Category: Stock Market

Are you looking for dividend shares to add to your income portfolio? If you are, then the two listed below could be worth considering.

These dividend shares have been rated as buys by brokers and tipped to provide income investors with attractive yields. Here’s what you need to know about them:

Centuria Industrial REIT (ASX: CIP)

The first ASX dividend share that is rated as a buy right now is Centuria Industrial.

It is the largest domestic pure play industrial REIT on the Australian share market with a focus on building a portfolio of high quality industrial assets to deliver income and capital growth for investors.

Macquarie is a fan of the company and has an outperform rating and $4.27 price target on its shares. It believes Centuria Industrial’s shares trade at an attractive level, particularly given the industry tailwinds the company is benefiting from. The latter includes strong nationwide demand for industrial space, particularly from ecommerce-related tenant customers.

Macquarie expects this to underpin generous dividends in the coming years. It is forecasting dividends per share of 17.3 cents per share in FY 2022 and 17.8 cents per share in FY 2023. Based on the current Centuria Industrial REIT share price of $3.88, this will mean yields of 4.5% and 4.6%, respectively.

Super Retail Group Ltd (ASX: SUL)

Another ASX dividend share that is rated as a buy is Super Retail. It is the company behind the BCF, Macpac, Rebel, and Supercheap Auto businesses.

While the company is having a tough time in FY 2022 due to COVID headwinds, this is only expected to be temporary. In light of this, the team at Morgans appear to believe income investors should use recent share price weakness as a buying opportunity. Especially with its shares trading at just 11x estimated FY 2023 earnings.

Morgans currently has an add rating and $13.80 price target on its shares.

In addition, the broker expects big dividend yields in the near term. It has pencilled in fully franked dividends per share of 59 cents per share in FY 2022 and 61 cents per share in FY 2023. Based on the current Super Retail share price of $10.45, this will mean yields of 5.6% and 5.8%, respectively.

The post Brokers rate these ASX dividend shares as buys appeared first on The Motley Fool Australia.

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• Analysts name 2 ASX 200 dividend shares to buy now

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 Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited. The Motley Fool Australia has recommended Macquarie Group Limited. 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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Can you believe May 2022 is here already? There are a number of ASX shares brokers rate as buys this month.

This article is about two smaller businesses that could be opportunities for investors to consider.

Here are two buy-rated stocks:

Elmo Software Ltd (ASX: ELO)

Elmo Software is an ASX tech share that provides HR and payroll software to small and medium businesses in Australia and the UK.

The Elmo Software share price has fallen 32% since the start of the 2022 calendar year.

Broker Morgan Stanley currently rates the ASX share as a buy with a price target of $7.80. That implies a possible rise of around 150% over the next year.

The company’s FY22 first half result included growth in a number of areas for the business. Annualised recurring revenue (ARR) rose by 35% to $98.3 million, while reported revenue rose 41% to $43.1 million.

In that result, Elmo was able to report a positive earnings before interest, tax, depreciation and amortisation (EBITDA) after it rose by $0.9 million to $0.3 million.

Due to “strong trading conditions” and increased adoption of cloud-software solutions by businesses to manage remote and hybrid workforces, Elmo upgraded its FY22 ARR guidance to $107 million to $113 million.

Elmo said that “operating leverage continues to improve with a reduction in key spend ratios across the business”.

Capitol Health Ltd (ASX: CAJ)

Capitol Health describes itself as a leading provider of diagnostic imaging and related services to the Australian healthcare market. It has clinics across Victoria, Tasmania, South Australia, and Western Australia.

The Capitol Health share price has fallen by 17% since the start of 2022.

The ASX share is currently rated as a buy by Ord Minnett with a price target of $0.44. That implies a possible upside of more than 30%.

Ord Minnett thinks the business has demonstrated the defensive nature of its earnings and that the end of COVID-19 will help the business.

In the first six months of FY22, Capitol Health announced that revenue rose by 11.2% to $94.9 million. Operating EBITDA grew by 6.9% to $22.2 million. Statutory net profit after tax (NPAT) jumped 30.2% to $8.1 million.

The company is looking to expand its network through both bolt-on acquisitions and the opening of greenfield/brownfield locations. It’s also developing various synergies from the acquisition and opening of clinics. The ASX share is working on becoming more efficient by standardising its processes across its clinics.

According to Ord Minnett’s projections, the Capitol Health share price is valued at 24 times FY22’s estimated earnings with a grossed-up dividend yield of 4.3%.

The post Brokers rate these 2 top ASX shares as buys in May 2022 appeared first on The Motley Fool Australia.

More reading

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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Elmo Software. The Motley Fool Australia has positions in and has recommended Elmo Software. 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 Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has travelled mostly sideways over the latter part of the decade.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has zoomed higher across the 10-year timeframe.

During March 2020, Bendigo Bank shares fell to a decade low of $5.32 after the pandemic shocked global markets. Since then, the company’s shares have almost recovered and are trading near their pre-COVID-19 highs.

Nonetheless, let’s take a look and see how much an investor would have made if they had invested $10,000 in Bendigo Bank shares a decade ago.

How much would your initial investment be worth now?

If you spent $10,000 on Bendigo Bank shares exactly 10 years ago, you would have picked them up for $7.55 each. The purchase would deliver approximately 1,324 shares without reinvesting the dividends received from the company.

Looking at yesterday’s closing price, the Bendigo Bank share price finished at $10.60. This means those 1,324 shares would be worth $14,034.40.

In percentage terms, the initial investment implies a return of 40.34% or a yearly average return of 3.45%. Comparing that to the ASX 200, the benchmark index has given back 5.18% over a 10-year period.

What about the dividends?

Over the course of the last decade, Bendigo Bank has made a total of 19 dividend payments from May 2012 to 2022. It’s worth noting that the last few dividend distributions were reduced due to the pandemic, affecting the company’s bottom line.

Adding those 19 dividend payments gives us an amount of $6.09 per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $8,063.16.

When putting both the initial investment gains and dividend distribution, an investor would have a total amount of $22,097.56.

As you can see from above, the banks have always been well regarded as strong dividend payers to investors.

Bendigo Bank share price snapshot

Year to date, the Bendigo Bank share price has stormed 16% higher following a rollercoaster ride for investors.

The company’s shares were heavily sold off from August 2021 after reaching a 52-week high of $11.27. Since then, its shares hit a 52-week low of $8.43 in December 2021, before surging back up again.

Bendigo Bank presides a market capitalisation of roughly $5.99 billion, making it the seventh-largest bank by value.

The post If you’d bought $10,000 of Bendigo Bank shares 10 years ago, guess how much you’d have now appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Tuesday
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Motley Fool contributor Aaron Teboneras 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 Bendigo and Adelaide Bank Limited. 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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An analyst has expressed an optimistic outlook for the shares of energy producer Santos.

The Santos share price climbed 2.69% in a week, from $7.80 on 26 April to the current price of $8.01.

Let’s take a look at why one expert recommends Santos.

What’s the outlook for Santos shares

Santos is an “exciting proposition”, Firetrail Investments portfolio manager Blake Henricks believes.

Speaking to Livewire, Henricks outlined how the company’s disciplined approach to capital could help the Santos share price. He outlined how the free cash flow break-even price of oil for Santos was previously close to $60 a barrel, but is now about $25. He said:

Now, one of the challenges I think of Santos, if we go back a year ago, because of all this capital expediture (CAPEX) they were spending, the break-even was probably close to $60 a barrel.

And so it looked like they weren’t going to generate much free cash flow. Subsequent to that, they have taken over Oil Search at a very good point in the cycle. And now what they’re undergoing or undertaking is an attempt to sell down some assets.

Santos reported record oil production and sales revenue of US$1.9 billion in quarterly results released in April. This was 25% higher than the previous quarter.

Free cash flow increased 186% on the previous corresponding period to US$865 million.

Henricks emphasised Santos’ asset sell-off could be positive for company shareholders. He added:

If they are successful in that, we expect very high shareholder returns for the medium term for Santos shareholders. And that’s what makes it a really exciting proposition.

Santos completed the merger with Oil Search in late 2021.

Santos share price snapshot

The Santos share price has gained 15% in the past 12 months while it has surged nearly 27% in the year to date.

In comparison, S&P/ASX 200 Index (ASX: XJO) has returned less than 5% in the past year.

Santos has a market capitalisation of about $27 billion based on the current share price.

The post Here’s what makes Santos shares ‘a really exciting proposition’: expert appeared first on The Motley Fool Australia.

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• Broker says Santos share price could storm 27% higher

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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week deep in the red. The benchmark index fell 1.2% to 7,347 points.

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

ASX 200 expected to fall again

The Australian share market looks set to continue its slide on Tuesday despite a rebound on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 25 points or 0.35% lower. On Wall Street, the Dow Jones rose 0.25%, the S&P 500 climbed 0.6%, and the Nasdaq jumped 1.6%.

Reserve Bank meeting

The Reserve Bank will be holding its most important cash rate meeting in years this afternoon. Opinion is divided on what action the central bank will take, but many in the market believe it could make a 0.5% increase to the cash rate today. Westpac Banking Corp (ASX: WBC) expects a more modest 15 basis point rise today and 40 basis point rise next month.

Oil prices rise

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a decent day after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 0.65% to US$105.38.12 a barrel and the Brent crude oil price has risen 0.65% to US$107.84 a barrel. Oil prices turned positive on supply concerns.

Gold price sinks

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a tough day after the gold price sank overnight. According to CNBC, the spot gold price is down 2.6% to US$1,861.90 an ounce. The precious metal was sold off after US bond yields rose ahead of the US Federal Reserve meeting this week.

Woolworths sales update

The Woolworths Group Ltd (ASX: WOW) share price will be one to watch today when the retail giant releases its third quarter sales update. According to a note out of Goldman Sachs, its analysts expect Woolworths to report group sales of $14.7 billion for the three months. This will be a year on year increase of 6.4%. “We expect the Australian and New Zealand foods division to report +4% and +5.5% comparable growth respectively and for BigW to see -6% decline in comparable sales,” it adds.

The post 5 things to watch on the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

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• The CBA share price was the worst performer of the ASX 200 big banks in April. What happened?
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• Here are the 3 most heavily traded ASX 200 shares on Monday
• Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month?
• Why are ASX tech shares having such a dire run on Monday?

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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 Webjet Ltd (ASX: WEB) share price travelled 8% higher last month after a sluggish run earlier on.

While the company’s shares wobbled during the early days of April, the easing of COVID-19 restrictions around the world sparked a turnaround.

Popular international destinations such as Bali and Thailand have driven demand yet again in the travel industry.

Indeed, this led Webjet shares to finish strongly at the backend of the month.

Notably, the company’s shares touched a two-month high of $6.15 on 22 April, before closing out April at $6.03 apiece.

What’s behind Webjet shares rise?

While it has been relatively quiet period on the news front from the company, the Webjet share price has gradually been moving on an upwards trend.

This is because after a two-year hiatus, countries are now learning to live with the virus, thus easing restrictions.

Nonetheless, Webjet has been busy taking advantage of its opportunities while the market had been in a downturn.

Webjet reported a cash surplus of $3.5 million per month in its first-half results, a significant turnaround compared to FY21. Harsh lockdowns led the company to record an average monthly cash burn of $5.5 million in the previous financial year.

Expenses were also down materially compared to pre-COVID times, reflecting strategic initiatives implemented by the company.

In addition, total transaction volume (TTV) stood at 63% of pre-COVID volumes in its WebBeds’ B2B business. And this is before many travel markets had reopened.

If the travel sector continues on its trajectory, Webjet’s TTV could reach pre-COVID levels by the second-half of FY23. On top of that, its group portfolio will be a much leaner business, having trimmed 20% of operating costs.

Webjet is scheduled to report its FY22 results towards the backend of this month.

Webjet share price summary

In the last 12 months, the Webjet share price has risen 22% following positive investor sentiment across the travel sector.

This represents a 32% gain from where its shares trade today compared to the 11 month low of $4.61 on 27 January.

When looking year to date, the company’s shares are up 18% after finishing Monday’s trading session at $6.10.

Based on valuation grounds, Webjet has a market capitalisation of around $2.32 billion.

The post Why did the Webjet share price have such a good run in April? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. 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 Altium Limited (ASX: ALU) share price has shed 30% of its value since the beginning of 2022.

Could the ASX tech share be an opportunity after its heavy decline? Or is it still too expensive?

What’s happening to the Altium share price?

The company has been headed lower as the sell-off among ASX growth shares has intensified.

There is much investor attention on inflation and how high interest rates are set to rise.

But why would interest rates have such an impact on asset valuations? Warren Buffett once described it effectively at a previous Berkshire Hathaway annual general meeting:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature … its intrinsic valuation is 100% sensitive to interest rates.

Central banks around the world are considering ramping interest rates higher to try to tame rampant inflation.

In that environment, Altium announced its FY22 half-year result, its biggest announcement for the year so far.

Earnings wrap

In the six months to 31 December 2021, Altium reported revenue rose by 28% to US$102 million. It revealed 105% Octopart revenue growth to US$22 million, thanks partly to tailwinds from the global electronic parts shortage.

It’s increasing its annual recurring revenue (ARR). For the half, ARR grew by 43%. Recurring revenue is now 74% of total revenue compared to 65% in the same period last year

Altium 365 is seen as a key part of the company’s future – it’s the company’s online platform offering. When the company reported, it said that it had 19,700 monthly active users (up 54% since August 2021).

The underlying earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved from 30.6% to 34.1%.

Altium upgraded its revenue guidance for FY22 to the high end of the range. Its revenue for FY22 is expected to be between US$213 million to US$217 million – representing growth of between 18% to 20%. ARR growth is expected to be between 23% to 27%.

Industry goals

The company has a number of high-profile customers including Tesla, Mercedes Benz, Google/Alphabet, SpaceX, NASA, Boeing, Lockheed Martin, Amazon, Disney, Apple, Microsoft, and many more.

Altium says that it’s “well positioned to disrupt the way electronic products are designed and manufactured”. The electronic PCB software business also said that electronics are at the heart of all intelligent systems.

Over the long-term, Altium wants to reach 100,000 subscribers and US$500 million of revenue.

Is the Altium share price a buy?

Citi currently rates the business as ‘neutral’ but it sees upside with the Altium share price with a target price of $34. It’s optimistic about the Octopart segment of Altium.

The broker thinks the current Altium share price is valued at 51 times FY23’s estimated earnings.

The post Down 30% in 2022, is the Altium share price now a buy? appeared first on The Motley Fool Australia.

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• The Altium share price has tumbled 27% in 2022, so what does this make the current dividend yield?
• Brokers name 2 ASX shares to buy after the tech selloff
• Here are 2 fantastic ASX growth shares analysts rate as buys

Citigroup is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Tristan Harrison has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Altium, Amazon, Apple, Microsoft, Tesla, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Alphabet (C shares) and Lockheed Martin and has recommended the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Walt Disney. 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 Transurban Group (ASX: TCL) share price outperformed the S&P/ASX 200 Index (ASX: XJO) on Monday. The ASX 200 fell 1.18% yesterday while Transurban shares managed a gain of 0.5%.

For readers who haven’t heard of Transurban, it’s a toll road business that builds and operates toll roads in Australia and North America. The weighted average concession life of Transurban’s roads is around 30 years.

It aims to balance growth in distributions over time and investment in new opportunities to increase long-term value.

Transurban released an investor update with comments about the current operating conditions.

West Gate Tunnel project

Transurban told investors about the progress it has made on its West Gate Tunnel project in Melbourne. When completed, the tunnel will be an alternative route to the West Gate Bridge. It will feature around 70km of new traffic lanes and connect to CityLink, another road operated by Transurban.

It’s expected to save up to 20 minutes per trip.

The first tunnel boring machine has excavated around 550m of the outbound tunnel. The second boring machine commenced tunnelling and excavated around 150m of the inbound tunnel.

More than 70% of the widening works on the West Gate Freeway have now been completed. The company also said that more than 600 metres of the new elevated roadway above Footscray Road has been built.

Transurban Traffic update

Transurban is expecting near-term and long-term traffic growth with the ongoing economic recovery after COVID-19 and new asset capacity. The lifting of the remaining government restrictions is expected to help.

Traffic changes can have an influence on the Transurban share price and profitability.

The company’s traffic stats showed that Easter traffic in Sydney and Brisbane was higher than in 2019. Indeed, consistent growth has been seen in these two cities since the beginning of March 2022.

However, in 2022 so far, Melbourne and North American traffic has largely been lower compared to 2019.

Transurban noted that airport-exposed roads were some of the most COVID-impacted, including Transurban roads in Sydney and Brisbane.

However, there are expectations for traffic to recover on airport corridors with the return of domestic and international travel.

Commercial traffic has been resilient, according to Transurban, thanks to e-commerce and construction. Large vehicle traffic has been relatively steady.

Transurban also points to the benefit of the public’s continued preference for private transport over public transport for daily use. The latest NSW public transport data shows public transport volumes down almost 60% compared to July 2019.

The company also said that a permanent and total shift away from the workplace is unlikely.

Fuel prices and inflation

There has been much market talk about the higher fuel prices. Transurban said that fuel price movements have “limited near-term influence on traffic volumes”. The business said that there are other factors that have more influence such as population growth, the employment rate, wage growth, and tourism levels.

However, Transurban acknowledged that over the longer-term, higher fuel prices may have a flow-on effect on the broader economic growth.

The toll road operator said that the average toll spend remains a “small” proportion of typical household expenditure, though it noted the cost of living pressure.

Transurban noted that it has inflation-linked toll escalations, which provide “protection in a rising interest rate environment and would likely result in a net benefit over the near term”.

Distribution

The Transurban FY22 distribution is expected to be in line with its ‘free cash’, excluding capital releases.

The post What drove the Transurban share price higher on Monday? appeared first on The Motley Fool Australia.

More reading

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• Transurban shares are one of only a handful of ASX 200 stocks gaining today. What’s happening?
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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.

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If you’re looking for ASX shares to buy and hold, then you may want to consider the two listed below.

Both have been named as buys and tipped for big things in the future. Here’s what analysts are saying:

Altium Limited (ASX: ALU)

The first ASX share to look at is Altium. It is the technology company behind the Altium 365 and Altium Designer electronic design platforms, the Nexus collaboration platform, and the Octopart parts search engine.

This portfolio of businesses have positioned Altium perfectly to profit from the increasing demand for electronic design and related software due to the rapidly growing Internet of Things (IoT) and AI markets.

Bell Potter is a fan of Altium and believes it is well-placed for growth in the coming years. So much so, it has forecast net profit to more than double between FY 2021 and FY 2024 from $47 million to $105 million.

The broker has a buy rating and $41.25 price target on the company’s shares.

Lovisa Holdings Limited (ASX: LOV)

Another ASX share that could be a top buy and hold option is Lovisa. It has already been growing at a solid rate for a number of years but appears well-placed to continue this trend long into the future.

This is due to the company’s strong brand and bold global expansion plans.

The team at Morgans is very positive on Lovisa’s outlook and believe it “could prove to be one of the biggest success stories in Australian retail.”

The broker added: “With ambitious (and financially well-incentivised) new leadership in place, we think now is the time LOV steps up to become a global force. Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the returns could be stellar.”

Morgans has an add rating and $24.00 price target on its shares.

The post 2 excellent ASX shares to buy and hold for a decade appeared first on The Motley Fool Australia.

More reading

• Have ASX tech shares finally reached the bottom?
• The Altium share price has tumbled 27% in 2022, so what does this make the current dividend yield?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. The Motley Fool Australia has recommended Lovisa Holdings Ltd. 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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Looking for growth shares to buy in May? Well, here’s some good news! Listed below are two growth shares that have recently been named as buys with major upside potential.

Here’s what you need to know about them:

Allkem Limited (ASX: AKE)

Allkem could be a growth share to buy in May. It is the top five global lithium mining company that was created with the merger of Galaxy Resources and Orocobre.

The company owns a collection of high-quality assets including Olaroz, Mt Cattlin, and the Sal de Vida brine project. This gives Allkem geographic diversity and also lithium type diversity.

Unlike the many explorers on the Australian share market that are some way off producing lithium, Allkem is already shipping it in large quantities. This is allowing the company to benefit from the sky high lithium prices being underpinned by the clean energy transition and the rapid adoption of electric vehicles.

Morgans is a big fan of Allkem and has an add rating and $16.98 price target on its shares. Based on the current Allkem share price, this implies potential upside of over 40%.

Xero Limited (ASX: XRO)

Another ASX growth share that has been tipped as a buy is Xero.

It is a leading cloud-based business and accounting software provider which had over 3 million subscribers globally at the last count.

As you may have noticed in 2022, tech shares are not performing very positively. And Xero is certainly no exception, with its shares down 38% since the start of the year.

While this is disappointing, it could be a buying opportunity for long term focused investors. In fact, Goldman Sachs believes Xero is a “compelling global growth story” and has recently reiterated its buy rating on its shares with a $133.00 price target.

Based on the current Xero share price, this implies potential upside of almost 48%.

The post Analysts rate these ASX growth shares as buys in May appeared first on The Motley Fool Australia.

More reading

• Why are ASX tech shares having such a dire run on Monday?
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• 2 ASX lithium shares to buy in May 2022: brokers
• Here’s why ASX 200 tech shares are having such a stellar end to the week
• Why the Xero share price is a buy right now: experts

Motley Fool contributor James Mickleboro has positions in Allkem Limited. 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.

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