Month: May 2022

The Brambles Limited (ASX: BXB) share price is in focus after the company confirmed it’s in talks that could lead to a takeover bid.

The S&P/ASX 200 Index (ASX: XJO) pallets and containers manufacturer was recently rumoured to be gearing up to receive an acquisition offer valued at more than $20 billion.

For context, Brambles has a market capitalisation of around $15 billion.  

The Brambles share price is $10.43 as of Friday’s close.

Here are all the details on the multi-billion dollar takeover talks.

Brambles confirms takeover talks

The Brambles share price could be in for a big day on the ASX after the company responded to rumours claiming it’s on the radar of private equity juggernaut CVC Partners.

The ASX 200 company confirmed it’s been approached by the firm over a potential takeover bid this morning. The ASX 200 pallet maker hasn’t received any proposal yet.

Brambles also noted there’s still no guarantee an offer will be tabled.

Discussions between the pair are focused on securing a bid that would convince Brambles to allow CVC due diligence, the Australian Financial Review reports.

That could reportedly result in an offer valuing Brambles at more than $20 billion, including debt.

Brambles said it’s still working towards its ‘Shaping our Future’ plan, as well as other strategies to bolster shareholder value amid the takeover talks.

Its latest quarterly results saw the company reporting a 7% increase in sales revenues – coming in at around US$4 billion.

It also upped its financial year 2022 guidance. Brambles is expecting to report sales growth of between 8% and 9% for the 12 months ended 30 June 2022.

Brambles share price snapshot

The Brambles share price is outperforming the ASX 200 in 2022.

The company’s shares have slipped nearly 2% year to date while the index has tumbled close to 7%.

Over the last 12 months, Brambles’ stock has slumped around 2.6% while the ASX 200 has traded relatively flat.

The post Brambles share price on watch as takeover talks confirmed appeared first on The Motley Fool Australia.

More reading

• Broker names 3 more ‘champion’ ASX 200 shares to buy and hold
• These were the best performing ASX 200 shares last week
• Here are the top 10 ASX shares today
• Why Betmakers, Brambles, Challenger, and Stockland shares are charging higher
• Here’s why the Brambles share price is soaring 7% 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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If you’re looking for some new growth shares to buy following the market meltdown, then it could be worth considering the two ASX shares listed below.

Both of these ASX shares have been tipped as buys with major upside potential. Here’s what you need to know about them:

Lovisa Holdings Limited (ASX: LOV)

The first ASX growth share that could be in the buy zone Lovisa. Especially with the growing fast-fashion jewellery retailer’s shares trading 21% lower year to date.

Analysts at Morgans are very positive on Lovisa due to its highly experienced management team and bold global expansion plans. It is for these reasons that the broker suspects that Lovisa could “prove to be one of the biggest success stories in Australian retail.”

And while its analysts acknowledge that a sizeable investment will be needed to expand its network in the US and Europe and to take the brand into new markets, it believes the returns could be stellar if successful.

Morgans currently has an add rating and $24.00 price target on its shares. This compares to the latest Lovisa share price of $15.85.

Megaport Ltd (ASX: MP1)

Another growth share that could be in the buy zone is Megaport. It is the leading global provider of elastic interconnection services, which has seen its shares crash 62% in 2022.

Megaport’s platform uses software defined networking (SDN) to rapidly connect users of its network to other services across the Megaport Network. The company notes that its service simplifies a hybrid cloud strategy by enabling dedicated private connectivity to on-premise facilities and direct connectivity to the public cloud from one place.

So, with the structural shift to the cloud continuing, Megaport appears well-placed to benefit from increasing demand and higher spending on enterprise networking.

Goldman Sachs, for example, estimates that the company’s “opportunity for further growth is immense [with] GSe A$129bn p.a. spent on fixed enterprise networking across MP1 geographies.”

In light of this, the broker has a buy rating and $13.10 price target on its shares. This compares favourably to the latest Megaport share price of $7.21.

The post Experts name 2 beaten down ASX growth shares to buy after the market meltdown appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to buy next week

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 MEGAPORT FPO. The Motley Fool Australia has recommended Lovisa Holdings Ltd and MEGAPORT FPO. 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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It has not been an easy time to be holding ASX shares in the technology sector.

The S&P/ASX All Technology Index (ASX: XTX) has plunged 40% since November.  And with more interest rates rises to come, immediate prospects still look grim.

But for those with long-term investment horizons, they need to grin and bear it if the business is continuing to perform.

Forager Funds is finding itself in exactly this position, with Whispir Ltd (ASX: WSP), Nitro Software Ltd (ASX: NTO) and Bigtincan Holdings Ltd (ASX: BTH) in the portfolio.

All three have halved their valuations since the start of the year.

Yikes.

Business performance is not linked to the share price dive

Forager, in a memo to clients, indicated the operational updates have been positive.

“Trends in revenue growth for all three remain at least in line with expectations, ranging from 24% at Whispir (using the recurring component of its revenue only) to more than 40% at Nitro.”

A blessing in disguise due the current market rout might be that these businesses have cleaned up their costs.

“Nitro reduced its estimate of current year losses and expects to be generating cash flow in the 2024 financial year. 

“Bigtincan was already cash-generative in the March quarter and should improve from there.”

With stock prices plummeting more than 50% this year, the market obviously doesn’t believe these tech firms will make a profit soon enough.

But Forager sees no reason why its conviction should change.

“The current period losses are very modest in contrast with the long-term revenue annuities being built,” read the memo.

“How valuable those annuities ultimately become is still to be proven, but as we get more evidence and if share prices continue falling, you should expect higher portfolio weightings.”

Surging interest rates, Forager admitted, might further impact investors valuations of tech shares. But the operational impact on these three businesses is “minimal”.

“Where the operating performance continues to justify our valuations, [we are] gradually increasing portfolio investments in the most heavily punished holdings.”

The analyst community generally agrees with Forager.

According to CMC Markets, all seven analysts that cover Nitro rate it as a “buy”. All four fund managers follow Whispir rate it as a “buy”.

Bigtincan has just Canaccord Genuity covering it, but it has labelled it a “strong buy”.

The post 3 ASX tech shares we’re sticking with: Forager appeared first on The Motley Fool Australia.

More reading

• Here’s why the Bigtincan share price is jumping 10% today
• Analysts say these top ASX growth shares are buys
• 2 highly rated small cap ASX shares that analysts say have huge potential
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• 3 quality ASX All Ordinaries shares tumbling 10% or more today

Motley Fool contributor Tony Yoo has positions in Nitro Software Limited and Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BIGTINCAN FPO and Whispir Ltd. The Motley Fool Australia has positions in and has recommended BIGTINCAN FPO. The Motley Fool Australia has recommended Nitro Software Limited and Whispir 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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a tough week on a high. The benchmark index stormed 1.9% higher to 7,075.1 points.

Will the market be able to build on this on Monday? Here are five things to watch:

ASX 200 expected to rise again

The Australian share market looks set to start the week strongly following a great night on Wall Street on Friday. According to the latest SPI futures, the ASX 200 is expected to open the day 54 points or 0.8% higher this morning. On Wall Street, the Dow Jones rose 1.5%, the S&P 500 climbed 2.4%, and the Nasdaq stormed 3.8% higher. The latter bodes well for the tech sector today.

Oil prices jump

Energy producers Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a good start to the week after oil prices stormed higher. According to Bloomberg, the WTI crude oil price rose 4.1% to US$110.49 a barrel and the Brent crude oil price climbed 3.8% to US$111.55 a barrel. This follows supply concerns as China looks to ease COVID restrictions.

Goodman Q3 update

The Goodman Group (ASX: GMG) share price will be on watch when the industrial property company releases its third quarter update. Goodman has provided guidance for earnings per share growth of 20% in FY 2022. However, a number of brokers believe that the company will outperform this. This could mean the market will be looking for an upgrade to its guidance this morning.

Gold price rises

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a poor start to the week after the gold price weakened on Friday night. According to CNBC, the spot gold price is down 0.9% to US$1,808.2 an ounce. A stronger US dollar weighed on the precious metal.

Aristocrat Leisure share price is in the buy zone

The Aristocrat Leisure Limited (ASX: ALL) share price could be in the buy zone according to the team at Goldman Sachs. Ahead of the gaming technology company’s half-year results this month, the broker has retained its buy rating and $43.00 price target on its shares. Goldman expects Aristocrat to deliver a 29% lift in net profit to $531 million for the half.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• These were the best performers on the ASX 200 last week
• Why I would invest $10,000 into these ASX 200 shares right now
• These were the worst performers on the ASX 200 last week
• Here are the top 10 ASX shares today
• Why did the Telstra share price rebound nearly 2% on Friday?

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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

IDP Education Ltd (ASX: IEL)

According to a note out of UBS, its analysts have retained their buy rating and $35.90 price target on this student placements and language testing company’s shares. This follows news that its CEO, Andrew Barkla, is stepping down from the role in the coming months. While UBS acknowledges that the news is a negative, it remains very positive on the company’s prospects and sees it as one of the best growth shares on the Australian share market. The IDP share price ended the week at $23.17.

Webjet Limited (ASX: WEB)

A note out of Goldman Sachs reveals that its analysts have retained their buy rating and $6.90 price target on this online travel agent’s shares. Ahead of the release of Webjet’s results next week, the broker has reiterated its buy rating. It feels that the company’s outlook is very positive thanks to the growing online channel, its Bedbanks business, and strong balance sheet. The latter gives it opportunities to make bolt-on acquisitions. The Webjet share price was fetching $5.47 at Friday’s close.

Xero Limited (ASX: XRO)

Another note out of Goldman Sachs reveals that its analysts have retained their buy rating but trimmed their price target on this cloud accounting platform provider’s shares to $118.00. This follows the release of a full-year result which fell a touch short on earnings and subscribers. Despite this, Goldman remains positive and continues to forecast strong growth over the coming years and sees value in its shares after recent weakness. The Xero share price ended the week at $84.16.

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

More reading

• 3 top ASX growth shares I’d buy next week
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• Nearmap share price jumps 9% on Friday
• Why 5E Advanced Materials, Block, Neometals, and Xero shares are racing higher
• ASX 200 midday update: Block and Xero rebound, gold miners fall

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 Idp Education Pty Ltd and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Webjet 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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There are plenty of ASX dividend shares available for income investors to look at. I plan to hold Rural Funds Group (ASX: RFF) forever because of the income it can produce.

Rural Funds operates as a real estate investment trust (REIT) that owns farmland and agricultural assets across Australia.

There are a few different reasons why I’m planning to keep holding Rural Funds in my portfolio for many years to come. Let’s take a look.

Diversification

Rather than just a single property in one location, Rural Funds owns a diverse portfolio of farms.

The ASX dividend share owns properties across agricultural sectors including cattle, vineyards, almonds, macadamias and cropping (sugar and cotton).

I think it is useful for Rural Funds to own different types of farmland for diversification purposes. For example, if the REIT’s portfolio were limited to just cattle farms, the investment ‘universe’ would be smaller. Diversification also allows management to look at a wider array of potential opportunities.

Rural Funds’ properties are also spread over different climatic conditions. In times of variable weather, this can lower short-term and longer-term risks. In addition, Rural Funds owns substantial water entitlements for its tenants to use.

Speaking of tenants, the REIT’s tenant base is mostly comprised of large, stable businesses. Some of the largest ones include Select Harvests Limited (ASX: SHV), Treasury Wine Estates Ltd (ASX: TWE), Olam International and JBS.

Distribution growth

For me, one of the main attractions of Rural Funds as an ASX dividend share is its goal to increase its distribution by 4% per annum.

While 4% per year isn’t exactly rocketing higher, it’s usually faster growth than inflation and it can compound over time.

I’m looking for businesses that hopefully provide income security even during times of economic uncertainty. Rural Funds stuck to its 4% distribution growth goal even during the COVID-19 year of 2020.

In FY22, it’s expecting to grow its annual distribution by 4% to 11.73 cents per unit. It has increased its distribution every year since it listed several years ago.

Contracted rental growth

One of the main ways that Rural Funds can achieve this distribution growth is through contracted rental indexation.

Rural Funds notes that 44% of its lease income is based on CPI inflation, which is currently running at an elevated rate. Most of the rest of the contracted income sees fixed annual increases, with occasional market reviews.

The ASX dividend share also invests in productivity improvements at its farms, which aims to increase the value of the farm for tenants (and Rural Funds), and aims to lead to further rental growth.

Yield

One of the final things that I like about Rural Funds is that it has a pretty good dividend yield. At the current Rural Funds share price, it has an FY22 distribution yield of 4%.

At the moment, its adjusted net asset value (NAV) per unit is $2.24. That’s the underlying value of the business. Currently, the Rural Funds share price is at a 30% premium to its NAV.

The post I plan to hold this quality ASX dividend share forever. Here’s why. appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Tristan Harrison has positions in RURALFUNDS STAPLED. 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 RURALFUNDS STAPLED. The Motley Fool Australia has recommended Treasury Wine Estates 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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Time and time again, statistics show that the most popular ASX exchange-traded funds (ETFs) are those that track ASX shares themselves.

That is not too surprising. Australian investors seem patriotic in that way, or perhaps they just stick to the companies we all know best. But international ETFs have also been rising in popularity as many investors want to add exposure to world-class companies outside Australia, companies perhaps like Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN), to their portfolios.

ETF provider Vanguard has the distinction of running the ASX’s most popular ETF — the Vanguard Australian Shares Index ETF (ASX: VAS). VAS is by far the winner. But Vanguard’s flagship international offering — the Vanguard MSCI International Shares Index ETF (ASX: VGS) — is a distant laggard. It is not even the ASX’s most popular international shares ETF. That honour goes to the iShares S&P 500 ETF (ASX: IVV).

VGS vs. IVV: Which ASX ETF comes out on top?

VGS and IVV are both remarkably similar, and yet quite different. On paper, VGS is far more diversified than IVV. It invests in shares ranging from more than 20 different advanced economies. These include Britain, Japan, Canada, the United States, and Europe. Its current basket counts almost 1,500 different individual shares.

In contrast, IVV tracks the US-centric S&P 500 Index. This index houses 500 of the largest companies that are listed on the US markets.

Yet both ETFs here largely have similar top 10 holdings. That is because both ETFs are weighted by market capitalisation. And the largest companies on both the S&P 500 and in VGS both happen to be the same.

But let’s get down to the $64,000 question: which ETF has been better to own for investors?

So as of 30 April, the iShares S&P 500 ETF had returned 8.5% over the preceding 12 months (including the value of dividend distributions). Over the past three years, IVV units have returned an average of 13.2% per annum. That grows to 14.5% over the past five years.

In contrast, VGS has returned 4.7% over the past year. It has averaged 10.1% over the past three, and 11.4% over the past five.

So it appears VGS’s increased diversification has held this ETF back compared to IVV. This makes IVV the unbridled winner in a showdown with VGS over any recent time period.

Of course, past performance is no guarantee of future gains, so this could well change in the future. But it perhaps explains why iShares’ S&P 500 ETF remains a far more popular choice than Vanguard’s International Shares ETF for ASX investors.

The post VGS: Were you better off buying the S&P 500 ETF? appeared first on The Motley Fool Australia.

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• 3 fantastic ETFs for ASX investors to buy this week
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• What’s impacting the Vanguard MSCI Index International Shares ETF price in 2022?
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Amazon, Apple, Vanguard MSCI Index International Shares ETF, and iShares Trust – iShares Core S&P 500 ETF. 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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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

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

JB Hi-Fi Limited (ASX: JBH)

According to a note out of Goldman Sachs, its analysts have reiterated their sell rating and $39.20 price target on this retailer’s shares. The broker believes that JB Hi-Fi will fall short of the market’s expectations in FY 2023. This is due to softening discretionary goods spending and increasing competition from online pureplays including Amazon. The JB Hi-Fi share price was trading at $48.53 on Friday.

Macquarie Group Ltd (ASX: MQG)

A note out of Credit Suisse reveals that its analysts have downgraded this investment bank’s shares to an underperform rating and trimmed their price target on them to $150.00. This follows the release of a full-year result that fell short of Credit Suisse’s expectations. And with the broker believing that Macquarie’s earnings have peaked, it feels now could be the time to sell. The Macquarie share price was fetching $183.11 at Friday’s close.

Wesfarmers Ltd (ASX: WES)

Another note out of Goldman Sachs reveals that its analysts have retained their sell rating and $38.60 price target on this conglomerate’s shares. As with JB Hi-FI, Goldman expects Wesfarmers to be impacted from softening consumer demand. This is being driven by broad-based inflation and higher housing costs. In addition, its analysts expect a decline in housing transaction volumes to negatively impact household goods consumption. The Wesfarmers share price ended the week at $49.97.

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

More reading

• Top ASX dividend shares to buy in May 2022
• 4 ASX shares of the most trusted brands in Australia
• 2 ASX 200 dividend shares to buy according to a top broker
• Where next for the Wesfarmers share price?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. 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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Despite popular sentiment, rising interest rates do not benefit all finance ASX shares.

The big banks, certainly, enjoy rate rises as they have both borrowers and depositors as customers.

When the Reserve Bank cash rate increases, they often pass on the full change to its borrowers while only awarding a partial amount to the depositors.

This fattens up what is known as their net interest margin, which is the difference between what they pay out to depositors and the income they receive from borrowers. 

But for those smaller players that are loan-only businesses, it’s a different picture.

Forager Funds, in a memo to clients, noted that rising interest rates “can affect customers’ ability to repay their loans” and inflate the cost of funding for the lenders. 

“Fear of growing problems in this sector has sent share prices plummeting,” read the memo.

“The fund has small investments in both Wisr Ltd (ASX: WZR) and Plenti Group Ltd (ASX: PLT), whose respective share prices have fallen 42% and 35% this calendar year alone.”

Performance ‘exceeded expectations’

Despite the stock price drop, the Forager team noted that the performance of the businesses has “exceeded expectations”.

The lending business is a race for scale.

“The expectation is for a small number of healthily profitable players to emerge over time and Wisr and Plenti look like two of them,” read the memo.

“March quarter reports showed Plenti’s loan book is already north of $1 billion and Wisr isn’t far away. They will both hit $2 billion over the next few years without dramatically increasing the rate of progress and that should enable them to be nicely profitable.”

‘Fear is overdone’ for Wisr and Plenti

The anxiety among investors for shares like Wisr and Plenti is, not so much the growth rate, but the hit to profitability from bad debts arising out of rising rates.

The Forager team acknowledged this “healthy scepticism is warranted”.

“But the fear is overdone,” read the report.

“Both these businesses are specifically targeting safer borrowers with a proven capacity to repay their loans. The March quarterly reports still showed default rates well below our long-run expectations.”

Forager also noted both Wisr and Plenti have indicated they will raise charges to customers.

“In any case, savings rates in Australia remain high and jobs plentiful,” the memo read.

“Economic conditions are absolutely going to deteriorate. But, while the portfolio weightings need to remain modest, we expect both businesses to successfully navigate and prove that their current share prices are far too low.”

The post 2 ASX shares with prices ‘far too low’ right now: Forager appeared first on The Motley Fool Australia.

More reading

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• 3 Stocks Warren Buffett Is Betting on Big Time Right Now
• Top ASX dividend shares to buy in May 2022
• Here are 2 fantastic ETFs for ASX investors to buy in May

Motley Fool contributor Tony Yoo 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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If you’re looking for investment options, then the two ASX shares listed below could be worth considering.

Analysts currently rate these shares as buys and see potential for them to climb materially higher from current levels. Here’s what you need to know:

Altium Limited (ASX: ALU)

The first ASX share to look at is Altium. It is the electronic design software company behind the Altium Designer and Altium 365 platforms, the NEXUS team-based PCB workflow solution, and the Octopart electronic parts search engine.

Thanks to their exposure to the rapidly growing Internet of Things (IoT) and artificial intelligence (AI) markets, demand for this offering is expected to increase materially over the coming years. In fact, management is targeting revenue of US$500 million by 2025-2026. This is more than double its FY 2022 revenue guidance of US$213 million to US$217 million. It is also targeting market dominance in electronic design software with a massive 100,000 subscribers by 2026. This compares to 55,978 at the end of the first half.

One leading broker that believes the Altium share price is great value at the current level is Bell Potter. It recently reiterated its buy rating and $41.25 price target on the company’s shares. Based on the current Altium share price of $27.00, this implies potential upside of 53%.

Baby Bunting Group Ltd (ASX: BBN)

Another ASX share that could be in the buy zone is leading baby products retailer Baby Bunting.

It has been tipped as a buy due to its positive growth outlook, exposure to less discretionary spending, and its strong market position. The latter is expected to strengthen further in the coming years as its store network expansion continues.

For example, at present the company has 60 national superstores across Australia. However, analysts at Citi expect this to hit 68 at the end of FY 2022 and then sees scope for over 110 stores in the future. In addition, the broker sees other growth opportunities from “exclusive/private label growth and supply chain efficiencies.”

At present, Citi has a buy rating and $6.22 price target on the company’s shares. Based on the current Baby Bunting share price of $4.21, this suggests of 48% for investors over the next 12 months.

The post Analysts name 2 ASX shares to buy with ~50% upside potential appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Block and Xero rebound, gold miners fall
• Thursday thrashing: ASX tech shares tumble
• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• Is the Altium share price now great value after dropping 30% in 2022?
• Why did the Xero share price just rebound 6%?

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 Altium. The Motley Fool Australia has recommended Baby Bunting. 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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