If you’re looking for exposure to the banking sector, then ANZ Group Holdings Ltd (ASX: ANZ) shares could be the way to do it.

That’s the view of analysts at Citi, which have named the banking giant as its top pick in the sector.

Its analysts recently responded to the bank’s first quarter update by retaining their buy rating and $29.25 price target on its shares.

Based on the latest ANZ share price of $24.77, this implies potential upside of 18% for investors over the next 12 months.

And with the broker expecting a $1.66 per share fully franked dividend in FY 2023, which would yield 6.7%, the total potential return on offer with ANZ shares stretches to almost 25%.

Why is the broker bullish on ANZ shares?

Citi was pleased with ANZ’s performance in the first quarter and particularly the strong trends it is exhibiting in lending growth and asset quality.

And while no earnings data was provided, the broker believes that the update suggests that the bank’s earnings are trending ahead of expectations. The broker commented:

ANZ’s 1Q23 disclosures exhibited strong trends in both lending growth and asset quality. No earnings disclosure was provided, but we think that after backing out RWA movements from capital, it comfortably implies above market earnings, although subject to movements in deductions/reserves.

Asset quality is set to be the key focus of today’s release, with an $83m provision release in the quarter driven by largely unchanged CP and a $101m IP release. Despite fears of deteriorating asset quality, impaired assets declined again in the quarter, although this could be the bottom as seasonally mortgages and personal credit arrears tick higher in the March quarter. Institutional lending momentum continued and accelerated in the Dec qtr, which we expect was driven by more available liquidity and pricing vs debt markets.

All in all, the broker believes this makes ANZ shares the best option for investors in the sector right now. It concludes:

ANZ remains our top pick in the sector, and we expect the lending momentum, particularly in institutional, to continue to differentiate vs peers.

The post Why ANZ shares are this broker’s ‘top pick in the sector’ appeared first on The Motley Fool Australia.

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More reading

• Why is the ANZ share price tumbling on Wednesday?
• Buy ANZ shares today for 16% upside: broker
• Brokers name 3 ASX shares to buy now
• Are ANZ shares a buy after the bank’s Q1 update?
• Expect 6%+ dividend yields from these ASX 200 shares: analysts

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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ASX 200 share Eagers Automotive Ltd (ASX: APE) is rocketing today after the company released its full-year results for 2022.

The Eagers share price is up by 9.3% to $13.04 at the time of writing. It hit an intraday high of $13.44 in earlier trading, which was 12.65% above yesterday’s closing price of $11.93.

Australia’s biggest car sales group announced a record full-year dividend of 71 cents per share for FY22. This is up 13.6% compared to FY21. The final dividend payment for FY22 will be 49 cents per share.

Let’s see what else the company reported today.

ASX 200 share rips it up on record operating profit

Here are the highlights of the 12 months ended 31 December 2022 (FY22):

• Record underlying operating profit before tax of $405.2 million, up from $401.8 million in the prior corresponding period of FY21 (pcp)
• Statutory profit before tax of $442.2 million, down from $456.8 million pcp
• Available liquidity of $631.1 million
• Fully franked final dividend of 49 cents per share, up 15.3% pcp.

What else happened in FY22?

Eagers Automotive said its record profit came down to continuing strong demand for both new and used cars, as well as a “sustainable strong return on sales through a reset cost base and ongoing focus on technology enabled productivity improvements …”.

It also noted the successful acquisition and integration of the ACT and South Australia multi-franchised dealership groups and continued investment in strategic partnerships.

The FY22 statutory result included significant items of $37 million net income before tax. This is predominately related to the capital gain made on the sale of the Bill Buckle Auto Group.

What did management say?

Eagers Automotive CEO Keith Thornton said:

Our record full year underlying profit reflects the strength of ongoing market dynamics combined with our reset and more productive operating platform, while our record dividend underlines the confidence the Board has in our outlook for 2023 and beyond.

Our new car order bank grew by 74% in 2022, representing an all-time record level with an extended run-off period and providing material embedded gross profit that will support future trading results.

What’s next?

Thornton said the industry “is at an inflection point” as the world begins to decarbonise.

He said:

… Eagers Automotive is uniquely positioned to capitalise on its scale and expertise while leading the generational shift towards a lower emission future.

Eagers Automotive share price snapshot

The ASX 200 share is up 21% in the year to date and down 7% over the past 12 months.

This compares to a 4.9% year-to-date bump in the S&P/ASX 200 Index (ASX: XJO) and a 1.1% rise over the past year.

The post Guess which ASX 200 share is soaring 9% after declaring a record dividend appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today

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 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. At the time of writing, the benchmark index is down 0.4% to 7,285.4 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Platinum Asset Management Ltd (ASX: PTM)

The Platinum share price is down 17% to $1.89. Investors have been selling this fund manager’s shares following the release of a disappointing half-year result. Platinum reported a 20.5% decline in revenue to $102.26 million and a 37.4% decline in net profit to $37.56 million. This led to the company slashing its dividend by 30% to 7 cents per share.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down 6.5% to $6.05. This follows the release of the airline operator’s half-year results. Although the Flying Kangaroo delivered a profit before tax at the top end of its guidance range and announced a $500 million on-market share buy-back, investors appear to have been betting on an even stronger result.

Red 5 Limited (ASX: RED)

The Red 5 share price is down 23% to 13.5 cents. This morning, this gold miner announced the completion of an $80 million institutional placement. These funds were raised at a 23% discount of 13.5 cents per share. The proceeds will ensure Red 5 is well funded, with sufficient working capital to support steady-state operations at the newly commissioned King of the Hills mine.

Zip Co Ltd (ASX: ZIP)

The Zip share price is down almost 7% to 52.7 cents. Investors have been selling this buy now pay later (BNPL) provider’s shares following the release of its half-year results. Although Zip reported record revenue, it still recorded a loss after tax of $243 million. Nevertheless, management believes it has sufficient cash to see it through to positive group cash EBTDA in FY 2024.

The post Why Platinum, Qantas, Red 5, and Zip shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• Why is Qantas buying back shares instead of paying dividends?
• Qantas share price falls 4% despite huge profits and major share buy-back
• Zip share price lower on $243m first-half loss
• Qantas share price on watch amid $1.4b half-year profit
• Earnings preview: Here are the ASX shares reporting on Thursday

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 Zip Co. 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 might be earnings season right now but, for some ASX shares, the top line is more of a focus than profits.

This is common in companies that have brought relatively new products to the market and are chiefly looking to build their customer base and take market share. In this scenario, rapid revenue growth is a prime metric of successful execution.

Two Australian companies currently on this path are ASX healthcare shares Nanosonics Ltd (ASX: NAN) and Polynovo Ltd (ASX: PNV). Both of these companies have released their first-half results for FY2023 to the market today.

So, are these revolutionary medical product sellers still delivering revenue growth fast enough to put your eyebrows at risk?

Are these ASX shares delivering the goods?

Accelerating revenue growth

Let’s start with the fastest-growing of the two companies, Polynovo. The $1.57 billion medical company, primarily focused on burns and wounds, showed the market it has high growth potential.

Polynovo achieved record revenue in the first half of FY2023, totalling $29.5 million. The figure represents an impressive 62.2% increase on the prior corresponding period. Notably, the rate of growth is the highest the company has recorded since the first half of FY2020 — suggesting a reacceleration of sales.

The company dialled up sales of its flagship biodegradable temporizing matrix (BTM) products by 67.5% during the period. Sales in the United States made the largest contribution in dollar terms, growing 61% to $22.8 million.

However, burgeoning employee and administrative expenses in the half swung Polynovo back into a net loss of $3.9 million.

Shares in this ASX healthcare company are up 3.38% at the time of writing to $2.295 apiece, furthering the company’s one-year share price gain to 101%.

Slower than last year

Much like Polynovo, ultrasound disinfection company Nanosonics came in with double-digit revenue growth. However, the difference begins at the rate of growth compared to the prior corresponding period.

For the six months ending December 2022, Nanosonics recorded $81.6 million in revenue — up 35% year on year. Certainly, it’s an impressive result on its own, though this is down from an increase of 41% in the previous first half.

Furthermore, the company’s new installed base of 1,270 devices was down 10% from the 1,410 it rolled out in the prior period.

On a positive note, consumables and service revenue increased 34% to $55.7 million. This was up on the previous growth rate of 23%. This could be a promising sign as the company looks to follow the classic razor and blade business model.

Accelerating revenue and controlled costs enabled Nanosonics to produce a supercharged net profit after tax (NPAT). Net profits increased 167% compared to the same period last year, hitting $10.4 million.

The Nanosonics share price is currently 0.32% higher to $4.755 today. Though, where the performance of this ASX share really outshines the broader market is in its one-year return — that’s up 15%.

The post 2 high-profile ASX healthcare shares lifting on blazing revenue growth appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Why did ASX 300 healthcare stock Polynovo tumble 12% today?
• 3 ASX shares I dream of owning at the right price

Motley Fool contributor Mitchell Lawler 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 Nanosonics and PolyNovo. The Motley Fool Australia has positions in and has recommended Nanosonics. 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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