Category: Stock Market

Pro Medicus Ltd (ASX: PME) shares are swapping hands at $123.22 apiece, up 2.6% at the time of writing. In the last 12 months, the ASX 200 share has soared 99.9% into the green, surpassing the S&P/ASX 200 index (ASX: XJO)’s rise of 7.7% in that time.

The astronomical run has cemented Pro Medicus’ status as one of the priciest stocks on the ASX. It currently trades at a trailing price-to-earnings ratio (P/E) of 171.5 times. In other words, investors are paying $171.50 to buy $1 of the healthcare company’s earnings.

This is more than nine times greater than the current iShares Core S&P/ASX 200 ETF (ASX: IOZ) P/E of 18.2.

Why the optimism?

According to analysts covering the ASX 200 share, the company’s high valuation is matched by equally impressive fundamentals, making it a stock worth considering. Let’s take a look.

Why this ASX 200 share is soaring

Brokers are bullish on this ASX 200 share thanks to several tailwinds behind the company. These include sales from its flagship software, Visage 7, alongside customer contract wins.

Visage allows radiologists to view large medical image files on mobile devices. This enhances diagnostic efficiency and enables a radiologist to see a patient’s scan from anywhere in the country.

The ASX 200 share is profitable too. It produced an earnings before interest and tax (EBIT) margin of 66% and a net profit after tax (NPAT) margin of 49% for the first half of FY 2024.

Barrenjoey analyst Josh Kannourakis has done the analysis and is bullish on the company’s outlook.

Speaking to the Australian Financial Review, Kannourakis said Pro Medicus’ underlying economics are “better than any other that I’ve seen both in terms of the unit economics [and] structure of contracts”.

And when this revenue is recognised, it is on “close to 100% gross margin”, he said.

Goldman Sachs also recently reiterated its buy rating on Pro Medicus, with an improved price target of $136 per share.

Goldman highlights the company’s recent contract wins, including five new deals with a minimum total contract value of $245 million this financial year. The broker believes it is well-positioned to capture more market share.

Finally, analysts at Bell Potter also raised the firm’s target on Pro Medicus to $115 per share on Friday. The broker is so convinced of the company’s outlook that it completely changed its position – from a sell with a $75 per share price target to a buy rating.

Not all positive views

Given its current valuation, some analysts are treading cautiously. As mentioned, the ASX 200 share currently sells at a P/E of 171.5.

Morgans’ Patrick Chan offers a more cautious view of the company’s valuation. He called Pro Medicus “one of the world’s most expensive stocks” despite acknowledging its impressive performance and strategic wins, according to the AFR.

“I think it’s overpriced”, he said. “[B]ut in saying that, I think it’s the best business on the ASX, and you can’t put a sell on it”.

“You might just trim around the edges, but hold long-term.”

Still, Morgans has set a price target of $85 on the ASX 200 share, well below Pro Medicus’ current share price at publication.

Is this ASX 200 share a buy?

Based on its P/E ratio, Pro Medicus is one of the most expensive stocks globally. However, according to leading brokers, it could still offer significant growth potential.

To date this year, its share price has rallied 27% into the green. At the time of writing, it has also outpaced the benchmark index return by 90% over the past year of trade.

As always, wise investors consider the risks of overpaying. It is crucial to weigh the high valuation against the company’s proven track record and future prospects.

The post Can this ASX 200 share still be a buy if it’s ‘one of the world’s most expensive stocks’? appeared first on The Motley Fool Australia.

More reading

• Guess which 3 ASX 200 shares are leading the charge higher this week
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Catapult, Clarity, Pro Medicus, and Qantas shares are rising today
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Zach Bristow 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 Pro Medicus. The Motley Fool Australia has recommended Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Qantas Airways Limited (ASX: QAN) share price is down 0.7% after the ASX travel share announced an agreement with Perth Airport regarding upgrades and developments. The S&P/ASX 200 Index (ASX: XJO) is up 0.5%, so Qantas shares are underperforming the market today.

Perth is an important destination for Qantas because of Project Sunrise, with Qantas creating ultra-long-haul flights over the coming years. The long-distance flights will use Airbus A350s, which arrive in 2026.

$5 billion Perth Airport investment plan

Qantas announced a 12-year agreement under which Perth Airport will invest approximately $3 billion in new terminal facilities and a new parallel runway, which is expected to open in 2028.

Perth Airport’s overall capital investment will total $5 billion, delivering two multi-storey car parks, major access roadworks, and the airport’s first hotel.

Qantas and Jetstar will relocate all services to a new terminal in the Airport Central precinct, which will enable the growth required to turn Western Australia into a “major domestic and international hub” for the airlines. Qantas will also invest in new aircraft.

Jetstar and Qantas plan to add 4.4 million seats to and from Perth annually by the time the new terminal opens in 2031. As part of the agreement, Qantas plans to build a new engineering hangar in the precinct.

The airline said the upgraded hub will significantly enhance inbound tourism and give Aussies more options when travelling to Asia, Africa, India and Europe.

Perth Airport will also invest in upgrades to terminals 3 and 4, where Qantas currently operates, to create additional capacity while the new terminals are built. Jetstar will relocate its domestic services to terminal 2 from September 2024.

The upgrades to terminals 3 and 4 will allow Qantas to add more services and destinations from Perth, including Auckland and Johannesburg, from mid-2025, subject to meeting border agency requirements. The works will also include gate upgrades to accommodate the ultra-long-haul aircraft for Project Sunrise.

As part of the agreement, all outstanding commercial issues between Perth Airport and Qantas have been resolved.

Management comments

The Qantas CEO Vanessa Hudson said:

This is the largest airport infrastructure deal in our history. It will enable us to create a world-class western hub and significantly expand our domestic and international services over the short, medium and long term.

Not only will it allow us to bring hundreds of thousands more travellers to and through Western Australia each year, it will also make it easier for overseas tourists to connect to more destinations across Australia.

Perth-London and Perth-Rome are two of the most popular flights on our international network, which gives us confidence in our strategy to ramp up WA flying over the next few years as we receive new aircraft and grow our fleet.

Qantas share price snapshot

Since the start of 2024, the Qantas share price has risen 12%, as seen on the chart below.

The post Qantas shares maintain altitude amid ‘historic’ $5 billion deal appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Why Catapult, Clarity, Pro Medicus, and Qantas shares are rising today
• Why Qantas shares are cheap and now is ‘a buying opportunity’
• 5 things to watch on the ASX 200 on Thursday
• Why Cettire, Neuren, Peter Warren, and Qantas shares are falling today

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.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing, the benchmark index is up 0.55% to 7,670 points.

Four ASX shares that are rising more than most today are listed below. Here’s why they are storming higher:

AVITA Medical Inc (ASX: AVH)

The AVITA Medical share price is up over 12% to $2.99. Investors have been buying the regenerative medicine company’s shares after the US FDA approved its premarket approval (PMA) supplement for the RECELL GO system. RECELL GO is an autologous cell harvesting device, harnessing the regenerative properties of a patient’s own skin to treat burn wounds and full-thickness skin defects. AVITA Medical’s CEO, Jim Corbett, said: “FDA approval of RECELL GO marks a paradigm shift in the treatment of partial-thickness and full-thickness wounds.”

Catapult Group International Ltd (ASX: CAT)

The Catapult Group share price is up a further 3% to $1.75. Investors have been scrambling to buy this sports technology solutions provider’s shares since the release of a strong full-year result on Thursday. Catapult posted a 20% increase in revenue to a record of US$100 million. This was driven largely by accelerating SaaS revenue, which increased 24% to US$82 million. Also getting investors excited was Catapult delivering on its guidance to generate positive free cash flow (FCF) in FY 2024. It generated FCF of US$4.6 million, which represents a US$26.2 million improvement year on year.

Meridian Energy Ltd (ASX: MEZ)

The Meridian Energy share price is up 2% to $5.90. This morning, this energy company announced that it has signed an agreement with New Zealand’s Aluminium Smelter (NZAS). The two parties have signed a package of conditional 20-year contracts for part of the NZAS Tiwai Point aluminium smelter’s electricity needs. The package includes a long-term fixed price contract for wholesale electricity price cover and a significant demand response agreement. Chief Executive Neal Barclay said: “This is a fantastic outcome for New Zealand and the Southland region. It’s further proof that large industrial businesses can utilise New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country.”

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix Pharmaceuticals share price is up over 13% to $17.87. Investors have been buying the radiopharmaceuticals company’s shares following the release of additional positive data from the ProstACT SELECT trial of TLX591. It is a lutetium-labelled rADC therapy for the treatment of adult patients with PSMA-positive metastatic castrate-resistant prostate cancer. Telix’s chief medical officer, Dr David N. Cade, notes that: “TLX591 is a radio-ADC with significant potential advantages compared to small molecule radiopharmaceuticals in treating prostate cancer.”

The post Why AVITA Medical, Catapult, Meridian Energy, and Telix shares are storming higher today appeared first on The Motley Fool Australia.

More reading

• Guess which All Ords ASX healthcare share just rocketed 19% on major FDA news
• Why is the Telix Pharmaceuticals share price soaring 11% today?
• Why Catapult, Clarity, Pro Medicus, and Qantas shares are rising today
• 3 ASX All Ords shares smashing new multi-year highs while the market sinks
• Catapult shines: 20% sales growth propels ASX tech stock to new 52-week high

Motley Fool contributor James Mickleboro has positions in Telix Pharmaceuticals. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical, Catapult Group International, and Telix Pharmaceuticals. The Motley Fool Australia has recommended Avita Medical, Catapult Group International, and Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The All Ordinaries Index (ASX: XAO) is up 0.5% in morning trade with one ASX healthcare share doing plenty of the heavy lifting.

Shares in the regenerative medicine company, which is focused on devices for wound care management and skin restoration, closed yesterday trading for $2.66. In earlier trade, shares were changing hands for $3.17 apiece, up 19.2%.

After some likely profit-taking, shares are trading for $3.00 apiece at the time of writing, up 12.8%. Investor enthusiasm roused following positive news from the United States Food and Drug Administration (FDA).

Any guesses?

If you said Avita Medical Inc (ASX: AVH), go to the head of the virtual class.

Here’s what the ASX healthcare share reported today.

ASX healthcare share rockets on FDA greenlight

The Avita Medical share price is surging after the company reported that the FDA has greenlit its premarket approval (PMA) supplement for the RECELL GO system.

RECELL GO is an autologous cell harvesting device. It harnesses the regenerative properties of a patient’s own skin to treat burn wounds and full-thickness skin defects.

The ASX healthcare share highlighted a number of advantages RECELL has over traditional skin grafting.

Those include:

• Improved healing is achieved using significantly less donor skin
• Pain is reduced, closure is faster, and the aesthetic appearance at the RECELL-harvested donor site is improved
• Fewer procedures are required for definitive closure
• A reduction in the length of stay for burns covering less than 50% of total body surface area

The company also noted that enhanced features of the device, including a simplified user interface, significantly reduce the training required for medical staff.

Commenting on the FDA approval sending the ASX healthcare share soaring today, Avita Medical CEO Jim Corbett said, “FDA approval of RECELL GO marks a paradigm shift in the treatment of partial-thickness and full- thickness wounds.”

Corbett added:

By streamlining processes and enhancing operational efficiency with the use of RECELL GO, clinicians can now treat a greater number of patients and more broadly experience the proven benefits of RECELL technology.

We believe that this transformative shift will empower more clinicians to achieve optimal outcomes for their patients, driving greater adoption, and fundamentally redefining wound care management. It’s GO time for a new era in wound care.

The ASX healthcare share will launch RECELL GO in its top burn treatment centres in the US in June.

Management said that existing accounts will be converted to RECELL GO throughout the year, while new accounts will receive RECELL GO with their first order.

The post Guess which All Ords ASX healthcare share just rocketed 19% on major FDA news appeared first on The Motley Fool Australia.

More reading

• Why AVITA Medical, Catapult, Meridian Energy, and Telix shares are storming higher today
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• 2 ASX healthcare shares rocking higher on big news
• 3 ASX shares at 52-week lows or worse
• Morgans names the best small cap ASX shares to buy in May

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 Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Talga Group Ltd (ASX: TLG) share price is having a tough finish to the week.

At the time of writing, the ASX 300 stock is down 13% to 56.5 cents.

This leaves the battery materials developer’s shares trading within touching distance of a multi-year low.

Why is this ASX 300 stock crashing?

Investors have been heading to the exits today after the company announced the completion of a mining study into the expansion options for its Vittangi Graphite Project in Sweden.

The release notes that the mining study forms part of a wider integrated scoping study aimed at expanding the ASX 300 stock’s existing initial 19,500 tonnes anode per annum (tpa) production of low-emission graphite anode products for lithium-ion battery markets.

According to the release, the study found mine plans supporting 0.6Mtpa, 1.0Mtpa, and 2.0Mtpa Run of Mine (RoM) ore production from existing indicated and inferred JORC resources of 35.0Mt at 23.8%Cg.

However, it also warns that “there is a low level of geological confidence associated with Inferred mineral resources and there is no certainty that further exploration work will result in the determination of Indicated mineral resources or that the production target itself will be realised.”

The study also found that a transition to underground mining and optimised development plan negates the need for multiple open pits, with the potential to increase life of mine beyond 40 years at a lower 0.6Mtpa mining rate.

Big investment required

But to get to the above, it will take a significant investment and there is no certainty that it will be able to raise the required funds. The release states:

To achieve the range of outcomes indicated in the Interim Report, capital funding in the order of €520 – €1,100 million [A$848 million to A$1.8 billion] plus contingencies may be required. Investors should note that there is no certainty that the Company will be able to raise that amount of funding when needed.

This compares to the current Talga market capitalisation of approximately A$210 million.

Nevertheless, the ASX 300 stock’s CEO, Martin Phillips, is positive on the company’s prospects and appears optimistic that today’s study is a big step forward for it. He commented:

Our large-scale Swedish graphite project is a key alternative source of strategic raw materials to support the EU’s ambitions and the demand from key export markets. The completed mining study underpins the Scoping Study underway to outline expansion options to supply the global battery anode market beyond our initial 19,500tpa project.

The post Why is this ASX 300 stock crashing 13% today? 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.

The Telix Pharmaceuticals Ltd (ASX: TLX) share price is racing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) biopharmaceutical company closed yesterday at $15.74. At the time of writing, shares are trading 10.6% higher at $17.41 after touching a high of $17.44 apiece in early trade.

For some context, the ASX 200 is up 0.44% at this same time, while the S&P/ASX 200 Health Care Index (ASX: XHJ) is up 1%.

Here’s what’s grabbing investor interest today.

ASX 200 healthcare share rockets on trial results

Investors are bidding up the Telix Pharmaceuticals share price today after the company announced positive results from its ProstACT SELECT clinical cancer trial.

Telix is testing the efficacy of TLX591, an investigational anti-PSMA1 radio-antibody-drug conjugate (rADC) therapy. TLX591 is being developed to treat adult patients with PSMA-positive metastatic castrate-resistant prostate cancer (mCRPC).

According to the release, SELECT is a radiogenomics study intended to evaluate lesion concordance between Ga (gallium)-based PSMA-PET imaging and TLX591 dosimetry for the purpose of validating PET imaging for patient selection for rADC therapy.

(Quite a mouthful, I know!)

The company said the new positive clinical results build on prior data from the ProstACT SELECT trial, which demonstrated a favourable safety profile and biodistribution.

The study reported a median radiographic progression-free survival (rPFS) of 8.8 months, which Telix called an encouraging signal of the potential efficacy of TLX591 in this patient population.

The trial involved 23 patients with previously treated, progressive mCRPC who received two 76 mCi intravenous infusions of TLX591 14 days apart.

Commenting on the results sending the Telix Pharmaceuticals share price soaring today, Nat Lenzo, nuclear oncologist and lead recruiter of the SELECT trial, said:

We are encouraged by this rPFS result, which compares favourably to small molecule radioligand therapy (RLT) Phase I and II studies at similar stages of development.

This is a compelling signal of the potential efficacy of TLX591 in this heavily pre-treated population. The results further support the development of this candidate in an earlier mCRPC patient population which is the focus of the ProstACT Global Phase III trial and where there remains significant unmet need for effective treatment.

David Cade, chief medical officer at Telix, added:

TLX591 is a radio-ADC with significant potential advantages compared to small molecule radiopharmaceuticals in treating prostate cancer. TLX591 is differentiated by a patient-friendly dosing regimen with far lower cumulative radiation exposure compared to small molecule radioligand therapies.

The company is currently preparing to enrol patients at its first US sites for the Phase III ProstACT Global trial.

Telix Pharmaceuticals share price snapshot

With today’s intraday gains factored in, the Telix Pharmaceuticals share price is up a whopping 69% so far in 2024.

But it could well have further to run.

Following on today’s announcement, Wilsons has placed a $20.00 price target on Telix Pharmaceuticals shares. That represents a potential 17% upside from current levels.

The post Why is the Telix Pharmaceuticals share price soaring 11% today? appeared first on The Motley Fool Australia.

More reading

• Which ASX biotech shares are pioneering the future of medicine?
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• Inherited a substantial sum of money? Here’s how I’d spend it (including the ASX stocks I’d buy)

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 Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ANZ Group Holdings Ltd (ASX: ANZ) share price is up 0.7% in early trading amid news the ASX bank share has sold its remaining shareholding in AmBank. The S&P/ASX 200 Index (ASX: XJO) is up 0.8% in morning trade, so ANZ shares are slightly underperforming the market.

AmBank is one of the largest financial institutions in Malaysia. It has been operating for more than 40 years. The Malaysian bank has more than three million customers and over 9,000 employees. Services include banking, underwriting of general insurance, life insurance, and asset management services.

ANZ sells remaining shares of AmBank

The ASX bank share announced it has agreed to sell its remaining 5.2% of the issued shares of AMMB Holdings Bhd, otherwise known as AmBank, through a block trade at a price of MYR4.10 per share.

ANZ disclosed the sale proceeds will increase its common equity tier 1 (CET1) ratio by approximately 5 basis points. This is in addition to the 16 basis points of capital released from the sale of the initial block of 16.5% of AmBank shares in March 2024. The sale announced in March was done at MYR3.85 per share, so it has risen 6% in two months.

The AMMB share price has risen by 16% in the past 12 months, according to Google Finance. ANZ appears to be capitalising on a price close to the highest level since the onset of the COVID-19 pandemic.

The settlement of this sale is anticipated to occur on 5 June 2024.

The bank said the sale proceeds will have “no material impact” on net profit after tax (NPAT).

ANZ said after the March sale that its capital management considerations would include the capital release from the sale. The ASX bank share did not reference any ‘capital management’ during today’s sell-down announcement.

Management comments

The ANZ chief financial officer Farhan Faruqui said:

The sale of our equity stake in AmBank is a significant milestone in delivering on our strategy to simplify the bank. We have valued our partnership with AmBank and wish the group well for the future.

ANZ share buyback

When the ASX bank share announced its FY24 half-year result earlier in May, it revealed its intention to buy back up to $2 billion of shares as part of its capital management plan.

The bank called the buyback “appropriate”, taking into account its “strong capital position”. ANZ said the share buyback is expected to reduce ANZ’s level 1 and level 2 CET1 ratios at March 2024 by 54 basis points and 46 basis points.

The post ANZ shares rise as the bank boosts its capital coffers 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.

Rio Tinto Ltd (ASX: RIO) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $127.66. In morning trade on Friday, shares are swapping hands for $128.41 apiece, up 0.6%.

For some context the ASX 200 is up 0.7% at this same time.

This comes amid news that the miner’s low carbon aluminium production in New Zealand has received a multi-decade new lifeline.

Rio Tinto shares in the green on smelter agreement

Rio Tinto shares are in the green after the company reported that New Zealand Aluminium Smelters (NZAS) has signed 20-year electricity arrangements that secure the future of the Tiwai Point aluminium smelter.

The smelter makes up around 13% of New Zealand’s total power demand. Back in 2021, Rio Tinto said the facility would be closed this year amid concerns over high energy costs.

Under the new agreement Tiwai Point, owned and operated by NZAS, will continue to produce high-purity, low-carbon metal, backed by a “diversified mix” of renewable electricty.

NZAS has inked contracts with Meridian Energy, Contact Energy and Mercury NZ to set pricing for an aggregate of 572 megawatts (MW) of electricity. That’s enough to meet the smelter’s full electricity needs.

Rio Tinto expects the agreements to commence in July and run until at least 2044.

Commenting on the deal that could be offering some tailwinds to Rio Tinto shares today, Rio’s Aluminium CEO Jérôme Pécresse said:

We are pleased the long-term future of the Tiwai Point smelter has been secured with these agreements, which were reached with a genuinely collaborative spirit between all parties.

They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminium needed for the global energy transition.

This is an exciting new chapter, and we would like to thank everyone involved.

“This is a fantastic outcome for New Zealand and the Southland region,” Meridian Energy CEO Neal Barclay added. “It’s further proof that large industrial businesses can utilise New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country.”

The agreement stipulates that in the event of future power shortages, NZAS could be asked to cut its electric use by up to 185 megawatts to ensure national energy security.

The agreements remain subject to regulatory approvals and other standard conditions.

In other news

Rio Tinto shares could also be getting a boost from the announcement of a separate transaction.

The ASX 200 miner reported it has entered into an agreement to acquire Sumitomo Chemical Company Limited’s 20.64% interest in NZAS for an undisclosed price.

Once that transaction is complete, Rio Tinto will own 100% of NZAS.

The post Rio Tinto shares marching higher amid an ‘exciting new chapter’ for production 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 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’re hunting for an income boost, then it could pay to look closely at the ASX shares listed below.

That’s because analysts are feeling bullish on these income options and recently put the equivalent of buy ratings on their shares.

Here’s what sort of dividend yields and gains you could expect to receive from these ASX income shares:

Deterra Royalties Ltd (ASX: DRR)

The first ASX income share that analysts think investors should be buying is Deterra Royalties.

It is focused on the management and growth of a portfolio of royalty assets across a range of commodities, primarily bulks, base, and battery metals. Its portfolio includes royalties held over Mining Area C, its cornerstone asset, in the Pilbara region of Western Australia, as well as five smaller royalties including Yoongarillup/Yalyalup, Wonnerup, Eneabba and St Ives.

Morgan Stanley is positive on the company and believes its portfolio has positioned it to reward shareholders with some big dividends in the near term.

For example, it is forecasting fully franked dividends per share of 32.7 cents in FY 2024 and then 39 cents in FY 2025. Based on the current Deterra Royalties share price of $4.54, this will mean sizeable dividend yields of 7.2% and 8.6%, respectively.

Morgan Stanley currently has an overweight rating and $5.60 price target on its shares. This implies potential upside of 23% for investors.

Inghams Group Ltd (ASX: ING)

Another ASX income share that analysts think could be a buy for investors right now is Inghams.

It is one of the largest integrated protein producers across Australia and New Zealand, providing chicken, turkey, and plant‑based protein products.

Morgans thinks investors should invest in Inghams while its shares are cheap. The broker notes that “ING remains undervalued trading on a low PE multiple, especially for what is a market leader, with a vertically integrated operating model and assets that are difficult and costly to replicate.”

Another positive is that its analysts are forecasting some big dividend yields in the near term. They expect the company to be in a position to pay fully franked dividends of 22 cents per share in FY 2024 and then 23 cents per share in FY 2025. Based on the current Inghams share price of $3.47, this equates to dividend yields of 6.3% and 6.6%, respectively.

Morgans has an add rating and $4.40 price target on its shares. This suggests that upside of 27% is possible over the next 12 months.

The post 2 ASX income shares with 20%+ upside and 6%+ dividend yields 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.

Earnings season is traditionally in February and August. However, not all ASX 200 stocks operate with the standard financial calendar.

As a result, this month there have been a number of result releases from popular companies.

The team at Wilsons has been running the rule over these updates and has given its verdict on them and their shares. Let’s see what the broker is saying about three stocks:

Aristocrat Leisure Limited (ASX: ALL)

Wilsons was impressed with this gaming technology company’s performance during the first half of FY 2024. It said:

Aristocrat’s (ALL) 1H24 result was an impressive, double-digit beat to consensus earnings expectations, which demonstrated the quality of the business underpinned by its ability to consistently gain market share.

And with management speaking positively about the ASX 200 stock’s outlook, Wilsons thinks that its shares could still be cheap. It adds:

ALL is still ‘cheap’ despite its recent rally with the company trading on a forward PE of ~18x. This multiple is attractive given ALL’s competitive strengths and the long runway for double-digit EPS growth, underpinned by continued share gains in land-based gaming and the accelerating performance of Aristocrat Interactive within the fast-growing real money gaming industry.

Webjet Ltd (ASX: WEB)

Another ASX 200 stock that impressed the broker this month was online travel agent Webjet.

While it was pleased with its performance in FY 2024, the thing that really caught its eye was its plan to demerge the WebBeds business. It said:

WEB reported FY24 full year EBITDA growth of +40% to $188m, which was towards the top-end of the company’s $180-190m guidance range and broadly in line with expectations. The major news however was WEB’s plans to demerge its B2B (WebBeds) and B2C segments (principally Webjet.com.au) into two separately ASX-listed companies in FY25.

Wilsons believes that the market is undervaluing the WebBeds business and appears to believe that the demerger will unlock this value. It explains:

To estimate the current ‘implied’ market valuation of WebBeds, we have conducted a sum-of-the-parts analysis of the combined WEB group. Our analysis assumes that Webjet OTA will trade on an FY25e EV/EBITDA multiple of ~8.6x – directly in line with the global peer average. Presuming this is accurate, WEB’s headline market multiple of ~13x implies WebBeds is valued at an implied FY25 EV/EBITDA multiple of ~15x – well below the average comp multiple of ~26x. This suggests that WebBeds is undervalued by the market in the current group structure. As such, we are confident that the proposed demerger, if successful, is likely to drive a re-rate of WebBeds valuation multiple (and thus WEB’s sum-of-the parts multiple), unlocking ‘hidden value’ for WEB shareholders.

Xero Ltd (ASX: XRO)

Finally, this cloud accounting platform provider is another ASX 200 stock that impressed this month with its results. It commented:

Xero’s (XRO) FY24 result was an impressive beat to consensus expectations, which has strengthened our conviction in our investment thesis. In the result, XRO showcased its ability to balance top line growth with profitability following recent cost outs. Notably, the company achieved its ‘rule of 40’ target several years earlier than expected by the street, with revenue growth of +22% and a free cash flow margin of 20%.

Based on this performance and its positive long term growth outlook, the broker feels that Xero’s shares are attractively priced. Particularly given its potential to outperform consensus estimates. It adds:

In summary, we expect continued double-digit subscriber growth, combined with price increases and a leaner cost base, to underpin significant long-term earnings growth that is not fully appreciated by the market in our view. Therefore, despite XRO’s high forward PE multiple of ~78x, the company still offers attractive value at current levels considering consensus EPS growth of ~34% p.a. (CAGR) to FY30 with potential for upgrades on top of this.

The post Wilsons gives its verdict on Webjet and these popular ASX 200 stocks appeared first on The Motley Fool Australia.

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