Category: Stock Market

S&P/ASX 200 Index (ASX: XJO) shares are usually some of the biggest and strongest businesses in their respective sectors.

COVID-19 has been a disruptive time for plenty of companies, but some have managed to take advantage of changes in customer demand.

With some pandemic impacts now subsiding, are the below businesses worth buying?

Xero Limited (ASX: XRO)

Xero is a world leader when it comes to cloud accounting software.

It is currently rated as a buy by the broker Citi, with a price target of $160 on the tech company. Whilst the broker used the competitor Sage (from the UK) as a barometer for the ASX share, Xero itself is reporting good growth.

Less than two weeks ago, Xero reported its HY22 full year result. It said that its UK revenue increased by 24% to $132.8 million with 65,000 net subscriber additions, taking the total to 785,000.

There were various other regions that saw a high level of net subscriber additions for the ASX 200 share. Australia saw 124,000 net subscriber additions, to reach 1.24 million subscribers. Total subscribers grew 23% to 3 million, with net subscriber additions rising 62% to 272,000 for the half.

The segment that saw the fastest growth was the ‘rest of the world’, which includes growth regions like South Africa and Singapore, which saw revenue increase by 72% to $45.9 million, helped by the acquisition of Planday.

Xero continues to invest heavily for growth, which is why the HY22 free cashflow fell by 88% to $6.35 million. However, the gross profit margin increased by a further 1.4 percentage points to 87.1%.

Management are preferring to re-invest cash generated to drive long-term growth and shareholder value.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is one of the leading electronics and home appliance retailers in Australia and New Zealand.

It is currently rated as a buy by the broker Credit Suisse, with a price target of $55.86. That implies the broker believes the share price could go up by more than 10% over the following 12 months.

The broker thought JB Hi-Fi’s first quarter sales were very good considering how many of its stores were closed during the lockdowns.

As a reminder, the ASX 200 share said that compared to FY21, the sales in the first quarter of FY22 for JB Hi-Fi Australia and The Good Guys were only down by 7.5% and 5.6% respectively. Compared to FY20, those sales were actually up 17.3% and 23.6% respectively.

In October, JB Hi-Fi said its sales momentum was continuing and was benefiting from the re-opening of stores in NSW and changes to the timing of key product releases. Management are feeling confident as the company enters the important Christmas trading period.

Based on Credit Suisse’s numbers, the JB Hi-Fi share price is valued at 14x FY22’s estimated earnings with a projected grossed-up dividend yield of 6.8%.

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

More reading

• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to sell next week
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares 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 shares of and has recommended Xero. The Motley Fool Australia owns shares of 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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The Commonwealth Bank of Australia Ltd (ASX: CBA) share price fell off the cliff-face last week, losing 9.5% across the five days. That comes despite it edging 0.36% higher on Friday to end the week at $97.81.

Shares in the banking giant tanked from a closing high of $107.68 on Tuesday to finish as low as $98.99 on Wednesday after the company released its quarterly trading update.

In light of this, several leading investment firms have weighed in on the investment debate for CBA shares. Here’s what the experts from each broker had to say.

Is the CBA share price a buy?

Analysts at Goldman Sachs don’t reckon so. The firm is heavily bearish and cut its price target by another 3% to $81.74 in a recent update.

Goldman notes that CBA isn’t immune to losing market share in its mortgage business, as competition mounts up from other Aussie banks in the space.

It says “while CBA’s commitment to investment is the right thing for the franchise in the medium term, it provides it with less flexibility to offset the revenue headwinds”.

The team at Macquarie Group Ltd (ASX: MQG) doesn’t think CBA is a buy right now either. The investment bank likens Commonwealth’s increased spending and worsening margins to that of Westpac’s, which doesn’t bode well.

It also notes mortgage competition and record low interest rates hurt CBA’s margins further. It expects CBA to deliver a deficit of 3% in pre-provision earnings growth in FY22.

Macquarie thinks the CBA share price could fall by up to 15% to $87.50 and maintains an underperform rating.

Morgan Stanley agrees with its colleagues and slaps an $87.50 price target as well while staying underweight on the company.

It states that investors should reassess CBA’s position within the market, and its ability to maintain above-average growth.

The firm also believes CBA won’t be able to restore its dividend to its FY19 glory for at least another 2–3 years. Further, it notes CBA’s buyback program is only likely to dilute the share count by around 1%, subsequently questioning its value.

What other ratings are there?

Ord Minnett also jumped into the debate and anticipates further earnings estimate downgrades following CBA’s trading update.

It noted Commonwealth’s revenue was 1% down from its quarterly average over the last 6 months and that it delivered worst-than-expected results.

Ord also has an underperform rating and believes further challenges will result in downgrades to margins, lower non-interest income, and higher costs to growing the business.

Adding to the sell list is Citi, with a sell rating and $94.50 valuation on the CBA share price.

Citi notes CBA’s result was 3% lower than its internal estimates, and that CBA’s net interest margin (NIM) faced pressure.

This makes its premium to peers hard to justify, according to Citi. It said, “trading at 2.4x book value and having strongly outperformed peers over the last month, we see little to justify the premium in this result”.

What’s the overall sentiment on the CBA share price?

Out of the 16 analysts covering the CBA, 11 have a sell rating or are bearish on the direction of its share price. Three firms, Jefferies, Bell Potter, and Jarden Securities, have buy ratings on the share and reckon it could be worth the purchase.

Each of these firms values CBA shares at $112, $111, and $101 per share respectively.

The spread between the highest and lowest valuation in the group is $39/share or 53%, with Morgans taking out the bottom spot with its reduced rating and $73 price target.

On average, the group values the CBA share price at $93.05, implying a downside potential of almost 5% on Friday’s closing price.

The post Top brokers weigh in on the CBA (ASX:CBA) share price appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
• Top broker says forget CBA (ASX:CBA) and buy Westpac (ASX:WBC) shares
• These were the worst performing ASX 200 shares last week
• What’s happening with the CBA (ASX:CBA) share price this week?
• Own CBA (ASX:CBA) shares? Here’s the bank’s latest foray into crypto

The author Zach Bristow 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 shares of and 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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If you’re interested in buying some dividend shares in the near future, then you may want to look at the two listed below.

These dividend shares have been tipped both as buys and as generous dividend payers by analysts. Here’s what they are saying about them:

Centuria Industrial Reit (ASX: CIP)

Centuria Industrial could be a top option for income investors. It is the largest domestic pure play industrial REIT, with a portfolio of high-quality assets situated in key metropolitan locations throughout Australia.

The company also recently added to this portfolio with the acquisition of eight freehold urban infill industrial assets for $351.3 million. Management was very positive on the transaction, noting that it expands Centuria Industrial’s exposure across attractive industrial sub-sectors. These include distribution centres, cold storage, and transport logistics.

Macquarie is very positive on the company and has an outperform rating and $4.22 price target on its shares. The broker is also forecasting a 17.3 cents per share distribution in FY 2022 and an 18.4 cents per share distribution in FY 2023. 

Based on the current Centuria Industrial share price of $3.73, this will mean yields of 4.6% and 4.9%, respectively

Charter Hall Social Infrastructure REIT (ASX: CQE)

Charter Hall Social Infrastructure REIT could be another ASX dividend share to buy. This real estate investment trust focuses on investing in social infrastructure properties such as childcare centres, government sites, and healthcare buildings. 

It also recently added some new properties to its portfolio. The REIT acquired two premium childcare assets in Queensland and a healthcare property owned by Healius Ltd (ASX: HLS) for a total of $58.4 million.

In response to the deal, Goldman Sachs retained its conviction buy rating, increased its price target to $3.91, and lifted its FY 2022 dividend estimate to 16.9 cents per share. Goldman then expects the latter to grow to ~17.7 cents per share in FY 2023.

Based on the current Charter Hall Social Infrastructure REIT share price of $3.68, this implies dividend yields of 4.6% and 4.8%, respectively, for investors.

The post 2 high quality ASX dividend shares with attractive yields appeared first on The Motley Fool Australia.

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• Analysts name 2 ASX 200 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 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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished a difficult week on a positive note. The benchmark index rose 0.2% to 7,396.5 points.

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

ASX 200 expected to sink

The Australian share market looks set to start the week deep in the red. According to the latest SPI futures, the ASX 200 is expected to open the day 45 points or 0.6% lower this morning. This follows a mixed end to the week on Wall Street, which saw the Dow Jones fall 0.75%, the S&P 500 drop 0.15%, but the Nasdaq buck the trend by pushing 0.4% higher.

NAB shares rated as a buy

The National Australia Bank Ltd (ASX: NAB) share price remains good value according to the team at Goldman Sachs. This morning the broker has reiterated its conviction buy rating and $31.15 price target on the bank’s shares. Goldman believes commercial banks are better positioned for the current environment tan retail-focused banks. This is due to the latter being impacted by aggressive competition for mortgages.

Oil prices tumble

Energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a tough start to the week after oil prices sank on Friday night. According to Bloomberg, the WTI crude oil price is down 3.15% to US$75.94 a barrel and the Brent crude oil price has fallen 2.9% to US$78.89 a barrel. Oil prices fell to six-week lows amid demand concerns following the announcement of lockdowns in Europe.

Gold price falls

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could start the week in the red after the gold price dropped on Friday night. According to CNBC, the spot gold price fell 0.8% to US$1,846.80 an ounce. This follows the strengthening of the US dollar after US Federal Reserve Governor Christopher Waller called for the early tapering of economic support.

WiseTech shares fully valued

Last week WiseTech Global Ltd (ASX: WTC) held its annual general meeting and reiterated its FY 2022 guidance for EBITDA growth of 26% to 38%. While this and its positive outlook led to Bell Potter lifting its valuation on the WiseTech share price by 18% to $56.25, it isn’t enough for a change of recommendation. Bell Potter has retained its hold rating on valuation grounds

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

More reading

• 2 ASX 200 dividend shares to buy
• These were the best performing ASX 200 shares last week
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• These 3 ASX 200 shares are topping the volume charts 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. owns shares of and has recommended WiseTech Global. The Motley Fool Australia owns shares of and has recommended WiseTech Global. 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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Exchange traded funds (ETFs) can be great additions to a balanced portfolio. This is because they give investors easy access to a large and diverse number of different shares that you wouldn’t ordinarily have access to.

Due to their growing popularity, there are an increasing number of ETFs for investors to choose from.

In order to narrow things down, I have picked out three ETFs that are popular with investors right now:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF tracks the performance of the 50 largest technology and ecommerce companies that have their main area of business in Asia (excluding Japan). Among the ETFs holdings are Alibaba, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent Holdings. As these and the other companies in the ETF are among the fastest growing in the region and revolutionising the lives of billions of people, they have been tipped to generate strong returns in the future.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

The BetaShares NASDAQ 100 ETF gives investors exposure to 100 of the largest non-financial companies on the famous Nasdaq index. This includes some of the most iconic companies in the world such as Amazon, Apple, Facebook, Microsoft, Netflix, and Tesla. Given the quality of these companies and their very positive outlooks, the Nasdaq 100 ETF has been tipped to generate strong returns for investors over the next decade.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF is one of the most popular ETFs on the Australian share market. And it isn’t hard to see why. This ETF provides investors with exposure to over 1,500 of the world’s largest listed companies. This means through just a single investment, you can own a slice of companies such as Apple, Johnson & Johnson, Nestle, Procter & Gamble, and Visa. This could make it a good option if your portfolio lacks international exposure.

The post 3 ETFs for ASX investors to buy now appeared first on The Motley Fool Australia.

More reading

• Here’s why not all ASX ETFs are created equal
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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. owns shares of and has recommended BETANASDAQ ETF UNITS and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and BetaShares Asia Technology Tigers ETF. The Motley Fool Australia has recommended Vanguard MSCI Index International Shares 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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One of the leading brokers that evaluates ASX shares thinks that the Pointsbet Holdings Ltd (ASX: PBH) share price could give investors upside of 60% over the next year.

Pointsbet is an ASX-listed corporate bookmaker that has operations in both Australia and the US. It offers sports wagering and iGaming.

Which broker thinks that the Pointsbet share price is an opportunity?

The broker in question is Credit Suisse. It has a price target on Pointsbet on $12.80 – that’s where analysts think that the business will be trading in 12 months from now. In other words, Credit Suisse thinks Pointsbet shares could rise by approximately 60% in a year.

Credit Suisse referenced the recent New York licence with its latest note, with this outcome showing that Pointsbet can be a real player in the US market. But the company will be spending more on marketing to capture that opportunity.

New York win

A couple of weeks ago, Pointsbet said that the New York State Gaming Commission has recommended that Pointsbet’s New York business be awarded a platform provider licence to operate mobile sports wagering in New York.

Pointsbet was only one of nine operators to be recommended by the New York State Gaming Commission, including BetMGM, Caesars and WynnBet.

Official approval procedures will follow, with the recommended operators to undertake independent system testing ahead of the official launch, expected in early 2022.

Pointsbet US CEO Johnny Aitken said:

Having the potential to secure market access to New York state – expected to be one of the largest and most important markets in the United States – represents another major milestone for our company, our brand, and our technology. We are thankful to the Gaming Commission for this recommendation and believe it speaks volumes to PointsBet’s reputation and ability to deliver an unrivalled, world-class experience. We eagerly await the official opportunity to leverage our exclusive sports betting partnership with NBC Sports and introduce the nation’s premier sports betting product to the countless passionate, sports-loving New Yorkers.

Rapid growth

Pointsbet continues to see the business growing quickly.

In the first quarter of FY22, its total turnover increased 42% to $979.9 million, with a 112% increase in the US to $348.6 million.

Pointsbet’s total gross win increased 66% to $117.1 million, with 197% growth in the US to $29.2 million.

The total net win grew by 76% to $67.3 million, whilst the US net win soared by 307% to $12.5 million.

The company also told investors that its cash active clients continue to scale significantly. Year on year, Australian clients jumped 78% to 222,662 and US clients soared 367% to 185,880.

What is the Pointsbet share price valuation?

Credit Suisse isn’t expecting Pointsbet to make a profit in FY22, so there isn’t a profit multiple valuation for this financial year.

The ASX currently puts the Pointsbet market capitalisation at $2.15 billion.

The post Leading broker thinks Pointsbet (ASX:PBH) share price offers 60% upside appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• 3 fantastic ASX shares to buy this month
• PointsBet (ASX:PBH) share price tipped to surge 44% higher
• Why Brainchip, Chalice, Life360, and PointsBet shares are surging higher
• ASX 200 (ASX:XJO) midday update: NAB result disappoints, PointsBet surges

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 shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. 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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As I mentioned here yesterday, it is possible for investors to generate significant wealth by making long term investments in quality companies.

But which shares could be top buy and hold options right now? Here are two that analysts rate highly:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

When looking for buy and hold shares, it always helps if you understand what a company’s long term plans are.

The good thing with this pizza chain operator is that management lays out its plans for all to see. This means investors have a clear understanding of where the company is heading over the next decade.

For example, at the end of FY 2021, Domino’s store network comprised 2,949 stores across the ANZ, European, and Asian markets. Whereas by 2033, management is aiming to more than double this to 6,650 stores by FY 2033.

In addition, the company’s strong balance sheet means that management is on the lookout for acquisitions. This could see Domino’s enter new markets in the future, giving it an opportunity to increase its network even further.

Goldman Sachs is a fan of Domino’s. Its analysts currently have a buy rating and $147.00 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Another ASX share that could be a quality buy and hold option is Hipages. It is an Australia-based online platform and software as a service (SaaS) provider with a focus on connecting tradies with residential and commercial customers.

At present, the company captures around 5% of total industry advertising spend. However, Goldman sees scope for this to grow materially in the future as its ecosystem builds out.

Goldman Sachs recently explained: “We see HPG as an attractive medium-term growth stock – HPG currently captures c.5% of the total industry advertising spend; by contrast REA/CAR capture c.40-60% of spending in their respective categories. As HPG builds out its ecosystem (including the imminent launch of the new “TradieCore” field service software solution), we see scope for HPG to increase its share towards these levels over the long term as the marketplace leader.”

The broker has a buy rating and $4.90 price target on Hipages’ shares.

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

More reading

• 2 excellent ASX growth shares to buy
• Analysts name 2 hot small cap ASX shares to buy
• Down 22% in 2 months, is the Domino’s (ASX:DMP) share price a very tasty buy?
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• Domino’s (ASX:DMP) biggest shareholder dropped $600 million last Thursday. Here’s why he’s not worried

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 shares of and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises Limited and Hipages Group Holdings Ltd. 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 Premier Investments Limited (ASX: PMV) share price has gone up 46% over the last 12 months. But could the retail stock be a bargain buy for investors?

It has a number of different retail brands including Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti. The ASX share also has substantial investments in Breville Group Ltd (ASX: BRG) and Myer Holdings Ltd (ASX: MYR).

What are analysts focusing on with the retailer?

It was only a couple of months ago that Premier Investments released its FY21 result to investors. That’s what has influenced analyst thoughts in recent times.

For example, both Credit Suisse and Morgan Stanley rate the business as a hold, but the price targets for the Premier Investment share price are lower than today’s level, at $28.74 and $26.75 respectively. That means both brokers are expecting Premier Investments shares to fall more than 10%.

Whilst those brokers thought the result was good, they are expecting the profit margins to somewhat reduce and demand to lower.

How did it perform in FY21?

Premier Investments reported that its statutory profit grew by 97.3% to $271.8 million.

The global retail sales of $1.4 billion went up 18.7%. Within that, Peter Alexander experienced record sales of $388.2 million, an increase of 34.7%. Apparel brands increased by 25.3% to $841.6 million.

It also experienced record sales of $300.7 million, up 36.4%, and contributed 20.8% of the global FY21 sales.

Premier Investment’s gross profit grew by 25.1% to $927.9 million, with the gross profit margin increasing by 331 basis points.

The Premier retail earnings before interest and tax (EBIT) grew by 88% to $351.9 million.

Is the Premier Investments share price a buy?

The brokers at Macquarie Group Ltd (ASX: MQG) currently rates Premier Investments as a buy, with a price target of $33, which is slightly higher than where it is now.

Macquarie also thinks that Premier Investments will probably see its margins revert to a more level.

However, analysts think there is going to be a high level of demand at its stores with lockdowns ending. The company has done the right thing by ensuring it has enough stock for the rest of 2021.

Using Macquarie’s estimates, the Premier Investments share price is valued at 24x FY22’s estimated earnings.

Trading update

Premier Investments told investors how it had done in the first seven weeks of its FY22 when it released its FY21 report.

It said that its retail store week was being disrupted by lockdowns, with 661 stores temporarily closed. However, those stores have been reopening.

The lost sales for those stores have been partially offset by “strong” global online sales which were up 44.6%. Smiggle Europe is also rebounding. For that seven-week period, total global online sales were down 9.5%. However, it did say that its online business continues to “accelerate” the EBIT margin “significantly higher” than the store network.

The post Is the Premier Investments (ASX:PMV) share price a bargain buy? appeared first on The Motley Fool Australia.

More reading

• Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit
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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 recommended Macquarie Group Limited and Premier Investments 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 Rio Tinto Limited (ASX: RIO) share price has drifted lower in recent times. This comes following tough trading conditions for the mining giant, particularly with the plunge in iron ore prices.

At Friday’s closing bell, Rio Tinto shares finished the day 0.83% higher at $90.25. Despite the uplift, its shares have sunk close to 10% since this time last month.

What’s dragging Rio Tinto shares through the mud?

Investors have been selling off Rio Tinto shares following the mining giant’s third-quarter results released in mid-October.

Rio Tinto advised it had another difficult 3-month period as it struggled to deal with COVID-19 challenges.

Operationally, Pilbara iron ore shipments grew just 2% to 83.4 million tonnes over the prior corresponding period (Q3 FY20). Other commodities such as bauxite, aluminium, mined copper, titanium dioxide slag, and iron ore pellets and concentrate all dropped production targets.

Most notably, iron ore – the primary force fuelling Rio Tinto’s growth — saw its price recede in the second half of 2021.

In May, the steel-making ingredient reached an all-time high of US$229.50 per tonne. The Rio Tinto share price accelerated on the back of bumper revenues over the period.

However, a slowdown in Chinese demand amid political pressure has led iron ore prices to tumble. Currently, iron ore is fetching US$92.01, a drop of 43% since the start of the calendar year.

Chinese lawmakers introduced new rules for its steel producers in an effort to curb reliance on Australian iron ore. Steel mills were instructed to limit 2021 output to no more than 2020 levels, or face penalties. This is seen as an effort to curb reliance on Australian iron ore, and boost domestic supply and demand.

China wants its steel industry to halt iron ore production at roughly 1 billion tonnes for 2021. Consequently, Chinese crude steel production has dropped 13% in August, 12% in September, and 21% in October – the biggest amount since March 2018.

China has also increased its efforts to close down some domestic factories to achieve carbon reduction targets. In addition, the country is seeking alternative resources to maintain production.

What do the brokers think?

A number of brokers weighed in on the Rio Tinto share price after the release of its latest performance report.

Analysts at Goldman Sachs cut its price target by 1.1% to $121.00. UBS had a more bearish tone, reducing its outlook by a sizeable 6% to $79.00.

International investment firm Credit Suisse dropped its rating by 3.6% to $106.00. Based on the current share price, this implies an upside of around 17%.

Rio Tinto share price snapshot

A challenging 12 months has led the Rio Tinto share price to fall almost 10% and this year to date it’s down by more than 20%. Its shares have steeply declined since the release of its FY21 half-year results in late July

On valuation grounds, Rio Tinto commands a market capitalisation of roughly $33.50 billion, and has approximately 371.22 million shares outstanding.

The post Why has the Rio Tinto (ASX:RIO) share price fallen in a hole over the past month? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Why China’s property sector had a huge impact on ASX iron ore miners: expert
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• Own Rio Tinto (ASX:RIO) shares? Here’s why the miner just bought into this battery maker
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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 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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Next week will be a big week for the Webjet Limited (ASX: WEB) share price.

The online travel agent is scheduled to hand in its highly anticipated half year results on Wednesday 24 November.

Ahead of the release, I thought I would look to see what the market is expecting from Webjet.

What should you expect from Webjet’s results?

Webjet is widely expected to release a much-improved result for the six months ended 30 September. However, it is likely to be far too soon for a return to profit.

For example, Goldman Sachs is forecasting a 611% increase in total transaction value (TTV) to $668.6 million, revenue of $52.5 million, an EBITDA loss of $13.4 million, and a net loss after tax of $35.5 million.

The broker, which has a buy rating and $7.00 price target on Webjet’s shares, also expects the company to finish the period in a strong financial position despite its loss. Goldman expects the company’s net cash position to be at $117 million.

What else is being said?

The team at Citi are a little more cautious and have warned investors that Webjet’s costs could negatively surprise.

Citi commented: “Webjet reports 1H22 results on the 24th of November. The key areas of interest for us in the result are: Near term costs — We estimate the market is underestimating B2B costs in 1H22. The market is implying ~$40 million for the half which implies zero growth in cost base from FY21 despite the elevated activity.”

Its analysts have a neutral (high risk) rating and $6.35 price target on the Webjet share price.

Is the Webjet share price a buy?

Opinion remains extremely divided. While Goldman clearly sees a lot of value in the Webjet share price, Citi continues to sit on the fence with its neutral rating.

It is also worth noting that Webjet is one of the most heavily shorted shares on the Australian share market. This appears to be an indication that there is a group of investors out there that are convinced the company’s result will disappoint. Though, it is worth acknowledging that if they are wrong and Webjet impresses, they could quite easily get caught up in a short squeeze.

Time will tell what happens, but it certainly will be worth watching Webjet’s shares very closely next week.

The post Why all eyes will be on the Webjet (ASX:WEB) share price next week appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Is the Webjet (ASX:WEB) share price a buy ahead of its half year results?
• Why are Webjet (ASX:WEB) shares still being shorted in November?
• These are the 10 most shorted ASX shares
• 2 ASX shares that may be too good to ignore

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 shares of and has recommended Webjet Ltd. 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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