The Newmont Corporation (ASX: NEM) share price is ending the week deep in the red.

In morning trade, the ASX 200 gold stock is down 7% to $47.20.

This follows the release of the Newcrest Mining owner’s FY 2023 results.

ASX 200 gold stock sold off following results

• Gold production down 6.8% to 5.55 million ounces
• All-in sustaining cost (AISC) up 19.2% to US$1,444 an ounce
• Adjusted EBITDA down 7.3% to US$4,217 million
• Net loss of US$2.5 billion

What happened during the 12 months?

It was a busy year for Newmont, with the company acquiring Newcrest Mining in FY 2023 for US$16.81 billion.

However, with the deal coming late in the year, it wasn’t enough for Newmont to deliver production growth during the 12 months.

Its production was down 6.8% to 5.55 million ounces. Combined with a sizeable increase in its AISC, this led to the company’s adjusted earnings dropping meaningfully year on year.

But those earnings were wiped out on a normalised basis by $1.9 billion in impairment charges, $1.5 billion in reclamation charges, and $464 million in Newcrest transaction and integration costs.

This led to Newmont reporting a loss of US$2.5 billion for FY 2023.

Management commentary

The ASX 200 gold stock’s CEO, Tom Palmer, highlights that 2023 was transformative for the company. He said:

2023 was a transformational year for Newmont, and for all of our stakeholders. With the acquisition of Newcrest now complete, our principal focus for 2024 is to integrate and transform our leading portfolio of Tier 1 assets into a unique collection of the world’s best gold and copper operations and projects. With stable production and structured reinvestment throughout the year, we are strongly positioned to deliver on our commitments in 2024 and set the stage for meaningful growth in 2025 and beyond.

Outlook

As its CEO revealed above, the company expects its production to return to growth in FY 2024.

Newmont’s 2024 production guidance is for approximately 6.9 million gold ounces, underpinned by 5.6 million gold ounces from its Tier 1 portfolio. This is expected to be achieved with an AISC of US$1,400 per ounce.

The post Guess which ASX 200 gold stock is crashing on US$2.5b loss appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday

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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The Bapcor Ltd (ASX: BAP) share price is in the green in early trade today.

Shares in the S&P/ASX 200 Index (ASX: XJO) auto parts company closed yesterday trading for $6.02. In morning trade on Friday, shares are swapping hands for $6.13 apiece, up 1.7%.

For some context, the ASX 200 is up 0.5% at this same time.

This follows the release of Bapcor’s half-year results for the six months ending 31 December 1H FY 2024.

Read on for the highlights.

Bapcor share price tracks revenues higher

• Record half-year revenue of $1.02 billion, up 1.7% year on year
• Pro-forma earnings before interest, taxes, depreciation and amortisation (EBITDA) of $143.8 million, down 1.7% from 1H FY 2023
• Pro forma net profit after tax (NPAT) of $54.2 million, down 12.6% year on year
• Fully franked interim dividend of 9.5 cents per share, down from 10.5 cents per share

What else happened during the first half for Bapcor?

Bapcor attributed its record half-year revenue to strong performance from its Trade & Wholesale segments.

However, the Bapcor share price could find itself under some pressure today, with earnings and profits down from 1H FY 2023. Management noted retail trading conditions were tougher than they were a year ago as inflation remains a concern. And finance costs were up amid rising interest rates.

As at 31 December, the company had a net debt of $332.7 million and a leverage ratio of 1.51 times. That’s up modestly from the $329.1 million net debt and 1.45 times leverage ratio a year earlier.

What did management say?

Commenting on the results lifting the Bapcor share price in early trade today, interim CEO Mark Bernhard said:

In 1H 2024 we have implemented actions to improve our operational performance, and also continued to execute our Better than Before transformation program to deliver longer-term growth. Better than Before is expected to deliver a $7 million to $10 million pro forma NPAT benefit in 2H 2024.

Bernhard also gave a nod to incoming CEO Paul Dumbrell, who takes the reins in May.

“While we remain confident in the overall program, we will naturally be reassessing the timing and prioritisation around its longer-term goals once our new CEO Paul Dumbrell starts,” he said.

“Paul brings a wealth of knowledge and experience within both our industry and the Bapcor business itself, and we look forward to having him on board in May.”

What’s next?

Looking at what could impact the Bapcor share price in the months ahead, the company noted that market conditions remain uncertain.

However, Bapcor expects pro-forma NPAT in the second half to benefit $7 million to $10 million from Better than Before, along with some $2 million run rate benefits from the second quarter improvement plans.

 “We have had a solid start into 2H24, and together with the targeted benefits from both our improvement actions and our transformation program, this is providing us with confidence going into 2H24,” Bernhard said.

Bapcor share price snapshot

The Bapcor share price has yet to fully recover from its mid-October plunge.

Shares in the ASX 200 auto parts company remain down 9% over 12 months, though that doesn’t include the two dividend payments.

The post Bapcor share price resilient following record half year revenues appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why is the Bapcor share price racing ahead of the ASX 200 on Thursday?
• Here are the top 10 ASX 200 shares today
• Here’s why the Bapcor share price is popping 6% today

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.

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The Aussie Broadband Ltd (ASX: ABB) share price is rocketing after it announced bumper half-year results, upgraded guidance, and leadership changes.

After closing Thursday at $3.82, the stock price was a whopping 10.7% higher in early trade on Friday morning to hit $4.23.

What did the company report?

• Revenue up 17.7% to $446 million
• Net profit after tax (NPAT) up 14.6% to $9.8 million
• EBITDA before transaction-related costs up 12.7% to $46.3 million
• Operating cash flow up 57.8% to $40.7 million
• Total broadband connections up 20.6% to 756,800

Aussie Broadband also announced that its co-founder Phillip Britt would move from the chief executive role to group managing director, with chief financial officer Brian Maher becoming the chief of the Aussie Broadband arm. Meanwhile executive director Michael Omeros will be appointed chief executive of Symbio once the acquisition completes.

What else happened in the first half?

The major development during the half was Aussie Broadband’s takeover of cloud telecommunications provider Symbio Holdings Ltd (ASX: SYM) for $262 million. The transaction is due to complete at the end of this month.

Aussie raised $140 million through stock issues to fund the Symbio deal and prepare for other potential mergers.

The Aussie Broadband share price fell when the acquisition was first announced in early November, but has since stabilised.

What did management say?

Aussie Broadband co-founder and group managing director Phillip Britt welcomed the results, saying:

The company’s transition from being a largely residential-focused retail service provider into a multi-faceted communications and technology service provider is well on track and delivering strong results. At the same time, our award-winning customer service has underpinned our success while continuing to grow our NBN market share.

We believe that the ACCC’s finalisation of the new NBN SAU regulations that came into effect on 1 December 2023 will be positive for Aussie. Following these changes, we were able to reduce prices in 100Mbps speed and above while improving margins in market segments that Aussie is already strong in. The full effect of these changes will flow through from the second half of FY24.

What’s next for Aussie Broadband?

Aussie Broadband upgraded its full-year guidance, with EBITDA forecast now $105 to $110 million, compared to $100 to $110 million previously. Expected capex has come down from $47 to $52 million to a range of $40 to $45 million.

The company reported already 19,000 new broadband connections have signed up in the second half.

Aussie Broadband share price snapshot

The broadband provider issued shares at $1 during its initial public offering (IPO) in late 2020. Before market open on Friday, it was almost a four-bagger to trade at $3.82.

The post Aussie Broadband share price rockets 11% after bumper results and upgraded guidance appeared first on The Motley Fool Australia.

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• Why one fund is backing these 2 hammered ASX shares from now on

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 positions in and has recommended Aussie Broadband and Symbio. The Motley Fool Australia has recommended Aussie Broadband. 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 Accent Group Ltd (ASX: AX1) share price is sinking on Friday morning.

At the time of writing, the footwear retailer’s shares are down 8.5% to $2.01.

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

Accent share price sinks on half-year report

• Sales down 1.7% to $810.9 million
• Earnings before interest, tax, depreciation and amortisation (EBITDA) down 7.5% to $157.5 million
• Net profit after tax down 27.6% to $42.2 million
• Fully franked interim dividend down 29% to 8.5 cents per share

What happened during the half?

For the six months ended 31 December, Accent reported a 1.7% decline in sales (including franchises) to $810.9 million. Like for like sales were down 0.6%.

Strong sales results were achieved across Skechers, The Athlete’s Foot, Hype DC, HOKA, Stylerunner, and Nude Lucy. However, challenging sales conditions were experienced in Platypus, Dr Martens, Vans, and Glue.

Also dragging on its performance was the wholesale business, which reported a 25% decline in sales. This reflects softer demand from its B2B customers.

Although Accent’s gross margin improved 140 basis points to 56.6%, its cost of doing business (CODB) margin offset this with an increase to 45% from 42% a year earlier. Management advised that its CODB was impacted by negative LFL retail sales, lower wholesale sales, and cost inflation in occupancy and team costs.

It is aiming to combat this with further cost efficiency initiatives in non-customer facing areas, including an ongoing review of support office costs.

In light of its profit decline, the Accent board elected to cut its fully franked interim dividend by 29% to 8.5 cents per share.

Management commentary

Accent’s CEO, Daniel Agostinelli, saw a number of positives from the half. He said:

Retail sales for the key trading period of Black Friday, Christmas and Boxing Day were positive including record Boxing Day sales online and instore. Like-for-like retail sales for this period (Weeks 20-26) were up 1.8%. I am delighted with the ongoing performance in Skechers, Hype DC, The Athlete’s Foot (TAF), HOKA, Stylerunner and Nude Lucy. Nude Lucy now has 34 stores trading. Digital sales continue to grow strongly, and online EBIT was ahead of last year. The Group opened 72 new stores in H1 (including 13 new Nude Lucy stores). The Company closed H1 FY24 with inventory levels below last year ($256.6 million vs $267.4 million) and aged stock levels are clean.

Outlook

The good news for shareholders is that the second half has started positively.

Management advised that total owned sales year to date to the end of January are up 1.6% and owned retail sales over this period are up 5.6% reflecting new store openings.

But much like the first half, the company’s gross margin and CODB margin remain higher than the prior corresponding period.

Mr Agostinelli concludes:

Whilst we recognise that there is some uncertainty in the economic outlook, in the context of the consumer environment, we have been pleased with trading and execution in the key periods of November, December and January. Looking forward, our store opening program remains on track. Stylerunner performance has been positive and the Nude Lucy brand is resonating well with customers. Continued store rollouts are planned in both banners.

The Accent share price is down 6% over the last 12 months.

The post Accent share price sinks 8% on earnings slump and dividend cut 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 Accent 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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Forget chalk and cheese, lithium and cheese is about as different as it gets on the Australian share market.

But funnily enough, they do share one thing in common. That is that the potential for some very big returns on the Australian share market.

That’s the view of analysts at Bell Potter, which have just named a couple of ASX 200 stocks specialising in these products as buys.

Here’s what you need to know:

Bega Cheese Ltd (ASX: BGA)

Bell Potter has retained its buy rating on this diversified food company’s shares with a $5.00 price target. This implies potential upside of almost 25% for investors over the next 12 months.

Its analysts believe that the ASX 200 stock is trading at an unwarranted discount and suspect it could soon rerate materially. The broker said:

Our Buy rating is unchanged. While the share price has bounced from the bottom, BGA continues to trade at an unreasonably high discount to its historical EV/EBITDA multiple (12.4x 10yr average) and its dairy FMCG peer group (12.3x FY24e EBITDA). Commodity prices (particularly SMP) have rallied from the low and the $250m EBITDA target pathway is becoming clearer. Continued execution against this target has the scope to see the BGA share price lift materially in outward years.

Mineral Resources Ltd (ASX: MIN)

Another ASX 200 stock that the broker is bullish on is mining and mining services company Mineral Resources. This morning, the broker retained its buy rating and $75.00 price target on its shares. This suggests potential upside of 23% for investors.

Bell Potter likes the company due to its production growth plans. It highlights:

Our twelve-month forward valuation for MIN is based on a DCF based valuation of our production scenarios for MIN’s Mining Services, Lithium, Iron Ore and Energy operations and projects. MINs businesses are in a period of significant growth. Over the next two-years Lithium and Iron Ore production quantities will grow substantially, accompanied by associated increases in contracted Mining Services volumes.

The post Lithium and cheese: Bell Potter tips 20%+ returns from these ASX 200 stocks appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
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• Bega Cheese shares soar 11% on profit jump
• Mineral Resources share price drops on earnings decline and dividend crunch
• 2 battered ASX mining shares to buy for cheap right now

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 Thursday, Pilbara Minerals Ltd (ASX: PLS) shares traded flat after the release of the lithium miner’s half-year results.

In case you missed it, the company reported a 65% decline in revenue to $757 million, a 77% decline in EBITDA to $415 million, and a 78% drop in underlying profit after tax to $273 million.

This was of course driven by a collapse in lithium prices over the last 12 months.

Should you be buying Pilbara Minerals shares following its results? Let’s see what one broker is saying.

Are Pilbara Minerals shares in the buy zone?

The team at Goldman Sachs has been running the rule over the result and wasn’t overly impressed. It said:

PLS reported Underlying EBITDA/NPAT of A$416mn/A$273mn, below GSe/ VA consensus expectations on higher exploration and corporate expenses (noted to be broadly the ongoing level in the near-term), and down on PcP due to lower revenue due to the moderating lithium price environment, with PLS realising -A$455mn of provisional pricing adjustments in the half.

In light of this, it will come as no surprise to learn that the broker’s bearish view has not changed following this release.

According to the note, Goldman has reiterated its sell rating on the company’s shares with a trimmed price target of $2.90. This implies potential downside of 21% for investors over the next 12 months.

The broker concludes:

Our 12m PT is down to A$2.90/sh, where PLS remains at a premium to peers (1.1x NAV & pricing ~US$1,260/t LT spodumene; peer average ~1.1x & ~US$1,160/t), with near-term FCF continuing to decline on lithium prices and increasing growth spend (c.-10% FCF yield in FY24E, and c.0% in FY25-27E). We also continue to see risk that a Beyond P1000 expansion disappoints vs. market expectations on a combination of capex, size, or timing. PLS also trades on a significant premium out to FY30E vs. peers on both EV/EBITDA and EV/Production on broadly normalised production/lithium prices.

The post Here’s why Pilbara Minerals shares could crash 21% 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 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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Qantas Airways Limited (ASX: QAN) shares were under pressure on Thursday following the release of its half-year results.

After initially taking off in early trade, the airline operator’s shares soon lost altitude and dropped deep into the red.

This led to the Qantas share price ending the day almost 7% lower at $5.21.

Should you buy Qantas shares?

If you want some big returns over the next 12 months, then you may want to consider buying the Flying Kangaroo’s shares.

That’s because the team at Goldman Sachs believes that its shares could rise over 50% from current levels.

According to a note out of the investment bank this morning, its analysts have reiterated their buy rating with a trimmed price target of $8.05.

Based on where Qantas shares currently trade, this implies potential upside of 55% for investors.

In addition, it is worth noting that while the broker doesn’t expect dividends in FY 2024, it expects the company to resume paying them next year.

And it could be worth the wait. Goldman is forecasting a 30 cents per share dividend for FY 2025, which equates to a 5.8% dividend yield.

What did the broker say?

While Goldman has revised its earnings estimates lower, it highlights that its earnings are still significantly stronger than pre-COVID times. Yet its valuation is not. It explains:

Despite negative revisions, we note that our FY24 EPS remains 52% above pre-COVID levels even as the business faces higher (vs pre COVID) fuel prices, elevated current customer investment and a 10% yoy GSe decline in unit revenue (FY24 RASK is 24% above pre-COVID equates to average 4.4% per annum). Despite this, QAN is trading 17% below its pre-COVID market capitalization with the enterprise value 24% lower. Retain Buy.

The post Why Qantas shares could rise over 50% 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 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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S&P/ASX 200 Index (ASX: XJO) shares have added a lot of wealth for many investors. I think they are a great idea for investors to jump on for opportunities when the chance is there.

The ASX 200 has returned an average of around 10% per annum over the ultra-long term. This sort of return can help people become a lot wealthier.

Using a compound interest calculator, investing $1,000 a month that makes 10% per annum becomes $687,000 after 20 years. Of course, there’s no certainty about what the future holds for the ASX 200 share market – it could do better than 10% per annum, or it could do worse.

Is this a great time to invest?

The ASX 200 as a whole is trading at close to its all-time high, so I wouldn’t call it a once-in-a-decade opportunity as a whole.

Even so, I still think investors can see adequate returns from the iShares Core S&P/ASX 200 ETF (ASX: IOZ) or the Vanguard Australian Shares Index ETF (ASX: VAS) which tracks the S&P/ASX 300 Index (ASX: XKO).

If we look at the chart over the last couple of years, there were some very opportune times to invest in the ASX 200, in June 2022, October 2022 and late October 2023.

I wish I could go back to the date of this article and invest more in Lovisa Holdings Ltd (ASX: LOV), Pinnacle Investment Management Group Ltd (ASX: PNI) and Johns Lyng Group Ltd (ASX: JLG), which are up by 40%, 30% and 14.6% respectively since 13 November 2023. Meanwhile, non-ASX 200 share Temple & Webster Group Ltd (ASX: TPW) has risen 80%. But we shouldn’t expect the same return to continue over the next few months.

I always think it’s possible to find opportunities in the ASX share market. Sometimes there are loads of great opportunities, and other times there are fewer bargains. Interest rates are still high, so I’d say some stocks have gotten ahead of themselves.

Which ASX 200 shares I’d buy

I believe some ASX 200 shares have such strong long-term growth potential that they can easily justify their valuations. I recently wrote about Johns Lyng and Pinnacle in separate articles, as well as Metcash Ltd (ASX: MTS) and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) in this article.  

I think there are even more opportunities the further we go down the market capitalisation list outside of the ASX 200.

While I don’t think today is the best time to invest, I think we can still find wonderful businesses that have lots of growth potential. They can help us build wealth, if we choose the right stocks and invest regularly.

The post A once-in-a-decade chance to get rich from ASX 200 shares? appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
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• Lovisa share price soars after opening 74 new stores in first half
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tristan Harrison has positions in Johns Lyng Group, Lovisa, Metcash, Pinnacle Investment Management Group, Temple & Webster 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 Johns Lyng Group, Lovisa, Pinnacle Investment Management Group, Temple & Webster Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Pinnacle Investment Management Group and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Johns Lyng Group, Lovisa, Metcash, and Temple & Webster 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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There are many ASX dividend shares for income investors to choose from on the Australian share market.

Two that have been rated as buys and tipped to offer big dividend yields in the near term are named below.

Here’s what analysts are forecasting from them:

Aurizon Holdings Ltd (ASX: AZJ)

The first ASX dividend share that could be a buy according to analysts is Aurizon.

It is a national rail and road network operator which connects miners, primary producers, and industry with international and domestic markets.

Ord Minnett is positive on Aurizon and earlier this month put an accumulate rating and $4.70 price target on its shares.

In respect to dividends, the broker is forecasting partially franked dividends of 17.8 cents per share in FY 2024 and then 24.3 cents per share in FY 2025. Based on the latest Aurizon share price of $3.97, this will mean yields of 4.5% and 6.1%, respectively.

HomeCo Daily Needs REIT (ASX: HDN)

Another ASX dividend share that analysts have named as a buy is HomeCo Daily Needs.

It is a property investment company with a focus on convenience-based assets. These are assets found across neighbourhood retail, large format retail, and health and services.

In response to its half-year results release this month, the team at Morgans has retained its add rating and $1.37 price target. The broker believes the company is positioned to benefit from “accelerating click & collect trends” and its development pipeline.

Morgans continues to forecast some big dividend yields in the near term. It expects dividends per share of 8 cents in FY 2024 and then 9 cents in FY 2025. Based on the current HomeCo Daily Needs share price of $1.24, this will mean yields of 6.5% and 7.25%, respectively.

The post Want big income? Buy these high-yield ASX dividend shares appeared first on The Motley Fool Australia.

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More reading

• Morgans says these high-yield ASX dividend stocks are buys
• Here are the top 10 ASX 200 shares today
• Aurizon share price charges higher on half-year earnings beat
• 3 ASX dividend shares for income investors to buy now
• Here are the top 10 ASX 200 shares today

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 Aurizon and HomeCo Daily Needs REIT. 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 been under pressure this week.

This has been driven by a pullback in iron ore prices and the release of the miner’s full-year results.

While disappointing for shareholders, it could prove to be a buying opportunity for the rest of us.

That’s the view of analysts at Goldman Sachs, which remain very positive on the mining giant.

What is the broker saying about Rio Tinto shares?

Goldman was relatively pleased with the company’s full-year results and believes it is well-positioned for the future. Particularly given the company’s growth options. It said:

RIO continues to believe they are option rich and have the best exploration pipeline in years, perhaps decades. We believe RIO is focused on creating value for shareholders through early stage exploration rather than large M&A, a good example being the recent copper JV with Codelco on the Nuevo Cobre project could extend into lithium salar projects in Chile.

In light of the above, the broker believes that Rio Tinto shares are attractively priced and has named five reasons to invest.

These are its compelling relative valuation at ~0.85x NAV, its attractive free cash flow (FCF) and dividend yield, strong production growth in 2024 and 2025, the Pilbara turnaround, and its compelling high margin low emission aluminium exposure.

In respect to its production growth, the broker said:

Rio is a FCF and production growth story in our view, with forecast Cu Eq production growth of ~5-6% in 2024 & 2025 driven by the ramp-up of the Oyu Tolgoi UG copper mine & a recovery at Escondida and Bingham, higher Pilbara Fe shipments with the ramp-up of new mines, and a rebound in aluminium production post labour and equipment challenges and the acquisition of Matalco.

Big returns

Goldman has retained its buy rating with a slightly trimmed price target of $138.30. This implies potential upside of 11% for investors.

In addition, it is forecasting a US$4.40 (A$6.71) per share fully franked dividend in FY 2024. This represents a 5.4% dividend yield, boosting the total potential return beyond 16%.

The post 5 reasons to buy Rio Tinto shares now appeared first on The Motley Fool Australia.

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More reading

• Rio Tinto shares fall on FY23 earnings decline and dividend cut
• Everything you need to know about the Rio Tinto dividend
• 5 things to watch on the ASX 200 on Thursday
• Rio Tinto share price on watch following FY 2023 earnings miss
• Why Corporate Travel Management, Iress, Rio Tinto, and Woolworths shares are crashing

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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