Category: Stock Market

With the COVID-19 Omicron variant sneaking in at the end of the month, November ended up a bloodbath for ASX travel shares.

The Motley Fool calculated that out of 12 travel-related stocks, just 3 ended the month higher than it started:

ASX share	November price change
Alliance Aviation Services Ltd (ASX: AQZ)	12.83%
Sydney Airport (ASX: SYD)	1.34%
Auckland International Airport Limited (ASX: AIA)	0.27%
Qantas Airways Limited (ASX: QAN)	(5.42%)
Air New Zealand Limited (ASX: AIZ)	(7.01%)
Apollo Tourism & Leisure Ltd (ASX: ATL)	(8.46%)
Corporate Travel Management Ltd (ASX: CTD)	(9.72%)
Regional Express Holdings Ltd (ASX: REX)	(10.76%)
Flight Centre Travel Group Ltd (ASX: FLT)	(11.21%)
Kelsian Group Ltd (ASX: KLS)	(12.26%)
Webjet Limited (ASX: WEB)	(13.45%)
Helloworld Travel Ltd (ASX: HLO)	(18.01%)

Let’s take a look at the trio of lucky ASX shares that had a positive November:

The airline that’s taking off during the pandemic

Alliance Aviation has been a favourite among professional investors the past year as it’s been one of the few airlines to grow during the pandemic.

The small operator did well from providing wet leases with its larger rivals, which is best described as an outsourcing agreement.

It seems Alliance shares did most of its climbing early in November while Omicron was merely a letter of the Greek alphabet.

On the morning of Monday 8 November, the company revealed Qantas had exercised further options on its wet leasing contract.

That week, the stock climbed 4.51%.

The shares then held steady the last few days during the Omicron panic to not lose their earlier gains.

According to CMC Markets, 4 out of 5 analysts rate the stock as a “strong buy”, with the 5th considering it a “hold”.

Will Sydney Airport’s takeover complete?

Sydney Airport also did most of its heavy lifting on 8 November.

The shares rocketed 2.79% on that day after it accepted a revised $8.75 per share takeover offer from the Sydney Aviation Alliance consortium.

The airport understandably lost a lot of those gains on Monday on the back of Omicron-triggered border closures, ending November 1.34% higher than it started.

Due to the pending acquisition, most analysts rate Sydney Airport shares as a “hold”, according to CMC Markets.

The deal is still subject to shareholder approval and, critically, requires a green light from the watchdog Australian Competition and Consumer Commission (ACCC).

The shares are starting December at $8.30.

No one knows what’s happening with Auckland Airport shares

Auckland Airport is another stock that made most of its gains by 8 November.

The shares rocketed 5.33% over the first 8 days of the month, but gave up most of those gains in the last fortnight.

The airport stock ended just 0.27% in the positive for November, which was still good for third place among travel shares.

According to CMC Markets, analysts are divided on Auckland Airport shares. Three out of 10 rating them as a “strong buy”, but 4 rate them as “hold” and 3 are urging clients to sell.

The post 3 best-performing ASX travel shares in November appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares rated as strong buys by top brokers
• Why the PlaySide Studios (ASX:PLY) share price is winning today
• Australian Ethical (ASX:AEF) share price sinks on earnings update
• Suncorp (ASX:SUN) share price drops as insurance sale completes
• Why is the Liontown Resources (ASX:LTR) share price frozen today?

Motley Fool contributor Tony Yoo owns shares of Corporate Travel Management Limited and Sydney Airport Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Helloworld Limited. The Motley Fool Australia has recommended Alliance Aviation Services Ltd., Corporate Travel Management Limited, Flight Centre Travel Group Limited, and 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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Amid all of this volatility on the ASX share market, there are some businesses on the stock market that are buy-rated by a number of leading brokers.

Analysts and brokers are always on the lookout for opportunities that could be good value and make returns in the medium-to-longer-term.

There’s always a chance that all of the brokers are wrong at the same time, but it could also signify that there’s an opportunity. Here are two that are well-liked at the moment:

EML Payments Ltd (ASX: EML)

EML Payments is a business which provides a payment solutions platform, helping businesses all over the world to “create awesome customer experiences.” It offers a number of services relating to payments, gift cards, virtual cards and so on. EML Payments says it can enable money to be moved quickly, conveniently and securely.

It’s currently rated as a buy by at least three brokers including UBS with a price target of $4.40. That implies the broker thinks the EML share price can rise more than 20% over the next 12 months.

EML shares now don’t seem as risky to the broker after the update from the Central Bank of Ireland (CBI). The broker now thinks that EML can win customers easier and there are no limitations on continuing operations.

UBS is expecting EML shares to rise and that it looks good value. The broker thinks that the EML share price is valued at 29x FY23’s estimated earnings.

EML said that that CBI will permit the Irish business in question (PCSIL) to sign new customers and launch new programs whilst staying within the material growth restrictions. Broad based reductions in limit controls on programs will not be imposed.

The ASX share noted that CBI intends that a material growth limitation over PCSIL’s total payment volumes will be imposed for 12 months or rescinded earlier after third party verification to confirm PCSIL’s remediation plan has been effectively implemented. PSCIL has been invited to provide submissions in relation to growth limits.

In the first quarter of FY22, EML’s revenue increased 29% to $52.4 million and underlying net profit (NPATA) jumped 41% to $4.6 million.

Audinate Group Ltd (ASX: AD8)

Audinate is a tech business that provides customers with the Dante system, which is an audio over IP networking solution. It is used in the professional live sound, commercial installation, broadcast, public address and recording industries.

The appeal of Dante is that it can replace traditional analogue audio cables by transmitting synchronised audio signals across large distances, to multiple locations at once, using an ethernet cable.

The ASX share is currently rated as a buy by at least three brokers. One of those brokers is Credit Suisse which has a price target of $11 on the business.

The broker noted supply chain issues for the company and its delayed sales, but this could mean longer-term demand for the business. But, the broker now isn’t expecting as much revenue growth in FY22 overall.

Audinate said the first quarter of FY22 was a record, with revenue of US$7.6 million, which was growth of 46.1% year on year. At the end of the quarter it had a backlog of orders for chips, cards and modules amounting to US$14.8 million – up from US$2.5 million in pre-COVID times. Customers are placing orders further into the future reflecting “strong underlying growth”.

Component shortages are expected to impact the business in the second half and for the foreseeable future. In response to this, Audinate is accelerating plans to release the next generation Brooklyn product by the fourth quarter of FY22, bringing forward engineering work already planned for the next 12 months – the ASX share will use a next generation chip that is not dependent on a capacity-constrained chip foundry.

The post 2 ASX shares rated as strong buys by top brokers appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX 200 shares in November
• Why EML Payments, Pact, Senex, and Webjet shares are dropping
• These were the best performing ASX 200 shares last week
• Here’s why EML (ASX:EML) shares have surged 33% this week
• Brokers name 3 ASX shares to buy 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 AUDINATEGL FPO and EML Payments. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and EML Payments. 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 PlaySide Studios Ltd (ASX: PLY) share price has continued its positive run and is pushing higher again on Wednesday.

At the time of writing, the video game developer’s shares are up a sizeable 4.5% to 88 cents.

This latest gain means the PlaySide Studios share price has now doubled in value in 2021.

Why is the PlaySide Studios share price rising again?

Investors have been bidding the PlaySide Studios share price higher today following the announcement of yet another agreement.

According to the release, PlaySide Studios has partnered with premier US based influencer network, gaming and production organisation One True King (OTK).

OTK, which was formed by incredibly popular content creators Asmongold, Mizkif, Esfand, Rich Campbell, and Tips Out in 2020, has a combined total reach that exceeds 21 million people globally.

The release notes that the agreement with OTK is in the form of a co-development contract for a new multiplayer PC based title with a planned release date in the second quarter of FY 2023. The contract will be a fixed-price, milestone-based development with a material revenue share model post launch.

OTK will market the title to its large and rapidly growing global audience via its various social media platforms.

Management commentary

PlaySide’s CEO, Gerry Sakkas, commented: “We are excited to collaborate with reputable gaming influencer organisation OTK which consists of some of the biggest streamers in the world and has a total reach of over 21 million followers worldwide.”

“We are continually working to expand our presence within the industry via unique partnerships. This co-development opportunity with OTK – our third since listing – allows us to further leverage the PlaySide brand and reinforces our position as Australia’s leading publicly listed gaming developer.”

The post Why the PlaySide Studios (ASX:PLY) share price is winning today appeared first on The Motley Fool Australia.

More reading

• Here’s why the PlaySide Studios (ASX:PLY) share price clocked it this morning
• PlaySide (ASX:PLY) share price on watch after landmark agreement with video game giant
• 5 ASX shares in an obscure but booming sector

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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The Australian Ethical Investment Limited (ASX: AEF) share price is sliding in early trade, down 3.36%.

This comes as the All Ordinaries Index (ASX: XAO) follows US markets downwards, currently down 0.32%.

Below we look at the earnings guidance update released by the Australian Ethical fund manager before market open this morning.

What earnings guidance was given?

The Australian Ethical share price is sinking this morning. It comes after the company reported it expects its underlying profit before tax (UPAT) for the half year ending 31 December 2021 to come in 8% above the UPAT reported for the prior corresponding half year.

According to the release, UPAT is expected to be between $5–$5.5 million, before performance fees. Performance fees from the company’s High Conviction Fund and Emerging Companies Fund “will only crystallise” on 30 June 2022 if those funds outperform their benchmarks.

The guidance is based on the assumption there won’t be any “significant market movement” during the rest of the financial year, according to Australian Ethical.

The company also reported a 9% increase in its funds under management (FUM) from 30 June. FUM stood at $6.64 billion as at 31 October.

Looking ahead, Australian Ethical’s CEO, John McMurdo, said:

The positive momentum we have been experiencing has carried over into the current financial year. While the emergence of a new coronavirus strain shows COVID-19 remains an ongoing concern, discussions around mobilising private finance to tackle climate change were high on the agenda during COP26 and shifting capital flows is an essential part of the decarbonisation process.

The Australian Ethical share price could be under pressure with the report that costs are going to increase in H2. According to McMurdo:

Australian Ethical will continue to invest in its high growth strategy given the positive momentum we are experiencing and the scale of the opportunity ahead. As such, costs in the second half will grow compared to the first half, as we continue to implement our strategic roadmap.

Australian Ethical share price snapshot

The Australian Ethical share price has surged ~180% in 2021. That far outpaces the 10.4% year-to-date gains posted by the All Ords.

Over the past month, Australian Ethical shares have gained around 3%.

The post Australian Ethical (ASX:AEF) share price sinks on earnings update appeared first on The Motley Fool Australia.

More reading

• This sector could be a $50 trillion investment opportunity: expert
• Why is the Australian Ethical Investment (ASX:AEF) share price surging 7% today?
• 2 great ASX shares to think about

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment 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 Suncorp Group Ltd (ASX: SUN) share price is currently down as the company completes the sale of one of its insurance businesses.

What has Suncorp sold?

Suncorp told the market that it has completed the sale of its 50% interest in RACT Insurance to its joint venture partner, the Royal Automobile Club of Tasmania Ltd (RACT), which was announced at the start of July 2021.

The sale was for a cash consideration of $83.75 million and is part of the continued simplification of the business.

Suncorp disclosed that the pre-tax profit on sale is $65 million, with the total capital release as a result of the transaction being $55 million. The $65 million pre-tax profit was at the low end of its guidance of between $65 million to $70 million. However, the total capital release was only expected to be approximately $50 million.

At the time of the sale, Suncorp’s CEO Steve Johnston said that the transaction was in the best interests of customers, shareholders and the business.

Mr Johnston said:

Suncorp and RACT have enjoyed a successful relationship in Tasmania since 2007. We have mutually agreed that now is the right time for RACT to take full control of the insurance entity. This is consistent with our focus on simplifying the group and driving improvement in our core insurance and banking businesses.

Tasmania remains an important market for Suncorp Group. We are now focused on driving growth in the region through our wholly owned brands. This includes our leading national mass market brand AAMI, as well as our more specialised brands Shannons and APIA.

Suncorp has also said that the divestments of RACT Insurance and its wealth business make strategic sense.

What is the company doing with its capital?

In FY21, as a result of the company’s “strong” balance sheet and confidence in the outlook, the board declared a fully franked final dividend of $0.40 per share, a $0.08 per share fully franked special dividend and announced an on-market share buyback of up to $250 million.

The total FY21 ordinary dividend of $0.66 per share represents a trailing grossed-up dividend yield of 8.7% at the current Suncorp share price.

It also said that it will continue to maintain its prudent capital management strategy, including an appropriate buffer. It is maintaining its commitment to a dividend payout ratio of between 60% to 80%.

It’s also committed to returning to shareholders with any capital that is excess to the needs of the business.

Suncorp share price snapshot and outlook

With the Suncorp share price currently down, it has now dropped 8% over the last month.

In FY22, it’s focused on driving improved momentum in the core business, in order to meet its FY23 plan to deliver a growing business with a sustainable return on equity that’s above the cost of equity.

The post Suncorp (ASX:SUN) share price drops as insurance sale completes appeared first on The Motley Fool Australia.

More reading

• Suncorp (ASX:SUN) share price slips despite launch of BNPL offering
• 2 high quality ASX 200 blue chip shares with major upside potential
• Broker sees 14% upside for the Suncorp (ASX:SUN) share price
• ASX 200 (ASX:XJO) midday update: NAB hits 52-week high, CSL upgraded
• Suncorp (ASX:SUN) share price higher on banking update

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

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The Liontown Resources Limited (ASX: LTR) share price won’t be going anywhere on Wednesday.

This morning the lithium developer requested a trading halt for its shares.

Why is the Liontown Resources share price frozen?

The Liontown Resources share price has been frozen today so the company can undertake a capital raising by way of an institutional placement.

As things stand, the company has yet to update the market on how much it is aiming to raise and at what price.

However, the AFR is reporting that Liontown Resources is planning to take advantage of its incredible share price rise by raising a massive $450 million from investors.

The report states that the company is understood to have held discussions with institutional investors in Australia and overseas, before settling on a price for its capital raising.

This is believed to be a 10% to 15% discount to the Liontown Resources share price at Tuesday’s close of $1.92. This would place the issue price in the region of $1.63 to $1.73 per new share.

Why is Liontown Resources raising $450 million?

The funds from the capital raising are reportedly going to be used to support the construction of Liontown Resources’ flagship Kathleen Valley Lithium project in Western Australia.

The company notes that the 100%-owned project is a Tier-1 battery metals asset with excellent grade and scale in one of Western Australia’s best mining districts.

A recently updated Definitive Feasibility Study (DFS) confirmed the potential to develop a state-of-the-art, second generation lithium-tantalum mining and processing operation with exceptionally strong financial and technical merits. It will be targeting production of 511,000 tonnes of lithium-rich spodumene concentrate once operational.

In addition, management highlights that the project has a class-leading sustainability and ESG framework.

And while it isn’t expected to be operational until 2024, the company appears confident that it won’t miss out on the sky high prices that lithium is commanding currently. Management notes that when the project comes on-line, it will be well positioned to benefit from a significant lithium supply deficit forecast to emerge from 2024.

The Liontown Resources share price is up 357% since the start of the year.

The post Why is the Liontown Resources (ASX:LTR) share price frozen today? appeared first on The Motley Fool Australia.

More reading

• Liontown (ASX:LTR) share price struggles despite premium lithium update
• Here are the top 10 ASX shares today
• ASX 200 lithium shares in focus amid China supply shortage
• Top brokers name 3 ASX shares to buy next week
• Why Greenland Minerals, Liontown, Nearmap, and Pushpay shares are tumbling lower

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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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

It’s party on in the crypto world today. Investors in most digital currencies are seeing tremendous interest resume, following a rather bearish week last week among most major cryptocurrencies.

As of 10 a.m. ET, Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) surged 2.3%, 8.5%, and 3%, respectively. These gains today have wiped out most of the losses seen in the crypto segment from last Friday’s omicron-driven decline.

So what

Much has been made of the move in Bitcoin to bear market territory, following Friday’s variant-driven decline. Of course, as the largest cryptocurrency in the world, when Bitcoin sneezes, other digital assets tend to catch a cold.

Such appears to have been the case with Bitcoin’s directional move in recent days driving momentum across the crypto sector. Ethereum and Dogecoin have both traded in relatively strong correlation to Bitcoin, both on the plunge late last week and on this week’s recovery.

Investors appear to be rotating back into riskier assets, as the true impacts of this variant are brushed off by the market. Whether or not this perspective turns out to be correct will be proven with time. However, bullish sentiment among growth investors appears to be winning out today.

Now what

Of the larger-cap cryptocurrencies, Ethereum continues to pave the way in terms of price performance. Today’s rise of more than 8% brings Ethereum to within spitting distance of its all-time high. Currently, this smart-contract-enabled ecosystem is within 4% of making new highs.

Bitcoin has stumbled to a greater degree and has more work to do to make up previous losses. As mentioned, this token was in bear market territory just a few days ago. However, Bitcoin appears to be moving in the right direction once again.

For Dogecoin, it appears meme token sentiment has officially shifted away from DOGE and into other speculative dog-themed tokens — namely, Shiba Inu. Today, Shiba Inu has risen more than 30%, eclipsing Dogecoin’s performance and suggesting a new sheriff is in town in the meme token space. Dogecoin remains approximately 70% off its all-time highs, following today’s rally. 

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

The post Why Bitcoin, Ethereum, and Dogecoin are all surging today appeared first on The Motley Fool Australia.

More reading

• Can Bitcoin edge out gold and bonds as a future store of value?
• Why did the Omicron crypto just rocket 900% and what is it doing now?
• Here’s how Bitcoin and this top altcoin are responding to the Omicron variant
• ‘Unstoppable’: Bitcoin will double in next 12 months, says expert
• 2 top cryptocurrencies to buy and hold forever

Chris MacDonald owns shares of Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. 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.

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

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November wasn’t a great month for the Flight Centre Travel Group Ltd (ASX: FLT) share price.

The travel agency’s stock tumbled 13.03% over the course of last month despite no price-sensitive news having been released by the company.

After closing at $20.41 on 1 November, the Flight Centre share price ended the final session of the month trading at $17.75.

For context, the S&P/ASX 200 Index (ASX: XJO) also ended the month in the red, dropping 1.56% over the same time frame.

Let’s take a look at what might have weighed on the company’s shares in November.

Flight Centre share price nosedives over November

The Flight Centre share price finished lower than it started for the second month in a row in November.

This time, it was likely driven lower by increasing numbers of new COVID-19 cases appearing around the globe.

The month started out relatively strong for Flight Centre. Its share price surged 5.4% amid the reopening of the United States’ international borders.

Unfortunately, it took a tumble on 22 November and hasn’t managed to recover yet.

The drop coincided with news that Austria was locking down as COVID-19 took off in the European nation along with many of its neighbours.

At the same time, the United States reported a 16.1% week-on-week increase in cases of the virus.

But that wasn’t Flight Centre’s worst day on the ASX in November.

Last Friday, the value of the company’s shares fell 7.4% amid the emergence of the Omicron COVID-19 variant.

At the time, officials warned that while we didn’t know the impact the variant could have, it had the potential to evade vaccines and treatments and spread rapidly.

Monday also started out disastrous for the Flight Centre share price. Luckily, it mostly recovered over the course of the day.

It’s worth noting; Flight Centre wasn’t the only ASX 200 travel share to suffer in November.

The Webjet Limited (ASX: WEB) share price also fell 14.9% last month, while that of Corporate Travel Management Ltd (ASX: CTD) dived 10.7%.

The post Why did the Flight Centre (ASX:FLT) share price go backwards in November? appeared first on The Motley Fool Australia.

More reading

• How did ASX 200 travel shares weather the Omicron storm today?
• Flight Centre (ASX:FLT) share price partially recovers as boss calls for calm
• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• Flight Centre (ASX:FLT) share price crashes 11% amid omicron fears
• These are the 10 most shorted ASX shares

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 recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and 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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The Fortescue Metals Group Ltd (ASX: FMG) share price roared back to life in November.

The mining giant’s shares were among the best performers on the S&P/ASX 200 Index (ASX: XJO) last month with a gain of 22.1%.

As a comparison, the ASX 200 slipped 0.9% over the period.

Why did the Fortescue share price race higher?

Investors were bidding the Fortescue share price higher last month after the iron ore price appeared to find a bottom. This followed the announcement of favourable policies in China which analysts feel could put a floor on prices.

This led to many investors picking up the company’s shares on the belief they had been oversold in prior months.

After all, even after its strong showing in November, the Fortescue share price is still down 31% since the start of the year.

Where next for its shares?

Opinion continues to be incredibly divided on the Fortescue share price and its future direction.

One of the most bearish brokers is Goldman Sachs. Last month the broker retained its sell rating and lowly $11.00 price target on the company’s shares.

Over at Morgans, its analysts are a little more positive but still see material downside for its shares. The broker upgraded the company’s shares in November to a hold rating but with a price target of just $13.00.

Finally, Bell Potter remains bullish on its shares. Last month the broker retained its buy rating but trimmed its price target slightly to $19.75. This implies potential upside of 16% over the next 12 months. Its analysts also estimate that Fortescue’s shares will provide a fully franked 13% dividend yield in FY 2022 despite the weaker iron ore prices.

Which broker makes the right call, only time will tell.

The post The Fortescue (ASX:FMG) share price jumped 22% in November appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX 200 shares in November
• Here’s why the iron ore price is in the spotlight today
• Could this help Fortescue (ASX:FMG) mitigate the risks of falling iron ore prices?
• 5 things to watch on the ASX 200 on Monday
• When might Fortescue (ASX:FMG) Future Industries become profitable?

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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The Lynas Rare Earths Ltd (ASX: LYC) share price was pushed higher yesterday on positive sentiment. At the end of Tuesday’s session, the rare earth miner’s shares finished at $8.87, 4.35% above their previous close.

Strength in the company’s share price helped Lynas set another new 52-week high of $8.95. With no announcements out, investors are forced to look at other potential catalysts for Tuesday’s record share price.

Sydney-based broker, Barrenjoey initiating coverage on Lynas and giving it an ‘overweight’ rating might have something to do with it.

Is the Lynas share price a buy at its 52-week high?

Despite the multi-year high for the Lynas share price, some analysts think the rare earths miner could have more upside still to give.

According to Barrenjoey analyst, Danial Morgan, the outlook for the high-flying mining company is looking positive. As a result, the broker initiated coverage on Lynas with an overweight rating. Accompanying this was a share price target of $10.50.

Since the March low in 2020, the company’s shares have been on a seemingly unstoppable path. Over this time, the value of each share has ballooned by nearly 600%. This incredible surge in the value of Lynas has been aided by a similarly rocketing price for neodymium and other rare earth elements.

While demand for the elements has been at record levels, the company expects an even stronger demand in 2022. Unless a significant increase in supply comes online in the near term, the price of rare earth elements has the potential to rise further if demand increases.

The higher commodity prices have also turned Lynas into a cash flow machine thanks to operating expenses largely staying the same. In FY21, the company produced free cash flow of $174.6 million and a record profit of $157 million.

Shareholders who have managed to maintain conviction in the Lynas share price are now up 112% for the year.

The post Lynas (ASX:LYC) share price tipped for 18% upside appeared first on The Motley Fool Australia.

More reading

• These were the 5 best performing ASX 200 shares in November
• The Lynas (ASX:LYC) share price has hit 10 9-year highs so far this month. Here’s why
• Looking to invest in the electrification and battery theme? Here are 5 ASX shares to consider
• These were the best performing ASX 200 shares last week
• Why has the Lynas (ASX:LYC) share price just hit a 9-year high?

Motley Fool contributor Mitchell Lawler owns shares of 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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