If you’re a growth investor and looking for options in March, then it could be worth checking out the two named below.

That’s because they have been tipped as buys by analysts at Goldman Sachs.

Here’s why the broker is feeling bullish about these ASX 200 growth shares:

TechnologyOne Ltd (ASX: TNE)

This enterprise software provider could be a top ASX 200 growth share to buy according to Goldman Sachs. Its analysts currently have a buy rating and $18.05 price target on its shares.

The broker believes TechnologyOne can hit its annual recurring revenue (ARR) target and expects this to support mid to high teen earnings per share growth through to at least FY 2026. It said:

In our view, the company is well placed to meet its A$500mn FY26 ARR target through a combination of SaaS flip uplift, net expansion and new customer growth. We see margin expansion resuming from FY24E onwards, which in combination with robust revenue growth should drive a mid-high teens EPS CAGR to FY26E, providing strong earnings visibility. TNE’s share price has historically been driven by its strong rate of compound earnings growth underpinned by its leading market position, high R&D investment and defensive public sector end markets.

Webjet Limited (ASX: WEB)

Goldman also believes that Webjet could be an ASX 200 growth share to buy. It has a buy rating and $8.10 price target on its shares.

The broker likes the online travel booking company due to its rapidly growing WebBeds business and structural growth opportunities. It explains:

Our Buy thesis on WEB is premised on 1) WEB demonstrating strong cash generation as the market recovers while current valuation continues to be impacted by macro concerns 2) We believe WEB’s Bedbanks business offers a structural growth opportunity and expect it to drive scale benefits, underpinned by system changes and ERP upgrades as WEB goes through the recovery cycle. 3) We believe the OTA business is exposed to the right channels with the ongoing shift towards digital bookings likely to aid WEB in growing its TAM as well as market share.

The post These ASX 200 growth shares could be strong buys in March appeared first on The Motley Fool Australia.

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More reading

• Brokers say these explosive ASX growth shares are buys with massive upside
• Here are the top 10 ASX 200 shares today
• Analysts tip 10% to 30% returns for these ASX growth shares in 2024
• Why Goldman Sachs rates these ASX growth shares as strong buys
• Webjet stock: 3 reasons it’s on my buy list

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

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If you want to strengthen your income portfolio this month with some new additions, then it could be worth looking at the ASX dividend shares listed below that brokers rate as buys.

Here’s what they are forecasting from them:

Deterra Royalties Ltd (ASX: DRR)

The first ASX dividend share that could be a buy for passive income is Deterra Royalties.

It owns a portfolio of royalty assets across a range of commodities. This includes royalties held over BHP Group Ltd’s (ASX: BHP) Mining Area C in the Pilbara region of Western Australia.

Morgan Stanley continues to see it as a top option for investors and is expecting some big dividend yields in the near term. It is forecasting fully franked dividends per share of 37 cents in FY 2024 and 34 cents in FY 2025. Based on the current Deterra Royalties share price of $4.97, this will mean yields of 7.4% and 6.8%, respectively.

The broker has an overweight rating and $5.65 price target on its shares.

Dexus Industria REIT (ASX: DXI)

Another option for income investors to look at is Dexus Industria. It is a real estate investment trust that owns high quality industrial warehouses across Sydney, Melbourne, Brisbane, Perth, and Adelaide.

Morgans is bullish on Dexus Industria and believes its portfolio will support the payment of dividends per share of 16.4 cents in FY 2024 and 16.6 cents in FY 2025. Based on the current Dexus Industria share price of $2.87, this will mean dividend yields of 5.7% and 5.8%, respectively.

The broker currently has an add rating and $3.18 price target on its shares.

Healthco Healthcare and Wellness REIT (ASX: HCW)

Analysts at Bell Potter see Healthco Healthcare and Wellness REIT as an ASX dividend share to buy.

It is a health and wellness focused real estate investment trust with a focus on hospitals, aged care facilities, and primary care properties.

Bell Potter expects the company to pay dividends of 8 cents per share in FY 2024 and 8.3 cents per share in FY 2025. Based on its current share price of $1.35, this represents dividend yields of 5.9% and 6.15%, respectively.

Bell Potter has a buy rating and $1.70 price target on its shares.

The post 3 ASX dividend shares to buy for a passive income boost 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.

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) ended its winning streak with a small decline. The benchmark index fell slightly to 7,660.4 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to fall again on Thursday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 15 points or 0.2% lower this morning. In late trade on Wall Street, the Dow Jones is down 0.3%, the S&P 500 has fallen 0.2%, and the Nasdaq is 0.5% lower.

Oil prices ease

ASX 200 energy shares including Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued session after oil prices eased overnight. According to Bloomberg, the WTI crude oil price is down 0.5% to US$78.39 a barrel and the Brent crude oil price is down 0.25% to US$83.44 a barrel. A rise in US inventories put pressure on prices.

Xero investor day

Xero Ltd (ASX: XRO) shares will be in focus on Thursday when the cloud accounting platform provider holds its inaugural investor day event. It’s possible that the company could provide a trading update at the event, as well as medium term growth targets.

Gold price edges lower

It could be a weak session for ASX 200 gold shares Newmont Corporation (ASX: NEM) and Northern Star Resources Ltd (ASX: NST) after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$2,040.2 an ounce. A stronger US dollar weighed on the precious metal.

Ramsay Health Care results

The Ramsay Health Care Ltd (ASX: RHC) share price will be on watch today when the private hospital operator releases its half-year results. Commenting on its expectations, Morgans said: “While post-COVID recovery has been slower than expected and inflationary pressure remains, we remain positive on the name, as activity levels continue to improve and operational efficiencies are moving in the right direction, with the long-term outlook strong, underpinned by market-leading positions and a unique, irreplaceable portfolio of assets.”

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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Savvy investors know that it’s time to pounce on ASX growth shares when the market is temporarily spooked despite the business remaining rock solid.

The startling fact is that the stock market is more emotional than it cares to admit, and often reacts harshly to short-term factors.

In this reporting season, I think Johns Lyng Group Ltd (ASX: JLG) is precisely in this situation.

The company presented its results on Tuesday morning, sending its share price plunging 20% in the first few minutes of trade.

That chaos has now nudged the total loss for Johns Lyng investors since April 2022 above the 30% mark.

Profit, earnings down after reporting season

The main culprit for this week’s panic seems to be a reduction in the half-year net profit after tax (NPAT).

Johns Lyng reported $31.1 million on Tuesday, as opposed to the $34.1 million for the first half of the 2023 financial year.

And that predictably led to a decrease in earnings per share (EPS), from 9.68 cents to 8.47 cents.

Perhaps Johns Lyng is a victim of its own past success here, as the stock has risen more than 400% in the past half-decade.

Expectations are high when a business grows that quickly, so the market dealt with this setback harshly.

But is Johns Lyng terminal?

Looking under the hood, the numbers were not convincingly indicative of a business in chronic decline.

“Johns Lyng said it had a record volume of Business as Usual (BaU) work during the quarter. This resulted in $426.1 million in revenue, up 13.7% on 1H FY23,” reported The Motley Fool’s Bronwyn Allen.

As much of Johns Lyng’s activities are related to natural disasters, the work can fluctuate over time. 

Revenue from the catastrophe (CAT) business did come in 35% lower compared to a record-breaking 1H FY23, when much of eastern Australia was suffering from heavy rains.

But management pointed out $120.4 million of CAT revenue collected this time is already 87% of the previous full-year forecast.

“This has led to an upgraded full-year revenue forecast of $177.8 million.”

The pros are sticking with the growth stock

A critical barometer for any investors considering swooping on Johns Lyng shares while they’re cheap is what the professionals think after the half-year numbers.

And it’s notable that none of the major broking houses have changed their ratings or target share price for Johns Lyng since Tuesday morning.

According to CMC Invest, five of seven analysts still believe the stock is a strong buy.

So for those willing to stick with it for the long run, this week could be an ideal opportunity to buy Johns Lyng at a discount.

The post 1 ASX growth stock down 30% to buy right now appeared first on The Motley Fool Australia.

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• Guess which ASX 200 stock is nosediving 20% on half-year results
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• I’d aim to turn a $20,000 savings account into $25,400 of passive income
• A once-in-a-decade chance to get rich from ASX 200 shares?

Motley Fool contributor Tony Yoo has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng 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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Rio Tinto Ltd (ASX: RIO) shares have long been a popular option for income investors.

And it isn’t hard to understand why.

The mining giant generates billions of dollars in free cash flow each year. It then uses this cash to reward its shareholders with dividend payments.

And while the size of the dividend may change regularly in response to commodity prices, the yields on offer with its shares are usually significantly greater than the market average.

This looks set to be the case again in 2024 following the release of the miner’s full-year results.

Last week, Rio Tinto’s board released its results and declared a fully franked final dividend per share of US$2.58 per share (A$3.96 per share). This was a 14.7% increase on the prior corresponding period and brought its full-year dividend to US$4.35 per share (A$6.67 per share).

Based on the latest Rio Tinto share price, this equates to yields of 3.2% for its final dividend and 5.4% for the full year.

But what’s next for the Rio Tinto dividend?

The good news for income investors is that there could be bigger dividends to come from Rio Tinto in the coming years.

According to a note out of Goldman Sachs, its analysts are now forecasting a modest increase to US$4.39 per share (A$6.73 per share) in FY 2024. This will mean a fully franked 5.45% dividend yield for investors.

A larger increase is expected in FY 2025, with Goldman expecting the miner to pay out US$4.61 per share (A$7.07 per share). If this proves accurate, it would mean a yield of 5.7% for investors.

Finally, in FY 2026, the broker expects the Rio Tinto dividend to be trimmed to US$4.55 per share (A$6.98 per share). This will still mean an attractive fully franked 5.65% dividend yield.

Goldman Sachs has a buy rating and $138.30 price target on the miner’s shares.

The post Here’s the Rio Tinto dividend forecast through to 2026 appeared first on The Motley Fool Australia.

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• 3 ASX dividend shares to buy before it’s too late
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Could you do with a second income of $24,000 each year?

Who couldn’t, right? That’s a huge overseas holiday each year, home renovation, or the kids’ school expenses taken care of.

It could even allow you to step down to part time work so you can free up time to spend with the family, pursue hobbies, or anything else that might make you happy.

I’m here to tell you that such a flow of passive income is not just a pie-in-the-sky dream. It is within the reach of ordinary Australians.

Here’s a hypothetical to consider:

Dividend stocks that also grow in valuation

In this sample scenario, let’s assume you have $40,000 to start investing.

I pick this as a reasonable figure because comparison site Finder last year found that this is about the level of savings that the average Australian has stored away.

There are many different strategies you can employ to grow this nest egg, but I’ll run with ASX dividend shares for this case.

There are some fantastic stocks out there that will not only pay you a serviceable dividend twice a year, but possess decent capital growth potential.

Take Ampol Ltd (ASX: ALD) and Super Retail Group Ltd (ASX: SUL) as examples.

They are paying excellent dividend yields of 7.1% and 6.3% respectively. Both are fully franked, so the amounts you actually receive may be more than that.

And the Ampol share price has risen 43% over the past five years, while Super Retail has rocketed 123%.

If you combine the two channels of returns, Ampol boasts a compound annual growth rate (CAGR) in excess of 14.5%. For Super Retail it’s a mind-blowing 23.6%.

If you have these types of winners mixed into a well diversified portfolio, assisted by franking credits, there is absolutely no reason why you can’t nab 12% a year.

It’s not like these are crazy speculative startup stocks. They are established players in the S&P/ASX 200 Index (ASX: XJO).

Save and invest for 11 years

Going back to that $40,000, if you keep that growing at 12% per annum while you add in an extra $250 each month and reinvest all the returns, you will be laughing in no time.

After 11 years of yearly compounding, that nest egg will have grown to $201,105.

From then, stop reinvesting the dividends and the capital growth. Just bank it as cash instead.

You will have turned on a perpetual tap that averages $24,132 of second income each year.

How good is that!

The post How I’d invest $250 a month in ASX dividend shares to target a $24,000 annual second income appeared first on The Motley Fool Australia.

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• Looking to bank the record Ampol dividend? Time is running out!
• Morgans says these ASX shares are buys (with special dividends to come)
• 25 ASX 200 shares with ex-dividend dates next week
• 1 ASX 200 dividend stock I’m buying for superior passive income in 2024
• Here are 3 ASX retail shares moving up to 19% on half-year results today

Motley Fool contributor Tony Yoo 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 Super Retail 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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Regular readers would know already that Nvidia Corp (NASDAQ: NVDA) is the hottest stock on the planet right now.

Customers are buying the company’s processing chips faster than it can make them, thanks to the huge computing power required for artificial intelligence (AI).

Nvidia’s last four quarterly results have all exceeded analysts expectations.

Accordingly, the share price has now gained a mind-blowing 239% over the past 12 months.

If you go back to October 2022, just before ChatGPT opened to the public and lit a fire under anything AI related, Nvidia stocks have surged 601%.

That’s a 7-bagger in just 16 months, folks.

So is it time to open up your US broking platform and grab some of this action?

The anxiety of flying stocks 

Of course, the big worry with stocks that have run up so much so fast is the lofty performance expectations on the business.

Nvidia could now be in a spot where even an update that merely meets expectations might not be enough to keep the stocks from sinking.

After all, there are plenty of short-term traders who will quickly pounce on any sign to offload their shares, take their winnings, and go home.

A related issue is that even if Nvidia keeps smashing it, the upside for the stock could be limited.

After the recent bull run, the PE ratio for the tech stock now stands at 66. 

According to TipRanks, the average share price target among 40 Wall Street analysts is US$867.93. That’s only about a 10% potential gain from the current level.

Sure, a 10% gain is nothing to sneeze at. But you could be severely disappointed if you’re buying Nvidia shares now with the hope that they’ll triple by this time next year.

Alternatives to Nvidia stocks

That is not to say Nvidia can’t keep this spectacular run going. Anything can happen.

But for me, with the uncertainty of whether that can happen or not, there are better uses of my spare investment cash.

Even if you want to invest in the same theme of computer chips or artificial intelligence, there are other stocks that could provide a better bang for buck.

Take Taiwan Semiconductor Mfg Co Ltd (NYSE: TSM) as an example.

The semiconductor maker is further up the supply chain, selling its products to chip makers such as Nvidia.

The TSMC share price has doubled since ChatGPT was unleashed in the world, so it has been no slouch for investors.

But the stock currently trades at a more sane PE ratio of 25, perhaps giving it more room to grow its valuation even if the future is not perfectly laid out.

All five Wall Street analysts covering TSMC reckon it’s a buy, according to TipRanks.

The post Should I buy Nvidia stock as an Australian investor? appeared first on The Motley Fool Australia.

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• 1 ASX stock I think is just as hot as Nvidia (without all the hype)
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Motley Fool contributor Tony Yoo has positions in Taiwan Semiconductor Manufacturing. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Nvidia and Taiwan Semiconductor Manufacturing. The Motley Fool Australia has recommended Nvidia. 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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This ASX defence stock blitzed the All Ordinaries Index (ASX: XAO) today, ranking as the fourth best-performing share on the list. Electro Optic Systems Holdings Ltd (ASX: EOS) relished in the bidding after releasing its full-year 2023 results.

Shares in the ASX defence company closed the day 17.5% higher at $1.88. Investors quickly warmed up to the latest figures, propelling shares beyond their $1.66 opening price.

Turnaround takes this ASX defence stock skyward

• Record revenue of $219.3 million, up 59% from from prior year
• Gross margin of 44% up from 34%
• Underlying EBITDA of $5.7 million, up from a $42.9 million loss
• Record operating cash flow of $113.1 million, up from $51.6 million of negative cash flow
• Net loss after tax narrowed to $34.1 million from $53.6 million

What else went on during FY23?

After a few harrowing years, progress is being made on righting the ship at Electro Optic Systems. The company is still booking losses, but orders and cash flow are heading in the right direction.

Between the two segments, defence and space, the former posted the largest increase in revenue. Specifically, defence revenue from continuing operations rose 49.4% to $155.4 million in FY23. Whereas space revenue climbed 31.9% to $63.9 million.

EOS landed several significant contracts throughout the year. In April 2023, the company secured two contracts to supply Ukraine with remote weapon systems valued at US$120 million. Later on, in May, EOS signed another deal valued at A$202 million to ‘modernise communications across the Royal Australian Navy fleet’.

The current geopolitical uncertainty was highlighted in today’s FY23 presentation. The conditions push defence spending higher, creating a ‘supportive market’ for Electro Optic Systems.

Additionally, the company is seeing a shift to cannon-based air defence as drones become more common in conflict. Two defence products targeting this segment were launched in 2023: the Counter-Drone Kinetic System and the Integrated Counter-Drone Laser Dazzler.

Lastly, bolstered cash flows were used to pay down debt during the year. Still, $50 million of debt remains (down from $70 million), amounting to $72.6 million with interest.

Looking ahead

No forecast was shared in the FY23 results, which tends to be typical in this industry. Nevertheless, an optimistic image was painted amid ongoing unrest across multiple regions, driving increased enquiries among NATO countries.

One of the presentation slides read, “Market conditions are expected to remain supportive for the foreseeable future”, which is vague but positive.

How has this ASX defence stock performed?

Clawing out of a deep hole, the EOS share price has been on a tear over the last 12 months. What was once a 54 cents per share stock is now $1.88, equating to an increase of 248%.

Few companies can attest to delivering that level of performance over the past year. Not even fellow ASX defence stock DroneShield Ltd (ASX: DRO) has undergone such a rally during this timeframe, despite posting its own record result today.

The post Why this ASX defence stock soared 16% on Wednesday appeared first on The Motley Fool Australia.

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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 positions in and has recommended DroneShield and Electro Optic Systems. 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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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 Block, Light & Wonder, and PolyNovo. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool Australia has recommended Light & Wonder. 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 seems to have become highly fashionable on the ASX to question the valuation of the Commonwealth Bank of Australia (ASX: CBA) share price of late.

CBA shares have enjoyed an extremely lucrative few months. It was only back in late October that the share price of the ASX 200’s largest bank stock was sitting around $96. But CBA has rebounded spectacularly ever since and has even spent 2024 so far hitting a series of new all-time record high share prices.

Today, CBA is sitting at $116.30 a share (at the time of writing), less than $2 away from its most recent all-time high of $118.24.

But this 20% rise since October has prompted many ASX experts to question the valuation that investors are now pricing Commonwealth Bank at. Earlier this month, my Fool colleague James went through ASX broker Goldman Sachs’ rather dim view of the bank.

ASX experts call out CBA share price as overvalued

As we discussed at the time, Goldman reiterated its sell rating on the CBA share price, giving it a 12-month price target of just $81.98. That implies CBA shareholders could be facing an approximate 30% haircut over the coming year.

Here’s some of what Goldman said to justify its bearishness:

…we do not think this justifies the 55% 12-month forward PPOP premium CBA is currently trading on versus peers (ex-dividend adjusted), compared to the 29% 15-year average… despite historically good performance on balancing investment and productivity, we stay Sell.

Goldman isn’t alone in this line of thinking either.

As reported by The Bull, Philippe Bui of Medallion Financial Group has also recently given the CBA share price a sell rating. And lo and behold, valuation concerns were central to this view as well.

Here’s what Bui had to say:

The CBA is the best of the big four banks, in our opinion. However, in the absence of strong earnings per share growth, it’s difficult to justify CBA’s premium compared to the other banks.

Statutory net profit after tax of $4.837 billion in the first half of fiscal year 2024 fell 8 per cent on the prior corresponding period. The net interest margin of 1.99 per cent was down 11 basis points.

In our view, it will be difficult to pay out increasing dividends if earnings don’t improve.

It is hard to ignore CBA’s valuation compared to even the other members of the big four. At current pricing, the CBA share price trades on a price-to-earnings (P/E) ratio of 20.33. In contrast, ANZ Group Holdings Ltd (ASX: ANZ) is sitting on a P/E of just 12.55.

This in effect means investors are paying 62% more for a dollar of CBA’s earnings than a dollar of ANZ’s.

That’s something all CBA shareholders might want to keep in mind.

The post Why the CBA share price premium is ‘difficult to justify’ appeared first on The Motley Fool Australia.

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More reading

• Up 20% in 4 months, where’s next for the CBA share price?
• Here’s the CBA dividend forecast through to 2026
• Why is the CBA share price sinking on Wednesday?
• High rates, falling profits: Why are ASX bank shares losing out this reporting season?
• You need to act fast if you want to receive the next CBA dividend

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 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.

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