If you’re an income investor looking for dividends to boost your passive income, then you may want to consider the ASX dividend shares named below.

Both of these ASX dividend shares have been rated as buys and tipped to provide investors with attractive yields in the coming years.

Here’s what you need to know about these shares:

Healthco Healthcare and Wellness REIT (ASX: HCW)

The first ASX dividend share for income investors to consider is the Healthco Healthcare and Wellness REIT.

This health and wellness focused real estate investment trust invests in properties including hospitals, aged care, childcare, government, life sciences and research, and primary care and wellness properties.

Analysts at Goldman Sachs are positive on the company and have a conviction buy rating and $2.14 price target on its shares.

Goldman advised that it is a fan of Healthco Healthcare and Wellness due to its strong balance sheet and its exposure to government-backed sub-sectors. It believes this makes it one of the “top picks in the sector.”

As for dividends, Goldman is expecting dividends per share of 7.5 cents in both FY 2023 and FY 2024. Based on the current Healthco Healthcare and Wellness REIT unit price of $1.72, this will mean yields of 4.35% for investors.

National Australia Bank Ltd (ASX: NAB)

Goldman Sachs is also a fan of this big four bank. Its analysts currently have a buy rating and $34.81 price target on its shares.

The broker is positive on NAB due to its exposure to commercial lending, which it expects to perform better than home lending in the current environment. Goldman also notes that the work NAB has done on productivity and cost management “leaves it well positioned for an environment of elevated inflationary pressure.”

In respect to dividends, Goldman Sachs is expecting NAB to pay fully franked dividends of $1.66 per share in FY 2023 and $1.73 per share in FY 2024. Based on the current NAB share price of $29.76, this means yields of 5.6% and 5.8%, respectively.

The post Buy NAB and this ASX dividend share for a passive income boost: analysts appeared first on The Motley Fool Australia.

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• Will 2023 get better for ASX 200 shares?
• Hunting for passive income among ASX small-cap shares? Here are my top 2 picks
• ASX financial shares lifted the ASX 200 today
• Here’s how I plan to recession-proof my ASX share portfolio this year
• 2022 was strong for the NAB share price. What’s next?

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 Pilbara Minerals Ltd (ASX: PLS) share price has been through a lot of pain over the last couple of months.

Since 9 November, it’s down 28%. However, over the past six months, it has risen by close to 70%. Certainly, it has been a very volatile time for the ASX lithium sector generally.

Is the negativity warranted?

On 26 October 2021, Pilbara Minerals announced that it had sold 10,000 dry metric tonnes (dmt) of spodumene concentrate for US$2,350 per dmt via the Battery Material Exchange (BMX).

Over the course of 2022, the company reported progressively higher prices through a number of BMX auctions. On 16 November 2022, it reported the sale of a 5,000 dmt cargo for US$7,805 per dmt.

In just over a year, the auction price jumped 230%.

But, on 14 December 2022, it revealed that it had sold two cargoes totalling 10,000 dmt for an average price of US$7,552 per dmt. That represented a decline of around 3% from the November auction. Investors may be thinking that the November auction price was the peak. The question is, is it going to keep falling?

However, at US$7,500 per dmt, Pilbara Minerals is still generating significant profit and cash flow.

The company also reported on 21 December 2022 that it had achieved a “significant improvement in pricing outcomes” with its major offtake customers, after completing price reviews. This revised price applies for all shipments in December 2022 and onwards.

Pilbara Minerals said that based on market pricing data, average pricing would equate to approximately US$6,300 per dmt (CIF [cost, insurance, freight] China) on an SC6.0 equivalent basis.

Essentially, the business is still experiencing strong pricing outcomes.

KPMG’s mining outlook for 2023 suggested that the mining outlook is “largely positive”. National Mining and Metals Leader at KPMG Australia Nick Harridge said that the “key demand story is highlighted with lithium”.

The report also said: “The pace of EV sales is increasing with nearly half of the current stock of EVs sold in the last year. But the transition away from fossil fuels will continue to require a rapid increase in the number of EVs manufactured.”

What’s the outlook for the Pilbara Minerals share price?

According to the forecast on Commsec, the ASX lithium share is valued at five times FY23’s estimated earnings and eight times FY24’s estimated earnings. Both of those valuations do not seem very demanding at all.

Remember, the lithium miner is looking to ramp up its production capacity of total spodumene concentrate across its Pilgangoora project of up to one million tonnes per annum. Plus, the business is working on growing its presence in the value chain of the lithium battery-making process, which means it will be able to capture more of the value.

Analysts are mixed on the company at the moment. Of the 16 analyst calls covered by Commsec, three are sells, six are holds, and seven are buys.

While Goldman Sachs currently rates it as a hold (according to Commsec), the price target of $4.70 implies a possible rise of around 20% over the next year.

What happens in 2023 could be largely dependent on the lithium price. If the commodity price holds up, then investor confidence could return – it’s already up more than 9% in 2023 to date.

With more electric vehicles expected to be manufactured in the coming years, I think the Pilbara Minerals share price is a long-term buy, with a possible dividend yield of 3.8% (excluding the effect of franking credits).

The post What is the outlook for the Pilbara Minerals share price in 2023? appeared first on The Motley Fool Australia.

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• What’s the outlook for ASX 200 lithium shares in 2023?
• Here are the top 10 ASX 200 shares today
• Why is the Pilbara Minerals share price racing 6% higher today?
• ASX 200 lithium shares lead the market higher on Friday
• 3 ASX growth shares to buy with huge upside potential – analysts

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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GQG Partners Inc (ASX: GQG) shares are quickly building a reputation as a high-yielding ASX dividend share. Indeed, it could be paying a very large dividend yield by 2024.

For investors who haven’t heard of this business before, it’s a recently-listed funds management business, though it was growing for a number of years when it was unlisted.

It offers four main share investment strategies – global equity, international equity, emerging markets, and US equity.

With the GQG share price down around 25% over the past year, I think this is a great time to be looking at the company.

Dividend prediction

With a market capitalisation of more than $4 billion, it’s a large funds management business and is benefiting from increasing scale.

The ASX dividend share currently has a dividend payout ratio policy of 90% of distributable earnings. That means most of the profit that it generates is turning into passive income for shareholders.

According to the estimate on Commsec, the business could pay an annual dividend per share of 13.2 cents per share in 2024. This translates into a forward dividend yield of 9.3%.

While it’s harder to predict things further ahead, Commsec currently has a projection of 16 cents for 2025. That would be a future dividend yield of 11.3%.

Remember, GQG pays out its dividend quarterly, so investors can receive their income in pleasing regular amounts.

Why can earnings keep growing?

At 30 June 2022, the fund manager was able to report that each of its main investment strategies had outperformed over the prior 12 months, at five years, and since inception. Achieving outperformance is certainly a good way to attract more funds under management (FUM).

Indeed, the ASX dividend share continues to see pleasing fund inflows, despite the volatility in the share market. For the three months to 30 September 2022, the business saw net inflows of US$0.8 billion. It’s seeing these fund inflows across multiple geographies and major channels.

With the vast majority of the company’s revenue and earnings coming from management fees, not performance fees, GQG’s profit (and dividend) can be more resilient and consistent.

The US-based business is expanding geographically, such as its presence in both Canada and Australia. Last year, it opened offices in Brisbane and Melbourne.

GQG notes that its management is (still) the largest shareholder in GQG, meaning its team is “highly aligned with shareholders, and acutely focused on and committed to GQG’s future”.

Foolish takeaway

Dividends are not guaranteed so we can’t say for sure how much dividend income is going to be paid in the coming years. There’s a chance that it could end up paying even more than the estimates.

I think the fund manager’s investment strategy can continue to produce good returns for investors. This can be good for FUM and, therefore, good for earnings and its dividend.

The post This ASX dividend share is projected to pay a 9% yield by 2024 appeared first on The Motley Fool Australia.

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• 10 ASX shares I think are buys for 2023

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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BHP Group Ltd (ASX: BHP) shares are among the most followed by ASX investors. BHP is the biggest business in Australia with a market capitalisation of $233 billion.

It’s significantly higher than the second largest company, Commonwealth Bank of Australia (ASX: CBA), which has a market capitalisation of $174 billion.

The last 12 months have been very volatile for the ASX mining share as commodity prices bounce around, as seen below.

How much profit could the miner make in FY23?

I’m going to focus on the profit in per share terms so that it’s in context with the BHP share price.

As a reminder, in FY22, the company’s continuing operations generated US$21.3 billion of underlying attributable profit (up 26%) and net operating cash flow of US$29.3 billion (up 13%).

The earnings per share (EPS) of continuing operations was US$4.21, up 25%.

According to Commsec, Goldman Sachs has suggested that BHP could generate EPS of US$2.48 for FY23. At the current exchange rate, that puts the BHP share price at 13 times FY23’s estimated earnings.

The business has a number of moving parts that combine for its overall profit, such as iron ore, copper, coal, and nickel.

While BHP can’t control the resource price, it decides how much resource it produces.

In the first quarter of FY23, copper production increased 9% year over year to 410.1 kt, iron ore production went up 3% year over year to 65.1 mt, metallurgical coal production declined 1% year over year to 6.7 mt, energy coal production sank 38% year over year (due to wet weather and labour shortages) to 2.6 mt, and nickel production jumped 16% year over year to 20.7 kt.

Remember, of the US$34.4 billion underlying earnings before interest and tax (EBIT) BHP made in FY22, US$6.3 billion came from copper, US$19.5 billion was from iron ore and US$8.7 billion was from coal (with US$5.7 billion of that generated by the BHP Mitsubishi Alliance, which produces metallurgical coal).

In summary, production increased in the FY23 first quarter for the divisions that generated most of the underlying profit in FY22.

Is it time to buy BHP shares?

Goldman Sachs has a neutral rating on the resources giant, with a price target of $42.90, according to Commsec. That suggests a possible fall of around 10% over the next year.

I think that investors are looking increasingly confident about the COVID situation in China. With lockdowns seemingly over and the Chinese government looking to support the property sector, it seems some of the confidence about resources is justified.

But I think it could be worthwhile for investors to wait until confidence about resources is lower, which could also lower the BHP share price.

The post How much profit are BHP shares going to make in 2023? appeared first on The Motley Fool Australia.

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• Will 2023 get better for ASX 200 shares?
• Why BHP, Core Lithium, Santos, and Winsome shares are charging higher
• 5 things to watch on the ASX 200 on Thursday
• These are the highest-yielding ASX 200 dividend shares right now
• Can the BHP share price deliver in 2023?

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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2022 was tough on the S&P/ASX 200 Index (ASX: XJO), but ASX energy stocks – and coal shares in particular – bucked the trend.

The S&P/ASX 200 Energy Index (ASX: XEJ) soared nearly 40% between the final close of 2021 and the end of 2022. That’s compared to the ASX 200’s 5.5% tumble.

The sector’s strong performance came on the back of surging energy commodities – a result of Russia’s invasion of Ukraine.

Indeed, Newcastle coal futures lifted above US$450 a tonne to reach a new record in 2022, bolstering producers’ bottom lines.

But which ASX 200 coal shares posted the biggest gains last year? Let’s take a look.

3 ASX 200 coal shares that outperformed all others in 2022

The Whitehaven Coal Ltd (ASX: WHC) share price outperformed not only all fellow ASX 200 coal stocks in 2022, but every other ASX 200 share as well.

After closing 2021 trading at $2.61, the stock rocketed to end 2022 at $9.42 — an incredible 261% rise.

That was despite floods impacting production at the company’s New South Wales open-cut mines.

in August, Whitehaven posted a record $1.95 billion profit for the 2022 financial year and a 1,396% year-on-year increase in earnings before interest, tax, depreciation, and amortisation (EBITDA).

The New Hope Corporation Limited (ASX: NHC) share price also took off in 2022, rising from $2.23 on 31 December 2021 to $6.36 12 months later – a 185% gain.

In September, it also posted a whopping profit for the last financial year. Its profit rose nearly 1,140% to $983 million year-on-year, while its underlying EBITDA came in around 330% higher at $1.58 billion.

Finally, coal mining stock Coronado Global Resources Inc (ASX: CRN) takes out the bronze spot, coming in as 2022’s third best-performing ASX 200 coal share.

After ending 2021 at $1.24, the company’s share price shot up to close last year at $1.99 – a 60.5% improvement.

The ears of dividend fans were likely pricked by this stock last year. It posted two ordinary dividends and three special dividends over the period, totalling approximately 59.75 cents per share.

Some of those payouts related to the whopping US$849 million of EBITDA it posted for the six months ended 30 June – a 3,200% year-on-year improvement.

The post These 3 ASX 200 coal shares posted the biggest gains of 2022 appeared first on The Motley Fool Australia.

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• Here are the top 10 ASX 200 shares today
• Brokers name 3 ASX shares to buy now
• The 3 best performing ASX 200 dividend shares of 2022
• Is China about to reignite ASX 200 coal shares?
• These are the highest-yielding ASX 200 dividend shares right now

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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On Friday, the S&P/ASX 200 Index (ASX: XJO) finished the week with a solid gain. The benchmark index rose 0.65% to 7,109.6 points.

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

ASX 200 expected to jump

The Australian share market looks set to continue its rise on Monday following a strong finish to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 70 points or 1% higher this morning. On Wall Street, the Dow Jones was up 2.1%, the S&P 500 rose 2.3%, and the NASDAQ jumped 2.55%. Investors were piling back into shares after signs that inflation is easing sparked hopes that interest rates may not rise as much as feared.

Oil prices mixed

ASX 200 energy shares Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have a subdued start to the week after a mixed finish to the week for oil prices. According to Bloomberg, the WTI crude oil price was up 0.15% to US$73.77 a barrel and the Brent crude oil price fell 0.15% to US$78.57 a barrel. Oil prices were down over 8% for the week amid global recession concerns.

Tech shares on watch

It could be a great session for tech shares such as Altium Limited (ASX: ALU) and Xero Limited (ASX: XRO) on Monday after their US counterparts stormed higher on Friday. Investors were scrambling to buy tech shares amid signs that inflation is easing. The NYSE listed Block Inc (ASX: SQ2) share price jumped almost 7%.

PEXA added to ASX 200

The PEXA Group Ltd IASX: PXA) share price will be one to watch on Monday after S&P Dow Jones Indices announced that the property settlements company would be added to the ASX 200 index. PEXA will replace Pendal Group Ltd (ASX: PDL), which is merging with Perpetual Limited (ASX: PPT).

Gold price jumps

Gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) could have a solid start to the week after the gold price stormed higher on Friday. According to CNBC, the spot gold price was up 1.6% to US$1,869.7 an ounce during the session. The precious metal climbed to a six-month high thanks to signs that inflation is easing.

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

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• What’s the outlook for ASX 200 lithium shares in 2023?
• How are ASX 200 energy shares tracking in the first week of trade?
• Can ASX tech shares rise from the ashes in 2023?
• Top brokers name 3 ASX shares to buy next week
• The 3 ASX 200 bank shares that outperformed all others in 2022

Motley Fool contributor James Mickleboro has positions in Altium and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Block, and Xero. The Motley Fool Australia has positions in and has recommended Block and 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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S&P/ASX 200 Index (ASX: XJO) energy shares counted amongst the top performers in 2022.

But the first week of trading in 2023 proved to be a difficult one for the big energy stocks.

In fact, none of the pure play ASX 200 energy shares finished the first week of 2023 trading in the green, while the benchmark index managed to notch up a 1.27% gain.

What headwinds did ASX 200 energy shares face in the first week of 2023?

Did someone say headwinds?

Yes, there’ve been a few.

First, investors in ASX 200 energy shares may be feeling a bit skittish over the Federal Government’s price gaps on domestic coal and gas sales. That legislation is due to last for 12 months. But there are no guarantees it might not be rolled over for an additional year. And analysts are still debating the potential impacts on the profitability of the big producers.

Second, windy conditions to drive wind turbines combined with unseasonably warm weather saw gas prices in Europe fall to levels not seen since before Russia’s invasion of Ukraine.

And the big oil and gas producers didn’t get any relief on the oil side either, with Brent crude oil finishing the week at US$80 per barrel. That’s more than 7% below the price where Brent crude was trading at the end of 2022.

So, which ASX 200 energy shares fared the best?

The best of the pack

The third-best performer in the first week of trading in 2023 was oil and gas giant Woodside Energy Group Ltd (ASX: WDS).

Woodside has a market cap of $64 billion and, at the current share price, pays a partly franked trailing dividend yield of 8.7%.

After gaining a stellar 62% in 2022 on the back of surging oil and gas prices, this ASX 200 energy share is down 2.1% in these early days of 2023, finishing the week at $34.61 per share.

Up next, we have oil and gas producer Santos Ltd (ASX: STO).

Santos has a market cap of $23.1 billion and, as of Friday’s closing price, pays an unfranked trailing dividend yield of 3.2%.

Having gained 13% in 2022, the Santos share price is down 1.3% in the new year, closing Friday at $7.02 per share.

Which brings us to the best of the pack over this first week, Origin Energy Ltd (ASX: ORG).

The diversified energy provider and producer has a market cap of $13.2 billion and pays a partly franked, trailing dividend yield of 3.8%.

Origin Energy shares gained 47% in 2022. In the first week of 2023, the ASX 200 energy share edged 0.1% lower, closing at $7.69 per share.

The post How are ASX 200 energy shares tracking in the first week of trade? appeared first on The Motley Fool Australia.

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More reading

• Why BHP, Core Lithium, Santos, and Winsome shares are charging higher
• 3 key factors that helped propel the Woodside share price 60% higher in 2022
• 5 things to watch on the ASX 200 on Friday
• Is the party over for these ASX 200 energy shares in 2023?
• Bigger profits risk bigger target: The Woodside share price conundrum

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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S&P/ASX 200 Index (ASX: XJO) shares had a rocky time last year. Will the ASX share market deliver positive returns this year?

A number of factors ravaged the ASX share market in 2022, including inflation, interest rates, conflict between Russia and Ukraine, and uncertainty in China.

We can see how the volatility hit the ASX with the exchange-traded fund (ETF) iShares Core S&P/ASX 200 ETF (ASX: IOZ).

But after the market has been jostled around, what might be in store for the ASX 200 this year?

Economic changes to start showing in results and trading updates

I think that a number of sectors are going to start showing changes in economic conditions.

For example, many bricks and mortar ASX retail shares may show strong year-over-year sales growth for the six months to 31 December 2022. That’s because the six months to 31 December 2021 saw lockdowns in a number of cities, with many stores shut or trading with restrictions. But, the trading update for the start of 2023 could start showing the impacts of inflation and higher interest rates.

Another area of change could be for ASX 200 bank shares like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and ANZ Group Holdings Ltd (ASX: ANZ).

With interest rates rising, the banks are passing on the hikes to borrowers more quickly than savers. I expect that banks are going to report higher lending margins and profits in 2023. This could be a boost for share prices. But, FY24 and even the second half of FY23 could show bank arrears starting to increase with how rapidly interest rates have risen.

Because the banking sector is significant within the ASX 200, it will have a key influence on whether the ASX 200 climbs or not.

Unpredictable resources sector

Another important factor for ASX 200 shares is the large resources industry.

Numerous companies on the ASX are digging stuff out of the ground, such as BHP Group Ltd (ASX: BHP), Forrtescue Metals Group Limited (ASX: FMG), Rio Tinto Limited (ASX: RIO), Mineral Resources Ltd (ASX: MIN) and so on.

If everyone knew what would happen next with resource prices, then it would be much easier to know what profits resource companies are going to report each year.

I think that Chinese demand for iron ore will grow in 2023 compared to the last few months as the Asian superpower exits COVID-19 restrictions. This could mean that the iron ore price could rise even further. But, with the commodity’s price above US$110 per tonne, it’s possible it has rallied ahead of itself. Time will tell.

One area that I am optimistic about is profit-producing miners that are exposed to electrification commodities such as copper, nickel and lithium. I think that the trend towards decarbonisation is going to continue regardless of a dip in the global economy.

My thoughts on ASX 200 share opportunities

Overall, I think the ASX 200 can produce a small capital gain by the end of the year, plus dividends. There will probably be more uncertainty, but I don’t think things will always look this negative.

For me, I think ASX tech shares could be a good place to look for long-term opportunities, as they’re now at much cheaper prices after the heavy declines in 2022.

The post Will 2023 get better for ASX 200 shares? appeared first on The Motley Fool Australia.

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• The 3 ASX 200 bank shares that outperformed all others in 2022
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Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group. 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 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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ASX tech shares had a terrible time in 2022 amid numerous interest rate rises. After such a bad run, can the sector regain investor confidence in 2023?

As an example of the heavy decline, the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) fell by around 32% last year. This is an exchange-traded fund (ETF) that is invested in around 50 ASX tech shares, ranging from large players like Xero Limited (ASX: XRO), WiseTech Global Ltd (ASX: WTC) and REA Group Limited (ASX: REA), down to small technology companies like Frontier Digital Ventures Ltd (ASX: FDV) and FINEOS Corporation Holdings PLC (ASX: FCL).

Could 2023 go much better?

According to reporting by the Australian Financial Review, a survey of 11 of the country’s leading technology CEOs by the newspaper showed that most of them believe the sales cycle slowdown which is currently hurting Europe and the US could also hurt Australian companies as well, though the ‘business to business’ (B2B) market could do better than ones that focus on consumers.

WiseTech CEO and founder Richard White said:

Regardless of geography, tight economies force business leaders to focus on efficiency in order to be resilient and maintain margins.

The top performing ASX tech companies are mostly B2B players, so they are in a better position compared with other markets in which many of the top tech companies are consumer-facing businesses and so more vulnerable to consumer spending trends.

[This year] has reminded the tech sector we should all have an ongoing focus on efficiency and profitability as part of good financial discipline. We implemented an organisation-wide efficiency program a couple of years ago … it’s given us an annualised cost reduction of approximately $50 million, which was important for driving further operational leverage as our revenue continues to grow.

I suspect investors will be unlikely to quickly return to the days when growth was the chief metric of business health for a tech company. Growth at any cost is pretty much dead, and I expect a focus on growth and profitability is here to stay.

My take on ASX tech shares

The technology sector is a diverse group and, while they have largely been sold off indiscriminately, I think there could be a good rebound for some names.

Remember, a share price is meant to reflect the entire future value of a business, discounted back to a valuation for today.

I do not think that the underlying value of some businesses are worth 40% less, 50% less or an even bigger discount, compared to 12 months ago. However, I’d also say that some businesses were not worth as much as how high the market had pushed them.

If the market sees that some ASX tech shares’ financials are holding up better than others, this could lead to a boost for names like that. Remember, if something drops by 50% from $100 to $50, it only needs to go to $75 to make a 50% return.

I can see names like Megaport Ltd (ASX: MP1), Xero Limited (ASX: XRO) and Life360 Inc (ASX: 360) being candidates that could rebound because of how hard they’ve been hit, yet revenue has continued to grow.

Over the long term, some of the names in this sector could be the ones that develop the most, with strong operating margins. So, being able to buy these ASX tech shares at much cheaper prices seems like a great opportunity to me.

Even if technology businesses don’t rebound in 2023, over the next three to five years, I think they could be among the better performers.

The post Can ASX tech shares rise from the ashes in 2023? appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• 3 ASX growth shares to buy with huge upside potential – analysts
• 5 things to watch on the ASX 200 on Friday
• ASX 200 tech shares are leading the market higher today
• Here’s how I’ll be investing my money in ASX shares in 2023

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 Frontier Digital Ventures, Life360, Megaport, WiseTech Global, and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended FINEOS Corporation. The Motley Fool Australia has positions in and has recommended WiseTech Global and Xero. The Motley Fool Australia has recommended FINEOS Corporation, Frontier Digital Ventures, Megaport, and REA 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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With most brokers taking a break over the holiday period, there haven’t been many notes hitting the wires.

But never fear! Summarised below are three recent recommendations that remain very relevant today. Here’s what brokers are saying about these ASX shares:

Allkem Ltd (ASX: AKE)

According to a note out of Citi, its analysts have a buy rating and $17.80 price target on this lithium miner’s shares. While the broker suspects that lithium prices may have peaked amid slowing electric vehicle demand in China, it doesn’t appear too concerned. This is due to Allkem locking in strong contracted prices. Combined with production growth, Citi remains positive on the company’s outlook. The Allkem share price ended the week at $11.91.

Corporate Travel Management Ltd (ASX: CTD)

A note out of Macquarie reveals that its analysts have an outperform rating and $19.95 price target on this corporate travel specialist’s shares. The broker acknowledges that industry data shows that corporate travel activity softened in the United States in November, putting Corporate Travel Management at risk of falling short of first half expectations. However, with its shares down heavily over the last 12 months and trading at an attractive level, the broker appears to believe this is more than priced in. The Corporate Travel Management share price was fetching $15.62 at Friday’s close.

Xero Limited (ASX: XRO)

Analysts at Bell Potter have a buy rating and $97.90 price target on this cloud accounting platform provider’s shares. According to the note, the broker has taken positives from the recent release of the first quarter update from rival Intuit (the owner of Quickbooks). Bell Potter notes that the update revealed softness in the Australian market for QuickBooks, which could bode well for Xero. In addition, it notes that Intuit commented that it believes that digitisation rather than macro remains the key driver for cloud accounting. This is likely to be a positive for Xero in the current economic environment. The Xero share price ended the week at $71.62.

The post Top brokers name 3 ASX shares to buy next week appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX growth shares to buy with huge upside potential – analysts
• 5 things to watch on the ASX 200 on Friday
• Experts says these ASX 200 mining shares can rocket higher in 2023
• Top ASX shares to buy in January 2023

Motley Fool contributor James Mickleboro has positions in Allkem 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 Australia has recommended Corporate Travel Management. 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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