Category: Stock Market

Some ASX All Ords shares do more of the heavy lifting than others.

Over the past five years, the All Ordinaries Index (ASX: XAO) has gained just over 20%.

But one obscure ASX All Ords share has left those gains well and truly in the dust.

And I’ll admit, until recently, this one was flying beneath my own radar as well.

Any guesses?

If you said Alpha HPA Ltd (ASX: A4N), go to the front of the virtual class.

What is Alpha working on?

Alpha, if you’re not familiar, is a battery metals development company with a market cap of $952 million.

The ASX All Ords share is primarily focused on its licensed Smart SX Technology, which enables it to produce sustainable, high-purity aluminium.

Alpha is currently developing its new Gladstone-based HPA First Project in Queensland.

According to the company website, Gladstone will “meet the growing demand for high purity alumina (HPA) using the most environmentally responsible and efficient methods”.

Alpha is targeting LED lighting, lithium-ion batteries and semiconductors as its primary demand drivers.

With that said…

This ASX All Ords share has been on fire

Spurred on by a $15.5 million federal government grant in late 2022 to support the production of critical minerals in Australia, Alpha has been steadily progressing the Gladstone plant towards full production.

In the latest quarterly report, the company advised it was “rapidly” deploying the first $6.8 million of that grant to expand equipment capabilities to include its full high-purity product range.

And investors clearly believe the ASX All Ords share has a bright future ahead.

Five years ago, you could have bought shares in the critical battery metals stock for 12 cents apiece.

Today those same shares are swapping hands for $1.08.

That’s a whopping 800% gain.

Or enough to turn a $5,000 investment into $45,000 in just five years.

Happy investing!

The post This obscure ASX All Ords stock has quietly turned a $5,000 investment into $45,000 in 5 years appeared first on The Motley Fool Australia.

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More reading

• REA shares fall as costs take a bite out of bottom line
• 3 ASX 200 shares with strong balance sheets
• Morgans names the best ASX 200 growth shares to buy in May
• Newcrest share price slips as exclusivity period for $32b takeover extended
• Brokers name 3 ASX shares to buy now

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 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 REA Group Ltd (ASX: REA) share price is in the red after the company revealed a notable jump in operating costs in the March quarter.

Right now, stock in the real estate advertising company is down 1.05%, trading at $137.26

REA share price slips as EBITDA drops 13%

Here are the key takeaways from the S&P/ASX 200 Index (ASX: XJO) communications company’s quarterly earnings:

• Revenue slumped 3% year on year to $269 million
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) plunged 13% to $136 million
• Free cash flow dipped 9% to $83 million
• Operating expenses across the group rose 9% to $133 million

Zooming out, REA revealed its revenue for the nine months ended 31 March jumped 2% year-on-year to $887 million.

Meanwhile, its EBITDA for the financial year so far has dropped 5% on that of the prior period to $495 million, dragged down by a 13% lift in operating costs.

What else happened last quarter?

A 12% drop in Australian property listings dinted the company’s performance last quarter following a strong listing environment in the prior period. The major capitals were hit hardest, with listings in Sydney falling 20% and those in Melbourne dropping 18%.

The company’s realestate.com.au platform maintained its leadership position, with 11.9 million people visiting the site each month – representing 59% of Australia’s adult population.

Meanwhile, REA India saw revenue jump 63% year-on-year. However, higher costs in the segment, along with technology costs and higher marketing spend, drove growth in operating costs.

What did management say?

REA CEO Owen Wilson commented on the update driving the company’s share price today, saying:

While interest rate uncertainty continued to impact the Australian property market, conditions have improved with the stabilisation of house prices and more vendors returning to the market.

The strength of REA’s premium product offering and audience continued to support revenues, and our Indian business delivered exceptional growth.

Lack of supply and interest rate uncertainty have caused some vendors to sit on the sidelines, but we expect this to improve given strong demand, positive price sentiment and increasing confidence that we are near the peak of the rate cycle.

What’s next?

While REA appears confident an uptick is on the way, listings remain lower than the prior period. National residential new listings were down 24% year-on-year in April, with Sydney listings dropping 25% and Melbourne listings falling 22%.

The company expects its Residential Buy yield growth to increase 10% in financial year 2023. Meanwhile, costs are forecast to increase in the low single-digits and Australian operating jaws are expected to be modestly negative.

Looking to financial year 2024, its Buy yield growth is expected to post a double-digit jump, mainly driven by an average 12% price increase in Premiere+.

REA share price snapshot

Fortunately for investors, today’s slump hasn’t been enough to send the REA share price into the longer-term red.

The stock is currently 27% higher than it was at the start of 2023. It has also risen 29% since this time last year.

For comparison, the ASX 200 has gained 4.3% year to date and 4.4% over the last 12 months.

The post REA shares fall as costs take a bite out of bottom line appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Top broker tips 7 ASX 200 property-related shares to cash in on the 2023 budget
• 3 ASX 200 stocks I’ll be watching like a hawk in May
• Don’t get duped: Why cheap ASX shares can still rip you off
• Buy these ASX growth shares right now: Goldman Sachs

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 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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There are some S&P/ASX 200 Index (ASX: XJO) shares that have a very secure financial position. A good balance sheet can benefit the company in a number of different ways, which I’ll outline below.

ASX 200 shares create three different statements for each financial reporting period – the profit and loss (P&L), the balance sheet and cash flow.

The balance sheet tells us about the assets, liabilities and shareholder equity in the business. As an example, we can think about the balance sheet items of a household. Assets could include bank accounts, shares and property, while liabilities could include a mortgage and a credit card balance.

Let’s talk about why strong balance sheets are important.

Advantages of a great balance sheet

It’s worthwhile having a good balance sheet through all parts of the economic cycle, and it could be essential during downturns for that sector or even the whole economy. Below are some of the advantages.

Strong emergency fund – It’s a wise idea for households to set aside some cash in an emergency fund for a rainy day. If the main breadwinner loses their job, the household expenses still need to be paid, so having money available can be a lifeline in tough times.

Companies still need to be able to pay for their operations even if revenue were to (temporarily) decline. If ASX 200 shares have a good balance sheet, they can hopefully navigate a market correction or even a recession with no significant long-term issues. Having that cash could even mean the business is able to invest and keep growing during difficult times, making it well-positioned for recovery.

When Bill Gates started Microsoft, he ensured that the company had enough cash to last 12 months with no revenue coming in.

Acquisitions – Having financial strength can enable an ASX 200 share to make useful deals. Acquisitions can happen at any point in the economic cycle, and being able to swallow up a weaker competitor when they’re struggling in a downturn can be a very beneficial move.

Avoid dilutive capital raisings – ASX 200 shares have a few different sources of funding – they can use cash on their own balance sheet, they can use debt (not ideal as that comes with risk and the interest cost) or a capital raising by issuing more shares.

Ideally, businesses will do capital raisings at a good share price. But, if an ASX 200 share has to raise capital at a low share price, it can mean ‘giving away’ a greater portion of business ownership.

Dilutive capital raisings have happened in recent history, with some ASX travel shares having to raise capital at much lower share prices during the COVID-19 crisis.

A good balance sheet should mean a company doesn’t need to raise capital during a crisis.

Which ASX 200 shares have strong balance sheets?

There are plenty of companies with good balance sheets on the ASX. But I think the best ones are companies that have little to no debt and a good amount of cash and are increasing their financial strength over time.

The three below are good examples of ASX companies with strong balance sheets, in my opinion.

Altium Limited (ASX: ALU) – this ASX tech share makes electronic PCB design software. At December 2022, it had US$205 million of cash which had increased from US$195 million at December 2021. The business has no debt and net assets of US$284 million.

Pro Medicus Ltd (ASX: PME) – this ASX healthcare share provides enterprise imaging and radiology software for large medical institutions. At December 2022, it had no debt and $65.5 million of cash, which was up around $8.5 million from December 2021.

JB Hi-Fi Limited (ASX: JBH) – this ASX retail share sells a wide variety of consumer electronics and appliances. It had no debt and $391.2 million of cash at 31 December 2022, up from $125.6 million at 30 June 2022.

The post 3 ASX 200 shares with strong balance sheets appeared first on The Motley Fool Australia.

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More reading

• It’s still rare to find a term deposit paying over 5%. Why not buy ASX dividend shares instead?
• ASX 200 mining shares in focus: Top broker says current iron ore price is ‘unsustainable’
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Flight Centre shares are trading around 52-week highs. Too late to buy?

Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and Pro Medicus. The Motley Fool Australia has recommended Jb Hi-Fi and Pro Medicus. 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 looking for ASX 200 growth shares to buy, then look no further.

That’s because Morgans has recently named some among its best ideas for the month of May.

Two that make the cut are listed below. Here’s why it is very bullish on them:

Corporate Travel Management Ltd (ASX: CTD)

This corporate travel booker has been named as an ASX 200 growth share to buy by Morgans. It has the company on its best ideas list with an add rating and $24.00 price target.

The broker believes Corporate Travel Management is well-placed for growth thanks to acquisitions it made during the pandemic, cost reductions, and its focus on technology. It explains:

Taking a longer term view, CTD remains as a key pick for the travel sector. We see substantial upside in its share price as the company recovers from the COVID affected travel downturn. In fact, CTD should be a materially larger business post COVID given it has made two highly accretive acquisitions during the downturn. The company has also won a lot of new business, implemented structural cost out opportunities and continued to develop its market leading technology offering which means that it will require less staff in the future. CTD is well managed and has a strong balance sheet (no debt).

Lovisa Holdings Ltd (ASX: LOV)

When it comes to ASX 200 growth shares, there are few with a better long-term outlook than Lovisa. Thanks to its global expansion plans and the popularity of its products with young consumers, it has been tipped to grow very strongly over the coming years.

Morgans certainly expects this to be the case. It has the fast fashion jewellery retailer on its best ideas list with an add rating and $28.50 price target. The broker commented:

We think it may prove to be one of the biggest success stories in Australian retail. With ambitious and well-incentivised new leadership in place, we think now is the time LOV steps up to become a global force. […] Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the returns could be stellar. We think LOV’s products fill an underserved niche, offering fast fashion jewellery at prices that are attainable to a resilient target demographic.

The post Morgans names the best ASX 200 growth shares to buy in May appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 travel stocks (not Qantas!) just upgraded by Citi
• Buy these top ASX growth stocks: experts
• ‘We’ve learnt the hard way’: 3 ASX shares that can grow in tough times
• Why these ASX 300 retail shares could be immune to rising interest rates
• 2 ASX travel shares poised for a massive 2023

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 Lovisa. The Motley Fool Australia has recommended Corporate Travel Management and Lovisa. 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 Newcrest Mining Ltd (ASX: NCM) share price is in the red after the S&P/ASX 200 Index (ASX: XJO) gold icon extended the exclusivity period offered to suitor, Newmont Corporation (NYSE: NEM).

Newmont offered to acquire its ASX 200 counterpart in February, but its bid was rejected by its Aussie rival. It later upped its all-scrip offer to an implied price of $32.87 per share.

The Newcrest share price slipped on open and is trading 1.38% lower at $28.49 in early morning trade.

Let’s take a closer look at today’s news of the $32 billion takeover facing the ASX 200 gold producer.

ASX 200 gold giant extends exclusivity period

The Newcrest share price is falling after the company announced Newmont will have an extra week to comb through its books.

Newmont will now have until 18 May before submitting a binding offer or losing its forfeiting its exclusivity. That is unless the period is extended further.

The US-listed rival-turned-suitor is said to have substantially completed its due diligence.

Newcrest investors have been offered 0.4 Newmont shares for each stock held in the ASX 200 gold company. That offer was declared best and final by the acquisition hopeful.

That represents an implied value of $32.87 per share and an enterprise value of $32 billion for the mining giant. Newcrest had a $25.8 billion market capitalisation as of Thursday’s close.

The offer also allows the ASX 200 gold share to pay a fully franked special dividend of as much as US$1.10 per share.

If the tabled acquisition goes ahead, Newcrest shareholders will walk away with a 31.1% ownership in Newmont.

Newcrest share price snapshot

The Newcrest share price has had a ripper run as of late.

The stock has gained 38% since the start of 2023. It’s also 17% higher than it was this time last year.

In comparison, the ASX 200 has lifted 4% year to date and 4% since this time last year.

The post Newcrest share price slips as exclusivity period for $32b takeover extended appeared first on The Motley Fool Australia.

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More reading

• What’s the gold price forecast for the remainder of 2023?
• 5 things to watch on the ASX 200 on Friday
• Top defensive ASX shares to buy in May 2023
• 5 things to watch on the ASX 200 on Friday
• Why are ASX 200 gold shares going gangbusters today?

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 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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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that you might want to know more about are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Allkem Ltd (ASX: AKE)

According to a note out of Macquarie, its analysts have retained their outperform rating and $16.70 price target on this lithium miner’s shares. This follows news that the company will merge with fellow lithium miner Livent Corp. Macquarie is a fan of the plan and sees significant potential synergies thanks to their complementary operations across Argentina and Canada. In addition, it highlights how the combination will provide additional conversion capacity at the Olaroz stage 2 operation. The Allkem share price was trading at $14.94 at yesterday’s close.

Bank of Queensland Ltd (ASX: BOQ)

A note out of Ord Minnett reveals that its analysts have upgraded this regional bank’s shares to a buy rating with an $8.50 price target. The broker made the move on valuation grounds following significant share price weakness in 2023. In addition, Ord Minnett believes the bank is well-placed to return to system loan growth and boost its margins once competition eases and the ME Bank integration completes. The Bank of Queensland share price is currently fetching $5.60.

Nextdc Ltd (ASX: NXT)

Analysts at Morgans have retained their add rating on this data centre operator’s shares with a trimmed price target of $13.50. The broker was pleased to learn of NextDC’s plan to expand overseas. Morgans is confident the plan leverages NextDC’s competitive advantage and believes healthy contract wins across enterprise and cloud should follow. The NextDC share price was trading at $11.78 prior to its trading halt.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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More reading

• Here’s what brokers are saying about the Allkem merger with Livent
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Allkem, Core Lithium, Graincorp, and Omni Bridgeway shares are racing higher
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem and Nextdc. 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 South32 Ltd (ASX: S32) share price has traded relatively flat over the last five years.

Indeed, an investor who bought $4,000 worth of the diversified mining company’s stock in May 2018 likely walked away with 997 shares, paying $4.01 apiece.

Today, that parcel would be worth $4,047.82. The South32 share price last traded at $4.06.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has climbed 19% in that time.

So, has the passive income on offer through the mining giant’s dividends made up for its share price’s underwhelming performance? Let’s take a look.

All dividends paid to those holding South32 shares since 2018

Here are all the dividends offered to those invested in South32 stock since this time five years ago:

South32 dividends’ pay date	Type	Dividend amount
April 2023	Interim	7.3 cents
October 2022	Final and special	20.7 cents and 4.4 cents
April 2022	Interim	11.9 cents
October 2021	Final and special	4.8 cents and 2.7 cents
April 2021	Interim	1.8 cents
October 2020	Final	1.4 cents
April 2020	Interim	3.3 cents
October 2019	Final	4.1 cents
April 2019	Interim	9.6 cents
October 2018	Final	8.7 cents
Total:		80.7 cents

As the chart above shows, each South32 share has yielded 80.7 cents in dividends since this time five years ago.

That means our figurative investment has provided $807.58 of dividend income over its life.

Considering both share price gains and dividends, the ASX 200 stock has provided a return on investment (ROI) of around 23%.

And that might have been bolstered if one were to have reinvested the passive income they received through their South32 shares, thereby compounding any gains.

Not to mention, all the dividends paid by South32 in that time have been fully franked. Thus, they might have brought additional benefits for some investors at tax time.

At the time of writing, South32 shares are trading with an impressive 6.9% dividend yield.

The post Invested $4,000 in South32 shares 5 years ago? Here’s how much passive income you’ve earned appeared first on The Motley Fool Australia.

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More reading

• South32 share price slumps amid ‘important’ US milestone
• ‘Buying opportunity’: 2 ASX 200 mining shares ripe to snap up now
• Here’s why brokers say these ASX dividend stocks with big yields are buys
• Top ASX passive income shares to buy in May 2023
• Here are the 3 most heavily traded ASX 200 shares 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 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 NIB Holdings Limited (ASX: NHF) share price has been a very strong performer over the last six months.

Since this time in November, the private health insurer’s shares have raced 19% higher.

As a comparison, over the same period, the benchmark ASX 200 index has gained just 1.5%.

This leaves the NIB share price trading at $8.00, which is just 20 cents short of its 52-week high.

Why has the NIB share price outperformed?

Investors have been buying NIB’s shares due to its improved outlook and recent update.

That update revealed that the company has raised its guidance for net policyholder growth for Australian residents in FY 2023 to 4% to 5% from 3% to 4%.

Management also revealed that ancillary claims are returning to normal, hospital claims are showing a modest uplift but remain subdued, and its net margins remain strong with a gradual return to its 6% to 7% target expected over the longer term.

Can its shares keep rising or have they peaked?

As things stand, the broker community appears to believe that the NIB share price may have peaked for the time being.

For example, Citi and Morgans both have the equivalent of buy ratings on its shares but with price targets of $7.85 and $7.55, respectively. These are both lower than where the company’s shares trade today.

Elsewhere, Macquarie and Morgan Stanley have the equivalent of hold ratings with price targets of $7.65 and $6.95, respectively, and Ord Minnett has a lighten rating with a $7.00 price target.

Though, that doesn’t necessarily mean that the NIB share price can’t keep rising. It just means that brokers are unlikely to be recommending its shares to clients until they are trading at a more attractive level.

In addition, a strong result in August from NIB could have brokers revisiting their models and price targets. Fingers crossed for shareholders that this happens.

The post Has the NIB share price now peaked at $8? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX healthcare shares I’m backing for strong growth this decade
• Perfect balance: 2 ASX 200 shares set to surge while paying dividends
• ‘Resilient earnings’: Buy 3 ASX 200 shares to win through troubled times

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 NIB Holdings. 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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This ASX 200 share in the building industry has been slashed by three brokers.

The CSR Limited (ASX: CSR) share price fell 2.81% on Thursday to close at $5.18. This follows the company’s share price sliding 2.6% on Wednesday on the back of its full-year results.

Let’s take a look at what’s going on with this ASX 200 share.

What’s the outlook?

CSR produces building materials for the construction of residential and commercial buildings. The company also owns a stake in the Tomago aluminium smelter in New South Wales.

Multiple brokers have downgraded their outlook for the CSR share price. Citi has cut CSR to neutral with a $5.45 price target, as my Foolish colleague James reported. This is still 5% higher than the company’s last closing price.

Further, capital market company CLSA has slashed CSR to sell with a $5 price target, while Jefferies has downgraded CSR to underperform with a $4.50 price target, the Australian Financial Review reported. These broker cuts imply downsides of 3.5% and 13% respectively.

The broker cuts follow the release of CSR’s annual results for the full year ended 31 March on Wednesday.

CSR reported statutory net profit after tax fell 19% to $218.5 million. Revenue lifted 13% to $2.6 billion, while group EBIT soared 13% to $329.7 million.

The NPAT before significant items was up 17% on the previous year. The company had a significant items expense of $6.5 million in 2023, whereas in 2022 the company received an $86 million tax boost from capital tax losses in 2022.

The company lifted its final dividend to 20 cents per share, up from 18 cents per share in 2022.

Looking ahead, the company sees challenges for 2024 for its aluminium business. The company said:

While cost volatility and unpredictability in energy and raw materials makes forecasting
challenging, at this early stage in the year, the best estimate for YEM24 is a loss in the
range of -$5 million to -$15 million

Meanwhile, CSR’s building products segment “made a strong start to the year” with a “pipeline of detached housing projects under construction at historically high levels”. Apartment construction activity is also on the rise.

As for its property segment, 2024 will include $44 million in contracted earnings at Horsley Park and a further $58 million in 2025. Major projects at Schofields and Badgerys Creek in NSW and Darra in Queensland are continuing to progress.

CSR share price snapshot

The CSR share price has shed 9% in the last year.

This ASX 200 share has a market capitalisation of about $477.8 million based on the latest closing price.

The post Guess which ASX 200 share has just been downgraded by 3 top brokers appeared first on The Motley Fool Australia.

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More reading

• Why Appen, CSR, Silver Lake, and Westpac shares are falling
• Top broker tips 7 ASX 200 property-related shares to cash in on the 2023 budget
• 3 ASX 200 building shares that could rise now that house prices have bottomed
• This 8.4% ASX dividend stock is my top pick for immediate income
• If house prices have bottomed, should I buy property-related ASX shares?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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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The gold industry has been a great place to invest this year. You only need to look at the performance of the S&P/ASX All Ords Gold index to see this.

Since the start of the year, this index has risen a massive 26%.

Why are ASX gold shares rising strongly?

This strong gain has been underpinned by a rising gold price.

Miners are price takers and not price setters, so the performance of the gold price has a major impact on the profitability of companies such as Evolution Mining Ltd (ASX: EVN), Newcrest Mining Ltd (ASX: NCM), Northern Star Resources Ltd (ASX: NST), and Regis Resources Ltd (ASX: RRL).

And right now, they are printing money thanks to the sky high gold price.

As a reminder, the spot gold price is currently fetching US$2,029.2 an ounce, which leaves it within a stone’s throw of the record high of US$2,069.40 set in 2020.

The big question now, though, is where is the gold price forecast to go from here? Let’s find out.

Gold price forecast

According to a recent note out of Goldman Sachs, its commodity team has laid out its forecast for the gold price (and other metals) over the remainder of 2023 and the coming years.

The good news is that the broker is feeling upbeat about the precious metal and sees scope for gold to break records this year.

The note reveals that Goldman is forecasting an average gold price of US$2,008 an ounce for the current quarter.

After which, it expects an average price of US$2,078 an ounce in the third quarter of 2023 and then US$2,108 an ounce in the fourth quarter. This is expected to result in an average price of US$2,021 an ounce for 2023.

But the gains may not stop there according to its commodities team. They have pencilled in an average price of US$2,175 an ounce for 2024. This represents an increase of 5% from current levels.

And while Goldman’s gold price forecast predicts an easing back to US$2,087 an ounce in 2025 and then US$2,000 an ounce in 2026, this is still at a very attractive level for gold miners.

All in all, it appears to be a good time to have some exposure to ASX gold shares in your portfolio.

The post What’s the gold price forecast for the remainder of 2023? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Top defensive ASX shares to buy in May 2023
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

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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