Category: Stock Market

Hub24 Ltd (ASX: HUB) shares are charging higher on Tuesday morning.

At the time of writing, the ASX 200 stock is up almost 4% to a record high of $48.17.

This means the investment platform provider’s shares are up 82% since this time last year.

Why is this ASX 200 stock charging higher?

Investors have been buying Hub24 shares this morning following the release of its fourth quarter update.

According to the release, Hub24 continued to deliver strong growth during the fourth quarter with platform funds under administration (FUA) increasing to $84.4 billion. This represents a 6% quarter on quarter increase and a 35% improvement on the prior corresponding period.

Management notes that this was driven by record quarterly net inflows of $5 billion, which was up 138% on the prior corresponding period.

However, this includes $1.8 billion from EQT. Excluding large migrations, fourth quarter net inflows were $3.2 billion, which is up 50% on the same period last year. This more than offset negative market movement of $0.3 billion for the quarter.

For the 12 months ended 30 June, the ASX 200 stock reported a record year of net inflows. They came in at $15.8 billion, which is up 62% on the prior corresponding period. Management believes this reflects Hub24’s continued market leadership, strong customer relationships, and proven ability to successfully deliver large, complex migrations.

Excluding large migrations, it still achieved a joint record for net inflows of $11.4 billion. This was in line with FY 2022’s net inflows.

Adviser growth

Also growing in the quarter was the number of advisers on its platform.

The ASX 200 stock advised that its proposition continues to resonate with advisers and licensees, delivering a strong pipeline of opportunities.

During the fourth quarter, 29 new distribution agreements were signed and the total number of advisers using the platform increased by 13% to 4,525.

Market share growth continues

Management notes that in the latest available Plan for Life data, Hub24 ranked first for quarterly and annual net inflows. It also had the largest quarterly and annual organic market share gains of all platform providers.

Hub24’s market share increased to 7.3%, which is up from 6.1% at the end of March 2023. This means it is ranked in seventh place overall. This places it just behind Netwealth Group Ltd (ASX: NWL) and AMP Ltd (ASX: AMP), with Insignia Financial Ltd (ASX: IFL) still the clear market leader.

The post Up 80% in a year, why is this ASX 200 stock hitting a record high today? 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 positions in and has recommended Hub24 and Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. 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.

Rio Tinto Ltd (ASX: RIO) shares are falling on Tuesday.

In morning trade, the mining giant’s shares are down 2% to $116.75.

This follows the release of the company’s second quarter update.

Rio Tinto shares fall on soft Q2 update

For the three months ended 30 June, Rio Tinto reported iron ore production of 79.5Mt and shipments of 80.3Mt. This represents an increase of 2% and 3%, respectively, over the first quarter.

This took the mining giant’s iron ore shipments to 158.3Mt for the half, which is a 2% decline on the prior corresponding period.

Management advised that productivity gains offset ore depletion during the quarter. However, production and shipping were impacted by a train collision in mid-May, which resulted in around six days of lost rail capacity and full stockpiles at some mines.

Elsewhere, aluminium production was flat quarter on quarter at 824kt, but up 3% for the half to 1,650kt. And copper production increased 10% from the first quarter to 171kt and 13% for the first half to 327kt.

How does this compare to expectations?

Goldman Sachs was expecting iron ore shipments of 79Mt for the quarter, whereas the consensus estimate was 82Mt.

With shipments coming in at 80.3Mt, Rio Tinto has outperformed Goldman’s estimate but fallen short of the market’s expectations.

Unfortunately, the miner’s copper production of 171kt has fallen short of estimates. Goldman was forecasting 180kt and the consensus estimate stood at 175kt.

This may explain why Rio Tinto shares are falling today.

Management commentary

Rio Tinto’s chief executive, Jakob Stausholm, appeared to be pleased with the quarter. He said:

Our operational performance continues to progress. While there are still significant improvements ahead, we are beginning to see a step-change in production, including from our Queensland bauxite business following the roll-out of the Safe Production System.

Stausholm also revealed that it is full steam ahead for the US$11.6 billion Simandou iron ore project in Guinea, which has been granted approval today. He adds:

We are growing with discipline in the materials the world needs for the energy transition. Construction of the Simandou high grade iron ore project in Guinea is advancing at pace, the ramp up of the Oyu Tolgoi underground is on track and we are set to achieve first production from the Rincon starter plant by the end of the year.

Outlook

Rio Tinto has held firm with its iron ore shipments guidance for FY 2024. It continues to expect shipments in the range of 323Mt to 338Mt.

And while it has retained its copper guidance, it is now expecting this to be at the lower end of its 660kt to 720kt guidance range.

Elsewhere, Bauxite production is expected to be at the top end of its guidance range and aluminium guidance remains unchanged.

The post Rio Tinto shares fall on soft second quarter update appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Leading brokers name 3 ASX shares to buy today
• Are Rio Tinto shares a buy on a pullback?
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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 positions in and has recommended Goldman Sachs Group. 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.

As the market continues to advance in 2024, one ASX 200 tech stock is outshining and is up double-digits this year to date.

Shares of Technology One Ltd (ASX: TNE) are now up 23.5% since January and have outpaced the S&P/ASX 200 Index (ASX: XJO) by more than 12% in the past year.

It was priced at $18.98 per share just before the open on Tuesday. You can see its performance in the last 12 months in the chart below.

These recent developments have caught the attention of top analysts. Based on recent fundamentals, one firm thinks the ASX 200 tech stock can grow. Here’s a closer look.

ASX 200 tech stock set for growth?

Bell Potter is one broker that rates the ASX 200 tech stock a buy. The firm has a price target of $20.25, indicating around 6.6% upside from the time of writing.

Analyst Christopher Watt said the company was “poised for significant growth”, noting the company’s consistent annual profit increases and a 20% rise in revenue for H1 FY24, according to The Bull.

Watt said:

This software-as-a-service provider is poised for significant growth given consistent annual profit before tax increases in the past few years, which are projected to continue. Revenue from ordinary activities was up 20 per cent for the half year ending March 31, 2024, when compared to the prior corresponding period. The stock’s price-earnings ratio has been re-rated higher. 

It’s not just Bell Potter who likes the company. Goldman Sachs also reiterates its buy rating on Technology One shares. In a June note, the broker raised its price target on the ASX 200 stock to $19.70, citing its “greater confidence” in earnings growth.

The firm highlighted a long-term opportunity for Technology One in the UK market, estimating it to be three times larger than Australia’s key sectors.

It says Technology One’s share price has been driven “by its strong rate of compound earnings growth” and market position. It sees this trend continuing:

In our view, the company is well placed to meet its A$500mn FY26 ARR target through a combination of SaaS flip uplift, net expansion and new customer growth. We see margin expansion resuming from FY24E onwards, which in combination with robust revenue growth should drive a mid-high teens EPS CAGR to FY26E, providing strong earnings visibility.

Meanwhile, Morgans also rates the ASX 200 tech stock a buy. According to my colleague James, it praised Technology One for its impressive earnings growth history and financial health.

Morgans expects the company’s earnings growth to shift even higher, potentially increasing valuation multiples. It values the company at $20.50 per share.

Foolish takeout

Technology One has consistently increased its annual profit over the past few years. For the half year ending March 31, 2024, revenue from ordinary activities was up 20% compared to the previous period.

Despite this track record, and growth prospects in the UK market, the consensus of analyst estimates rates Technology One a hold, according to CommSec.

Analysts from Goldman Sachs, Morgans, and Bell Potter make up 3 of the 7 rating the ASX 200 tech stock a buy, whereas three firms say it is a sell.

As always, remember to conduct your own due diligence.

The post Buy this ASX 200 tech stock ‘poised for significant growth’ appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to buy today

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 Goldman Sachs Group and Technology One. The Motley Fool Australia has recommended Technology One. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Fortunately for growth investors, there are many growth shares to choose from on the ASX.

But which ones could be good long-term options? Let’s take a look at two that are highly rated by analysts right now:

Treasury Wine Estates Ltd (ASX: TWE)

The team at Morgans thinks that Treasury Wine could be an ASX growth share to buy. It is the wine giant behind a range of popular brands including Penfolds, Wolf Blass, Lindeman’s, and 19 Crimes.

As well as getting a boost from the removal of Chinese tariffs, the broker believes the acquisition of DAOU Vineyards could be significant to its growth prospects. It explains:

It may take some time for the market to digest TWE’s acquisition of Paso Robles luxury wine business, DAOU Vineyards (DAOU) for US$900m (A$1.4bn) given it required a large capital raising. The acquisition is in line with TWE’s premiumisation and growth strategy and will strengthen a key gap in Treasury Americas (TA) portfolio. Importantly, DAOU has generated solid earnings growth and is a high margin business. It consequently allowed TWE to upgrade its margins targets. While not without risk given the size of this transaction, if TWE delivers on its investment case, there is material upside to our valuation.

Morgans has an add rating and $15.03 price target on its shares. This suggests that upside of 21% is possible over the next 12 months.

Xero Ltd (ASX: XRO)

Analysts at Goldman Sachs are feeling very bullish about this cloud accounting platform provider and see it as an ASX growth share to buy.

The broker highlights that Xero has an enormous runway for growth thanks to its large total addressable market (TAM). It explains:

Xero is a Global Cloud Accounting SaaS player, with existing focuses in ANZ, UK, North American and SE Asian markets. We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company’s pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – the stock is Buy rated. Key catalysts include: High frequency data (downloads/visitation/pricing); CEO North America strategy update and results, and potential M&A.

Goldman currently has a conviction buy rating and $180.00 price target on its shares. This implies potential upside of 26% for investors over the next 12 months.

The post 2 outstanding ASX growth shares to buy and hold appeared first on The Motley Fool Australia.

More reading

• Could investing $10,000 in ASX shares make you a millionaire?
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Motley Fool contributor James Mickleboro has positions in Treasury Wine Estates and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Are you on the lookout for some ASX dividend stocks to buy? If you are, then you may want to check out the three listed below.

They have all been named as buys by brokers and tipped to offer some great dividend yields in the near term. Here’s what you need to know about them:

Centuria Industrial REIT (ASX: CIP)

The first ASX dividend stock that could be a buy according to analysts is Centuria Industrial.

It is Australia’s largest domestic pure play industrial property investment company with a portfolio of 88 high-quality, industrial assets situated in key in-fill locations and close to key infrastructure.

UBS is a fan of the company and believes it is well-positioned in the current environment thanks to strong demand for industrial property.

The broker expects this to allow Centuria Industrial to pay dividends per share of 16 cents in both FY 2024 and FY 2025. Based on the current Centuria Industrial share price of $3.19, this will mean dividend yields of 5% for income investors across both years.

UBS currently has a buy rating and $3.50 price target on its shares.

Deterra Royalties Ltd (ASX: DRR)

Another ASX dividend stock that could be a buy is Deterra Royalties.

It is a mining royalties company with a portfolio of assets across a number of commodities. This includes Mining Area C, which is operated by BHP Group Ltd (ASX: BHP).

Its shares have recently been sold off after announcing a major acquisition and making changes to its dividend policy. While UBS believes the latter will result in a significant dividend cut in FY 2025, it still expects a good yield next year. It also highlights the quality of its assets.

UBS is forecasting dividends per share of 31 cents in FY 2024 and then 16 cents in FY 2025. Based on the current Deterra Royalties share price of $4.05, this will mean yields of 7.7% and 4%, respectively.

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

Eagers Automotive Ltd (ASX: APE)

A final ASX dividend stock that could be a buy is Eagers Automotive. It is a leading automotive retail group which has been around for over a century.

Analysts at Bell Potter remain positive on the company and believe that recent share price weakness has created a buying opportunity for income investors. Especially given its belief that above-average dividend yields are still coming despite tough trading conditions.

For example, Bell Potter is forecasting fully franked dividends of 64.5 cents per share in FY 2024 and then 73 cents per share in FY 2025. Based on its current share price of $10.56, this represents dividend yields of 6.1% and 6.9%, respectively.

Bell Potter has a buy rating and $13.35 price target on its shares.

The post Brokers name 3 ASX dividend stocks with great yields to buy 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 Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Some ASX mining shares have suffered significant pain over the last few weeks. L1 Capital, a fund manager, has pointed out to investors why some commodity stocks could be excellent buys today.

It’s common for commodity businesses to experience volatility, as they can experience significant resource price changes. Operational challenges/changes can also lead to the occasional sell-off.

If investors can choose the right businesses at the right price, they could be excellent opportunities. L1 outlined why the below two stocks look oversold.

Mineral Resources Ltd (ASX: MIN)

The fund manager pointed out that the Mineral Resources share price fell 25% during June because of “softness in its key commodity end markets, most notably with lithium spodumene and iron ore prices down 16% and 7%”.

The negative resource price movements more than offset some of the positive operational announcements from the ASX mining share, such as the delivery of the first ore from its Onslow iron project ahead of schedule.

L1 noted the company also announced the sale of a 49% interest in the Onslow haul road for A$1.3 billion. Once this transaction is completed, the investment team believe Mineral Resources will be “well placed to drive future growth and shareholder returns.”

The ASX mining share can’t do much about the weaker lithium price, but L1 pointed out it remains on track to more than double its production over the coming years to more than 1,000kt of spodumene concentrate.

The fund manager finished its positive view of the company with the following:

We continue to believe that all key areas of Mineral Resources’ core business (iron ore, lithium, mining services and gas) have favourable medium-term tailwinds and the shares remain significantly undervalued.

Nexgen Energy (Canada) CDI (ASX: NXG)

The other ASX mining share that L1 provided positive commentary on was this uranium mining business.

The Nexgen share price fell 10% in June because the uranium share price dropped 8% over the month.

L1 believes the uranium market has “positive fundamental supply/demand tailwinds over the medium to long term”.

What is this company actually planning? It’s developing Arrow, the world’s largest undeveloped uranium deposit, in the Saskatchewan region of Canada.

The development of this deposit is significant because it would be a “major, new, strategic Western source to address the anticipated uranium market deficit.”

L1 expects Nextgen will have completed all regulatory requirements over the course of 2024, “providing a clear pathway to full scale construction of the project.”

The fund manager outlined why Nextgen’s future (and valuation) looks so positive:            

Arrow has the potential to generate more than C$2b of cash flow annually, once developed (2028) – a highly attractive proposition given NexGen’s current market cap of ~C$5.2b.

The post 2 ‘highly attractive’ sold-off ASX mining shares to buy appeared first on The Motley Fool Australia.

More reading

• Top 10 most traded ASX shares and US stocks in June
• Is it time to dive back into ASX lithium shares?
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• Bell Potter names 3 of the best ASX 200 stocks to buy in July
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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 Scott Phillips.

Investors that are looking for big returns might want to check out the ASX stocks in this article.

That’s because Bell Potter has just named them as buys and tipped them to rise strongly from current levels. Here’s what the broker is saying about them:

Boss Energy Ltd (ASX: BOE)

If you’re looking for exposure to the booming uranium industry, then Boss Energy could be the ASX stock to buy. Last week, Bell Potter put a buy rating and $5.90 price target on the uranium miner’s shares. This implies potential upside of 45% for investors from current levels.

Bell Potter believes that recent share price weakness has created a buying opportunity for investors. It said:

We continue to see value in BOE given the pull back in the uranium sector. BOE maintains a stable balance sheet with sufficient liquidity to execute the ramp up of Honeymoon whilst progressing growth projects across Honeymoon and Alta Mesa. We continue to see Honeymoon as a low-cost restart operation, which has the capacity to generate strong margins in the current pricing environment.

Coronado Global Resources Inc (ASX: CRN)

The broker also thinks investors should be buying this coal miner’s shares. Ahead of its quarterly update, Bell Potter has put a buy rating and $1.85 price target on its shares. This suggests that upside of 29% is possible for investors over the next 12 months.

It believes Coronado Global is positioned to benefit from supply constraints and industry consolidation. It said:

Throughout 2024, CRN should realise improved production volumes and subsequent cost benefits following the self-funded investment across its Australian and US operations. We expect CRN to generate improved free cash flow and shareholder returns going forward. Our buy recommendation is underpinned by a supply constrained met coal environment, supporting long term prices. We see the potential for CRN to participate in industry consolidation.

Coventry Group Ltd (ASX: CYG)

Bell Potter is a fan of Coventry Group and sees it as an ASX stock to buy.

It is a multi-disciplinary industrial supply and services company that is primarily engaged in the distribution of industrial fasteners and specialist building supplies.

Bell Potter has put a buy rating and $2.00 price target on its shares. This implies potential upside of 38% for investors from current levels. It said:

In our view, transitory cycle challenges should not deter investors from the 30-50% mid-term earnings upside potential we see in the turnaround of Konnect Australia (KAA) and growing track record of delivery by management.

The post These ASX stocks could rise ~30% to 45% appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Do you own the 3 best performing ASX 200 shares of FY 2025?
• 1 ASX 200 coal stock to buy and 1 to hold
• Here are the top 10 ASX 200 shares today
• Why did ASX uranium shares like Boss Energy have such a bumper day?

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 has not been an easy time to invest in ASX lithium stocks.

Unless you were shorting them, lithium investors are likely to be nursing sizeable paper losses over the last 12 months.

During this time, lithium stocks such as Arcadium Lithium (ASX: LTM), Core Lithium Ltd (ASX: CXO), IGO Ltd (ASX: IGO), Liontown Resources Ltd (ASX: LTR), and Pilbara Minerals Ltd (ASX: PLS) have all dropped materially.

This has been driven by significant lithium price weakness caused by the oversupply of the white metal, softer than expected demand, and the emergence of low cost lepidolite in China.

Weak lithium prices are squeezing the profits of lithium miners and making some unprofitable. It was for the latter reason that Core Lithium decided to suspend its mining operations indefinitely earlier this year.

But what’s next for lithium prices?

Let’s take a look and see what analysts at Goldman Sachs are forecasting for three widely used lithium types. These are lithium carbonate, lithium spodumene, and lithium hydroxide.

Lithium prices

To begin with, let’s look at what lithium prices were commanding on average during 2023.

• Lithium carbonate – China: US$32,694 per tonne
• Lithium hydroxide – China: US$32,452 per tonne
• Spodumene 6%: US$3,712 per tonne

Now, let’s have a quick look at the current spot prices of these metals compared to what they were commanding back in January. The current prices are as follows:

• Lithium carbonate – China: US$10,934 per tonne (January: US$11,867)
• Lithium hydroxide – China: US$9,563 per tonne (January: US$9,899)
• Spodumene 6%: US$990 per tonne (January: US$1,000)

Lithium forecasts through to 2027

Unfortunately for investors of ASX lithium stocks, Goldman Sachs is not expecting a meaningful improvement in lithium prices in the coming years.

Lithium carbonate – China:

For lithium carbonate, the broker is forecasting the following average price through to 2027 and then for the long term:

• 2024: US$11,683 per tonne
• 2025: US$11,000 per tonne
• 2026: US$13,323 per tonne
• 2027: US$15,646 per tonne
• Long-term: US$15,500 per tonne

Lithium hydroxide – China:

For lithium hydroxide, the broker is forecasting the following:

• 2024: US$11,463 per tonne
• 2025: US$12,500 per tonne
• 2026: US$14,323 per tonne
• 2027: US$16,146 per tonne
• Long-term: US$15,500 per tonne

Spodumene 6%:

Finally, the broker is expecting spodumene prices to remain significantly lower than 2023 averages for the foreseeable future. It has pencilled in the following for the coming years:

• 2024: US$995 per tonne
• 2025: US$800 per tonne
• 2026: US$978 per tonne
• 2027: US$1,155 per tonne
• Long-term: US$1,150 per tonne

Final word

In light of the above, it seems that only ASX lithium stocks with low costs will be in a position to run profitable operations in the coming years.

It is largely for this reason that Goldman has a buy rating and $7.15 price target on IGO’s shares. It recently said:

We reiterate our belief that further Greenbushes expansion remains one of the most economically compelling brownfield lithium projects, where the JV also retains significant optionality around extending/converting the TRP, while the resource likely underpins even further expansion (i.e. CGP5, subject to market conditions).

The post Here’s the lithium price forecast through to 2027 appeared first on The Motley Fool Australia.

More reading

• Why Atturra, Bravura, Core Lithium, and Opthea shares are racing higher today
• Leading brokers name 3 ASX shares to buy today
• Why are Liontown shares roaring higher on Monday?
• Are AGL or Pilbara Minerals shares a better buy?
• Top 10 most traded ASX shares and US stocks in June

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 Goldman Sachs Group. 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.

ASX rare earths stocks have garnered plenty of attention in recent years as the West continues to secure sources of the critical elements outside of China.

If you’re not familiar, rare earths elements (REEs) are core ingredients across a range of high-tech devices. Those include phones, EVs and military equipment. They’re also used for high-power magnets, which you’ll find in equipment like wind turbines.

While Lynas Rare Earths Ltd (ASX: LYC) gets much of the media coverage in this space, there are some fast-rising stars you might want to consider aside from this S&P/ASX 200 Index (ASX: XJO) rare earths miner.

Namely Brazilian Rare Earths Ltd (ASX: BRE).

And when I say fast-rising star, that’s no hyperbole.

On 24 January, the ASX rare earths share closed the day trading for $1.52. Yesterday, the small-cap miner ended the day trading for $3.13 a share.

That sees the Brazilian Rare Earths share price up 105.9% in less than six months.

Here’s what’s been piquing investor interest.

What’s driving the ASX rare earths stock to the moon?

Brazilian Rare Earths only listed on the ASX on 21 December.

While shares have been up strongly since the listing, the sustained rally kicked off in early February.

That rally was initially spurred by promising assay results from an early diamond drilling program at the ASX rare earths miner’s Monte Alto Rare Earths Project, located in Brazil.

Results from the initial exploratory campaign included wide intervals of high-grade rare earth elements, niobium and scandium mineralisation (+10% TREO) recorded in four holes and ultra-high-grade mineralisation (+20% TREO) recorded in an additional six holes.

 “These exceptional high-grade assay results validate Monte Alto as a world-class rare earth exploration project with some of the highest grades ever reported globally,” Brazilian Rare Earths CEO Bernardo da Veiga said at the time.

On 22 February, investors sold the shares down heavily. But they bounced back over the following days, after the miner reported it had exercised its option to acquire the advanced Sulista Rare Earth Project in Bahia, Brazil. The option saw the miner secure more than 100 square kilometres of highly prospective exploration licences across the southern extension of the Rocha da Rocha Rare Earth Province.

Shares surged again on 25 March on the back of more strong assay results from across the Rocha da Rocha Rare Earth Province. The ASX miner also reported on a new rare earth discovery, the Pelé Project, located 60 kilometres from Monte Alto.

And the good times continued into June.

On 6 June, the Brazilian Rare Earths share price closed up 10.7% after the latest batch of drill results confirmed “ultra-high rare earth grades” at the miner’s Sulista Project.

And the miner is well capitalised to accelerate its exploration and development activities, having completed a $80 million share placement raising on 13 June. The company issued the new shares for $3.30 apiece, 9.6% below the prior trading day’s closing price.

That put that ASX rare earths stock under some selling pressure, with shares still down just more than 13% since the cap raise.

The post Move over Lynas! How this ASX rare earths small-cap surged 106% in just 6 months appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Down 13% in FY24, is this the year for Lynas shares?
• These are the 10 most shorted ASX shares
• 10 ASX shares to buy in FY25
• 3 high-flying ASX 200 stocks leading the charge into FY 2025

Motley Fool contributor Bernd Struben 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.

Telstra Group Ltd (ASX: TLS) shares could undoubtedly benefit from the ASX telco share‘s projected profit growth in the coming years.

Telstra announced last week that it would increase the price of its postpaid and prepaid mobile plans by between $2 and $4 per month. The company said network traffic was growing at 20% per year, and it needed to continue to invest to provide “additional capacity to support more data, faster speeds, and a more consistent experience for customers.”

Not only should the price hike help short-term revenue and earnings, but the broker UBS thinks the telco industry could continue to see industry mobile average revenue per user (ARPU) keep rising.

The broker’s research suggests overall consumer churn could remain stable and low and “likely confined to [the] more price-sensitive end of the market”.

UBS thinks investors are “not pricing in the ability for the industry to capture the majority of price rises recently announced, and are expecting a level of down-trading of plans by consumers”.      

Let’s examine the projected profit Telstra will generate in the coming years following the news of these price increases.

FY24 projection

These recently announced price increases won’t be implemented until FY25, but FY24 is benefiting from previous price rises that were linked to inflation.

UBS is projecting in FY24 that Telstra could generate revenue of $23.66 billion, earnings before interest and tax (EBIT) of $3.66 billion and $2.05 billion of net profit after tax (NPAT).

The profit growth is projected to be approximately 6% compared to FY23, and the Telstra dividend per share is forecast to be 18 cents.  

How about FY25?

Earnings growth is expected again in FY25 despite the ongoing investment in its 5G network and other telco infrastructure.

UBS suggests that in FY25, Telstra could generate $24.1 billion of revenue, $3.7 billion of EBIT, and $2.06 billion of NPAT.

If those projections are true, the NPAT would grow by around 1%, and the dividend could rise to 19 cents per share, according to UBS.

And FY26?

Profit is expected to start accelerating in FY26, which is a financial year that could really excite investors.

Owners of Telstra shares could see their business generate $24.7 billion in revenue, $4.47 billion in EBIT, and $2.54 billion in NPAT.

That’d be a jump of almost $500 million in NPAT in dollar terms. In percentage terms, the FY26 net profit is forecast to rise by 23%. This large profit growth could lead to a jump in the dividend per share to 21 cents.

Expectations for FY27

Ongoing double-digit profit growth is expected in FY27, which could be welcome news for Telstra shareholders.

The company could generate $25.4 billion in revenue, $5 billion in EBIT, and $2.87 billion in NPAT, according to UBS.

This could mean a 13% increase in net profit in percentage terms, which could fund a large bump in the dividend per share to 24 cents.

Finally, here’s the FY28 forecast

The last year of this series of projections is also forecast to be a good one for owners of Telstra shares.

UBS predicts that in FY28, the ASX telco share could generate $26.1 billion in revenue, $5.4 billion in EBIT, and $3.18 billion in net profit.

In percentage terms, this could represent a 10.75% year-over-year increase and might help fund a dividend payment of 26 cents per share.

If these projections come true, NPAT could grow by $1.1 billion over the next four years, leading to an 8 cents per share increase in the dividend between FY24 and FY28, which is an exciting prospect for Telstra shareholders.

The post Here is the earnings forecast out to FY28 for Telstra shares appeared first on The Motley Fool Australia.

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