Category: Stock Market

There are a lot of great ASX shares for investors to choose from on the local market.

To narrow things down for readers, let’s now take a look at two shares that analysts at Bell Potter rate very highly.

These shares feature on its favoured list for June, which the broker believes offer attractive risk-adjusted returns over the long term. They are as follows:

Regal Partners Ltd (ASX: RPL)

Bell Potter believes that this growing fund manager is being undervalued by the market.

Its analysts highlight that the company has strong organic and inorganic growth potential, strong performing investment funds, and accelerating inflows. The broker commented:

In recent years, Regal has expanded rapidly through strong investment performance, net flows into its funds, launches of new funds, and the acquisition or merger with VGI Partners, PM Capital and Taurus, which have expanded funds under management from $1.1bn in 2017, to over $12.1bn (March 2025). We continue to favour RPL, given its strong organic & inorganic growth potential, and entrepreneurial culture. In the last six months, and following the recent acquisition of PM Capital and Taurus (50%), the firm has shown an acceleration of inflows, strong investment performance (which will give rise to performance fees) and success in marketing new funds. We feel this strong performance is not reflected in the share price and see considerable upside.

Bell Potter has a buy rating and $4.02 price target on its shares. This implies potential upside of 11% for investors from current levels. A ~5.6% dividend yield is forecast over the next 12 months.

Universal Store Holdings Ltd (ASX: UNI)

Another ASX share that Bell Potter is a big fan of is Universal Store. It is a youth focused apparel, footwear and accessories retailer in Australia.

It has a large number of stores under its flagship Universal Store brand. In addition, it is expanding private label brands by growing the stand-alone format of Perfect Stranger and Thrills.

Bell Potter thinks that it has a good growth trajectory thanks to its store rollout and sees scope for margin improvements. It said:

Management execution remains a key strength for UNI and we see good growth trajectory for the name given the building of core brands while growing its store rollout. In our view, the higher margin sales from the majority of private label sales should become a major driver of margin improvement and earnings growth, in an expanded store footprint. While we remain cautious on the overall consumer sentiment, given the return to positive comps while cycling elevated pcp through Jan-Feb, we think UNI is well placed as comps become supportive through the 2H.

The broker has a buy rating and $6.15 price target on its shares. This suggests that upside of 23% is possible over the next 12 months. A ~5% dividend yield is also expected over the period.

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

More reading

• Why Telstra and these excellent ASX dividend stocks could be buys
• 3 under the radar ASX shares to buy this month
• Analysts name 3 small cap ASX shares to buy for big returns
• These ASX shares could rise 25% to 65%
• 6 ASX retail shares to buy this month

Motley Fool contributor James Mickleboro has positions in Universal Store. 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.

If you are searching for retirement portfolio options this month, then you may want to look at the ASX shares listed below that have been named as buys.

Here’s why these shares could be top options for this portfolio:

CSL Limited (ASX: CSL)

When you are building a retirement portfolio, it is always a smart idea to focus on high quality companies.

Well, there are arguably few higher quality businesses out there than biotechnology giant CSL. It is the company behind the CSL Behring, CSL Seqirus and CSL Vifor businesses, which provide lifesaving therapies and vaccines to patients in more than 100 countries.

And with management always reinvesting heavily in its research and development (R&D) activities, CSL consistently has an R&D pipeline filled with potentially lucrative products.

Macquarie is a fan of the company and believes its outlook is very positive thanks to its key CSL Behring business. It currently has an outperform rating and $330.00 price target on its shares. In addition, it sees scope for them to rise to $500 within the next three years.

APA Group (ASX: APA)

Another ASX share to consider buying for a retirement portfolio is APA Group. It owns and operates energy infrastructure assets and businesses.

This includes energy infrastructure, comprising gas transmission, gas storage and processing, and gas-fired and renewable energy power generation businesses.

It could be a great option for retirees due to its defensive earnings, long track record of growth (almost 20 years of dividend increase), and big dividend yield.

In respect to the latter, analysts at Macquarie are forecasting dividends of 56 cents per share in FY 2024 and 57.5 cents per share in FY 2025. Based on the current APA Group share price of $8.33, this equates to 6.7% and 6.9% dividend yields, respectively.

Macquarie currently has an outperform rating and $9.40 price target on its shares.

Woolworths Limited (ASX: WOW)

A final ASX retirement share to consider buying is supermarket giant, Woolworths. This is due to its positive growth outlook and defensive earnings.

In respect to the former, Goldman Sachs’ analysts “forecast WOW 2-yr sales CAGR FY24-26e of +3.2% and EBIT growth of +4.8%.” This is expected to support the payment of fully franked dividends of $1.08 per share in FY 2024 and $1.14 per share in FY 2025. Based on the current Woolworths share price of $32.85, this implies yields of 3.3% and 3.5%, respectively.

Goldman also sees plenty of upside for investors. It currently has a buy rating and $39.40 price target on its shares.

The post Buy these ASX shares for a winning retirement portfolio appeared first on The Motley Fool Australia.

More reading

• How much could $10,000 invested in CSL shares be worth next year?
• 3 of the best ASX 200 blue chip shares to buy now
• Tax-busters: 5 fully-franked ASX dividend shares I’d buy for FY25
• 3 reasons to be positive on ASX 200 shares in FY25 (and 3 to be wary)
• Where Aussies are spending their money, and the ASX shares that could benefit

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, Goldman Sachs Group, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Apa Group and Macquarie Group. 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.

Now could be the time to pounce on Clinuvel Pharmaceuticals Limited (ASX: CUV) shares now if you want big returns for your portfolio.

That’s the view of analysts at Bell Potter, which are feeling very positive about the ASX 300 share.

Why is it an ASX 300 share to buy?

In case you’re not familiar with Clinuvel, it is a global specialty pharmaceutical company focused on developing and commercialising treatments for patients with genetic, metabolic, systemic, and life-threatening, acute disorders.

Its lead therapy is Scenesse, which is approved for commercial distribution in Europe, the USA, Israel, and Australia as the world’s first systemic photoprotective drug for the prevention of phototoxicity (anaphylactoid reactions and burns) in adult patients with erythropoietic protoporphyria (EPP).

The ASX 300 share is also seeking to expand Scenesse’s use into other treatment areas. It is this that is getting Bell Potter excited. It commented:

CUV are conducting two Phase 3 trials to expand the label of Scenesse to include patients with vitiligo. Following recent company announcements, we have revisited vitiligo development expectations and market forecasts. The first Phase 3 trial primary readout is expected in 2H CY25 and represents one of the next major catalysts for the company excluding financial results. Assuming the Phase 3 trials proceed smoothly, we expect submission to the FDA in late CY26 for potential approval by end-CY27.

Bell Potter notes that if successful, this expansion has the potential to be a huge boost to its sales. It adds:

With ~1% of the US population affected by vitiligo, the market size is far greater than the single rare disease for which Scenesse is currently approved. We estimate a directly addressable vitiligo market in the US of ~65-70k patients (vs. ~2k patients for EPP). This translates into legitimate potential for Scenesse to increase its annual sales several fold if the Phase 3 trials succeed and regulatory approval is granted.

Big return potential

In light of the above, the broker has reaffirmed its buy rating and $22.25 price target on the ASX 300 share. Based on its current share price of $14.60, this implies potential upside of 52% for investors over the next 12 months.

The broker concludes:

We view the first vitiligo Phase 3 readout in CY25 as a significant catalyst for the company and see the current CUV price as a good entry point for those willing to take on clinical risk with downside mitigated to a degree by the existing, profitable EPP franchise.

The post Guess which ASX 300 share could rise over 50% appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
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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.

The National Australia Bank Ltd (ASX: NAB) share price has increased by more than 35% in the last 12 months, as shown on the chart below. Shareholders and other investors may wonder whether the good streak can continue in FY25.

NAB has a different reporting schedule than many other ASX shares. Its full-year ends on 30 September, while June is the last month of the financial year for Australian individuals and many businesses.

There are still three and a half months left of the ASX bank share‘s FY24, so commentary about the outlook could apply to both the end of FY24 as well as FY25.

Worsening arrears

At the beginning of May 2024, NAB reported its FY24 first-half result, which showed cash earnings of $3.55 billion (down 12.8% year over year).

One of the negatives within the result was that the percentage of its loans that were overdue by at least 90 days or impaired is increasing – it was 0.66% in the FY23 first half, 0.75% in the FY23 second half and 0.79% in the first half of FY24. This represented “higher arrears across the Australian home lending and business lending portfolios, partially offset by lower impaired assets.”

NAB said:

The Australian economy is proving resilient and most customers are faring well in the current more challenging environment. However, there remains continued uncertainty in the outlook including the impacts of global instability and the ability of customers to manage the full extent of higher interest rates and elevated cost of living pressures.

Strong competition

NAB reported in the HY24 result that revenue decreased by 3.7%, mainly reflecting “lower margins”.

The net interest margin (NIM) decreased by 5 basis points (0.05%) to 1.72%, while the underlying NIM declined 10 basis points. This reflected “lending margin competitive pressures primarily relating to housing lending, along with higher term deposit costs and deposit mix impacts.”

NAB said the benefits of a higher interest rate environment have been more than offset by competition while cost pressures remain elevated.

NAB shares its outlook

With the FY24 first-half result, the ASX bank share said the following:

With our new executive leadership team in place, we are considering how we evolve our strategic priorities. We start in a great place with strong, safe balance sheet settings and attractive growth options. While no major strategic pivots are needed, we are excited about opportunities to leverage the good work of the past several years to allow us to become even simpler and drive better outcomes for customers and colleagues while maintaining a disciplined approach. This will remain at the core of everything we do and underpin our ability to deliver sustainable growth and returns.

Forecasts

Analysts at broker UBS expect stronger results in FY25 than in FY24.

The broker currently forecasts that NAB could generate net profit after tax (NPAT) of $7 billion in FY24 and $7.15 billion in FY25. This would translate into earnings per share (EPS) of $2.21 in FY24 and $2.27 in FY25. While higher, this does not imply much growth in FY25.

UBS expects NAB shares to offer a fully franked dividend yield of around 5% over the next two financial years.

The broker currently has a sell on NAB shares because of a “fully valued” NAB share price. The price target is $30, implying a fall of 15% from where it is today.

The post Can owners of NAB shares bank on a good outlook for FY25? 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 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.

The great news for growth investors is that there are plenty of quality options to choose from on the Australian share market.

But which ones could be buys in June?

Let’s take a look at five ASX growth shares that brokers rate highly:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

This pizza chain operator has been struggling in recent years due to operational mishaps and inflationary pressures. While this is disappointing, there are signs that the worst could now be over and its fortunes could improve from FY 2025.

Morgan Stanley appears to believe this makes it a good time to make a patient investment in Domino’s. Last month, it put an overweight rating and $52.00 price target on its shares.

IPD Group Ltd (ASX: IPG)

Analysts at Bell Potter think that this distributor of electrical equipment and industrial digital technologies could be an ASX growth share to buy in June.

Its analysts expect the company to benefit from the electrification megatrend. They note that IPG is “a high quality play on the electrification growth trend which is emerging as a dominant market narrative.”

Bell Potter has the company on its preferred list with a buy rating and $5.60 price target.

Lovisa Holdings Ltd (ASX: LOV)

The team at Morgans is feeling very positive about Lovisa and sees it as an ASX growth share to buy this month.

It believes the growing fashion jewellery retailer is well-positioned to continue its strong form long into the future thanks to its large global expansion opportunity. It has previously noted that its plan to “enter mainland China in FY24, [is] paving the way for significant longer-term growth.” This expansion has since taken place and has started positively according to industry date.

Morgans currently has an add rating and $35.00 price target on its shares.

Treasury Wine Estates Ltd (ASX: TWE)

Morgans also thinks that Treasury Wine could be an ASX growth share to buy right now. This is partly due to its recent acquisition of DAOU Vineyards (DAOU) for US$900 million (A$1.4 billion).

The broker notes that “if TWE delivers on its investment case, there is material upside to our valuation.”

Morgans has an add rating and $14.03 price target on its shares.

Webjet Limited (ASX: WEB)

Finally, the team at Morgans is also bullish on online travel booking company Webjet.

It thinks Webjet could be an ASX growth share to buy thanks largely to its dominant WebBeds B2B business and the “significant market share still up for grabs.” Morgans believes this positions the company well for the future.

The broker has an add rating and price target of $11.20 on Webjet’s shares.

The post 5 top ASX growth shares to buy in June appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises, Lovisa, and Treasury Wine Estates. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, Ipd Group, and Lovisa. The Motley Fool Australia has positions in and has recommended Ipd Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises, Lovisa, and Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you on the lookout for some new additions to your income portfolio in June?

Well, if you are, then read on. That’s because listed below are three ASX dividend stocks that brokers have recently named as buys and tipped to offer attractive dividend yields.

Here’s what you can expect from them in the coming years:

GDI Property Group Ltd (ASX: GDI)

Analysts at Bell Potter are tipping this property company’s shares as a buy. Especially given their expectation that GDI Property is well-positioned to pay some big dividends in the coming years.

For example, the broker is forecasting dividends per share of 5 cents across FY 2024, FY 2025, and FY 2026. Based on the current GDI Property share price of 61 cents, this implies dividend yields of 8.2% for the next three years.

Bell Potter has a buy rating and 75 cents price target on its shares.

Rural Funds Group (ASX: RFF)

Another ASX dividend stock that Bell Potter is feeling bullish about is Rural Funds.

It is another property company. However, it is very different to GDI Property. It owns a portfolio of high-quality agricultural assets. This includes across industries such as orchards, vineyards, water entitlements, cropping, and cattle farms.

In respect to dividends, the broker is forecasting dividends per share of 11.7 cents in both FY 2024 and FY 2025. Based on the current Rural Funds share price of $2.00, this will mean yields of 5.85% for investors.

Bell Potter currently has a buy rating and $2.40 price target on its shares.

Telstra Group Ltd (ASX: TLS)

A third ASX dividend stock that has been tipped as a buy is Telstra. It is of course Australia’s leading telecommunications company.

The team at Goldman Sachs continues to be positive on the company. It recently reiterated that its analysts “believe the low risk earnings (and dividend) growth that Telstra is delivering across FY22-25, underpinned through its mobile business, is attractive.”

Speaking of dividend growth, the broker is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 18.5 cents per share in FY 2025. Based on the current Telstra share price of $3.55, this equates to fully franked yields of 5.1% and 5.2%, respectively.

Goldman currently has a buy and $4.25 price target on its shares.

The post Buy Telstra and these ASX dividend stocks now appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 high yield ASX dividend stocks to buy
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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 Rural Funds Group and Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Hopes for interest rate cuts are once again on the horizon after Canada and Europe’s rate cuts earlier this month.

Lower interest rates are often seen as making money more accessible and could potentially boost consumer spending.

Central banks are contemplating these cuts in the hope of freeing up more money for consumers, thereby stimulating economic growth.

While predicting macroeconomic trends is almost pointless, investors can certainly assess which ASX retail shares could benefit from a potential uptick in consumer spending. Let’s explore.

Nick Scali Limited (ASX: NCK)

First up is furniture retailer Nick Scali. In 1H FY24, the company reported a 20% drop in revenue to $227 million. To be fair, this was off a high base a year ago when it reported a record revenue of $284 million, as the company benefitted from increased deliveries of the previous orders.

That said, its written sales orders — a leading indicator — were just up 1.1%, and they were down slightly by 0.4% on a same-store basis.

The good news is that the company has improved its costs. Gross margins rose from 62% in 1H FY23 to 65.6%, while general operating expenses fell by $4.8 million from a year ago. Tight cost control and better logistics costs were behind such impressive margin expansion.

The company started to see an uptick in its orders. In 2Q FY24, from October to December 2023, its written sales orders rose 8.2% from a year ago.

This sales momentum may continue if potentially lower interest rates lead to better consumer sentiment.

Nick Scali recently expanded into the United Kingdom market by acquiring Fabb Furniture, as my colleague James highlighted. This may be a wild card in the short term, depending on consumer sentiment in the UK. However, for the longer term, the company believes this provides a great expansion opportunity to a bigger UK market.

Nick Scali shares are trading at 13x trailing earnings. The Nick Scali share price is down 2.46% at $13.46 at the close on Monday.

Super Retail Group Ltd (ASX: SUL)

Next up is Super Retail Group, which owns popular retail brands like Super Cheap Auto, Macpac, Rebel and BCF.

Super Retail tends to do better than other consumer discretionary companies across economic cycles, as my colleague Sebastian pointed out.

In its May trading update, the company said its like-for-like sales growth was largely flat, with BCF experiencing a 5% decline and Macpac experiencing a 3% growth.

Super Retail Group CEO Anthony Heraghty said that while store foot traffic and transaction volumes continued to grow, the ongoing cost-of-living pressure was impacting a number of items per sale.

But the resilience of the business was insufficient to keep investors excited amid overall consumption weakness.

The Super Retail Group share price has fallen 16.37% year-to-date, putting its valuation at a price-to-earnings ratio of 11.54 times based on FY24 earnings estimates by S&P Capital IQ.

This is cheap compared to its historical trading range of 8 times and 20 times. Excluding the Great Financial Crisis of 2008 and the COVID-19 outbreak in March 2020, the stock has rarely traded below 10x on a forward basis.

At the close of trading, the Super Retail Group share price was trading at $13.28, offering a dividend yield of 5.72%.

Accent Group Ltd (ASX: AX1)

Lastly, let’s talk about shoe seller Accent Group, a company behind well-known brands like The Athlete’s Foot, Platypus Shoes, Hype DC, and Skechers.

In 1H FY24, the company reported a 2.7% growth in its revenue to $811 million, but its operating profits took a bigger hit, falling 20% to $72.4 million.

The company mentioned its cost of doing business increased due to negative like-for-like retail sales, lower wholesale sales and cost inflation.

However, given its extensive store network, this could be reversed if consumers returned to their stores to buy more shoes.

Based on FY25 earnings estimates by S&P Capital IQ, Accent Group shares are trading at a P/E ratio of 14 times.

Dividends are an added bonus. Bell Potter seems to like Accent Group for its dividends. As my colleague James noted, the broker forecasted dividends of 13 cents per share (cps) in FY24 and 14.6 cps in FY25. At the current share price, these represent 6.7% and 7.5%, respectively.

The Accent Group share price closed on Monday down 1.53% at $1.93.

The post 3 ASX retail shares that could benefit from potential interest rate cuts appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee has positions in Nick Scali. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail Group. The Motley Fool Australia has recommended Accent Group and Nick Scali. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a small decline. The benchmark index fell 0.3% to 7,700.3 points.

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

ASX 200 expected to rebound

The Australian share market is expected to rebound on Tuesday after a strong start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 30 points or 0.4% higher. On Wall Street, the Dow Jones was up 0.5%, the S&P 500 rose 0.8%, and the Nasdaq charged 0.95% higher.

Clinuvel named as a buy

The Clinuvel Pharmaceuticals Limited (ASX: CUV) share price could be dirt cheap according to analysts at Bell Potter. This morning, the broker has reaffirmed its buy rating and $22.25 price target on the healthcare stock. It said: “We view the first vitiligo Phase 3 readout in CY25 as a significant catalyst for the company and see the current CUV price as a good entry point for those willing to take on clinical risk with downside mitigated to a degree by the existing, profitable EPP franchise.”

Oil prices jump

It could be a very good session for ASX 200 energy shares such as Santos Ltd (ASX: STO) and Karoon Energy Ltd (ASX: KAR) after oil prices jumped overnight. According to Bloomberg, the WTI crude oil price is up 2.6% to US$80.47 a barrel and the Brent crude oil price is up 2.1% to US$84.39 a barrel. Oil prices are rising amid optimism that summer fuel demand will draw down inventories and tighten the market in the third quarter.

Premier Investments goes ex-dividend

Premier Investments Limited (ASX: PMV) shares are going ex-dividend on Tuesday and could trade lower. In March, the Smiggle and Peter Alexander owner released its half year results and reported EBIT of $209.8 million. This allowed the company to increase its interim dividend by 16.7% to a record of 63 cents per share. Eligible shareholders can now look forward to receiving this on 24 July.

Gold price falls

ASX 200 gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a subdued session on Tuesday after the gold price dropped overnight. According to CNBC, the spot gold price is down 0.6% to US$2,334.9 an ounce. Higher bond yields put pressure on the precious metal.

The post 5 things to watch on the ASX 200 on Tuesday 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 recommended Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Rising living costs are forcing consumers to tighten their belts.

According to the Australian Bureau of Statistics, spending on discretionary goods and services rose only by 0.6% in April 2024, while non-discretionary spending rose by 5.8%.

Amid this backdrop, it’s not surprising that the automobile dealership sector faces significant challenges. Many potential buyers are delaying vehicle purchases, raising questions about the current value of retail stocks in this industry.

This bleak industry outlook has driven Peter Warren Automotive Holdings Ltd (ASX: PWR) to a five-year low in its share price.

This consumer discretionary stock is trading at a price-to-earnings (P/E) ratio of below 8 times and offers an 11% dividend yield. Is this the right time to buy Peter Warren shares, or is it merely a value trap?

Automotive dealership business

Peter Warren is an automotive dealership group with a rich heritage, having operated in Australia for over 60 years. The company runs 85 franchise operations and represents 27 brands across volume, prestige, and luxury segments.

Peter Warren operates along the eastern seaboard under various banners, including Peter Warren Automotive, Mercedes-Benz North Shore, Macarthur Automotive, Penfold Motor Group, Bathurst Toyota, Volkswagen, and Euro Collision Centre.

Understandably, it is not an easy time to run any consumer discretionary business, let alone auto dealerships.

In 1H FY24, the company reported a 1% growth in its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA). Its underlying profit before tax was down 20% to $34.4 million as the higher interest rates weighed on.

The share price has halved over the past five years, reducing the company’s market value by approximately $300 million.

Profit guidance downgrades

The weak profits and rising debt costs led the company to downgrade its FY24 profit guidance.

As indicated in its May update, the company anticipates an underlying profit before tax of $52 million to $57 million for FY24, which is below market expectations.

The business is hit by weak customer demand and intensifying competition. The company noted:

A significant increase in vehicle supply by OEM’s has led to greater competition between dealerships and lower gross profit margins on new vehicles. The contraction in new vehicle margins has occurred across the industry and is the most acute in brands and models where supply levels and inventory holdings are highest.

The level of customer demand for new vehicles has reduced as a result of cost-of-living pressures.

Are Peter Warren shares cheap enough?

At such a low share price, Peter Warren shares appear undervalued based on many valuation metrics. Using estimates compiled by S&P Capital IQ, Peter Warren shares are currently trading at:

• 8 times FY24 earnings estimates
• 9 times FY25 earnings estimates
• 0.6 times its book value
• fully-franked dividend yield of 11%

However, the higher P/E ratios for FY25 imply analysts’ forecast earnings will continue falling in the coming years.

While it’s difficult to argue that these numbers are expensive, whether they are cheap enough will depend on when the earnings will reach their bottom from here.

Is it time to buy Peter Warren?

Peter Warren shares look cheap using many commonly used valuation metrics, although it is difficult to pinpoint when exactly consumers will return to buy more cars.

The post Is this ASX All Ords retail stock too cheap to ignore? appeared first on The Motley Fool Australia.

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Motley Fool contributor Kate Lee 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.

ASX uranium shares, Microsoft Corp (NASDAQ: MSFT) co-founder Bill Gates, and the AI revolution have an energetic thread connecting them.

As you may be aware, the rapid expansion of AI is also driving increased energy demand. The new technology requires the construction of more data centres, which in turn require significantly more electricity to drive the AI-enabled chips.

In a world intent on decarbonising its energy sources, this connects the AI revolution to ASX uranium shares like Paladin Energy Ltd (ASX: PDN), Bannerman Energy Ltd (ASX: BMN), Deep Yellow Limited (ASX: DYL), Boss Energy Ltd (ASX: BOE) and Alligator Energy Ltd (ASX: AGE).

Because data centres need reliable baseload power that can’t always be delivered by solar or wind power, a growing number of operators are investigating the potential of nuclear energy to power the new centres when the sun’s not shining, and the wind’s gone flat.

Which brings us to Microsoft’s Bill Gates.

ASX uranium shares count as ‘allies’

Bill Gates has been investigating the potential of next generation nuclear reactors via his start-up company TerraPower since 2008.

And in potentially good news for ASX uranium shares, Gates told US broadcaster CBS that he’s prepared to invest billions more dollars into the company’s first commercial-scale reactor, located in Wyoming.

“I put in over a billion, and I’ll put in billions more,” Gates said about the project after construction commenced last week.

The new TerraPower nuclear plant was originally planned to start producing power in 2028. That’s been pushed back to 2030 following the US ban on Russian uranium imports. The plant is now expected to come online in 2030.

With Russia’s nuclear fuel “unacceptable now,” Gates said TerraPower would source the radioactive metal domestically and from the nation’s allies. Presumably that could include ASX uranium shares.

Exploding AI demand

In an interview with US-based National Public Radio (NPR), Gates addressed the strains that the “exploding AI demand” could put on the electric grid.

“The additional data centres that we’ll be building look like they’ll be as much as a 10% additional load for electricity,” he said.

Gates added:

The US hasn’t needed much new electricity, but with the rise in a variety of things from electric cars and buses to electric heat pumps to heating homes, demand for electricity is going to go up a lot.

And now these data centres are adding to that. So, the big tech companies are out looking at how they can help facilitate more power, so that these data centres can serve the exploding AI demand.

As for ASX uranium shares, Australia has the world’s largest proven uranium reserves. Enough to sustainably power the AI revolution into the far-distant future.

The post What Bill Gates, ASX uranium shares and the AI revolution have in common appeared first on The Motley Fool Australia.

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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 positions in and has recommended Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Microsoft. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.