Category: Stock Market

The National Australia Bank Ltd (ASX: NAB) share price advanced 1.15% in early trading on Tuesday to reach a nine-year high of $37.68 apiece.

Several other ASX 200 bank shares are also resetting price records today. Meantime, the S&P/ASX 200 Index (ASX: XJO) is down 0.14% to 8,006.7 points at the time of writing.

Why did the NAB share price just touch a 9-year high?

The ASX S&P/ASX 200 Financials Index (ASX: XFJ) is one of the strongest performers today, up 0.39% behind the S&P/ASX 200 Communication Index (ASX: XTJ) at 0.44%.

There is no price-sensitive news from NAB to explain its share price rise today. The Big Four bank has only released a daily update on its share buyback program

The bank advised the on-market purchase of 507,590 NAB shares yesterday. This is part of a larger program that commenced in August 2023, through which the bank has bought back almost 52 million shares.

The buyback program is due to end on 1 May 2025.

As the chart below shows, all ASX 200 bank shares, bar Bank of Queensland Ltd (ASX: BOQ), have been on a sustained run since November 2023, when speculation of interest rate cuts began.

Last Friday, Australia’s biggest bank, Commonwealth Bank of Australia (ASX: CBA), overtook mining behemoth BHP Group Ltd (ASX: BHP) to become the biggest ASX 200 company by market capitalisation.

Despite the NAB share price trading at elevated levels, several executives have added to their personal holdings in recent months.

Non-executive director Sarah Carolyn Kay was the most recent purchaser among NAB board members.

Kay bought 2,000 NAB shares on-market on 3 July for an implied average share price of $35.44.

Can the exuberance over ASX 200 bank shares last?

There are some mixed views on this. UBS reckons ASX 200 bank shares ‘don’t appear overly expensive‘ compared to global peers, whereas Goldman Sachs views them as the most expensive in the world.

Goldman Sachs said ASX 200 bank shares valuations are “skewed to the downside” from here. The broker says there is an expanding valuations discrepancy despite weaker relative profitability.

Philip King, CIO at Regal Funds Management, says Aussie banks are being “attacked from all angles” by competitors such as buy now, pay later operators, non-bank lenders, and private credit.

Martin Conlon from Schroders says the banks’ profits will be “flat at best” unless they can reduce costs.

What’s ahead for the NAB share price in FY25?

While UBS expects NAB to grow its profits in FY24 and FY25, the broker has a sell rating on the shares. The NAB share price is now trading well beyond the broker’s 12-month price target of $30.

Goldman Sachs has a neutral rating on NAB with a 12-month share price target of $34.04.

Earlier this month, NAB paid an interim dividend of 84 cents per share to shareholders.

My colleague Tristan recently reported on the FY25 outlook for NAB.

The post NAB share price hits 9-year high amid yet another strong day for ASX 200 banks appeared first on The Motley Fool Australia.

More reading

• Westpac and three other ASX 200 bank shares smashing new multi-year highs today
• Prepare for earnings! What ASX bank share buyers can learn from Wells Fargo results?
• It’s official, Aussies are getting richer! Here’s how
• Top 4 reasons why more Aussies are managing their own superannuation
• Why mum and dad investors aren’t buying ASX bank shares like they used to

Motley Fool contributor Bronwyn Allen has positions in Anz Group, BHP Group, Commonwealth Bank Of Australia, and Macquarie Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Macquarie Group. The Motley Fool Australia has positions in and has recommended Bendigo And Adelaide Bank and Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is out of form on Tuesday. In afternoon trade, the benchmark index is down 0.25% to 7,998.8 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is down 2% to $6.33. This morning, this Canadian iron ore miner announced a gradual return of its workforce to its Bloom Lake mine following a preventive evacuation and temporary shutdown of operations in response to nearby forest fires. However, it also advised that the timing and resumption of full operational activities remain subject to the availability of railway services. Management continues to collaborate with local authorities and the railway operator to expedite a return to normal operations, while prioritising the safety of its employees and the community.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 4% to 11.5 cents. This is despite there being no news out of the lithium miner today. However, it is worth noting that its shares have been on fire in recent sessions. This could mean that some investors are taking some profit off the table on Tuesday after a weak night for lithium stocks on Wall Street. Even after this decline, Core Lithium’s shares are up 25% since this time last week. Though, it is worth remembering that they remain down over 85% on a 12-month basis.

Encounter Resources Ltd (ASX: ENR)

The Encounter Resources share price is down 13% to 72 cents. This follows the release of initial assays from first pass, wide-spaced aircore drilling at the Green target of the Aileron project. While the drilling has mapped out carbonatite hosted niobium-REE mineralisation over 1.6km of strike (which remains open), it seems that some investors were betting on stronger results. Nevertheless, its executive chairman, Will Robinson, was pleased. He said: “Broad spaced aircore drilling is achieving what we had hoped by rapidly identifying and mapping out near surface mineralised carbonatites in the West Arunta. The mineralised trend at Green broadly follows a curved, magnetic anomaly extending to the north-east from WA1’s Luni discovery and wraps around into the Stromness fault.”

Rio Tinto Ltd (ASX: RIO)

The Rio Tinto share price is down 2.5% to $117.09. Investors have been selling the mining giant’s shares after it fell short of expectations during the second quarter. The consensus estimate for iron ore shipments was 82Mt, but Rio Tinto reported shipments of 80.3Mt. It was the same for copper production, which came in at 171kt compared to the consensus estimate of 175kt. Management now expects to hit the low end of its copper guidance for the full year.

The post Why Champion Iron, Core Lithium, Encounter Resources, and Rio Tinto shares are dropping appeared first on The Motley Fool Australia.

More reading

• Rio Tinto shares fall on soft second quarter update
• Here’s the lithium price forecast through to 2027
• 5 things to watch on the ASX 200 on Tuesday
• Why Atturra, Bravura, Core Lithium, and Opthea shares are racing higher today
• Leading brokers name 3 ASX shares to buy today

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

It’s looking like today’s trading is off to a shaky start. After hitting a new record high yesterday and climbing above 8,000 points for the first time ever, the S&P/ASX 200 Index (ASX: XJO) is taking a breather today. But let’s talk about four ASX 200 bank shares, including Westpac Banking Corp (ASX: WBC), that have still smashed out new multi-year highs.

At the time of writing, the ASX 200 is reversing some of yesterday’s gains and is down around 0.08% to just over 8,010 points.

So what’s going on with the ASX banks this Tuesday?

Well, as we just mentioned, there’s been a cavalcade of new multi-year highs from no fewer than four ASX banks.

First up, let’s talk about Westpac shares.

Westpac and three other ASX bank shares at new multi-year highs

At the time of writing, Westpac shares are up a far more confident 0.43% at $28.23 each. But earlier this morning, we saw those same shares rise up to $28.26 each. Not only is that a new 52-week high for Westpac, but it is also the highest that this ASX 200 bank has traded at in the post-COVID era.

To find the last time Westpac asked this kind of price, you’d have to go all the way back to October 2019.

Things are looking even brighter for another big four bank though – National Australia Bank Ltd (ASX: NAB). NAB shares are presently up a chunky 1.02% at $37.63 each. That’s after this bank climbed up as high as $37.68 a share earlier in today’s session.

Again, that is a new 52-week high for NAB. But it is also a multi-year high. You’d have to go all the way back to April 2015 to find the last time NAB shares were leading with those kinds of figures.

Over at ANZ Group Holdings Ltd (ASX: ANZ), things aren’t quite as euphoric. But ANZ has still clocked a new high today. This bank is currently up a solid 0.42% at $29.96 a share. That’s after hitting a new high of $29.98 this morning. It’s also the highest level at which ANZ shares have traded since May of 2017. So another new multi-year record here.

Finally, you might assume our last bank share at a new high today would be Commonwealth Bank of Australia (ASX: CBA). CBA is no stranger to new highs lately, and it is the only big four bank we haven’t mentioned yet. But CBA hasn’t hit any new highs today. It is currently up a decent 0.17% at $132.92 after going as high as $133.08 this morning. But that wasn’t enough to break yesterday’s new record of $133.30 a share.

No, our last ASX bank share to discuss this Tuesday is Bendigo and Adelaide Bank Ltd (ASX: BEN).

Bendigo Bank is enjoying a lift similar to that of NAB right now. This bank is presently up a healthy 1.18% at $11.97 a share after rising as high as $11.98 in earlier trading. You guessed it, that’s a new 52-week high for this bank stock. But it is also the highest we’ve seen Bendigo Bank since February 2017.

Why are these stocks at new 52-week highs today?

There are no apparent market catalysts today that could easily explain the successful performance of ASX bank shares, especially these four stocks.

Perhaps it just comes down to the expectation that interest rates are going to fall this year. Last week, we discussed the latest inflation figures out of the United States. American inflation came in much cooler than expected over the month of June, dropping to an annualised 3% – the lowest level in three years.

That bodes extremely well for US interest rates. And If US rates drop, it could mean that our own Reserve Bank of Australia (RBA) might follow suit. Of course, that’s just speculation. But it could explain why investors are so in love with the ASX banks today. Let’s see what the rest of the week brings.

The post Westpac and three other ASX 200 bank shares smashing new multi-year highs today appeared first on The Motley Fool Australia.

More reading

• NAB share price hits 9-year high amid yet another strong day for ASX 200 banks
• Prepare for earnings! What ASX bank share buyers can learn from Wells Fargo results?
• It’s official, Aussies are getting richer! Here’s how
• Top 10 most traded ASX shares and US stocks in June
• Top 4 reasons why more Aussies are managing their own superannuation

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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 positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has run out of steam and is on course to record a decline. At the time of writing, the benchmark index is down 0.2% to 8,002.9 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Electro Optic Systems Holdings Ltd (ASX: EOS)

The EOS share price is up 5% to $1.70. Investors have been buying this defence and space company’s shares after it announced an update on its first half performance. EOS achieved unaudited first half revenue of approximately $142.6 million. This represents an increase of 92% on the $74.3 million that it recorded in the prior corresponding period. Management advised that this was driven by growth across all businesses. This includes the impact of accelerating production and delivery of remote weapons systems under an existing contract with a customer in the Middle East, growth in the EM Solutions business, and growth in the Space Technologies business.

Hub24 Ltd (ASX: HUB)

The Hub24 share price is up 1.5% to $47.06. This morning, this investment platform provider released its fourth quarter update and revealed further strong growth. Hub24 reported that its platform funds under administration (FUA) increased to $84.4 billion during the fourth quarter. This represents a 6% quarter on quarter increase and a 35% improvement on the prior corresponding period. This reflects record quarterly net inflows of $5 billion, which was up 138% on the prior corresponding period. For the 12 months, the company also reported a record year of net inflows. They came in at $15.8 billion, which is up 62% on the prior corresponding period.

Integrated Research Limited (ASX: IRI)

The Integrated Research share price is up 12% to 95 cents. This has been driven by the release of the performance management solutions provider’s trading update this morning. It revealed a strong rebound in total contract value (TCV), statutory revenue, and EBITDA. The latter is now expected to be at the upper end of its previous guidance. Management believes the result provides a platform for a strategic shift to product-led growth. It also announced that its CEO, John Ruthven, will be stepping down. The company felt that the “timing is right for new leadership and CEO transition.”

Kingsgate Consolidated Limited (ASX: KCN)

The Kingsgate share price is up almost 2% to $1.69. This morning, this gold miner announced that it has entered into definitive loan documentation for a US$35 million term facility with Nebari Gold Fund and Nebari Natural Resources Credit Fund. The funds will be available for drawdown following satisfaction of conditions precedent that are standard for a facility of this nature. Management notes that the funding will enable it to consolidate its existing debt, repay preference shareholder loans, ensure timely delivery of new mining equipment, and expand the aggressive near mine and regional exploration programs.

The post Why EOS, Hub24, Integrated Research, and Kingsgate shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• Guess which ASX defence stock is rocketing 10% today (Hint: not DroneShield!)
• Up 80% in a year, why is this ASX 200 stock hitting a record high today?
• Why Immutep, Kingsgate, Netwealth, and Ora Banda shares are storming higher
• Why Hub24, Netwealth, Pantoro, and WA1 shares are falling today
• Shares vs. property: Which stocks and suburbs delivered the best growth in FY24?

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 positions in and has recommended Electro Optic Systems and Hub24. The Motley Fool Australia has recommended Hub24. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ASX bank shares had a fantastic year, with the S&P/ASX 200 Banks Index (ASX: XBK) surging 30% over the past year, outperforming the 6% return of the S&P/ASX 100 Index (ASX: XTO).

Commonwealth Bank of Australia (ASX: CBA) shares performed well, increasing by 30% over the past year, in line with the ASX 200 Bank Index.

After the stock price surge, the bank became Australia’s largest company through market capitalisation, overtaking mining giant BHP Group Ltd (ASX: BHP).

But, after such a wonderful year, is it the right time to consider locking in some gains?

How expensive are CBA shares?

It’s exciting to see the share prices rise rapidly. However, it becomes problematic if earnings fail to grow quickly enough to keep up with the share price performance. That might be the case here for CBA shares.

According to S&P Capital IQ, analysts predict that the bank’s earnings-per-share (EPS) will remain steady, rising from $5.76 in the trailing 12 months to $5.91 in FY26, representing approximately 1% annual growth.

The bank’s 1-year forward price-to-earnings (P/E) ratio has increased from 16x in March 2023 to 23x now due to inconsistencies in earnings growth and share price movements. This is not only the highest P/E multiple in its history but also more expensive than other ASX bank shares. Compared to its peers, based on S&P Capital IQ estimates:

• Westpac Banking Corp (ASX: WBC) shares are valued at FY25 P/E of 15x
• National Australia Bank Ltd (ASX: NAB) shares are valued at FY25 P/E of 16x
• ANZ Group Holdings Ltd (ASX: ANZ) shares are valued at FY25 P/E of 13x

Expert views

Bell Potter believes it is time to sell CBA shares. The broker has a sell rating on CBA shares mainly due to higher valuations relative to the bank’s growth potential, according to The Bull. Analyst Christopher Watt said:

Our recommendation is based on potential overvaluation concerns and limited growth prospects in a fiercely competitive banking sector. While it remains a strong institution, its current market price may not justify the investment risk. The shares have risen from $111.86 on April 19 to trade at $129.85 on July 11. Investors may want to consider taking some profits.

Melbourne-based fund manager L1 Capital is another expert noticing CBA’s high valuations. In its latest investment letter for the June quarter, the asset manager highlighted:

CBA currently trades at the most expensive valuation in its history, despite offering no earnings growth for the next two years. It also stands out as an outlier relative to the other major Australian banks, trading at a ~60% premium to peers on an earnings multiple basis compared to its long-term
average premium of only ~17%. In our view, this performance is not supported by fundamentals, rather it indicates a level of crowding and over-valuation.

After all, this might be an opportune time to realise your profits, according to these experts.

The CBA share price is up slightly by 0.075% to $132.79 this morning.

The post Is now the time to take some profits on CBA shares? appeared first on The Motley Fool Australia.

More reading

• Prepare for earnings! What ASX bank share buyers can learn from Wells Fargo results?
• ASX 200 shatters record. Why it could still be ‘relatively cheap’ to invest
• $20,000 stashed away? Here’s how I’d use it to target a $1,750-a-month passive income
• Top 4 reasons why more Aussies are managing their own superannuation
• Investing in ASX shares? Why CEO pay DOES matter when misaligned

Motley Fool contributor Kate Lee 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 Scott Phillips.

Telix Pharmaceuticals Ltd (ASX: TLX) shares were a standout performer on the ASX in FY24, rallying more than 66% over the twelve months.

This extends the enormous growth Telix has shown since 2019. The stock is up from $1.55 in December of that year to trade at $20.37 just after the open on Tuesday.

You can see this impressive rise over the past year in the chart below.

As we head into FY25, the question is whether this impressive run will continue. Here’s what the experts say.

Telix shares surge in FY24

The meteoric rise of Telix shares last financial year was driven by several key factors. One major catalyst was the company’s quarterly update in April.

In it, Telix reported unaudited total revenue of $175 million, an 18% increase from the previous quarter. Growth was largely due to stronger sales of its prostate cancer imaging product, Illuccix, particularly in the U.S. market.

CEO Dr. Christian Behrenbruch also mentioned Telix’s acquisitions of ARTMS Inc. and IsoTherapeutics Group, LLC, as catalysts. According to my colleague James, Behrenbruch said these transactions “enhance the vertical integration of [Telix]” and “differentiate Telix as a leading independent radiopharmaceutical company.”

Aside from that, the company also completed the listiing of its American Depositary Receipts (ADRs) on the Nasdaq Global Market (Nasdaq) in June.

This sent Telix shares to yet another record high.

What’s the outlook for FY25?

Management has reaffirmed its FY24 revenue guidance, expecting between US$445 million and US$465 million for the year.

This marks a 35%-40% increase over FY23. The company’s optimistic outlook is built on its ongoing investment in research and development. It anticipates R&D spending to grow by 40%-50% in FY24, which could be positive for Telix shares.

Moreover, in July, Telix shares benefited from proposed changes by the Centers for Medicare & Medicaid Services (CMS) in the U.S.

These changes are set to improve payments for diagnostic radiopharmaceuticals. Telix’s Illucix diagnostics product falls under this label.

Once in effect, the new changes could enhance patient access and support the use of Illuccix and other upcoming diagnostic products.

Dr Behrenbruch also said Telix is progressing with three drug approval submissions in the U.S. and is expanding its Phase III ProstACT GLOBAL therapy trial internationally, pending regulatory approvals.

The trial is investigating Telix’s new compound, TLX591, in patients with prostate cancer.

Aside from that, Telix is rated a buy based on the consensus of analyst estimates, according to CommSec.

Foolish takeout

With a strong pipeline, solid revenue growth, and strategic acquisitions, Telix shares could be well-positioned for continued success in FY25.

Investors looking for exposure to the innovative field of radiopharmaceuticals might find Telix attractive.

But remember, past performance is no indication of future results. Conduct your own due diligence.

The post Up 66% in FY24, will Telix Pharmaceuticals shares continue? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX All Ords shares rocketing over 10% today
• Why Ora Banda, Paladin Energy, Seven Group, and Telix shares are charging higher
• CBA and 7 other ASX 200 shares smashing new highs on Thursday
• Why is the Telix Pharmaceuticals share price rocketing 15% to a record high?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

S&P/ASX All Ordinaries Index (ASX: XAO) shares are down 0.073% in early trading on Tuesday.

Meantime, The Australian reports that brokers have upgraded their ratings on these three ASX shares.

Let’s check them out.

3 ASX shares just upgraded by the experts

ASX communications share has ‘a very strong position’, says Citi

Citi has raised its rating on ASX large-cap communications share CAR Group Limited (ASX: CAR) from hold to buy. The broker has placed a 12-month price target of $39.80 on Car shares.

The broker expects double-digit earnings growth over the medium term. It is tipping earnings per share (EPS) growth of 17% for FY24 compared to the 13.2% achieved in FY23.

We’ll find out if Citi is right on 12 August when Car Group reports its full-year results.

Citi analyst Siraj Ahmed said:

While another RBA rate rise and weakening demand are risks to the Australian business, we see Car Group having a very strong position and expect it to deliver solid growth even in a tough environment.

Goldman Sachs also has a buy rating on Car shares. The broker recently raised its price target to $41.40.

As we recently reported, Car Group was the top-performing stock of the communications market sector in FY24. The Car share price surged by 48% over the financial year.

The ASX communications share is currently $35.89, up 2.08% today and 14.33% in the year to date.

Broker positive on ASX real estate share

JP Morgan has commenced coverage on ASX mid-cap property share PEXA Group Ltd (ASX: PXA). The broker has given the stock an overweight rating and a $15 price target over the next 12 months.

Late last month, the Australian Registrars National Electronic Conveyancing Council (ARNECC) ceased its interoperability program, which aimed to enable more competition for electronic conveyancing services. The news lifted PEXA shares by 2.06% on the day.

PEXA will release its full-year FY24 results on 21 August.

The PEXA share price is $14.21, up 3.57% on Tuesday and 28.83% in the year to date.

10% potential upside on ASX industrials share

Barrenjoey has raised its rating on diversified industrials and investment company Seven Group Holdings Ltd (ASX: SVW) to overweight. The broker has a 12-month share price target of $40 on the stock.

Seven Group was the No. 1 stock for price growth in the industrials market sector in FY24. Seven shares rose by 52.9% over the 12-month period.

Last week, Seven announced it would pay a fully franked final dividend of 30 cents per share, up 30% on last year. The ex-dividend date is 19 August, and shareholders will be paid on 2 September.

This brings Seven’s total dividends for FY24 to 53 cents per share, equating to a dividend yield of 1.45%.

The Seven share price is $36.35, up 1.42% on Tuesday and down 2.21% in the year to date.

The post Brokers say buy! 3 ASX shares receiving upgrades today appeared first on The Motley Fool Australia.

More reading

• Brokers name 3 ASX shares to buy now
• Buy this ASX tech stock for a 20%+ return: Goldman Sachs
• 5 things to watch on the ASX 200 on Friday
• Why Ora Banda, Paladin Energy, Seven Group, and Telix shares are charging higher
• The best ASX 200 share of each market sector in FY24

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group, JPMorgan Chase, and PEXA Group. The Motley Fool Australia has recommended Car Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

ResMed Inc (ASX: RMD) shares have been on an interesting journey this year to date. The stock is around 20% higher since January, and hit yearly highs of $33.10 in May after a volatile period.

This pertains to the market’s response to various announcements regarding GLP-1 weight loss medications, which have had far-reaching effects.

The thinking is that these compounds could impact everything from obesity and blood pressure to lifestyle and food choices, including respiratory and sleep disorders. Naturally, companies in the healthcare industry have seen their share prices wobble as new studies emerge on these drugs.

In fact, despite their impressive run in 2024, Resmed shares are currently trading at $30.49, down more than 6% over the past 12 months.

Despite this decline, some analysts believe now is a good time for investors to consider adding this ASX 200 healthcare stock to their portfolios.

Resmed shares rated buy

Brokers are generally bullish on Resmed shares. According to CommSec, consensus rates the company a buy.

Bell Potter is one of those firms. It points to the company’s consistent annual profit before tax increases and a 7% revenue boost in Q3 FY 2024.

Analyst Christopher Watt believes ResMed’s growth trajectory is solid, despite recent concerns over the impact of weight loss drugs, according to The Bull.

This means it could be undervalued, offering “an attractive entry level” to buy the stock.

[Resmed] shares suffered in the first half of fiscal year 2024 over investor concerns regarding the potential negative impact that weight loss and diabetes drugs could have on its business. 

However, RMD lifted revenue by 7 per cent in the third quarter of fiscal year 2024 when compared to the prior corresponding period. Income from operations increased by 25 per cent. In our view, RMD is undervalued and presents an attractive entry level for long term investors.

Earlier in the year, the broker estimated that more than a billion people worldwide suffer from obstructive sleep apnoea (OSA), with many remaining undiagnosed. This could be a tailwind for ResMed, it says.

Bell Potter has set a price target of $36.00 for ResMed shares.

Morgans also rates Resmed a buy. According to my colleague James, it sees weight loss drugs as “having little impact on the large, underserved sleep disorder breathing market…”.

It has a price target of $34.11 on Resmed shares, around an 11.5% upside potential at the time of writing.

Fundies are also bullish on Resmed. ECP Asset Management finds ResMed’s valuation very appealing. Wilsons’ analysis supports this view, noting that ResMed trades at a significant discount to its historical price-to-earnings (P/E) multiples.

It expects the ASX healthcare stock to rise as concerns about GLP-1 weight loss drugs ease, allowing the market to focus on ResMed’s fundamentals.

Foolish takeaway

Despite market concerns about the impact of GLP-1 weight loss drugs, many experts believe these concerns are overblown for Resmed shares.

Whether or not they are correct remains to be seen. The stock is down around 4.5% in the past month.

As always, broker opinions are just that – opinions. Remember to conduct your own due diligence.

The post Buy Resmed shares at ‘attractive entry level’ says top broker appeared first on The Motley Fool Australia.

More reading

• Why the ResMed share price tanked in FY 2024 and what to expect in FY 2025
• Investing in ASX shares? Why CEO pay DOES matter when misaligned
• Here are the top 10 ASX 200 shares today
• These top ASX 200 growth shares could rise 20% to 45%
• Top ASX shares to buy for FY25

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Wesfarmers Ltd (ASX: WES) share price is up 0.3% after the company revealed it had appointed a new director with significant healthcare and services experience. This movement comes with the S&P/ASX 200 Index (ASX: XJO) currently down 0.04%.

Wesfarmers may be best known for its Bunnings, Kmart, and Officeworks retailers, but it also has a growing healthcare division that it wants to expand further.

Some of the businesses inside its healthcare segment include Priceline, the Soul Pattinson Chemist brand, Clear Skincare, SILK Group (which operates laser clinics) and InstantScripts (a digital service to access prescriptions and doctors).

Wesfarmers appoints new director

The company has appointed Kate Munnings to the Wesfarmers board. Munnings has worked across a range of roles, professions, and industries. She started her career as a registered nurse before studying law, practising as a lawyer, and holding senior executive and board positions in healthcare organisations.

Between 2020 and 2023, she was the managing director and CEO of Virtus Health, an ASX-listed assisted reproductive services business that was taken private in 2022. Between 2016 and 2020, Munnings was the chief operating officer of Ramsay Health Care Ltd (ASX: RHC).

Munnings worked at Transfield Services for ten years, from 2006 to 2016, where she finished as the chief executive of operations. She also served as chief risk and legal officer and company secretary.

She’s currently the non-executive director of Ryman Healthcare. Munnings is also the chair of the Digital Health Cooperative Research Centre, as well as the CEO of Vitrafy Life Sciences Ltd.

Leadership comments

The Wesfarmers chair, Michael Chaney, said:

Kate brings a unique blend of experience that will complement the capabilities on our Board and aligns with our focus on delivering shareholder value over the long term. Her background in healthcare will be particularly valuable as Wesfarmers continues to develop its health division.

The new director, Kate Munnings, said:

I look forward to joining Wesfarmers and contributing the insights I have gained from my diverse experiences, particularly most recently within the health sector.

Munnings will stand for election at the Wesfarmers annual general meeting, which is scheduled to be held on 31 October 2024.

What’s the attraction of healthcare?

Wesfarmers noted in its recent 2024 strategy briefing day presentation that the company operates in “large addressable markets with strong growth trends.”

The business said there is a “growing demand for health products and services and increasing role of community pharmacists in primary care.” Wesfarmers also pointed to an “increasing spend on beauty and wellbeing products and services”. The company then noted, “increasing adoption of digital delivery models and growing expectations for more personalised and integrated experiences.”

In total, Wesfarmers thinks there is an addressable market of around $60 billion, with “opportunities in logical adjacencies”. The breakdown of the total addressable market is: a $26 billion addressable market for health, beauty and retail, $23 billion for pharmacy wholesale, $6 billion for medi-aesthetics and $4 billion for digital health.

Time will tell how effective Wesfarmers is at growing in those areas.

Wesfarmers share price snapshot

The chart below shows that the Wesfarmers share price has risen by around 20% since the start of 2024.

The post Wesfarmers share price rises amid healthcare expert appointment appeared first on The Motley Fool Australia.

More reading

• Here’s how the ASX 200 market sectors stacked up last week
• Investing in ASX shares? Why CEO pay DOES matter when misaligned
• How I’d aim to build a $75,000 income from ASX shares and never work again!
• ASX 200 re-writes history. Which companies are leading the charge?
• Wesfarmers vs Woolworths: Which are the best 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. has positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

One ASX defence stock is trying to upstage the high-flying DroneShield Ltd (ASX: DRO) on Tuesday.

That stock is Electro Optic Systems Holdings Ltd (ASX: EOS), which comprises two divisions. These are Defence Systems and Space Systems.

The Defence Systems division specialises in technology for weapon systems optimisation and integration, as well as ISR (Intelligence, Surveillance and Reconnaissance) and C4 systems for land warfare. Its key products include next-generation remote weapon systems, vehicle turrets, and high-energy laser weapons (directed energy).

Whereas the Space Systems division includes its Space Technologies and EM Solutions businesses. These are businesses specialising in applying optical sensors and effectors to detect, track and characterise objects in space, as well as delivering RF and optical space communications technology.

Why is this ASX defence stock rocketing?

Investors have been bidding the Electro Optic Systems share price 10% higher to $1.79 this morning following the release of the company’s half year sales update.

According to the release, the company achieved unaudited first half revenue of approximately $142.6 million. This is an increase of 92% on the $74.3 million that it recorded in the prior corresponding period.

However, management has warned that investors should not necessarily expect similar growth in the second half. It explains that “[g]iven the lumpy nature of EOS revenue, quarterly figures should not be used to imply full year estimates.”

Management advised that its strong first half revenue performance was driven by growth across all of businesses. This includes the impact of accelerating production and delivery of remote weapons systems under an existing contract with a customer in the Middle East, growth in the EM Solutions business, and growth in the Space Technologies business.

At the end of the period, the ASX defence stock had an unaudited cash balance of $52.2 million. While this is down from a cash balance of $72.4 million at the end of March, it includes the previously announced repayment of $20.5 million of debt during the month of April.

A further debt repayment of $52.1 million is due in October 2025. This gives the company over a year to build its cash position and make its repayment. Speaking of which, management has not included any cash flow information with this update. However, this will be released to the market before the end of the month.

Following today’s gain, this ASX defence stock is now up over 70% since the start of the year.

The post Guess which ASX defence stock is rocketing 10% today (Hint: not DroneShield!) appeared first on The Motley Fool Australia.

More reading

• ‘Geopolitical risk is unlikely to subside’: Should you pile into ASX defence shares right now?

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 positions in and has recommended DroneShield and Electro Optic Systems. 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 Scott Phillips.