Category: Stock Market

The Boral Ltd (ASX: BLD) share price is on course to end the week on a high.

In morning trade, the building materials company’s shares are up 13% to a 52-week high of $6.10.

This follows the release of a strong half-year result.

Boral share price jumps on strong profit growth and guidance upgrade

Here’s a summary of how the company performed during the six months ended 31 December:

• Revenue up 9.4% to $1,839.9 million
• Underlying EBIT up 110.9% to $201 million
• Underlying net profit after tax up 143% to $138.6 million
• No interim dividend
• FY 2024 EBIT guidance upgraded

What happened during the half?

During the first half, Boral’s revenue increased 9.4% to $1,839.9 million. This was driven largely by strong price realisation, with volumes flat to slightly up on the prior corresponding period.

And thanks to a 520 basis-point improvement in its EBIT margin, Boral’s EBIT was up a massive 110.9% to $201.0 million. This margin improvement reflects a combination of higher revenue and rigorous cost management.

Finally, although the company’s underlying profit after tax increased by 143.9% to $138.6 million, the Boral board decided against paying a dividend. It advised that this was due to its low franking credit balance.

Management commentary

Boral’s CEO, Vik Bansal, was pleased with the company’s performance. He said:

I am pleased to report first half results that demonstrate the benefits of our operating model and our business improvement strategy. Our volumes were flat to slightly up on pcp, with an increase in quarry and recycling materials. We achieved good price realisation across all product lines, and this supported growth in net revenue. We also continued to reduce costs and instil operational efficiencies to offset input cost inflation. The combined improvements in price and cost efficiencies, together with a mix in volumes that were flat to slightly higher, enabled an EBIT margin of 10.9%, almost double pcp.

Outlook

Bansal advised that the company is expecting that its earnings will be weighted to the first half as per tradition. He said:

Boral’s earnings have historically been weighted towards the first half. While FY23 was a recent exception to this trend, with the introduction of a new operating model and strategy in 1H23, we expect to return to a typical first half weighting in FY24.

Nevertheless, the CEO expects the company’s EBIT to be stronger than previous guidance.

He now expects FY 2024 underlying EBIT to be in the range of $330 million to $350 million. This compares favourably to its previous guidance of $300 million to $330 million. It will also be a significant 42% to 51% increase on FY 2023’s EBIT of $231.5 million.

Following today’s gain, the Boral share price is now up 60% since this time last year.

The post Boral share price jumps 13% on massive profit growth and guidance upgrade appeared first on The Motley Fool Australia.

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• 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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Novonix Ltd (ASX: NVX) shares are having a strong finish to the week.

In morning trade, the battery materials technology company’s shares are up 20% to 74 cents.

This compares favourably to the ASX 200 index, which is currently up by a modest 0.1%.

Why are Novonix shares racing higher?

Investors have been buying the company’s shares after Novonix announced an agreement with leading electric vehicle (EV) batteries manufacturer, Panasonic Energy.

According to the release, the two parties have signed a binding off-take agreement for high performance synthetic graphite anode material to be supplied to Panasonic Energy’s North American operations from Novonix’s Riverside facility in Chattanooga, Tennessee.

Under the off-take agreement, Panasonic Energy has agreed to purchase at least 10,000 tonnes of anode material for its U.S. plants over the term of 2025-2028. In addition, during the term, if additional volumes are requested, Novonix will attempt to deliver the increased volumes.

The agreement is subject to Novonix achieving agreed milestones in respect to production qualification timelines.

Novonix CEO, Dr. Chris Burns, was pleased with the news. He said:

We are excited to announce the finalization of a binding off-take agreement with Panasonic Energy to become a supplier of key anode material for its North American based facilities. Off-take agreements with high-quality partners such as Panasonic Energy solidify NOVONIX’s position as a leader in onshoring the supply chain of synthetic graphite and accelerating the adoption of clean energy in the industry. We look forward to expanding our long-standing relationship with Panasonic Energy to support its growth efforts in North America.

Despite today’s strong gain, Novonix shares remain down by a disappointing 56% over the last 12 months.

The post Novonix shares jump 20% on Panosonic deal appeared first on The Motley Fool Australia.

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• Why is the Novonix share price on a rollercoaster 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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National Australia Bank Ltd (ASX: NAB) shares are under the spotlight after announcing a new CEO. Ross McEwan led an impressive turnaround of the ASX bank share and now he’s passing on the job to somebody else after a long career in financial and insurance services.

The NAB board of directors has decided on Andrew Irvine as the group CEO and managing director of the bank. He has been the group executive of business and private banking since 2020 and will take on the role starting 2 April 2024.

Why was Irvine chosen as the new NAB CEO?

The NAB chair Philip Chronican said Irvine has “key strengths” supporting the appointment, including “passion for customer service, success leading Australia’s largest business bank franchise, people leadership, risk management and international experience.”

Chronican also said Irvine’s expertise in digitisation, transformation and modernisation has created “significant benefits” for how the bank operates.

Before joining NAB, Irvine was head of Canadian business banking at the Bank of Montreal, one of the largest and oldest banks in Canada.  

Can the ASX bank share keep performing?

In my own eyes, Ross McEwan was the leading bank CEO in the industry and helped pick up the performance of NAB (shares).

However, that doesn’t necessarily mean that NAB isn’t going to do as well. Irvine was hired under McEwan and hopefully learned a lot from him. The business banking side of NAB has done very well, and Irvine’s leadership has been an important part of that.

Barrenjoey banking analyst Jonathan Mott said the choice was a “solid” move. Mott said in a note, according to reporting by The Australian:

Having been Group Executive Business and Private Banking since 2020, Andrew Irvine is well respected by the market. We view this as a solid appointment and there is no change to our investment thesis.

Ross McEwan has been well liked by the market, widely tributed for simplifying the business, ‘getting the basics right’, managing costs and building a strong balance sheet. We believe an internal candidate with international experience, hired by Ross McEwan, will be viewed well by the market.

We see NAB as relatively well positioned within the sector given the positive medium-term outlook for business banking. With the risk of a harder landing having reduced, the likelihood of losses within its SME book has decreased.

Citi analyst Brendan Sproules doesn’t think it will be easy for Irvine because of how high the bar is after McEwan’s leadership. Sproules said:

We think that the appointment of Andrew Irvine, current Group Executive Business and Private Banking, will be well received by the market.

While that is positive, it doesn’t escape the fact that Ross potentially had the strongest support out of any bank CEOs from the investor base.

Given NAB has achieved a strong re-rating in recent years from its strong execution and transparency, the bar has been set very high for Mr Irvine.

Coupled with conducive conditions in business banking, this allowed for a solid re-rating versus peers ANZ Group Holdings Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC).

Going forward, Mr Irvine comes in to the top role with the bar set very high and a much tougher environment for business banking, with slowing system growth.

Is the NAB share price a buy?

The broker Citi has a sell rating on NAB shares, with a price target of $25.79, which implies a possible fall of around 20% in the next year.

I personally wouldn’t call it a sell, but the loss of McEwan is a blow for NAB. Also, after a 14% rise since the start of December 2023, I wouldn’t call the share price cheap either. I want to hear from Irvine about his vision and ideas for NAB before calling it a strong buy, though I’d still prefer it to other ASX bank shares, for now at least.

The post What is the outlook for NAB shares under new CEO Irvine? appeared first on The Motley Fool Australia.

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Treasury Wine Estates Ltd (ASX: TWE) shares could be undervalued.

That’s the view of analysts at Goldman Sachs, which have been running the rule over the ASX 200 stock’s brand portfolio.

That broker highlights that its “NTA [net tangible assets] analysis suggests underlying brand portfolio undervalued.”

What is the broker saying about this ASX 200 stock?

Goldman has been busying calculating the value of the wine giant’s brand portfolio following the acquisition of DAOU for $1.7 billion.

It believes that the market is undervaluing its portfolio. It explains:

TWE is trading at last close of A$11.0/sh. Our December 2023 note discusses extensively our channel checks and scenario analysis of recently acquired DAOU. Our current SOTP values DAOU at Enterprise Value of ~A$1.7B, or Equity Value of ~A$1.2B post attributable net debt, vs. acquisition price net of debt at A$1.1B, and implies per share value of ~A$1.50/sh. As such, the current trading price of A$11.0/sh implies that the underlying business ex-DAOU is valued at A$9.50/sh. Against this, we calculate an NTA range (ex DAOU) of A$6.0-A$9.3/sh, with mid-point at A$7.7/sh, primarily reflecting inventory of ~A$5.7/sh and owned vineyard land holdings in ANZ and US of A$1.6/sh.

This implies that the market is valuing the underlying business at ~23% premium to NTA, attributable to a notable portfolio of luxury and premium brands, led by Penfolds. This is below our TP A$12.40/sh implied ~42% premium to NTA for the underlying TWE business. We believe that the next key event to watch will be China’s tariff review results, which per the announced duration of the process should be end-March 2024. Despite still challenging demand conditions, our channel checks suggest market share gains can be expected for TWE as smaller traders and brands cycle out of the market.

Double digit returns

In light of the above, Goldman has reiterated its buy rating and $12.40 price target on the ASX 200 stock.

This implies potential upside of almost 13% for investors over the next 12 months.

In addition, Goldman expects a 3.2% dividend yield in FY 2024, boosting the total potential return to approximately 16%.

The post The market is undervaluing this ASX 200 stock: Goldman Sachs appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Treasury Wine Estates. 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 some exposure to the mining sector, then it could be worth checking out the two ASX 200 mining stocks listed below.

These miners have just been named on Bell Potter’s favoured list for the month of February. Here’s what the broker is saying about them:

Arcadium Lithium (ASX: LTM)

Investors looking for lithium options may want to consider Arcadium Lithium. It is the lithium giant that was formed following the merger of Allkem and Livent Corp.

Bell Potter likes the company due to its diverse operations, robust balance sheet, and strong growth potential. It explains:

LTM provides the largest, most diversified exposure to lithium in terms of mode of upstream production, asset locations, downstream processing and customer markets. It is a key large-cap leverage to lithium prices and sentiment, which we expect to improve over the medium term. The group has a strong balance sheet and growth portfolio.

Bell Potter has a buy rating and lofty $12.10 price target on its shares.

Regis Resources Ltd (ASX: RRL)

Another ASX 200 mining stock that Bell Potter is bullish on is gold miner Regis Resources.

It likes the company due to its Australia-based portfolio and growth opportunities. It also believes the company could become a takeover target in the future. It said:

As one of the largest ASX listed gold producers, we are attracted to its all Australian asset portfolio and organic growth options which are unique at this scale. Furthermore, we see key opportunities in the fundamental, medium-term outlook and, in our view, these may also make RRL an appealing corporate target in the current conducive M&A environment.

Bell Potter has a buy rating and $2.60 price target on its shares.

The post Lithium and gold: Bell Potter says these ASX 200 mining stocks are buys 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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The ASX 50 index is home to some of the best companies that the Australian share market has on offer.

And while not all shares on the index are necessarily buys right now, two that have been given the thumbs up by Morgans are listed below.

Here’s why the broker thinks these ASX 50 shares are strong buys:

CSL Ltd (ASX: CSL)

Morgans believes this biotechnology giant is a great option for investors. Particularly given its positive earnings outlook and the discount its shares trade on compared to long-term average multiples. It explains:

While shares have struggled of late, we continue to view CSL as a key portfolio holding and sector pick, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares trading at 25x, a substantial discount (20%) to its long-term average.

Morgans has an add rating and $328.20 price target on its shares.

ResMed Inc (ASX: RMD)

Another ASX 50 share that could be a top option according to Morgans is sleep treatment focused medical device company ResMed.

The broker appears to believe weakness caused by weight loss drug concerns is a buying opportunity for investors. It commented:

While weight loss drugs have grabbed headlines and investor attention, we see these products having little impact on the large, underserved sleep disorder breathing market, and do not view them as category killers. Although quarters are likely to remain volatile, nothing changes our view that the company remains well placed and uniquely positioned as it builds a patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.

Morgans has an add rating and $32.82 price target on ResMed’s shares.

The post Morgans says these ASX 50 shares are strong buys appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in CSL and ResMed. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended CSL. 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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Although inflation is easing, it is still around 4% on an annual basis.

This means that if you received a 3% dividend yield on your income portfolio, you would actually be losing money in real terms.

The good news is that there are reliable, buy-rated ASX dividend shares out there that offer potential yields that are greater than inflation. In addition, analysts see scope for them to generate decent capital gains for investors.

Here are three ASX dividend shares to consider buying:

Healthco Healthcare and Wellness REIT (ASX: HCW)

Bell Potter thinks that Healthco Healthcare and Wellness REIT could be an ASX dividend share to buy. It is a health and wellness focused real estate investment trust with a focus on hospitals, aged care facilities, and primary care properties.

The broker is expecting the company to pay dividends of 8 cents per share in FY 2024 and 8.3 cents per share in FY 2025. This represents dividend yields of 5.9% and 6.15%, respectively.

Bell Potter has a buy rating and $1.75 price target on its shares.

Suncorp Group Ltd (ASX: SUN)

Insurance giant Suncorp could be a good option for income investors.

Goldman Sachs thinks it is an ASX dividend share to buy and has put a buy rating and $15.00 price target on it.

As for dividends, the broker is forecasting fully franked dividends per share of 75 cents in FY 2024, 82 cents in FY 2025, and 85 cents in FY 2026. This will mean yields of 5.25%, 5.9%, and 5.95%, respectively.

Telstra Group Ltd (ASX: TLS)

Goldman Sachs also thinks that Telstra could be a reliable ASX dividend share to buy. In fact, it highlights that “the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.”

In respect to dividends, the broker is forecasting fully franked dividends of 18 cents per share in FY 2024, 19 cents per share in FY 2025, and 20 cents per share in FY 2026. This represents yields of 4.5%, 4.75%, and 5%, respectively.

Goldman has a buy rating and $4.65 price target on Telstra’s shares.

The post 3 reliable ASX dividend shares to beat inflation 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 positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Telstra 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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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was on form again and pushed higher. The benchmark index rose 0.3% to 7,639.2 points.

Will the market be able to build on this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to edge lower

The Australian share market looks set to end the week in a subdued fashion following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 8 points or 0.1% lower this morning. In late trade on Wall Street, the Dow Jones is down 0.1%, the S&P 500 is down 0.1%, and the NASDAQ is up 0.1%.

Oil prices surge

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Karoon Energy Ltd (ASX: KAR) could have a great finish to the week after oil prices surged overnight. According to Bloomberg, the WTI crude oil price is up 3% to US$76.12 a barrel and the Brent crude oil price is up 3% to US$81.55 a barrel. Traders were buying oil after Israel rejected Hamas’ cease-fire proposal.

Megaport results

The Megaport Ltd (ASX: MP1) share price will be on watch today when the elasticity connectivity and network services interconnection provider releases its half year results. The company has already pre-released its results, reporting a 35% increase in revenue to $95 million and EBITDA of $30 million. All eyes will be on its guidance, which was unchanged despite the stronger than expected half.

Gold price edges lower

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a soft session after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$2,048.3 an ounce. A stronger US dollar weighed on the precious metal.

REA remains a buy

REA Group Ltd (ASX: REA) shares are a buy according to analysts at Goldman Sachs. In response to the release of its half year results, the broker has retained its buy rating with a trimmed price target of $201.00. It said: “Revenue outlook very positive; pay-back on increased investment the key unknown.”

The post 5 things to watch on the ASX 200 on Friday 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 positions in and has recommended Goldman Sachs Group, Megaport, and REA Group. The Motley Fool Australia has recommended Megaport and REA 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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Owning Flight Centre Travel Group Ltd (ASX: FLT) shares used to be very rewarding for receiving dividends.

The appearance of COVID-19 in early 2020 was a setback for the world for many reasons, including its impact on travel demand. But if things continue going well, Flight Centre could soon become a good ASX dividend share to invest in again.

One of the five largest travel agencies in the world, Flight Centre operates more than 2,000 leisure, corporate and wholesale businesses in 11 countries. It has more than 450 stores across Australia, New Zealand, South Africa, Canada and the United Kingdom.

Can strong dividends return?

In FY19, the company paid an annual ordinary dividend per share of $1.58. At the current Flight Centre share price, that would translate into a cash dividend yield of 7.3% and a grossed-up dividend yield of 10.4%.

Things have changed a lot since then.

There are more Flight Centre shares on issue after the company’s capital raising to ensure its survival through COVID-19. Plus, it hasn’t been as profitable up until now because of all of the COVID-19 impacts.

However, there may be light at the end of the dividend-starved tunnel for Flight Centre investors.

At the end of FY23, it revealed a dividend of 18 cents per share. The dividends could be about to be much bigger.

The estimate on Commsec suggests the business could pay an annual dividend per share of 48 cents in FY24, which is the current financial year. That would be a grossed-up dividend yield of 3.2%.

In FY25, the annual dividend per share could grow again to 70.9 cents. This would equate to a grossed-up dividend yield of 4.7%.

While that’s not the biggest yield in the world, the ASX dividend share would challenge what we can get from savings accounts at the moment.

Can profit growth continue?

At its AGM, the company said it expected leisure and corporate sales growth in FY24 as both sectors progressed towards a full recovery, with that complete recovery expected late this year. This suggests a boost for FY25 as well.

Flight Centre advised it expected a stronger profit margin as the revenue margin increased and the cost margin decreased.

The company also noted there would be better market dynamics for travellers as competition and capacity improved.

Finally, IATA projections of 3.4% compound annual growth in passengers globally through to 2040 would prove to be a useful tailwind for the company.

Flight Centre share price snapshot

After a rise of almost 20% in the company’s shares in the past year, it’s currently trading at 16x FY25’s estimated earnings.

The post Is Flight Centre about to regain ASX dividend share status? appeared first on The Motley Fool Australia.

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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 recommended Flight Centre Travel 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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Christmas and the holidays are wonderful times, but they also tend to be uncomfortably expensive. I know my own investing habits took a holiday of their own over the summer break.

But now that we’re well into February, many of us might find that we once again can spare a few dollars for our investing portfolios.

So if you’re fortunate enough to find yourself in this camp, here are two ASX share picks I’d be happy to add to my portfolio this February.

2 ASX share picks for February 2024

BetaShares Nasdaq 100 ETF (ASX: NDQ)

I’m continually amazed at how many managed funds that invest in international shares in Australia simply can’t beat the returns of a simple index like the NASDAQ-100 Index (NASDAQ: NDX).

The Nasdaq is one of the two major stock exchanges in the United States. It tends to house most of the famous US tech companies, which have proven to be the driving force behind its stunning returns.

On the ASX, ordinary investors have the opportunity to share in these returns through the Betashares Nasdsaq 100 exchange-traded fund (ETF). This fund holds portions of the largest 100 non-financial shares on the Nasdaq Index. That includes everything from Apple, Microsoft, Amazon and Alphabet to Meta Platforms, NVIDIA, Airbnb and Netflix.

This ETF’s numbers are just stunning. As of 31 January, investors have enjoyed an average annual return of 22.63% over the past five years. Those returns are not guaranteed in the future, of course.

But this ETF still gives us an easy avenue to invest in some of the best companies on the planet, making it a no-brainer ASX share pick this month for me.

REA Group Ltd (ASX: REA)

Many Australians might not know the name REA Group, but they’ve probably heard of this classifieds company’s flagship asset – realestate.com.au.

REA Group has experienced a big pullback this week, thanks to the company’s latest earnings report. As we went through yesterday, REA still reported an 18% rise in revenues over the six months to 31 December. It also revealed a 22% jump in profits and a 16% spike for its next dividend payment.

I’m not sure what spooked investors here. Sure, REA’s expenses did rise significantly over the period. But REA’s lead as the premier destination for property buyers, renters and sellers looks more unassailable than ever.

As such, I think this ASX 200 share is ripe for the picking as a buy-the-dip opportunity this February.

The post 2 picks I’d buy for my ASX share portfolio in February appeared first on The Motley Fool Australia.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Airbnb, Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Airbnb, Alphabet, Amazon, Apple, BetaShares Nasdaq 100 ETF, Meta Platforms, Microsoft, Netflix, Nvidia, and REA Group. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Airbnb, Alphabet, Amazon, Apple, Meta Platforms, Netflix, Nvidia, and REA 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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