The Woodside Energy Group Ltd (ASX: WDS) share price is in the green.

Shares in the S&P/ASX 200 Index (ASX: XJO) oil and gas stock closed on Friday trading for $27.21. In earlier trade, shares were swapping hands for $27.49 apiece, up 1.0%.

At the time of writing, the ASX 200 energy stock has given back some of those gains and is trading for $27.23 a share, up 0.1%.

That still sees the Woodside share price racing ahead of the ASX 200 today, with the benchmark index down 1.3% at this same time.

Here’s what’s happening.

What’s supporting the Woodside share price today?

The Woodside share price looks to be catching tailwinds from two fronts today.

First, a rising oil price.

Global oil prices saw a sizeable uptick over the long King’s Birthday weekend. On Friday, Brent crude oil was trading for $US79.62 per barrel. Today that same barrel is trading for US$81.88, up 2.8%.

Oil prices have been under pressure recently following the decision by the Organization of Petroleum Exporting Countries and their allies (OPEC+) to begin unwinding their production cuts in the fourth quarter of 2024.

Noting the three-week slide in oil prices, Fawad Razaqzada, a market analyst at City Index said (quoted by Bloomberg), “At the start of this week, traders have decided to buy the dip. With the US driving season underway, demand is likely to recover, keeping the downside limited for now.”

Also likely helping the Woodside share price outperform today is the company’s announcement it has achieved its first oil from the Sangomar field, located 100 kilometres offshore of Senegal. Woodside highlighted that this marks the safe delivery of Senegal’s first offshore oil project.

The deepwater Sangomar Field Development Phase 1 project includes a stand-alone floating production storage and offloading (FPSO) facility. The nameplate capacity stands at 100,000 barrels per day. The project includes subsea infrastructure designed to allow further development phases.

“This is a historic day for Senegal and for Woodside,” Woodside CEO Meg O’Neill said.

O’Neill continued:

First oil from the Sangomar field is a key milestone and reflects delivery against our strategy. The Sangomar project is expected to generate shareholder value within the terms of the production sharing contract.

Delivering Senegal’s first offshore oil project safely, through a period of unprecedented global challenge, demonstrates Woodside’s world-class project execution capability. We are proud of the relationships we have formed with PETROSEN, the government of Senegal and our key international and local contractors to develop this nationally significant resource.

Commenting on the first oil milestone that could help support the Woodside share price longer-term, Thierno Ly, general manager of PETROSEN said:

First oil from the Sangomar field marks a new era not only for our country’s industry and economy, but most importantly for our people…

We have never been so well positioned for opportunities for growth, innovation, and success in the economic and social development of our nation.

Woodside said the project’s cost estimate remains within the provided range of US$4.9 billion to US$5.2 billion.

The drilling campaign is ongoing, and Woodside said it expects to continue commissioning activities and ramping up production through 2024.

The Woodside share price is down 20% over the past 12 months.

The post Why is the Woodside share price racing ahead of the benchmark today? appeared first on The Motley Fool Australia.

More reading

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• Why is the Woodside share price tumbling on Tuesday?

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.

Today, I will be looking at two ASX large-cap stocks that are catching investors’ eye with their recent performance.

ANZ Group Holdings Ltd (ASX: ANZ) and Qantas Airways Ltd (ASX: QAN) have both seen significant gains this year and are on expert’s radars.

And with the S&P/ASX 200 Index (ASX: XJO) advancing just a little more than 2% this year to date, these could be attractive options for anyone looking to add solid performers to their portfolio.

Here’s why these two ASX large caps could be cheap right now.

Is ANZ a cheap ASX large-cap stock?

ANZ shares are currently trading at $29.18 just after the open on Tuesday. This marks a nearly 13% increase this year year-to-date. According to Goldman Sachs and UBS, ANZ shares could continue to deliver impressive returns.

UBS has set a price target of $30 for ANZ shares, implying an around 3% upside from the current level. According to my colleague Tristan, the broker reckons ANZ will generate earnings per share (EPS) of $2.29 in FY24, with a growth of 5.7% to $2.42 in FY25.

This growth could stem from ANZ’s recently announced $2 billion share buyback, which reduces the number of shares on issue and enhances EPS.

Meanwhile, Goldman Sachs analysts rate ANZ a buy thanks to its “large pipeline available which can be used to offset cost inflation”.

“We continue to see upside for [ANZ] Group returns due to accretive mix shifts in the Institutional business towards higher ROE Payments and Cash Management business”, the broker said, adding ANZ trades at a discount to the sector, excluding dividends.

ANZ has outperformed the ASX 200 Index by over 18% in the last 12 months, with a 26% rise compared to the index’s 9% gain. It currently trades at a price-to-earnings ratio (P/E) of 12.8.

This tells me investors are paying less for $1 of the banks’s earnings than they are for the iShares Core S&P/ASX 200 ETF (ASX: IOZ), the index fund tracking the benchmark, with a P/E of 18 times.

The earnings yield is 7.7% at this P/E. When combined with the ASX large-cap stock’s trailing dividend yield of 6.1%, this represents potential value in my opinion.

Are Qantas shares undervalued?

The Qantas share price is up 15% this year and currently trades at $6.20 apiece. Despite this rise, many analysts believe Qantas shares are still undervalued compared to its peers.

Goldman Sachs recently added Qantas to its June Asia-Pacific conviction list. The broker says the airline is primed to grow beyond its pre-pandemic ranges. It expects Qantas to produce EPS of 85 cents in FY24 and 96 cents in FY25, which is significantly higher than the 57 cents per share reported in 2019.

Qantas currently trades at a P/E ratio of 6.7, which is well below the average P/E of 9.1 for its regional and US competitors, according to Goldman.

If Qantas hits its projected EPS of 96 cents in FY25 and its P/E converges to the peer average, this implies a potential share price of $8.64, as I’ve discussed previously.

Goldman Sachs has set a price target of $8.05 for Qantas shares, implying a potential upside of 29% from the current price.

This valuation makes Qantas shares look cheap in my view. It offers potential upside for investors with a substantial margin of safety.

But it’s not just the potential disconnect in valuation. Several factors could drive Qantas shares higher. Goldman Sachs highlights that the airline’s cost-out program, operational performance improvements and potential positive trading updates could also boost investor confidence.

It also expects Qantas to potentially return $1.2 billion to shareholders as dividends over FY 2025-2027.

Conclusion

ANZ and Qantas might present compelling opportunities for investors seeking ASX large-cap stocks with strong growth potential.

With their solid performance and attractive valuations, experts say these stocks could be worth considering for your portfolio.

As always, conduct your own due diligence and remember to consider your personal financial circumstances.

The post 2 ASX large-cap stocks that look cheap right now appeared first on The Motley Fool Australia.

More reading

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• Here’s where I see the Qantas share price ending in FY 2025
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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 S&P/ASX 200 Index (ASX: XJO) is down 1.1% today, but you can’t blame this rocketing ASX 200 share.

Shares in the auto parts company closed on Friday trading for $4.36. In earlier trade on Tuesday, shares were swapping hands for $4.99 apiece, up 14.5%. After some likely profit-taking, shares are currently trading for $4.88, up 11.9%.

This comes after management confirmed media speculations of a potential takeover offer at a significant premium to Friday’s closing price.

Any guesses?

If you said Bapcor Ltd (ASX: BAP), give yourself a virtual gold star.

Here’s what’s happening.

ASX 200 share in takeover crosshairs

The ASX 200 share is rocketing today after reporting it had received a non-binding, indicative proposal from Bain Capital after market close on Friday.

The United States-based private investment firm is seeking to acquire all of Bapcor’s shares by way of a scheme of arrangement. This would see Bapcor shareholders receive $5.40 cash per share, adjusted for any dividends paid or declared after this proposal.

That’s almost 24% higher than Friday’s closing price, explaining why the Bapcor share price is having such a stellar run today.

Bain’s offer values the ASX 200 share, which has some 1,100 Autobarn, Autopro and Burson stores, at more than $1.8 billion.

Amid the media speculations of a takeover offer, the board said it was disclosing its receipt of the indicative proposal before concluding its assessment. The board stressed that the proposal remains subject to a number of conditions being met.

“The board cautions that at this time there is no guarantee that the indicative proposal put forward by Bain Capital will result in a binding offer or that any transaction will eventuate,” they stated.

Macquarie Capital has been appointed as Bapcor’s financial adviser and Allens as its legal adviser.

Investors in the ASX 200 share were advised they do not need to take any action at this time.

How have Bapcor shares been tracking?

Bain Capital is lobbing its bid for Bapcor after a sizeable share price retrace for the auto parts retailer.

Before market open today, the ASX 200 share was down almost 27% over the past 12 months. Though that doesn’t include the 21 cents a share in fully franked dividends Bapcor paid out over this period.

The stock has been under pressure following profit downgrades amid rising costs. The company has also struggled with its top management, with Paul Dumbrell backing out of his appointment as CEO in April, just days before he was meant to take up the helm.

The post Guess which ASX 200 share just rocketed 15% on a $1.8 billion takeover offer appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
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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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The GQG Partners Inc (ASX: GQG) share price has delivered excellent performance over the last six months, surging more than 70%. In comparison, the S&P/ASX 200 Index (ASX: XJO) has gained around 9% over the same time period.

Despite the huge rise in the GQG share price, I still think it’s a long-term opportunity due to the progress the business is making and what I believe is still a good valuation.

The fund manager, based in the US, offers clients a variety of different investment strategies including US shares, emerging market shares, and global shares. It also offers investment options like dividend shares.

There are a few reasons I’m still excited about this company.

Solid growth rate

GQG’s growth is reliant on an increase in its funds under management (FUM).

The company’s main investment strategies have outperformed their respective benchmarks, which helps organically grow the FUM and also helps attract more FUM from clients.

As of 31 May 2024, GQG’s FUM had reached US$150.1 billion, up from US$120.6 billion at 31 December 2023. That’s an increase of 24% in just five months.

In the five months to May 2024, the ASX All Ords company experienced net inflows of US$9.1 billion – it’s seeing a lot of extra client money flowing in, which is compelling and suggests inflows could continue at a decent rate in the coming months.

The business charges minimal (or no) performance fees via its funds, so nearly all of its revenue comes from management fees. FUM growth is key to delivering revenue growth.

Operating leverage

Fund managers can deliver rising profit margins as they grow because their costs may not rise as much as revenue.

For example, a funds management business doesn’t need an additional 10% more people or a 10% bigger office if its FUM grows by 10%.

The business has rapidly grown in the last two years, so it has increased its expenditure to reflect the global fund manager it has become, including geographic expansion (such as Australia). But, I believe operating leverage will be displayed in the next few years and the company’s profit margins can increase.

In GQG’s 2023 result, net revenue rose 18.5% and net profit after tax rose 18.7%.

Low earnings multiple

Fund managers don’t usually trade on a high price-to-earnings (P/E) ratio, so we’re able to buy the earnings at a reasonable multiple compared to some other sectors.

GQG is valued at 16x FY23’s distributable earnings and the fund manager has grown significantly since FY23. Its average FUM for FY23 was US$101.9 billion – the ASX share’s FUM (as at May) is currently 47% higher than this, suggesting pleasing earnings growth over the next 12 months.

The company is committed to a dividend payout ratio of 90% of its distributable earnings. Based on Commsec’s dividend estimate for FY24 and FY25, GQG is valued at 13x FY24’s estimated distributable earnings and 12x FY25’s estimated earnings.

Good dividend

GQG is predicted to pay an annual dividend per share of 18.2 cents in FY24 and 19.9 cents per share in FY25, translating into forward dividend yields of 6.9% and 7.5%, respectively (GQG’s financial year runs on the calendar year, so the FY24 annual dividend is still a prediction).

While these are not the biggest dividend yields on the ASX, I think they could be among the better yields from a company that’s still growing at a decent pace.

The post This low-profile $7.8 billion ASX share has risen 70% in 6 months. I’d still buy it! appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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.

There are a good number of options on the Australian share market for investors looking for exposure to the retail sector.

But which ASX retail shares are in the buy zone right now? Well, six that analysts at Bell Potter are bullish on are listed below.

But first, let’s take a look at what the broker is saying about the sector. Commenting on the retail sector, Bell Potter said:

We make earnings changes to LOV & TPW driven by medium to long term revisions and PFP as we factor in the acquisitions announced yesterday. We also increase our target earnings multiples for LOV & UNI which see our LOV, UNI, TPW & PFP price targets increasing 17%, 9%, 6% and 2% respectively. We’ve seen the Consumer Disc. sector (ASX200) testing its 10-year median P/E multiple (20.5x) back in Jul-23, however materially re-rating since then towards a high point in late Mar-24 (25.8x), and thereafter a correction back to 22.5x.

In this backdrop, we identify key opportunities where the valuations are well supported by distinctive growth traits and also clearly identifiable large TAM opportunities. Our key picks are the two global rollout names, LOV & PMV and also AX1 & UNI given the potential income tax cut benefit from 1Q25 to the younger consumer demographic and short-term catalysts for UNI associated with fast-approaching supportive comps.

Let’s now take a look at six ASX retail shares that the broker is recommending as buys. They are as follows:

Accent Group Ltd (ASX: AX1)

Bell Potter has a buy rating and $2.50 price target on this footwear retailer’s shares. This implies potential upside 25% for investors from current levels.

Cettire Ltd (ASX: CTT)

This online luxury products retailer’s shares could be great value following recent weakness. The broker has a buy rating and $3.01 price target on its shares, which suggests potential upside of 28% for investors.

City Chic Collective Ltd (ASX: CCX)

Bell Potter has a buy rating and 62 cents price target on this plus sized women’s fashion retailer’s shares. Based on its current share price of 28 cents, this implies that its shares could more than double in value from current levels.

Lovisa Holdings Ltd (ASX: LOV)

Another ASX retail share that the broker is bullish on is fashion jewellery retailer Lovisa. It has a buy rating and $36.00 price target, which suggests that they could rise of 15% for investors.

Premier Investments Limited (ASX: PMV)

Bell Potter thinks that Smiggle and Peter Alexander owner Premier Investments could be in the buy zone. The broker has a buy rating and $35.00 price target on its shares. This implies potential upside of 21% for investors.

Universal Store Holdings Ltd (ASX: UNI)

A final ASX retail share that could be a buy is Universal Store. Bell Potter has a buy rating and $6.15 price target on the youth fashion retailer’s shares. Based on its current share price of $5.12, this would mean potential upside of 20%.

The post 6 ASX retail shares to buy this month appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Lovisa and Universal Store. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa. The Motley Fool Australia has recommended Accent Group, Cettire, Lovisa, and Premier Investments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

A2 Milk Company Ltd (ASX: A2M) shares have risen around 70% in 2024 to date, as shown on the chart below. Despite recent Chinese headwinds, the company is expected to see growing profit in the coming years.

This leading New Zealand infant formula business has managed to navigate the difficulties and uncertainties caused by the COVID-19 pandemic, and investors now seem to be looking forward to a positive outlook.

With the FY24 half-year result, the company noted it had gained a “significant” market share in the Chinese label infant formula over the prior few years, leading to revenue and earnings before interest, tax, depreciation and amortisation (EBITDA) growth.

The A2 Milk Chinese infant formula market share has reached 6.4%, “becoming one of the most successful brands in China and in the top-5 overall.” The business has focused on more ‘controlled’ channels, away from the daigou channel.

A2 Milk warned that due to China’s annual birth rate declining, it may take until FY27 (or later) to reach its $2 billion target of annual revenue rather than FY26. It’s still targeting an EBITDA margin “in the teens”.

Having said all of that, the business is still expected to deliver growth in the next few years, according to the broker Goldman Sachs’ estimates on Commsec.

FY24

In FY23, the business generated NZ$1.59 billion of revenue, NZ$219.3 million of EBITDA and NZ$155.6 million of net profit after tax (NPAT).

Goldman Sachs expects growth across all those financial metrics in the 2024 financial year, which ends this month.

The broker thinks A2 Milk’s annual revenue can increase to NZ$1.69 billion (up 6%), which could support EBITDA rising by 8% to NZ$237.4 million. The NPAT could increase 9% to NZ$169.8 million based on the projections.

If those predictions come true, it shows the company’s profit margins could grow, which would be a positive for A2 Milk shares.

FY25

Goldman Sachs suggests the business could continue growing in FY25.

Annual revenue is projected to rise another 6.25% to NZ$1.79 billion in FY25, with EBITDA increasing by 15.5% to NZ$274.2 million. NPAT could then grow another 13.3% to NZ$192.4 million. So, the predictions suggest another year where profit could rise faster than revenue, implying improving margins.

FY26

The broker thinks there could be yet another year of earnings growth for owners of A2 Milk shares in the 2026 financial year.

A2 Milk’s annual revenue is predicted to rise another 5% to NZ$1.89 billion, with EBITDA projected to increase 10.7% to NZ$303.6 million and NPAT predicted to rise around 12% to NZ$215.2 million.

The infant formula market has been difficult to forecast over the last five years with a lot of unpredictability. Still, if the company can keep growing earnings, it could be a helpful tailwind for A2 Milk shares.

The post Here is the earnings forecast out to 2026 for A2 Milk shares appeared first on The Motley Fool Australia.

More reading

• My ASX share portfolio has two giant weeds in it. Should I pull them out?
• How ASX shares vs. property performed in May
• Here are the top 10 ASX 200 shares today
• Up 63%: The A2 Milk share price just hit a new 52-week high
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.