The big four ASX 200 bank shares are in the green today, along with the S&P/ASX 200 Index (ASX: XJO).

But top broker Morgan Stanley isn’t too confident about the short-term trajectory of bank shares. 

As reported in The Australian, the broker has cut its 12-month price target on all of the big four ASX 200 bank shares, and downgraded its rating on two of them.

Let’s find out why. 

Broker pessimistic about ASX 200 bank shares  

Morgan Stanley has cut its rating on National Australia Bank Ltd (ASX: NAB) shares to underweight.

It has also cut Westpac Banking Corp (ASX: WBC) shares to equal weight.

At the same time, the broker has slashed its 12-month price targets on the big four ASX 200 bank shares.

It cut its price target on NAB shares by 9% to $25.30 and cut the target on Westpac shares by 8% to $21. 

Morgan Stanley also reduced its price target on ANZ Group Holdings Ltd (ASX: ANZ) shares by 2% to $25.20 and on Commonwealth Bank of Australia (ASX: CBA) shares by 4% to $82.

Morgan Stanley has made the changes because it thinks the outlook on margins is too optimistic, particularly for NAB and Westpac.

Analyst Richard Wiles says: 

The benefit of large rate hikes and highly favourable deposit pricing comfortably offset mortgage head-winds and drove average margin expansion of +19bp for the major banks in late 2022.

However, we expect margins to fall by an average of 15bp over the next 18 months as entrenched mortgage discounting, emerging deposit competition and mix shift, and higher wholesale funding costs offset the ongoing tailwind from replicating portfolios.

How are the banks performing in 2023? 

As we reported recently, rising interest rates present both pros and cons for bank shares. 

On top of that, rumblings in the global banking sector have dampened investors’ enthusiasm. 

Here’s what has happened to the share prices of the big four banks so far in 2023. 

• The ANZ share price has ascended 4%
• The Commonwealth Bank share price has slipped 1.5%
• The Westpac share price has fallen 6.7%
• The NAB share price has tumbled 9.3%.

The Reserve Bank has raised interest rates 11 times since May 2022. The cash rate is currently 3.85%.

The post <strong>Which ASX 200 bank shares were just downgraded by Morgan Stanley?</strong> appeared first on The Motley Fool Australia.

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More reading

• Here’s how I’d start earning passive income by investing $5 a day in ASX shares
• The NAB dividend forecast has grabbed my attention!
• CBA shares are in ‘uncharted valuation territory’ and could crash: broker
• ‘Attractive value & dividend’: 2 alluring ASX 200 shares to buy now
• 5 things to watch on the ASX 200 on Tuesday

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in Commonwealth Bank of Australia, Westpac Banking Corporation, and ANZ Group Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. 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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If you’re keen to invest in ASX dividend shares to begin earning some handy passive income alongside potential share price gains, you don’t need a whole heap of cash to begin.

In fact, you can start building your regular passive income stream with just $5 a day.

Here’s how I’d go about it.

You don’t need a fortune to begin earning a passive income

First, I’d set aside that $5 each day to invest in fully franked S&P/ASX 200 Index (ASX: XJO) dividend shares.

I’d stick with ASX 200 stocks for a few reasons. Namely, they tend to be less volatile, there’s more readily available research on their performance and outlook, and many have a long track record of making two dividend payouts each year.

All good boxes to tick for that reliable passive income I’m after.

I’d also stick with the fully franked ASX dividend stocks. That’s because I want the 30% tax credit from what the companies have already paid on their profits when it comes my time to give the ATO their pound of flesh.

And the reason I’m setting aside $5 each day rather than immediately investing it into ASX dividend shares mostly boils down to brokerage fees.

On the online trading account I use, I pay $10 for every transaction less than $1,000.

So, to keep those fees from eating into the passive income I’m after, I’d wait at least 60 days between making new investments, so I could buy at least $300 worth of shares at a time.

Which ASX 200 dividend shares to target?

There are a large number of ASX 200 dividend shares paying juicy, fully franked trailing yields.

Do be aware, though, that those trailing yields are derived from the past 12 months of payouts. Future yields may be higher or lower, depending on a range of company-specific and wider macroeconomic factors.

With that said, I’d begin to build my passive income portfolio by spreading my investments across at least three stocks operating in three different sectors.

As my portfolio grows in value I’d look to expand both the number of stocks and the sectors they operate in. That greater diversity will help reduce my overall risk they all turn down together.

So, up first we have JB Hi-Fi Ltd (ASX: JBH).

The ASX 200 consumer discretionary share paid out a record interim dividend of $1.97 per share on 3 October. Together with the final dividend of $1.53, paid on September 9, that works out to a full-year payout of $3.50 per share.

At the current JB Hi-Fi share price of $45.13, that equates to a trailing yield of 7.8%.

Next, I’d look to Woodside Energy Group Ltd (ASX: WDS) to bulk up that passive income stream.

The ASX 200 oil and gas stock delivered a record $2.154 final dividend, paid on 5 April. Together with the interim dividend of $1.60, that equates to a full-year payout of $3.754 per share.

At the current Woodside share price of $35.14 per share, that works out to a trailing yield of 10.7%.

And the third stock I’d target for passive income with my $5 a day is Australia and New Zealand Banking Group Ltd (ASX: ANZ).

The ASX 200 bank stock paid a final dividend of 74 cents per share on 15 December and declared an interim dividend of 81 cents per share. ANZ shares traded ex-dividend last Monday, 15 May. Eligible shareholders will see the interim dividend land in their bank accounts on 3 July.

With a total 12-month payout of $1.55 and currently trading for $23.76 per share, ANZ trades on a fully franked trailing yield of 6.5%.

By investing just $5 a day I’ll have invested $1,825 by the end of the first year (minus some modest brokerage fees).

If I split that evenly between these three stocks I’d earn a yield of 8.33%.

Or a handy $152 in annual passive income from my daily $5 investments, with potential tax benefits.

And, of course, I’ve also aimed to choose stocks that will see their share prices go higher atop those juicy dividend returns.

The post Here’s how I’d start earning passive income by investing $5 a day in ASX shares appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 bank shares were just downgraded by Morgan Stanley?
• ASX 200 energy shares charging higher as G7 nations stress ‘important role’ of gas
• Woodside share price lifts as Germany flags need for ‘new gas power stations’
• Here’s what ANZ’s iron ore forecast could mean for the BHP share price in 2023
• Are Woodside shares the greatest dividend buy of the ASX 200?

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 Jb Hi-Fi. 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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With so many blue chip ASX 200 shares for investors to choose from, it can be hard to decide which ones to buy.

To help narrow things down, I have picked out two that analysts at Citi rate as buys right now. They are as follows:

CSL Limited (ASX: CSL)

When it comes to blue chip ASX 200 shares, there are few that can compare to CSL.

It is one of the world’s leading biotechnology companies, comprising the CSL Behring, CSL Vifor, and Seqirus businesses. These are leaders in their field and collectively generate strong revenue and earnings whatever is happening in the economy.

This could make CSL a particularly good option in the current uncertain economic environment.

Citi certainly believes this is the case. It currently has a buy rating and $350.00 price target on its shares. Its analysts note that this price target “implies CSL should trade on an FY25 PE of ~28x, in line with the 10-year average.”

Goodman Group (ASX: GMG)

Another high-quality blue chip ASX 200 share that could be a buy is Goodman Group.

It is a leading integrated commercial and industrial property company that has $80.7 billion of total assets under management and a work in progress (WIP) pipeline valued at $13 billion. The company notes that the latter has high pre-commitment with its WIP 64% committed and completions for the 9 months 99% leased.

This shouldn’t come as a big surprise, though. Management also highlights that demand remains very strong thanks to the “scarcity of assets and the complex planning and delivery environment for new space.”

It is partly for this reason that analysts at Citi “see potential for GMG to generate consistent high-single to low-double digit earnings growth over the medium term.”

The broker currently has a buy rating and $24.30 price target on Goodman’s shares.

The post Here’s why analysts rate CSL and this top blue chip ASX 200 share as buys appeared first on The Motley Fool Australia.

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More reading

• 5 ASX 200 shares to buy according to brokers
• What’s the forecast for the CSL share price in the second half of 2023?
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Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended Goodman 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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ASX All Ords tech share Weebit Nano Ltd (ASX: WBT) is trading 1.83% higher today at $5.57 per share.

The S&P/ASX All Ordinaries Index (ASX: XAO) is also up 0.12%.

Weebit Nano is a developer of advanced semiconductor memory technology.

The head of its research and development activities is Dr Yoav Nissan-Cohen, who is an executive director on the board. 

According to a notice lodged with the ASX, Dr Nissan-Cohen has sold 300,000 Weebit Nano shares after converting 300,000 unlisted options. 

Let’s take a look at the details. 

$2 million payday ASX All Ords tech director 

The off-market trade took place on 16 May and netted just over $1.97 million.

The sale price of the Weebit shares was $6.57. 

The timing was fortuitous, given the ASX All Ords tech share has fallen 17% since the day of the trade. 

As the chart below shows, Weebit shares hit a new 52-week high of $9.03 on 10 March. 

Then came the catastrophic fall to just $4.56 by 27 March. Yikes! 

The ASX All Ords share was smashed after the company announced a heavily discounted fully underwritten institutional placement to raise $45 million and a non-underwritten share purchase plan (SPP) to raise up to an additional $10 million on 23 March. 

The likely bugbear that investors had with this plan was the offer price of $5 per share.  

The ASX tech stock went on to recover by 73% over April and May to hit a high of $7.89 on 11 May before starting to drift down again. 

Nissan-Cohen acquired the 300,000 shares on 10 May by converting 300,000 unlisted options into ordinary shares. 

He converted 230,000 unlisted options at 54 cents per share and 70,000 unlisted options at 82.3 cents per share. 

Options are a common form of remuneration for key executives in listed organisations. They are typically granted alongside a base salary and performance rights. 

Nissan-Cohen retains 670,000 unlisted options and 80,000 performance rights in the ASX All Ords tech company.

The post <strong>Why did this ASX All Ords director just offload $2 million in shares?</strong> appeared first on The Motley Fool Australia.

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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 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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