Xero Ltd (ASX: XRO) shares have climbed higher in Thursday lunchtime trade.

At the time of writing, the ASX tech shares are up around 3% and are changing hands at $57.70 each.

It’s great news for investors after the stock has suffered considerable losses over the past 12 months.

The shares have fallen around 22% over the past month, are down 49% for the year-to-date, and are also a huge 63% lower than this time last year.

What on earth is going on with Xero shares?

The cloud-based accounting software company has been smashed by a tech-sector wide selloff over the past year. This was driven by concerns that AI could replace the core services of companies like Xero. At the same time, investors were spooked that tech companies had quickly become overinflated and far above fair value.

There was also an investor rotation away from growth stocks and into defensive assets earlier this year, fuelled by ongoing global volatility and inflation concerns.

There hasn’t been any price sensitive news out of the company since May, so there isn’t any indication that the continued share price decline recently is down to any company specific factors.

It’s likely that, more recently, investors have been taking their profits off the table after the shares briefly rebounded in July and part of August.  

Over the past month, there has also been a renewal of macroeconomic pressures. These include the September interest rate hike, higher-than-expected inflation figures, and sky-high 10-year bond yields. 

Is there any upside left for the ASX tech shares? Or can we expect another rebound?

If expert sentiment is anything to go by, we could see a strong share price rebound over the next 12 months.

Market Index data shows the majority of brokers have a buy rating on the stock. The $112 average target price implies an upside of around 92%, at the time of writing.

Data is similar on TradingView. The majority (six out of seven) of analysts have a buy/strong buy rating on Xero shares. The $113.34 average target price implies an upside of around 94%. But some think the shares have the potential to jump 148% higher to $144.40 each, at the time of writing.

Last month, the team at Macquarie Group Ltd (ASX: MQG) flagged that US growth and AI monetisation could act as key catalysts for Xero shares. They added that the acquisition of Melio has dramatically expanded what Xero can chase in terms of market size.

Citi, Morgan Stanley and UBS are also positive on Xero shares. The three brokers both have a buy rating on the stock and forecast a target price of $113.60, $130, and $125 respectively.

Michael Gable from Fairmont Equities is less optimistic. He has a sell rating on Xero shares and is concerned that increasing bond yields and interest rates could continue to be a headwind for technology stocks like Xero.

The post Xero shares crash 63% in a year: Is there any upside left? appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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 Macquarie Group and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia 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.

Retiring at 60 with $750,000 in superannuation sounds like a pretty good position to be in.

But leaving work seven years before reaching Age Pension age means your savings will need to do more of the heavy lifting.

So, would $750,000 be enough to enjoy a comfortable retirement at 60?

Let’s look at the numbers.

How much superannuation do you need for a comfortable retirement?

According to the Association of Superannuation Funds of Australia (ASFA), a single retiree who owns their home outright needs approximately $56,166 a year to enjoy a comfortable retirement.

That covers everyday living expenses alongside things like private health insurance, leisure activities, holidays, and maintaining a reasonable standard of living.

ASFA also estimates that a single person needs around $630,000 in superannuation at age 67 to fund that lifestyle, assuming some support from the Age Pension.

But our hypothetical retiree wants to finish working at 60. That means funding an additional seven years of living expenses before reaching Age Pension age.

And those seven years could make a meaningful difference to their superannuation balance.

Could dividends cover the costs?

Let’s imagine our retiree invests their $750,000 in a relatively defensive portfolio of dividend-paying ASX shares and other income-producing investments.

This might include shares like Coles Group Ltd (ASX: COL), Telstra Group Ltd (ASX: TLS), and Wesfarmers Ltd (ASX: WES).

If the portfolio generates an average dividend yield of 4%, it would initially provide approximately $30,000 a year in passive income.

That is a reasonable starting point, but it falls short of ASFA’s comfortable retirement estimate.

To cover annual spending of $56,166, our retiree would need to find another $26,166 from their portfolio in the first year. That money would have to come from selling investments.

So, while a 4% dividend yield provides a substantial contribution, investment performance will play an important role in determining how long the retirement savings last.

What would be left at 67?

Let’s consider two scenarios.

In both cases, we will assume annual spending remains at $56,166 and the portfolio continues producing a dividend yield equivalent to 4% of its value.

Scenario 1: No capital growth

In the first scenario, the investments generate their 4% dividend yield but experience no capital appreciation.

Because annual withdrawals are more than the income being generated, the portfolio gradually becomes smaller.

After seven years, the original $750,000 would have fallen to approximately $543,000.

That is around $87,000 below ASFA’s current $630,000 benchmark for a comfortable retirement at 67.

Our retiree would still have substantial savings, but their financial position would be noticeably weaker than when they stopped working.

Scenario 2: 3% annual capital growth

Now let’s imagine the portfolio achieves 3% annual capital growth alongside its 4% dividend yield. That represents a total annual return of approximately 7%.

Under this scenario, the retirement balance would only reduce to approximately $718,000 at age 67.

That is around $88,000 above ASFA’s current benchmark.

Even after funding seven years of retirement, the portfolio would have retained most of its original value.

For me, that demonstrates just how significant investment returns can be when retiring early.

Of course, neither scenario is guaranteed. Dividends can change, markets can fall, and returns rarely arrive at a consistent rate.

It is important to remember that these calculations also exclude inflation, fees, and taxes. In particular, the cost of a comfortable retirement is likely to rise over those seven years, making the comparison with today’s $630,000 benchmark less favourable.

Foolish takeaway

For me, $750,000 would be a promising starting point for retirement at 60.

The numbers suggest that retiring seven years early could be achievable, particularly if investments continue growing alongside their dividend income.

But with potentially decades of retirement still ahead, I would want a reasonable financial buffer to account for rising living costs and periods of weaker investment returns.

The post Is $750,000 in superannuation enough to retire at 60? appeared first on The Motley Fool Australia.

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Motley Fool contributor Grace Alvino has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Maas Group Holdings Ltd (ASX: MGH) shares plunged more than 20% on Thursday after doubts were raised that data centre aspirant Firmus’ float would get off the ground.

Mega float might sink

Firmus has been in the market trying to get commitments for its initial public offer (IPO), which was rumoured to be priced at $11 per share, valuing the company at $43.7 billion.

But both The Australian and the Australian Financial Review are now reporting that demand for the shares is weak, and that the IPO could be pulled entirely.

This would be bad news for Maas Group, which holds a 3.2% stake in Firmus.

Maas Group Chair Stephen Bizzell recently told the company’s annual general meeting that the company had been increasing its exposure to Firmus.

He said:

During the year and subsequent to financial year end, Maas took meaningful steps to increase its exposure to next-generation infrastructure. This included a strategic investment in Firmus Grid Limited, securing significant electrical infrastructure work supporting the development of AI and data infrastructure in Australia through JLE Group, and the acquisition of commercial property with power availability and grid proximity for future digital and energy infrastructure developments. These initiatives, together with the proposed Construction Materials divestment, represent a clear evolution in the Group’s strategic direction.

Share valuation at risk

Macquarie this week released a new research report into Maas Group, in which it was conservative as to how it valued the company’s Firmus stake.

While saying the 3.2% holding would be worth $4 per share at the $43.7 billion valuation, Macquarie only valued it at $1.42 per share, which reflected the $15.5 billion valuation at the time the investment was made.

The Australian, citing unnamed sources, reported on Thursday that the asking price for Firmus shares had fallen from $11 to $9, then $8.25, while the size of the raise had also fallen, from US$5 billion to US$3 billion.

The report said the IPO could be delayed or shelved altogether.

Maas Group shares fell as low as $4.47 in early trade on Thursday before recovering to be 24.7% lower at $4.81.

Macquarie’s price target on the company was increased from $6.75 to $8.15 this week, largely as a result of the Firmus valuation.

Maas Group also announced this week that the divestment of the construction materials business had formally been completed, and it had been paid $1.61 billion.

The company also remains entitled to receive contingency payments of up to $120 million, subject to the achievement of agreed commercial and operational milestones.

The post How the Firmus float just tanked this company’s share price appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England 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.