Fortunately for growth investors, there are plenty of shares on the Australian share market with strong long term growth potential.

Two that have been named as buys and tipped for strong growth are named below. Here’s why analysts are bullish on them:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX growth share for investors to look at is Aristocrat. It is a gaming technology company with a portfolio of world class poker machines and digital games.

It has been growing at a solid rate for well over a decade and has been tipped to continue this trend by the team at Citi. After smashing its forecasts during the first half, Citi is now forecasting a 35% increase in net profit in FY 2022 to $1,168 million.

Looking further ahead, the broker believes that Aristocrat “represents a compelling long-term growth story, with exposure to ongoing growth in mobile game penetration and potential to grow into new markets.”

In light of this, Citi has put a buy rating and $41.00 price target on the company’s shares. Based on the current Aristocrat share price of $33.01, this implies potential upside of 24% for investors.

NextDC Ltd (ASX: NXT)

Another ASX growth share that is rated highly by analysts is NextDC. It is a leading data centre operator which has been benefiting greatly from the structural shift to the cloud.

Pleasingly, this shift still has a long way to go. As a result, NextDC’s world class network of centres across key locations throughout Australia look well-placed to capture increasing demand.

But management isn’t settling for that. It has its eyes on edge centres (regional data centres) and the Asia market. The latter has seen the company open up offices in Singapore and Tokyo.

Goldman Sachs is a fan of NextDC and has a conviction buy rating and $14.20 price target on its shares. Based on the current NextDC share price of $9.78, this implies potential upside of 45%.

The post Analysts name 2 ASX growth shares to buy with huge upside potential appeared first on The Motley Fool Australia.

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More reading

• Experts name 3 ASX growth shares to buy next week
• Is it safe to buy ASX shares right now?
• Broker says Aristocrat share price is great value with 27% upside
• Why did ASX 200 tech shares fall today?
• 2 stellar ASX growth shares analysts are tipping as buys this month

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price closed lower today, finishing 1.82% down at $21.60.

The banking sector has been hit hard these past two months. A number of macroeconomic headwinds look set to plague the industry – namely inflation and interest rate rises.

Exchange Traded Funds (ETFs) tracking the sector have booked extensive losses this year to date, such as the Vaneck Australian Banks ETF (ASX: MVB), down 12%.

Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFJ) has tumbled almost 14% this year to date as well, as illustrated below.

Broker sees further upside for ANZ share price

Yet the team at JP Morgan are constructive on ANZ. The broker reiterated its overweight stance in a recent note.

The broker reckons ANZ will absorb any headwinds well and that some industry pressures are actually a net positive for the bank.

“Our overweight recommendation reflects ANZ’s reasonable [net interest margin] NIM leverage to rising interest rates on a broadly flat cost profile,” the JP Morgan team wrote.

NIMs are a critical measurement used in the evaluation of banking profits, based on net interest income (NII).

“Over the long term, we expect fewer headwinds than for some other peers due to ANZ’s lower exposure to competitive pressures on mortgage margin,” the broker added.

“In addition, we view valuation as attractive, given its significant [price to earnings] P/E discount to peers.”

Those at JP Morgan recently revised the price target down on ANZ, now valuing the company at $28.30 per share, down from $29 earlier.

At the current market price, this implies an upside potential of approximately 31%.

Meanwhile, 56% of brokers covering the stock have it rated as a buy, with 38% saying it’s a hold, according to Bloomberg data.

In the last 12 months, the ANZ share price has slipped more than 24% into the red.

The post Here’s why JP Morgan sees more than 30% upside in the ANZ share price appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Why are ASX 200 bank shares having another day to forget?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 bank shares tumble: Citi says time to buy
• Brokers name 3 ASX shares to buy 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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The Woodside Energy Group Ltd (ASX: WDS) share price finished in the red today.

The energy giant’s shares fell 3.09% to close at $31.97 each. For perspective, the S&P/ASX 200 Index (ASX: XJO) descended 1.27% today.

So why did the Woodside Energy share price have such a tough day?

Energy shares slide

Woodside shares dropped today but they were not alone among oil producers. The Beach Energy Ltd (ASX: BPT) share price slumped 3.13% while Santos Ltd (ASX: STO) shares slipped nearly 1%. The S&P/ASX 200 Energy Index (ASX: XEJ) also fell 2.41% today.

Oil prices in the US slumped overnight amid fears of a US Federal Reserve interest rate hike.

In comments cited by Reuters, Again Capital LLC partner John Kilduff suggested these interest rate fears are impacting oil prices. He said:

This fear of an even greater basis point hike is driving down equities and oil.

The US Senate Finance Committee chair Ron Wyden is also planning to introduce a law targeting a 21% tax on excess profits of oil and gas companies earning more than $1 billion of revenue per year, the publication reported.

Brent crude oil futures dropped 0.9% to $1.21.17 a barrel in US markets overnight. However, oil prices have since recovered, with Brent crude oil up 0.29% to $121.52 a barrel. However, Tokyo crude oil is still down 2.11%.

In recent news, Woodside has worked with industry associates to develop a new offshore caisson cleaning and inspection tool (CCAIT system). This enables remote inspection of pivotal equipment on offshore platforms. Executive vice president technical services Daniel Kalms said:

The CCAIT system removes the costs of mobilising tools from international locations, including the cost of delay in fractured supply chains. These can represent up to 50% of the total cost of an inspection campaign.

Woodside share price snapshot

The Woodside share price has risen more than 35% in the past year, while it is up more than 46% year to date.

For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) has returned around 20% in the past year.

The post Why is the Woodside share price in the red today? appeared first on The Motley Fool Australia.

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More reading

• Why Block, Nanosonics, St Barbara, and Woodside shares are dropping
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• Woodside share price soars again despite CEO forecasting oil prices will pull back

Motley Fool contributor Monica O’Shea 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 Sezzle Inc (ASX: SZL) share price has sunk further on Wednesday, closing 13.5% down at 32 cents apiece.

The drop marks a horrendous performance from Sezzle with the company’s share price collapsing more than 96% over the past 12 months and 89% this year to date.

It’s lost 55.6% in the last month alone.

In broader sector moves, the S&P/ASX All Technology Index (ASX: XTX) slipped a further 3.58% into the red on Wednesday.

What’s up with the Sezzle share price?

Investors have punished Sezzle this year to date amid a wave of macroeconomic pressures that directly impact the buy now pay later (BNPL) space.

The combination of surging inflation and spiking interest rates is indeed a bitter dish for the sector. It can push bad debts higher and companies have to make provisions for these, hurting their income.

These factors also impact consumer demand. Surging inflation pushes prices higher, whilst interest rates drive interest payments in the same direction.

Both have a destructive effect on disposable income and, potentially, aggregate demand.

One fund manager summed it up, saying “The bad debt experience is horrendous.” East72 Fund Manager Andrew Brown told The Age:

The simple fact of life is this: BNPL business as a stand-alone means that you are going to attract a large number of people who are incapable of paying their money back, particularly if you don’t have robust credit checks.

In a world where the cost of debt is rising, these are imminent signs for the sector.

Competition is also rising in the sector after Apple announced it might embed a BNPL update into its store.

The broader market sell-off is undoubtedly punishing Sezzle’s share price this week as well.

The post Sezzle share price fizzles again, now down 55% in a month appeared first on The Motley Fool Australia.

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More reading

• Why is the Sezzle share price fizzling 7% on Friday?
• 10 ASX All Ords shares that could be stung by tax-loss selling
• ‘Just horrific’: Why this fundie says Zip should abandon its Sezzle takeover
• Why Brambles, James Hardie, Seek, and Sezzle shares are sinking
• Why is the Sezzle share price tumbling on Tuesday?

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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