The team at Morgans regularly picks out its best ASX share ideas. These are the ASX shares that the broker thinks offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence.

On the list at the moment are the two ASX 100 shares listed below. Here’s why the broker believes these are among the best shares to buy right now:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX 100 share that Morgans is tipping as a best buy is gaming technology company Aristocrat Leisure.

The broker likes the company due to its strong balance sheet, leadership position, and real money gaming opportunity. It explained:

ALL is a global market leader in the rapidly-growing land-based gaming and mobile gaming industries. It has delivered revenue growth of 17% pa over the past five years and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments. Demand for its gaming machines and digital games is resilient to economic cycles, though has slowed in recent months, leading the share price down. ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September. With $3.3bn of currently available liquidity, ALL has significant funding capacity for growth, even after the buyback. It has a stated ambition to build a meaningful presence in the rapidly-growing online real money gaming segment, which we believe may be achieved both through organic investment and inorganic acquisitions.

Morgans has an add rating and $43.00 price target on Aristocrat’s shares.

Westpac Banking Corp (ASX: WBC)

Another ASX 100 share making the list is Australia’s oldest bank, Westpac.

The broker rates this banking giant highly due to its return on equity potential. It also sees Westpac as a top option for income investors due to its fully franked dividend yield. Its analysts said:

We view WBC as having the greatest potential for return on equity improvement amongst the major banks if its business transformation initiatives prove successful. The sources of this improvement include improved loan origination and processing capability, cost reductions (including from divestments and cost-out), rapid leverage to higher rates environment, and reduced regulatory credit risk intensity of non-home loan book. Yield including franking is attractive for income-oriented investors, while the ROE improvement should deliver share price growth.

Morgans has an add rating and $25.80 price target on Westpac’s shares. It also expects a fully franked 6%+ dividend yield in FY 2023.

The post Morgans names 2 of the best ASX 100 shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Up 20% in 6 months, is the Westpac share price now fully valued?
• Top brokers name 3 ASX shares to buy next week
• Here are the top 10 ASX 200 shares today
• How I’d invest my very first $500 in ASX shares in 2023
• Which ASX 200 bank shares are the ones to buy in 2023?

Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Westpac Banking. 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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Iron ore shares struggled against the ASX 200 on Monday.

Fortescue Metals Group Ltd (ASX: FMG), Rio Tinto Ltd (ASX: RIO) and BHP Group Ltd (ASX: BHP) trailed the benchmark index at market close.

Fortescue shares slid 2% today, while Rio Tinto shares slipped 0.1%. The BHP share price was up just 0.1% at the market close after hitting a milestone $50 per share high earlier today. The S&P/ASX 200 (ASX: XJO) jumped 0.82% to finish at 7,388.2 points at today’s close.

Let’s take a look at what may have weighed on iron ore shares on the ASX 200 today.

What happened?

News emerged yesterday that China’s economic planning agency would seek to crack down on surging iron ore prices by heightening its supervision, according to Bloomberg.

All three iron ore-producing giants — Fortescue, Rio and BHP — are impacted by the iron ore price, which can weigh on potential earnings and, therefore, investor sentiment.

China’s National Development and Reform Commission advised on Sunday it was interviewing companies relating to iron ore. In a statement (translated into English), the commission said:

The National Development and Reform Commission will continue to pay close attention to changes in the iron ore market and prices, and work with relevant departments to further study and take measures to severely crack down on illegal activities such as fabricating and disseminating information on price increases, hoarding, and price gouging, so as to effectively ensure the smooth operation of the iron ore market.

Iron ore futures on the Singapore Exchange have fallen 4.50% to US$119.85 at the time of writing.

The ASX 200 iron ore shares also produce other metals and minerals, including copper, nickel, zinc and aluminium. Aluminum is currently up 1.82%, while zinc is 2.74% higher, according to trading economics. Copper is down 1.16%, while nickel is sliding 0.85%.

Share price snapshot

The BHP share price has gained nearly 20% in the last 12 months.

Fortescue shares have climbed 4% in the past year.

The Rio Tinto share price has jumped 10% in the last 52 weeks.

The post Why did iron ore shares lag the ASX 200 on Monday? appeared first on The Motley Fool Australia.

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More reading

• BHP share price hits milestone $50 mark on Monday
• Why is the Fortescue share price being hammered on Monday?
• Is the BHP share price about to crack $50?
• 6 ASX mining shares just upgraded by brokers
• 4 ASX 200 shares celebrating Friday with new, 52-week highs

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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It has been a fruitful time to own Westpac Banking Corp (ASX: WBC) shares over the last six months. The Westpac share price has lifted by around 20% in that period.

Other ASX 200 bank shares have also performed well, with the Commonwealth Bank of Australia (ASX: CBA) share price up 14%, the National Australia Bank Ltd (ASX: NAB) share price rising 9% and the ANZ Group Holdings Ltd (ASX: ANZ) share price 13% higher.

Westpac stands above the rest over the past six months. But can this continue?

What’s driving Westpac shares?

The ASX banks are all expected to see improving profitability thanks to the higher official central bank interest rate.

Banks like Westpac are able to quickly pass on the interest rate rises to borrowers but give savers less of an interest rate rise. According to various media reporting, Treasurer Jim Chalmers has asked the Australian Competition and Consumer Commission (ACCC) to look at the rates offered on deposit accounts.

Being able to make more profit from the same loan book is a good help for Westpac.

Another aspect is that the business is looking to significantly reduce its cost base. In FY21, it spent $10.1 billion on underlying expenses, which were reduced to $9.4 billion in FY22. The target is $8.6 billion by FY24, Lower costs can improve the bank’s net profit position.

Are Westpac shares worth buying?

The ASX bank share could still be called cheap based on the conventional measure of looking at its price/earnings (p/e) ratio.

According to Commsec, the business is valued at under 12x FY23’s estimated earnings. Due to its low valuation, it could also pay a large dividend yield.

Commsec estimates suggest it could pay an annual dividend per share of $1.38. If paid, this would equate to a grossed-up dividend yield of 8.2%.

So, investors can still gain Westpac shares for a relatively low earnings multiple and a good dividend yield.

Of the analysts that Commsec cover, nine of them rate it as a buy, while four consider it a hold and four rate it as a sell.

The investment bank Goldman Sachs is among the brokers that rate the ASX bank share as a buy, with a price target of $27.68, according to Commsec. That suggests it could rise another 15% over the next year.

Foolish takeaway

Share prices often follow earnings over time. In other words, if Westpac shares are able to generate more profit, then this could drive shareholder returns for investors.

However, on the horizon, there is a concern about how much the higher interest rates will lead to higher arrears. I’m inclined to think that bad debts are going to rise by the end of 2023.

The post Up 20% in 6 months, is the Westpac share price now fully valued? appeared first on The Motley Fool Australia.

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More reading

• Broker forecasts CBA share price to slide 15%
• 5 things to watch on the ASX 200 on Monday
• The ASX 200 shares with a multi-billion-dollar tailwind
• Buy ANZ shares now for 19% upside AND generous dividend income: broker
• 3 ASX 200 shares I own for big dividends in 2023

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 Westpac Banking. 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) kicked off the week strong, leaping 0.82% on Monday to close at 7,388.2 points.

That was despite a lacklustre performance from mining shares. The S&P/ASX 200 Materials Index (ASX: XMJ) lifted just 0.2% today as lithium stocks and iron ore giants weighed on the sector.

The S&P/ASX 200 Information Technology Index (ASX: XIJ), on the other hand, led the market’s gains, lifting 1.8%.

It was also a good day to be invested in ASX 200 bank shares. Shares in the big four banks rose between 0.7% and 1.6% on Monday after many of their New York-listed peers leapt on quarterly earnings on Friday.

Finally, the S&P/ASX 200 Energy Index (ASX: XEJ) rose 1.5% on Monday following a strong Friday session for oil prices.

So, with all that in mind, let’s take a look at the 10 shares taking out today’s top spots on the ASX 200.

Top 10 ASX 200 shares countdown

Today’s top-performing ASX 200 share was none other than Super Retail Group Ltd (ASX: SUL). Shares in the retailer jumped 7.7% to close at 12.34.

The company provided a glimpse into its record first half this morning, with revenue for the period expected to come in at close to $2 billion.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Super Retail Group Ltd (ASX: SUL)	$12.34	7.68%
Megaport Ltd (ASX: MP1)	$7.35	7.46%
Imugene Limited (ASX: IMU)	$0.17	6.25%
New Hope Corporation Limited (ASX: NHC)	$6.52	4.82%
Xero Limited (ASX: XRO)	$74.31	4.56%
Netwealth Group Ltd (ASX: NWL)	$13.73	4.17%
WiseTech Global Ltd (ASX: WTC)	$53.99	4.01%
Domain Holdings Australia Ltd (ASX: DHG)	$3.12	4%
Novonix Ltd (ASX: NVX)	$1.82	4%
Seek Ltd (ASX: SEK)	$24.08	3.79%

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

• Here are the 3 most heavily traded ASX 200 shares on Monday
• BHP share price hits milestone $50 mark on Monday
• This ASX 200 retail share is booming 10% on an ‘outstanding first-half result’
• Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24

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 Megaport, Netwealth Group, Super Retail Group, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Netwealth Group, Super Retail Group, WiseTech Global, and Xero. The Motley Fool Australia has recommended Megaport and Seek. 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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