In the last six months, the BHP Group Ltd (ASX: BHP) share price has risen by around 30%. It has certainly been a great run for the ASX mining share – but is it a buy?

As Australia’s biggest resources business, BHP benefits enormously from higher commodity prices.

The iron ore price has gone from around US$90 per tonne up to US$121 per tonne, according to Commsec.

When the price of a resource rises, it boosts revenue and usually adds even more to net profit after tax (NPAT) because the costs of producing the resource are largely fixed but the price for it has increased. That extra cash can flow straight to the bottom line.

What’s driving the BHP share price higher?

The mining giant is seemingly benefiting from the improving outlook for China. After a period of COVID-19 lockdowns, which limited economic activity, things are now looking more promising for a recovery. China’s cities are open again.

A return to full economic activity could be good news for the demand for commodities like iron ore, copper, and nickel, which BHP supplies. That could also be good news for the BHP share price, which we’re already seeing.

But China doesn’t want to pay too much for iron of course. According to reporting by the Australian Financial Review:

China’s state planner on Wednesday issued its third warning this month against excessive speculation in iron ore, adding it will increase supervision of the country’s spot and futures markets.

Companies should not engage in price gouging and speculation, said the National Development and Reform Commission (NDRC), in a post on its official WeChat account.

So, the higher the iron ore price goes, the more pressure China could try to put on it and push the price of iron ore down.

Should investors buy right now?

The phrase “buy low, sell high” is a bit of a cliché. However, I think it’s very relevant when it comes to investing in resource businesses.

It seems easy to buy shares when commodity prices are roaring and strong profit is likely. But, resource prices don’t usually stay strong forever. Supply and demand can vary quite significantly. Just look at how things have plunged and soared for iron since 2015.

I don’t think it makes a lot of sense to buy at the current BHP share price when it’s close to its all-time high. Even if the company’s dividend income could be strong this year.

In my opinion, the best time to buy BHP shares is when things look bleak and the outlook is pessimistic.

One leading investment bank, Goldman Sachs, has a neutral rating on the ASX mining share, with a price target of $48.10, according to Commsec. That implies a slight fall for the BHP share price over the next year.

The post Should I buy BHP shares in 2023? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• My ASX shares fell 15% last year. Here’s what I’m doing now
• ASX 200 mining shares: To buy or not to buy?
• Why did iron ore shares lag the ASX 200 on Monday?
• BHP share price hits milestone $50 mark on Monday

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 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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If you’re “over the market volatility“, it may be time to buy blue-chip ASX 200 shares that won’t deliver spectacular returns over the short term but will deliver reliable earnings and growth over the long term.

That’s the advice of Motley Fool Australia’s chief investment officer, Scott Phillips, who chatted with Gemma Dale on nabtrade’s Your Wealth podcast yesterday.

Phillips nominated two ASX healthcare shares with “multi-decade runways” for growth based on long-term social trends. Both are large-cap shares in the S&P/ASX 200 Index (ASX: XJO).

The ‘long-term winners’ for growth this year

Phillips said the economy is in a state of flux and no one really knows what’s going to happen next.

In such tumultuous times, he reckons “long-term winners are really, really, really attractive” because they offer earnings stability and good growth prospects.

Phillips said:

… if you can do moderately well for a very long period of time as an investor, you’ll do very well overall.

And if you can buy businesses that are in that space that just continue to compound away, grind away and just get bigger and bigger and bigger, and more and more successful over time, I think that’s an opportunity there.

Which two ASX 200 shares should you buy?

The two ASX 200 shares Phillips recommends are Cochlear Limited (ASX: COH) and Resmed CDI (ASX: RMD).

Phillips likes these ASX 200 shares because the world is getting older and fatter, and these companies are the market leaders in their respective fields of helping people hear and helping them sleep.

Why buy Cochlear shares?

Cochlear is the world’s leading hearing implant device manufacturer. Its implants are the standard of care for children with severe or profound hearing loss. The company also sells products to seniors once their normal hearing aids are no longer effective.

Phillips said:

It’s a medically diagnosed condition [and] Cochlear is the leader in this space. They are in a business that is going to have more and more people diagnosed over time because medical science gets better, the world is becoming more affluent so the developing worlds … will be able to afford some of this technology … and if you’re a Cochlear customer, you’re a Cochlear customer effectively for life — it’s an implanted device.

Why buy Resmed shares?

Resmed is a global leader in sleep technology. It develops, manufactures, and distributes medical devices such as CPAP masks, and cloud-based software applications that diagnose, treat, and manage a range of respiratory disorders. These include sleep apnoea, which is common among obesity sufferers, and chronic obstructive pulmonary disease (COPD).

Phillips said:

… sleep apnoea is a continuing issue, the world is getting fatter, we’re getting older, the growth in the diagnosis of sleep apnoea continues to be huge, so these are companies I think with literally multi decade runways.

They’re not going to be spectacular growth, they’re not going to give you Afterpay-like returns over six or 18 months but these are just great businesses that I think have a really great long term future.

Phillips said as the market leaders, the two ASX 200 companies had excellent prospects for revenue growth, which bodes well for share price appreciation.

He said: “As long as you remain the brand of choice, that’s a pretty good way to keep that cash rolling.”

Also during the interview, Phillips discussed what investors could do to set their portfolios up for success in today’s difficult economic environment.

The post 2 ASX 200 shares with multi-decade growth runways: Scott Phillips appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• How to prepare your portfolio for the ‘old normal’: Scott Phillips
• 3 ASX 200 shares smashing new 52-week highs on Wednesday
• Why is this ASX 200 mining share halted today?

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 Cochlear and ResMed. The Motley Fool Australia has positions in and has recommended ResMed. The Motley Fool Australia has recommended Cochlear. 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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After a terrible 2022, it’s not entirely surprising that many investors are tentative about what to do for 2023.

How much worse will the Australian and global economies get? When will central banks stop raising interest rates? How badly will company earnings fare as the year wears on?

Are ASX shares a wise investment for 2023? Will they end the year higher or lower than now?

AMP Ltd (ASX: AMP) chief economist Dr Shane Oliver set out to explore the answers to these riddles.

First the bad news, then the good news

If you’re fed up with the volatility we saw in 2022, unfortunately, the prominent economist reckons more will follow this year.

“2023 is likely to remain volatile and a retest of 2022 lows for shares is a high risk,” Oliver said on the AMP blog.

“Economic growth will slow sharply this year thanks to rate hikes and cost of living pressures — with a high risk of recession in the US and Europe.”

But the great news is that, if you can withstand the early volatility, sunshine could follow later in the year.

“Easing inflation, central banks getting off the brakes — with the RBA at or close to the peak on rates — economic growth likely stronger than feared and improved valuations should make for better returns.”

Why will Australia fare better than most?

Why is Oliver optimistic? 

One of the reasons is that long-term inflation expectations remain low.

“Inflation has likely peaked,” he said. 

“Labour market tightness is showing signs of easing which should take pressure [off] wages – this is flowing from slowing demand and in Australia will be helped by foreign workers returning.”

He also feels like many central banks are closer to “peak hawkishness” and that Australia specifically will dodge a recession.

“A slump in consumer spending along with weaker global growth will see Australian growth slow to around 1.5% this year,” said Oliver.

“The risk of recession is high, but it’s likely to be avoided.”

The Reserve Bank of Australia, in Oliver’s opinion, is less “aggressive” and is not as likely to go overboard with rate hikes compared to other central banks.

Despite a slowing economy, Australian business investment outlook “remains solid”.

“A rebound in Chinese growth is likely to support export volumes and prices,” said Oliver.

“Chinese growth is expected to rebound to around 6% this year thanks to reopening providing an offset to weakness in other countries.”

The Australian labour market will also see an easing of current staff shortages.

“Immigration is rebounding rapidly, which means more workers and support for economic growth.”

For all these reasons, Oliver reckons ASX shares will outperform global stocks.

He’s forecasting international shares will return around 7% this year, so Australian stocks will certainly end up much higher by the end of 2023.

“The anticipation of stronger growth in 2024 and improved valuations should make for better returns in 2023.”

The post Why ASX shares could be much higher at the end of 2023 appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why did the AMP share price crumble 4% on Monday?
• Why AMP, Computershare, IAG, and Telix shares are dropping today

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

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) fought hard and carved out the smallest of gains. The benchmark index rose 0.1% to 7,393.4 points.

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

ASX 200 expected to fall

The Australian share market looks set to fall on Thursday following a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 12 points or 0.15% lower this morning. In late trade in the United States, the Dow Jones is down 1.3%, the S&P 500 has fallen 1.05% and the NASDAQ has dropped 0.75%. This has been put down to a combination of skittishness and profit taking.

BHP quarterly update

The BHP Group Ltd (ASX: BHP) share price will be on watch on Thursday when the mining giant releases its second quarter production update. According to a note out of Goldman Sachs, its analysts are expecting the Big Australian to report iron ore shipments of 74.8Mt, which is ahead of the consensus estimate of 71.9Mt. Goldman also expects copper production of 420kt and met coal production of 6.9Mt.

Oil prices fall

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a tough day after oil prices tumbled on Wednesday night. According to Bloomberg, the WTI crude oil price is down 1.1% to US$79.27 a barrel and the Brent crude oil price is down 1.3% to US$84.82 a barrel. Oil prices fell on US recession concerns.

Allkem named as a buy

The Allkem Ltd (ASX: AKE) share price could be great value after its quarterly update. That’s the view of analysts at Bell Potter. This morning the broker has retained its buy rating with a slightly trimmed price target of $19.36. It said: “We expect AKE’s cash generation to lift substantially from 2023 with ongoing strength in lithium demand, commodity prices and production growth.”

Gold price edges lower

ASX 200 gold shares Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) will be on watch after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.2% to US$1,905.8 an ounce. The precious metal appears to be running out of steam after some strong gains recently.

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

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• 3 ASX 200 shares smashing new 52-week highs on Wednesday
• Why is this ASX 200 mining share halted today?
• Cheap ASX shares: A rare chance to get rich?
• Guess which ASX 200 lithium share just capped off a record quarter

Motley Fool contributor James Mickleboro has positions in Allkem. 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 past year has been a gutwrenching experience for anyone holding Tesla Inc (NASDAQ: TSLA) shares.

A debilitating blow was dealt to the electric vehicle (EV) makers’ valuation in 2022. Unfortunately, a mix of demand concerns and Elon Musk’s Twitter-buying escapades contributed to a crushing 65% fall in the company’s share price.

Despite the numerous reported fiascos, buying activity of Tesla shares among Aussies was as feverish as ever during the final quarter of 2022, according to data from investment company eToro. As fate would have, shares in the EV company are up 21.6% this year already.

So, is there a case for investing in Tesla right now?

Oh no, not the price cuts…

You might have heard the news… Tesla has cut the prices of its Model 3 and Model Y by as much as 20% in the United States and Europe. This has prompted a cacophony from commentators on how this is a bleak indicator of weakening demand as competition ramps up.

While I believe that is partly true, I personally don’t believe the cuts are the apocalyptic signal that some claim it to be. Instead, the move appears more of a reaction to both government incentives and economic conditions — allow me to explain…

Prior to the price cuts, Tesla’s entry-level Model Y (long range) did not qualify for the US government’s US$7,500 clean vehicle tax credit. The new price tag of US$52,990 — a 20% reduction — makes the car eligible.

Furthermore, the reduced prices might mean that Tesla wins more sales that would have otherwise gone to cheaper alternatives such as Chinese EV maker BYD. According to Reuters, Tesla sales in China surged following the cuts.

On the economic front, there’s a good chance that inflation and jumbo interest rate hikes have suppressed demand. At the end of last year, the Federal Reserve Bank of St. Louis said it had “reasonable confidence” that the US will fall into a recession in 2023.

As a Tesla shareholder, I think the tradeoff of a reduced margin in the short term to prop up sales is a worthwhile one. A sale made at a lesser margin is better for cash flow than no sale at all.

Thankfully, Tesla has that flexibility. For the 12 months ending September 2022, the company reported a net income margin of 14.9%. For comparison, BYD operated at a margin of 2.9%.

Are Tesla shares a buy?

Never ask a barber if you need a haircut. I’m a Tesla shareholder and I’ll clearly have my biases on whether it’s time to buy shares in the EV maker. But, for what is worth, Tesla looks well positioned compared to the competition at the moment.

As far as I know, there isn’t another car manufacturer out there with the same pricing power that Tesla holds. Likewise, no other automaker has a balance sheet as healthy as the Elon-led business. Most other car companies are juiced up on debt like no tomorrow.

For those reasons — accompanied by the belief that EV adoption is a long tailwind — I personally believe Tesla shares look attractive right now.

The post Aussie investors are buying Tesla shares in droves. Should you? appeared first on The Motley Fool Australia.

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More reading

• Should I buy Tesla stock for 2023 or not?
• Tesla share price correction: A chance to get rich?
• What can ASX lithium share investors learn from Tesla discounting its cars?

Motley Fool contributor Mitchell Lawler has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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 S&P/ASX 200 Index (ASX: XJO) wobbled in and out of the green on Wednesday before ultimately closing 0.1% higher at 7,393.4 points.

Providing the biggest boost was the tech sector. The S&P/ASX 200 Information Technology Index (ASX: XIJ) outperformed, lifting 1.7% on Wednesday, driven by a 4.6% gain out of Block Inc (ASX: SQ2).

Weighing heaviest on the Aussie bourse, meanwhile, was the S&P/ASX 200 Real Estate Index (ASX: XRE), falling 0.9%.

In the doldrums alongside it was the S&P/ASX 200 Energy Index (ASX: XEJ). The sector slumped 0.2% despite oil prices rising overnight.

The Brent crude oil price rose 1.7% to US$85.92 a barrel overnight while the US Nymex crude oil price gained 0.4% to US$80.18 a barrel amid better-than-expected growth data out of China.

So, with all that in mind, let’s take a look at the 10 ASX 200 shares posting the index’s biggest gains on Wednesday.

Top 10 ASX 200 shares countdown

Leading the charge today was lithium favourite Sayona Mining Ltd (ASX: SYA). Its share price roared 8.9% higher to close at 24.5 cents.

Interestingly, there was no price-sensitive news from the company today. Though, its stock did tumble 2% on Tuesday.

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Sayona Mining Ltd (ASX: SYA)	$0.245	8.89%
Telix Pharmaceuticals Ltd (ASX: TLX)	$7.07	8.6%
Block Inc (ASX: SQ2)	$107.45	4.57%
Blackmores Ltd (ASX: BKL)	$87.05	4.3%
JB Hi-Fi Limited (ASX: JBH)	$47.98	3.16%
Lake Resources NL (ASX: LKE)	$0.835	3.09%
Alumina Limited (ASX: AWC)	$1.70	3.03%
New Hope Corporation Limited (ASX: NHC)	$6.56	2.98%
Core Lithium Ltd (ASX: CXO)	$1.05	2.94%
Coronado Global Resources Inc (ASX: CRN)	$2.12	2.91%

Our top 10 shares countdown is a recurring end-of-day summary to let you know which companies were making big moves on the day. Check in at Fool.com.au after the weekday market closes to see which stocks make the countdown.

The post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Don’t ‘save’ for retirement! I’d invest in dirt-cheap ASX shares instead
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Top brokers name 3 ASX shares to buy today
• Why is the Core Lithium share price rebounding 5% today?
• Why Ampol, Block, JB Hi-Fi, and Telix shares are racing higher

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 positions in and has recommended Block. The Motley Fool Australia has positions in and has recommended Block. The Motley Fool Australia has recommended Blackmores and 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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Most of us have probably been taught that saving is a good thing. And it is. 

Having some cash stored away for that inevitable rainy day is a fundamental step in being financially independent. It’s important to have money set aside for when your car breaks down, there’s a medical emergency, or whatever other malady life can throw in one’s way.

The last place you want to find yourself when presented with an unexpected expense is the personal loan application desk at your local bank.

But just as importantly, it’s important to realise that savings are insurance, not a path to wealth. Whilst interest rates have shot up over the past 12 months, which at least gives investors some meaningful cash flow, cash still isn’t offering real (inflation-beating) returns. The top interest rate available for a term deposit right now is around 4.5%.

But recently, we’ve found out that Australian inflation was running at a hot 7.3% over the 12 months to 30 November. That means that the purchasing power of our cash in our 4.5% term deposit is going backwards by 3.3% in real terms.

As such, it is virtually impossible to grow one’s wealth using cash alone.

That’s why I’m turning to ASX shares.

Why invest in cheap ASX shares for retirement?

ASX shares are one of the best places to have your money if you wish to build wealth. For one, the best companies can keep ahead of inflation by increasing their prices to match the falling real value of cash.

But ASX shares can also give investors inflation-beating returns. Even an index fund like the Vanguard Australian Shares Index ETF (ASX: VAS) has delivered an average return of 8.54% per annum over the past ten years on average. That crushes the returns of cash.

The ASX share market has rallied quite convincingly over the past two months or so, which dulls the potential returns of investors just getting started with investing. But that doesn’t mean there aren’t plenty of dirt-cheap ASX shares still out there. One sector I’m currently looking at is ASX 200 retail shares.

Rising interest rates have dampened investor demand for consumer discretionary companies like retailers. But I think this has left many looking cheap.

Take JB Hi-Fi Limited (ASX: JBH). It’s currently sitting on a price-to-earnings (P/E) ratio of just 9.54, yet has a trailing, fully franked dividend yield of 6.6%.

Harvey Norman Holdings Limited (ASX: HVN) is looking even cheaper. It has a P/E ratio of just 6.64 right now, but with a fully franked dividend yield of 8.34%. I wouldn’t be surprised if these shares turn out to be market-beaters over the next few years at least.

So that’s why I’m not saving for my retirement. I’m investing for it instead.

The post Don’t ‘save’ for retirement! I’d invest in dirt-cheap ASX shares instead appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• 5 reasons I’d consider buying the Vanguard Australian Shares Index ETF (VAS)
• Why Ampol, Block, JB Hi-Fi, and Telix shares are racing higher
• These ASX dividend shares have been tipped as buys by analysts
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has positions in Vanguard Australian Shares Index ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. 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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If you’re wanting to pick up some ASX growth shares, then you may want to consider the two listed below.

Both of these growth shares have been tipped as buys by analysts at Goldman Sachs partly due to their massive global market opportunities.

Here’s what you need to know about them:

Life360 Inc (ASX: 360)

Life360 could be a quality ASX growth share to buy according to Goldman.

This rapidly growing location technology company is responsible for the Life360 mobile app. This freemium app is hugely popular and currently boasts almost 50 million global active users.

The company also added to its arsenal with recent acquisitions of wearables company Jiobit and items tracking company Tile, which are opening the door to cross and upselling opportunities.

Overall, Goldman estimates that “Life360 is exposed to a US$12bn global TAM with a large opportunity to expand its product suite, grow average revenue per paying circle (ARPPC), increase payer conversion, and lift penetration rates outside of the US.”

It also highlights that it believes “Life360 is approaching an inflection point as it proves the pricing power of its subscription business model and moves out of the non-profitable tech basket.” This could be supportive of a re-rating in the near future.

Goldman has a buy rating and $7.90 price target on Life360’s shares.

Xero Limited (ASX: XRO)

Another ASX growth share that Goldman Sachs believes is in the buy zone right now is Xero.

It is a fast-growing cloud-based accounting solution provider to ~3.3 million small and medium sized businesses globally.

Although this is a large number, it is still on a fraction of its overall market opportunity. This gives Xero and its highly rated and sticky platform a major runway for growth over the next decade and beyond.

Goldman Sachs believes Xero is “very well placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds.”

It estimates that “>100mn SMBs worldwide represent[s] a >NZ$76bn TAM”, which it feels makes Xero “a compelling global growth story.”

Goldman Sachs has a buy rating and $115.00 price target on Xero’s shares.

The post These ASX growth shares have massive global opportunities: Goldman Sachs appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Life360 and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Despite being the most shorted share on the Australian share market, the Flight Centre Travel Group Ltd (ASX: FLT) share price has started the year strongly.

As you can see below, with another gain under its belt today, the travel agent’s shares are now up almost 10% in 2023.

Where next for the Flight Centre share price?

Unfortunately, I’m not aware of a single broker that has a buy rating on Flight Centre shares.

However, that doesn’t necessarily mean that analysts don’t believe they can climb higher from here.

For example, Goldman Sachs has a neutral rating and $16.10 price target and Morgans has a hold rating and $18.25 price target on its shares.

Based on the current Flight Centre share price of $15.79, the latter implies potential upside of 13% for investors from here.

Morgans highlights that the company is recovering from the pandemic, but also notes that uncertainty remains. It is for that reason that the broker only has a hold rating on its shares at present. It recently explained:

FLT is targeting further bottom-line improvement during FY23 and heavily skewed to the 2H. It said that it is too early to provide specific market guidance given normal travel patterns (local v long haul, holidaymakers v VFR) are yet to resume; China is yet to reopen; airline capacity is restricted; and its revenue margins are yet to stabilise and normalise.

The broker also believes that revenue margins may be softer in the near term but expects them to improve once capacity normalises and competition increases. It said:

FLT’s revenue margin is expected to remain below pre-COVID levels in the near term because of cyclical factors (higher airfare prices), planned business mix changes (growth in lower margin channels/businesses) and the lower commissions.

While capacity is restricted and the airlines load factors are high, we think FLT has reduced bargaining power with the airlines. However over the medium term, as capacity normalises and there is increased competition, we think the airlines will rely more on FLT as one of the world’s largest travel groups and will thus reward the company for its efforts.

All in all, the future is looking brighter for Flight Centre, but it may just have a few more dark clouds to get through first.

The post The Flight Centre share price has made a flying start to 2023! Should I buy? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Could ASX 200 travel shares be set for a major boost in 2023?
• Should I buy Flight Centre shares for spectacular dividend growth?
• Here are the 10 most shorted ASX shares
• The Flight Centre share price nosedived 18% in 2022. Is it preparing for take-off in 2023?

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 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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The Woolworths Group Ltd (ASX: WOW) share price is in the green today and the supermarket giant is Australia’s most valuable brand, according to a study.

Brand Finance Australia has ranked Woolworths first in its annual Australia 100 report for 2023.

Brand Finance is one of the world’s leading independent brand valuation consultancies. The company values the Woolworths brand at $16.2 billion in 2023, which is 18% higher than last year.

This is the fourth consecutive year that Woolworths has taken out the top place for value.

Brand Finance explains that brand value refers “to the present value of earnings specifically related to brand reputation”.

Why is Woolworths Australia’s top brand?

According to the report:

Woolworths has continued its focus on customer experience, including the roll out of curated ranges tailored to local communities, and offering more inclusive experiences to a wider range of consumers.

Woolworths also continued to manage the impacts of climate change, working to reduce emissions from its own operations through green electricity and electric vehicle trials, as well as the phasing out of some plastic use.

These factors continued to maintain the brand’s strong reputation and loyalty amongst Australian consumers …

Which other ASX shares made the top 10 brands?

Woolworths’ closest competitor, Coles Group Ltd (ASX: COL) held onto fourth place, with its brand value up 10% to $10.9 billion.

The report said: “Over the last year, Coles has continued to demonstrate flexibility and innovation, with improved scores for quality and value for money.”

Here are the top 10 ASX-listed brands by value.

Out of the 100 companies listed, 74 experienced an increase in brand value, while 21 saw a fall over the year.

The companies that saw a decline in their brand value included Optus, which is owned by Singapore Telecommunications Limited (SGX: Z74).

Optus experienced a 19% fall in brand value to $3.3 billion due to the cyberattack.

What does this mean for Woolworths shares?

Mark Crowe Managing Director, Brand Finance Australia, said quantifying brand value helped businesses attract investors, secure financing, and influence mergers and acquisitions.

Crowe said:

A strong brand can lead to improved business returns in several ways. First, a brand can help a business differentiate itself from its competitors and establish a unique identity in the market, which can lead to increased customer loyalty and retention. This, in turn, can drive higher sales and revenue.

A strong brand can command a higher price or premium for products or services, as consumers are willing to pay more for a brand they perceive as high-quality, value for money and trustworthy.

Finally, a strong brand can provide a competitive advantage and help insulate a business from economic downturns or industry disruptions.

Crowe said brand value also helped businesses understand where brand fitted into their earnings.

In FY22, Woolworths’ revenue was $60.84 billion, indicating its brand power contributed 26% to earnings.

According to the ASX, Woolworths shares have a market capitalisation of $42.28 billion.

The post Did Woolworths just become 18% more valuable? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Are Woolworths shares worth buying for dividend income or not?
• Are ASX 200 retail shares on sale in 2023?
• Buy these ASX 200 dividend shares when the market reopens: analysts
• Buy Woolworths shares for 23% upside AND dividend income: Goldman

Motley Fool contributor Bronwyn Allen has positions in Anz Group, BHP Group, Commonwealth Bank Of Australia, and 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 positions in and has recommended Coles Group, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended 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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