Category: Stock Market

The Pilbara Minerals Ltd (ASX: PLS) share price is digging a deeper hole on Tuesday.

At the time of writing, shares in the lithium producer are down 6.2% to $3.65. The company is not alone in its punishment today, with nearly the entire S&P/ASX 200 Index (ASX: XJO) sitting in the red, aside from some strength among gold miners.

It’s been a tough month for Pilbara Minerals shares amid a cascading lithium price. A mixed bag of views on the battery commodity has cast doubt on the industry’s future cash flows. In turn, the Pilbara Minerals share price has tumbled 24% over the past month.

Could the downtrodden price represent a valuable opportunity?

Time to pull the trigger on Pilbara Mineral shares?

First and foremost, mining is a price-taking industry. Profits for companies — including those of Pilbara Minerals — are heavily dependent on the going rate for the commodity in question.

All else equal, you can expect the company’s earnings to grow in lockstep with the material. Hence, the supply and demand of lithium are critical to the performance of the industry and the companies that operate in it.

As we can see in the chart below, Pilbara’s profits have skyrocketed alongside the price of lithium since 2021. However, lithium futures (orange) have traded downwards since the end of last year, coinciding with the peak in revenue.

While Pilbara Minerals shares may look cheap at a price-to-earnings (P/E) ratio of 6.6 right now, this is based on the past 12 months of earnings. The concern is earnings could be meaningfully lower moving forward with lithium carbonate prices tumbling nearly 40% so far this year.

If the current Pilbara Minerals share price represents an opportunity then it really comes down to whether you believe lithium prices will trend higher or sustain their downward move.

What are analysts forecasting for lithium?

As previously mentioned, the future of lithium depends on who you ask and over what time frame.

My colleague, Tristan Harrison, recently wrote about Citi’s forecasts of further weakening in the electrifying material’s price.

According to the broker, short-term pressure will come from a perceived weakness in electric vehicle demand in China. As such, Citi’s analysts are expecting a price of US$40,000 per tonne in the next three months compared to its prior US$60,000 per tonne estimate.

Meanwhile, the team at Morgans is expecting demand in the Chinese market to return from March onwards. On this assumption, analysts think Pilbara Minerals shares are worth considering amid the selling.

The post Down 24% in a month, is the Pilbara Minerals share price now a bargain buy? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why Bank of Queensland, Brainchip, Pilbara Minerals, and Yancoal shares are sinking today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Here’s why experts rate these ASX 200 growth shares as buys
• Will the Pilbara Minerals share price crash in 2023?
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/eg6l05I

With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

IDP Education Ltd (ASX: IEL)

According to a note out of Credit Suisse, its analysts have initiated coverage on this language testing and student placement company’s shares with an outperform rating and $35.50 price target. The broker likes the company due to its defensive earnings and exposure to structural growth markets. The latter is expected to be supported by the growing middle class in Asia. The IDP Education share price is trading at $27.98 today.

Global Lithium Resources Ltd (ASX: GL1)

A note out of Macquarie reveals that its analysts have retained their outperform rating on this lithium developer’s shares with a trimmed price target of $3.60. This follows the release of its latest drilling update, which points to a large north-eastern extension of the existing Manna Deposit. Macquarie was pleased with the update and has only trimmed its valuation to account for a probable equity funding package to support project development. The Global Lithium share price is fetching $1.32 this afternoon.

Woolworths Group Ltd (ASX: WOW)

Analysts at Citi have retained their buy rating and $42.20 price target on this retail giant’s shares. The broker is feeling relatively positive on consumer spending and has boosted its earnings estimates marginally to reflect this. Citi is forecasting earnings per share growth of approximately 14% in both FY 2023 and FY 2024. The Woolworths share price is trading at $36.22 on Tuesday.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Should I buy Woolworths shares at $37?
• ‘Still has legs’: Not too late to buy these 2 stellar ASX 200 shares, says expert
• Big lesson from reporting season: STAY AWAY from these ASX shares, says expert
• ‘A rocky road ahead’: Expert names 2 ASX 200 shares to thrive in a tough 2023
• Here’s how I would secure monthly dividends in the 2024 financial year with these ASX stocks

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

from The Motley Fool Australia https://ift.tt/c5X1u2D

Well, it’s been an awful day for the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday, no way around it. At present, the ASX 200 has lost a meaty 1.65%, dragging the Index back under 7,000 points. And one of the worst casualties of this market pessimism is the Magellan Financial Group Ltd (ASX: MFG) share price.

Magellan shares haven’t done well in the face of this ASX sell-off, to put it kindly. This ASX 200 fund manager has cratered by a nasty 4.4% at the time of writing, putting the company down to $8.03 a share. 

This bad news was a lot worse this morning too. Just before midday, the Magellan share price fell as low as $7.90 a share.

Not only is that a new 52-week low for Magellan, but it represents a new 10-year low for the fund manager. Yep, you’d have to go back all the way to June 2013 to find the last time Magellan was trading with a 7 at the front of its share price:

So what’s going on with Magellan today that has the company at a decade low?

Why is the Magellan share price at a 10-year low today?

Well, it doesn’t appear to be the result of anything out of the company itself. There hasn’t been much in the way of news at all out of Magellan recently. The company’s last ASX announcement was the funds under management (FUM) update we received on 6 March.

This didn’t contain much in the way of good news, with Magellan’s FUM standing at $45.4 billion as of 28 February, down from $6.2 billion at the end of January.

Magellan shares have been losing steam ever since this update was released, but its losses have accelerated sharply over the past few days. In fact, over the past week alone, the Magellan share price is down by more than 7%.

As such, it looks like investors are bailing out of Magellan thanks to the woes of the broader market. As we’ve extensively covered here at the Fool, the collapse of the US bank SVB Financial Group has spooked markets all around the world.

The ASX sell-off in the wake of the news that SVB had gone under late last week has resulted in the ASX 200 losing all of the gains that it had notched up in 2023 so far.

So it seems that investors can thank this bout of panic for the lows we are seeing in the Magellan share price this Tuesday.

The post Magellan share price slumps 5% to 10-year low appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why has the Newcrest share price leapt 7% in under a week?
• ASX 200 dives 2%, wiping out last of 2023 gains
• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday

Motley Fool contributor Sebastian Bowen 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.

from The Motley Fool Australia https://ift.tt/HsCSGop

The Qantas Airways Limited (ASX: QAN) share price has been caught up in the market selloff on Tuesday.

At the time of writing, the airline operator’s shares are down 3% to $6.30.

This means that its shares are now down over 7% over the last three sessions.

Should you buy Qantas shares?

One leading broker that is likely to see this as a buying opportunity is Goldman Sachs.

According to a recent note, its analysts have put a conviction buy rating and $8.30 price target on its shares.

This implies potential upside of almost 32% for Qantas’ shares over the next 12 months.

Why is Goldman so bullish?

Goldman believes the market is thoroughly undervaluing Qantas based on its positive outlook and significantly improved earnings capacity. In fact, its analysts highlight that its shares are still trading below pre-COVID levels despite this. The broker explained:

As a key beneficiary of the re-opening of the world post-COVID, we expect the airline’s traffic capacity to return to 96% of pre-COVID levels by FY24e, with the airline’s earnings capacity (EPS) expected to exceed that of pre-COVID levels by ~65%.

We forecast a ~14% FY19-24e cumulative uplift in unit revenues (c. 2.5%pa), and ~50% drop-through of QAN’s A$1bn+ structural cost-out program. QAN’s current market capitalisation and enterprise value are 1% above and 14% below pre-COVID levels. As such, we believe QAN is not priced for a generic recovery, let alone prospects for improved earnings capacity. We continue to see upside associated with substantially improved MT earnings capacity and include QAN in our regional Conviction List.

All in all, this could make the recent weakness a great opportunity for investors to pick up Qantas shares at a discount.

The post Qantas shares have dumped 7% in 3 days. Should I buy? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ‘Still has legs’: Not too late to buy these 2 stellar ASX 200 shares, says expert
• 7 ASX All Ordinaries shares smashing new 52-week highs today
• Qantas share price could surge to $10: JPMorgan
• Qantas share price flying higher despite new labour disruptions
• Qantas share price takes off to new multi-year high 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.

from The Motley Fool Australia https://ift.tt/WqusNCh

ASX lithium shares were among the top performers on the exchange amid all-time high lithium prices in 2022.

While concerns over a potential short-term oversupply of the battery-critical metal has pressured lithium stocks more recently, that hasn’t stopped one-time short seller Tim Murray from joining forces with Anson Resources Ltd (ASX: ASN).

ASX lithium share may have found ‘the Holy Grail of mining’

Murray, the former managing partner of J Capital, an activist short seller, was amongst the loudest critics of the lithium boom and wrote reports highlighting why he thought a number of ASX lithium shares were on shaky ground.

Now he’s singing a slightly different tune, after signing on with Anson Resources in January as the miner’s chief operating officer (COO).

To be clear, he’s not bullish on all ASX lithium shares. But he highlights the potential for Anson Resources to use direct lithium extraction (DLE) to produce lithium in a far more environmentally friendly way than conventional methods.

“It’s sort of like the Holy Grail in lithium mining,” Murray said (courtesy of The Australian Financial Review).

Murray said the standard process used to produce lithium to make batteries “involves a lot of waste” with evaporation ponds.

According to Murray:

It’s dirty, there’s lots of water and chemical usage, lots of coal power too. But this is different, that’s why it’s so attractive because you get green lithium through this process. That’s how I went from sceptic to believer.

Anson Resources’ core asset is the Paradox Lithium Project in the US state of Utah.

But there’s a long road ahead before the miner realises any potentially successful DLE production. The company had $45 million in cash as at 31 December, and forecasts it will need more than $700 million to get Paradox up and running.

However, Murray pointed to Anson’s agreement with China-based Sunresin to license its proven DLE technology as giving the ASX lithium share a big edge over its rivals.

“Anson is way ahead of other companies. Sunresin is a big deal. A lot of other players are just a few mates in a shed tinkering with some test tubes,” he said (quoted by the AFR).

As part of the S&P Dow Jones Indices quarterly rebalance of the S&P/ASX Indices, Anson resources will be added to the All Ordinaries Index (ASX: XAO) next Monday, 20 March.

Anson Resources share price snapshot

As you can see on the chart below, the ASX lithium share has been a strong performer over the past 12 months, up 75%.

The stock is up 17% so far in 2023.

The post Guess which ASX lithium share turned one sceptic into a bona fide believer appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• 5 ASX lithium shares being added to the All Ordinaries in the latest rebalance
• At under 30 cents each, are these ASX lithium stocks cheap?

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.

from The Motley Fool Australia https://ift.tt/LPdb5Ku

The S&P/ASX 200 Index (ASX: XJO) is out of form again on Tuesday. In afternoon trade, the benchmark index is down 1.65% to 6,992.1 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Kingsgate Consolidated Limited (ASX: KCN)

The Kingsgate share price is up 10% to $1.61. Investors have been buying this gold miner’s shares for a couple of reasons. One is a rise in the gold price and the other is an update on the Chatree Gold Mine. The latter reveals that inspectors have given its Thailand-based mine the thumbs up for reopening.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price is rising again and is up 11% to $10.08. Investors have been buying this biotech company’s shares this week after its treatment for Rett’s Syndrome was granted US FDA approval. The company has a deal in place with its partner Acadia Pharmaceuticals (NASDAQ: ACAD) that could underpin significant royalty and milestone payments.

Newcrest Mining Ltd (ASX: NCM)

The Newcrest share price is up over 3% to $24.81. Investors have been buying this gold miner’s shares following a strong rise in the gold price. This was driven by demand for safe haven assets and has lifted the whole industry. For example, the S&P/ASX All Ordinaries Gold index is up almost 3% today.

Pushpay Holdings Ltd (ASX: PPH)

The Pushpay share price is up 2.5% to $1.16. This morning, this payments company revealed that it has given Pegasus Bidco another day to make an improved takeover offer. The suitor now has until 7pm New Zealand time on Wednesday to make its new proposal. This comes after shareholders rejected its previous offer at the start of the month.

The post Why Kingsgate, Neuren, Newcrest, and Pushpay shares are rising today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Why has the Newcrest share price leapt 7% in under a week?
• Why is everyone suddenly talking about ASX 200 gold stocks again?
• Why are ASX 200 gold stocks like Northern Star having such a stellar run today?
• Why Neuren, Northern Star, Race Oncology, and Westgold shares are storming higher
• Guess which ASX All Ords stock is rocketing 27% on a new FDA approval

from The Motley Fool Australia https://ift.tt/NDsyX0p

The S&P/ASX 200 Index (ASX: XJO) is having a very difficult time on Tuesday. In afternoon trade, the benchmark index is down 1.9% to 6,974.9 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Bank of Queensland Ltd (ASX: BOQ)

The Bank of Queensland share price is down over 4% to $6.39. Investors have been selling bank shares today amid concerns over the collapse of Silicon Valley Bank last week. The regional players have been hit particularly hard on contagion fears.

Brainchip Holdings Ltd (ASX: BRN)

The Brainchip share price has crashed a further 8% to a new 52-week low of 46 cents. This struggling semiconductor company’s shares have been hammered since it revealed second-half revenue of just US$250,000 last month. And with a market capitalisation of just under $900 million, there could still be plenty more declines to come. No wonder short sellers are loading up on the meme stock.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is down 5% to $3.69. This has been driven by the broad market weakness today, with higher risk assets getting hit hardest. And given how high up the risk curve lithium shares are, it isn’t surprising to see Pilbara Minerals and its peers come under pressure.

Yancoal Australia Ltd (ASX: YAL)

The Yancoal share price is down 14% to $5.87. The catalyst for this was the coal miner’s shares going ex-dividend this morning. Last month, thanks to strong coal prices, the coal miner delivered a bumper profit and declared a massive 70 cents per share fully franked final dividend. This represents a 10.2% yield based on its last close price.

The post Why Bank of Queensland, Brainchip, Pilbara Minerals, and Yancoal shares are sinking today appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 bank shares: Are they better prepared than Silicon Valley Bank?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Here’s why experts rate these ASX 200 growth shares as buys
• Why Atlantic Lithium, Arafura, Brainchip, and Core Lithium shares are falling
• Will the Pilbara Minerals share price crash in 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 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.

from The Motley Fool Australia https://ift.tt/1LFgw7t

The Newcrest Mining Ltd (ASX: NCM) share price is up 3.6% during the lunch hour on Tuesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) gold miner closed yesterday trading for $24.02 each. They are currently trading for $24.89 apiece.

That puts the Newcrest share price up 7.1% since last Wednesday’s closing bell.

For some context, the ASX 200 is down 4.6% over that same period.

What are ASX 200 investors considering?

First, it’s not just the Newcrest share price that’s outperforming over the past four trading days.

Since last Wednesday’s close, the S&P/ASX All Ordinaries Gold Index (ASX: XGD) has rocketed 7.8%.

That tremendous rally has been driven by a 5.4% boost in the gold price over this short period, with gold currently fetching US$1,911 per troy ounce.

The rally in the yellow metal helping drive the Newcrest share price higher has in turn been fuelled by investor angst over last week’s implosion of United States-based SVB Financial Group (NASDAQ: SIVB). With the market concerned over more potential bank insolvencies, gold is shining brightly thanks to its classic haven status.

What else is helping lift the Newcrest share price?

Atop the fast-rising gold price, the Newcrest share price could be receiving some helpful tailwinds from reports the ASX 200 gold miner has resumed takeover talks with US gold mining giant Newmont.

On 16 February, the Newcrest board unanimously rejected the offer, valued at some $22 billion, saying it didn’t “represent sufficient value” for its shareholders.

According to The Australian Financial Review, Newmont has agreed to the non-disclosure and standstill agreements Newcrest requested as the next step to continuing negotiations.

Last week, Newcrest interim CEO Sherry Duhe wouldn’t be pinned down on what the board would deem a reasonable valuation for the Newcrest share price.

According to Duhe:

There’s not an absolute number out there… We have been very clear, and our board’s been unanimous, in the rejection of both the offers Newmont has made to date.

We have a fantastic company with a really strong balance sheet, we have a pretty unparalleled portfolio out there with very long life assets that are low cost, and increasingly we’ve got a huge amount of copper in the portfolio which is essential for electrification and net zero.

Exploration update

Investors may also be bidding up the Newcrest share price today following an exploration update at its Red Chris project, located in British Columbia, Canada.

Red Chris is a joint venture between Newcrest (70%) and Imperial Metals Corporation (30%). Newcrest is the operator.

According to this morning’s release, successful exploration at Red Chris has expanded the East Ridge Exploration Target delivering additional mining potential.

“The scale of East Ridge and its proximity to our existing infrastructure means it has the potential to play a significant role in the long-term future of Red Chris,” Duhe said. “We believe East Ridge represents a considerable opportunity for Newcrest as we continue to pursue further options to unlock value at Red Chris.”

Newcrest share price snapshot

Buoyed by the strong run this past week, the Newcrest share price – pictured below – is up 21% so far in 2023.

The post Why has the Newcrest share price leapt 7% in under a week? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 dives 2%, wiping out last of 2023 gains
• Why is everyone suddenly talking about ASX 200 gold stocks again?
• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday

SVB Financial provides credit and banking services to The Motley Fool. 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 SVB Financial. The Motley Fool Australia has recommended SVB Financial. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

from The Motley Fool Australia https://ift.tt/TjCIwW0

The Rio Tinto Ltd (ASX: RIO) share price is down 0.9% today to $117.44 as the company prepares to launch production at its enormously expanded Mongolian copper mine.

It appears that the Rio Tinto share price is falling along with the S&P/ASX 200 Index (ASX: XJO).

ASX 200 shares are having a shocker all around today. The index is down 2% at the time of writing, with every one of the 11 market sectors in the red.

Rio Tinto share price down amid copper mine launch

According to reporting in The Australian, Rio Tinto CEO Jakob Stausholm is in Mongolia for the official commencement of production from the new underground section of the Oyu Tolgoi copper mine.

According to Stausholm, the mine is “on track to be the fourth-largest copper mine in the world”.

The Oyu Tolgoi copper mine already produces 130,000 tonnes of copper annually from its open pit.

But when you add in the richer production expected from the underground section, Rio reckons average annual output will rise to 500,000 tonnes from 2028 to 2036.

Production will then slow to an average of 350,000 tonnes of copper per year for a further five years.

It hasn’t been a smooth road to this point due to friction between Rio Tinto and the Mongolian Government, which owns 33% of the project.

At one point, the parties reached an impasse over investment and revenue sharing that resulted in a near two-year delay in construction.

When Stausholm took over as CEO in January 2021, he made it a personal mission to get Oyu Tolgoi sorted.

Things appear to be going swimmingly now.

The Mongolian Prime Minister Oyun-Erdene Luvsannamsrai is with Stausholm at the site for the launch.

What’s the significance of Oyu Tolgoi?

For Mongolia, the significance is huge. According to the article, the mine will eventually deliver as much as half of the country’s total gross domestic production (GDP).

For Rio Tinto, the mine will do a couple of big things for the company.

Firstly, it will diversify its earnings a bit more.

Rio has four key mining segments — iron ore, aluminium, copper, and other minerals.

In 2022, copper contributed US$2.376 billion in underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA). This represented 8.8% of total EBITDA, making copper the smallest contributing segment overall.

Iron ore was the largest, contributing US$18.612 billion in EBITDA or 69% of the earnings pie.

To put Oyu Tolgoi into perspective, at peak capacity, Rio’s share of production will equate to 330,000 tonnes (66% ownership).

That represents a huge increase in copper production overall for the company. In 2022, Rio achieved total mined copper production of 521,000 tonnes and refined copper production of 209,200 tonnes.

Secondly, Oyu Tolgoi will enhance Rio’s ability to capture the rising demand for minerals critical to the global energy transition.

Copper is used in electric vehicles and wind turbines.

In Rio’s 2022 Strategic Report released to the ASX on 23 February, Stausholm said:

We expect the energy transition will add as much as 25% in additional demand above traditional sources across our key products by 2035.

That is why our strategy is about growing in the materials required to achieve the energy transition, such as copper, lithium and high-quality iron ore.

A highlight this year was resetting our relationship with the Mongolian Government and successfully executing our first significant M&A in a decade through our acquisition of Turquoise Hill Resources Ltd. This doubled our interest in Oyu Tolgoi to 66% …

The location of the mine in the Gobi Desert is about 100km north of the Chinese border. That’s pretty convenient considering China consumes almost half of the world’s copper output.

Broker Goldman Sachs is backing the Rio Tinto share price for significant growth over the next year.

It has a conviction buy rating on the mining share and has upped its price target on Rio to $140.40.

The post Rio Tinto share price dips despite copper mega-mine milestone appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#0095C8”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#0095C8”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• Top brokers name 3 ASX shares to buy next week
• Why 29Metals, BHP, Helia, and Rio Tinto shares are dropping today
• Why is the Rio Tinto share price tumbling 4% on Thursday?
• 5 things to watch on the ASX 200 on Thursday
• Last chance to snag the next dividend from these 4 ASX 200 mining shares

Motley Fool contributor Bronwyn Allen 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.

from The Motley Fool Australia https://ift.tt/GJdoxVt

The Woodside Energy Group Ltd (ASX: WDS) share price has been through plenty of pain in the past week, it has dropped around 12%. But, can the gas and oil ASX share turn things around?

Over the past year, the business has been through a lot. It has benefited from the higher energy prices amid the Russian invasion of Ukraine.

It’s down more than 3% today. Despite all of the elevated profit generation, it’s now only 3% higher than it was 12 months ago.

What’s going on, and will the Woodside share price be able to recover?

Uncertainty rattles markets

The ongoing volatility in the US after the collapse of the bank Silicon Valley Bank (SVB) has caused some uncertainty.

The Australian Financial Review reported on a decline in the oil price yesterday. The Brent crude oil price declined US$2, or 2.4% to US$80.77. This decline was attributed to fears of a new financial crisis, though a “recovery in Chinese demand provided support.”

The newspaper reported that “worries about further Federal Reserve monetary tightening have been exacerbated by high US crude oil inventories.”

The relationship between supply and demand can have a noticeable impact on a resource price. It was noted by the AFR that “crude oil production in the seven biggest US shale basis is expected to rise in April to its highest since December 2019″, according to the Energy Information Administration.

What to make of this for the Woodside share price?

Clearly, investors don’t think it’s a positive. If Woodside’s production volume and production costs don’t change, then a reduction of the revenue per barrel of oil equivalent will largely be a cut to net profit after tax (NPAT) as well.

An investing opportunity can be opened up if a business keeps getting cheaper. But, it’s a bit trickier when it comes to resource shares, particularly when it comes to oil, gas and coal ASX shares. We don’t know what resource prices are going to do next.

Last week, JP Morgan cut its price target on Woodside shares to $34, according to reporting by The Australian. A price target implies where the share price could be in 12 months. At the time of the price target, that implied a decline. But, now it would suggest a small rise in the low-single-digits.

In the short term, movements of energy prices could dictate which way the Woodside share price goes from here.

The post Down 12% in a week, has the Woodside share price got further to fall? appeared first on The Motley Fool Australia.

(function() {
function setButtonColorDefaults(param, property, defaultValue) {
if( !param || !param.includes(‘#’)) {
var button = document.getElementsByClassName(“pitch-snippet”)[0].getElementsByClassName(“pitch-button”)[0];
button.style[property] = defaultValue;
}
}

setButtonColorDefaults(“#43B02A”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43B02A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#fff”, ‘color’, ‘#fff’);
})()

More reading

• ASX 200 dives 2%, wiping out last of 2023 gains
• Top ASX 200 tech shares to buy right now: Morgans
• 5 things to watch on the ASX 200 on Tuesday
• 3 ASX 200 shares trading ex-dividend on Tuesday
• Why are ASX 200 gold stocks like Northern Star having such a stellar run 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.

from The Motley Fool Australia https://ift.tt/mrkzgDX