CSL Ltd (ASX: CSL) shares have a long history of delivering market-beating returns for investors.
For example, over the last 15 years, the biotechnology giant’s shares have generated an average total return of 16.55% per annum.
To put that into context, a $10,000 investment back in 2009 would have grown to be worth approximately $99,500 today.
And while the market has historically delivered a very solid 10% per annum return, CSL’s outperformance has led to significantly greater wealth creation than if you had just invested the same $10,000 into an index fund.
For instance, $10,000 compounding at 10% per annum would grow to become approximately $42,000 in 15 years.
That’s less than half the return of CSL shares during the same period. Clearly it has been a great stock to hold in your portfolio.
But does this remain the case today? Let’s see if CSL can be a market-beater again in the future.
Can CSL shares beat the market?
Analysts at Morgans are feeling very positive about the company’s outlook. So much so, CSL has been named on the broker’s best ideas list again this month. Morgans said:
While shares have struggled of late, we continue to view CSL as a key portfolio holding and sector pick, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares trading at 25x, a substantial discount (20%) to its long-term average.
The broker has an add rating and $315.40 price target on its shares. This implies potential upside of 12% for investors from current levels.
Bigger returns to come
Over at Macquarie, its analysts are even more bullish on CSL shares. Macquarie currently has an outperform rating and $330.00 price targets on them. This suggests that potential upside of almost 17% is possible over the next 12 months.
But the returns won’t stop there according to the broker. Macquarie is so positive on the medium term outlook for the key CSL Behring business that it sees scope for the CSL share price to climb beyond $500 within three years. If this proves accurate, it would mean a return of 77% from current levels.
While nothing is guaranteed in the investment world, it is fair to say that analysts are quite confident that CSL can continue its market-beating ways long into the future. Time will tell if that is the case.
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CSL wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended CSL. 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) is out of form and trading lower. At the time of writing, the benchmark index is down 0.45% to 7,813.5 points.
Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:
The Australian Ethical share price is up 5% to $4.62. This follows news that the investment company has entered into a binding agreement to acquire the sustainable fixed income asset management business, Altius Asset Management, from Australian Unity. Once complete, it will see Australian Ethical grow its funds under management (FUM) from $10.3 billion to $12.3 billion. This will be an increase of 19%. Management highlights that the proposed acquisition is consistent with its strategy to serve the growing potential addressable market created by the structural drivers favouring responsible investing.
The Cromwell Property Group share price is up over 7% to 46.7 cents. This morning, the property company announced that it has agreed to sell its European fund management platform and interests to Stoneweg for $457 million. Management notes that the transaction continues the company’s strategy to simplify the business and transition to a capital light fund management model. It also allows Cromwell to focus on its core competencies in Australia and New Zealand.
The Smartpay share price is up 10% to $1.22. This follows news that the payments company has signed a contract with Cuscal Payments NZ. The contract will see Cuscal provide payment processing services to support Smartpay provide acquiring services in New Zealand. CEO Marty Pomeroy said: “This is a significant milestone in Smartpay’s ongoing partnership with Cuscal and the journey to becoming a trans-tasman instore payments provider, and realising a transformational opportunity for our organisation.”
The Xero share price is up 9% to $135.07. Investors have been buying the cloud accounting platform provider’s shares following the release of its FY 2024 results. Xero reported a 22% increase in operating revenue to NZ$1.71 billion for the 12 months. This was underpinned by a 419,000 increase in subscribers to 4.16 million and a 14% lift in average revenue per user to NZ$39.29. On the bottom line, the company swung from a loss of NZ$133.5 million to a sizeable profit of NZ$174.6 million. Xero CEO, Sukhinder Singh Cassidy, said: “This result shows we’re doing what we said we’d do. We’ve delivered a strong and profitable FY24 result and Rule of 40 outcome, demonstrating our commitment to balancing growth and profitability.”
Should you invest $1,000 in Australian Ethical Investment right now?
Before you buy Australian Ethical Investment shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Australian Ethical Investment wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Australian Ethical Investment and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Australian Ethical Investment. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
An orange tributary of the Kugororuk River in Alaska.
Joshua Koch, US Geological Survey
Scientists say that dozens of waterways in Alaska are "rusting," or turning into a dirty orange.
They said permafrost thawing in the summer is now exposing minerals to the surface, releasing metals and acid.
Some brooks and streams are turning so acidic that they're comparable to lemon or orange juice.
At least 75 of Alaska's brooks and streams have been turning a dirty orange likely due to thawing permafrost, with some rivers so impacted that the discoloration can be seen via satellite, a new study says.
This phenomenon, which researchers say comes amid unusually rapid warming in the region, was first observed in the northwestern state in 2018, scientists told Business Insider's Jenny McGrath in January.
The researchers have been stumped by it for years. But their findings, published Monday in the peer-reviewed Communications Earth & Environment journal, say that the waterways' rusty color likely comes from minerals uncovered by the thaw.
Previously locked beneath Alaska's permafrost, these minerals are now exposed to water and oxygen, causing them to release acid and metals like zinc, copper, iron, and aluminum, the study said.
The dissolved iron is thought to be the main culprit behind the "rusting" of the rivers, which typically occurs in July and August when the thaw is the most pronounced.
But the implications of the melt go far beyond color. These waters are becoming so acidic that some are registering pH levels of 2.6, or between the equivalent of the acidity of lemon juice and orange juice.
Pure water has a pH value of 7. Rivers and lakes typically have a pH value of 6.5 to 8, and acid rain has a pH value of 4.2 to 4.4.
A stream tributary of the Akillik River in Kobuk Valley National Park, Alaska turned orange between 2016 (left) and 2018 (right).
Jon O'Donnell/National Park Service
"These findings have considerable implications for drinking water supplies and subsistence fisheries in rural Alaska," researchers wrote.
They added that the region has already suffered the "complete loss" of two fish species due to the acidity: juvenile Dolly Varden trout and the Slimy Sculpin. Chum salmon and whitefish are also at risk of population decline, they said.
The changes could be devastating for indigenous tribes in the region, which rely heavily on fishing, researchers noted.
The 75 orange streams observed were scattered across northern Alaska over a span of about 600 miles, the study said. All of them were in remote areas, miles away from human activity that could impact land, such as roads or mining.
Researchers highlighted satellite images of the Agashashok River, a tributary of the Kuguroruk River, and the Anaktok Creek tributary of the Salmon River in northwest Alaska. They said all three have turned considerably redder in the summer months of the last 10 years.
An orange tributary joins the Kuguroruk River in Alaska.
According to the administration's multiagency report, Alaska's fishing and tourism industries, which collectively provide more than 90,000 jobs and $2.57 billion in wages, are also at risk, with fish stocks expected to collapse and winter tourism likely falling.
OpenAI pressured departing employees to sign NDAs or risk losing vested equity, Vox reported.
Equity is crucial in tech compensation, often outweighing lower starting salaries.
CEO Sam Altman and OpenAI said they will not claw back equity.
OpenAI's turbulent month continues, with a series of stories highlighting how the company has pressured departing employees over tech's most precious commodity: stock.
A Vox story on Saturday said the company could take back vested equity if departing employees did not sign a non-disparagement agreement.
Equity often makes up the majority of tech employees' compensation packages. They trade relatively lower starting salaries for big upside potential years later — if a company makes it big, their equity could be worth millions of dollars.
"For a company to threaten to claw back already-vested equity is egregious and unusual," California employment law attorney Chambord Benton-Hayes told Vox.
On Saturday, OpenAI CEO Sam Altman said on X, "Vested equity is vested equity, full stop."
A new Vox story questions the CEO's tweeted claim that he "did not know this was happening." Wednesday's Vox report cites unnamed former employees and leaked OpenAI documents.
An April 10, 2023 document seen and publishedby Vox on Wednesday shows that Altman signed incorporation documents for the holding company that handles OpenAI's equity.
The document, in Vox reporter Kelsey Piper's words, "contains multiple passages with language that gives the private company near-arbitrary authority to claw back equity from former employees or — just as importantly — block them from selling it."
Compensation packages in the tech industry, especially at startups, often include shares of equity and provisions around how investors, including employees, can sell their shares before a company goes public. Startups typically want to manage who owns pieces of equity.
Employee told not signing could impact equity
Vox noted that OpenAI's type of NDA was unusual.
Separation agreements with the NDA language were signed by OpenAI execs, including general counsel and chief strategy officer Jason Kwon. Vox reported that Kwon apologized internally for the languagein the documents, which had been standard since 2019, saying, "The team did catch this ~month ago. The fact that it went this long before the catch is on me."
Altman on Saturday said on X that OpenAI had never clawed back anyone's equity and will not do so, even if employees don't sign a non-disparagement agreement.
"This is on me and one of the few times i've been genuinely embarrassed running openai; i did not know this was happening and i should have,"he posted on X.
On Wednesday, an OpenAI spokesperson told Business Insider:
As we shared with employees today, we are making important updates to our departure process. We have not and never will take away vested equity, even when people didn't sign the departure documents. We'll remove nondisparagement clauses from our standard departure paperwork, and we're releasing former employees from existing non-disparagement obligations unless the nondisparagement provision was mutual. We're communicating this message to former employees. We're incredibly sorry that we're only changing this language now; it doesn't reflect our values or the company we want to be.
The Vox report said some former employees were given seven days to sign their separation agreements. OpenAI pushed back against at least two employees who asked for more time to review the agreement, Vox reported.
Not signing "could impact your equity," OpenAI told one of them, per Vox.
OpenAI has had a rough week following a well-received demo of its new model GPT-4o. On Monday, it was revealed that Altman had asked Scarlett Johansson to voice OpenAI's new assistant and she declined. Still, last week's demo immediately drew comparisons between the since-pulled "Sky" assistant voice and Johansson's. She is retaining legal counsel.
This Sky incident, multiple high-profile departures, the dissolving of the company's Superalignment team, and the Vox reports have led to questions about the running of the company that is at the forefront of building potentially world-upending AI technology.
More than two months later, she said on Wednesday at the Hudson Institute that she would indeed vote for Trump — while again signaling that he will have to do more to reach out to her voters.
"Trump would be smart to reach out to the millions of people who voted for me and continue to support me and not assume that they're just going to be with him," she said. "And I genuinely hope he does."
And the numbers bear her out.
In state primaries that have taken place since Haley dropped out, her voters have not all jumped ship. As my colleague John Dorman wrote earlier this month, this was evident in the recent Indiana primary, where Haley took 21% of the vote.
Dorman writes:
Similar to results in states like Virginia and North Carolina, Trump performed strongly in Indiana's rural counties. However, the former president still has a suburban problem, as evidenced by his numbers in the Indianapolis area, with many moderates and GOP-leaning independents continuing to be leery of his 2024 candidacy.
In a tight election, it comes down to turnout. In 2020, Biden won Pennsylvania, a key swing state, by about 80,000 votes, and he beat Trump with a little more than 11,000 votes in Georgia. In 2016, Trump beat former Secretary of State Hillary Clinton by about 22,000 in Wisconsin, but Biden won the state in 2020 with around 20,000 votes.
If Trump doesn't woo Haley's voters — key voters in suburban areas — and they stay home from the polls, that could hurt him in key swing states.
According to an April Axios report, "In Chester County, Haley won 25% of the vote; in Delaware, she won 23%; in Montgomery, she won 25%, and in Bucks, 19% of the vote went to Haley."
In Wisconsin and Georgia, Haley took double-digit shares of the votes in key counties.
Trump cannot win without these suburban voters, Vince Galko, a Pennsylvania GOP strategist, told Axios at the end of April, "especially in states like the Rust Belt states of Pennsylvania and others."
For the moderate suburban voters who have been swaying toward Haley only time will tell if they will follow her decision and also vote for Trump.
The last time Haley called on Trump to reach out to her supporters, he instead insinuated that they were "Radical Left Democrats" before asking for their support.
Google CEO Sundar Pichai (left) and Meta CEO Mark Zuckerberg (right).
Justin Sullivan via Getty Images; Alex Wong via Getty Images
Ex-Reddit CEO Yishan Wong says tech giants are obsessed with AI but shipping bad products.
"The big internet giants are in a state of memetic competition over AI," Wong said.
Wong said tech companies are forcing everyone to use their LLM-powered products.
Tech giants are letting their obsession with AI affect the quality of the products they're launching, former Reddit CEO Yishan Wong said on Wednesday.
"The big internet giants are in a state of memetic competition over AI, with Google's existential fear of OpenAI in the center ring," Wong said in a post on X, formerly Twitter.
"This is leading to all of them integrating LLM-powered AI into their products, but the AI sometimes gives flawed answers, which is problematic in products where the existing quality/accuracy expectation was higher," Wong continued.
Wong is no stranger to the tech world.
Before taking over the reins of Reddit in 2012, Wong spent nearly a decade in leadership and engineering roles in PayPal and Facebook, per his LinkedIn profile.
The Carnegie Mellon University graduate was Reddit's CEO for nearly two years before leaving the social network in 2014. Wong is currently the CEO of Terraformation, climate change-focused and forest restoration startup.
"What this means is that now we're getting shittier products because the tech giants are obsessed with 'competing on AI' instead of just delivering good and useful products," Wong said on Wednesday.
The big internet giants are in a state of memetic competition over AI, with Google's existential fear of OpenAI in the center ring.
This is leading to all of them integrating LLM-powered AI into their products, but the AI sometimes gives flawed answers, which is problematic in…
"With cars, people could still keep using horses. It wasn't a wholesale product changeover – people adopted as the product improved," he added.
Wong's former company Reddit does seem eager to cash in on the AI revolution. In February, the social media platform said Google was licensing its content to train their AI models. Reddit struck a similar deal with OpenAI this month as well.
Representatives for Wong didn't immediately respond to requests for comment from BI sent outside regular business hours.
"The vision is that there will be a Tony Stark like Jarvis assistant in your phone that locks you into their ecosystem so hard that you'll never leave," Jenson wrote. "That vision is pure catnip. The fear is that they can't afford to let someone else get there first."
To be sure, established companies like Google and Meta have been scrambling to catch up with upstarts like OpenAI in the AI race.
But having deep pockets and resources hasn't really given the tech giants the leg-up they might've been hoping for.
Likewise for Meta, whose decision to roll out its AI-powered chatbot across its social media platforms drew derision from their users. Instead of a regular search bar, Facebook, WhatsApp, and Instagram users were now stuck with a chatbot that can't be turned off.
Do you remember how the COVID-19 market crash began, with ASX 200 shares plummeting almost 700 points in just five trading days?
Oh, the shivers up my spine! And that was just the start of it, too.
ASX 200 shares vs. property during the COVID crash
The first case of COVID-19 was registered in Australia on 31 January 2020.
Just three weeks later on 21 February, there was fear in the share market.
The S&P/ASX 200 Index (ASX: XJO) closed at 7,139 points on Thursday, 20 February… and then began its month-long fall. The benchmark index hit its trough of 4,546 points on 23 March.
All up, ASX 200 shares cratered 2,593 points or 36.3% over those four-and-a-bit weeks.
That was a terrible month for investors and a scary time for all of us for many other reasons, too!
Meantime, in the property market…
Discussions among experts about potentially large price falls due to COVID-19 began in March 2020.
SQM Research director Louis Christopher said a 30% decline in Sydney and Melbourne home values was possible in his worst-case scenario.
At best, property could be described as experiencing a ‘blip’ compared to what happened to ASX 200 shares.
The national median value fell for five consecutive months in 2020, but only in small amounts.
According to CoreLogic data, the median value declined -0.4% in May, -0.7% in June, and -0.6% in July. It then fell a further -0.4% in August and -0.1% in September.
Shares vs. property: Which has done better since COVID?
In analysing shares vs. property and their performance since COVID-19 hit us, it is clear that ASX 200 shares have come out the winner if we take an overall view.
Meantime, the ASX 200 has risen 50.2% from 31 March 2020 to 27 March 2024.
So, ASX 200 shares win from an overall perspective.
But as you’ll see below, some capital city and regional property markets did better than 50.2% growth.
So, it’s fair to say that both asset classes have delivered impressive gains since COVID-19.
Pandemic property boom
Emergency low interest rates, government stimulus payments such as Jobkeeper, and the ability to work from home, thanks to technology, enabled many homeowners to continue repaying their loans.
The banks offered loan repayment holidays to those doing it tough to limit arrears. A moratorium on evictions stopped landlords from evicting tenants who couldn’t pay their rent due to job losses.
Lockdowns prevented people from leaving their homes, and open homes were disallowed for periods.
These were some of the factors that kept the housing market from collapsing during the first year of the pandemic. After that, a boom ensued, and home values soared across the country.
The prolonged period of emergency low interest rates was an incredibly powerful factor in the boom.
Once-in-a-lifetime rock-bottom mortgage rates encouraged more people to upgrade their homes or buy more property investments after lockdowns were lifted.
A lack of stock for sale kept supply lower than demand, forcing prices higher across the nation.
Creagh notes several trends during the pandemic. These include regional property prices growing faster than capital city prices as thousands of people who could work from home left the major cities.
People also left expensive inner-city areas to buy larger and more affordable homes in city outskirts areas.
Creagh said:
At the very onset of the pandemic, there was a pause in the housing market as lockdown restrictions, closed borders and uncertainty weighed, with many thinking home prices would fall.
In fact, the opposite occurred. Housing demand surged, and along with record low interest rates and limited stock for sale, combined to drive a price boom that saw national prices growing at the third-fastest rate in Australia’s history.
After the pandemic boom, prices began to fall shortly after the Reserve Bank began increasing interest rates in May 2022. But this price moderation did not last long.
Strong population growth after the border reopened, continuing low stock for sale, a tight rental market and continuing low unemployment led to a new property growth cycle commencing in early 2023.
Creagh commented:
Net migration has hit record levels since the international borders reopened, and insufficient housing supply coupled with strong demand has offset the higher interest rate environment and deterioration in housing affordability.
Here is how property prices moved between March 2020 and 2024, according to REA’s PropTrack data.
Property market
Median home value
Price growth March 2020 – March 2024
Sydney
$1,069,000
34.7%
Melbourne
$802,000
17.2%
Brisbane
$801,000
63.1%
Adelaide
$723,000
64%
Perth
$660,000
57.3%
Hobart
$662,000
36.1%
Darwin
$482,000
25.1%
ACT
$827,000
37.4%
Regional New South Wales
$715,000
51.6%
Regional Victoria
$584,000
40.6%
Regional Queensland
$647,000
66.5%
Regional South Australia
$439,000
66.2%
Regional Western Australia
$496,000
55.5%
Regional Tasmania
$501,000
53.6%
Regional Northern Territory
$424,000
9.4%
Source: REA Group, PropTrack
V-shaped COVID recovery for ASX 200 shares
As stated earlier, ASX 200 shares fell 36.3% between 20 February and 23 March 2020.
Then began the recovery in a fairly pronounced V-shape, as shown in the chart below.
ASX 200 shares went from the trough of 4,546 points on 23 March to 6,198.6 points on 9 June. From there, the benchmark index moved sideways before a Santa Rally in November and December 2020.
The chart shows the journey from there through til today.
During the four-year period we are examining in this article, ASX 200 shares rose 50.2%.
Today, the ASX 200 shares index is 7,799.1 points, down 0.62%.
And a fun fact: the ASX 200 reached a new all-time high of 7,910.5 points on 1 April.
5 top rising ASX 200 shares over 4 years
Here are the ASX 200 shares that had the highest share price growth between 31 March 2020 and 31 March 2024, according to data from S&P Global Market Intelligence.
As you can see, ASX lithium shares and ASX uranium shares dominate the list.
Should you invest $1,000 in Boss Resources Limited right now?
Before you buy Boss Resources Limited shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Boss Resources Limited wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
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 REA Group. The Motley Fool Australia has recommended REA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The BHP Group share price is down 2.5% to $45.02. The market has responded negatively to news that the Big Australian has made a third offer for Anglo American plc (LSE: AAL). And while the offer has been rejected, the two parties will continue discussions for another week. Commenting on the rejection, the Anglo American board said: “The Board considered BHP’s Latest Proposal carefully, concluded it does not meet expectations of value delivered to Anglo American’s shareholders, and has unanimously rejected it.” It then adds that it is “willing to continue to engage with BHP and its advisers on this topic and has therefore requested a one week extension to the PUSU deadline which has been consented to by the Panel.”
The Nufarm share price is down over 4% to $4.81. This follows the release of the agricultural chemicals company’s half year results. Nufarm reported revenue of $1.8 billion but a statutory net profit after tax of just $49 million. The good news is that a stronger second half is expected. Nufarm CEO, Greg Hunt, said: “Despite challenging conditions, Nufarm delivered a solid result for the first half of fiscal 24. For FY24 we expect EBITDA of between $350 million and $390 million. The mid-point of our guidance implies growth of 25% YoY in EBITDA in the second half of FY24.”
The Peninsula Energy share price is down almost 7% to 11.2 cents. This uranium miner is in the process of raising funds. Earlier this week, it revealed that strong demand and support was received from both new and existing global institutional and sophisticated investors as part of its fully underwritten $105.9 million equity raising. The retail component of this raising opened this morning. The proceeds are expected to fully fund operations at the flagship Lance Projects to sustainable free cash flow in 2025.
The Regis Resources share price is down 7.5% to $1.96. Investors have been selling Regis Resources and other ASX gold shares on Thursday following a sharp pullback in the gold price overnight. This has seen the S&P/ASX All Ordinaries Gold index lose almost 4% of its value today.
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Bhp Group wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
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.
The first ASX 200 share getting hit with a downgrade is building materials company James Hardie Industries (ASX: JHX).
The James Hardie share price is up 22% over 12 months but down 20% in 2024. Shares are up 1.4% today at $47.84.
The company reported its full-year results on Tuesday. The past year’s results looked solid, with net sales up 4% year on year to US$3.94 billion. But the outlook for the year ahead looks to have led to the broker downgrades.
Earnings guidance for FY 2025 fell short of consensus expectations. And management noted that the outlook for its housing markets “continues to remain uncertain”.
With those results in mind, JP Morgan cut its rating for James Hardie shares to ‘neutral’ with a $50 price target, which is some 4% above current levels.
Macquarie also reduced its price target by 12% to $55. But the broker raised the ASX 200 share to an ‘outperform’ rating.
According to Macquarie (quoted by The Australian):
The group has made strong progress on cost and working capital reduction and improving the efficiency in procurement and R&D spend. These factors set the group up well for an eventual broad-based recovery.
Which brings us to the second ASX 200 share getting hit with a broker downgrade, Sonic Healthcare Ltd (ASX: SHL).
The Sonic Healthcare share price is down 28% over the past 12 months. Shares are up 3.5% today, however, at $25.40.
The medical diagnostic company released a disappointing earnings update on Tuesday, which saw management cut full year revenue and earnings guidance. The company flagged headwinds including inflation, adverse currency exchange rates, and delayed margin improvement initiatives.
On the back of this update, Citi cut its target price on Sonic Healthcare shares by 19% to $25.
Moving on, the third ASX 200 share getting a downgraded broker outlook is Telstra Group Ltd (ASX: TLS).
The Telstra share price is down 21% over the past 12 months. Shares are up 0.6% today at $3.44 apiece.
Australia’s biggest telco announced some significant organisational restructuring on Tuesday.
Among the bombshells, the ASX 200 share said that ongoing inflationary cost pressures will see 2,800 employees cut from its workforce.
And in a move that looks to have spurred the broker downgrade, Telstra said it was axing its annual inflation-linked postpaid mobile plan price reviews.
On the back of the update, Macquarie cut Telstra to a ‘neutral’ rating with a $3.70 price target.
The broker cited the removal of the inflation-linked price hikes as a “key negative” for the stock.
According to Macquarie analyst Darren Leung:
While Telstra indicated this provides them with greater flexibility to respond to market conditions, we view it as a negative for the industry when the market leader is no longer leading the upward price trajectory.
Put another way, pricing decisions are now increasingly dependent on Telstra’s peers, who have had a mixed track record.
Which brings us to the fourth ASX 200 share getting a broker downgrade, Westpac Banking Corp (ASX: WBC).
Westpac hasn’t released any price-sensitive reports since its half-year results on 6 May.
The Westpac share price is up 26% over the past 12 months. Shares are down 1.1% today at $26.78.
Despite today’s dip, Goldman Sachs believes that, like its peers, the big four bank’s valuations are still stretched. The broker cut Westpac shares to a ‘sell’ rating with a $24.10 price target.
Goldman Sachs analyst Andrew Lyons noted:
With earnings risks more balanced, valuations skewed heavily to the downside, and our analysis suggesting previous sector de-ratings not being catalysed by absolute or relative earnings downgrades, we take a more negative view on the banks.
Should you invest $1,000 in James Hardie Industries Plc right now?
Before you buy James Hardie Industries Plc shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and James Hardie Industries Plc wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 Goldman Sachs Group, JPMorgan Chase, and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool Australia has recommended Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Betashares Nasdaq 100 ETF (ASX: NDQ) has just hit another all-time high today. During late morning trading on Thursday, shares in the exchange-traded fund (ETF) were peaking at $43.16.
As shown in the chart below, the ETF has lifted 15% in 2024 and 133% in the last five years.
Is the NDQ ETF a buy at an all-time high?
Of course, past performance is not a reliable indicator of future performance, but the chart above shows how the NDQ ETF has continued to eclipse its previous all-time highs.
Ultimately, a company’s financial and operational performance drives the share price over the long term. And the biggest businesses within the Betashares Nasdaq 100 ETF have succeeded in steadily growing earnings. These include Microsoft, Apple, Nvidia, Amazon, Broadcom, Meta Platforms and Costco.
I think the US technology stocks, including Alphabet, Microsoft, and Nvidia, have powered the ETF’s latest all-time high.
Indeed, Nvidia has reported its FY25 first quarter, which showed annual revenue growth of 262% to $26 billion, and adjusted earnings per share (EPS) jumped 461% to $6.12. These numbers beat market expectations.
Additionally, the NDQ ETF gives Aussies exposure to 100 globally leading US businesses that deliver products, services, and technological advancements that are changing how people work, learn, communicate, and entertain themselves. These are the sorts of companies we should want to own in our portfolio.
Finally, its annual management fee is 0.48%, which is cheaper than most active fund managers and, therefore, relatively appealing.
Does the valuation make sense?
According to BetaShares, at the end of April 2024, the NDQ ETF was trading on a forward price/earnings (P/E) ratio of 24.6x, which is higher than other share markets like Australia and the United Kingdom.
However, the large US tech names have delivered long-term earnings growth, which the market continues to underestimate. I think a higher valuation is justified if future earnings growth is (expected to be) strong.
The US share market could be volatile in the next year or even the next four years. But if profit keeps rising over the rest of the decade, the NDQ ETF can generate adequate returns to 2030.
While I’d prefer to invest in the Betashares Nasdaq 100 ETF at a lower price, I still think its five-year return can outperform the S&P/ASX 200 Index (ASX: XJO).
Should you invest $1,000 in Betashares Nasdaq 100 Etf right now?
Before you buy Betashares Nasdaq 100 Etf shares, consider this:
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Betashares Nasdaq 100 Etf wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Suzanne Frey, an executive at Alphabet, is a member of The Motley Foolâs board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Foolâs board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. 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 Alphabet, Amazon, BetaShares Nasdaq 100 ETF, Costco Wholesale, Meta Platforms, Microsoft, and Nvidia. 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 positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
