Day: 30 March 2023

The All Ordinaries (ASX: XJO), or All Ords, stock Pact Group Holdings Ltd (ASX: PGH) could be a strong opportunity in 2023, according to the broker Credit Suisse.

Firstly, let’s talk about what the business actually does.

Pact describes itself as a leader in the circular economy, with its packing, re-using and recycling solutions. It aims to create “smarter ways of reducing waste through reusing and recycling resources, therefore keeping them in circulation well into the future.”

The re-use segment aims to eliminate single-use products. It offers a number of solutions including retailer garment hangers, fresh produce crates, steel drums, household wheelie bins and water tanks.

With its packing, it locally sources recycled materials for various categories like dairy, drinks, food, industrial, health and personal care.

Is the ASX All Ords stock an opportunity?

Over the past year, the Pact Group share price has dropped over 50%. That means it’s now much cheaper than in 2022.

The broker Credit Suisse recently slapped an outperform rating on the business, with a price target of $3.70, according to the Australian Financial Review.

Outperform essentially suggests that the broker believes it’s a buy.

A price target is where the broker thinks the share price will be in 12 months after the target was issued.

At the current Pact share price, that suggests the broker believes the ASX All Ords stock could rise by 235%.

Firstly, just remember that just because an expert says a share price is going to rise doesn’t mean it’s going to happen. It’s just their opinion.

However, the fall of the Pact share price does present an exciting opportunity, if the recovery occurs. If a share price falls 50%, a recovery back to the former value is a rise of 100%. Credit Suisse is suggesting the price can recover back to September 2021 levels.

How is the business performing?

The latest result was the FY23 half-year result, which showed an 8% increase in revenue, while underlying earnings before interest and tax (EBIT) fell 8% to $75 million, though EBIT was higher than guidance.

The All Ords ASX stock is working on “cost recovery and removing costs” in the business.

However, the materials handling and pooling business was “significantly impacted by a downturn and destocking in the US and Europe garment retail sector, in addition to reduced demand from China because of COVID lockdowns. Volume in the pooling business was impacted by “adverse weather conditions impacting growing regions in Australia and New Zealand.”

But, it did say that it’s expecting an improvement in the materials handling and pooling segment, with its Sulo bins business expected to report growth on the back of “significant local council contract wins.” The pooling business is expecting a recovery with a return to stable weather and growing conditions.

While debt is higher than the company would like, it decided not to pay a dividend so that it could reduce debt.

FY23 underlying EBIT is expected to be ahead of FY22’s underlying EBIT.

Pact share price valuation

According to Commsec, the business is expected to generate 16.1 cents of earnings per share (EPS). This would put the ASX All Ords stock at just 7 times FY23’s estimated earnings.

Commsec numbers suggest that the business could then generate 19.4 cents of EPS in FY24 and 19.8 cents of EPS in FY25. So, if those projections are correct, it’s on a very low forward price/earnings (P/E) ratio.

The post Top broker tips 230% upside for this ASX All Ords stock you’ve probably never heard of appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 mining shares just upgraded by Macquarie, one with 20% upside
• The trimmed-down BHP dividend will be paid today. What’s next?
• $1,600 annual dividend income from a $20,000 ASX share portfolio? Here’s how
• Forget term deposits and buy these high-yield ASX dividend shares instead: experts
• The biggest ever interim CBA dividend is being paid today. Here’s the latest

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 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 materials sector – hosting many of the market’s favourite mining shares – makes up nearly a quarter of the entire S&P/ASX 200 Index (ASX: XJO). No doubt, then, some big winners can likely be found among its ranks.

Fortunately, broker Macquarie has done some digging recently, upgrading its outlook for two ASX 200 materials stocks. Let’s take a look at which materials giants have the top broker feeling bullish this week.

2 ASX 200 mining shares leaving top broker Macquarie bullish

Champion Iron Ltd (ASX: CIA)

The first ASX 200 mining share on the broker’s radar is Champion Iron. It posted record iron ore production from its Canada-based assets last quarter.

The company’s also looking into producing a direct reduction pellet food iron ore able to be used in electric arc furnaces, thereby halving steelmaking emissions.

The Champion Iron share price closed Wednesday’s session at $6.80, but Macquarie thinks it can go far higher.

The broker hit the stock with an outperform rating and an $8 price target, according to reporting by the Australian Financial Review. That marks a potential 17.6% upside.

South32 Ltd (ASX: S32)

Joining Champion Iron in being upgraded is ASX 200 diversified miner South32.

The BHP Group Ltd (ASX: BHP) spin-out produces alumina, aluminium, copper, silver, lead, zinc, nickel, manganese, metallurgical coal, and bauxite, many of which are critical to the energy transition.

Thus, the company’s products will likely be in demand in the coming years and decades. That could be a good sign for its bottom line.

Shares in the ASX 200 diversified mining company last traded at $4.23.

Considering Macquarie’s reported new outperform rating and $5.10 price target, the stock could offer more than 20% upside.

The post 2 ASX 200 mining shares just upgraded by Macquarie, one with 20% upside appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Buy BHP and this ASX 200 mining share now: analysts
• Analysts say these ASX dividend shares can boost your passive income
• Want to boost your portfolio with ASX blue chips? Analysts say buy these shares
• ‘Increasing demand’: Expert picks 2 ASX 200 mining shares to buy (not BHP)

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Macquarie Group. 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’s a good day to be an owner of BHP Group Ltd (ASX: BHP) shares.

That’s because today is the day that the BHP dividend is being paid to eligible shareholders.

The BHP dividend

Last month, the Big Australian released its half-year results and, as was widely expected, posted a decline in revenue.

For the six months ended 31 December, BHP reported a 16% reduction in revenue to US$25,713 million. This reflects lower average realised prices for iron ore, copper, and hard coking coal, which was partially offset by higher prices for weak coking coal, thermal coal, and nickel.

It was a similar story for its earnings, with BHP posting a 28% decline in underlying EBITDA to US$13,230 million. This was driven by a combination of weaker commodity prices and inflationary pressures.

In light of this profit decline, the BHP board unsurprisingly elected to cut its interim dividend.

BHP declared an interim dividend of 90 US cents per share, which was down from US$1.50 per share a year earlier. Nevertheless, this still equates to a massive return of US$4.6 billion and is the equivalent to a 69% payout ratio.

Eligible shareholders can now look forward to receiving BHP’s interim dividend, which equates to A$1.36 in local currency, in their nominated bank accounts today.

What’s next for its dividends?

Thanks to recent strength in iron ore prices, Goldman Sachs is expecting the BHP final dividend to be larger.

It has pencilled in a fully franked final dividend of US$1.21 per share. This brings its full-year dividend to US$2.11 per share.

This equates to A$3.16 in local currency and is the equivalent of a generous fully franked 7% yield based on the current BHP share price of $45.00.

The post The trimmed-down BHP dividend will be paid today. What’s next? appeared first on The Motley Fool Australia.

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More reading

• Buy BHP and this ASX 200 mining share now: analysts
• BHP share price dips as coal mines catch attention
• Why these 3 ASX 200 shares could be leading picks for dividends and growth
• Want $10,000 of passive income? Check out these ASX shares
• Own BHP shares? Here’s how the iron ore giant is cleaning up steelmaking’s act

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 dividend shares are capable of producing a high level of dividend income if investors choose ones with a good enough yield.

But, investors shouldn’t chase a high dividend yield just for the sake of it. If a business isn’t able to maintain (or even grow) earnings, then I think that the dividend is in danger of being cut.

So, with that in mind, I’d only want to choose businesses that look like they can achieve earnings per share (EPS) growth. This would achieve both good dividend income and hopefully some share price growth over the long term as well.

I think businesses that are in a good industry, with consistent demand, and are re-investing for growth, can lead to attractive dividend returns.

ASX dividend shares that could make $1,600 of dividend income from a $20,000 ASX share portfolio

To get that sort of income level, we’re talking about an average yield of 8%. So, let’s split the money across four investments.

I’d start with the ASX share Shaver Shop Group Ltd (ASX: SSG), one of the largest retailers of all things related to hair removal. Even in a downturn, I think the company will still see decent demand – our hair doesn’t stop growing just because the economy is faltering. An ongoing store rollout can help earnings grow.

The ASX share’s EPS and dividend are expected to rise in FY24 and FY25, while the FY23 grossed-up dividend yield is predicted to be 14.3%, according to Commsec.

Pacific Current Group Ltd (ASX: PAC) is an investment manager that invests in other fund manager businesses and helps them grow. Its portfolio of managers around the world is diverse, and it includes a stake in GQG Partners Inc (ASX: GQG). Pacific Current is expecting to make more investments, while its current fund managers could see further funds under management (FUM) growth.

According to Commsec, the ASX dividend share could pay a grossed-up dividend yield of 8.7%.

Next, it’s hard to miss Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) as a dividend-focused investment. It has grown its ordinary dividend every year since 2000, thanks to its defensively-positioned investment portfolio. But, that portfolio keeps growing as the business re-invests some cash flow into more opportunities.

Its last two ordinary dividends amount to a grossed-up dividend yield of 3.8%.

Wesfarmers Ltd (ASX: WES) is the parent business of a number of Australia’s leading businesses including Bunnings, Kmart, Officeworks and Wesfarmers chemicals, energy and fertilisers (WesCEF). It is building platforms of growth, and it’s opening new growth avenues including in lithium, and beauty and health.

It aims to grow the dividend over time for shareholders, and Commsec numbers suggest it’s going to pay a dividend yield of 5.3%.

Foolish takeaway

Between these four ASX share names, the average yield is just over 8%, generating the required $1,600 of passive dividend income from a $20,000 investment.

I think these names can produce growing dividend income, growing earnings and hopefully some long-term share price growth as well.

But, they’re not the only ones that could deliver good dividends.

The post $1,600 annual dividend income from a $20,000 ASX share portfolio? Here’s how appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 stocks smashing new 52-week highs on Wednesday
• Why I continue buying shares of this magnificent ASX dividend stock hand over fist
• How to make passive income for life with just $5 a day
• Is time running out to buy high-yield ASX dividend shares?
• The whopper Wesfarmers dividend is being paid today. Here’s what you need to know

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers. 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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While rates are rising fast, savings accounts and term deposits still can’t compete with the yields on offer with ASX dividend shares.

For example, Commonwealth Bank of Australia (ASX: CBA) is currently offering a respectable 3.95% per annum on 12-month term deposits, but the shares listed below could offer significantly better yields.

Here’s what you need to know about them:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share for income investors to look at is footwear retailer Accent.

It has been tipped as a buy by analysts at Bell Potter. The broker has put a buy rating and $2.40 price target on its shares.

Its analysts were pleased with the company’s performance during the first half and its strong start to the second half. It also appears confident this positive form can continue thanks to its exposure to younger consumers that are less impacted by rising rates.

Bell Potter is expecting this to lead to fully franked dividends of 15.5 cents per share in FY 2023 and 12.2 cents per share in FY 2024. Based on the current Accent share price of $2.24, this would mean yields of 6.9% and 5.4%, respectively, over the next couple of years.

National Australia Bank Ltd (ASX: NAB)

Another ASX dividend share that could be a good option right now for income investors is this banking giant.

That’s the view of analysts at Goldman Sachs, that remain very positive on the banking giant. In fact, the broker highlights that the company’s recent first-quarter update indicates that its cash earnings are “run-rating 3% above what was implied by our previous 1H23E forecasts.”

Outside this, Goldman likes NAB due to its belief that volume momentum will favour commercial volumes over housing volumes over the next 12 months. It points out that “NAB provides the best exposure to this thematic.”

In light of this, the broker currently has a buy rating and $35.42 price target on its shares.

As for dividends, the broker is forecasting a $1.73 per share dividend in FY 2023 and then a $1.76 per share dividend in FY 2024. Based on the current NAB share price of $27.04, this will mean fully franked yields of 6.4% and 6.5%, respectively.

The post Forget term deposits and buy these high-yield ASX dividend shares instead: experts appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank stocks: ‘No different’ or ‘extremely strong’?
• Bendigo Bank shares worst of the ASX 200 banks following UBS downgrade
• Why Bendigo and Adelaide Bank, Jervois Global, Megaport, and NAB are dropping today
• If I buy NAB shares today, what could my returns be in a year’s time?
• Is right now a once-in-a-decade opportunity to buy ASX 200 bank shares?

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 recommended Accent Group. 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 hasn’t been a fun month for bank shareholders in March. The banking crisis has weighed heavily on sentiment and dragged ASX 200 bank shares lower.

But Commonwealth Bank of Australia (ASX: CBA) shareholders have a reason to smile on Thursday.

That’s because today is payday for Australia’s largest bank’s interim dividend.

The CBA dividend

Last month, CBA released its half year results and reported a 12% increase in operating income to $13,593 million. Management advised that this was driven largely by volume growth in core products and a recovery in its net interest margin.

CBA’s net interest margin increased 18 basis points year over year to 2.10%. This reflects higher earnings on deposits, replicated products, and equity hedges in a rising rate environment, partly offset by increased competition.

On the bottom line, CBA’s cash net profit after tax came in 9% higher year over year at $5,153 million. This was driven by its strong operational performance, a rising rate environment, and higher loan loss provisioning.

This ultimately allowed the CBA board to increase its fully franked interim dividend by 20% to a record of $2.10 per share. This represents a 69% payout ratio and reflects the bank’s continued capital and balance sheet strength.

Today is payday for this record CBA interim dividend, with eligible shareholders due to receive it in their nominated accounts. Unless, of course, they elected to take part in the bank’s dividend reinvestment plan.

What’s next?

The good news is that an even larger dividend is expected from CBA in the second half of FY 2023.

According to a note out of Goldman Sachs, its analysts are forecasting a fully franked final dividend of $2.58 per share.

This will bring the FY 2023 CBA dividend to a total of $4.68 per share, which equates to an attractive 4.9% yield.

The post The biggest ever interim CBA dividend is being paid today. Here’s the latest appeared first on The Motley Fool Australia.

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More reading

• ASX 200 bank stocks: ‘No different’ or ‘extremely strong’?
• Bendigo Bank shares worst of the ASX 200 banks following UBS downgrade
• Own CBA shares? Here’s the ASX 200 bank’s latest small business outlook
• Is time running out to buy high-yield ASX dividend shares?
• Stay away from this ASX sector (and buy this one instead): expert

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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If you’re looking for big dividends, then you will be hard-pressed to find anything larger than what could be on offer with New Hope Corporation Limited (ASX: NHC) shares.

According to a recent note out of Morgans, its analysts are expecting the ASX 200 coal miner to provide investors with double-digit dividend yields through to at least FY 2025.

What is Morgans saying about this ASX 200 share?

The note reveals that Morgans has an add rating and $6.35 price target on the coal miner’s shares. Based on the current New Hope share price of $5.46, this implies potential upside of 16.3% for investors over the next 12 months.

While the ASX 200 company’s recent half-year results were a touch softer than Morgans was expecting, the broker remains very positive on the investment opportunity here.

Particularly given its belief that “NHC’s Bengalla expansion (ongoing) and Acland ramp-up (from late 2023) are material cashflow contributors which look under-recognised by the market.”

In addition, the broker has “confidence that NHC won’t over-reach into M&A” and “the eventual return of surplus capital to shareholders is more likely than a large acquisition.”

Speaking of which, Morgans is forecasting some very big dividend yields in the coming years.

Big dividends are coming

The note reveals that Morgans is expecting New Hope to pay a fully franked $1.00 per share dividend in FY 2023, then $0.90 per share in FY 2024, and finally $0.70 per share in FY 2025.

Based on where this ASX 200 share is currently trading, this will mean huge yields of 18.3%, 16.5%, and 12.8%, respectively.

To put this into context, a $20,000 investment would provide income investors with dividends of $3,660, $3,300, and then $2,560, respectively.

That’s almost $10,000 in dividends in just three years from a $20,000 investment. No wonder Morgans is bullish!

The post Passive income: Broker says buy this ASX 200 share for an 18% dividend yield appeared first on The Motley Fool Australia.

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More reading

• 3 dividend stocks with the biggest ASX 200 yields. Time to buy?
• How I’d invest $20k in ASX 200 shares to earn a second income of $140 a month
• BHP share price dips as coal mines catch attention
• Top brokers name 3 ASX shares to buy next week
• Why is the New Hope share price up 9% this week?

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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Two darlings of the S&P/ASX 200 Index (ASX: XJO) have plummeted in the past month. Is it time to go bargain shopping?

That’s the question posed to Shaw and Partners portfolio manager James Gerrish about Ramsay Health Care Ltd (ASX: RHC) and IDP Education Ltd (ASX: IEL).

The stocks, which have been in favour with many professional investors in recent times, have fallen 3.7% and 6.1% respectively over the last month.

According to Gerrish, the instability in the global banking sector over the past fortnight has caused “some panic across financial markets”.

“Indeed [this has] led to some increased volatility on both the stock and sector level,” he said in a Market Matters Q&A.

So are either of these a “buy the dip” candidate?

Elective surgery or international students?

Many experts have pointed out the continuing post-pandemic recovery in elective surgery as a tailwind for private hospital operator Ramsay Health.

Wilsons equity strategist Rob Crookston last week rated the stock as one of his top “defensive growth” buys.

“Wilsons healthcare analysts forecast an earnings per share CAGR of 36% (versus consensus of 26%) between FY23E and FY25E, driven by a recovery in surgeries, strong underlying utilisation trends, raised prices for payers, dwindling COVID costs, and continued brownfield activity.”

As such, Gerrish thinks Ramsay is certainly a buy-the-dip temptation.

“We like Ramsay Health into recent weakness around the $63 to $64 area,” he said.

“It’s not on our hitlist yet, but at current levels it’s certainly being watched carefully.”

International student services provider IDP Education showed mixed fortunes during last month’s reporting season, according to Gerrish.

“At their February results they reported an overall beat in terms of earnings due to higher fees being earnt,” he said.

“However, there was obvious softness in IELTS [English testing] volumes… due mainly to visa backlogs.”

In the long run, the problem will correct itself.

“But the timing is unknown. As with all things in government, [it] seems to take longer than expected,” said Gerrish.

“We suspect that’s the underlying reason for [share price] weakness.”

So ultimately, which of the two would he buy during the current dip?

“We prefer Ramsay Health over IDP Education at this point.”

The post These ASX 200 shares just plunged. Which one’s the bargain? appeared first on The Motley Fool Australia.

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More reading

• 3 ‘defensive growth’ ASX shares perfect for the current climate: expert
• Where I would go hunting for defensive ASX 200 shares with upside
• Goldman Sachs says these ASX 200 shares are buys
• Leading brokers name 3 ASX shares to buy today
• ‘Still has legs’: Not too late to buy these 2 stellar ASX 200 shares, says expert

Motley Fool contributor Tony Yoo 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 IDP Education. The Motley Fool Australia has recommended IDP Education. 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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If you’re wanting to boost your income with some ASX 200 dividend shares, then you might want to consider the two listed below.

Both have been tipped to provide investors with a growing stream of fully franked dividends. Here’s what you need to know about these dividend shares:

Coles Group Ltd (ASX: COL)

The first ASX 200 dividend share to look at is Coles.

It is one of the big two supermarket operators with over 800 supermarkets. It also owns over 900 liquor retail stores and over 700 Coles express stores. However, the latter are in the process of being divested.

Coles isn’t settling for this, though. As well as growing its network further, the company is aiming to make its operations more efficient through cost cutting and its focus on automation with Ocado.

Citi is very positive on its outlook and has a buy rating with a $20.20 price target on its shares. It is also forecasting fully franked dividends per share of 69 cents in FY 2023 and 71 cents in FY 2023.

Based on the current Coles share price of $18.00, this implies yields of 3.7% and 3.85%, respectively.

Suncorp Group Ltd (ASX: SUN)

Another ASX 200 dividend share that has been tipped as a buy is Suncorp.

It is one of Australia’s leading insurance and banking companies and the owner of brands including AAMI, Apia, Bingle, GIO, Shannons, Suncorp, and Vero brands.

Morgans is positive on Suncorp and currently has an add rating and $14.44 price target on its shares.

It likes the company due to its efficiency program, attractive valuation, and generous yield. In respect to the latter two, the broker commented that “[w]ith SUN trading on 11.5x FY24F earnings and a 6% dividend yield, we see it as reasonable value at current levels.”

At present, the broker is forecasting fully franked dividends per share of 77.7 cents in FY 2023 and 87.8 cents in FY 2024. Based on the current Suncorp share price of $11.94, this will mean yields of 6.5% and 7.35%, respectively.

The post Analysts say buy these growing ASX 200 dividend shares for passive income appeared first on The Motley Fool Australia.

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More reading

• The record Coles dividend is being paid today. Here’s the lowdown
• Stay away from this ASX sector (and buy this one instead): expert
• Here are 2 ASX dividend shares that brokers rate as buys
• For $1,000 in monthly passive income, buy 18,462 shares of this ASX 200 stock
• Citi rates these 3 ASX 200 blue chip shares as buys

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 positions in and has recommended Coles Group. 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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Many ASX 200 bank stocks have been falling recently amid banking troubles in the northern hemisphere.

However, at a banking summit this week, Commonwealth Bank of Australia (ASX: CBA) CEO Matt Comyn described the Australian banking system as “extremely strong”.

So let’s check what could be ahead for ASX 200 banking stocks.

What’s ahead?

Firstly, lets take a look at the performance of ASX 200 banking shares in the past month.

• Bendigo and Adelaide Bank (ASX: BEN) shares have slumped 13%
• Bank of Queensland Ltd (ASX: BOQ) shares have fallen 10%
• National Australia Bank Ltd (ASX: NAB) shares have slid nearly 10%
• ANZ Group Holdings Ltd (ASX: ANZ) shares have declined almost 9%
• Westpac Banking Corporation (ASX: WBC) shares have descended nearly 6%
• Commonwealth Bank of Australia (ASX: CBA) shares have dropped 5%.

And yesterday, broker UBS slashed the price target on multiple ASX 200 banking shares.

Bank of Queensland was relegated to a sell with a $6 price target, while NAB and Bendigo Bank were also slashed to sell with $25 and $8 price targets respectively.

The broker retained a neutral rating on CBA but cut the price target to $100, the Australian Financial Review (AFR) reported. UBS also maintained its buy rating on ANZ shares with a downgraded price target of $25. Westpac was cut to neutral with a lowered $22.50 price target.

As quoted in The Australian, UBS analyst John Storey said recent events in the US and Europe have “lowered the confidence threshold of investors for banks in their portfolios”. He added:

Australia is no different, with the ASX banking index now down about 6.5 per cent year-to-date compared to the market falling 1.5%.

Extremely strong?

However, on the flip side, CBA boss Matt Comyn described the banking system in Australia as “extremely strong” at the AFR Banking Summit in Sydney.

He said:

I think the Australian banking system is a credit to the policy frameworks [and] is in an extremely strong position. I would say uniquely, globally.

Comyn noted spending still remains strong in hospitality and some parts of retail. He was also optimistic in the lending portfolio going forward:

We don’t see rapid deterioration in conditions coming … We see over the course of the year, a gradual [decline] as households come under more pressure each month.

The post ASX 200 bank stocks: ‘No different’ or ‘extremely strong’? appeared first on The Motley Fool Australia.

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More reading

• Bendigo Bank shares worst of the ASX 200 banks following UBS downgrade
• Down 10% in a month, what’s going on with the Bank of Queensland share price?
• Why Bendigo and Adelaide Bank, Jervois Global, Megaport, and NAB are dropping today
• Own CBA shares? Here’s the ASX 200 bank’s latest small business outlook
• Is time running out to buy high-yield ASX dividend shares?

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 positions in and has recommended Bendigo And Adelaide Bank. 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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