on major discovery

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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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

Shares of Snap Inc (NYSE: SNAP) plummeted on Tuesday, falling as much as 40.7%. As of 10:48 a.m. ET, the stock was still down 40.4%.

The catalyst that sent the social media company plummeting was a profit warning that set off alarm bells about the state of the economy.

So what

In a regulatory filing after the market close on Monday, Snap — the parent of Snapchat — warned that the economic picture had become much more uncertain, causing the company to rein in both its revenue and profit guidance for the second quarter.

In a statement, the company said:

Since we issued guidance on April 21, 2022, the macroeconomic environment has deteriorated further and faster than anticipated. As a result, we believe it is likely that we will report revenue and adjusted EBITDA below the low end of our Q2 2022 guidance range.

Management went on to say that the company remains “excited” about the “long-term opportunity” ahead. “Our community continues to grow, and we continue to see strong engagement across Snapchat, and continue to see significant opportunities to grow our average revenue per user over the long term.”

Now what

Following the profit warning, analysts scrambled to adjust their models to fit the changing economic paradigm. There was a raft of outlook adjustments, as no fewer than a dozen of Wall Street’s finest lowered their price targets on Snap.

Perhaps more telling, however, was the fact that none of the analysts downgraded Snap’s stock, which is decidedly bullish. Truist analyst Youssef Squali’s take was the most upbeat, telegraphing a long-term view.

He pointed out that while the outlook is disappointing, he expects the situation to be temporary, according to The Fly. He cited the company’s strong fundamentals and the increasing adoption of its first-party data measurement by advertisers. Squali also said that the growing adoption of Snapchat products by its users, including Map and Spotlight, as well as the continuing growth of its daily active users as signs that the current situation is transitory. 

Taking a long-term view is difficult on days like today, but given the growing opportunity and underlying strength of its business, Snap investors will likely look back on today as a chance to buy shares on the cheap.

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

The post Why Snap stock cratered on Tuesday appeared first on The Motley Fool Australia.

More reading

• Here’s why ASX 200 tech shares are under pressure on Tuesday
• Snapchat share price dives 30% pulling Nasdaq futures lower

Danny Vena 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.

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

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The Nanosonics Ltd (ASX: NAN) share price is dropping on Wednesday.

In morning trade, the infection prevention company’s shares are down 1.5% to $3.74.

Why is the Nanosonics share price falling?

The weakness in the Nanosonics share price on Wednesday has been driven by the release of a business update.

This update was in relation to the company’s direct sales model transition in North America which was announced in February.

According to the release, the direct sales model transition is progressing well with the transfer of GE customers currently in progress and a significant number of accounts already set up by Nanosonics.

The release notes that GE has been supporting Nanosonics with the transition by communicating with all of their trophon customers about the new arrangements being implemented for the ongoing provision of trophon products.

Furthermore, the relevant GE customer data has been supplied to Nanosonics and the company has communicated with all these customers to set up direct trading accounts. A significant number of these accounts are now in place. Management expects that the transition will be completed for the majority of customers by 30 June 2022.

Also supporting the transition will be a number of former GE High Level Disinfection team members that have joined Nanosonics. These include the previous Head of the GE High Level Disinfection team, a GE operations lead who was responsible for the supply and logistics of trophon products to all GE customers, and a number of sales managers.

Trading update

During the third quarter, Nanosonics’ global installed base grew to 28,900. This is up a modest 2.6% from 28,160 units at the end of December. It could be this slowing growth that is weighing on the Nanosonics share price today.

Nevertheless, management expects its full-year revenue to be in line with current market consensus estimates.

Nanosonics’ Chief Executive Officer and President, Michael Kavanagh, commented:

The continued transition to a more direct sales channel model in North America brings many benefits to Nanosonics and its customers. Our North American team can now manage the overall growth strategy associated with new installed base, upgrade adoption and consumables usage. This deeper relationship with our North American customers together with our corresponding infrastructure expansion also supports planned product expansion beyond trophon.

We are very pleased with the ongoing progress being made with the transition to the updated sales model. Our North American team and the GE healthcare ultrasound team continue to collaborate well ensuring the current and future infection prevention needs of all customers and their patients are fully met.

The post Nanosonics share price slides lower on business update appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares

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 Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Nanosonics Limited. 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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Lithium carbonate prices have levelled off in recent weeks and now trade at 475,500 yuan/tonne at last check.

Despite a small reversal period, prices for the white salt – which is widely used to make cathode material for lithium-ion batteries when in ‘battery grade’ form – are holding multi-year highs on Wednesday.

New bulls arrive for ASX 200 lithium shares

Analysts at Barrenjoey Markets are heavily bullish on three leading ASX 200 lithium shares.

The broker has initiated coverage with buy calls on each of IGO Ltd (ASX: IGO), Allkem Ltd (ASX: AKE) and Liontown Resources Ltd (ASX: LTR).

It values IGO at $14.50 per share and starts Allkem at $15 while assigning a $1.80 price target for Liontown.

For each of these players, this represents a double-digit upside potential should Barrenjoey’s forecasts come to fruition.

Allkem also received an upgrade from Cowen with an $18 per share valuation, whereas analysts at UBS completely reversed course from a sell to a buy rating on IGO.

In a recent note, the Swiss investment bank was constructive on a number of catalysts, including IGO’s first production of battery-grade lithium hydroxide at Kwinana, the Western Areas transaction and a recent pullback in the share price.

Not only that, but IGO’s exposure to the Greenbushes mine remains a key driver for the miner’s share price, UBS says.

“As the downstream ramps up Greenbushes remains the earnings driver into,” it said, adding that the joint venture with Tianqi is substantially de-risked with the Kwinana update.

UBS values IGO at $12.15 per share.

Foolish summary

Each of these ASX 200 lithium shares has pushed well into the green over the past 12 months. Liontown is up 240% in a year whereas Allkem has surged 120% and IGO 62%.

The post Brokers name 3 ASX 200 lithium shares primed to take off appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Why Allkem, NAB, Pushpay, and Virgin Money UK shares are rising
• Why are ASX 200 lithium shares kicking goals today?
• Why the IGO share price is rallying on Monday
• These were the best performing ASX 200 shares last week

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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