The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Idp Education, Pro Medicus, and REA Group. The Motley Fool Australia has recommended Ansell, Idp Education, Premier Investments, Pro Medicus, and REA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Well, last night was one of the biggest nights of the year on both the political and economic calendars – Federal Budget night. It’s the night when the Treasurer tells us what the government intends to collect in terms of taxes. And where it intends to spend this money in government expenditure.

In other words, it’s a list of both economic winners and losers thanks to government intervention in the economy for the next financial year.

Last night was the Labor Party’s second budget since coming to power in the 2022 Federal election. It was also the second surplus the government has posted in as many years. This one represents a $9.3 billion difference between what the government takes out of the economy and what it puts back in expected over the coming financial year.

Since the budget is such a huge part of the economy, it can have significant impacts on the share market. Not to mention on individual ASX shares. So today, let’s discuss which ASX shares are set to benefit the most from what was announced last night.

First up, the budget implements the revamped ‘stage three’ tax cuts that have been on the cards for a while now. This will result in every Australian income taxpayer receiving a tax cut beginning on 1 July. In addition, every household in the country will also be eligible for a $300 energy bill rebate.

Which ASX shares are winners from last night’s federal budget?

For one, this will probably benefit energy generators and retailers like AGL Energy Ltd (ASX: AGL) and Origin Energy Ltd (ASX: ORG). That’s because consumers arguably won’t feel the full brunt of their energy use over the 12 months from 1 July.

But more money in pockets from both the tax cuts and the energy rebates will probably disproportionately flow through to consumer discretionary shares. Those might include Harvey Norman Holdings Ltd (ASX: HVN), JB Hi-Fi Ltd (ASX: JBH), Premier Investments Limited (ASX: PMV) and Super Retail Group Ltd (ASX: SUL).

But perhaps the centrepiece of last night’s Budget was the ‘Future Made in Australia’ policy. According to AMP economist Shane Oliver, this $22.7 billion program consists of a package of measures. These include tax breaks, loans, subsidies and cuts to red tape to facilitate additional investment in Australian critical mineral production and processing.

These critical minerals are all commodities needed for future-facing technologies like green hydrogen, renewable energy generation and rechargeable battery manufacturing. They include lithium, cobalt, rare earths, nickel and vanadium.

Most ASX shares that are involved in the mining, production or processing of one or more of these ‘critical’ commodities stand to be potentially massive winners from last night’s budget.

That’s probably why we saw big share price gains for the likes of Arcadium Lithium plc (ASX: LTM), Lynas Rare Earths Ltd (ASX: LYC) and Fortescue Ltd (ASX: FMG) today.

Foolish takeaway

So these are just some of the shares that might benefit the most from last night’s budget. We saw a notable market reaction for many of these shares today in response, but only time will tell exactly how much these shares will tangibly benefit from what was announced by the government last night.

The post Which ASX shares could be set to benefit from the federal budget? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Harvey Norman and Super Retail Group. The Motley Fool Australia has recommended Jb Hi-Fi and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Well, only 364 days until the 2025 Federal Budget! Start the countdown.

And, as a finance, economics and policy nerd, I’m only very slightly kidding!

But before we get to that, let’s take a look at what the Treasurer announced overnight in the 2024 Federal Budget.

The headlines?

Well, there’s a $9.3b Budget surplus. Given the size of our national debt and inflation pressures, that’s a good thing.

And, as we all well and truly know by now, every (income) taxpayer will get a tax cut from July 1. They’ll cost $105 billion over the next five years.

The new ‘what’s in it for me’ for everyone is a $300 saving on our energy bills (and $325 for one million small businesses), which will cost the Budget about $3.5 billion.

That’s the biggest of the big stuff announced yesterday, but it’s not the whole thing.

The government’s other ‘signature policy’, the focus-group-named ‘Future Made in Australia’ program will cost $23b over a decade.

Additionally, there’s $3b for additional medicines to be included in the Pharmaceutical Benefits Scheme, the previously announced $3b reduction in HECS/HELP debts and $1.9b in rent assistance. There’s also the best part of $1b for victims of domestic violence, and another $1b for more housing.

That’s a lot of ‘stuff’ to take in. And the numbers are mind-boggling.

Oh, and the bad news? This year’s surplus is expected to be the last one for yonks. Indeed, the cumulative surplus of the next 4 years is forecast at $112 billion, wiping out this year’s surplus a dozen times over.

Unfortunately, the Treasurer seems to have not received, or misplaced, my letter from yesterday. There is no Sovereign Wealth Fund. No structural Budget balance, and no plan to pay down the national debt.

And while the Budget was relatively restrained, there is spending in this Budget that will, unfortunately, put upward pressure on inflation. (Yes, the Treasurer said otherwise, but I don’t know how you put extra money into the economy from tax cuts and energy rebates and have it magically not put upward pressure on inflation, even if you think they’re justified).

I was asked on radio this morning: “You’ve been watching Budgets for years… what’s your verdict on this one?”

My answer: It’s better than it could have been, but not as good as it should have been.

How so? Let me explain.

I’m a broken record on Stage 3 tax cuts, but one more time: they’re unaffordable and irresponsible, because they add to the national debt and – notably at this time in particular – are inflationary.

The $300/$325 energy rebate/subsidy is not means-tested. There are plenty of people in our country who need every spare dollar the government can give them. And plenty of people who don’t. Giving everyone some money is politically convenient, but not economically responsible.

The Budget is still expansionary, despite the surplus. Which at first blush doesn’t seem possible. The reason is that the surplus comes primarily from sales of commodities to overseas customers. The ‘domestic balance’ is still stimulatory, overall.

And as I’ve written before, the ‘Future Made in Australia’ thing is very, very likely to be a waste of money. If there are new, profitable, things that business could be doing, it already would. And if it’s not profitable, there’s only a very slight chance that government subsidies can make it so… without those subsidies going on forever. And they’re subsidies that could otherwise be spent elsewhere or, more preferably, banked to help lower the national debt.

(Also, any assets – human and financial – that are dragged toward these subsidised activities would likely be coming from higher value activities elsewhere, so we lose, twice.)

Those are the very real downsides for the economy and the country from this Budget.

But it’s also true that the Treasurer (and his ministerial colleagues) could have spent more of the extra revenue on other things. That they didn’t, should count for something (yes, it’s a function of low expectations and bitter experience that ‘it could have been worse’ is a positive, but here we are!).

Much of the new spending is objectively worthwhile, too, on social and welfare grounds. Not everything needs an economic return to be justified.

It is, overall, a bit of a nothing Budget, though. Some handouts, as we’re used to expecting, but not that much in the way of newly announced spending. A surplus, which is welcome, but not particularly large, and not as a result of government policy… more just luck, internationally and domestically.

Not much ambition. No signature policies. No great nation-building. And no Sovereign Wealth Fund, unfortunately. But also, on the other side, no (new) grandiose spending plans of any significant scale.

So, a bit… nothing.

For all of that, every taxpayer and every household gets some extra cash from July 1. If that feels to you like a pre-election Budget, you’re not alone. I could be wrong, but this seems designed to make us all feel like we’re a little better off (even if it’s funded by national debt!), without scaring the horses.

And the investing takeaways? It’s really rare that any Federal Budget changes the outlook for the long-term investor. And that’s the way I feel about this one, too. In the short term, retailers might get a little bump when the tax cuts are spent and when people find they’ve got a few bucks left over from lower energy prices. Builders and building materials companies may benefit if the government’s plans for more housing come to fruition. Green energy and green metals may benefit – eventually – from some of the ‘Future Made in Australia’ piggybank, but that’s years away, and it’s unclear if the Opposition will support it, or retain it if they win the next election.

The bigger question for investors from any Budget should be ‘How does this impact the Australian economy over the next 5, 10 and 20 years?’.

The answer? It doesn’t change the outlook much, at all. Which isn’t as good as it sounds, given we have a large and growing national debt (and national interest bill). At some point we may need to reckon with the can that’s been kicked down the road by successive governments, but it shouldn’t (needn’t) derail our investing plans.

So, that’s a wrap. I’ll send the Treasurer my letter again next year. Hopefully with some time to think about it, he, and the Shadow Treasurer, might have an opportunity to plan for an even brighter future.

Fool on!

The post My 2024 Budget verdict appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Which ASX shares could be set to benefit from the federal budget?
• Buy this ASX 200 share for a 20%+ return
• Top brokers name 3 ASX shares to buy today
• Why Fletcher Building, Healius, Iperionx, and Iress shares are sinking today

Motley Fool contributor Scott Phillips 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.

If you’re looking to bolster your investment portfolio’s returns, then it could be worth looking at the ASX 200 share in this article.

That’s because analysts at Bell Potter believe that a total return in excess of 20% is possible over the next 12 months.

Which ASX 200 share is the broker bullish on?

The stock in question is Eagers Automotive Ltd (ASX: APE). It is an automotive retailer with a significant network of dealerships sprawling across Australia.

According to a note from this morning, the broker has reiterated its buy rating on the ASX 200 share with a slightly trimmed price target of $14.75 (from $15.20).

Based on its current share price of $12.55, this implies potential upside of 17.5% for investors between now and this time next year.

But the returns won’t stop there according to Bell Potter. It expects Eagers Automotive to pay 74 cents per share fully franked dividends in FY 2024, FY 2025, and FY 2026.

This represents 5.9% dividend yields at current prices and boosts the total 12-month return to approximately 23.5%.

To put that into context, a $20,000 investment would turn into almost $25,000 if Bell Potter is on the money with its recommendation.

What is the broker saying?

Bell Potter notes that the ASX 200 share is due to hold its annual general meeting next week. In previous years, the company has provided a trading update at the event and the broker expects this to be the case this year.

The note reveals that its analysts are expecting a relatively flat start to FY 2024 compared to the same period last year. It said:

Eagers will hold its AGM next week on Wednesday, 22nd May and as per usual we expect the company to provide a trading update for the year-to-date (ytd). We expect underlying net profit before tax for the first four months of 2024 to be roughly in line with the pcp as we see the positive of much stronger Toyota sales in Australia for the ytd (up 45% versus pcp) to be largely offset by the negatives of a lower contribution from BYD (due to the clearance of Atto 3’s) and any impact from the cyber security incident in late 2023.

Nevertheless, the broker believes its shares are undervalued based on its current 11x earnings multiple and deserves to trade at 12.5x earnings. It said:

We have reduced the multiples we apply in the PE ratio and EV/EBITDA valuations from 13x and 6x to 12.5x and 5.75x and also increased the WACC we apply in the DCF from 9.0% to 9.2% given the uncertainty around the trading update and the potential for the ytd performance to be flat to slightly down. The result is a 3% decrease in our PT to $14.75 which still >15% premium to the share price so we maintain our BUY recommendation.

The post Buy this ASX 200 share for a 20%+ return 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.

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Macquarie, its analysts have retained their outperform rating and $48.50 price target on this gaming technology company’s shares. The broker is feeling confident ahead of the company’s half year results release this week. It is expecting a result in line with consensus expectations. This will mean earnings growth of approximately 6% year on year. After which, the broker believes Aristocrat is well positioned to accelerate its growth thanks to the diversity of its portfolio. This is expected to offset any competitive pressure in the key North American market. The Aristocrat share price is trading at $40.60 at the time of writing.

CSL Ltd (ASX: CSL)

Analysts at UBS have retained their buy rating and $330.00 price target on this biotherapeutics giant’s shares. This follows the release of a quarterly update from the company’s collections partner, Terumo. It notes that Terumo’s update revealed that it has ramped up the rollout of CSL’s new Rika collection platform to more centres in the United States. In fact, the ramp up appears to be ahead of schedule, with the FY 2024 target already reached. This can only be good news given the benefits of the new technology on plasma yields. The CSL share price is fetching $284.02 on Wednesday afternoon.

Eagers Automotive Ltd (ASX: APE)

A note out of Bell Potter reveals that its analysts have retained their buy rating on this auto retailer’s shares with a trimmed price target of $14.75. Unlike Aristocrat Leisure, a reasonably mixed update is expected from Eagers Automotive next week. Bell Potter is expecting the company’s underlying net profit before tax for the first four months of 2024 to be broadly in line with the prior corresponding period. This is due to strong Toyota sales in Australia being largely offset by the negatives of a lower contribution from BYD and any impact from its cyber security incident. Nevertheless, due to its low earnings multiples and big dividend yield, the broker feels its shares are great value at current levels and retains its buy recommendation. The Eagers Automotive share price is trading at $12.54 on Wednesday.

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

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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 and Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a strong session on Wednesday. At the time of writing, the benchmark index is up 0.5% to 7,763.8 points.

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

Fletcher Building Ltd (ASX: FBU)

The Fletcher Building share price is down a further 3% to a new multi-year low of $2.66. Investors have been selling this building materials company’s shares this week following the release of a disappointing trading update. Management advised that market conditions across the company’s Materials and Distribution divisions have weakened throughout FY 2024. As a result, it expects to fall short of its EBIT (before significant items) guidance of NZ$540 million to NZ$640 million. It now expects a result in the range of NZ$500 million to NZ$530 million. Fletcher Building also warned that it expects market conditions to remain challenging in both New Zealand and Australia in the near term.

Healius Ltd (ASX: HLS)

The Healius share price is down almost 7% to $1.25. This appears to have been driven by the release of a broker note out of Morgan Stanley. According to the note, the broker has reiterated its underweight (sell) rating on the pathology services company’s shares with a $1.00 price target. Morgan Stanley has concerns that the company debt refinancing announcement is a sign that operating conditions have deteriorated further during the second half.

Iperionx Ltd (ASX: IPX)

The Iperionx share price is down almost 5% to $2.02. This has been driven by news that the titanium metal and critical materials company has completed an institutional placement. The company has received firm commitments for a placement of 26.2 million new shares at a discount of $1.91 per new share. This will raise gross proceeds of $50 million before costs. The proceeds from the placement will be used to scale titanium manufacturing capacity at IperionX’s operations in Virginia. This includes new equipment at the Advanced Manufacturing Center, final design, and engineering studies to increase titanium production capacity to ~2,000 metric tons per annum.

Iress Ltd (ASX: IRE)

The Iress share price is down 4% to $8.11. Investors have been selling this financial technology company’s shares after it released an update on unauthorised access to its user space on GitHub. Management advised that in the course of the investigation, it has now been discovered that a credential within Iress’ GitHub user space was stolen and used to gain access to Iress’ OneVue production environment. The OneVue production environment contains client data and Iress is investigating the extent and nature of the data accessed. At this time, it has found no evidence that the remainder of Iress’ production environment, software or client data has otherwise been compromised.

The post Why Fletcher Building, Healius, Iperionx, and Iress shares are sinking 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 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.

Three ASX All Ords shares are setting the bar high on Wednesday, surging as much as 20%.

The All Ordinaries Index (ASX: XAO) is up a healthy 0.5% in afternoon trade amid some tailwinds from the federal budget. But these three ASX All Ords shares are leaving those gains in the dust.

So, without further ado…

Three ASX All Ords stocks rocketing higher

First up is global education services provider IDP Education Ltd (ASX: IEL).

The IPD share price closed yesterday at $15.88. In earlier trading today, investors had bid up the ASX All Ords share to $18.07, up 13.8%. After some likely profit taking, shares are currently swapping hands for $16.75 apiece, up 5.5%.

IDP looks to be benefiting from the news that the stock is going to be included in the MSCI Global Small Cap Index commencing in June. This could see investors from across the world trading the stock.

Launched in 2001, MSCI notes:

The MSCI World Small Cap Index captures small cap representation across 23 developed markets countries. With 4,130 constituents, the index covers approximately 14% of the free float-adjusted market capitalisation in each country.

Also rocketing higher today is ASX All Ords share Chalice Mining Ltd (ASX: CHN).

Chalice Mining shares closed yesterday at $1.46. In afternoon trade today, they are changing hands for $1.60 apiece, up 9.8%.

With no fresh news out from Chalice Mining, investors may be buying shares with expectations that the Federal budget could offer ongoing tailwinds for the miner.

Among the details released last night, the government revealed its $22.7 billion Future Made in Australia (FMIA) plan will provide $13.7 billion in tax incentives for green hydrogen and processed critical mineral production.

That could align well with Chalice Mining’s Julimar project in Western Australia, which hosts platinum group elements, nickel, copper, cobalt and gold. Chalice has previously flagged that the Julimar could provide the foundation for a world-class green metals project.

Which brings us to the third ASX All Ords share soaring today, Renascor Resources Ltd (ASX: RNU).

Renascor shares closed yesterday trading for 10 cents. Those same shares are currently swapping hands for 12 cents apiece, up a blistering 20% today.

Renascor also looks to be a beneficiary of potential additional government support for its graphite mining and processing operations.

On 30 April, prior to the release of the new budget, the ASX All Ords share reported:

The previously announced and conditionally approved $185 million loan facility from the Australian government’s $4 billion Critical Minerals Facility has been approved to be utilised to fast track the construction of Renascor’s proposed graphite mining and processing operation, the upstream portion of Renascor’s Battery Anode Material (BAM) Project in South Australia.

The post 3 ASX All Ords shares going gangbusters on Wednesday appeared first on The Motley Fool Australia.

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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 Idp Education. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.