Day: August 16, 2022

‘Green premium’: What could it mean for the Vulcan Energy share price?

Envirosuite investor holds a tech device while sitting on a ledge looking out to trees through a windowEnvirosuite investor holds a tech device while sitting on a ledge looking out to trees through a window

The Vulcan Energy Resources Ltd (ASX: VUL) share price has taken a battering, shedding almost 16% year to date.

But there could be new hope on the horizon for the zero-carbon lithium producer. The company says it’s developing products that may sell at a ‘green premium’ in the future.

Vulcan Energy describes the phenomenon as the market paying more for commodities produced in a low-emission environment.

The company has outlined how its products fit into the green premium paradigm. It said its zero-carbon lithium products are currently being used to slash emissions in the production of electric vehicles and lithium-ion batteries.

Vulcan Energy has embraced comments in a sustainability report published by FitchSolutions on Monday. The report states that “zero-carbon lithium products will sell at a premium compared with [lithium from] hard rock mine output”.

FitchSolutions lithium sustainability report

The report found Western nations are willing to pay more for zero-carbon lithium due to the rising urgency of implementing environmental and social governance (ESG) policies to fight climate change. It forecast this will force companies to fight for a limited supply of low-carbon materials which, in turn, will lead them to trade at premium prices.

Vulcan Energy estimates traditional lithium production methods from hard rock mines will produce approximately 1.05 billion tonnes of CO2, or 3% of the world’s estimated annual CO2 emissions, to meet the demand for electric vehicles.

Due to governmental pressures, lithium exploration companies will be forced to adopt more carbon-neutral extraction techniques in the future, the report said. It asserted Western governments are set to favour direct lithium extraction (DLE) technology as the preferred production method due to its smaller carbon footprint.

DLE, which extracts lithium from geothermal waters, has also led to exploration in areas outside conventional hard rock mining sites, the report said. It cited the Californian Energy Commission’s estimate that geothermal areas surrounding the Salton Sea in California could support 40% of the world’s lithium demand.

However, the report concludes by noting the green premium of lithium could be short-lived over the long run if exploration activities find enough of it that can be extracted via DLE techniques.

Vulcan Energy share price snapshot

Certainly, a green premium would be welcome news for the Vulcan Energy share price. It’s down almost 32% in the past 12 months.

That’s well below the S&P/ASX 200 Index (ASX: XJO) which has lost around 6.3% over the same period.

At the current share price, Vulcan Energy has a market capitalisation of $1.3 billion.

The post ‘Green premium’: What could it mean for the Vulcan Energy share price? appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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 Appen share price is down 20% in a month. Is it going lower?

A woman looks in anticipation at her laptop, watching eagerly.

A woman looks in anticipation at her laptop, watching eagerly.

The market may have been pushing higher again on Tuesday, but the same cannot be said for the Appen Ltd (ASX: APX) share price.

The artificial intelligence data services company’s shares continued their slide with a decline of almost 1% to $4.66.

This latest decline means the Appen share price is now down 20% since this time last month.

Has the Appen share price bottomed?

Unfortunately, one leading broker still believes the Appen share price can fall from current levels.

According to a note out of Bell Potter, just a week after downgrading the company’s shares to a hold rating, last week the broker went a step further by downgrading its shares to a sell rating with a $4.25 price target.

This price target implies potential downside of 9% for investors over the next 12 months.

What did the broker say?

Bell Potter was disappointed with Appen’s performance during the first half of FY 2022.

And while its analysts continue to forecast a huge rebound in the second half and solid growth in FY 2023 and FY 2024, the broker acknowledges that these forecasts are uncertain.

It commented:

There is no change in our forecasts for Appen which we only updated last week after the company provided an updated on the 1H2022 result and 2022 outlook. We continue to forecast underlying EBITDA of US$40.0m in 2022 which implies an H2 result of US$31.5m after Appen said the H1 result would be US$8.5m.

We note, however, there is no guidance for 2H2022 and 2022 and very little visibility on what the H2 result will be after the company said “the conversion of forward orders to sales is less certain this year compared to prior years”. We also continue to forecast underlying EBITDA of US$60.8m in 2023 and US$69.0m in 2024 but, again, there is very little visibility on what the results will be in these years. Our forecasts in 2023 and 2024 do assume a rebound in digital advertising and customer spend but the timing and extent of this turnaround is uncertain.

The post The Appen share price is down 20% in a month. Is it going lower? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Appen Ltd right now?

Before you consider Appen Ltd, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Appen Ltd wasn’t one of them.

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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 positions in and has recommended Appen Ltd. 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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Will Pilbara Minerals shares pay a dividend in 2022?

woman shrugging

woman shrugging

Earlier today, BHP Group Ltd (ASX: BHP) released its full year results and declared another huge dividend. This is being underpinned by the record free cash flow the mining giant generated during the last 12 months.

In light of this, investors may be wondering if the free cash flow that Pilbara Minerals Ltd (ASX: PLS) is generating thanks to sky high lithium prices will be sufficient for it to pay a dividend along with BHP in FY 2022.

Will there be a Pilbara Minerals dividend in FY 2022?

Unfortunately, after scouring a range of broker notes, I’ve not found a single analyst tipping a Pilbara Minerals dividend in FY 2022.

Though, that doesn’t necessarily mean that one isn’t coming. Analysts are often wrong with their estimates. For example, the market was not expecting Telstra Corporation Ltd (ASX: TLS) to increase its dividend last week but it did. And guessing a maiden dividend is perhaps even harder.

So when will there be one?

According to a recent note out of Credit Suisse, its analysts are expecting the dividend payments to commence in FY 2023. And it certainly could be worth the wait if the broker is on the money with its forecasts.

The note reveals that Credit Suisse is forecasting a 29 cents per share dividend that financial year. Based on the current Pilbara Minerals share price of $3.17, this will mean a yield of 9.1% for investors.

In FY 2024, the broker is expecting the lithium miner’s dividend to ease a touch. Its analysts are forecasting a 21 cents per share dividend for that financial year. This will be a dividend yield of 6.6% for investors.

All in all, based on the above, Pilbara Minerals could soon be considered a dividend share. And a high yielding one at that!

The post Will Pilbara Minerals shares pay a dividend in 2022? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

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*Returns as of August 4 2022

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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 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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Can the Macquarie share price get back over $200 this year?

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.

A mature age woman with a groovy short haircut and glasses, sits at her computer, pen in hand thinking about information she is seeing on the screen.

The Macquarie Group Ltd (ASX: MQG) share price has risen by 14.4% since 17 June 2022. That compares to a rise of almost 10% in the S&P/ASX 200 Index (ASX: XJO).

Macquarie is a global investment bank, generating income and profit from across the world.

The Macquarie share price has still fallen by 13.5% over 2022 to date, indicating it may not be impervious to the effects of strong inflation and rising interest rates.

Macquarie shares hit a 2022 low in mid-June but they have been steadily rising since. That low came as investors were getting used to central banks, such as the Reserve Bank of Australia (RBA), ramping up interest rates at a rapid rate.

But, with the Macquarie share price rising over the past couple of months, is there still an opportunity for it to hit $200 in 2022?

Brokers are mostly optimistic on the Macquarie share price

Experts have had their chance to review Macquarie’s FY23 first quarter update.

The investment bank said that it experienced “favourable trading conditions” with the FY23 first quarter operating group contribution “up” year over year, though conditions did “soften” during the quarter.

Broker Morgan Stanley said it thinks that the first quarter, which was expected to be down, demonstrated enough that FY23 will meet or beat forecasts for this financial year. Morgan Stanley has a price target of $218, which implies a rise of almost 20%. The rating is ‘overweight’.

The broker Ord Minnett has a price target of $202 on the investment bank, with a potential rise of around 10%. It also said the first quarter was stronger than expected. Ord Minnett’s rating is ‘buy’.

Meantime, UBS has a price target on Macquarie of $200. It also thought the first quarter was better than expected. Its rating is ‘neutral’.

However, while Citi is also ‘neutral’ on the investment bank, the price target is just $172. That implies a possible drop of 6%. It’s concerned about interest rates going up.

A price target is where the broker thinks the share price will be in 12 months. These price targets were given in July, but it’s certainly possible that the Macquarie share price could hit these numbers before the end of 2022.

What next?

Macquarie is expecting to report its FY23 half-year result on 28 October 2022.

Referring to the outlook, Macquarie said in its FY23 first quarter update that it will “continue to maintain a cautious stance, with a conservative approach to capital, funding, and liquidity that positions us well to respond to the current environment”.

It also said:

Macquarie remains well-positioned to deliver superior performance in the medium-term. This is due to our deep expertise in major markets, strength in business and geographic diversity and ability to adapt the portfolio mix to changing market conditions, an ongoing program to identify cost-saving initiatives and efficiency, a strong and conversative balance sheet and a proven risk management framework and culture.

Macquarie share price snapshot

Over the last month, Macquarie shares have gone up more than 5%.

The post Can the Macquarie share price get back over $200 this year? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.* Scott just revealed what he believes could be the “five best ASX stocks” for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now

See The 5 Stocks
*Returns as of August 4 2022

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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 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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