Day: 11 May 2023

If you’re looking for an easy way to diversify your investment portfolio, then exchange traded funds (ETFs) could be the way to do it.

But which ETFs should you look at? Listed below are three excellent ETFs that could be worth considering in May. Here’s what you need to know about them:

BetaShares Global Cybersecurity ETF (ASX: HACK)

The first ASX ETF you might want to look at is the BetaShares Global Cybersecurity ETF. As you might have guessed from its name, this ETF provides investors with access to the growing cybersecurity sector. This means you’ll be owning cybersecurity companies such as Accenture, Cisco, Cloudflare, Fortinet, Okta, Splunk, Zscaler, Crowdstrike. As we have seen over the last 18 months, cybersecurity is becoming increasingly important and a failure to protect data can lead to significant brand damage and financial loss. This bodes well for companies in this ETF.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF for investors to look at in May is the VanEck Vectors Morningstar Wide Moat ETF. This ETF provides investors with an easy way to invest in the type of companies that Warren Buffett buys. The ETF generally contains ~50 attractively priced companies with sustainable competitive advantages or moats. These include the likes of Alphabet (Google), Adobe, Boeing, Meta (Facebook), Kellogg Co, and Walt Disney.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF for ASX investors to look at this month is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors easy access to a global video game market estimated to comprise almost 3 billion active gamers. Among the companies included in the fund are AMD, Electronic Arts, Nintendo, Nvidia, Roblox, and Take-Two. The fund manager, VanEck, points out that these companies are well-placed to benefit from the increasing popularity of video games and eSports.

The post 3 of the best ETFs for ASX investors to buy this month appeared first on The Motley Fool Australia.

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More reading

• Why these 2 ASX ETFs could be great options to buy for growth
• Invest like Warren Buffett with this ASX share to grow your wealth enormously
• 2 top ASX ETFs I’d buy with the goal of long-term capital growth
• 3 fantastic ETFs for ASX investors to buy in May
• 3 top quality ETFs for ASX investors to buy and hold for 10 years

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 BetaShares Global Cybersecurity ETF. The Motley Fool Australia has positions in and has recommended BetaShares Global Cybersecurity ETF. The Motley Fool Australia has recommended VanEck Vectors Video Gaming And eSports ETF and VanEck Morningstar Wide Moat ETF. 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) slipped lower once more on Thursday, falling 0.05% to close at 7,251.9 points.

Weighing it down was the S&P/ASX 200 Materials Index (ASX: XMJ), which slumped 0.4% despite a ripper performance from many of the market’s lithium shares.

They surged on the back of merger news from Allkem Ltd (ASX: AKE). The lithium producer announced its intent to merge with Livent Corp (NYSE: LTHM) to create a $15.7 billion industry giant.

The S&P/ASX 200 Utilities Index (ASX: XUJ) put on an even worse performance, falling 1.1%.

But it wasn’t an endless sea of red. The S&P/ASX 200 Information Technology Index (ASX: XIJ) lifted 1.4% while the S&P/ASX 200 Communications Index (ASX: XTJ) rose 0.7%.

So, with all that in mind, let’s dive into the ASX 200 shares that outperformed all others on Thursday.

Top 10 ASX 200 shares countdown

Perhaps unsurprisingly, the index’s biggest gain in today’s session was posted by Allkem. Its share price rocketed 15.7% to close at $14.94, seemingly dragging many other ASX 200 lithium stocks along for the ride.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Allkem Ltd (ASX: AKE)	$14.94	15.72%
Lake Resources NL (ASX: LKE)	$0.575	12.75%
Graincorp Ltd (ASX: GNC)	$7.81	10%
Core Lithium Ltd (ASX: CXO)	$1.11	8.82%
Pilbara Minerals Ltd (ASX: PLS)	$4.78	5.05%
Sayona Mining Ltd (ASX: SYA)	$0.21	5%
Seek Ltd (ASX: SEK)	$24.37	3.79%
BrainChip Holdings Ltd (ASX: BRN)	$0.44	3.53%
Telix Pharmaceuticals Ltd (ASX: TLX)	$11.30	3.2%
Eagers Automotive Ltd (ASX: APE)	$14.46	3.14%

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 Allkem, Core Lithium, Graincorp, and Omni Bridgeway shares are racing higher
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Top broker tips ‘scope for significant capital return’ on GrainCorp shares
• ASX lithium shares rocket higher amid Allkem merger news
• 3 ASX All Ordinaries shares rocketing over 14% on Thursday

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 recommended 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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The Commonwealth Bank of Australia (ASX: CBA) share price may be trading meaningfully lower than its 52-week high, but that isn’t enough for one leading broker to become positive.

In fact, its analysts continue to believe that Australia’s largest bank’s shares are trading at an undeserved premium to peers.

As a result, it has responded to CBA’s third-quarter update by reiterating its sell rating.

What is the broker saying about the CBA share price?

According to a note out of Goldman Sachs, its analysts have retained their sell rating and $87.78 price target on the bank’s shares.

Based on the current CBA share price of $98.35, this implies potential downside of approximately 11% over the next 12 months.

While Goldman was pleased enough with CBA’s recent update, it hasn’t seen enough to justify its current valuation. It explains:

Overall, operational trends are broadly consistent with peers (NIMs at an inflection point with headwinds from mortgage and deposit competition; credit quality remains sound) and we struggle to justify the stock’s relative PER rating (43% premium to peers vs. 21% 15-yr average). Stay Sell rated.

Goldman then went on to name three key reasons why it think investors should be selling down CBA shares. It said:

We are Sell rated on CBA given: i) while operating trends have remained strong (evident in CBA’s above system lending growth, as well as its gain in business deposits and MFI market share), ii) NIMs seem to have peaked, which we had otherwise expected to occur in 1H24 and at a higher level, and iii) CBA, by nature of its skew towards consumer banking, is also more exposed to sector-wide headwinds such as intense mortgage price competition and adverse impacts from households experiencing higher interest burdens from still rising interest rates. Therefore, we cannot justify the 12-mo forward PER premium (ex-dividend adjusted) that CBA is trading on versus its peers (20% historic average).

The post 3 reasons the CBA share price is heading lower: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• How to invest $5,000 in ASX shares today like Warren Buffett might
• Why is the Commbank share price smashing the banking sector today?
• Is the CBA share price running out of steam?
• 5 things to watch on the ASX 200 on Wednesday
• CBA share price slips today despite $2.6 billion cash profit

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 Galan Lithium Ltd (ASX: GLN) share price is storming higher today.

Galan Lithium shares soared 23% to $1.27 from yesterday’s close of $1.03 in early afternoon trade. The lithium explorer’s shares have since pulled back, but are still up 19%. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) is sliding 0.44% today.

Let’s take a look at why this ASX lithium share is having such a top run.

What’s going on?

Galan Lithium shares are rising more than multiple ASX lithium shares today, but it is not the only lithium explorer in the green.

ASX lithium shares rising include:

• Pilbara Minerals Ltd (ASX: PLS), jumping 5%
• Allkem Ltd (ASX: AKE), gaining 9%
• Lake Resources N.L. (ASX: LKE), soaring 14%
• Sayona Mining Ltd (ASX: SYA), lifting 7.5%

Galan shares could be rising today amid major news from another ASX lithium player with projects in Argentina.

Galan Lithium owns two lithium brine projects in Argentina, which happen to be near the lithium operations of Livent Corp (NYSE: LTHM) and Allkem.

Allkem and Livent today announced they would merge to create a new US$10.6 billion mega lithium company.

If the deal receives regulatory and shareholder approval, Allkem shareholders would own 56% of the company while Livent would hold a 44% stake.

The new company would list on the New York Stock Exchange and maintain a foreign exempt listing on the ASX.

What’s been going on at Galan Lithium?

Galan 100% owns the Hombre Muerto West (HMW) and Candelas projects in Argentina, within the South American triangle.

Commenting on this lithium region on the company website, Galan states:

It is home to the established El Fenix lithium operations (Livent Corporation) and Sal de Vida (Allkem) and Sal de Oro (POSCO) lithium projects.

Recently, Galan Lithium announced the total resource at its HMW project has lifted to 6.6 million tonnes of lithium carbonate equivalent at 880mg/l Li.

Galan noted this is the third major resource upgrade since March 2020. Managing director Juan Pablo (JP) Vargas de la Vega said:

This latest increase in the high grade, low impurity HMW Resource highlights the potential enormity of
the brine resource that sits within Galan’s 100% owned tenements in Argentina. We have continued to
acquire tenements and continued to drill holes since our maiden resource was announced at HMW

Galan Lithium also owns the Greenbushes South lithium project in Western Australia.

Galan Lithium share price snapshot

The Galan Lithium share price has lost nearly 19% in the past 52 weeks.

This ASX lithium share has a market cap of about $375.97 million based on the last closing price.

The post Why is the Galan Lithium share price rocketing 23% today? appeared first on The Motley Fool Australia.

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More reading

• Why Allkem, Core Lithium, Graincorp, and Omni Bridgeway shares are racing higher
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• ASX lithium shares rocket higher amid Allkem merger news
• 3 ASX All Ordinaries shares rocketing over 14% on Thursday
• Why are Allkem shares rocketing 14% higher today?

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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In late trade, the S&P/ASX 200 Index (ASX: XJO) looks set to record another small decline. The benchmark index is currently down 0.1% to 7,246.7 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Allkem Ltd (ASX: AKE)

The Allkem share price is up 16% to $15.01. Investors have been scrambling to buy this lithium miner’s shares after it announced plans to merge with fellow industry giant Livent. This will create a $15.7 billion lithium monster with significant synergies and a collection of complementary operations.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is up 8% to $1.10. As well as the above giving the whole lithium industry a boost, Core Lithium released some news of its own this morning. That news included the local government granting it approval for the BP33 underground project. BP33, which would be the second proposed mine at the Finniss Project, has a mineral resource of 10.1Mt @ 1.48% Li2O.

Graincorp Ltd (ASX: GNC)

The Graincorp share price is up almost 10% to $7.78. This morning, the grain exporter released its half-year results and upgraded its guidance for FY 2023. Graincorp now expects a full-year net profit after tax of $220 million to $260 million. This is up from its previous guidance of $180 million to $220 million.

Omni Bridgeway Ltd (ASX: OBL)

The Omni Bridgeway share price is up over 5% to $2.76. This follows the release of an announcement from the class action funder. The company revealed that it has entered into a term sheet to sell a participation in Fund 1 to Gerchen Capital Partners for an initial payment of US$38 million and a deferred fair value of the company’s retained residual interest in the Fund of US$35.7 million.

The post Why Allkem, Core Lithium, Graincorp, and Omni Bridgeway shares are racing higher appeared first on The Motley Fool Australia.

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More reading

• Why is the Galan Lithium share price rocketing 23% today?
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Top broker tips ‘scope for significant capital return’ on GrainCorp shares
• ASX lithium shares rocket higher amid Allkem merger news
• 3 ASX All Ordinaries shares rocketing over 14% on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem. 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 a small decline. The benchmark index is currently down 0.15% to 7,245.7 points.

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

Appen Ltd (ASX: APX)

The Appen share price is down a further 2.5% to $2.23. Investors have been selling the artificial intelligence data services company’s shares this week following the release of another disastrous update. For the first four months of FY 2023, Appen revealed that its revenue was down 21.4% to US$95.7 million and its constant currency underlying EBITDA was negative US$12.4 million.

CSR Limited (ASX: CSR)

The CSR share price is down 3% to $5.17. This appears to have been driven by the release of a couple of bearish broker notes. One of those came from Citi, which has downgraded the building materials company’s shares to a neutral rating with a $5.45 price target. Elsewhere, Macquarie has retained its underperform rating with a trimmed price target of $4.50.

Silver Lake Resources Ltd (ASX: SLR)

The Silver Lake share price is down over 4% to $1.08. This morning, the gold miner announced a new competing proposal to acquire the Leonara assets of St Barbara Ltd (ASX: SBM). SIlver Lake has increased its offer to $707 million. Investors appear to believe it could be overpaying for the assets.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is down 2.5% to $21.16. This has been driven by the banking giant’s shares trading ex-dividend this morning for its upcoming interim dividend payment. Eligible investors can now look forward to being paid this 70 cents per share fully franked dividend towards the end of next month on 27 June.

The post Why Appen, CSR, Silver Lake, and Westpac shares are falling appeared first on The Motley Fool Australia.

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More reading

• Why is the Westpac share price sinking today?
• 5 things to watch on the ASX 200 on Thursday
• Top broker tips 7 ASX 200 property-related shares to cash in on the 2023 budget
• Top brokers name 3 ASX shares to buy today
• Hoping to bag the boosted Westpac dividend? You’ll need to buy shares today

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Corporation. 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) is continuing to build on the losses we’ve seen for most of the week today, with another session of selling. So far this Thursday, the ASX 200 has again seen a fall in value, with the index currently nursing a 0.15% loss, putting it at just under 7,245 points. 

But let’s not dwell too long on all of that. Instead, it’s a great time to take stock of the shares that are currently at the top of the ASX 200’s share trading volume charts, according to investing.com. 

The 3 most traded ASX 200 shares by volume this Thursday

Allkem Ltd (ASX: AKE)

First up today is ASX 200 lithium share Allkem. This session has had a strong 14.03 million Allkem shares swap owners on the ASX thus far. There is little mystery as to Allkem’s presence on this list today. As we covered this morning, the company had some big news to share with investors.

Allkem will be merging with the US lithium giant Livent Corp by the end of the year in an all-stock merger. Investors are delighted with this news, judging by the fact the Allkem share price has rocketed almost 18% to $15.21 a share at the time of writing. So it’s no surprise to see so many shares flying around.

PIlbara Minerals Ltd (ASX: PLS)

Next up we have another ASX 200 lithium stock in Pilbara Minerals. So far today, a sizeable 42.17 million PiIbara shares have changed hands as it currently stands. We haven’t heard any news out of Pilbara itself this Thursday.

But the Allkem merger seems to have lit a fire under this entire corner of the ASX. In PiIbara’s case, we have seen an impressive 5.3% rise in the company’s shares, putting them at $4.79 each. So this looks like the cause of this elevated trading volume on display here.

Sayona Mining Ltd (ASX: SYA)

Thirdly, it’s time for a look at yet another ASX 200 lithium stock in Sayona Mining. A whopping 67.7 million Sayona shares have been bought and sold on the share market this session. And once again, it seems that the big news out of Allkem is probably to thank for this high volume.

In Sayona’s case, investors have watched as this company has spiked by a lucrative 7.5% up to 21.5 cents a share. It’s almost certainly this big surge in value that has driven such high trading figures.

The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

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More reading

• ASX lithium shares rocket higher amid Allkem merger news
• 3 ASX All Ordinaries shares rocketing over 14% on Thursday
• Flight Centre shares are trading around 52-week highs. Too late to buy?
• Why I think the NAB share price is a buy right now
• Why are Allkem shares rocketing 14% higher today?

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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The Woodside Energy Group Ltd (ASX: WDS) share price has declined nearly 5% in the year to date, but could it be set to rebound?

Woodside shares have fallen 4.6% from $35.44 at market close on 30 December last year to $33.82 at the time of writing. Today, Woodside shares are up 0.24%.

Let’s check the outlook for the Woodside share price.

What’s ahead?

Citi has lifted the price target on Woodside shares to a “neutral” from “sell”.

Head of Energy James Byrne has upgraded Woodside following management briefings in Singapore, the Australian Financial Review reported.

He cited three reasons for the upgrade. Firstly, he is positive Woodside can deliver on crucial milestones for the company’s Senegal oil project. Byrne visited the shipyard constructing the production vessel, the publication noted.

Secondly, Byrne’s concerns about the impact of the federal government’s Petroleum Resources Rent Tax on Woodside have been alleviated.

In an announcement on 7 May, the federal government advised of changes to tax for LNG offshore gas projects. There will be a 90% cap on income that can be offset by deductions from 1 July 2023, in effect meaning “the offshore LNG industry pays more tax, sooner”.

However, the changes are “better than feared“, Byrne said in comments cited by The Western Australian and could leave Woodside “largely unscathed”, the publication noted.

Thirdly, Byrne noted Woodside management has new confidence it can sell down the Scarborough offshore gas project amid more regulatory certainty, the AFR reported. The project received primary approvals in 2022 but is still awaiting secondary approvals.

Citi’s price target is now $32 according to the publication, which implies a slight downside on the current share price.

Woodside’s Scarborough and Pluto Train 2 project construction is now “30% complete” and construction of key offshore and onshore infrastructure is ramping up, Woodside said in quarterly results at the end of April.

The company’s total quarterly production for the first quarter ended 31 March fell 9% compared to the previous quarter. However, sales, revenue, and production were significantly higher than in the first quarter of 2022.

The Brent crude oil price is currently up 0.79% to US$77.01 a barrel, according to Bloomberg.

Meantime, natural gas is down 0.5% to US$2.18 per MMBtu.

Share price snapshot

The Woodside share price has returned 11% in the last year.

Woodside has a market cap of about $64 billion based on the current share price

The post 3 reasons this top broker just upgraded the Woodside share price appeared first on The Motley Fool Australia.

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More reading

• How to invest $5,000 in ASX shares today like Warren Buffett might
• 5 things to watch on the ASX 200 on Wednesday
• Is the 10% dividend yield on Woodside shares legit?
• Why Lynas, Piedmont Lithium, Westpac, and Woodside shares are rising
• Could this tax change end up burning the Woodside share price?

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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If you strip out the passive income, Wesfarmers Ltd (ASX: WES) shares will have just beaten the one-year performance of the S&P/ASX 200 Index (ASX: XJO).

Over the past 12 months, Wesfarmers shares have gained 3.8%, compared to a 2.4% gain posted by the benchmark index.

Now let’s add that passive income back into the equation.

The ASX 200 retail share paid two fully franked dividends over the past year, maintaining its long track record as a reliable income stock.

Wesfarmers’ board declared a final dividend of $1 per share, which hit stockholders’ bank accounts on 6 October.

Wesfarmers shares delivered an interim dividend of 88 cents per share, which was paid on 28 March.

The interim dividend was up a healthy 10% year on year. That was driven by a 14% increase in the company’s half-year profits, which reached $1.4 billion over the six months.

All told then, shareholders will have received $1.88 for every Wesfarmers share they hold.

At the current share price of $51.19, that works out to a trailing yield of 3.7%. Or $185 in passive income from a $5,000 investment at today’s price. With potential tax benefits from the franking credits.

The dividends also help boost the accumulated gain to 7.6% over the year.

But some ASX 200 investors will be earning significantly more passive income than others.

How much passive income might Wesfarmers shares have delivered?

Like most of the market, Wesfarmers shares tumbled to one-year lows in June.

At market close on 17 June, shares were changing hands for $41.66 apiece, having dropped more than 17% over the prior four weeks.

Now it would have taken a brave, or perhaps well-advised, investor to snap up $5,000 worth of shares on that day.

Indeed, buying a stock that’s been falling will often see you holding a stock that’s set to fall further.

But with the benefit of hindsight, we know that’s not the case for Wesfarmers shares.

If you’d bought on 17 June you would have been eligible for both of the retail company’s dividend payments.

At $41.66 per share that works out to a 4.5% yield. Or a very tidy $225 in passive income from your $5,000 investment.

Not to mention the 22.9% gain in the Wesfarmers share price since that low.

The post Hunting for passive income? Guess what you’re earning if you invested $5,000 in Wesfarmers shares last June appeared first on The Motley Fool Australia.

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More reading

• UBS tips 4 ASX 200 retail shares to benefit from the federal budget
• Top defensive ASX shares to buy in May 2023
• 5 things to watch on the ASX 200 on Wednesday
• The Wesfarmers share price was in the red today despite green energy acquisition rumours
• Which ASX retail shares could be ‘most impacted’ by Amazon’s rapid growth?

Motley Fool contributor Bernd Struben 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 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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Graincorp Ltd (ASX: GNC) shares are bouncing more than 9% today after the ASX 200 agribusiness released its 1H FY23 results and upgraded its full-year earnings guidance.

The GrainCorp share price is currently $7.75, up 9.15%.

GrainCorp has delivered a “significant beat” on consensus estimates, according to UBS analyst Apoorv Sehgal, and ASX investors are pretty impressed too, given the big price boost for the shares today.

Let’s compare GrainCorp’s numbers to analysts’ expectations.

GrainCorp shares soar on EBITDA and NPAT upgrades

As reported in The Australian, Sehgal noted revenue has increased by 18% to $4.5 billion. This is well above the $3.8 billion that analysts expected.

In terms of FY23 full-year guidance, GrainCorp now expects earnings before interest, tax, depreciation, and amortisation (EBITDA) of between $500 million and $560 million.

That’s up from previous EBITDA guidance of $470 million to $530 million. The consensus expectation has been $507 million.

GrainCorp also forecasts a net profit after tax (NPAT) of $220 million to $260 million.

The company was previously guiding $180 million to $220 million. The consensus has been $214 million.

Are GrainCorp shares a buy?

Sehgal says he sees “scope for significant capital return” on GrainCorp shares.

UBS has a buy rating on the ASX agriculture stock.

Its 12-month price target is $8.65, implying a potential upside of 11.6% for investors who buy today.

What is the Graincorp dividend?

GrainCorp shares will pay an interim dividend of 24 cents with 100% franking on top.

This is the same amount that GrainCorp paid for 1H FY22.

Even after today’s bounce, GrainCorp shares are still offering healthy returns for income investors.

The stock is trading on a trailing dividend yield of 7% based on the current share price.

Why is the stock down 27% over the past 12 months?

Here’s the short answer.

GrainCorp shares had a ripper run over 2021 and into the second half of 2022.

What’s a ripper run? That would be a 154% spike in the share price in 14 months. Yeah, pretty major!

This culminated in the ASX agriculture share reaching an all-time high of $10.86 on 4 May last year.

It’s not uncommon for ASX shares to experience a pullback after such meteoric growth.

GrainCorp has gradually fallen since May 2022 until an apparent stabilisation in March.

The post Top broker tips ‘scope for significant capital return’ on GrainCorp shares appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 stocks surging ahead following guidance upgrades
• Here are the top 10 ASX 200 shares today
• Here are the top 10 ASX 200 shares today
• Why Cleanaway, Graincorp, Healius, and PolyNovo shares are pushing higher today
• 5 things to watch on the ASX 200 on Tuesday

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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