S&P/ASX 200 Index (ASX: XJO) mining stocks digging up gold are in our spotlight today.

This comes as the gold price hovers near nine-month highs.

The yellow metal is currently trading for US$1,915 (AU$2,709) per troy ounce after hitting fresh nine-month highs of US$1,950 on Wednesday.

And bullion could well march higher from here, supported by its historic safe haven status as the world faces plenty of uncertainty in the year ahead.

Any further price rises would certainly be good news to ASX 200 mining stocks in the gold space.

You may have heard analysts say that gold miners are leveraged to the price of gold. That’s because the miners’ all-in-sustaining costs (AISC) are essentially fixed, regardless of the price they receive for the precious metal.

So, when the gold price marches higher, most all of those gains go straight to the bottom line.

With that said, we look at three ASX 200 mining stocks producing gold that could soar amid a rising gold price.

ASX 200 mining stock number one

Up first, we have Newcrest Mining Ltd (ASX: NCM).

The ASX 200 mining stock has a market cap of  $20.7 billion and pays a trailing dividend yield of 1.8%, fully franked.

The Newcrest Mining share price is up 9.6% in 2023, currently trading at $22.63 per share.

In the December quarter, Newcrest produced 512,000 ounces of gold at an AISC of $1,082 per ounce. That compares to the current gold price of AU$2,709.

Newcrest was recently upgraded by Morgans to an add rating with a $25.70 price target. That’s 13.8% above the current price.

According to the analysts at Morgans:

We see a dependable production and earnings base from which NCM can ride recovering gold and copper prices. Trailing its smaller gold peers, we see an emerging value proposition on offer in NCM, which benefits from mine diversification, solid margins, and long-life reserves.

James Rutledge, portfolio manager of Perpetual’s Pure Value Fund, is also bullish on the ASX 200 mining stock.

Addressing Newcrest shares, Rutledge said (courtesy of The Australian Financial Review):

The performance of the stock will no doubt be dictated by the performance of the gold price, but we see further upside to the stock as the market starts to appreciate Newcrest’s increasing exposure to copper, as well as their potential growth opportunities.

Perpetual believes investors are underappreciating Newcrest’s growth projects.

“Over the remainder of FY23, the release of studies on several growth projects such as at Havieron and Brucejack should see the market start to price in this growth,” he said.

Another gold producer that could fly higher

Another ASX 200 mining stock that could have a strong year ahead is Gold Road Resources Ltd (ASX: GOR).

Gold Road has a market cap of $1.8 billion and pays a fully franked trailing dividend yield of 0.9%.

The Gold Road Resources share price is down 6.0% in the new year, currently trading for $1.58 per share.

The ASX 200 mining stock reported that its 2023 annual production is set to ramp up to a range of 340,000 and 370,000 ounces (170,000 — 185,000 ounces attributable) at an attributable AISC between AU$1,540 and AU$1,660 per attributable ounce.

Bell Potter recently raised Gold Road to a buy rating with a price target of $1.95 per share. That’s 22% above the current price.

In December, analysts at Celeste Funds Management came out with a positive note on Gold Road, saying the miner can offer investors “low-cost gold exposure”.

According to Celeste:

Gold Road presents an attractive growth profile through increasing grade at Gruyere, and their investment in De Grey Mining Limited (ASX: DEG) offers significant growth optionality.

Which brings us to…

The third ASX 200 mining stock focussed on gold

The third ASX 200 mining stock in our spotlight that could have a big year ahead of it is Evolution Mining Ltd (ASX: EVN).

Evolution Mining has a market cap of $5.9 billion and pays a trailing dividend yield of 1.8%, fully franked.

The Evolution share price is up 9.2% in 2023, currently trading at $3.25.

In its December quarterly results, Evolution reported a 3% increase in gold production to 166,404 ounces and a 27% reduction in AISC to AU$1,099 per ounce.

The gold miner maintained its FY23 production and AISC guidance at 720,000 ounces and AU$1,240 ounces, give or take 5%.

In mid-January, Fairmont Equities managing director Michael Gable said he expected the ASX 200 mining stock to see further share price increases in 2023.

“We’re bullish about the outlook for gold in volatile and uncertain times across the globe,” Gable said.

He added:

Evolution is one of the biggest gold miners on the ASX. The share price has risen from $1.81 on October 21, 2022, to trade at $3.33 on January 12, 2023. We expect the upward trend to continue. In our view, any short-term weakness presents a buying opportunity.

The post The gold price is near 9-month highs. Could these ASX 200 mining stocks be set to soar? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Centuria Office, Deep Yellow, Newcrest, and Xero shares are racing higher today
• 5 things to watch on the ASX 200 on Thursday
• Investing in ASX 200 gold shares? Here’s what to expect from the yellow metal in 2023

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Coles Group Ltd (ASX: COL) share price will be one to watch this month.

That’s because on 21 February the supermarket giant is scheduled to release its half year results.

Should you buy Coles shares before its results?

Opinion is divided on Coles shares ahead of its results release.

In the bear corner stands Goldman Sachs, which has a sell rating and $14.90 price target on its shares. This implies potential downside of 18% for investors over the next 12 months.

Goldman prefers Woolworths Group Ltd (ASX: WOW) and expects it to outperform Coles in the near term. It explained:

We expect WOW 2Q23 sales and 1H23 margins to outperform COL on more positive mix driven pricing, continued growth of Cartology and lower step-up in new supply chain implementation cost. We forecast WOW to grow 1H23 EBIT +12% YoY vs COL flat.

Bullish view

In the bull corner you’ll find Morgans with an add rating and $19.50 price target. This suggests that Coles shares could rise almost 8% from current levels.

It likes Coles due to its solid balance sheet, defensive qualities, and favourable trends in consumer shopping habits. The broker commented:

Trading on 20.6x FY23F PE and 4.0% yield, we continue to see COL as offering good value with the company’s solid balance sheet and defensive characteristics putting it in a good position to navigate through a weaker economic environment. The unwinding of local shopping should also help further market share gains.

It is also worth noting that Credit Suisse is positive on Coles.

So much so, earlier this week the broker upgraded the company’s shares to an outperform rating with an improved price target of $19.31. It expects Coles to benefit greatly from food inflation and is forecasting strong earnings growth this year.

The post Should I buy Coles shares before this month’s ASX earnings update? appeared first on The Motley Fool Australia.

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More reading

• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season
• ASX shares investors rejoice! RBA says inflation has now peaked
• ‘Attractive stock’: Fundie names one ASX share to buy, one to watch, one to avoid
• Here are the top 10 ASX 200 shares today
• Leading brokers name 3 ASX shares to buy 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 positions in and has recommended Coles 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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The Lithium Energy Ltd (ASX: LEL) share price is ending the week on a high on news of “exceptional” drilling results.

Assays from the company’s Burke Graphite Project have confirmed its one of the world’s highest-grade deposits.

The Lithium Energy share price has leapt 9.04% to trade at 90.5 cents on the back of the announcement.

Let’s take a closer look at the latest from the ASX lithium and graphite developer.

ASX lithium stock soars on graphite find

Lithium Energy is having a great Friday on the ASX, as its share price soars on news of its graphite project – previously found to be capable of producing battery-grade product.

Assay results from seven of 29 holes drilled at the outback Queensland project have now been received, showing intercepts of more than 20% total graphitic carbon. The company’s release states:

These grades are exceptionally high when compared with most other known graphite deposits globally.

Lithium Energy is also moving to begin assessing a potential purified spherical graphite anode manufacturing facility in Australia. Such a facility could use Burke graphite as feedstock.

Assays from the remaining 22 holes completed at the project are pending. Meanwhile, the company is gearing up to kick off drilling 150 kilometres away.

Around 2,000 metres of reverse circulation drilling and 200 metres of diamond drilling are planned for its Corella Tenement in the coming months.

Beyond graphite, the company has a 90% interest in Argentina’s Solaroz Lithium Project.

It announced it had encountered significant intersections of highly conductive brines in the lithium project’s northern section earlier this week.

Lithium Energy share price snapshot

The Lithium Energy share price has had a great start to 2023 on the ASX. It has gained around 26% so far this year. Though, that still leaves it 6% lower than it was this time last year.

The company currently boasts a market capitalisation of around $56 million.

The post Why did this ASX lithium share just rocket 9%? appeared first on The Motley Fool Australia.

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More reading

• ASX investors are buying up the Betashares Nasdaq 100 ETF. Should you?
• Could this BNPL share be wiped from the ASX?
• Why are ASX 200 iron ore shares being hammered hard on Friday?
• I’d start spending $500 a month on ASX 200 shares to retire early
• IAG share price sinks 5% as New Zealand flood claims pour in

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The Betashares Nasdaq 100 ETF (ASX: NDQ) has been very popular with investors recently.

For example, according to CommSec data, the tech-focused exchange-traded fund (ETF) came third on the list of most traded ASX shares on its platform last week.

Furthermore, the vast majority of these trades were buys. The data shows that a whopping 78% of trades were buy orders from retail investors, with just 22% sell trades.

The good news for those buyers is that the Betashares Nasdaq 100 ETF has been in fine form this week, rising 4.5% over the period. Great timing from them!

As you can see below, after having its best January in 20 years, the ETF has now gained an impressive 10.5% since the start of the year.

Should I buy the Betashares Nasdaq 100 ETF?

If you take another look at the chart above, you’ll see that although the ETF is up strongly this year, it is still trading meaningfully lower than its highs.

I believe that this indicates that it isn’t too late for investors to put money into the ETF today. Especially with inflation starting to ease, interest rate hikes coming to the end of their cycle, and the quality on offer in the ETF.

When you buy the Betashares Nasdaq 100 ETF, you are buying a slice of the 100 largest non-financial companies on the famous NASDAQ-100 Index (NASDAQ: NDX). This includes the likes of Alphabet, Apple, Amazon, Meta, Microsoft, Netflix, and Tesla.

I feel that these are arguably some of the highest quality companies on the planet and have very bright long term growth prospects. And while it may take time for their shares to reach previous highs, I have little doubt they will eventually be scaling new heights and dragging the Betashares Nasdaq 100 ETF along for the ride.

All in all, I would be buying this ETF today if I were not already a unitholder.

The post ASX investors are buying up the Betashares Nasdaq 100 ETF. Should you? appeared first on The Motley Fool Australia.

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• Need passive income? Turn $5,000 into $800 every month
• Invested $1,000 in the Betashares Nasdaq 100 ETF (NDQ) 5 years ago? Here’s how much dividend income you’ve earned
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Suzanne Frey, an executive at Alphabet, 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. 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. Motley Fool contributor James Mickleboro has positions in BetaShares Nasdaq 100 ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon.com, Apple, BetaShares Nasdaq 100 ETF, Meta Platforms, Microsoft, Netflix, and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Alphabet, Amazon.com, Apple, Meta Platforms, and Netflix. 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 Openpay Group Ltd (ASX: OPY) share price isn’t returning to the ASX boards as planned on Friday.

This morning, the embattled buy now pay later (BNPL) provider requested that its shares remain suspended.

What’s going on with this ASX BNPL share?

Unfortunately for its shareholders, there’s a reasonable possibility that Openpay could never trade on the ASX again.

According to its suspension request, the non-payment of the company’s utilisation notice by 31 January means that Openpay has breached the covenants of loan agreements with senior secured lenders.

Management has advised that constructive discussions are underway with its senior secured lenders, and a sub-committee of non-conflicted directors anticipate that negotiations will allow the company to make an announcement and end the suspension.

What’s the issue?

Openpay ended the last quarter with a cash balance of approximately $17 million after burning through $18 million of cash during the three months.

Clearly, if it were to do the same in the current quarter, it would run out of money.

However, the company has unused finance facilities of $41 million, which would boost its total available funding to $58 million. This would give it 3.19 quarters of funding according to its cash flow report.

The issue is getting hold of these funds. No explanation has been provided, but it appears as though its financiers aren’t overly keen to put this money up. Which is understandable given how far away Openpay seems to be from becoming profitable. If it ever will be.

All in all, it wouldn’t be overly surprising if this ASX BNPL share follows the lead of Laybuy Group Holdings Limited (ASX: LBY) and delists from the Australian share market in the near future given the sad state it is in.

The post Could this BNPL share be wiped from the ASX? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 iron ore shares being hammered hard on Friday?
• I’d start spending $500 a month on ASX 200 shares to retire early
• IAG share price sinks 5% as New Zealand flood claims pour in
• Up 25% in a year, is it time to cash in Qantas shares?
• Is Bank of Queensland gearing up for the next big ASX 200 bank merger?

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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Some of the S&P/ASX 200 Index (ASX: XJO)’s biggest names are among its worst performers on Friday as iron ore shares plummet.

It follows a rough slog for iron ore futures overnight as Chinese inventories remain high, perhaps suggesting demand for the steel-making ingredient could underwhelm.

It likely comes as no surprise, then, that the mining sector is suffering today.

The S&P/ASX 200 Materials Index (ASX: XMJ) is currently down 1.62% – coming in as the worst performer among the ASX 200’s 11 sectors. That’s compared to the index’s 0.31% gain.

Let’s take a closer look at what’s going wrong for ASX 200 iron ore shares on Friday.

What’s going wrong for ASX 200 iron ore shares?

Here’s how many of the market’s major iron ore shares are performing on Friday:

• The BHP Group Ltd (ASX: BHP) share price is down 2.47%, trading at $47.645
• The Fortescue Metals Group Limited (ASX: FMG) share price has dumped 1.75% to reach $21.85
• The Rio Tinto Ltd (ASX: RIO) share price is falling 2.24% to hit $122.62

The drop follows a rough night for the red metal. Iron ore futures plunged 1.9% to US$123.95 a tonne overnight amid continuously high Chinese inventories.

That may have undermined expectations China’s move away from its COVID-19-zero policy could bolster demand for iron ore.

The nation is the world’s largest iron ore consumer and has reportedly recently doubled down on its property sector, thereby bolstering demand for steel and, likely in turn, iron ore.

However, China’s National Development and Reform Commission noted its intent to “crack down” on activities designed to boost the price of the metal last month.

Of course, the higher the price of iron ore, the more earnings iron ore miners will realise from their production.

While today is proving to be a rough one for the ASX 200 giants, their year-to-date performance has been strong. The Fortescue share price has gained 7% since the start of 2023, while that of BHP and Rio Tinto have both lifted 5%.

The post Why are ASX 200 iron ore shares being hammered hard on Friday? appeared first on The Motley Fool Australia.

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• Can buying Pilbara Minerals shares today create long-term wealth?
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Motley Fool contributor Brooke Cooper 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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If you want to retire early, then you could try and win the lottery. But with the odds on Powerball stacked against you, I wouldn’t be relying on this.

Instead, I would look to grow my wealth by buying and holding high-quality ASX 200 shares over the long term.

Growing your wealth

The good news is that you don’t need to start with a huge sum of money to do this. Slow and steady can win the race when it comes to investing.

If you can afford to put $500 into ASX 200 shares each month, you could potentially retire early thanks to the power of compounding.

It’s difficult to say how much money you will need for retirement in the future, particularly if you want to retire early, but let’s look at retiring with a passive income stream of $60,000 per annum.

$60,000 passive income in retirement

Historically, the share market has provided investors an average annual return of 10%.

And while past performance is not a guarantee of future returns, I’m optimistic that the share market will continue to deliver similar returns over the long term.

If it does, and you invest $500 a month and earn the market return, you would have grown your portfolio to just over $1 million after 30 years.

After which, once your portfolio has hit the $1 million mark, you can switch your focus to income by building a portfolio filled with high-yield ASX 200 dividend shares that provide you with ~6% yields.

At present, this includes bank shares such as Westpac Banking Corp (ASX: WBC) (see here) or the Vanguard Australian Shares High Yield ETF (ASX: VHY).

Overall, this means that if you started investing in this way in your 20s, you could theoretically be retiring early in your 50s.

The post I’d start spending $500 a month on ASX 200 shares to retire early appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Westpac Banking. 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 Vanguard Australian Shares High Yield ETF and Westpac Banking. 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 Insurance Australia Group Ltd (ASX: IAG) share price is down 5.2% in Friday morning trade. 

The S&PASX 200 Index (ASX: XJO) insurance stock closed yesterday trading for $4.83 per share. Shares are currently changing hands for $4.58 apiece.

This comes following the company’s release of this morning’s Auckland flooding impact and financial update.

What’s happening with the New Zealand flood claims?

The IAG share price is sinking after the company said it has received more than 15,000 claims to date across its AMI, State, NZI and partner brands related to the devastating rains and floods around Auckland.

IAG’s CEO Nick Hawkins reiterated the insurer’s primary focus is supporting its clients.

“We have a large team, led by our New Zealand CEO Amanda Whiting, on the ground to provide immediate support and in the longer term, to help our customers and their communities recover,” he said.

As the company reported on Monday, when the IAG share price closed 3.7% lower, its reinsurance arrangements provide it with a Maximum Event Retention of $236 million. IAG expects the Auckland claims to exceed $350 million.

With second-event reinsurance covers in place, the Maximum Event Retention for a second event during the 2023 financial year is $192 million. IAG will pay an additional premium for its second drop-down cover.

IAG share price slides despite growth estimates

IAG is scheduled to release its half-year results for the six months ending 31 December on Monday, 13 February.

The company forecasts first-half gross written premium (GWP) growth of 7.5%. On an underlying basis, IAG expects 9.8% GWP growth.

Commenting on the growth outlook that’s failed to lift the IAG share price today, Hawkins said:

Our strong top-line growth over the half reflects significant premium increases and new customer growth. Premium rates continue to increase in response to claims inflation and in anticipation of additional reinsurance and natural perils costs. Our retention rates have remained at very high levels.

The company forecasts a 1H23 net profit after tax (NPAT) attributable to shareholders of $468 million, up from $173 million in 1H22. It noted that this includes the benefit of the post-tax $252 million reduction in the Business Interruption provision.

The insurer expects its CET1 ratio will be 1.11, above its target range of 0.9 to 1.1.

What’s ahead?

Looking ahead to the full year, IAG forecasts FY23 GWP growth of some 10%. That’s up from its previous guidance of ‘mid to high-single digit’.

The company said it’s on track to achieve a 15% to 17% insurance margin, which could help boost the IAG share price in the months ahead.

“The strong premium growth we’re delivering, along with the strength of our business and brands, provides us with confidence in the outlook and the ability to deliver our targeted 15% to 17% margin over the medium term,” Hawkins said.

IAG share price snapshot

With today’s intraday slide factored in, the IAG share price, pictured below, has dropped into the red in 2023, down 3.7%. Shares are up 5% over the past 12 months.

The post IAG share price sinks 5% as New Zealand flood claims pour in appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Brainchip, IAG, Metcash, and ResMed shares are sinking today
• Why is the IAG share price tumbling 4% on Monday?
• 2 Warren Buffett-style ASX dividend stocks for big income
• Goldman Sachs gives its verdict on the IAG share price

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Qantas Airways Limited (ASX: QAN) share price has been one of the better-performing, non-resource S&P/ASX 200 Index (ASX: XJO) shares over the past year.

But, after the last 12 months, is it time to exit Qantas as an investment?

Qantas shares have done well amid a recovery for travel, it has increased its profit guidance and improved its expectations for net debt.

The last Qantas market update was released near the end of November 2022. It showed that underlying profit before tax was expected to be $1.35 billion to $1.45 billion for the first half of FY23, while net debt is expected to fall between $2.3 billion to $2.5 billion.

While consumers “continue to put a high priority on travel ahead of other spending categories”, fuel costs were “significantly elevated with FY19 and are expected to reach approximately $5 billion for FY23”. That’s despite international capacity being around 30% below pre-COVID levels.

Is this the best it gets for the Qantas share price?

One expert thinks that the airline could fly even higher.

Wilson Advisory has held Qantas shares in its ‘focus portfolio’ for exposure to the travel recovery theme. It “still believes Qantas presents a well-priced investment opportunity due to its current discounted valuation relative to US peers, while earnings still have the potential to surprise to the upside”.

According to Wilson, Qantas shares are forecast to trade at an enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of 3.2x for the 2024 calendar year, while the average of American Airlines, Delta Air Lines, United Airlines and Southwest Airlines is 4.4x.

Wilson said this discount seemed “unjustified”, with Qantas and the Australian air travel industry going through “structural change” since the pandemic. There was “reduced competition”, and a “more rational market” with the potential initial public offering (IPO) of Virgin. Qantas has also reduced its costs by around $1 billion since the start of the pandemic, increasing its profitability.

Wilson also noted that Qantas earnings were forecast to grow in FY24 by 2.6%, with that estimate looking “too conservative”, according to the team. It thinks pent-up travel demand will continue to help prices and passenger numbers. Wilson also pointed out that international travel numbers are yet to fully recover. The airline could also announce further share buybacks.

How far could the airline rise?

Wilson suggested that if Qantas’ (analyst consensus) forecast EBITDA for FY24 was put on a multiple of 4x, compared to the FY24 US peer average of 4.4x, this would place the Qantas share price at $8.57. That’s a potential upside of more than 30%.

But, if Qantas were conservatively valued at 3.5x the consensus FY24 EBITDA – below the pre-COVID multiple of 3.7x – this would suggest a value of $7.34. This could be a possible rise of around 15% for Qantas shares.

Wilson also suggested that forecast earnings for FY23 to FY25 could be too conservative, and that upgrades were plausible for the next 12 months. This could mean even further upside.

The post Up 25% in a year, is it time to cash in Qantas shares? appeared first on The Motley Fool Australia.

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More reading

• Should I buy Qantas shares before the company’s ASX earnings update?
• Morgans names 2 of the best ASX 200 shares to buy in February
• 3 of the very best ASX 200 travel shares to buy according to Goldman Sachs
• Up 8% in 2023, is it too late to buy Qantas shares now?
• Qantas share price struggles amid second incident in 2 days

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Merger and acquisition activity amid S&P/ASX 200 Index (ASX: XJO) bank shares have been hot lately, with ANZ Group Holdings Ltd (ASX: ANZ)’s plan to buy Suncorp Group Ltd (ASX: SUN)’s banking division piquing attention in July.

And now another unification could be in the works. Bank of Queensland Ltd (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) are reportedly rumoured to be in early merger discussions.

The not-quite-big-four-banks boast respective market capitalisations of approximately $4.6 billion and $5.7 billion.

Right now, the Bank of Queensland share price is $7.05 while that of Bendigo Bank is $10.02.

Let’s take a closer look at the talks rumoured to be happening between the two ASX 200 bank shares.

Is Bank of Queensland in ASX 200 merger talks?

Bank of Queensland and Bendigo Bank are contemplating a more-than-$10 billion merger, sources have reportedly told The Australian. However, Bank of Queensland is said to have denied such suggestions.

It follows the surprise ousting of former Bank of Queensland CEO George Frazis in November. Commenting on Frazis’ departure, chair Patrick Allaway said:

[D]ifferent leadership is now required to ensure BOQ can continue to build a stronger and more resilient bank through future cycles.

It has reportedly been suggested that the bank has stalled its search for a new leader as it considers a possible merger, which could bring both competitive and regulatory benefits.

Though, the bank told the publication its search for a new CEO is ongoing and no talks between it and Bendigo Bank are in progress.

The rumours come just two years after Bank of Queensland acquired ME Bank for around $1.3 billion – representing an implied acquisition multiple of 1.05 times book value and 11.9 times cash underlying earnings.

Then, Allaway dubbed the buy, “a key step in our strategy to be a compelling alternative to the big banks.”

If a Bank of Queensland/Bendigo Bank merger proposal sounds familiar, it’s probably because it is.

The former bank put forward a $17.18 per share takeover bid for the latter in 2007. That bid was ultimately rejected. Bendigo Bank instead merged with Adelaide Bank later that year.

So, might the market see another merger proposal from the ASX 200 bank shares in the coming months or years? Only time will tell.

The post Is Bank of Queensland gearing up for the next big ASX 200 bank merger? appeared first on The Motley Fool Australia.

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• Did you buy $1,000 of Bank of Queensland shares 10 years ago? Here’s how much dividend income you’ve made
• This could crash the earnings season party for ASX 200 bank shares: Macquarie
• Dividends, dividends, dividends! 3 ASX 200 bank shares forecasting yields over 8%
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Motley Fool contributor Brooke Cooper 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 Bendigo And Adelaide Bank. 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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