Category: Stock Market

Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and $5.50 price target on this infant formula company’s shares. While it acknowledges that infant formula prices are stabilising, it isn’t enough for any changes to its rating. Particularly given its concerns over slowing birth rates in China and market share losses in stage 1 formula. The A2 Milk share price finished the week at $6.02.

Magellan Financial Group Ltd (ASX: MFG)

A note out of UBS reveals that its analysts have retained their sell rating and cut their price target on this fund manager’s shares to $29.00. This follows the release of another disappointing funds under management update, which revealed further fund outflows. The broker suspects this is being driven by the poor performance of its flagship Global Fund and fears that there could be further outflows to come. Particularly on the retail side due to its poor performance and high fees. The Magellan share price was trading at $33.90 at Friday’s close.

Unibail-Rodamco-Westfield CDI (ASX: URW)

Analysts at Ord Minnett have retained their sell rating and $4.00 price target on this shopping centre operator’s shares. While Ord Minnett notes that Unibail-Rodamco-Westfield’s shares have pulled back meaningfully in recent months. It still doesn’t see enough value in them to change its rating. Particularly given how it is yet to see proof that a rebound in trading conditions is taking place. As a result, it is holding firm with its sell rating for the time being. The Unibail-Rodamco-Westfield share price ended the week at $4.94 today.

The post Top brokers name 3 ASX shares to sell next week appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX shares today
• Which shares are set to finish the week as the top movers on the ASX 300?
• Top brokers name 3 ASX shares to sell today
• Why Fletcher Building, Magellan, Sezzle, & Starpharma are racing higher
• Here’s why these top brokers reckon the Magellan (ASX:MFG) share price is cheap

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 A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re wanting to construct a balanced portfolio, owning a few ASX 200 shares could be a smart move.

But which ASX 200 shares should you buy? Two that could be in the buy zone are listed below:

Coles Group Ltd (ASX: COL)

The first ASX 200 share for investors to consider is Coles. It is one of the big two supermarket operators in the ANZ market. In addition to this, it has a number of complementary businesses such as its convenience stores, flybuys loyalty program, and Liquorland.

Due to the strength of these businesses and their positive long term outlooks, Coles has been tipped as an ASX share to buy. This is particularly the case for income investors due to its attractive yield and favourable dividend policy.

Morgans is positive on the company and is forecasting generous dividend payments in the coming years. Its analysts are expecting dividends per share of 61 cents in FY 2022 and 62 cents in FY 2022. Based on the current Coles share price of $17.03, this will mean fully franked yields of 3.6% and 3.65%, respectively, over the next two years.

Morgans has an add rating and $19.80 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX 200 share to look at is ResMed. It is one of the world’s leading sleep treatment-focused medical device companies.

ResMed has been growing its revenue and earnings at a very strong rate over the last decade. This has been underpinned by its industry-leading products, growing software business, the increasing awareness of sleep disorders, and its investment in research and development (R&D).

Pleasingly, the company’s growth outlook remains very positive. This is thanks to its huge addressable market and the shift to home healthcare. The latter is being supported by its comprehensive out-of-hospital software platforms that allow people to stay healthy in the home or care setting of their choice.

Another positive is that one of its biggest rivals is currently battling with a major product recall. This is expected to allow ResMed to gain market share this year.

The team at Credit Suisse are very positive on the company. The broker currently has an outperform rating and $44.00 price target on its shares.

The post 2 high quality ASX 200 shares named as buys appeared first on The Motley Fool Australia.

More reading

• Top broker names 2 of the best ASX shares to buy in October
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• 2 highly rated ASX dividend shares to buy
• 2 ASX 200 dividend shares named as buys for October

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 recommended ResMed. The Motley Fool Australia owns shares of and has recommended COLESGROUP DEF SET. 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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Last week saw a number of broker notes hitting the wires once again. Three buy ratings that caught my eye are summarised below.

Here’s why brokers think investors ought to buy them next week:

Premier Investments Limited (ASX: PMV)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this retail conglomerate’s shares to $33.00. The broker was pleased with Premier Investments’ performance in FY 2021. And while it expects earnings and margins to normalise in FY 2022, it still sees value in its shares. It also notes that the company’s decision to stock up on inventory looks well-timed due to supply chain headwinds that could impact its rivals. The Premier Investments share price ended the week at $30.28.

Redbubble Ltd (ASX: RBL)

A note out of Morgan Stanley reveals that its analysts have commenced coverage on this ecommerce company’s shares with an overweight rating and $6.50 price target. Morgan Stanley likes Redbubble due to its position as the largest print-on-demand marketplace globally with over 700,000 independent artists on its platform. The broker believes the company has a large addressable market and sees opportunities to monetise its growing user base. The Redbubble share price was trading notably lower than this price target at $4.52 at Friday’s close.

Qantas Airways Limited (ASX: QAN)

Analysts at Ord Minnett have retained their buy rating and lifted their price target on this airline operator’s shares to $6.50. According to the note, the broker believes that there is significant pent-up demand in the travel market. As a result, Ord Minnett expects Qantas to benefit once border reopen. Especially with Virgin Australia downsizing and seemingly conceding market share to Qantas. The Qantas share price ended the week at $5.59.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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Is it possible that the Woolworths Group Ltd (ASX: WOW) share price could rise to $45 by the end of 2021?

At the moment the supermarket giant is sitting at around $40. In the middle of August 2021 it had reached up to $42.

But can it rise by approximately 12.5% before the end of the 2021 calendar year?

Broker opinions on the Woolworths share price

Most brokers don’t think Woolworths is a buy right now, with several price targets around the $40 mark. That effectively means that they don’t think that Woolworths shares are going to go anywhere over the next 12 months.

But there are a couple of opinions that are a bit different than that.

Credit Suisse has a sell on the company, with a price target of around $31. That suggests the broker believes that Woolworths shares are going to drop by more than 20% over the next 12 months. It thinks it’s overvalued for its expected earnings and potential (limited) growth. Using Credit Suisse’s forecast, the Woolworths share price is valued at 32x FY22’s estimated earnings.

But there is a broker with a $45 price target – Ord Minnett. However, that’s where the broker sees the Woolworths share price being in 12 months, not in the next two or three months. The thought is that supermarkets could see continued elevated levels of sales for longer because of COVID-19.

How is the supermarket business trading?

The FY21 announcement was the latest trading update that investors received.

FY21 total group sales were up 5.7% to $67.3 billion in FY21, with e-commerce sales up 58.1% to $5.6 billion. Group earnings before interest and tax (EBIT) increased 13.7% to $3.66 billion, whilst group net profit rose 22.9% to $1.97 billion. Within that, Australian food sales grew 5.4% and the EBIT rose 9% to $2.4 billion.

In terms of FY22, in the first eight weeks, Australian food sales were up 4.5% and Big W sales were down 15.1% (after a strong performance at the start of FY21 and store closures in FY22). For New Zealand, it said the two-year average growth had “continued to improve” with “some benefit to sales from recent lockdowns”.

The Woolworths annual general meeting is on 27 October 2021, so investors are likely to get an update for the first quarter of FY22 in that presentation.

Share buy-back to help the Woolworths share price?

When Woolworths announced its FY21 result, it also announced that it was returning $2 billion of capital to shareholders with an off-market share buy-back. The completion of the demerger of Endeavour Group Ltd (ASX: EDV) and repayment of intercompany loans provided a catalyst for a detailed review of capital management options.

The leadership said that this capital return reflected a strong balance sheet and its franking credit balance, whilst allowing it to continue to invest in its businesses.

Woolworths said the buy-back would be done through a tender process.

The post Can the Woolworths (ASX:WOW) share price hit $45 by the end of 2021? appeared first on The Motley Fool Australia.

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• Woolworths (ASX:WOW) share price gains amid class action settlement
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Here at the Fool, we’ve recently been having a look at how some of the ASX 200’s blue chip shares performed over the most recent quarter. The 2022 financial year began on 1 July, which means its first quarter wrapped up on 30 September.

As many of you probably know, the S&P/ASX 200 Index (ASX: XJO) is dominated by the famous big four ASX bank shares. That’s Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd. (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

Presently, CBA, Westpac, NAB and ANZ together make up four of the ASX 200’s six largest companies. That means wherever the banks go, the ASX 200 usually isn’t too far behind.

So how did the big four banks perform over the first quarter of FY2022? To give some context, the ASX 200 began July at 7,313 points and finished the quarter at 7,332.2 points on 30 September. That translates into a fairly mild gain of 0.26%

Bank vs ASX bank

Well, let’s start off with the big dog, CBA. CBA shares kicked off July at a share price of $99.87. On 30 September, this bank closed at $104.33 a share. That puts CBA’s gains for those 3 months at an impressive 4.47%.

Turning to Westpac, and we see that this ASX bank started the quarter at a share price of $25.81. By the end of September, Westpac shares closed at $26 on the dot. That’s a far less impressive gain of 0.74%.

NAB shares seemed to tread a similar path to CBA. NAB (or JAB, as this bank likes to be known as these days) were trading at a price of $26.22 at the start of July. By the end of September, they had risen to $27.83. That’s a gain of 6.14%.

Lastly, we have ANZ. ANZ shares were asking $28.15 each at the dawn of the new financial year. They ended up finishing up September at a price of… $28.15. No joke, the ANZ share price went absolutely nowhere quarter-to-quarter. You can’t fault this bank for inconsistency at least.

So all of the major bank shares had a positive quarter, with the exception of ANZ. NAB seems to be the real banking winner of FY22 so far with its 6.14% gain, followed by CBA, Westpac and finally ANZ. It’s interesting to note that 3 of the 4 banks outperformed the ASX 200 over the period.

Let’s see how they go this quarter!

The post How did ASX bank shares perform in the last quarter? appeared first on The Motley Fool Australia.

More reading

• Is the Westpac (ASX:WBC) share price a buy for its 7% dividend yield?
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• Why do Pilbara Minerals (ASX:PLS) shares keep topping the volume charts?
• Could the CBA (ASX:CBA) share price hit $120 by the end of 2021?

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank 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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Are you looking for dividend shares to buy next week? If you are, then you may want to look at the two listed below.

Here’s why these ASX dividend shares could be in the buy zone:

Adairs Ltd (ASX: ADH)

The first ASX dividend share to look at is this leading retailer of homewares and home furnishings. Adairs has a growing network of stores across Australia and New Zealand and a strong online presence through both its core brand and the Mocka brand.

Thanks to a thriving housing market and a favourable redirection in consumer spending during the pandemic, Adairs reported strong sales and profit growth in FY 2021. And while lockdowns will make it hard to top this in FY 2022, the company’s longer term outlook remains very positive.

In the meantime, the team at Morgans are still expecting Adairs’ shares to provide very generous dividend yields in FY 2022 and FY 2023.

Its analysts have pencilled in fully franked dividends per share of 22 cents and 27 cents for the two financial years. Based on the current Adairs share price of $3.84, this will mean yields of 5.7% and 7%, respectively.

Morgans has an add rating and $4.20 price target on the company’s shares.

BHP Group Ltd (ASX: BHP)

Another ASX dividend share to look at is BHP. It could be a top option for income investors, especially after recent and significant weakness in the BHP share price.

That weakness has been driven by a sharp pullback in the iron ore price. However, while the iron ore price weakness is disappointing (but not unexpected), other commodities such as coal have been booming.

It is because of this that the team at Macquarie remains very bullish on BHP. In fact, the broker estimates that BHP’s shares are trading on a free cash flow yield of ~20% despite the iron ore price weakness.

This strong free cash flow is expected to underpin fully franked dividends of $3.97 per share in FY 2022 and $2.88 per share in FY 2023. Based on the current BHP share price of $37.74, this will mean yields of 10.5% and 7.6%, respectively.

Macquarie has an outperform rating and $56.00 price target on the mining giant’s shares.

The post 2 buy-rated ASX dividend shares with big yields appeared first on The Motley Fool Australia.

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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 ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. 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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Brokers are always on the search for ASX share opportunities that may be good ideas to consider.

Businesses are regularly updating the market and conditions are changing. Add in that fact that share prices are changing as well and investors can get the chance to regularly find potential options in different areas.

The two businesses in this article are ones that are liked by multiple brokers:

Monash IVF Group Ltd (ASX: MVF)

Monash IVF describes itself as a leading provider of assisted reproductive services and specialist women’s imaging and diagnostic services in Australia and Malaysia. It is a leading player in the development of new technology in the sector.

Over the last year the Monash IVF share price has risen by around 45%. However, brokers still think that the ASX share is an opportunity.

It’s currently rated by at least three brokers, including Morgans, which has a price target of $1.09 on the business. That suggests the Monash IVF share price could rise by more than 15% over the next 12 months, if the broker is right.

Morgans reckons that Medicare data shows there’s a good level of demand for reproductive services that could mean FY23 is promising.

On Morgans’ numbers, Monash IVF is valued at 13x FY23’s estimated earnings. It could pay a grossed-up dividend yield of 7.4%.

In FY21 the business generated revenue growth of 26.3% to $183.6 million, with Australian stimulated cycles up 36.6% (with Australian stimulated cycle growth of 36.6% and 0.6% market share growth). Ultrasound scan volumes increased 12.9% to 10,623 scans.

Monash IVF experienced rising profitability across the business. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 37.1% to $47.7 million and adjusted net profit after tax (NPAT) went up 61.5% to $23.3 million – this beat the profit guidance of $21 million to $23 million. It also generated free cashflow of $32.8 million.

The ASX share itself said there has been a fundamental shift as a result of the pandemic, changing people to focus on family, health and wellbeing, with a re-direction towards family extension.

Steadfast Group Ltd (ASX: SDF)

Steadfast describes itself as the largest general insurance broking network and the largest underwriting agency group in Australasia. It provides services to broker businesses across Australia, New Zealand, Asia and London. The ASX share also operates as a co-owner and consolidator through its equity interests in a number of broker businesses, underwriting agencies and other businesses.

It also has a stake in unisonSteadfast, a global general insurance broker network with 264 brokers in 140 countries.

Steadfast is currently rated as a buy by at least three brokers, including Macquarie Group Ltd (ASX: MQG) which has a price target on the business of $5.30. Based on Macquarie’s estimate, Steadfast is valued at 21x FY23’s estimated earnings. It’s expected to pay a grossed-up dividend yield of 4.1% for FY23.

The ASX share recently announced its FY21 result and also completed an acquisition.

It has bought Coverforce, one of the largest privately owned insurance brokers, which is predominately focused on the small and medium enterprise sector. The acquisition price was $411.5 million, funded with a capital raising. Management said this was expected to leverage the expertise and skills across both platforms, whilst also benefiting from increased scale.

In FY21, it generated revenue growth of 8.9% to $899.9 million, whilst underlying net profit surged 20.2% to $130.7 million. This allowed the business to grow its total dividend by 18.8% to 11.4 cents per share.

The post 2 ASX shares that are rated as buys by multiple brokers appeared first on The Motley Fool Australia.

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• The most important catalyst for outperforming ASX shares: fund manager

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 Steadfast Group Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Steadfast Group 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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Here at the Motley Fool, we’ve been checking out how some of the ASX 200’s blue-chip shares have performed in the most recent quarter.

In Australia, we run on a July-June financial year. That means the first quarter of said financial year (1 July – 30 September) has just wrapped up. So today, we’re looking at the CSL Limited (ASX: CSL) share price, and how it performed over this period.

CSL is one of the largest shares in the S&P/ASX 200 Index (ASX: XJO). It was actually the largest share for a while last year, pipping Commonwealth Bank of Australia (ASX: CBA) and BHP Group Ltd (ASX: BHP). As it stands today, CSL is the ASX 200’s No. 2 share, recently overtaking BHP, which has been suffering due to falling iron ore prices.

CSL used to be known as one of the ASX’s top growth shares. Its share price exploded over 2017, 2018, and 2019, but has been struggling more recently in the shadow of the pandemic.

So how did CSL shares fare over this most recent quarter?

CSL outperforms ASX 200 in FY22 first quarter

CSL shares started on 1 July at a price of $285.19. They finished up at $293.40 on 30 September. That means the CSL share price appreciated by around 2.88% over the quarter. That’s a fair bit above what the ASX 200 managed — an increase of roughly 0.26%.

As it stands today, the CSL share price last traded at $290.46 as of Friday’s close (up 0.83%). The company is up 1.92% year to date in 2021.

However, it’s still down around 1.65% over the past 12 months, and close to 14% from the company’s all-time high, which it hit way back in February 2020. Even so, the company is still up by about 175% over the past 5 years.

Could CSL shares be a buy right now?

With the quarter CSL just had, and its distance from its all-time high, many an investor may be wondering if the company might be a buy today. Well, as my Fool colleague Tristan covered last week, there are a couple of brokers who think it might be.

Credit Suisse is one such broker. It currently rates CSL shares with a 12-month share price target of $315, albeit with a ‘neutral’ rating. That implies a potential upside of roughly 8% from here. Credit Suisse still reckons CSL can grow its profits, even if competitive threats are rising for the company.

At CSL’s last share price of $290.46, the company has a market capitalisation of $131.26 billion, a price-to-earnings (P/E) ratio of 40.64, and a dividend yield of 1.01%.

The post Here’s what happened to the CSL (ASX:CSL) share price in the FY22 first quarter appeared first on The Motley Fool Australia.

More reading

• Why this expert reckons the Woolworths (ASX:WOW) share price is on special
• These were the best performing ASX 200 shares last week
• Can the Wesfarmers (ASX:WES) share price reach $60 by Christmas?
• These were the worst performing ASX 200 shares last week
• Here are the top 10 ASX shares today

Motley Fool contributor Sebastian Bowen 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 CSL Ltd. 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 a fan of growth shares like I am, then you may want to look closely at the three shares listed below.

Here’s why these could be growth shares to buy:

Hipages Group Holdings Ltd (ASX: HPG)

The first ASX growth share to look at is Hipages. It is a leading Australian-based online platform and software as a service (SaaS) provider. The Hipages platform connects consumers with over 34,000 trusted tradies (and growing) across Australia. In FY 2021, the company reported a 12% increase in job volumes to 1.53 million and a 22% increase in full year revenue to $55.8 million. This is still only a fraction of its total addressable market which is estimated to be $110 billion across the residential and commercial sectors.

Goldman Sachs is very bullish on its growth prospects. It currently has a buy rating and $4.35 price target on its shares.

PointsBet Holdings Ltd (ASX: PBH)

Another ASX growth share to look at is PointsBet. It is a sports betting and iGaming provider with operations in the ANZ and US markets. Like Hipages, PointsBet was on form again in FY 2021. For the 12 months ended 30 June, it reported a 228% increase in full year turnover to $3,781.4 million. This was driven by a 117% increase in Australian active clients to 196,585 and a 661% increase in US active clients to 159,321. More of the same is expected in FY 2022 thanks to the growing popularity of mobile sports betting, innovative products, and its continued US expansion.

Goldman Sachs is also very positive on PointsBet due to its massive opportunity in the US market. The broker has a buy rating and $14.75 price target on its shares.

Temple & Webster Group Ltd (ASX: TPW)

A final growth share to consider is Temple & Webster. Australia’s leading online furniture and homewares retailer was on form again in FY 2021 and continued its meteoric growth. For the 12 months, the company reported a 62% year on year increase in customer numbers to 778,000. Combined with increased repeat purchases, this underpinned an 85% increase in revenue to $326.3 million. Positively, Temple & Webster still has a long runway for growth over the next decade. This is due to increasing online penetration rates and its leadership position online. The company estimates that in 2020 just 7% to 9% of category sales were made online. This compares to 25.3% in the US in 2020.

The team at Morgan Stanley are very positive on the company’s outlook. Its analysts currently have an overweight rating and $16.00 price target on its shares.

The post 3 fantastic ASX growth shares to buy appeared first on The Motley Fool Australia.

More reading

• Why is the Hipages (ASX:HPG) share price leaping 6% on Wednesday?
• 2 leading ASX e-commerce shares that could be buys in October 2021
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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 Hipages Group Holdings Ltd., Pointsbet Holdings Ltd, and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Hipages Group Holdings Ltd., Pointsbet Holdings Ltd, and Temple & Webster Group 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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This weekend could be a good time to research some ASX shares that are currently unloved by the market.

Share prices are always changing and this can open up opportunities for investors to find value ideas.

However, finding companies with longer-term growth plans could make these ASX shares potential opportunities:

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the largest iron ore miners in the world, but it’s quite a bit smaller than it used to be. The Fortescue share price has fallen by around 46% since the peak in late July 2021.

However, commodities are often cyclical and a lower price of both the resource (iron ore) and the company could make it something to consider.

Indeed, the brokers at Macquarie Group Ltd (ASX: MQG) currently (and recently) rated Fortescue as a buy with a price target of $21. That suggests a potential upside of almost 50% over the next 12 months, if the analysts end up being right.

Macquarie thinks that lower capex will help the ASX share even if iron ore prices are depressed. It also thinks that Fortescue Future Industries (FFI) could be a helpful factor for Fortescue. FFI is the division that is looking to enable Fortescue to become a green miner and it also has longer-term goals of helping other industries become greener as well.

On Macquarie’s numbers, Fortescue is valued at 8x FY23’s estimated earnings with a projected FY23 grossed-up dividend yield of 14%.

Accent Group Ltd (ASX: AX1)

Accent is a market leader when it comes to shoe retailing in Australia and New Zealand.

It sells through a number of different brands in the domestic market including The Athlete’s Foot, the Glue Store, Pivot, CAT, Platypus, Skechers, VANS, Trybe and Timberland.

In FY21, the company demonstrated operating leverage across the different profit lines of the business. Whilst total sales increased 19.9% to $1.14 billion, earnings before interest and tax (EBIT) grew 32.1% to $124.9 million and net profit after tax (NPAT) rose 38.6% to $76.9 million.

The ASX share is rapidly expanding its online sales in this era of elevated e-commerce. Total digital sales increased 48.5% to $209.9 million, representing 20.9% of retail sales.

A growing store network is helping expand its potential reach to customers. In FY21 it added 90 new stores, whilst closing seven where rent outcomes could not be achieved. Management said that new stores continue to perform strongly on more favourable rents than the existing portfolio.

Current COVID-19 restrictions are impacting the company’s sales, but it has plans to open more stores and grow online sales. Digital sales were up 66.7% in the first seven weeks of FY22, though total sales were down 16%.

Over the long-term, it wants to grow its earnings per share (EPS) at a compound rate of at least 10%.

According to Commsec, the Accent share price is valued at 14x FY23’s estimated earnings with a grossed-up dividend yield of 7.3%.

The post 2 ASX shares that could be worth researching this weekend appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Accent Group. 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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