Commonwealth Bank of Australia (ASX: CBA) shares were on form again on Wednesday.

Australia’s largest bank’s shares ended the day 0.5% higher at $108.07.

This leaves the CBA share price trading within a whisker of a 52-week high of $108.39.

Can CBA shares keep rising?

Unfortunately, analysts at Goldman Sachs appear to believe that investors should be taking profit and selling CBA’s shares right now.

According to a recent note, the broker has reiterated its sell rating with a $90.98 price target.

This implies potential downside of 16% for investors over the next 12 months.

Why isn’t the broker a fan?

While Goldman Sachs believes CBA is a high quality bank, the broker just can’t get its head around its valuation.

There are three key reasons why its analysts don’t believe that CBA’s shares deserve to trade at such a premium to the rest of the big four. These include intense competition, its exposure to macro headwinds, and softer volume trends. Goldman explained:

While the 1Q23 update highlighted the strength of the CBA franchise (particularly deposits), reflected in its very strong NIM performance, we reiterate our Sell given: i) it does remain more exposed to the intense competition we are currently observing in mortgages (albeit CBA appears to be favouring NIM over volumes), ii) we expect that potential further macro downside is likely to more adversely impact the household this cycle, which CBA is more exposed to, and iii) domestic volume trends have tracked towards system levels.

The broker highlights that despite the above, its shares still trade at a 51% premium to the average forward price-to-earnings ratio (PER) of peers. This is more than double the historic average. Goldman concludes:

We therefore do not believe its fundamentals justify the 51% 12-mo fwd PER premium it is currently trading on versus peers, compared to the 20% historic average. With c.14% [now 16%] downside to our revised 12-month TP of A$90.98, maintain Sell.

The post Are CBA shares flying too close to the sun? appeared first on The Motley Fool Australia.

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More reading

• Markets are nervous. Why waiting to buy these ASX 200 shares could prove expensive
• Will ASX 200 shares bottom before the year is out? Here’s Macquarie’s ‘best guess’
• Why did Macquarie just switch out ANZ for CBA shares?
• 4 quality, undervalued ASX 200 shares in an earnings upgrade cycle revealed: fund manager
• Are ASX 200 bank shares a buying opportunity hiding in plain sight?

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 Cleanaway Waste Management Ltd (ASX: CWY) share price is under consideration by investors on news the business could expand into the recycling space. It comes after recycling coordinator REDcycle suspended its collection of soft plastics.

It has reportedly ceased activity because third parties can’t deal with the huge volume of used soft plastics being returned.

For readers that don’t know, Cleanaway is one of Australia’s largest businesses operating waste and recycling collection trucks, as well as waste centres. It recently held its annual general meeting (AGM).

Potential REDcycle competitor

The Australian Financial Review (AFR) has reported that Cleanaway and plastics maker Qenos are weighing up a “$500 million co-investment” to step into the space left by REDcycle. The REDcycle program allowed shoppers to return soft (scrunchable) plastics via Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) supermarkets.

Apparently, the two businesses have been “working for months” on a plan to collect around 100,000 tonnes annually of soft plastics through existing household garbage collections. Of course, Cleanaway trucks already do this for hundreds of locations.

Cleanaway boss Mark Schubert explained a final decision will be made by mid-2023 on whether it should proceed, the AFR reports. Though it will depend on the “price and availability” of gas for these potential new plants that may be built on existing Qenos sites in Sydney and Melbourne. This will be an important part of the business case for the ASX 200 share.

According to the plan, the Cleanaway project would aim to recycle about 10 times the quantity REDcycle was collecting.  

How would this work?

If this were to happen, it would be based on a “bag in a bin” concept at each household. Cleanaway would integrate the soft plastics pickup into the weekly truck collection schedule. Mr Schubert said:

It’s a very convenient solution at scale, you do a bag in a bin.

What the REDcycle program showed is there is huge community and customer support. What’s required though is scale.

Our plan would be to invest in the front-end sorting.

It would take about two years for the plants to be fully operational. Cleanaway would share about half of the $500 million cost.

Cleanaway has reportedly already done trials of soft plastic pick-ups for about 2,000 homes in inner Melbourne.

The AFR reports that the technology to do this already exists. In fact, it’s happening overseas on a commercial scale. In terms of the process, the newspaper said:

The companies would jointly invest in the advanced recycling technology to convert the soft plastics into feedstock, and make new plastic through a process known as pyrolysis. The end product is a polyethylene called Alkanew, which can be used to re-manufacture the very same packaging.

Is the Cleanaway share price an opportunity?

In 2022 to date, Cleanaway shares have fallen by more than 12%.

Macquarie currently has an outperform rating on the ASX 200 share, with a price target of $2.90. This implies a mid-single-digit rise for the Cleanaway share price. Though, potential cost pressures are giving the broker cause for caution.

The post Could this ASX 200 share cash in on the suspension of REDcycle? appeared first on The Motley Fool Australia.

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More reading

• 3 key things I look for when buying ASX dividend shares

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 positions in and has recommended COLESGROUP DEF SET. 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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The S&P/ASX 200 Index (ASX: XJO) spent a second day in the green today. The index closed 0.7% higher at 7,231.8 points – a five month high.

Among its top performers were coal stocks, which led the S&P/ASX 200 Energy Index (ASX: XEJ). The sector was, in turn, among those leading the ASX 200, gaining 1.3% today amid rising oil prices.

The Brent crude oil price lifted 1% to US$88.36 a barrel and the US Nymex crude oil price gained 1.1% to trade at US$80.95 a barrel.

The S&P/ASX 200 Industrials Index (ASX: XNJ) also outperformed, lifting 1.3% on the back of a trading update from Qantas Airways Limited (ASX: QAN).

Other winning sectors included the S&P/ASX 200 Materials Index (ASX: XMJ and the S&P/ASX 200 Utilities Index (ASX: XUJ). They gained 1% and 1.6% respectively.

Meanwhile, the S&P/ASX 200 Information Technology Index (ASX: XIJ) weighed on the market, falling 1%.

All in all, nine of the index’s 11 sectors closed Wednesday in the green. But which share outperformed all others to take today’s top spot? Keep reading to find out.

Top 10 ASX 200 shares countdown

The top performing stock on the index on Wednesday was tech favourite BrainChip Holdings Ltd (ASX: BRN). Its share price gained nearly 7% despite the company’s silence.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
BrainChip Holdings Ltd (ASX: BRN)	$0.695	6.92%
Chalice Mining Ltd (ASX: CHN)	$4.95	6.45%
Whitehaven Coal Ltd (ASX: WHC)	$9.62	5.6%
Qantas Airways Limited (ASX: QAN)	$6.18	5.28%
Gold Road Resources Ltd (ASX: GOR)	$1.72	4.24%
Incitec Pivot Ltd (ASX: IPL)	$4.14	4.02%
Brickworks Limited (ASX: BKW)	$21.88	3.94%
Nickel Industries Ltd (ASX: NIC)	$0.98	3.7%
Nufarm Ltd (ASX: NUF)	$6.15	3.54%
Karoon Energy Ltd (ASX: KAR)	$2.38	3.48%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Why is the Whitehaven share price soaring 17% so far this week?
• Why did the BrainChip share price leap 7% today?
• 3 ASX 200 shares hitting new 52-week highs on Wednesday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why Calix, Chalice Mining, Qantas, and Whitehaven Coal shares are rising

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 positions in and has recommended Brickworks. The Motley Fool Australia has positions in and has recommended Brickworks. 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 S&P/ASX 200 Index (ASX: XJO) has had a strong week thus far, even though it’s only Wednesday. Since Last Friday, the ASX 200 has added a healthy 1.1%, despite the drop we saw on Monday. But when it comes to the Whitehaven Coal Ltd (ASX: WHC) share price, those ASX 200 gains look pathetic by comparison.

Whitehaven shares have been on an absolute tear this week. Although we’re only just rounding out ‘hump day’, Whitehaven shares have risen from $8.19 each last week to the $9.62 we see today. That’s an increase worth a whopping 17.5% – over only three days of trading too.

So what’s going on with Whitehaven this week that has helped such a whopping win?

Why are Whitehaven shares on fire this week?

Well, it seems that these gains can be put down to what is happening with coal prices. At its core, Whitehaven’s profitability rises and falls on the back of coal prices. And coal has once again been on the rise in late.

Earlier this month, the energy-dense fuel was going for around US$325 per tonne. Today, it’s back over US$355. That’s more than double what coal was going for at the start of the year.

So it’s perhaps no surprise that the Whitehaven share price is up an extraordinary 247% over 2022 thus far.

As we discussed yesterday, there are also some issues in the South American coal market going on right now. The South American coal industry is presently suffering from blockades on some of its transport rail lines.

A group of former employees at South American coal miner Cerrejon are reportedly behind these blockades. If they persist, it could lead to supply constraints in the global coal market, which is already being squeezed by other factors, such as the war in Ukraine.

This could also be feeding into sentiment surrounding coal mines like Whitehaven, as well as the price of coal itself.

So these factors could be what is pushing the Whitehaven share price up so convincingly this week. It’ll be interesting to see how the Whitehaven share price goes over the rest of the trading week.

The post Why is the Whitehaven share price soaring 17% so far this week? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why Calix, Chalice Mining, Qantas, and Whitehaven Coal shares are rising
• Here are the top 10 ASX 200 shares today
• Why are ASX 200 coal shares smoking hot on Tuesday?
• Why is the Whitehaven share price soaring 8% on Tuesday?

Motley Fool contributor Sebastian Bowen 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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