Starting from just a modest amount, anyone can build an ASX stock portfolio to fatten up for a significant flow of passive income later.

Just $20,000, which is about half the savings that the average Australian has in their bank account, can get you started.

I reckon, eventually, you could sit back and watch an average of $25,000 every year land in your bank account.

It’s all possible using the power of compounding.

Check this out:

Invest and keep adding to it

Let’s hypothetically assume you can build a portfolio with that $20,000 that can, over the long term, average a compound annual growth rate (CAGR) of 12%.

I contend that this is reasonable, with diligent research and stock selection.

Quality businesses like Johns Lyng Group Ltd (ASX: JLG) and Lovisa Holdings Ltd (ASX: LOV) have managed to return 40.6% and 23.3% per annum over the past five years.

So with a mixture of those sorts of winners, some neutrals and the inevitable losers, there’s no reason why your $20,000 can’t grow at 12% a year.

Just practice sensible diversification, and act on sensible advice.

But it’s not just about investing and then forgetting about it.

Big rewards only come with hard work, and you need to keep saving and adding to this investment.

Assuming that you can afford to add $400 a month, after 12 years of monthly compounding, the nest egg will have grown to $211,436.

Passive income after 12 years of 12%

Now let’s have some fun.

From the 13th year, sell off the 12% gains each year.

That will provide you with an annual passive income of $25,372.

Mission accomplished.

Of course, the share market can be volatile so you won’t receive this much every single year. 

In some years, the passive income will be far less. In others, it will be much more.

But if you maintain a portfolio with a 12% CAGR, over the long run the cash flow will average out to $25,372.

The moral of the story is that regardless of how much you can afford to put in, start investing.

You can’t buy time, but it’s such an important ingredient.

The post I’d aim to turn a $20,000 savings account into $25,400 of passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has positions in Johns Lyng Group and Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group and Lovisa. The Motley Fool Australia has recommended Johns Lyng Group and Lovisa. 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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Investing for the long-term makes a lot of sense to me, so I’m going to talk about three ASX shares that I think are buys and that I could own for the rest of my life.

If we own an ASX share forever, it would reduce brokerage costs and it might reduce how much capital gains tax we’re required to pay along the way compared to if we had regularly sold those holdings for a gain.

Holding for the long term also means we’re giving compounding the longest time to work its magic.

With that in mind, these are the three ASX shares I’d choose.

Telstra Group Ltd (ASX: TLS)

Telstra seems to be the clear leader in the telecommunications sector, and it’s adding many more thousands of subscribers every reporting period. Not only that, but mobile price increases are also leading to a growing average revenue per user (ARPU), which is offsetting Telstra’s cost increases.

An internet connection seems to be becoming more important as the years go by. It’s being used more for e-commerce, connecting with government services, banking, work, education, entertainment and so on.

I don’t think the internet is going away – I’d suggest most households and businesses see the internet bill as an essential one to pay for beyond the foreseeable future.

I’m more confident about Telstra’s ultra-long-term outlook than the shorter-term because of the chance that 5G (or 6G) could be faster and better than what the NBN can provide. That could mean that households and businesses switch en masse to wireless internet, which may enable Telstra to capture much more of the broadband profit margin (rather than paying a lot to the NBN).

The ASX share seems committed to paying appealing dividends each year, which is promising for shareholders wanting cash flow.  

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns farmland across Australia, in a number of sectors including cattle, vineyards, almonds, macadamias and cropping.

The business is achieving rental growth in a few different ways. Most of its tenancy contracts have rental income growth built-in, either with fixed increases or CPI-linked inflation increases, with some having occasional market reviews.

The ASX share is regularly investing in improvements at its farms, such as increased water access, better infrastructure or altering the farm type to a profitable choice, such as macadamias.

Farmland has been a useful asset for thousands of years. I think that’s going to continue for decades or even centuries.

As long as management makes sure the portfolio is focused on the right commodities and ensures it doesn’t take on too much debt, I think this could be a very long-term investment.

It’s currently paying an annualised distribution of 11.73 cents per unit, which is a forward yield of 5.3%.

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

This ASX share is the one that I’d feel most confident about holding for the ultra-long term.

It operates as an investment house, meaning it invests in other assets on behalf of shareholders.

This company has already been operating for over 120 years, so it has proven it has longevity.

It is invested in a number of sectors including resources, building products, property, agriculture, financial services, credit/bonds, electrical parts and many more.

The investment flexibility allows it to find opportunities across various sectors and business sizes. One of the most attractive features of the business is that it can invest in both public and private businesses.

I think its portfolio can still be performing well for many years from now, and paying dividends. It has grown its dividend every year since 2000 and paid a dividend each year since 1903.

This ASX share may well be my biggest position 10 years from now, 20 years from now and 30 years from now. I like that its portfolio is positioned to deliver both capital growth and dividend growth.

The post 3 ASX shares to buy and hold forever appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Rural Funds Group, Telstra Group, and Washington H. Soul Pattinson and Company Limited. 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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Tech shares led the ASX 200 market sectors for the second consecutive week, with a 3.29% gain over the past five trading days. This comes on top of last week’s 6.2% rise, so tech investors must be cheering!

The S&P/ASX 200 Index (ASX: XJO) lost 0.28% over the week to finish at 7,643.6 points on Friday.

Seven market sectors finished the week in the green.

Let’s review.

Tech shares led the ASX sectors again this week

It’s hard to look past Nividia Corp as the catalyst for another great week for ASX tech stocks.

We first learned of Nvidia’s “insane result“‘ for 4Q FY23 early yesterday morning. After that, the S&P/ASX 200 Information Technology Index (ASX: XIJ) began a steady rise, gaining 2.04% of this week’s 3.29% lift.

Overnight, the Nvidia share price launched 16.4% higher to a record US$785.38 (and plenty of analysts say it can go much higher over the next year, with the most bullish predicting US$1,400 per share).

Nvidia’s 16.4% gain contributed to a 2.94% surge in the NASDAQ, which dragged many other popular US tech stocks higher, including Meta Platforms 3.87%, Amazon 3.55%, and Apple 1.12%.

As usual, our tech sector followed Wall Street today and soared on the exciting momentum.

The biggest of our tech stocks, Wisetech Global Ltd (ASX: WTC) had a ripper week with its share price up 10.38% to $87.95. This follows the release of the company’s 1H FY24 results on Wednesday.

Wisetech announced revenue of $500 million, which was 32% higher than 1H FY23. EBITDA leapt 23% to $230 million and underlying net profit after tax (NPAT) was $128 million, up 5%.

For the 15th time in a row, Wisetech raised its dividend. It declared a fully franked interim dividend of 7.7 cents per share, up 17%.

Among the other big ASX 200 tech stocks this week:

• The Xero Limited (ASX: XRO) share price gained 2.79% to finish at $119.91 on Friday
• Nextdc Ltd (ASX: NXT) shares lifted 1.47% to $15.17
• The Altium Limited (ASX: ALU) share price fell 0.62% to $65.60.

ASX 200 market sector snapshot

Here’s how the 11 market sectors stacked up this week, according to CommSec data.

Over the past five days:

The post Here’s how the ASX 200 market sectors stacked up this week appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Altium, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, WiseTech Global, and Xero. 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 WiseTech Global and Xero. The Motley Fool Australia has recommended Amazon, Apple, Meta Platforms, and 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Tracy Vo for Nine’s Late News on Thursday night to unpack the latest business news, including a lower profit for Qantas Airways Limited (ASX: QAN), calls for the Treasurer to retain his power of veto over the Reserve Bank of Australia (RBA), and a billion dollar payday for Andrew ‘Twiggy’ Forrest.

The post Qantas descends, Treasurer’s RBA dilemma and Twiggy’s payday: Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips has positions in Fortescue. 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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The Pexa Group Ltd (ASX: PXA) share price is having a strong finish to the week.

In late trade, the property technology company’s shares are up 5.5% to $12.14.

This follows the release of the company’s half-year results.

Pexa share price jumps on half-year results

• Revenue up 16% to $163.3 million
• Group operating EBITDA margin at 36%
• Operating EBITDA up 12% to $58.8 million
• Group net profit after tax before amortisation (NPATA) down 36% to $15 million
• Net loss after tax of $4.6 million (from $4 million profit)

What happened during the half?

For the six months ended 31 December, Pexa reported a 16% increase in revenue to $163.3 million.

This reflects an 11% lift in Pexa exchange revenue to $149.6 million, an 80% jump in Digital Growth business revenue to $7.2 million, and a 261% increase in International business revenue to $6.5 million.

Operating EBITDA was up 12% to $58.8 million for the half. This was driven by a 17% jump in Pexa exchange EBITDA to $82.9 million, which was partially offset by operating losses from its other businesses.

Pexa’s NPATA came in at $15 million for the half, down from $23.5 million a year earlier. Management advised that this reduction was primarily due to costs associated with the acquisition of Smoove, restructuring costs, and higher amortisation arising from investments.

Management commentary

Pexa’s CEO, Glenn King, was pleased with the half. He said:

Across the Group, these results represent the discipline we have brought to executing our strategy. This includes improving the efficiency of our business through our Productivity Enhancement Program and beginning to embed our capital management framework. We have made strong progress to ensure we are well placed to execute on our strategic objectives in the second half, but we still have more to do to realise our ambitions in Australia and overseas.

Pleasingly, PEXA Exchange continues to perform strongly and has maintained its leading market position, reflecting the resiliency of the platform. It delivered a good first-half result, benefiting from CPI-linked price increases, increased market volumes and penetration and a shift in activity towards higher-value transfers.

How does this compare to expectations?

Goldman Sachs described the result as “strong” and notes that its margins are tracking ahead of its FY 2024 guidance. The broker adds:

PXA reported 1H24 Sales/EBITDA/Adj. NPATA +16%/+12%/-8% vs. pcp to A$163mn/A$59mn/A$26mn, which were +2%/+8%/+15% vs. GSe and +5% vs. Visible Alpha Consensus Data EBITDA (A$56mn). FY24 guidance reiterated including group operating EBITDA margins (ex. Smoove) >35%. Net debt/EBITDA increased to 2.5x (1H23 2.3x) with PXA flagging no current expectation of material acquisitions to come.

Outlook

Pexa has reaffirmed its previous guidance for FY 2024. It expects:

• Group operating EBITDA margin of 35% or better
• Exchange operating EBITDA margin of 50-55%
• Net cash outflows of $70 million to $80 million for the International and Digital Growth businesses
• Breakeven operating EBITDA for Digital Growth for the month of June 2024.

The Pexa share price is down approximately 2% over the last 12 months.

The post Pexa share price jumps on ‘strong’ half-year result 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 positions in and has recommended Goldman Sachs Group and PEXA 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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Of all the index funds on the ASX, those that track the Nasdaq 100 Index have delivered some of the greatest returns in recent years.

Propelled by their huge stakes in the stellar ‘magnificent seven’ tech stocks, exchange-traded funds (ETFs) like the BetaShares Nasdaq 100 ETF (ASX: NDQ) have delivered some breathtaking returns for investors, that make our own ASX seem very tame by comparison.

Just take NDQ units.

Over the 12 months to 31 January 2024, this ETF has returned an astonishing 51.31% (including dividend distributions). The fund has also averaged a Warren Buffett-esque 22.63% per annum over the past five years.

Until recently, the BetaShares Nasdaq 100 ETF was the only Nasdaq-specific fund on the ASX. But last year, it was complimented with the addition of the Global X US 100 ETF (ASX: N100).

Given the kinds of numbers above, it’s not too surprising to see that the ASX has just welcomed not one, but two more ETFs that give investors additional Nasdaq exposure.

Betashares just yesterday launched the BetaShares Nasdaq Next Gen 100 ETF (ASX: JNDQ), as well as the BetaShares Nasdaq 100 Equal Weight ETF (ASX: QNDQ).

Both of these ETFs give investors exposure to Nasdaq stocks. But both offer different paths to doing so. We’ll start with the Nasdaq 100 Equal Weight ETF, as it’s a little simpler to explain.

Two new Nasdaq ETFs hit the ASX

So like most index funds, the BetaShares Nasdaq 100 ETF (NDQ) holds the 100 shares in its portfolio in weighted proportions. This means that the largest shares (by market capitalisation) take up far more room in the fund’s portfolio than the smaller ones.

To illustrate, right now Microsoft – the largest public company in the world at present – commands an NDQ weighting of around 8.8%. In contrast, one of the smaller holdings in this ETF is the pharmacy chain Walgreens Boots Alliance. It holds just a 0.1% weighting in the same portfolio.

However, the QNDQ ETF seeks to change this paradigm. As its name implies, this fund gives every stock in the Nasdaq 100 an equal weight, meaning that Microsoft has the same level of weighting and influence on this fund as Walgreens. That would be around 1%.

The Nasdaq Next Gen 100 ETF is a little different though. Instead of holding the largest 100 shares on the Nasdaq (as NDQ and QNDQ both do), it tracks the largest 100 shares outside the Nasdaq 100 (the Nasdaq 101-201 if you will).

So rather than having access to names like Microsoft, Apple, Amazon and Tesla, you’re getting smaller companies like eBay, DraftKings, Zoom Video and Baidu.

On day two of these funds’ ASX lives, both are doing well and are above the price the units listed at yesterday. But it will be interesting to see how both of these new Nasdaq ETFs go over longer periods of time, especially compared to the uber-popular BetaShares Nasdaq 100 ETF.

The post Meet the ASX’s new NASDAQ ETFs appeared first on The Motley Fool Australia.

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More reading

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• Here’s how these 3 ASX 200 shares just earned substantial broker upgrades

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Amazon, Apple, Microsoft, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, Apple, Baidu, BetaShares Nasdaq 100 ETF, Microsoft, Tesla, and Zoom Video Communications. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended eBay and has recommended the following options: long January 2026 $395 calls on Microsoft, short April 2024 $45 calls on eBay, 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 Amazon, Apple, and Zoom Video Communications. 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 RPMGlobal Holdings Ltd (ASX: RUL) share price is up 8.91% at $2.14 amid a broader tech stock rally on Friday.

RPMGlobal provides technology solutions, advisory consulting, and training to the mining industry.

The company is outperforming its ASX All Ords peers, with the S&P/ASX All Ordinaries Index (ASX: XAO) up just 0.49% by comparison.

But technology is the hottest market sector of the day, with the S&P/ASX 200 Information Technology Index (ASX: XTX) currently up 1.49%.

This follows a 2.94% surge for the NASDAQ overnight.

Popular US tech stocks made impressive gains, led by Nvidia Corp, which shot up 16.4% to a new record high of US$785.75 after the semiconductor company released its 4Q FY23 numbers.

Meta Platforms gained 3.87%, Amazon rose 3.55%, and Apple lifted 1.12%.

As earnings season continues, RPM Global released its 1H FY24 numbers last week.

Let’s take a look at the report.

1H FY24 results disappoint market despite 466% profit surge

The RPMGlobal share price fell 5.7% the day after the company released its 1H FY24 results post-close.

Despite reporting a 466% increase in profit, ASX investors punished the stock. Perhaps they were expecting even better?

For the half year ended 31 December 2023, RPMGlobal reported:

• Group revenue of $56.3 million, a 20.6% rise on the prior corresponding period (pcp) of 1H FY23
• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $10 million, up 88.7% pcp
• Profit after tax $6.8 million, up 466.7% pcp
• Net assets of $58.2 million, up $0.8 million as of 31 December 2023
• Cash of $23.3 million and no debt.

What else happened in 1H FY24?

RPMGlobal said net revenue from the software division increased 24.9% to $37.1 million, with software subscription revenue up 26% to $21.3 million. The company said some of this growth was due to customers converting their software licenses from perpetual to subscription.

Software consulting revenue rose 22.6% to $6.5 million. Maintenance and support revenue fell 9.7% to $6.5 million. Perpetual licence sales were steady at $1.1 million.

The company noted that it has outlaid $10 million in an on-market share buyback over the past year.

What did RPMGlobal management say?

The company said its software products and advisory services were gaining market share from competitors, evidenced by Southeast Asia sales and the reputation built by the advisory business.

Management commented:

AMT continues to be selected and implemented by the world’s major mining companies, and XECUTE is quickly becoming the ‘go-to” operational product for tier two miner’s and has started to make serious inroads into the tier one global miners.

We believe XECUTE will begin to rival AMT in terms of market acceptance and revenue generation in the next few years.

What’s next for RPMGlobal?

Management said it was optimistic about the years ahead, given RPMGlobal’s strong balance sheet, healthy cash flow, and competitive advisory and software offerings.

RPMGlobal share price snapshot

The RPMGlobal share price has risen 34% over the past year, while the ASX All Ords has lifted 5.4%.

The post RPMGlobal share price up 9% amid tech stock rally appeared first on The Motley Fool Australia.

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More reading

• 3 ASX shares I think you’ll be glad you bought at these prices
• 3 no-brainer ASX stocks I’d buy before a bull run

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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 Amazon, Apple, Meta Platforms, Nvidia, and RPMGlobal. The Motley Fool Australia has recommended Amazon, Apple, Meta Platforms, Nvidia, and RPMGlobal. 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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Flight Centre Travel Group Ltd (ASX: FLT) shares will be on focus next week when the travel agent giant releases its half-year results.

Ahead of the release on Wednesday, let’s see what the market is expecting.

Flight Centre half-year results preview

According to a note out of Goldman Sachs, its analysts are expecting the company to report explosive growth for the first half.

Its analysts have pencilled in sales growth of 28.5% to $1,288.1 million and earnings before interest and tax (EBIT) growth of 344.9% over the prior corresponding period. This is modestly higher than the market consensus estimate.

As for dividends, the broker is expecting a 23 cents per share dividend for the full year.

Flight Centre’s dividends are usually weighted to the second half, so this could mean an interim dividend in the region of 8 cents per share.

Elsewhere, analysts at Morgans recently commented on their expectations for the first half of FY 2024. They said:

Earnings are seasonally skewed to the 2H (even more so post the Scott Dunn acquisition). 2Q NPBT was guided to be below the 1Q of A$54m. In line with seasonal trends, 1H cashflow is usually weak.

Should you buy Flight Centre shares?

At present, Goldman Sachs is sitting on the fence with this one. It has a neutral rating and $20.70 price target on the company’s shares. This implies potential downside of 5% from current levels.

Morgans, on the other hand, is feeling more upbeat. It has an add rating and $26.00 price target on Flight Centre’s shares.

If the broker is on the money with this recommendation, it would mean upside of 19% for investors over the next 12 months.

The post Own Flight Centre shares? Here’s what you need to know ahead of its results 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 positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has recommended Flight Centre Travel Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Three S&P/ASX 200 Index (ASX: XJO) shares just earned substantial upgrades from leading brokers.

The bullish broker outlooks for these stocks follow the release of the companies’ earnings results.

The brokers forecast these big-name ASX stocks could see share price gains of as much as 25% over the year ahead. And that’s not including the dividends all three companies pay.

Read on for the three stocks with some big potential gains ahead.

(Broker data courtesy of The Australian.)

Why these three ASX 200 shares could surge in 2024

The first ASX 200 share earning a broker upgrade is Domino’s Pizza Enterprises Ltd (ASX: DMP).

The fast-food pizza retailer reported its half-year results on Wednesday. The Domino’s share price closed up 2.7% on the day and gained another 7.7% yesterday. Shares are up 0.4% in early afternoon trade today at $43.85 apiece.

On the positive side of the ledger, network sales increased 8.8% year on year to $2.14 billion. And Domino’s reported same store sales growth of 1.25%. This came alongside an 11.8% boost in online sales, which reached $1.71 billion over the six months.

On the negative side of the ledger for the ASX 200 share, earnings before interest and tax (EBIT) was down 5.3% to $107.9 million. And net profit after tax (NPAT) was down 13% to $62.3 million. Earnings and profits were both impacted by the company’s struggling Asian operations.

Still, 2024 is off to a strong start.

In the first seven weeks of the new half, same stores sales growth increased 8.39% in ANZ and 0.34% in Asia. Growth dipped 0.64% in Europe.

Even after the past three days of share price gains, Jarden Securities sees significant further upside ahead.

The broker raised Domino’s to an ‘overweight’ rating with a $49 price target. That’s almost 12% above current levels. And that’s not including dividends. Domino’s declared an unfranked interim dividend of 55.5 cents per share.

Which brings us to the second ASX 200 share receiving a significant broker upgrade, fashion jewellery retailer Lovisa Holdings Ltd (ASX: LOV).

Lovisa reported its half-year results on Thursday. Investors reacted by sending the stock up 10.4%. And the Lovisa share price is up another 4.8% in afternoon trade on Friday at $28.62.

Investor enthusiasm was stoked by the company’s opening 74 new outlets over the six months. Lovisa had 854 stores at the end of December. In a major development, the company opened its first stores in China and Vietnam.

On the financial front, revenue increased 18.2% year on year to $373 million, with NPAT up 12.0% to $53.5 million.

Citi noted that “Lovisa has delivered another strong result and is successfully evolving into a global retailer”.

The broker raised Lovisa to a ‘buy’ rating with a $31.65 price target. That represents a potential upside of more than 10% from current levels. Lovisa also pays dividends. The company declared an interim dividend 50 cents per share, 30% franked.

Rounding off the list

Rounding off the list of ASX 200 shares receiving hefty broker upgrades is gambling and gaming company Tabcorp Holdings Ltd (ASX: TAH).

Tabcorp reported its half-year results on Thursday.

The company reported a statutory net loss after tax of $636.8 million for the six months. And revenue was down 5% year on year to $1.21 billion.

Concerned over the sliding revenues, investors hit the sell button yesterday, sending the Tabcorp share price down 10.3%. But the buyers are back on Friday, with Tabcorp shares up 4.2% at the time of writing, trading for 68 cents apiece.

It’s unlikely today’s buying is fuelled by the 1 cent per share, fully franked interim dividend.

But the fact that this represents a payout ratio of 111%, which management said reflected “confidence in the business and a strong financial position”, could be stirring optimism.

As could the ASX 200 share’s ongoing investments in AI and new technology platforms, which management said was enabling the company to become a more digital-oriented business.

Macquarie certainly has a bullish outlook for the stock. The broker raised Tabcorp to an ‘outperform’ rating with an 85-cent price target.

That represents a 25% potential upside from current levels.

The post Here’s how these 3 ASX 200 shares just earned substantial broker upgrades appeared first on The Motley Fool Australia.

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More reading

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• Why Clinuvel, Medibank, Sayona Mining, and Tabcorp shares are sinking today
• Tabcorp share price tumbles 13% on half-yearly earnings loss

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 Domino’s Pizza Enterprises and Lovisa. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Lovisa. 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 Nvidia Corp (NASDAQ: NVDA) share price closed last night at US$785.38, up 16.4% after the semiconductor company delivered a cracking quarterly update that included a 769% net income increase.

Say, what? Yep, that isn’t a typo.

Following the results, several brokers have laid out their predictions for the Nvidia share price from here.

And one analyst is tipping the stock will get to US$1,400… within just 12 months.

Nvidia share price on fire

Hans Mosesmann, senior research analyst at Rosenblatt Securities, appears to have the highest 12-month target price on Nvidia at the moment.

He thinks the stock can almost double within the next 12 months to US$1,400 per share.

That’s a pretty remarkable prediction for a company that already has a market cap of US$1.94 trillion.

Then again, the Nvidia share price has more than tripled over the past year. So, in a historical context, you could say Mosesmann’s tip of a near-doubling over the next year sounds like a slowdown!

For the record, this time last year the Nvidia share price was about US$232.

That’s pretty staggering growth.

What else is staggering is Nvidia’s results for 4Q FY23 and the full year reported yesterday.

Let’s recap.

Astonishing 4Q FY23 results send Nvidia shares 16% higher

For the three months ended 31 December, Nvidia reported:

• Revenue up 265% year over year to US$22.1 billion
• Gross margin up 12.7% to 76%
• Net income up 769% to US$12.3 billion
• Earnings per share (EPS) up 765% to US$4.93

For the full year 2023, Nvidia reported:

• Full-year revenue up 126% to a record of US$60.9 billion
• Gross margin up 15.8% to 72.7%
• Net income up 581% to US$29.76 billion
• Earnings per share up 586% to US$11.93

Nvidia’s founder and CEO, Jensen Huang, commented: “Accelerated computing and generative AI have hit the tipping point. Demand is surging worldwide across companies, industries and nations.”

The company expects 1Q FY24 revenue to go higher still, to $24 billion (+/- 2%), with an improved gross margin in the range of 76.3% to 77%.

And all of this good news has market analysts in a bit of a lather.

Most brokers raise 12-month share price targets

Most brokers raised their 12-month price targets on Nvidia overnight and maintained their buy ratings.

Here is a selection of the most bullish predictions:

• Rosenblatt Securities raised its price target to US$1,400, up from US$1,100 (maintain buy)
• Keybanc raised its Nvidia share price target to US$1,100, up from US$740 (maintain overweight)
• Benchmark raised its price target to US$1,000, up from US$625 (maintain buy)
• Bernstein raised its price target to US$1,000, up from US$700 (maintain outperform)
• Bank of America raised its price target to US$925, up from US$800 (maintain buy)
• Truist raised its price target to US$911, up from US$691 (maintain buy)
• TD Cowen its Nvidia share price target to US$900, up from US$700 (maintain outperform)
• Wolfe raised its price target to US$900, up from US$630 (maintain outperform)

A couple of brokers were a little more conservative on Nvidia’s share price trajectory from here:

• UBS lowered its price target to $800, down from $850 (maintain buy)
• Deutsche Bank raised its price target to $720, up from $560 (maintain hold rating)
• Morgan Stanley raised its price target to $795, up from $750 (maintain overweight)

Nvidia’s place in the world

As my colleague Seb points out, Nvidia’s market cap is larger than many countries’ entire economies.

However, Nvidia still isn’t as big as Microsoft Corp (US$3 trillion) and Apple Inc (US$2.82 trillion).

Globally, Nvidia is the world’s fourth-most valuable listed stock.

The post Is the Nvidia share price on course to reach US$1,400? appeared first on The Motley Fool Australia.

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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Bank of America, Microsoft, Nvidia, and Truist Financial. 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 recommended Apple and 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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