On Friday, the S&P/ASX 200 Index (ASX: XJO) finished a volatile week on a subdued note. The benchmark index edged 0.2% lower to 6,955.2 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to start the week slightly in the red despite a solid finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day a modest 3 points lower this morning. On Wall Street, the Dow Jones was up 0.4%, the S&P 500 rose 0.55%, and the NASDAQ climbed 0.3%.

Oil prices fall

Energy shares such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a subdued start to the week after oil prices fell on Friday. According to Bloomberg, the WTI crude oil price was down 1% to US$69.26 a barrel and the Brent crude oil price fell 1.2% to US$74.99 a barrel. Concerns over the health of the banking sector were to blame.

Aristocrat Leisure shares are a buy

Aristocrat Leisure Limited (ASX: ALL) shares could be heading higher from here according to analysts at Morgans. A note reveals that its analysts have retained their add rating and $43.00 price target on the gaming technology company’s shares. It commented: “We’re optimistic about ALL’s long-term growth potential, given its superior capitalisation and strong ability to invest in the development of its land-based and digital gaming businesses.”

Gold price pulls back

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a soft start to the week after the gold price pulled back on Friday night. According to CNBC, the spot gold price fell 0.75% to $1,981.0 per ounce. The gold price continues to hover around the US$2,000 an ounce mark amid the banking crisis.

Dividends being paid

A couple of ASX 200 shares will be paying their latest dividends on Monday. These are appliance manufacturer Breville Group Ltd (ASX: BRG) and gold miner Gold Road Resources Ltd (ASX: GOR). The former is rewarding its shareholders with a fully franked 15 cents per share interim dividend.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

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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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that investors might want to be aware of are summarised below.

Here’s why brokers think investors ought to buy them next week:

CSL Limited (ASX: CSL)

According to a note out of Macquarie, its analysts have retained their outperform rating and $340.00 price target on this biotherapeutics company’s shares. Macquarie is feeling positive about CSL’s outlook thanks to improving plasma collection yields. It expects this to boost its margins in the coming years. In addition, it highlights that CSL’s research and development pipeline should also be supportive. The CSL share price ended the week at $288.49.

New Hope Corporation Limited (ASX: NHC)

Another note out of Macquarie reveals that its analysts have retained their outperform rating and $6.00 price target on this coal miner’s shares. While New Hope’s half-year results and dividend fell short of expectations, the broker remains positive. Particularly given the strength of the Bengalla operation, its organic growth opportunities, and potential M&A activities. The New Hope share price was fetching $5.49 at the end of the week.

Nextdc Ltd (ASX: NXT)

Analysts at Citi have retained their buy rating on this data centre operator’s shares with an improved price target of $12.70. This follows a post-earnings season review of the tech sector by the broker. The good news is that Citi remains positive following the review. The broker revealed that it likes NextDC due to its strong revenue growth outlook, which is being supported by a combination of strong demand and inflation-linked contracts. The NextDC share price ended the week at $10.06.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Want to boost your portfolio with ASX blue chips? Analysts say buy these shares
• Why is the New Hope share price up 9% this week?
• Do New Hope shares really pay a 17.6% dividend yield?
• Here’s how much I’d need to invest in New Hope shares to generate a $250 monthly income
• Here are the top 10 ASX 200 shares today

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 Whitehaven Coal Ltd (ASX: WHC) share price has crumpled by almost 27% since ticking over into 2023. Unfortunately, the disappointing showing puts the coal producer among some of the worst-performing ASX 200 shares on a year-to-date basis.

Shares in the Australian coal miner are still up 45% from where they were a year ago. However, shareholders have been taking their money and running amid a declining coal price.

Remarkably, the skyrocketing earnings and the falling share price have resulted in a price-to-earnings (P/E) ratio of 1.9 times. For context, the industry average for energy shares hovers around 6.6 times earnings.

So, could it be time to back the dump truck up and shovel this ASX 200 share into the portfolio?

Coal is the maker or the breaker

Mining and selling a commodity is a tough business. When it’s good, it’s great, and when it rains, it pours — that’s the cyclical nature of the industry. This is because the going price of the commodity — which is driven by supply and demand — largely determines the company’s profits.

It’s a dynamic that has worked in the favour of Whitehaven shareholders over the past year. The energy-dense commodity’s price leapt from around US$150 per tonne to US$450 per tonne while costs held steady. As a result, the income margin ballooned from basically nothing to more than 45%.

But now comes the rain…

Coal prices have retreated abruptly this year, dropping back to within the pre-2022 range. Meanwhile, the ASX 200 share revealed increasing costs in its latest half-year results. Those two factors combined likely mean thinner margins are inbound.

To worsen matters, by the company’s own admission, thermal coal demand is expected to fall from 2025 onwards. Though, Whitehaven Coal’s management is banking on a shortfall in supply to heave prices higher.

It seems the market is now questioning whether prices will bounce back to drive sustained shareholder returns.

Would I buy this ASX 200 share?

I’m unconvinced that renewable energy will replace fossil fuels in this decade. In 2021, clean energy sources accounted for 32.5% of Australia’s total electricity generation, increasing from 27.7% the prior year.

However, at the current rate, we could potentially see 80% of our total electricity demand sourced from renewables in 10 years. I’d expect this will weigh on Whitehaven’s sales for thermal coal, but metallurgical coal — used for steelmaking — might be sustained.

The other issue the company could face is rising costs. As of 16 February 2023, Whitehaven is guiding for the cost of coal to be between A$95 per tonne to A$102 per tonne. If coal prices were to continue to fall, margins would obviously come under pressure.

As shown above, analysts’ estimates (depicted as dots) suggest earnings declines could be on the horizon. By FY2025, net profits after tax (NPAT) could be $1,429 million, compared to $3,393 million for the 12 months ending 31 December 2022.

For the reasons above, I personally wouldn’t be a buyer of this ASX 200 share.

The post One of the most beaten-up ASX 200 shares of 2023 so far. Is it time to buy? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 2 ASX 200 mining shares to buy with huge upside potential: analysts
• Expert tips 10% dividend yield and booming share price for this ASX 200 stock
• Why Atlantic Lithium, Life360, Neuren, and Whitehaven Coal shares are charging higher
• Analysts warn of future earnings downgrades for ASX 200 coal shares

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 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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When you’re trying to build a strong portfolio, having a few blue chips in there can be a good thing.

That’s because blue chips are typically large companies that have been operating for many years. They tend to have stable cash flows, strong business models, and experienced management teams.

Combined, this can make them lower risk options and a good foundation to build a portfolio around.

But which blue chip ASX 200 shares could be in the buy zone right now? Here are three that are rated as buys:

Cochlear Limited (ASX: COH)

The first ASX 200 blue chip share that could be a buy is Cochlear. It is one of the world’s leading hearing solutions companies. It has a portfolio of world class products, which have been developed through its significant annual investment in research and development. Thanks to this and its very strong position in a market benefiting from ageing populations, Cochlear has been tipped to continue its solid growth long into the future.

Goldman Sachs is bullish on Cochlear and has a buy rating and $265.00 price target on its shares.

CSL Limited (ASX: CSL)

Another ASX 200 blue chip share that has been rated as a buy is CSL. It is one of the world’s leading biotechnology companies, comprising the CSL Behring, CSL Vifor, and Seqirus businesses. It has been tipped for solid growth over the long term thanks to its world class product portfolio, strong demand for immunoglobulins, and its lucrative research and development pipeline.

Citi is a fan of the company and has a buy rating and $350.00 price target on its shares.

South32 Ltd (ASX: S32)

A final ASX 200 blue chip share to consider is South32. It is a mining company producing a diverse range of metals. This includes alumina, aluminium, bauxite, copper, energy and metallurgical coal, manganese, nickel, silver, and zinc. Thanks largely to its exposure to commodities that are vital to the clean energy transition, it has been tipped to generate significant free cash flow in the coming years.

Morgans is bullish on the miner and has an add rating and $5.60 price target on its shares.

The post Want to boost your portfolio with ASX blue chips? Analysts say buy these shares appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Does the CSL share price really offer 22% upside right now?
• ‘Increasing demand’: Expert picks 2 ASX 200 mining shares to buy (not BHP)
• How I’d aim to retire rich enough to live on passive income from my ASX dividend shares
• Analysts say these ultra high quality blue chip ASX 200 shares are buys

Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Cochlear. The Motley Fool Australia has recommended Cochlear. 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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