Category: Stock Market

Investors in S&P/ASX 200 Index (ASX: XJO) mining stocks are keeping one eye on China.

And for good reason.

As the biggest consumer of iron ore and Australia’s top export market, when China sneezes, the big three mining shares tend to catch a cold.

Iron ore kicked off 2024 trading for just over US$143 per tonne.

But amid ongoing sluggishness in China’s steel-hungry property markets, the iron ore price has trended lower through most of the year. Overnight iron ore dropped 3% to US$98.55 per tonne.

As you’d expect, that’s thrown up some headwinds for ASX 200 mining stocks.

Here’s how they’ve performed so far in 2024:

• Fortescue Metals Group Ltd (ASX: FMG) shares are down 15.6%
• BHP Group Ltd (ASX: BHP) shares are down 11.6%
• Rio Tinto Ltd (ASX: RIO) shares are down 10.6%

For some context, the ASX 200 is up 2.4% year to date.

But despite ongoing issues with China’s real estate sector, some unexpectedly strong data out over the weekend could offer some countering tailwinds for the big miners.

ASX 200 mining stocks eyeing a rebound

China’s factory activity exceeded consensus expectations for March.

The government released its manufacturing purchasing managers’ index, which climbed to 51.1 on Monday, Bloomberg reports. Any reading over 50 signals growth, with March marking the fifth consecutive month of expansion.

With the nation’s industrial sector recovering, that’s increasing investor bets that China can still achieve its 2024 economic growth target of 5%.

And China’s government is intent on helping its industrial base, with pledges to support businesses with equipment and other material upgrades.

“Looking forward, the roll-out of policies such as the large-scale equipment upgrade will continue to support demand for the manufacturing sector,” Xiao Jinchuan, an analyst with Guangfa Securities said (quoted by Bloomberg).

Not that ASX 200 mining stocks like BHP, Rio Tinto and Fortescue are fully out of the woods just yet.

According to Wang Zhe, senior economist at Caixin Insight Group:

Downward economic pressures persist, employment remains subdued, prices remain low, and insufficient effective demand has not been fundamentally resolved, underscoring the need to further boost domestic and external demand.

The biggest news investors are holding their breath for is a significant boost in stimulus measures to get the Chinese property sector back on its feet.

According to Bloomberg Economics, real estate made up nearly 25% of China’s economy in 2018. That’s shrunk to under 20% today.

And despite the unexpected growth in factor activity, China’s property markets still drive the majority of iron ore demand.

So far, the government hasn’t come out with the so-called bazooka stimulus measures, like multi-billion-dollar infrastructure spending, needed to counter the decline in steel demand from the property markets.

But, in a potential boost for ASX 200 mining stocks, I expect we’ll see more such measures announced over the coming months.

After all, if the government falls too far short of its 5% GDP growth goals, it could be bad news for President Xi Jinping. And at the end of the day, Xi has a lot of stimulus levers left to pull.

The post How this unexpected development in China could boost ASX 200 mining stocks appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Why hot ASX copper shares could have further to run
• Should I buy BHP or Rio Tinto shares in April?
• 5 excellent ASX dividend stocks to buy in April
• 5 things to watch on the ASX 200 on Thursday

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.

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BlinkLab Limited (ASX: BB1) shares have had a strong start to life on the ASX boards following an initial public offering (IPO).

In afternoon trade, the medtech company’s shares are trading at 26 cents.

This is 30% higher than its ASX IPO listing price of 20 cents.

Though, things were even better in earlier trade. At one stage, Blinklab shares were up as much as 52% to 30.5 cents.

What is this latest ASX IPO?

BlinkLab is a company focused on developing new smartphone-based artificial intelligence-powered mental healthcare solutions.

It was started by neuroscientists at Princeton University in the United States and over the past several years has fully developed a smartphone-based test for early diagnosis of autism, ADHD, and other neurodevelopmental conditions.

The company notes that previous clinical trials have shown an impressive success rate in the diagnosis of autism, achieving sensitivity of 85% and specificity of 84%.

Importantly, these trials are very similar to regulatory studies required by US Food and Drug Administration (FDA) and have shown a much higher accuracy compared to currently approved products that do not use computer vision nor a smartphone.

Funds raised

BlinkLab advised that its oversubscribed ASX IPO raised $7 million at $0.20 per new share.

These funds will be used to finalise an FDA Class II medical device registration study in autism in partnership with leading US university hospitals.

In addition, the company plans to initiate further clinical studies in other programs including ADHD, as well as continue to advance in-house artificial intelligence/machine learning algorithms.

‘A milestone for BlinkLab’

BlinkLab’s co-founder and chief executive officer, Henk-Jan Boele, was pleased with the IPO and listing on the ASX. He said:

Today marks a milestone for BlinkLab as we list on the ASX, which will be a new chapter in our journey to bridge the translational gap between groundbreaking science and everyday lives of people. Since the beginning as a Princeton University startup several years ago, our mission has always been to harness the power of fundamental neuroscience using mobile technology in order to improve the early diagnosis of neurodevelopmental conditions in children.

This listing not only validates our team’s dedication, excellence, and hard work but also opens exciting opportunities for us to expand our reach and impact. We are deeply committed to obtaining regulatory clearances for BlinkLab to make neuroscience accessible and beneficial for all. Our ASX listing is a significant step towards realizing this vision. We look forward to the support of our new shareholders and the broader community as we continue to innovate and bring our vision to life.

The post The newest ASX IPO stock is just rocketed 50% appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 stock is down 11% in under a month. Should you buy before it trades ex-dividend?
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• Here are the top 10 ASX 200 shares today

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Transurban Group (ASX: TCL) shares are steady at $13.20 on Thursday.

Transurban owns a portfolio of 22 toll roads in Australia and North America. Some names you may be familiar with are the CityLink, Cross City Tunnel, and the Eastern Distributor.

The toll road operator has been an interesting stock to watch over the past few years. Some big economic and demographic changes have occurred that have directly advantaged and disadvantaged the stock.

For example, COVID ushered in a new workplace era with plenty of people now working from home, and therefore no longer on the roads in peak hours.

But we’ve also seen good population growth, primarily due to migration rather than natural increase, and that means more road users.

And the company has navigated rising inflation better than most because a large percentage of its revenue is linked to the going CPI rate, and a further chunk benefits from fixed rates of toll increases.

Here’s a chart showing how the Transurban share price has moved around over the past five years.

As you can see, the stock has moved in a pretty tight price band, demonstrating relative stability and resilience after recovering from the COVID market crash.

And what about dividends?

In short, pretty good growth and reliability here, as the chart below shows.

Transurban raised its dividend consistently for 10 years until COVID punched a hole in revenues in 2020.

Despite this, the company kept paying dividends throughout the pandemic.

In 2019, Transurban declared a 61-cent dividend for the full year.

It only got back to paying this sort of amount last year, declaring 61.5 cents would be paid per share.

What will the Transurban dividend be in 2024?

The consensus analyst forecast published on CommSec is for Transurban shares to pay 62.1 cents per share this year.

The analysts expect an increase to 65.4 cents in 2025 and 68.7 cents in 2026.

Let’s see how that shakes out in dividend yield terms.

A $10,000 budget (minus a brokerage fee of $5) will buy you 757 Transurban shares at the current price.

Total spend = $9,992.40.

If we multiply 757 shares by 62.1 cents, we get a total annual dividend amount of $470.10. That’s a dividend yield of 4.7%.

In 2025, the dividend payment is anticipated to be $495.10. That’s a dividend yield of 4.95%.

In 2026, the dividend payment is tipped to be $520.05. That’s a dividend yield of 5.2%.

What’s next for Transurban shares?

Both Citi and Bell Potter think Transurban shares can rise in price from here.

And both brokers have exactly the same 12-month target price on the ASX share.

That price is $15.60, which implies a potential 18.2% upside for investors who buy Transurban shares today.

The post If I invest $10,000 in Transurban shares, how much dividend income will I receive? appeared first on The Motley Fool Australia.

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More reading

• 5 excellent ASX dividend stocks to buy in April
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• How I’d invest $20k to target $1,400 a year from ASX dividend shares
• Are these ASX dividend stocks quality buys this week?

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 Transurban 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.

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Sayona Mining Ltd (ASX: SYA) shares are racing higher on Thursday afternoon.

At the time of writing, the lithium miner’s shares are up 12% to 4.25 cents.

This compares very favourably to the performance of the ASX 200 index, which is up 0.5% at the time of writing.

Why are Sayona Mining shares jumping?

Investors have been buying the company’s shares this afternoon following the release of an announcement after lunch.

That announcement was in relation to its operational review of the North American Lithium (NAL) operation.

According to the release, following a detailed review of the NAL operation and a range of operating scenarios, the joint venture partners have agreed to continue its ramp-up towards steady state production with regular reviews of operating costs and market conditions.

NAL is jointly owned by Sayona Mining, which has a 75% interest, and Piedmont Lithium Inc (ASX: PLL), which holds the remaining 25% interest.

Judging by the way Sayona Mining shares are surging today, investors appear to have been fearing the worst. Especially after Core Lithium Ltd (ASX: CXO) suspended its mining operations.

And while the joint venture partners did evaluate various care and maintenance scenarios covering options to either slow down or cease mining, process existing stocks only, and suspend operations for up to 12 months, it ultimately decided that the ramp-up towards steady state production was the right path to take.

‘Positioning Sayona for long-term success’

Sayona Mining’s interim CEO, James Brown, was pleased with the review. He commented:

The NAL operational review was a critical exercise to ensure we are optimising our resources and positioning Sayona for long-term success. Importantly, there is clear line of sight towards achieving steady state production in 2024, while NAL will further benefit from capital improvements such as the Crushed Ore Dome. Process plant recoveries have exceeded expectations, a significant milestone in any ramp-up, with multiple new daily production records achieved in March.

Throughout this process, a key consideration was the direct impact on our dedicated workforce and host communities. This review has also validated our approach to continue to assess capital improvement initiatives that will increase production or lower unit operating costs.

Brown advised that he believes this approach will maximise value for shareholders when the lithium market recovered. He adds:

Looking forward, we will regularly evaluate NAL operations in the ordinary course of business based on prevailing market conditions and the ability to achieve our operating cost targets. We are confident that this approach to considering alternatives and maintaining optionality will enable Sayona to maximise value for shareholders ahead of an anticipated recovery in the lithium market.

The post Why are Sayona Mining shares jumping 12% today? appeared first on The Motley Fool Australia.

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More reading

• These are the 10 most shorted ASX shares
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• ‘Cheapest’ lithium miner: Broker says Sayona Mining shares could rise 200%+
• These are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares 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.

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ASX travel shares were absolutely smashed during the pandemic. The price charts below tell the story.

The scariest part for ASX travel stock investors was that this one black swan event that had never been seen before in modern times didn’t just impact the industry, it shut it down.

We didn’t know at the time the extent to which the pandemic would impact our lives, how long it would take to get through, and whether these travel businesses would even survive in the meantime.

It was a serious reminder to investors of the virtues of portfolio diversification.

Anyway, it’s all over now, so let’s look at what has happened to four ASX travel shares since COVID-19 “ended”.

Officially, the World Health Organisation declared that COVID-19 was no longer a public health emergency of international concern (PHEIC) on 5 May 2023.

But it was over well before that.

For the purposes of analysing what’s happened to the share prices of these four ASX travel shares since the pandemic ended, let’s use 21 February 2022 as our starting point.

That’s when Australia reopened its international border to fully vaccinated visa holders.

ASX travel shares: The long road to recovery

Webjet Ltd (ASX: WEB)

The Webjet share price is currently $8.65, up 2.67% on Thursday and up 18% over the past 12 months.

The ASX travel share has not yet managed to go anywhere near its pre-pandemic trading prices.

At the time of the pandemic market crash, Webjet shares dropped about 75% in value.

Then began a gradual recovery to close at $5.57 on 21 February 2022.

Since then, the ASX travel share has risen by 55%.

Webjet ceased paying dividends in the second half of 2020 and has not yet reinstated them.

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price is currently $16.36, up 0.55% on Thursday and down 14.5% over the past 12 months.

This ASX travel share managed to exceed its pre-pandemic trading levels in late 2021.

At the time of the market crash, Corporate Travel Management shares also dropped by about 75% in value.

The share price recovery had its ups and downs before closing at $22.83 on 21 February 2022.

Since then, the ASX travel share has fallen by 39%.

Corporate Travel Management ceased paying dividends in the second half of 2020 and resumed the payouts in the second half of 2022.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is currently $5.43, up 0.37% today and down 20% over the past 12 months.

The ASX airline share has not yet managed to rise above its pre-pandemic price levels.

At the time of the crash, Qantas shares dropped about 63% in value.

The share price recovery was a rollercoaster, with the stock closing at $5.15 on 21 February 2022.

Since then, the ASX travel share has risen by 5.6%.

Qantas ceased paying dividends in the first half of 2020 and has not yet reinstated them.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is currently $21.30, up 0.85% and up almost 13% over the past 12 months.

The ASX travel share has not yet managed to rise above its pre-pandemic trading levels.

At the time of the crash, Flight Centre shares dropped about 75% in value.

Then began a slow recovery to close at $19.50 on 21 February 2022.

Since then, the ASX travel share has risen by 9.6%.

Flight Centre ceased paying dividends in the first half of 2020 and resumed payments in late 2023.

The post What’s happened to ASX travel shares since COVID ended? appeared first on The Motley Fool Australia.

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More reading

• 7 ASX All Ords shares elevated to ‘strong buy’ status in March
• 3 ASX shares I think will lead the next bull market charge
• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Will Qantas shares pay a dividend in 2024?

Motley Fool contributor Bronwyn Allen has positions in Flight Centre Travel Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has positions in and has recommended Corporate Travel Management. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

BHP Group Ltd (ASX: BHP)

According to a note out of Goldman Sachs, its analysts have retained their buy rating on this mining giant’s shares with a trimmed price target of $49.20. The broker has been looking at the mining sector ahead of the release of quarterly updates later this month. It believes BHP will deliver a reasonably solid quarterly update, with copper and met coal production expected to increase quarter on quarter. Outside this, the broker continues to like BHP due to its attractive valuation, its optionality with a +US$20 billion copper pipeline and strong production growth, and its robust free cash flow generation. The BHP share price is trading at $44.67 on Thursday.

Newmont Corporation (ASX: NEM)

A note out of Citi reveals that its analysts have initiated coverage on this gold miner’s shares with a buy rating and $69.00 price target. The broker is feeling positive on the Newcrest Mining owner due to the sky high gold price and its expectation that prices will remain high in the second half of 2024. The only risks it sees are execution risks relating to the miner’s strategies. However, it appears relatively confident that the company can deliver meaningful free cash flow growth in the coming years. The Newmont share price is fetching $56.98 this afternoon.

Orora Ltd (ASX: ORA)

Analysts at Goldman Sachs have also retained their buy rating but cut their price target on this packaging company’s shares to $3.00. According to the note, Goldman was disappointed with Orora’s trading update earlier this week. While it was somewhat expecting the company to downgrade its Saverglass earnings expectations, it was surprised to see management do the same for its legacy business earnings. It notes that the key source of disappointment was its North America business, which had thus far demonstrated earnings resilience and strong margin expansion. In light of this, the broker has downgraded its earnings estimates through to FY 2026 and its valuation accordingly. However, it still sees plenty of value on offer with its shares and good (5%+) dividend yields over the coming years. The Orora share price is trading at $2.24 on Thursday afternoon.

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

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More reading

• Why hot ASX copper shares could have further to run
• Guess which ASX 200 gold stock this leading broker just tipped for 21% gains
• Should I buy BHP or Rio Tinto shares in April?
• 5 things to watch on the ASX 200 on Thursday
• Are your big ASX 200 mining dividends in for a chop?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 recommended Orora. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The price of copper has marched 12% higher over the past six months, bringing ASX copper shares along for the ride.

Today, the electrifying metal is perched at its highest point in 14 months, commanding a US$4.19 per pound price. Despite the recent performance, some analysts believe the rally is set to continue. If true, further upside in ASX copper stock might be only a matter of time.

Positive prognosis for Doctor Copper

Commodity prices are a function of supply and demand. Because of this, we can study the market for any expected changes in either of those two to give a glimpse into where prices might head in the future.

More supply and less demand can lead to much lower prices. Less supply and less demand can result in unchanged prices. But, less supply and more demand… that can be a recipe for a dramatic price increase, depending on the severity.

As it turns out, developments that could aid in reduced supply and greater demand for copper have unfolded over the past week.

Firstly, China moved closer toward potentially cutting copper production by 10% last week. These talks have come about as Chinese copper smelters struggle to refine the base metal economically. For example, a cargo of copper ore from ASX share BHP Group Ltd (ASX: BHP) reportedly offered $3 per tonne for treatment and 0.3 cents per pound for refining — a decade low, according to industry sources.

Secondly, loan changes could boost the demand side of the equation. As reported by Reuters, China’s central bank overnight announced the removal of minimum down payments on vehicle financing stipulated by the government.

Changes are being made to revitalise consumer spending in the largest vehicle market in the world.

China accounted for 69% of all new electric vehicle sales globally in December 2023. Hence, loosening loan conditions could mean increased demand for copper-heavy EVs.

An analyst at Wilsons, an Australian wealth firm, is also bullish on the year ahead for copper, saying:

Leaving aside copper’s strong long-term demand outlook, from a perspective the global macro environment is also supportive of copper demand over the next 12 months.

BHP and Sandfire Resources Ltd (ASX: SFR) are the firm’s top picks in the sector.

How are ASX copper shares performing today?

Aussie copper miners are basking in a mostly green day after copper prices surged overnight. Some are even setting fresh 52-week highs in today’s session, including:

• Sandfire Resources — up 2.8% to $9.09
• WA1 Resources Ltd (ASX: WA1) — up 15.6% to $14.50
• Metals Acquisition Ltd (ASX: MAC) — up 3.9% to $21.06

The BHP share price is down 0.4% despite the rally in copper prices. Shares in the ASX mining giant have underperformed the S&P/ASX 200 Index (ASX: XJO) over the past 12 months, falling 2.8% versus the benchmark’s 8% gain.

The post Why hot ASX copper shares could have further to run appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Should I buy BHP or Rio Tinto shares in April?
• 5 things to watch on the ASX 200 on Thursday
• Are your big ASX 200 mining dividends in for a chop?
• 3 ASX shares I think will lead the next bull market charge

Motley Fool contributor Mitchell Lawler 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.

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It’s understandable that many income investors search for ASX dividend shares that offer the safest streams of passive income.

For retirees and other investors who rely on dividend income to fund their living expenses, nothing is perhaps more important than having a good idea of what kind of paycheques one can expect over at least the next 12 months.

Unfortunately for us all, there’s really no such thing as a ‘safe’ dividend share. No company is under any obligation to increase or even maintain a dividend payment from year to year. Or pay a dividend at all, for that matter – a lesson we all painfully learned during the pandemic.

But there are still shares that can come close. So today, let’s talk about two of what I think are the safest dividend shares you can buy on the ASX today, judging by their records of paying out dividends for decades.

2 ‘safe’ ASX dividend shares paying income for decades

Wesfarmers Ltd (ASX: WES)

Wesfarmers may not exactly be a household name. But many of this sprawling retail and industrial conglomerate’s underlying brands are. They include Bunnings, Kmart, OfficeWorks, Target, Kleenheat Gas, King Gee and many more.

Wesfarmers is one of the oldest shares of the Australian stock market. It has managed to change with the times over its long history but has also retained assets that continue to deliver growth to its portfolio.

Nowhere is this more evident than Wesfarmers’ dividend track record. As an example, Wesfarmers paid out a total of $1.10 per share in dividends in 2009. By 2019, this had grown to $2.78 per share.

The company’s more recent payouts have been diluted thanks to the Coles Group Ltd (ASX: COL) spinoff in 2018. But investors have still enjoyed a dividend pay rise every year since 2020, which is significant considering the impacts of the pandemic.

Today, Wesfarmers shares offer a fully-franked dividend yield of 2.92%.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Next up, we have one of my favourite ASX dividend shares in investing house Soul Patts.

Like Wesfarmers, Soul Patts is a highly diversified business. It owns a huge portfolio of underlying assets, which include a concentrated ASX stock portfolio. This is dominated by stakes in companies like TPG Telecom Ltd (ASX: TPG), New Hope Corporation Ltd (ASX: NHC) and Brickworks Ltd (ASX: BKW).

Soul Patts’ assets also house a diversified, broader ASX stock portfolio, property, bonds, private credit and venture capital investments.

There may be no such thing as a safe dividend share, but in my view, Soul Patts is about as close as it gets. After all, this is a company with a 24-year and continuing streak of delivering annual dividend pay rises to its investors.

In 2012, this company gave its investors payouts worth a fully-franked 46 cents per share. But by 2023, that had risen to 87 cents per share.

Right now, Soul Patts shares are trading on a fully-franked dividend yield of 2.67%.

The post 2 safe ASX dividend shares that have paid income for decades appeared first on The Motley Fool Australia.

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• This ASX 200 stock is down 11% in under a month. Should you buy before it trades ex-dividend?
• Where I’d instantly invest $10,000 in ASX shares for passive income
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• Why today is a good day to own Wesfarmers shares

Motley Fool contributor Sebastian Bowen has positions in Washington H. Soul Pattinson and Company Limited and Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Brickworks, Coles Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Commonwealth Bank of Australia (ASX: CBA) shares have been on a tear over the past half year.

Six months ago, shares in the S&P/ASX 200 Index (ASX: XJO) bank stock were trading for $98.09. Today those same shares are worth $118.70, up 21%.

March even saw CBA shares break into new all-time highs, closing at $121.45 on 8 March.

And despite numerous analysts cautioning that its valuation is looking stretched, CommBank could continue to outperform, in part due to its market-leading adoption of artificial intelligence (AI).

CBA shares and AI

Perpetual Investment Management portfolio manager Anthony Aboud believes AI can benefit every ASX 200 bank stock.

But he calls out CBA shares as likely to gain the most, with Australia’s biggest bank quick to embrace AI. In FY 2023, the bank’s information technology expenses increased by 8% year on year.

“If you were to believe that there would be cost out efficiencies through AI initiatives, CBA has historically been the one bank which could be able to capitalise on that first,” Aboud said (quoted by Bloomberg).

As CBA moves to automate more of its processes, he said this will bring down costs, which will come as good news to shareholders.

And those costs are sizeable. According to Bloomberg data, CBA spent north of $7 billion in FY 2023 on its workforce.

In February, CBA shares got a lift after the bank reported it was rolling out cutting-edge AI technologies developed by Microsoft Corp (NASDAQ: MSFT).

As we reported at the time, CBA’s group chief information officer, Gavin Munroe, said the bank’s software engineering teams had been given access to Microsoft’s GitHub co-pilot. And he said their productivity was rocketing as a result.

Other tailwinds for the ASX 200 bank stock

Also offering some potential tailwinds for CBA shares is the outlook for lower interest rates.

Aboud said that as the RBA starts to cut the official cash rate, “Margins will probably stay stable” for CBA and the other big banks.

 “The probability of bad debts increasing with lower interest rates is probably lower, so they’ll probably do OK in that environment,” he added.

Indeed, if CBA opts not to pass on the full amount of any future rate cuts to borrowers, it could boost earnings and profits in the year ahead.

Investors are also increasingly optimistic inflation will come under control without Australia entering a recession.

As always, before buying CBA shares or another ASX stock, be sure to do your own research first, or reach out for some expert help.

The post Why this expert expects CBA shares will capitalise on AI appeared first on The Motley Fool Australia.

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More reading

• ASX expert: Sell CBA shares now
• Why March was a record-smashing month for the CBA share price
• Own CBA shares? It’s payday for you!
• 5 things to watch on the ASX 200 on Thursday
• Are CBA shares really worth $120?

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 positions in and has recommended Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. 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.

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Much to the relief of Aussie investors, the S&P/ASX 200 Index (ASX: XJO) is having a much better session on Thursday. In afternoon trade, the benchmark index is up 0.5% to 7,819.2 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is down almost 3% to $5.85. This is despite there being no news out of the infant formula company. However, it is possible that profit taking could be weighing on its shares today. After all, they remain up approximately 38% year to date despite this decline. Investors have been bidding the A2 Milk share price higher this year thanks to a stronger than expected performance in FY 2024. During the first half, A2 Milk reported a 3.7% increase in revenue to NZ$812.1 million and a 15.6% jump in net profit after tax to NZ$85.3 million.

Lindsay Australia Ltd (ASX: LAU)

The Lindsay Australia share price is down 2% to $1.03. This decline has been driven by the logistic services provider’s shares going ex-dividend for its interim dividend. In February, Lindsay Australia released its half-year results and reported a 23.9% increase in operating revenue to a record of $417.9 million and a 21.7% jump in underlying EBITDA to a record of $52.1 million. This allowed the company’s board to increase its interim dividend by 10.5% to a fully franked 2.1 cents per share. Eligible shareholders can now look forward to receiving this dividend later this month on April 19.

Meridian Energy Ltd (ASX: MEZ)

The Meridian Energy share price is down 2% to $5.47. Investors have been selling this energy company’s shares despite there being no news out of it today. Though, given that utilities are generally regarded as safe haven assets, it’s possible that some investors are dumping its shares today and moving back into risk assets after the market recovered from yesterday’s selloff. Meridian Energy shares remain up 10% over the last 12 months.

Opthea Ltd (ASX: OPT)

The Opthea share price is down over 2.5% to 73 cents. This morning, this retinal disease focused global biopharmaceutical company released a presentation relating to its Sozinibercept product. Management believes it has the potential to be the first product in more than 15 years to improve visual outcomes. It is addressing a high unmet need for wet age-related macular degeneration (AMD). And while the company estimates that it has a multi-billion dollar commercial opportunity in a growing market, investors don’t appear to be overly convinced based on its share price performance.

The post Why A2 Milk, Lindsay Australia, Meridian Energy, and Opthea shares are falling today appeared first on The Motley Fool Australia.

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More reading

• 7 ASX small-cap shares that are cheaper than the ASX 200 in March 2024
• Why is the A2 Milk share price up 46% year to date and at a 52-week high?
• This new catalyst could make A2 Milk shares a buy
• Here are the top 10 ASX 200 shares 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 positions in and has recommended Lindsay Australia. The Motley Fool Australia has recommended A2 Milk and Lindsay Australia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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