Category: Stock Market

Coles Group Ltd (ASX: COL) shares are on course to end the week in the red.

In afternoon trade, the supermarket giant’s shares are down 1% to $16.68.

This means the Coles share price is now down 10% over the last six months, as you can see below.

Should you buy Coles shares?

One leading broker that thinks investors should be buying Coles shares is Morgans.

According to a recent note, its analysts have an add rating and $19.50 price target on its shares.

This suggests that the supermarket operator’s shares could rise by 17% if everything goes to plan.

But the returns won’t stop there. Coles has a divided policy that aims to pay out up to 90% of its earnings to shareholders each year.

Morgans expects this to result in a fully franked dividend of 64 cents per share being paid to shareholders in FY 2023. This equates to an attractive 3.8% dividend yield at current prices.

Why is it positive?

Morgans is positive on the company for a number of reasons. This includes its attractive valuation, defensive qualities, and strong balance sheet.

The broker also expects a reversion in consumer shopping habits to be a positive for the retailer. It explained:

Trading on 20.6x FY23F PE and 4.0% yield, we continue to see COL as offering good value with the company’s solid balance sheet and defensive characteristics putting it in a good position to navigate through a weaker economic environment. The unwinding of local shopping should also help further market share gains.

All in all, Morgans appears to believe that Coles shares could be a top option for investors looking for defensive blue chips.

The post Want 17% upside plus dividend income? Broker says buy Coles shares appeared first on The Motley Fool Australia.

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More reading

• How I’d invest my very first $500 in ASX shares in 2023
• Why I think these 3 ASX 200 dividend shares are top buys for retirement
• Brokers name 2 ASX dividend shares to buy now
• How I’d invest $1,000 in ASX 200 shares for rising inflation
• How I’d use a stock market crash to boost my passive income

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 positions in and has recommended Coles 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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The S&P/ASX 200 Index (ASX: XJO) looks on track to end the trading week on a high note after what has been a pretty pleasing week for the ASX.

So far today, the ASX 200 has gained another 0.7%, which lifts the index to around 7,330 points. That’s a good 3.1% above where we wrapped things up last week.

So time now for a deeper dive into these happy gains. So let’s check out the ASX 200 shares currently at the top of the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Friday

South32 Ltd (ASX: S32)

First up today is the ASX 200 mining share South32. This Friday has seen a hefty 11.62 million South32 shares change hands as it currently stands.

We haven’t had any news from this company today. However, the South32 share price has risen another 0.99% so far to $4.58 a share, which might be the smoking gun behind this high volume.

It was even better for South32 shares earlier this afternoon, too, topping out at $4.64. This comes after some new broker opinions out this morning, which could be influencing volumes here as well.

AMP Ltd (ASX: AMP)

Next up, we have the ASX 200 financial services company AMP. A sizeable 12.9 million AMP shares have bounced around the ASX at this point today. AMP has had a rather bouncy week, with the company updating investors on the terms of its upcoming Collimate Capital sale earlier this week.

Since last Friday, the AMP share price has risen by around 6.5%. Despite its flat share price today (at $1.34 a share), this impressive week might be behind so many AMP shares flying around.

Pilbara Minerals Ltd (ASX: PLS)

Our third, final and most traded ASX 200 share today is none other than Pilbara Minerals. This lithium producer has had a notable 15.5 million of its shares bought and sold thus far this session.

We haven’t seen any fresh news out of Pilbara either. But that hasn’t stopped this lithium leader’s shares from bucking the market today with a nasty loss. Pilbara Minerals shares have shed a painful 3.6% so far this Friday to $4.01 each. It’s this loss we can probably thank for the elevated volumes on display.

The post Here are the 3 most heavily traded ASX 200 shares on Friday appeared first on The Motley Fool Australia.

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More reading

• Still shopping, share price not dropping: Lovisa shines among 3 best ASX 200 retail shares of 2022
• 6 ASX mining shares just upgraded by brokers
• 4 ASX 200 shares celebrating Friday with new, 52-week highs
• 2 ASX 200 dividend stocks I’m running a mile from
• 3 ASX 200 shares I own for big dividends in 2023

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.

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It’s fair to say 2022 was a challenging year for ASX 200 retail shares. Rising inflation and interest rates meant shoppers began to tighten their belts.

In such an environment, consumer discretionary shares are often the first to take a hit. Being ‘discretionary’ in nature, these businesses don’t sell essential goods.

So, when households and young hip singles, who are critical to the consumer discretionary market, are forced to slim down their spending, they typically start with discretionary items first.

So it’s even more impressive that the top-performing ASX 200 retail share of 2022 is a jewellery retailer.

Lovisa Holdings Limited (ASX: LOV)

The fashion jewellery and accessories retailer recorded an astonishing 15% share price gain in 2022.

To put that into perspective, this was a far superior performance to its ASX 200 retail share peers.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) dived about 23% over the 12-month period. The S&P/ASX 200 Index (ASX: XJO) slipped 5.5% as well.

So, Lovisa shares really shimmered and shone by comparison. And here’s a clue why.

As my Fool colleague Cathryn reports, Lovisa does things differently to other ASX 200 retail shares.

As part of its vertically-integrated business model, Lovisa designs and manufactures all of its products in-house. Other retailers sell a mix of own-brand and third-party products.

This boosts Lovisa’s gross margins, which came in at a whopping 79% in FY22. As Cathryn puts it, “for every pair of $10 earrings flying off the shelves, it paid suppliers on average just $2.10”.

Lovisa also has smaller stores, which means lower rents. This contributed to an FY22 EBITDA margin of 31%.

The Lovisa share price is having a great day today, currently $26.30, up 3.3%.

As my Fool colleague James reports, today’s bump is likely a response to a broker note out of Canaccord Genuity. According to the note, its analysts have lifted their price target on Lovisa shares by 22% to $27.75.

Bapcor Limited (ASX: BAP)

The second ‘best-performing’ ASX 200 retail share in 2022 was car parts and accessories retailer Bapcor — but its share price actually lost value. Yep, that’s how bad the year 2022 was for retailers.

The Bapcor share price shed 7.85% in value over the 12 months. That’s a lot better than the index, but it’s doubtful shareholders were comforted by that.

But there’s some good news looking ahead.

Broker Citi reckons automotive shares are worth buying despite the obvious economic headwinds in 2023.

Bapcor is Citi’s “top pick” among small-cap car shares. This broker likes its “relatively less-discretionary product offering” and potentially “conservative fiscal 2025 consensus earnings”.

The Bapcor share price is trading at $6.66 on Friday afternoon, down 1.26%.

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price lost 13.2% in value in 2022. But this follows a 99% spike from the stock’s trough price during the COVID-19 crash in early 2020 through to the end of 2021.

JB Hi Fi’s net profit skyrocketed by 80% between FY20 and FY22 as people sought more home entertainment options during lockdowns, along with technology upgrades to help them work from home.

So, in this context, a 13.2% correction for this ASX 200 retail share appears not to be a big deal.

As Motley Fool Australia’s chief investment officer, Scott Phillips points out, the price decline has actually made JB Hi-Fi shares an appealing value buy.

JB Hi-Fi shares are still trading on a very low price-to-earnings (P/E) ratio of 9.67, according to the ASX.

The JB Hi-Fi share price is trading at $45.74 on Friday afternoon, up 0.46%.

The data above is from S&P Global Market Intelligence canvassing ASX 200 retail share price gains from the close on 31 December 2021 to the close on 31 December 2022.

The post Still shopping, share price not dropping: Lovisa shines among 3 best ASX 200 retail shares of 2022 appeared first on The Motley Fool Australia.

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More reading

• Falling inflation! Could the party be back on for ASX 200 retail shares?
• 6 ASX mining shares just upgraded by brokers
• Why Life360, Lithium Power, Lovisa, and Santos shares are storming higher today
• 4 ASX 200 shares celebrating Friday with new, 52-week highs
• 2 ASX 200 dividend stocks I’m running a mile from

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in BHP Group and Woodside Energy Group. 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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Interested in receiving extra money without putting in the work that often comes first? I believe it’s possible to build a consistent, life-long passive income by investing in ASX dividend shares.

And getting there doesn’t have to break the bank. In fact, I think it could be possible to create a second income by putting just $3 a day aside to invest.

How I’d build passive income with just $3 a day

There are plenty of investments capable of providing passive income. However, not many can be entered into with just a few dollars a day.

Investing in property, for instance, generally requires a substantial deposit.

On the other hand, buying ASX dividend shares doesn’t often require a large lump sum. Though, it does demand some spare cash. That’s where my $3 a day plan comes into play.

While that’s a small number – indeed, it likely wouldn’t buy a coffee in a café – consistently setting $3 aside every day can be the beginning of a decent nest egg.

$3 each day is equal to $21 a week, $93 a month, or $1,095 a year.

$1,095 can be enough to provide nearly $55 of annual passive income if one were to realise a 5% dividend yield.

If I were to use that dividend income to buy more shares, I could increase my returns substantially over the years without parting with extra cash – that’s the power of compounding.

Investing in ASX dividend shares in 2023

In my opinion, the trick to building life-long passive income is choosing the right investments.

Companies typically pay dividends out of surplus profits. Thus, in seeking out a sturdy passive income stream, I would search for companies I believe can boast strong cash flows now and into the future.

My gold standard would likely be companies operating in industries with consistent demand as well as competitive advantages over their peers.  

I might also pay particular attention to blue chip shares. Blue chip stocks are normally market leaders with sturdy balance sheets and a history of strong performance.

Once I’d pinned down a diverse handful of shares boasting the qualities I’d been seeking, I would determine if they were trading at an attractive price.

If they are, I would consider adding them to my portfolio to build passive income, starting in 2023.

The post How I’d use $3 a day in 2023 to earn passive income for life appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Falling inflation! Could the party be back on for ASX 200 retail shares?
• Should I buy Santos shares in 2023?
• 3 ASX lithium shares forecasting maiden production in 2023
• Can AGL shares really deliver a 7% dividend yield in FY24?

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It has been a busy week for Australia’s top brokers after the holiday period. 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 Goldman Sachs, its analysts have reiterated their buy rating and $15.20 price target on this lithium miner’s shares. Although the broker continues to expect lithium prices to fall materially in 2024, it remains positive on Allkem. This is due to its production growth plans, which the broker believes will support its earnings in the coming years despite falling prices. Allkem is the broker’s top pick in the lithium industry. The Allkem share price is trading at $12.48 this afternoon.

Argosy Minerals Limited (ASX: AGY)

A note out of Macquarie reveals that its analysts have initiated coverage on this lithium developer’s shares with an outperform rating and 85 cents price target. The broker highlights that Argosy Minerals’ operation in Argentina is due to commence commercial production in the first half of the year, which positions it to be profitable in FY 2023. The broker also sees scope for its production to grow meaningfully in the coming years. The Argosy Minerals share price is fetching 66.7 cents today.

Goodman Group (ASX: GMG)

Analysts at Citi have retained their buy rating but trimmed their price target on this industrial property company’s shares to $21.10. According to the note, after a difficult year for REITs in 2022, the broker is cautiously optimistic that 2023 will be better. In light of this, it is positive on Goodman, particularly given its best-in-class balance sheet and potential for upside to its guidance. The Goodman share price is trading at $18.60 on Friday afternoon.

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

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More reading

• 3 ASX lithium shares forecasting maiden production in 2023
• Broker says Allkem share price can rise 20% even if lithium prices fall
• 5 things to watch on the ASX 200 on Friday
• Which ASX lithium shares are producing and which are not in 2023?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor James Mickleboro has positions in Allkem. 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 S&P/ASX 200 Index (ASX: XJO) looks like it’s about to end the trading week on a high note. At present, the ASX 200 is up another 0.73%, bringing its gains in 2023 so far to a rather impressive 5.57%. That’s more than the index lost over the entirety of 2022. But ASX 200 retail shares are doing even better this Friday.

The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) is one of the best-performing sectors on the share market today. And this is the sector that is dominated by ASX retailers.

Just take Lovisa Holdings Ltd (ASX: LOV). Its shares are up a stellar 3.34%. Premier Investments Limited (ASX: PMV), the name behind Smiggle, Peter Alexander and Jay-Jays, is up 1.66%.

JB Hi-Fi Limited (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN) and Dusk Group Ltd (ASX: DSK) are also seeing some healthy green numbers.

So what might be giving this embattled sector a boost this Friday?

Why are ASX 200 retail shares on fire today?

Well, it’s possible that the latest economic numbers out of the United States overnight have helped to boost sentiment. According to the US Bureau of Labor Statistics, America’s consumer price index (CPI) fell by 0.1% over the month of December, largely on the back of cheaper fuel prices.

This brings the annual inflation rate in the US down to 6.5%. That’s the lowest figure in more than a year.

Lower inflation might mean that the US Federal Reserve might not be forced to lift interest rates as high as previously anticipated. This could have an effect on our own Reserve Bank of Australia (RBA)’s interest rate plans.

And lower rates are generally good news for shares. Especially those in the consumer discretionary sector, as these companies generally thrive when customers have more disposable income to spend.

We also got some good news earlier this week regarding Australia’s retail sector. On Wednesday, the Australian Bureau of Statistics (ABS) revealed that retail spending in Australia lifted by 1.4% in November to a record high.

Although this was attributed to the rising popularity of the Black Friday sales, it is still potentially a sign that Australian retailers are in a good space right now.

So it could be a combination of these factors that are boosting investors’ confidence in ASX 200 retail shares as we round out the second trading week of 2023.

The post Falling inflation! Could the party be back on for ASX 200 retail shares? appeared first on The Motley Fool Australia.

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More reading

• Why Life360, Lithium Power, Lovisa, and Santos shares are storming higher today
• 3 ASX All Ords shares forecasting dividend yields of at least 7% in FY24
• Here are the top 10 ASX 200 shares today
• 2 ASX 300 retail shares to buy right now, and one to avoid: Macquarie
• Why Brainchip, IAG, Premier Investments, and Telix shares are sinking today

Motley Fool contributor Sebastian Bowen has positions in Dusk Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman and Lovisa. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Dusk Group, Jb Hi-Fi, Lovisa, and Premier Investments. 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 Santos Ltd (ASX: STO) share price has climbed slightly in the last year, but could it provide better returns in the future?

Santos shares have risen 3.95% in the last year and are currently fetching $7.37.

In today’s trade, Santos shares are up 3.37%. So what is ahead for the Santos share price?

Could Santos go higher?

Santos is a major oil and gas producer. The price of oil and natural gas is likely to weigh on Santos shares in 2023.

UBS analysts are tipping energy prices to continue to leap higher in 2023. In a report released in January, the UBS chief investment office said it expects oil to “come out on top in 2023”.

UBS is predicting oil prices to lift higher than US $100 a barrel in coming months. Analysts forecast brent crude oil to reach US$110 a barrel, while WTI oil is predicted to hit US $107 a barrel. UBS said, “We expect crude oil prices to rise in 2023 for several reasons”. These include China’s reopening and Russian oil production falling.

With China reopening, oil demand looks set to exceed 2019 levels and hit a record high in 2H23. Emerging Asia, including India, should return to driving oil demand growth in 2023.

Meanwhile, Russian oil production should fall in 2023 due to the European Union’s embargo on Russian crude and refined products (to come into force on 5 February).

While production outside the OPEC+ group, which is primarily driven by the US, will likely grow again in 2023, the increase should only be modest following years of underinvestment in building new supply.

Meanwhile, UBS is tipping natural gas to reach US$4.50 per MMBtu by mid-2023 and hit US$5 per MMBtu by late 2023. Natural gas is currently fetching US$3.68, according to Bloomberg. However, in 2022, natural gas rose as high as US$9.7 per MMBtu in August.

What are brokers saying?

Meanwhile, analysts at Morgans are predicting the Santos share price to charge higher in 2023. The broker has placed an add rating on the Santos share price with a $9 price target. This implies an upside of 22%, based on the current share price.

Morgans is optimistic on Santos due to it’s “growth profile and diversified earnings base”. Analysts said Santos is:

Well placed to outperform against a backdrop of a broader sector recovery.

Santos share price snapshot

The Santos share price has returned gains of 43% over the last five years. In the last week, Santos shares have climbed nearly 7%.

Santos has a market capitalisation of about $24 billion based on the current share price.

The post Should I buy Santos shares in 2023? appeared first on The Motley Fool Australia.

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More reading

• Why Life360, Lithium Power, Lovisa, and Santos shares are storming higher today
• Oil best China reopening play: Goldman Sachs
• 5 things to watch on the ASX 200 on Thursday
• Morgans names 2 ASX 200 dividend shares to buy now
• 5 things to watch on the ASX 200 on Tuesday

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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With Goldman Sachs once again reiterating its belief that lithium prices will start its sharp decline later this year, many of the developers and explorers on the Australian share market run the risk of missing out on the sky high prices the battery making ingredient is commanding right now.

Goldman is forecasting the following average prices for these lithium types this year and next compared to current spot prices:

• Lithium carbonate
  • Spot: US$66,750 a tonne
  • 2023: US$53,300 a tonne
  • 2024: US$11,000 a tonne
• Lithium hydroxide
  • Spot: US$76,650 a tonne
  • 2023: US$58,650 a tonne
  • 2024: US$12,500 a tonne
• Lithium spodumene 6%
  • Spot: US$5,990 a tonne
  • 2023: US$4,330 a tonne
  • 2024: US$800 a tonne

The good news is that a few ASX lithium shares are scheduled to commence production this year, which means they may still be able to benefit from the current high prices for a period of time.

Which ASX lithium shares are due to commence production?

Three ASX lithium shares targeting their maiden production this year are Argosy Minerals Limited (ASX: AGY), Core Lithium Ltd (ASX: CXO), and Sayona Mining Ltd (ASX: SYA).

In respect to Argosy Minerals, it has completed 98% of the total works required for the massive 2,000tpa Rincon Lithium Project in Argentina. It also recently produced 1 tonne of battery quality lithium carbonate during the commissioning period. The company is aiming to achieve steady-state production operations by end of the second quarter of calendar year 2023.

Core Lithium isn’t far behind. In fact, the lithium developer made its first shipment of 15,000 dmt of 1.4% Li2O spodumene direct shipping ore last week. It is now aiming to commence spodumene concentrate production in the first half of 2023.

Finally, Sayona Mining is on the cusp of restarting the North American Lithium project with partner Piedmont Lithium Inc (ASX: PLL). At the end of last month, the company revealed that it was on track to restart production at the Quebec based operation in the first quarter of 2023. Sayona owns 75% of the project, with Piedmont Lithium owning 25%.

The post 3 ASX lithium shares forecasting maiden production in 2023 appeared first on The Motley Fool Australia.

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More reading

• Why Brainchip, Core Lithium, Deterra Royalties, and Mesoblast shares are falling
• Will Sayona Mining turn a profit in 2023?
• Here’s what Goldman Sachs is saying about the Core Lithium share price now
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Which ASX lithium shares are producing and which are not 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.

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AGL Energy Limited (ASX: AGL) shares may not have the best reputation as a prime income-producing investment. Since 2018, the dividend per share (DPS) from this energy giant has crumbled — falling from $1.26 per share to 26 cents per share.

Once upon a time, a 4% dividend yield was considered to be quite good. But now savvy savers can score themselves a 4.5% return through a personal savings account. A higher yield — say around 7% — is more desirable now given the risk premium of shares.

Could AGL shares be one blue-chip that can deliver a sublime 7% yield in the future?

What are analysts expecting for AGL shares?

Let’s start with our baseline. At the moment, the $5.25 billion energy retailer is trading on a 3.3% trailing dividend yield, paying 26 cents per share during the past year. As shown below, this is around historical lows for the company.

According to Commsec consensus estimates, analysts forecast the company’s yield to expand to 7.2% in FY24. This is based on the current AGL share price and the estimated DPS of 56 cents per share for the year ending June 2024.

If the analysts are right, then AGL could be a passive income machine in FY24. But could their estimates be off the mark? The short answer is yes, they could be — no one knows the future with 100% certainty. But it’s more valuable if I provide my thoughts with justification.

Dripping dividends or hunkering down?

If AGL pays 56 cents per share in dividends in FY24, it would increase 115% from its current level. There are three ways that the energy giant could achieve this phenomenal feat:

• Doubling its profits and maintaining its current payout ratio; or
• Maintaining its current profits and doubling its payout ratio; or
• Some combination of the two options above.

In its September 2022 update, AGL guided for between $200 million to $320 million underlying net profit after tax (NPAT) for FY23. At the midpoint, that would be $260 million in underlying NPAT — suggesting a 15.5% increase. If statutory earnings were to grow at the same pace, we’d be looking at approximately $994 million.

Below is the range of scenarios I could see playing out in FY24 — ranging from a 20% fall in earnings (due to investment in its energy transition) to a 20% increase caused by higher wholesale electricity prices.

	Bear case	Base case	Bull case
Earnings growth	-20%	0%	+20%
Statutory NPAT	$795.2 million	$994 million	$1,192.8 million
Payout ratio	20%	40%	60%
Total dividends	$159.04 million	$397.6 million	$715.68 million
DPS	23.6 cents	59.1 cents	$1.06
Dividend yield	3.0%	7.6%	13.6%

Assuming the AGL share price stays at current levels, I’d personally think a dividend yield of around 7% in FY24 is possible. The base case assumes no earnings growth, which is probable in my view as the company plans to invest $20 billion in new generation capacity over the next 13 years.

The post Can AGL shares really deliver a 7% dividend yield in FY24? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 200 dividend stocks I’m running a mile from
• Fortescue’s Twiggy Forrest is in the wars this week. Here’s why
• The AGL share price rocketed 30% in 2022. Can it keep the fire burning this year?
• Bought $1,000 of AGL shares 10 years ago? Here’s how much dividend income you’ve received
• 5 ASX 200 directors who have been buying up their company shares this month

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.

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A collection of ASX mining shares have been upgraded by various brokers today.

While the upgrades demonstrate increased confidence in these ASX mining shares, many are already trading above the brokers’ raised valuations.

Over the past three months, the S&P/ASX 300 Metals & Mining Index (ASX: XMM) has increased by almost 25%.

Investors are likely more enthusiastic about ASX mining shares now that China has dumped its COVID-19 Zero policy. This significantly disrupted the Chinese economy and affected demand for our exports.

Which ASX mining share got the biggest price forecast bump?

According to The Australian, Goldman feels a lot more confident about the prospects for ASX copper share Sandfire Resources Ltd (ASX: SFR).

The broker has raised its 12-month share price target by a whopping 38% to $4.50. But Sandfire shares are already trading well above this at $6.20, down 1.12% at lunchtime on Friday.

Goldman has also upgraded its share price target on ASX iron ore share Champion Iron Ltd (ASX: CIA) by 22% to $8.40.

Champion Iron shares are swapping hands for $7.76 today, up 0.91%. So, there’s a bit of potential upside available for investors here.

The broker has also raised its price target for South32 Ltd (ASX: S32) shares by 17% to $4.20. South 32 shares are already above this point, trading at $4.64 today, up 1.98%.

Conversely, Credit Suisse is not so confident and has cut its recommendation on South 32 shares to neutral.

Goldman upped its price target for BHP Group Ltd (ASX: BHP) shares by 12% to $48.10. But investors are more bullish, pushing BHP shares to $49.89 today, up 1.03%.

Goldman also backs ASX coal share New Hope Corporation Limited (ASX: NHC).

The team has raised its price target on New Hope shares by 26% to $4.90. But the New Hope share price has soared well beyond this to $6.27, up 5.91% on no news from the company at all today.

At the time of writing, it’s the top-performing share on the S&P/ASX 200 Index (ASX: XJO) today, according to ASX data.

They’ve also raised their forecast for the thermal coal price by 18% to US$275 per tonne for 2023.

Goldman also sees Rio Tinto Limited (ASX: RIO) heading 9% higher to $130 per share. Rio Tinto is currently trading at $122.85 per share, up 1.39% today.

Barclays has raised its recommendation on Rio Tinto shares to equal weight.

What’s got the brokers positive on ASX resources stocks?

In a new note, Goldman Sachs says it is forecasting a commodity price recovery in the second half of FY23:

While we continue to think 1Q23 will be a tough quarter for base metals and steel due to ongoing weak European and global demand, our expectation of a China reopening in 2Q, extreme lows in global base metal inventories and ongoing supply side disruptions make us positive on a 2H commodity price recovery.

Goldman said it was “most positive” on 62% fe and high-grade iron ore, as well as coking coal, due to an expected increase in Chinese steel production.

The broker is also optimistic about copper, aluminium, and zinc due to low global inventories and supply-side disruptions.

It cites copper production issues in Chile and a “slow restart of European aluminium and zinc smelters” as reasons for the shortages right now.

The post 6 ASX mining shares just upgraded by brokers appeared first on The Motley Fool Australia.

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More reading

• Why right now is always a great time to invest in ASX ETFs: Scott Phillips
• 4 ASX 200 shares celebrating Friday with new, 52-week highs
• 2 ASX 200 dividend stocks I’m running a mile from
• 3 ASX 200 shares I own for big dividends in 2023
• Are nervous investors returning to the ASX stock market right now?

Motley Fool contributor Bronwyn Allen has positions in BHP Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Barclays Plc. 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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