Month: May 2022

The Cobalt Blue Holdings Ltd (ASX: COB) share price is back in the green on Monday after last week’s rollercoaster.

There’s been no news from the cobalt developer today. However, there was plenty going on with the stock last week.

At the time of writing, the Cobalt Blue share price is trading at 81 cents, 1.25% higher than its previous close.

Though, earlier today, the stock was trading at 84.5 cents, representing a 5.6% gain.

In comparison, the All Ordinaries Index (ASX: XAO) is currently up 0.21%.

Let’s take a look at what’s been happening with the cobalt stock lately.

What’s going on with Cobalt Blue’s stock?

The Cobalt Blue share price has had a wild ride over the last seven days. It’s possible today’s unexplained movement could be an extension of such volatility.

 The stock launched 13% higher on both Tuesday and Wednesday last week for no obvious reason.

However, the gains came after an episode of ABC’s Four Corners featuring the company was broadcast on Monday night. The episode explored Australia’s critical metals mining boom.

Speaking on the program, Cobalt Blue CEO Joe Kaderavek discussed federal and state government support for the company’s Broken Hill Cobalt Project, demand for its products, and its potential position in the battery-powered future.

But investor elation for the stock soon turned sour. The Cobalt Blue share price tumbled 11% on Thursday following the release of an update on its demonstration plant.

That’s despite the company announcing the plant’s construction was progressing well and it expected mining and concentration operations to begin soon. Additionally, demand for larger-scale samples of the project’s product had been better than expected.

The bigger picture

It’s also worth noting the company’s major commodity’s value hasn’t exhibited any major movements lately.

Cobalt futures surged approximately 15% on the London Metal Exchange over the course of February and March.

However, they’ve been mostly stable since. Cobalt futures have traded at around US$82,000 a tonne for the last 30 days.

Cobalt Blue share price snapshot

Despite its recent volatility, the Cobalt Blue share price has been performing well lately.

It has gained 65% since the start of 2022. It’s also 150% higher than it was this time last year.

The post Why did the Cobalt Blue share price leap 5% this morning? appeared first on The Motley Fool Australia.

More reading

• 3 critical minerals you might not have heard of (and the ASX shares that have surged because of them)
• Why did the Cobalt Blue share price come off the boil in April?

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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Goldman Sachs, its analysts have retained their buy rating and $43.00 price target on this gaming technology company’s shares. Goldman believes that Aristocrat will release a strong half-year result this month. It expects the company to report a 16% increase in revenue and a 20% jump in NPATA for the period. In light of this and its positive outlook, the broker feels its shares are good value at the current level. The Aristocrat share price is trading at $32.16.

Breville Group Ltd (ASX: BRG)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $34.80 price target on this appliance manufacturer’s shares. This follows the release of an update from rival De’Longhi last week which revealed a record quarterly performance. Macquarie sees the result as a positive read-through for Breville’s performance during the second half of FY 2022. The Breville share price is fetching $21.93 today.

Xero Limited (ASX: XRO)

Analysts at Citi have retained their buy rating and $108.00 price target on this cloud accounting platform provider’s shares. The broker suspects that the increased investment by Sage in the UK (brand, marketing and go-to-market) was one of the reasons for Xero’s lower than expected subscriber growth in the country during the second half of FY 2022. Nevertheless, Citi remains positive. While conceding that competition is a risk, it continues to expect Xero to deliver strong growth in the UK driven by cloud adoption. The latter will be supported by the Making Tax Digital regulatory changes. The Xero share price is trading at $86.92 on Monday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 tech shares having such a stellar start to the week?
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to buy next week
• 3 top ASX growth shares I’d buy next week
• Here are the top 10 ASX shares today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Goldman Sachs and Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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ASX 200 tech shares are starting the week on a high, following a similar path to those on US markets.

The S&P/ASX All Technology Index (ASX: XTX) is up 2.08% at the time of writing at 2,096.4 points after rising 4% higher earlier in the session. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.2% so far today.

Let’s take a look at why ASX 200 tech shares could be climbing today.

Technology shares rise

ASX 200 tech share Block Inc (ASX: SQ2) is soaring 4.15% at the time of writing, while the Xero Ltd (ASX: XRO) share price is 3.81% higher. Wisetech Global Ltd (ASX: WTC) shot up 4.8% early in the day and has now settled at 0.41% higher.

Meanwhile, Altium Limited (ASX: ALU) is ahead 1.93% and TechnologyOne Ltd (ASX: TNE) is 1% higher.

ASX technology shares often follow in the footsteps of their US counterparts. On Friday, US tech shares were surging. The Nasdaq-100 Technology Sector Index (NASDAQ: NDXT) soared 5.67% on Friday. Apple Inc (NASDAQ: AAPL) leapt 3.19%, while Microsoft Corporation (NASDAQ: MSFT) jumped 2.26%, Meta Platforms Inc (NASDAQ: FB) jumped 3.86% and Telsa Inc (NASDAQ: TSLA) rocketed 5.71%.

Commenting on this market recovery on Friday, CFRA chief investment strategist Sam Stovall told CNBC:

Just as trees don’t climb to the sky, prices don’t fall forever. Even in corrections and approaching bear markets, they tend to experience relief rallies, which is what the markets appear to be starting today.

Meanwhile, on the New York Stock Exchange, Block Inc (NYSE: SQ) soared 11.07%

Share price snapshot

The All Technology Index has fallen 16% over the past year, while it is down 30% year to date.

In the past month, the index has shed nearly 14%, while it has dropped almost 3% in the past week.

For perspective, the ASX 200 has climbed nearly 2% in the past year while it has fallen 4% year to date.

The post Why are ASX 200 tech shares having such a stellar start to the week? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• 3 top ASX growth shares I’d buy next week
• These were the worst performers on the ASX 200 last week
• Here are the top 10 ASX shares today
• Nearmap share price jumps 9% on Friday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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 has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is enjoying a healthy lift today.

Shares in the S&P/ASX 200 Index (ASX: XJO) travel group closed on Friday at $19.62 and were trading for $20.07, up 2.3% at the start of the lunch hour.

This comes following news that the company has retained a “prestigious” state government contract.

What government contract was retained?

The Flight Centre share price could be enjoying some extra tailwinds today following news reported by The Australian that the company has retained its New South Wales government travel management contract.

With a tender process now concluded, FCM – the company’s global business travel division – will keep the contract, which it’s held for six years. The new contract runs for three years, along with two more one-year options.

Commenting on the contract retention, FCM Travel Solutions general manager Melissa Elf said:

We’re delighted to have retained this prestigious account and we’re looking forward to helping the New South Wales government achieve its aims… The travel contract will consist of nine clusters and over 80 agencies, with each agency having specific requirements, and the program will be further supported with enhanced reporting.

What’s been happening with the Flight Centre share price?

Buoyed by the reopening of domestic and many international travel routes, the ASX 200 travel share has outperformed the benchmark both in the calendar year and over the past 12 months.

Flight Centre shares are up 31% since this time last year and up 8% so far in 2022.

By comparison the ASX 200 has gained 1% over the full year and remains down 6% since the opening bell on 4 January.

Is there further upside?

Barring any major uptick in the COVID pandemic, the Flight Centre share price could march considerably higher from here, according to analysts at Bell Potter.

Citing some strong third-quarter metrics, the broker noted that March saw Flight Centre return to operating profit.

Bell Potter retained its buy rating and increased its target for the Flight Centre share price to $24.50. That’s 22% above the current price.

The post What’s boosting the Flight Centre share price on Monday? appeared first on The Motley Fool Australia.

More reading

• Why is the Flight Centre share price picking up altitude today?
• Broker says Flight Centre share price could takeoff and rise 24%
• When was the best ever day on the Flight Centre share price chart?
• Unprecedented: Does this event mean we’re now in a bear market?
• Leading brokers name 3 ASX shares to buy today

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 Flight Centre Travel 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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The recent ASX big bank reporting season threw up a few surprises during this rising interest rate environment. And one, in particular, is standing out from the crowd, according to a top broker.

The most surprising thing to emerge from the results was the dramatic change in tune in the big banks’ approach to costs.

That was the findings of Citigroup as it noted the complete reset of the major banks’ future cost expectations.

ASX big bank cost target surprise

The National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) have already abandoned the cost targets they religiously set previously.

ASX big banks had previously focussed heavily on cost control as that was an effective lever to manage margin pressure when interest rates were at record lows.

The turn in the rate cycle will help them to pad margins, but high inflation is making costs a challenge to manage. The irony is that the winner will be the one that masters the art of cost control.

How to pick the winner

“A rising cash rate is set to accelerate revenue growth for all the major banks,” said Citi.

This is likely to lead to a narrowing of the current revenue differences, as lending demand slows. Therefore, EPS growth forecasts in the next few years will be dictated by each bank’s cost strategy, so long as asset quality holds up.

There is one ASX big bank share that Citi believes will be in pole position to outperform against this backdrop.

The ASX bank share that is the top buy pick

This is the Westpac Banking Corp (ASX: WBC) share price as Westpac is the only major bank sticking to its cost-savings goals.

At face value, it means Westpac is also likely to be the only ASX big bank to face higher expenses.

“Costs will grow at every bank except WBC, which seems determined to run its own race,” added the broker.

“We see WBC as offering the best risk-return equation as well as the strongest EPS growth profile.”

What is the Westpac share price worth?

Citi’s 12-month price target on the Westpac share price is $29 a share. This implies a 19% upside before dividends and franking are included.

Further, the broker rates the ANZ Bank share price as its second ASX bank share option to buy. This is followed by the NAB share price, which is rated as neutral and Commonwealth Bank of Australia (ASX: CBA) share price, which Citi rates a ‘sell’.

The post This is the best ASX bank share to buy in a rising rate environment: Citi appeared first on The Motley Fool Australia.

More reading

• Hoping to bag the next Westpac dividend? Read this
• Top ASX dividend shares to buy in May 2022
• Top brokers name 3 ASX shares to sell today
• How does the ANZ dividend compare to the other ASX 200 banks?
• Inflation to ‘peak shortly’: CBA boss says markets have priced in too many rate rises

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, National Australia Bank Limited, and 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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The Galileo Mining Ltd (ASX: GAL) share price is racing higher again on Monday.

In afternoon trade, the mineral exploration company’s shares are up a further 42% to a new multi-year high of 77 cents.

This means the Galileo Mining share price is now up 250% since the start of the month.

Why is the Galileo Mining share price storming higher?

The catalyst for the rise in the Galileo Mining share price on Monday has been news that one of the company’s major shareholders has increased their stake.

According to a change of substantial holding notice, Mark Creasy has increased his stake by 3 million shares to 44,371,895 shares. This represents an interest of 26.35%.

Mr Creasy made the move on Friday, paying an average of 58 cents per share or a total consideration of $1.74 million.

The billionaire mining prospector appears to have liked what he saw when Galileo Mining released drilling results last week.

‘Significant’ discovery

Last Wednesday, Galileo Mining revealed that it has discovered “significant” palladium, platinum, copper, gold, and nickel mineralisation at the Norseman project in Western Australia.

Drilling from 144m at hole NRC266 intersected with 33 metres at 1.64 grams per tonne (g/t) palladium, 0.28 g/t platinum, 0.09 g/t gold, 0.32% copper, and 0.3% nickel. Management believes this shows the potential for a large mineralised system.

Galileo Mining’s managing director, Brad Underwood, commented:

While we are at an early stage in the discovery process, the thick and consistent zone of mineralisation, and the extensive prospective strike length, suggests the potential for a large mineralised system.

Galileo remains fully funded with $8.2 million at the end of the March quarter and able to continue aggressive exploration programs at all our projects. We look forward to updating the market as work progresses on this exciting new West Australian discovery.

The post Why is the Galileo Mining share price jumping 42% today? appeared first on The Motley Fool Australia.

More reading

• 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 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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The Westpac Banking Corp (ASX: WBC) share price has been moving in circles the past week.

Investor fears surrounding interest rate hikes, inflation, China’s COVID-19 crisis, and a global economic slowdown are impacting the markets in May.

This led the S&P/ASX 200 Index (ASX: XJO) to fall 1.27% since last Monday, despite lifting 0.19% so far today.

Westpac, on the other hand, is currently up 1.35% to $24.325.

Westpac shares set to go ex-dividend

Despite the recently volatility, investors have been buying the bank shares following the company’s half year results last week.

This is most likely because of the upcoming ex-dividend date for Westpac shares.

Investors need to buy Westpac shares before market close on Wednesday to be eligible for the interim dividend. The ex-dividend date is on Thursday 19 May.

It’s worth noting though that, historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

When can Westpac shareholders expect payment?

For those who are eligible for the Westpac interim dividend, shareholders will receive a payment of 61 cents per share on 24 June. The dividend is also fully franked which means shareholders will receive a portion of tax credits from this.

Furthermore, investors can elect to take up the bank’s dividend reinvestment plan (DRP) which will instead add a number of shares to their portfolios.

There is no DRP discount rate, however, price will be determined by the daily volume-weighted average (VWAP) from 25 May to 7 June.

The last election date for shareholders to opt-in to the DRP is on 23 May.

Westpac share price snapshot

In 2022, the Westpac share price has gained 14% but is down almost 4.5% over the last 12 months.

The company’s shares reached a year to date high of $24.67 last month, before moving sideways in the following weeks.

Westpac commands a market capitalisation of roughly $85 billion and has a trailing dividend yield of 4.92%.

The post Hoping to bag the next Westpac dividend? Read this appeared first on The Motley Fool Australia.

More reading

• Top ASX dividend shares to buy in May 2022
• Is the Westpac share price a smart bank buy today?
• Time is running out to secure dividends from these 3 ASX 200 shares
• 2 top ASX dividend shares experts rate as buys
• Westpac share price is a buy: Broker tips ‘strongest EPS growth in the sector’

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 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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The future of Boral Limited (ASX: BLD) shares could be unfolding as the company continues down one of five avenues outlined for its journey towards net zero.

The S&P/ASX 200 Index (ASX: XJO) building products manufacturer has been granted $30 million for a carbon capture, use, and storage (CCUS) project at its New South Wales cement and lime facilities.

Today’s news of the grant – offered by the Australian Government’s CCUS Hubs and Technologies Program – was announced by the company’s partner on the project, Calix Ltd (ASX: CXL).

At the time of writing, the Boral share price is $3.33, 1.52% higher than its previous close. For context, the ASX 200 is currently up 0.88%.

Let’s look closer at the latest on the building and construction materials producer’s pathway to net-zero emissions.

Boral granted $30m for CCUS project

Own Boral shares? You likely know the company is planning to reach net-zero emissions by 2050.

And one of the five pillars the company is using to support its climate targets is emerging CCUS technologies.

That’s good news for Calix. Boral has been granted $30 million to use the environmental technology company’s low emissions intensity lime and cement (LEILAC) technology at its NSW-based facility.

The project aims to use the technology to target 100,000 tonnes of carbon each year. It will also look into using renewable energy sources and alternative fuels to further reduce emissions.

As a result, Boral could end up producing true zero-carbon lime and cement at the facility.

Boral chief operating officer Darren Schulz commented on today’s news:

This is game changing technology for our industry and will play a critical role in supporting customers’ sustainability targets.

Boral share price snapshot

Despite today’s uptick, the Boral share price is trading considerably lower year to date.

It has tumbled 46% since the start of 2022, while the ASX 200 has slumped 6%.

The stock has also fallen 51% over the last 12 months. Meanwhile, the index has gained 1%.

The post Boral share price climbs amid ‘game changing’ carbon project appeared first on The Motley Fool Australia.

More reading

• The Boral share price has been smashed 10% so far in May. What’s happening?
• 2 ASX All Ords shares helping the planet and the back pocket
• What’s happening to the Boral share price 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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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.

Get out. That’s tempting investing advice with the stock market in a downward spiral. The idea is that simply getting out of the stock market altogether is the safest strategy right now.

However, reality is more complicated. Thinking about selling all your stocks? Here are two big risks you’ll face.

Missing out

Some investors have an exit strategy. They sell stocks during a correction to avoid taking an even bigger loss if a full-blown bear market occurs. There’s a significant risk, though, that the lack of an effective reentrance strategy will ultimately cost more than staying in the market.

As a case in point, I personally know someone who sold all of his stocks back in late 2008. He did so before the bottom completely fell out. This appeared to be a prudent move — for a while.

The problem, however, was that he was still too apprehensive about the market to again buy stocks in 2009. Even as the rebound picked up momentum in 2010, he continued to hesitate. Sure, he eventually did jump back in. However, he waited so long to do so that he would have been better off never selling in the first place.

You might think, “That won’t happen to me. I’ll only stay out of the market until the dust clears.” But how will you know when is the best time to invest again? The stock market is unpredictable. It can sometimes recover so quickly that even well-intentioned investors miss out on gains. Just look at the steep sell-off and rapid rebound in 2020.

Also, what will you do if you return to investing only for the market to plunge again? It’s easy for such ‘whipsaws’ to result in much greater losses than you’d incur by sticking things out.

Warren Buffett’s “swindler”

There’s also another key risk with selling all your stocks — inflation. Your money will have to be parked somewhere if you sell all your stocks. But there are few alternatives that are safe from the effects of inflation.

Warren Buffett summarized the problem well in his comments at Berkshire Hathaway‘s (NYSE: BRK.A) (NYSE: BRK.B) recent shareholder meeting. The legendary investors said, “Inflation swindles the bond investor, too. It swindles the person who keeps their cash under their mattress. It swindles almost everybody.”

As is often the case, Buffett was exactly right. You might think that you’re avoiding losing money by exiting the stock market. However, with inflation at 40-year highs, the value of those dollars parked in bonds, savings accounts, or nearly every other place will still decline.

Sure, inflation can hurt stocks as well. Many businesses, though, hold up quite well during periods of high inflation. Some have escalators in their contracts with customers that automatically increase prices based on the Consumer Price Index. Others, such as oil and gas companies right now, benefit because the higher prices contributing to rising inflation are tailwinds rather than headwinds. 

Three magic words

I won’t state that exiting the stock market altogether will definitely cause you to lose more than holding steady. Maybe you’ll be able to time the market really well. However, I do think that most investors are better off remaining invested.

There are three magic words that might seem cliched but are nonetheless excellent advice: Think long term. Great investors such as Buffett have achieved their success by adhering to those three words.

Buffett hasn’t sold all of the stocks owned by Berkshire during the recent market downturn. On the contrary, he’s investing more heavily than he’s done over the past couple of years. The ‘Oracle of Omaha’ knows that corrections and bear markets can be a blessing for long-term investors.

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

The post Thinking about selling all your stocks? Here are 2 big risks you’ll face appeared first on The Motley Fool Australia.

More reading

• Worried about inflation? Here’s what Warren Buffett says Berkshire Hathaway is doing
• 3 lessons from what Buffett didn’t say at Berkshire Hathaway’s shareholder meeting
• Warren Buffett talks cash and more at Berkshire Hathaway’s annual meeting

Keith Speights has positions in Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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 Fortescue Metals Group Ltd (ASX: FMG) share price is tracking lower after its opening spike on Monday and is now trading 0.62% in the red at $19.27 apiece.

After a huge run throughout March and April this year, the Fortescue share price has slipped off the mantlepiece lately and now trades around 10% down over the past month.

Is the Fortescue share price ‘cheap’?

Analysts at JP Morgan aren’t so convinced, noting that Fortescue currently trades within ranges of the broker’s fair valuation of the company.

The broker prices Fortescue at $19 per share, in line with how investors are pricing Fortescue in the market.

JP Morgan said in a recent note:

[Fortescue] continues to trade near our [net present value] NPV. A potential reopening trade in China is positive for iron ore, but FMG continues to trade near its CY22 highs, and this positive thematic looks priced in.

While broadly in line with our NPV, the stock trades with a lower [free cash flow] FCF yield of ~8% vs mining sector peers like BHP at 12%, with FMG also on an [eventerprise value] EV/[earnings before interest, tax, depreciation and amortisation] EBITDA premium (5.4 times vs BHP at 4.4 times).

Sentiment looks low

Analysts at Bloomberg Intelligence adopt a similar posture, noting potential headwinds in the price of iron ore stemming from a slowing in the property market and Chinese demand.

Analysts Yi Zhu and Anthony Cham Fang Yau wrote:

Fortescue Metals is on track to deliver on annual shipment guidance of 185-188 million tons of iron ore in fiscal 2022 ending June.

However, revenue growth will hinge on the iron ore price in fiscal 2H, due to a slowing property sector and a potential decline in China’s crude-steel output.

The company also expects higher costs in the fiscal year due to a shortage of skilled labor, rising fuel prices and increased maintenance expenses.

Despite its positive run so far in 2022, analysts appear to be more pessimistic on the stock relative to other large miners.

Exactly 60% of coverage has it rated as a hold right now, with the remaining 40% of brokers urging their clients to sell Fortescue shares, according to Bloomberg data.

The consensus price target from this list is $17.97 per share, suggesting a small amount of downside potential if the group is right.

The post Is the Fortescue share price cheap after dropping 10% in a month? appeared first on The Motley Fool Australia.

More reading

• Why are Fortescue and green hydrogen making news again on Friday?
• Is the Fortescue share price a buy for its 16% dividend yield?
• Is the Fortescue Future Industries hydrogen dream more fantasy than feasible?
• Why is the Fortescue share price rebounding today?
• Why are ASX 200 mining shares in the green 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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