Category: Stock Market

Looking for a growth share or two to buy in 2022? Two that could be worth considering are listed below.

Both look well-placed for growth during the 2020s. Here’s what you need to know about these ASX growth shares:

Allkem Limited (ASX: AKE)

Allkem could be a growth share to buy in 2022. It is the top five global lithium mining company that was created with the merger of Galaxy Resources and Orocobre. Allkem owns a collection of high-quality assets including Olaroz, Mt Cattlin, and the Sal de Vida brine project. Importantly, unlike a growing number of explorers on the Australian share market, Allkem is already producing lithium in large quantities. This means that it is benefiting greatly from the record lithium prices being underpinned by the clean energy transition and the rapid adoption of electric vehicles.

The good news is that Macquarie expects these high prices to remain for at least four years, which bodes well for the future. In light of this, the broker has put an outperform rating and $13.60 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX growth share to consider is ResMed. It is focused on the development, manufacture, distribution, and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders. These include sleep disordered breathing (SDB), chronic obstructive pulmonary disease (COPD), neuromuscular disease, and other chronic diseases. Thanks to its world class portfolio, huge market opportunity, and wide distribution network, ResMed appears well-placed for growth again over the 2020s. Particularly given a major product recall from a key rival.

Credit Suisse is very positive on ResMed and expects it to benefit greatly from the aforementioned product recall by Philips. In light of this, it has slapped an outperform rating and $43.00 price target on the company’s shares.

The post 2 excellent ASX growth shares offering big potential returns in 2022 appeared first on The Motley Fool Australia.

More reading

• Macquarie names the best ASX lithium shares to buy in 2022
• Why analysts love these ASX 200 blue chip shares
• 3 ASX 200 shares with major upside potential in 2022
• 3 excellent ASX growth shares analysts are excited about
• Is the IGO (ASX:IGO) share price a better buy than Allkem?

Motley Fool contributor James Mickleboro owns Orocobre 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 recommended ResMed Inc. 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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There are some S&P/ASX 200 Index (ASX: XJO) shares that are leaders in Australia, or even in multiple countries. But are they buys at the moment?

Businesses that are leaders usually have strong competitive advantages that helped get them to the top and also are keeping them there.

However, business strength is one thing. Analysts also like to evaluate whether a share price is good value at the time before calling something a buy.

Let’s have a look at these two leading ASX 200 share:

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the leading retailers of electronics and home appliances in Australia (and New Zealand) with its three operating brands – JB Hi-Fi Australia, JB Hi-Fi New Zealand and The Good Guys.

The broker Ord Minnett recently decided to upgrade its thoughts on JB Hi-Fi from a hold to a buy, with a price target of $54 – that’s more than 10% higher than where it is today.

Ord Minnett thinks households are going to keep buying products from JB Hi-Fi at levels elevated compared to pre-COVID. It also thinks that people will continue spending on items on their homes, whilst the return on spending on travel remains slow. Retail can continue to benefit from indirect pandemic impacts.

According to the broker, the JB Hi-Fi share price is valued at 13x FY22’s estimated earnings with a projected grossed-up dividend yield of 7.6% from the ASX 200 share.

In the first quarter of FY22, JB Hi-Fi Australia sales were only down 7.5% on FY21, but up 17.3% on FY20. The Good Guys sales were down 5.6% on FY21 but up 23.6% on FY20.

Xero Limited (ASX: XRO)

Xero is a leading global cloud accounting business for small and medium businesses. It has a notable presence in a number of countries including New Zealand, Australia, the UK, the USA, South Africa and Singapore.

Opinions are mixed on the ASX tech share.

The brokers at Citi currently rate it as a buy, with a price target of $160. That’s more than 10% higher than where it is today. However, the broker is keeping an eye on the UK competitor Sage which is focusing more on the smaller accounting software segment.

However, UBS has a much lower price target of $88 on the ASX 200 share, calling it a sell. That’s around 40% lower than where it is today. Whilst the broker sees the continuing growth of subscribers and its annualised recurring revenue (ARR), the Xero share price is too high for the broker to be interested.

The FY22 half-year result showed total subscriber growth of 23% to 3 million, whilst annualised monthly recurring revenue (AMRR) went up 29% to NZ$1.13 billion. Looking at some individual markets, Australia added 124,000 net subscribers, to finish with 1.24 million subscribers and the UK added 65,000 net subscribers to end with 785,000 subscribers.

The post Are these 2 strong ASX 200 shares buys? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• 2 strong ASX 200 dividend shares to own for income
• Why is the BetaShares Crypto Innovators ETF (ASX: CRYP) share price leaping higher today?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. 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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Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Perennial Value Management portfolio management director Stephen Bruce explains why an Australian investment bank is still the one stock he’d want to hold onto for dear life.

The ASX share for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for 4 years, which stock would you want to hold?

Stephen Bruce: I wouldn’t change my answer from last time. I still think if you want to pick a stock which will adapt to whatever the environment is presenting, I think Macquarie Group Ltd (ASX: MQG) have demonstrated that they’re an organisation that — despite the fact that they’ve grown very large — they’ve still managed to maintain that flexibility and nimbleness and adaptability to see where opportunities are and take them. And similarly, to see when things are on the decline and to move out of things that have seen their best days. 

So long as they maintain that ability, which I think is pretty well ingrained into the culture of management there, I think you can rely on Macquarie to be doing the right thing in whatever the circumstances are.

If we think about the outlook now and what we think it might be like in 4 years, if you continue on with the green and energy transition theme, Macquarie [has] largely invented it. They were the leaders in infrastructure as pioneers of infrastructure-as-an-asset class.

And now that’s obviously becoming a very crowded space, but they’ve proactively moved down the value chain into greenfield developments and actually creating the assets rather than just buying them. They have this early mover position in greenfield renewable projects et cetera and I think that’ll only get stronger for them.

MF: The share price has gone up a lot since we last spoke. Do you still think it’s good value?

SB: It’s nowhere near the value it was when it was $140, but you can make an argument that if we look at it now, it’s probably operating in the best conditions you can imagine really across all of its businesses. 

The banking’s buoyant, so the investment banking backdrop is really, really strong. People are fighting for infrastructure assets so prices are really, really high. There’s heaps of money flowing into the funds they manage. The performance bids will be good. 

With asset prices being really high, their principal realisation gains will be really strong. And then with the commodities prices being way high and being volatile in general, that’s really good for their trading businesses, which is becoming an increasingly large part of their operations. So that should be firing as well as people do more hedging, et cetera. 

They’re in a really good patch and probably, as I said, whatever transpires they’ll adapt to it. The [current] valuation’s probably reasonable, but the earnings I think could actually surprise on the upside and make it all look better.

The post The ASX share I’d hold onto no matter what: expert appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps
• Should Appen (ASX:APX) shareholders worry about Amazon in 2022?
• Where are Macquarie (ASX:MQG) shares headed in 2022?
• The Altium (ASX:ALU) share price has risen 20% this year. What’s the outlook for 2022?
• Frontrunners emerge in Macquarie (ASX:MQG) VicRoads play

Motley Fool contributor Tony Yoo owns Macquarie 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 recommended Macquarie Group 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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With savings accounts and term deposits still offering very low interest rates, the share market arguably remains the best place to earn a passive income.

But with so many dividend shares to choose from, it can be hard to decide which ones to buy. To help narrow things down, I’ve picked out two that are highly rated right now. They are as follows:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to consider is Baby Bunting. It is a baby products retailer with a strong and growing presence both online and through its collection of 60 national superstores across Australia. Combined, this makes Baby Bunting the clear leader in a less discretionary category with around 300,000 births a year in Australia.

Positively, management still sees significant room to grow its store network in the future, which gives it a long runway for growth over the next decade. It is partly for this reason that the team at Citi is bullish on Baby Bunting. Its analysts have a buy rating and $6.11 price target.

Citi commented: “We reiterate our Buy rating and see the company having a range of multi-year growth strategies including rollout (target of 110+ stores, with 68 expected by end of FY22e), exclusive/private label growth and supply chain efficiencies.”

The broker has also pencilled in fully franked dividends per share of 16 cents in FY 2022 and 20 cents in FY 2023. Based on the current Baby Bunting share price, this will mean yields of 3% and 3.7%, respectively.

Charter Hall Social Infrastructure REIT (ASX: CQE)

Another ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. It is a real estate investment trust with a focus on social infrastructure properties.

These properties are in high demand, which underpinned a 100% occupancy rate and a weighted average lease expiry (WALE) in excess of 15 years in FY 2021. And with approximately three-quarters of its tenancies on fixed rent reviews, the company’s future growth looks very positive.

Goldman Sachs is positive on the company. The broker currently has a conviction buy rating and $4.13 price target on its shares. Its analysts note that the Charter Hall Social Infrastructure REIT has just announced the acquisition of two childcare portfolios (in Western Australia and Melbourne) for a total price of $134.3 million and a passing yield of 4.6%.

In response the broker said: “The acquisitions solidify our view that the REIT is positioned for a solid growth outlook given its strong balance sheet with headroom and liquidity to pursue investment opportunities on the back of recent solid asset valuations.”

As for dividends, Goldman is forecasting dividends per share of 17.1 cents in FY 2022 and 17.5 cents in FY 2023. This implies yields of 4.5% and 4.6%, respectively.

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

More reading

• 2 ASX shares rated as strong buys by brokers
• 2 buy-rated ASX dividend shares with strong yields
• 2 buy-rated ASX shares with big growth plans
• Analysts name 2 ASX dividend shares to buy

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 recommended Baby Bunting. 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 last 12 months has been very strong for the Pilbara Minerals Ltd (ASX: PLS) share price. In 2021 to date, shares of the lithium miner have risen by more than 210%.

Pilbara has benefited from a strong increase in the lithium price and demand is expected to continue to rise over the coming years.

What is the analyst outlook for the Pilbara Minerals share price in 2022?

Brokers are pretty mixed on the business.

On the one hand there is a broker like Macquarie Group Ltd (ASX: MQG) which thinks that Pilbara Minerals is a buy, with a price target of $3.70. That’s around 35% higher than where it is today.

Macquarie thinks that lithium prices will continue to remain strong into 2022 and this will help the company’s earnings. The broker thinks earnings will be stronger in the next few years thanks to that strong commodity price.

According to Macquarie, the Pilbara Minerals share price is valued at 9x FY23’s estimated earnings.

However, there are also some analysts that are not so confident on the business.

For example, Credit Suisse actually has a sell/underperform rating on the lithium miner.

Credit Suisse’s price target on Pilbara Minerals is just $2.05. That implies that the share price could drop by more than 20% over the next 12 months.

This broker doesn’t think that the lithium miner is going to earn as much in FY22 or FY23, compared to Macquarie’s forecast.

Looking at Credit Suisse’s numbers, the Pilbara Minerals share price is valued at 29x FY23’s estimated earnings.

What’s happening with the lithium price?

Pilbara Minerals says that the lithium market conditions remain very strong, with high demand and constrained supply leading to record product pricing, which is still “trending higher”.

The lithium miner said that the average price received in the three months to December 2021 was expected to be at the high end of the prior guidance (being US$1,650 to US$1,800 per dmt).

However, this quarter and FY22 annual concentrate production and shipping guidance has been revised due to delays with commissioning, ramp-up initiatives and extended plant shutdowns (both planned and un-planned) at both processing plants.

There has been an industry-wide shortage of skilled personnel in construction production and maintenance roles currently being experienced across the WA resource sector.

The production for the three months to December 2021 has been revised to 85kt to 95kt of spodumene concentrate, when it was previously 90kt to 115kt. FY22 shipped tonnes has been reduced to 380kt to 440k (down from the previous 440kt to 490kt.

The post What is the 2022 outlook for the Pilbara Minerals (ASX:PLS) share price? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Why Afterpay, Lovisa, Liontown, and Pilbara Minerals shares are racing higher
• Here’s why the Pilbara Minerals (ASX:PLS) share price is bouncing back 8% today
• ASX 200 (ASX:XJO) midday update: Rio Tinto’s lithium acquisition, Pilbara Minerals jumps

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 recommended Macquarie Group 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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On Wednesday the S&P/ASX 200 Index (ASX: XJO) fought hard and managed to record a small gain. The benchmark index rose 0.1% to 7,364.8 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to push higher on Thursday. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.3% higher this morning. This follows a solid night on Wall Street, which in late trade sees the Dow Jones up 0.5%, the S&P 500 up 0.6%, and the Nasdaq up 0.6%.

Oil prices higher

Energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a good day after oil prices pushed higher again overnight. According to Bloomberg, the WTI crude oil price is up 1.9% to US$72.45 a barrel and the Brent crude oil price is up 1.4% to US$74.89 a barrel.

Gold price pushes higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 0.8% to US$1,803.60 an ounce. The gold price rose amid Omicron concerns.

Janus Henderson named as a buy

The Janus Henderson Group (ASX: JHG) share price could be great value according to the team at Bell Potter. According to a note, the broker has resumed coverage with a buy rating and price target of $71.00. The broker notes that in PE ratio terms, Janus Henderson’s shares are trading at 10.4x 2022 earnings. This is a 17% discount to US peers (12.5x).

Iron ore prices fall

The BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG) shares could have a tough day after iron ore prices pulled back. According to Metal Bulletin, the spot benchmark iron ore price has fallen 2.6% to US$123.39 a tonne. Low grade 58% fines fell 2.5% to US$96.71 a tonne.

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

More reading

• Here are the top 10 ASX shares today
• Own Fortescue Metals (ASX:FMG) shares? Here’s what to watch in 2022
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• 2 strong ASX 200 dividend shares to own for income
• Top brokers name 3 ASX shares to buy today

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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If you’re looking for an easy way to invest in international shares for diversification, then exchange traded funds (ETFs) could be the answer. But which ETFs should you look at?

Listed below are three excellent ETFs for smart investors. Here’s what you need to know about them:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF could be an ETF to consider for 2022. This ETF gives investors exposure to the 100 largest non-financial shares on the famous NASDAQ index. These are household names and include many of the largest companies in the world. Among the companies you’ll be owning a slice of are Amazon, Alphabet, Apple, Facebook/Meta, Microsoft, Netflix, Nvidia, and Tesla.

VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)

Another ETF to consider is the VanEck Vectors Morningstar Wide Moat ETF. This ETF gives investors access to a diversified portfolio of fairly valued companies with sustainable competitive advantages. The latter is something that legendary investor Warren Buffett looks for when he picks his investments. At present, there are a total of 46 US based stocks in the fund. These include Amazon, Constellation Brands, Disney, Kellogg Co, Microsoft, and Salesforce.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

A final ETF to consider is the VanEck Vectors Video Gaming and eSports ETF. This fund gives investors access to a portfolio of the largest companies involved in video game development, hardware, and esports. This means you’ll be buying a slice of companies such as graphics processing units company Nvidia, and game developers Activision Blizzard, Electronic Arts, Roblox, and Take-Two. These companies have been tipped to benefit from the increasing popularity of video games and eSports.

The post 3 ETFs for smart ASX investors in 2022 appeared first on The Motley Fool Australia.

More reading

• 2 top tech ETFs for 2022
• 2 strong ETFs that could be buys for 2022
• 3 ETFs for ASX investors in 2022
• 3 excellent ETFs for ASX investors to buy in December
• 2 top ETFs that could be buys in December 2021

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 BETANASDAQ ETF UNITS. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF and VanEck Vectors Morningstar Wide Moat ETF. 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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Are you looking for a source of income in this low interest environment? If you are, then you may want to check out the ASX 200 dividend shares listed below.

Both dividend shares offer investors generous yields that smash the interest rates on offer with term deposits. Here’s what you need to know about them:

DEXUS Property Group (ASX: DXS)

The first ASX dividend share to look at is Dexus. It is an Australian real estate company focused on office, industrial and retail properties.

It recently revealed that 124 of its 189 assets have been externally valued, resulting in a ~$421 million or 2.4% increase in valuation. Management believe this demonstrates the strong demand for high quality industrial property.

But management isn’t resting on its laurels. The company has a $15.4 billion development pipeline, which provides it with an opportunity to grow both portfolios and enhance future returns.

Macquarie is positive on DEXUS and has an outperform rating and $11.93 price target on its shares. The broker is also forecasting dividends per share of 53.7 cents in FY 2022 and 57.5 cents in FY 2023. Based on the current Dexus share price of $11.08 this will mean yields of 4.8% and 5.1%, respectively.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share to look at is Australia’s largest telco, Telstra. After years of disappointing investors with dividend cuts, the telco giant has turned a corner and now has analysts anticipating dividend increases in the near future.

This is being underpinned by the success of its transformational T22 strategy and its new T25 strategy which is aiming to deliver sustainable earnings growth over the coming years.

Goldman Sachs appears confident Telstra will deliver on its goals. It is forecasting 16 cents per share dividends for FY 2022 and FY 2023, before an increase to 18 cents per share in FY 2024 and then 19 cents per share dividend in FY 2025.

Based on the current Telstra share price of $4.13, this will mean fully franked yields 3.9% and then 4.35% and 4.6%, respectively. Goldman has a buy rating and $4.40 price target on the company’s shares.

The post These ASX 200 dividend shares are rated as buys appeared first on The Motley Fool Australia.

More reading

• Telstra (ASX:TLS) share price struggles amid new court order
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• 2 non-telco sectors that could prove pivotal to Telstra’s (ASX:TLS) growth
• Dexus (ASX:DXS) share price edges lower despite valuation lift
• Here are the 3 most heavily traded ASX 200 shares this Friday

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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Today, the S&P/ASX 200 Index (ASX: XJO) pulled itself out of a midday rut to finish higher. At the end of the session, the benchmark index is 0.13% higher at 7,364.8 points.

Investors tended to shift towards the more risk-on shares today, with tech and healthcare companies getting a boost. Simultaneously, energy shares received an energetic jolt during today’s session following an increase in oil prices overnight. In contrast, real estate and mining shares failed to share in the same enthusiasm as the sectors suffered downward pressure.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Link Administration Holdings Ltd (ASX: LNK) was the biggest gainer today. Shares in the administration services company soared 15.03% after confirming it has entered into a deal with Dye & Durham to be acquired for $5.50 per share. Find out more about Link Administration Holdings here.

The next biggest gaining ASX share today was Pilbara Minerals Ltd (ASX: PLS). The lithium producer surged 8.77% after Macquarie Group Ltd (ASX: MQG) named the company its top pick in the ASX lithium space. Uncover the latest Pilbara Minerals details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Link Administration Holdings Ltd (ASX: LNK)	$5.51	15.03%
Pilbara Minerals Ltd (ASX: PLS)	$2.73	8.77%
Pexa Group Ltd (ASX: PXA)	$17.23	6.03%
Afterpay Ltd (ASX: APT)	$87.49	5.41%
Ebos Group Ltd (ASX: EBO)	$37.00	4.23%
Liontown Resources Ltd (ASX: LTR)	$1.545	4.04%
Uniti Group Ltd (ASX: UWL)	$4.40	4.02%
IDP Education Ltd (ASX: IEL)	$35.33	3.91%
Lynas Rare Earths Ltd (ASX: LYC)	$9.36	3.89%
Mineral Resources Ltd (ASX: MIN)	$52.00	3.77%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Link (ASX:LNK) share price surges 15% on takeover news
• 2 strong ASX 200 dividend shares to own for income
• Why Afterpay, Lovisa, Liontown, and Pilbara Minerals shares are racing higher
• Here’s why the Pilbara Minerals (ASX:PLS) share price is bouncing back 8% today

Motley Fool contributor Mitchell Lawler owns AFTERPAY T FPO, Lynas Corporation Limited, and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO, Idp Education Pty Ltd, and Link Administration Holdings Ltd. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Macquarie Group Limited and Uniti Group 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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The Cimic Group Ltd (ASX: CIM) share price fell slightly today despite a major government contract victory.

At market close, the Cimic share price was $16.46, down 0.3%.

Let’s take a look at what might have impacted investor sentiment for Cimic today.

Major project win

The mining, construction and engineering services company informed investors of a major $1.8 billion New South Wales government contract win for its subsidiary CPB Contractors.

The company has been selected for boxes and tunnelling works on the Sydney Metro railway line. It’s expected to deliver roughly $1.35 billion in revenue.

The train line will run between the suburb of St Mary’s and the new Western Sydney Airport station, due for completion in 2026. CPB Contractors is already working on the project.

The construction involves the design and construction of 9.8km of twin tunnels and works on several train stations.

Speaking on the contract win today, Cimic executive chairman and CEO Juan Santamaria said:

This is a strategic transport investment that will generate long lasting benefits for the people of Western Sydney and provide a significant boost to jobs during construction.

Today’s news comes amid some negative publicity for the company in recent days. Shares in Cimic tumbled more than 13% on Monday amid claims the company underpaid workers after it sold its Middle Eastern company BIC Contracting.

The plunge sparked a trading halt and a price query from the ASX, prompting the company to issue a statement assuring the market it was working to ensure the employees received their entitlements.

That took the shine off the company’s shares finishing in the green on Friday last week. That coincided with news of a commercial settlement on the West Gate Tunnel project in Melbourne.

Cimic share price snapshot

The Cimic share price has plunged the past 12 months, falling almost 34%. Year to date, the company’s shares are down 32%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has returned more than 11% to investors in the past year.

The company commands a market capitalisation of roughly $5.1 billion based on the current share price.

The post Cimic (ASX:CIM) share price struggles despite $1.8b contract win appeared first on The Motley Fool Australia.

More reading

• Cimic (ASX:CIM) share price recovers slightly on repayment pledge, closes 13% lower
• Cimic (ASX:CIM) share price dumps 15% before being halted. Here’s why
• Why Audio Pixels, CIMIC, Magellan, and St Barbara shares are tumbling
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• Here’s why the Cimic (ASX:CIM) share price popped today

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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