While the market rebounded strongly last month, there are still plenty of shares trading well below their highs.

Two that have been beaten down in 2022 and could be great value now are listed below. Here’s what analysts are saying about them:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator’s shares have been having a very tough year. Weakness in Japan and concerns over inflationary pressures have been weighing on investor sentiment. This has led to the Domino’s share price dropping 42% since the start of the year.

The team at Citi remains positive on the company and believes recent share price weakness is a buying opportunity. This is due to its very positive long term growth outlook. It said:

Our Buy rating is predicated on potential upside from potential M&A activity, upside to long term store rollout and sales on track to rebound later in CY22 once the business has cycled through the abnormal comps.

Citi has a buy rating and $92.95 price target on the company’s shares.

Xero Limited (ASX: XRO)

Another ASX share that has been beaten down is Xero. It is a cloud-based accounting solution platform provider competing with the likes of MYOB, Quickbooks, and Sage.

Despite delivering a 29% increase in revenue to NZ$1.1 billion and a 28% jump in annualised monthly recurring revenue to NZ$1.2 billion in FY 2022, Xero’s shares have been hammered in 2022 due to weakness in the tech sector. Since the start of the year, the Xero share price has lost 34% of its value.

The team at Goldman Sachs appear to see this as a buying opportunity for investors. Particularly given its belief that Xero can continue growing at a rapid rate for many years to come. The broker said:

While noting that the near term remains robust, we do acknowledge the risk of higher churn from SME business challenges and recent price increases. Nevertheless, we see Xero as well-placed to navigate this uncertainty given the stickiness & importance of its software, and lower levels of churn vs. AU overall. We revise FY23-25 GP [22% CAGR] to reflect FX and higher churn/ARPU growth (price increases).

Goldman currently has a buy rating and $113.00 price target on its shares.

The post Experts name 2 beaten down ASX shares that could be going cheap appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Top brokers say Domino’s share price has loads of extra topping in it, here’s why
• Broker gives its verdict on the Xero share price following new product launch
• 2 excellent ASX tech shares experts say are buys
• Top brokers name 3 ASX shares to buy today
• How are ASX 200 tech shares performing on Wednesday?

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/QNWbEw1

Lindsay Australia Limited (ASX: LAU) is one of few ASX All Ords shares to defy the market sell-off in 2022.

The S&P/ASX All Ordinaries Index (ASX: XAO) has tumbled 9% over the year to date. In contrast, the Lindsay Australia share price has risen 17.7% to 46.5 cents at the market close on Wednesday.

In a new note released this week, broker Ord Minnett says the integrated logistics and rural supply company has “historically performed consistently in a weakening economy”.

The broker’s analysts maintain a buy recommendation on the ASX All Ords share. They’ve also raised their valuation to 55 cents per share, implying a potential upside of 18%.

Who is Lindsay Australia?

Lindsay Australia transports fresh produce and provides farming equipment to rural growers.

Ord Minnett points out that it “operates predominately in the consumer staples category”. This is a market sector that has traditionally withstood rising inflation better than other ASX All Ords shares.

Founded in 1953, Lindsay listed on the ASX in 2001. The company says it is “a pioneer in the refrigerated fruit and vegetable transport industry”. It was one of the first to use refrigerated trailers in Australia.

According to Ord Minnett, Lindsay operates 19 logistics terminals, 18 rural stores, and an import/export hub at the Brisbane produce markets.

About 85% of the goods it transports are perishable foods, mostly fruit and vegetables. These products are delivered to more than 3,000 customers across Australia.

Lindsay Rural supplies and transports farming equipment, fertiliser, nutrients, and packaging materials to about 1,500 customers.

Headquartered in Brisbane, the company employs more than 1,500 staff. The founding Lindsay family holds an estimated 13% of issued shares.

Why buy?

Ord Minnett explains why it likes this ASX All Ords share in a note released this week.

The broker says:

Positive results and outlook commentary from Elders Ltd (ASX: ELD) and Silk Logistics Holdings Ltd (ASX: SLH) during the past quarter reinforces our thesis that transport and agri conditions remain favourable, supported by upward pricing of freight contracts to reflect cost pressures and tightness of supply.

Specific to the horticulture sector, ABARE has issued bullish output forecasts for FY22e and FY23e, rising by 6% and 7% respectively. Momentum from LAU’s first half result is likely to accelerate into the second half, given a higher forecast number of rail containers in operation and improving returns from the 18-store rural network.

Growth in these areas is supportive of group margins, ROE and free cash flows.

We are attracted to the market position of Lindsay Australia … and the consistency of revenue generation from grower and corporate customers. Competitive advantage is found in the synergies and customer value-add leveraged through the combined transport and rural store network.

Refrigerated transport holds high barriers to entry and the acceleration of rural and rail services is proving to be a major positive catalyst for returns. The company has more than doubled the number of rail containers to approximately 400 by 30 June 2022.

We expect LAU to increase the share of group EBITDA generated by rail services to approximately 25% in the medium term, improving free cash flow generation and adding to the ESG credentials of the business. Returns on equity have increased materially to approximately 15% in FY22e and with lower financial leverage we see higher rates of earnings per share growth into future periods.

What’s next for this ASX All Ords micro-cap?

Lindsay Australia is expected to release its full-year FY22 earnings during this month’s earnings season.

Ord Minnett is expecting FY22 EBITDA of $57.1 million, up 27%. It projects an adjusted EPS of 4.95 cents per share, up 54%.

The broker says the ASX All Ords share trades on a price-to-earnings (P/E) ratio discount to its peers.

It notes forecasts of horticulture production in FY22e and FY23e to be approximately 8% above the long-term average. This will benefit Lindsay Australia given 70% of its group revenue comes from the horticulture sector.

The broker said: “With scale as Australia’s largest stand-alone horticulture logistics specialist and national operations, we see upside risk to earnings forecasts and have raised our estimates in FY23e and FY24e”.

Lindsay Australia has a market capitalisation of $140.42 million.

The post Broker says buy: The ASX All Ords share defying this year’s sell-off to leap 13% appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Top ASX shares to buy in August 2022

Motley Fool contributor Bronwyn Allen 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 Lindsay Australia Limited. The Motley Fool Australia has recommended Lindsay Australia Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/YopzG8Z

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price was rangebound today. ANZ shares closed trade 44 basis points down at $22.71.

The bank raised $2.3 billion of debt capital on Wednesday following sharp demand for its bond issue that was completed today.

In broad market moves, the S&P/ASX 200 Financials Index (ASX: XFJ) softened today, 0.88% in the red at market close.

ANZ raises $2.3 billion for Suncorp deal

The bank issued the subordinated bonds at a fixed coupon rate (interest rate) of 5.986% until maturity, according to Refinitiv Eikon data.

ANZ has been on the road with its pitchbook in an effort to sure up additional capital. It follows the bank’s $4.9 billion purchase of Suncorp Bank.

It had issued $3.5 billion of equity via an equity raise to pay for the transaction, and completed another bond issue last week for $2.8 billion.

That offer was at a higher interest rate – 6.32% to be exact. More to the point, it adds to a large cash injection the company has secured over the past few months.

After the $4.9 billion capital expense, ANZ’s balance sheet would have seen a large outflow of cash.

Consequently, this would have adjusted its capital adequacy ratios (CET1 and CET2 ratios).

Banks are required to keep a certain amount of capital on the balance sheet relative to their liabilities. It’s synonymous to the bank’s reserves.

These are known as capital adequacy ratios and place a layer of resiliency over the sector.

With that in mind, ANZ needed to acquire the additional capital in order to bring its CET1/CET2 ratios back in line with the required 4%/8% respectively.

ANZ share price snapshot

In the last 12 months, the ANZ share price has slipped more than 18% into the red. ANZ shares have lost 16.8% since the start of 2022.

The post ANZ share price best of bad bunch after pocketing extra $2.3b appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• How are ASX 200 bank shares responding to the RBA rate increase?
• Is the ANZ share price an ASX banking buy for the next 12 months?
• Own ANZ shares? Tech experts raise red flags over Suncorp integration
• What might the ANZ deal mean for Bank of Queensland shareholders?
• Analysts rate these ASX 200 blue chip shares as buys

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.

from The Motley Fool Australia https://ift.tt/wyBLEor

The Core Lithium Ltd (ASX: CXO) share price powered ahead despite a small hiccup earlier last month.

The ASX lithium share finished at $1.155 a share, up 20.94% for the month of July.

In contrast, the S&P/ASX 200 Materials (ASX: XMJ) index fell almost 1% over the same time frame.

Let’s take a look at what led the company’s shares to accelerate while the broader index remained stagnant.

What happened to Core Lithium last month?

Despite tumbling to a near year-to-date low of 82.5 cents on 13 July, the Core Lithium share price made a stunning turnaround.

Selling pressure increased within the first couple of weeks of July as investors were betting against the lithium industry.

This saw Core Lithium, along with its peers, sink deep in the red.

On the same day, the company announced it significantly increased the Mineral Resource Estimate and Ore Reserves Estimate for the Finniss Lithium Project.

However, this failed to appease the market with investors shrugging off the good news at the time.

But as they have before, Core Lithium shares began to turn the tide in the following days as bargain hunters appeared to take advantage of the recent share price weakness.

The response saw the company’s shares rocket more than 20% from 14 July until 21 July.

In addition, Core Lithium released its June quarterly activities and cashflow report which highlighted its progress at Finniss.

With the company targeting first production of spodumene concentrate by the end of 2022, this could bode well for its share price.

Of course, this is provided lithium prices remain stable from here on.

Core Lithium share price summary

Adding to its already impressive gains, the Core Lithium share price has almost doubled in value in 2022.

When factoring in the last 12 months, its shares are up an incredible 317%.

Core Lithium commands a market capitalisation of roughly $2.03 billion.

The post Why did the Core Lithium share price jet 20% higher in July? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Core Lithium, Deterra, Panoramic, and Qualitas shares are racing higher
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why has the Lake Resources share price rocketed 16% today?
• Core Lithium share price surges 4% on ‘exceptional’ drill results
• Core Lithium shares leapt 9% following this week’s results release, but why?

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.

from The Motley Fool Australia https://ift.tt/8KwaYx1