Category: Stock Market

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher with the market on Wednesday.

In morning trade, the shares of Australia’s largest bank are up 0.5% to $94.44.

Is the CBA share price good value?

Unfortunately for shareholders, one leading broker doesn’t see any value in the CBA share price at the current level. In fact, its analysts believe the bank’s shares should be trading notably lower than where they are today.

According to a note out of Goldman Sachs this morning, its analysts have retained their sell rating and $82.57 price target on its shares.

Based on the current CBA share price, this implies potential downside of 12.5% for investors over the next 12 months before dividends.

Why is Goldman bearish on CBA?

Following a review of the banking sector, Goldman Sachs has highlighted three key reasons for its bearish stance on the CBA share price.

These include the margin pressures it is facing from aggressive competition for mortgages, its investments, and the premium the bank’s shares trades on compared to its big four bank peers.

Goldman Sachs explained: “While CBA remains the preeminent retail banking franchise in Australia, its 1Q22 trading update highlighted that even it is not immune from the profitability pressures that are currently particularly evident in mortgages (competition and mix). Furthermore, while CBA’s commitment to investment is the right thing for the franchise in the medium term, we believe it provides it with less flexibility to offset these revenue headwinds.”

“Therefore, with our FY21-24E PPOP CAGR now 1% p.a, versus its peers at c. 5%, we struggle to justify the current 60% P/PPOP premium it trades on versus its peers (25% 15-year average),” the broker concluded.

The post 3 reasons Goldman says the CBA (ASX:CBA) share price is a sell appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• ‘We see CBA (ASX:CBA) underperforming’: Why this broker is avoiding Commonwealth Bank in 2022
• How does the Macquarie (ASX:MQG) dividend compare to the big four banks?
• Here’s what higher interest rates could mean for ASX bank shares
• Own CBA (ASX:CBA) shares? Here’s what the big bank reported this week

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 Bruce Jackson.

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Key points

• Fortescue Future Industries is buying into a joint venture project to develop green hydrogen
• If successful, this method of making hydrogen wouldn’t need renewable energy or electrolysers
• The Fortescue share price is up around 3% in morning trading

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The Fortescue Metals Group Limited (ASX: FMG) share price is up this morning. Fortescue Future Industries (FFI) is going to buy a stake in Sparc Hydrogen alongside Sparc Technologies Ltd (ASX: SPN) and the University of Adelaide.

Green hydrogen joint venture

Sparc announced to the ASX today that binding agreements have been executed between Sparc Technologies, Future Fortescue Industries and the University of Adelaide, forming the Sparc Hydrogen Joint Venture.

FFI will subscribe for shares in Sparc Hydrogen under a subscription agreement. Sparc Technologies intends to issue and complete the share issue imminently.

A shareholders agreement has been executed and includes provisions for things like governance and funding provisions.

FFI is going to pay $1.8 million to earn a 20% stake after the stage 1 funding close. It will pay an additional $1.475 million to buy an additional 16% stake. That will leave it with ownership of 36% of the joint venture. Sparc will also end up with 36% after the two stages, whilst the University of Adelaide will own 28%.

What is the green hydrogen project?

As reported by my colleague Brooke Cooper this week, the Sparc Hydrogen joint venture is aiming to create “ultra-green” hydrogen by utilising solar power.

It will seek to further develop a process known as thermo-photocatalysis which will turn water into hydrogen and oxygen.

Adopting this process to produce green hydrogen means that renewable energy from wind farms and/or solar panels and electrolysers are not needed. Due to that, capital and operating expenditure is expected to be significantly lower than electrolysis and other forms of hydrogen production currently in use. Fortescue Future Industries is currently working on projects involving renewable energy and electrolysers.

This thermo-photocatalysis technology can potentially be adopted remotely and for onsite use, therefore reducing the reliance on long distance hydrogen transportation and/or electricity transmission.

Stage one of the project, in the first 2.5 years, will include steps like optimising thermo-photocatalytic reactor conditions, constructing a new reactor for full solar simulation, testing it (including the longevity and durability) and designed a prototype scale reactor for on-sun operation.

Stage two, over the following two years, will involve the installation and commissioning of the prototype reactor. It will also include the pre-commercial pilot scale system design, procurement, installation, commissioning and operation of a thermo-photocatalytic reactor.

Comments from management

The Fortescue Future Industries CEO Julie Shuttleworth said:

There is irrefutable scientific evidence that the planet is warming. Green hydrogen is a practical, implementable solution to decarbonise hard to abate sectors, including heavy industry. The research being undertaken by Sparc Hydrogen is important for FFI’s growing technology portfolio as we develop technologies to lower emissions globally. We are excited to enter into this agreement and to support this critical research into green hydrogen.

Fortescue share price snapshot

The Fortescue share price is up around 3% in early trading today, with the S&P/ASX 200 Index (ASX: XJO) up by 0.8%.

The post Fortescue (ASX:FMG) Future Industries to buy stake in Sparc Hydrogen appeared first on The Motley Fool Australia.

More reading

• Will a growing dividend help the AFIC (ASX:AFI) share price?
• 5 things to watch on the ASX 200 on Wednesday
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• This top ASX broker tips Coles (ASX:COL) shares for 20% upside

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group Limited. 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 Bruce Jackson.

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Key points

• The Lynas Rare Earths share price is moving higher on its latest news
• Ministerial approval has been received for the Kalgoorlie rare earths processing facility
• Conditions set out in the report are in line with Lynas’ proposed conditions

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The Lynas Rare Earths Ltd (ASX: LYC) share price is rising after the company received the go-ahead for its Kalgoorlie rare earth processing facility.

At the time of writing, shares in the rare earths producer are up 3.59% to $9.23. This follows a bitter slump in the company’s shares over the last week despite posting record sales in its latest quarterly update.

Nonetheless, the focus for investors today is the latest news for the Kalgoorlie facility. So, let’s go over the announcement with a fine-tooth comb.

Another step closer to local processing

Investors are taking a liking to the Lynas share price on the ASX this morning as the market considers the latest milestone in the company’s bid to construct a processing facility in Kalgoorlie, Western Australia.

Yesterday afternoon, the rare earths company revealed it had received ministerial approval for the proposed facility. This comes more than six months after the environmental review process began.

According to the release, the Ministerial Statement for the Kalgoorlie processing facility has been issued under the Environmental Protection Act 1986 (WA). This statement is important to investors and the company, as it sets out the conditions for the construction and operation of the facility.

In a pleasing development for shareholders, the conditions passed on were consistent with those Lynas proposed.

Along with a raft of other conditions, some of the limitations set by the EPA report include:

• Processing of rare earth concentrate limited to 162,000 dry tonnes per annum
• Rare earth carbonate production limited to 68,000 dry tonnes per annum
• Proposal life of 25 years

Following on from this approval, Lynas is now working on finalising the secondary approvals. These approvals are necessary to implement the project.

What’s happening with the Lynas share price?

Despite a cracking year in 2021, the Lynas share price has been off to an underwhelming start this year. Shares are down more than 12% since the beginning of the year, marking a considerable underperformance of the S&P/ASX 200 Index (ASX: XJO).

While investors have been selling down Lynas on the ASX, the price of rare earths remains elevated. In fact, neodymium is holding at a high of ~US$202,000 per tonne.

The post Lynas (ASX:LYC) share price jumps on government green light appeared first on The Motley Fool Australia.

More reading

• The Lynas (ASX:LYC) share price is tumbling 5% today. What’s going on?
• The Lynas (ASX:LYC) share price is slipping today despite record sales results
• Why is the Lynas Rare Earths (ASX:LYC) share price up 20% in a month?
• Here’s why leading brokers name the Lynas (ASX:LYC) share price as a buy
• These were the best performing ASX 200 shares last week

Motley Fool contributor Mitchell Lawler owns Lynas Corporation Limited. 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 Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Many cryptocurrencies surged sharply higher on Tuesday morning as the government of India proposed a 30% tax on capital gains from buying and selling digital coins. Let’s take a look at three of the largest cryptocurrencies by market cap:

Cryptocurrency	24-hour Move	7-day Move	30-day Move	Market Cap
Bitcoin (CRYPTO: BTC)	2%	4.9%	(17%)	$739 billion
Ethereum (CRYPTO: ETH)	4.8%	13%	(26%)	$333 billion
Cardano (CRYPTO: ADA)	2%	1.9%	(22%)	$48 billion

Data from Coinmarketcap.com, as of 12:20 p.m. ET on Feb. 1, 2022.

So what

India has a rocky history of cryptocurrency regulations. Last November, the Modi government wanted to ban digital coins as a payment method, treating them more like stock-like securities. Cryptocurrency firms were not allowed to market their products and services at all.

At the Davos-based World Economic Forum conference in mid-January, Prime Minister Narendra Modi compared the crypto market to system problems such as inflation, climate change, and disrupted supply chains. He called on world leaders at the gathering to come together and face the shared enemy of digital finance systems.

“Cryptocurrency is an example of the kind of challenges we are facing as a global family with a changing global order,” Modi said. “To fight this, every nation, every global agency needs to have collective and synchronized action.”

That bearish attitude from the second-largest country in the world weighed heavily on the crypto market. Bitcoin prices fell 17% in the next three days after Modi’s speech. Ethereum prices dropped 21% over the same period while Cardano took a 24% haircut. Many investors feared that India might follow in the footsteps of China, which banned cryptocurrency operations outright in September.

So when India’s budget for 2022 included a proposed 30% tax rate on crypto-based capital gains, it’s easy to see that as a modest step forward. If India is willing to participate in the global cryptocurrency economy while pocketing a generous slice of the profits its citizens reap from it, that’s much better news than an outright refusal. Furthermore, India is planning to launch a national digital currency of its own. Modi’s ruling party did not strike that plan from the budgeting agenda, so India’s central bank may launch that coin as early as this year.

Now what

As you can see in the table above, this jump does not mean that the cryptocurrency market is out of the woods. Most tokens are still down by double-digit percentages over the last 30 days and even further away from the sector-wide highs of November.

Still, Modi’s budget is unequivocally good news for cryptocurrency investors and businesses with Indian connections. Bitcoin miners are on a global hunt for facilities with low costs for electric power and data-center floor space where they can run their mining chips without breaking the bank. Cardano’s backers don’t share that interest since their preferred blockchain network relies on a proof-of-stake architecture that doesn’t require massive computing efforts. Ethereum falls between those extremes. This cryptocurrency still depends on a proof-of-work system similar to Bitcoin’s but is in the process of switching over to proof-of-stake later this year.

On an even wider scale, India’s potential ability to provide the right assets for crypto-mining operations at the right price arguably matters less than the fact that it’s a major world economy that can steer the global crypto conversation along a friendlier route than China’s chosen path. That discussion is quite active as governments around the world grapple with these newfangled digital assets.

So a 30% tax on cryptocurrency profits may sound draconian, but it’s actually a small step in a productive direction. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Here’s why the leading cryptocurrencies are ticking higher appeared first on The Motley Fool Australia.

More reading

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• ASX shares have had a shaky start to 2022. Here’s what investors are planning: survey
• Bitcoin price sinks again. Here’s where it could find support: expert
• Has the case for Bitcoin as an inflation hedge crumbled?

Anders Bylund owns Bitcoin, Cardano, and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin and Ethereum. The Motley Fool Australia owns and recommends Bitcoin and Ethereum. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Key points

• Some Santos shareholders might be seeing red this week after the company’s CEO was appointed to another ASX 200 board
• Kevin Gallagher’s new spot at the board table of Mineral Resources was announced after Monday’s close
• An investor group has spoken out in disapproval of the appointment. It believes the CEO should be focusing on its recent merger and the energy transition

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Owners of Santos Ltd (ASX: STO) shares might have been irked this week by news the company’s boss is taking a seat on another S&P/ASX 200 Index (ASX: XJO) board.

That’s led an activist investor group to question if the Santos board is “out of touch”, saying the company’s CEO should be focused on its recent $22 billion merger and the energy transition.

At the time of writing, the Santos share price is $7.18.

Let’s take a closer look at Gallagher’s new role and why some investors are riled up about it.

Could this have Santos shareholders up in arms?

Santos shareholders might be seeing red after the company’s CEO was appointed to the board of iron ore and lithium producer Mineral Resources Limited (ASX: MIN).

Mineral Resources announced Gallagher’s new position on Monday night.

It sparked comments from Australasian Centre for Corporate Responsibility’s director of climate and environment, Dan Gocher. Gocher said that it’s unusual for ASX CEOs to sit on the board of another company:

The appointment of Santos CEO Kevin Gallagher to the board of ASX-listed Minerals Resources will not be received well by shareholders in either company.

Santos shareholders expect Gallagher to be entirely focused on the integration with Oil Search, and the acute risks posed by the energy transition… The Santos board’s approval of this appointment suggests the board is out of touch and has failed to comprehend investors’ expectations of modern CEOs.

Additionally, analysts are reportedly concerned about an overlap between the two companies, potentially creating conflicts for the energy giant’s boss.

The apparent red flag is Mineral Resources’ subsidiary, Energy Resources, which is drilling for gas in the Perth Basin.

Mineral Resources chair, Peter Wade commented on Gallagher’s appointment as a non-executive director, saying:

[Gallagher’s] extensive corporate background and knowledge of the Australian energy market will be of great value to [Mineral Resources].

Gallagher has reiterated his intent to continue his tenure at Santos. That’s despite the new appointment having sparked concerns he might be eyeing an exit.

Santos provided Gallagher with a $6 million incentive pay scheme early last year for his delivery of projects and transitions to 2025.

The Australian Financial Review quoted the CEO as saying:

I remain fully committed to leading Santos successfully out until the end of 2025…

I have very few external commitments outside my Santos role, and I am confident there will be no conflict on my time through taking up this non-executive role

Santos share price snapshot

The Santos share price has had a great start to 2022.

It has gained 13% since the final close of last year. Though, it’s only 6% higher than it was at this point in 2021.

The post Here’s why Santos (ASX:STO) is attracting some investor ire this week appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• ASX lithium shares in focus amid potential supply squeeze
• Why have ASX energy shares become such hot property in 2022?
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

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

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The BrainChip Holdings Ltd (ASX: BRN) share price has been a strong performer on Wednesday.

In morning trade, the artificial intelligence chip company’s shares are up 14% to $1.89.

This latest gain means the BrainChip share price is now up ~180% in 2022.

Why is the BrainChip share price pushing higher?

Investors have been bidding the BrainChip share price higher again today after it announced the receipt of another patent in the United States.

According to the release, the US Patents and Trademarks Office (USPTO) has issued a patent for “Method and a System for Creating Dynamic Neural Function Libraries.” The patent protects the basic structure and function of a digital neuron consisting of multiple synapse circuits connected to a soma circuit. This mirrors a biological neuron where a soma cell receives its inputs via multiple synapses.

BrainChip’s portfolio now comprises 8 US and 1 Chinese granted patents. But it may not end there. The company has recently expanded international patent filings with a total of 21 patent applications currently pending in the US, Europe, Canada, Japan, Korea, Australia, Brazil, Mexico and Israel.

Management commentary

BrainChip’s Chief Technology Officer and Founder, Peter van der Made, was pleased with the news.

He said: “Patents are a hallmark of a company, symbolizing the innovation and advantages that differentiate its products and solutions from competitors in the marketplace. By being granted another patent from the USPTO, we are able to signify to our customers and partners that the technology we have developed is at the forefront of revolutionizing AI at the edge in ways that previous attempts have not been able to achieve.”

“Additionally, this recognition further protects us from others developing similar offerings that would otherwise infringe on our work. We will continue to work towards increasing our patent awards globally as we continue to advance the field of neuromorphic artificial intelligence,” he concluded.

The post What’s driving the BrainChip (ASX:BRN) share price 14% higher today? appeared first on The Motley Fool Australia.

More reading

• Own BrainChip (ASX:BRN) shares? Here’s some of the institutional investors which have also bought up big
• Why is the BrainChip (ASX:BRN) share price storming 12% higher?
• What happened to ASX tech shares today?
• Why Accent, BrainChip, Fortescue, and Novonix shares are sinking
• Is BrainChip (ASX:BRN) the real deal?

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 Bruce Jackson.

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Key points

• AMP shares are the in spotlight as the company reports full year results on 10 February
• Earnings per share will be carefully watched
• AMP did not pay an interim dividend and may not pay a final dividend

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AMP Ltd (ASX: AMP) shares are in the spotlight as investors await the diversified financial services company’s 2021 full year financial results. Those are scheduled for release on Thursday 10 February.

Last year, AMP shares took an 11% tumble on the day the company released its 2020 results. That came on the back of a 33% year-on-year decline in underlying net profit after tax (NPAT).

So what will investors be looking for this year?

Earnings results will impact AMP shares

Investors will be keeping a close eye on earnings.

And earnings may well be down from last year, which could put pressure on AMP shares.

Macquarie has reduced its earnings per share (EPS) forecast for 2021 by 4.1% to 8.40 cents.

If AMP does see a fall in EPS, it will run contrary to the wider blue-chip market.

As the Australian Financial Review notes:

Australian blue-chips capped off the 2021 financial year with a 26 per cent surge in earnings per share, which is expected to slow to growth of 13.6 per cent in 2021-22, and 4.5 per cent in 2022-23, according to consensus estimates measured by Morgan Stanley.

Macquarie highlighted some key points from AMP’s strategy update, reported by FNArena.

Among those, AMP announced an additional $115 million of cost-out through 2024.

The company also reported a “10 basis-point fee compression in Australian Wealth Management, a 10% decline in net interest margins from the bank over an indefinite timeframe and 50% loan growth by 2024”.

Demerger ahead

AMP expects its 2 post-demerger businesses – AMP Limited and AMP Capital’s Private Markets business – to emerge independently by mid-year.

Macquarie forecasts it will be effective in June 2022.

According to AMP:

The rationale for the demerger is to enable the two businesses to increase focus on their respective markets and growth opportunities – AMP Limited as a retail wealth manager in Australia and New Zealand, and PrivateMarketsCo as a global manager of infrastructure and real estate investments with a growing focus on international institutional clients.

Macquarie still expects “multiple headwinds” in the leadup to the completion of the demerger.

Dividends unlikely

Income investors awaiting a return to AMP’s historical dividends may be disappointed.

AMP last paid an interim dividend of 10 cents per share on 1 October 2020, fully franked.

The company did not pay an interim dividend in 2021. In explaining its decision, management said:

The board continues to maintain a conservative approach to capital management to support the transformation of the business. In line with this approach, the board has resolved to not declare an interim 2021 dividend. The capital management strategy and payment of dividends will be reviewed following the completion of the demerger in 1H 22.

Analysts at both Citi and Macquarie are not expecting AMP to pay a final dividend.

How have AMP shares been performing?

The AMP share price fell 39% over the past 12 months, compared to a gain of 4% posted by the S&P/ASX 200 Index (ASX: XJO).

So far in 2022, AMP shares are down 8%.

The post Own AMP (ASX:AMP) shares? Here’s what to look for in next week’s earnings update appeared first on The Motley Fool Australia.

More reading

• Own AMP (ASX:AMP) shares? The company is rumoured to be on the hunt for assets
• Why Westpac (ASX:WBC) and these other ASX shares are trading at 52-week lows
• Is value finally emerging in the AMP (ASX:AMP) share price?
• AMP (ASX:AMP) latest to join call for RBA interest rate hike in August 2022
• Own AMP (ASX:AMP) shares? Here’s why this expert downgraded some of its funds

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 Bruce Jackson.

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The Amcor (ASX: AMC) share price is falling following the release of its half year update.

At the time of writing, the packaging company’s shares are down 1.5% to $16.75.

Amcor share price falls despite reporting solid growth

• Net sales up 12% to US$6,927 million
• Adjusted earnings before interest and tax (EBIT) up 5% to US$769 million
• Adjusted earnings per share (EPS) up 9% to 35.8 US cents
• Quarterly dividend of 12 US cents declared
• Additional US$200 million share buyback announced, bringing total to US$600 million in FY 2022
• Full year guidance for adjusted EPS growth of 7% to 11% in constant currency reaffirmed

What happened during the first half?

For the six months ended 31 December, Amcor delivered a 12% increase in sales to US$6,927 million. This reflects Flexibles sales growth of 10% to US$5,347 million and Rigid Packaging sales growth of 17% to US$1,580 million. Management advised that the majority of its sales growth was driven by price increases, which related to the pass through of higher raw material costs.

As for its earnings, Amcor’s EBIT rose 5% to US$769 million. This reflects Flexibles EBIT growth of 6% to US$691 million, which offset a 13% decline in Rigid Packaging EBIT to US$117 million. The latter was caused by supply chain disruptions and raw material shortages.

In light of its positive form, management has increased its FY 2022 share buyback by US$200 million to US$600 million. However, it advised that the additional share repurchases are not expected to benefit EPS growth until FY 2023 as there will be no material impact on the weighted average number of shares outstanding in FY 2022.

Management commentary

Amcor’s CEO, Ron Delia, was pleased with the company’s performance given the challenging operating environment.

He said: “Amcor delivered a solid first half result as our teams continue to successfully navigate a persistently challenging and dynamic operating environment. Across the business we continued to prioritize our customers and our scale and operational agility enabled us to service demand in key segments, driving growth and sales mix improvements.”

“At the same time, we implemented a broad range of actions to recover higher input costs and manage through general inflation. As a result, sales grew 12% and we delivered 9 percent adjusted EPS growth year to date. We remain confident in the outlook for fiscal year 2022, enabling us to reaffirm guidance and increase cash returns to shareholders.”

Outlook

Although Mr Delia acknowledges that operating conditions remain volatile, he remains confident on the future.

He said: “While the external environment will continue to evolve, we remain focused on executing our strategy for long-term value creation from the strong foundation established over the last several years. The Amcor investment case has never been stronger and we are increasing investments in premium segments like healthcare and protein, in emerging markets and in our innovation capabilities to drive growth and margin expansion.”

The company has reaffirmed its FY 2022 guidance for earnings per share growth in the range of 7% to 11% and adjusted free cash flow of US$1.1 billion to US$1.2 billion.

The post Amcor (ASX:AMC) share price falls despite reaffirming earnings guidance and US$200m buyback expansion appeared first on The Motley Fool Australia.

More reading

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• 2 great value ASX dividend shares that brokers love
• 3 buy-rated ASX growth shares

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 owns and has recommended Amcor Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you want to build a strong portfolio, then owning a few blue chips could be a good starting point.

Blue chips are generally large companies that have been operating for a long period, have stable cash flows, and experienced management teams. This makes blue chips lower risk options and a good foundation to build a portfolio from.

But which blue chip shares should you consider buying? Two that analysts rate highly are listed below:

CSL Limited (ASX: CSL)

The first blue chip ASX 200 share to look at is CSL. It is one of the world’s leading biotechnology companies, comprising the CSL Behring plasma therapies business and the Seqirus vaccine business. The company is also in the process of acquiring Vifor Pharma for $7 billion. Vifor Pharma has a focus on iron deficiency, nephrology, and cardio-renal therapies. It also has a burgeoning research and development (R&D) pipeline that complements CSL’s existing R&D activities and should be supportive of long term growth.

Citi is bullish on the company and has a buy rating and $340.00 price target on its shares. This implies 30% upside from the current CSL share price of $261.55.

It was a fan of the Vifor Pharma acquisition. Citi recently commented: “The key positive from the transaction is that it expands the CSL late stage R&D pipeline, which we have noted for some time was limited for a company the size of CSL.”

Treasury Wine Estates (ASX: TWE)

Another blue chip ASX 200 share to consider is Treasury Wine. It is one of the world’s largest wine companies and the owner of a number of popular brands such as 19 Crimes and Penfolds. While times have been hard over the last couple of years due to being effectively kicked out of China, Treasury Wine is bouncing back thanks largely to growing demand in the US.

Morgans is positive on Treasury Wine’s long term outlook. So much so, it has an add rating and lofty $14.06 price target on its shares. This suggests the Treasury Wine share price could rise 30% from its current level of $10.81.

The broker commented: “The new business units centred around the brands, are now fully in place and we are excited to see what they can earn with TWE effectively creating the benefits of a demerger without the extra costs. It also demonstrates that the SOTP is worth materially more than the whole.”

The post Analysts name 2 ASX 200 blue chip shares with 30% upside appeared first on The Motley Fool Australia.

More reading

• Treasury Wine (ASX:TWE) share price lifts amid latest tariff battle
• Top broker says latest CSL (ASX:CSL) acquisition will boost more than its bottom line. Here’s why
• The Treasury Wine (ASX:TWE) share price has plunged 25% from its 2021 highs. What’s next?
• 3 ‘champion stocks’ for ASX investors in 2022
• 3 blue chip ASX 200 shares to buy after the selloff

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. owns and has recommended CSL Ltd. The Motley Fool Australia has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re wanting to add some ASX dividend shares to your portfolio, then it could be worth considering the two listed below.

Here’s why analysts at Morgans think they could be top options for income investors in February:

Telstra Corporation Ltd (ASX: TLS)

The first ASX dividend share to look at is Telstra. It could be a dividend share to buy due to its outlook being the best it has been in over a decade. This is being underpinned by the successful execution of its transformative T22 strategy and the growth targets included in its new T25 strategy.

Morgans is very positive on the company and sees a lot of value in its shares at the current level. It has an add rating and $4.55 price target on them.

The broker commented: “The SOTP [sum of the part] for TLS is worth more than the current share price (and steps to release this value are underway; albeit timing is unclear).”

As for dividends, Morgans continues to expect fully franked dividends per share of 16 cents for FY 2022 and FY 2023. Based on the current Telstra share price of $3.94, this implies yields of 4% for investors.

Transurban Group (ASX: TCL)

Another ASX dividend share that the broker is positive on is toll road operator Transurban. It has an add rating and $14.57 price target on its shares.

Morgans notes that Transurban’s performance has been improving, with traffic volumes recovering nicely from the pandemic.

It commented: “A recovery trend is evident in Melbourne (TCL’s single largest asset), Sydney is exceeding 2019, while Brisbane remains broadly in-line with 2019. TCL expects traffic to return to long-term trend by 2023.”

In addition, the broker is positive on the future due to its exposure to a number of growth drivers.

Morgans explained: “We view TCL as a high quality pure-play toll road infrastructure portfolio benefitting from employment and population growth, urbanisation, and the value of time, with particular exposure to the east coast capital cities in Australia.”

As for dividends, the broker is forecasting dividends per share of 35 cents in FY 2022 and then 55.3 cents in FY 2023. Based on the current Transurban share price of $12.72, this implies yields of 2.75% and 4.35%, respectively.

The post Broker names 2 ASX 200 dividend shares to buy in February appeared first on The Motley Fool Australia.

More reading

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• These 3 ASX 200 shares are topping the volume charts on Monday
• Telstra (ASX:TLS) boosts IoT cred with new acquisitions
• Here’s why the Telstra (ASX:TLS) share price could be an opportunity: analysts
• 2 ASX dividend shares with 4%+ yields

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 owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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