The S&P/ASX 200 Index (ASX: XJO) started the short week in the red, falling 0.11% in Monday’s session to close at 7,322 points.

Weighing it down was the mining sector, with two of the S&P/ASX 20 Index (ASX: XTL)’s materials giants – Fortescue Metals Group Limited (ASX: FMG) and South32 Ltd (ASX: S32) – posting apparently disappointing quarterly production updates.

The S&P/ASX 200 Materials Index (ASX: XMJ) slumped 1.6% while shares in Fortescue dumped 3.4% and those of South32 tumbled 7.4%. The sector was likely hampered by iron ore futures, which fell 1.8% on Friday to US$117.21 a tonne.

The top-performing sector, on the other hand, was the S&P/ASX 200 Real Estate Index (ASX: XRE). It jumped 1.2%.

Interestingly, however, today’s top-performing stock is housed on the S&P/ASX 200 Health Care Index (ASX: XHJ). Keep reading to find out healthcare share outperformed all others on the index on Monday.

Top 10 ASX 200 shares countdown

The Nanosonics Ltd (ASX: NAN) share price posted the ASX 200’s biggest gain today, rising 7.5% to close at $5.56.

That’s despite no news having been released by the infection prevention specialist.  

These shares made today’s biggest gains:

ASX-listed company	Share price	Price change
Nanosonics Ltd (ASX: NAN)	$5.56	7.54%
Pilbara Minerals Ltd (ASX: PLS)	$4.23	5.22%
Polynovo Ltd (ASX: PNV)	$1.70	4.94%
Credit Corp Group Limited (ASX: CCP)	$17.41	4.56%
Centuria Capital Group (ASX: CNI)	$1.74	3.88%
Downer EDI Ltd (ASX: DOW)	$3.52	2.92%
Block Inc CDI (ASX: SQ2)	$95.08	2.25%
Ingenia Communities Group (ASX: INA)	$4.14	2.22%
Mineral Resources Ltd (ASX: MIN)	$80.36	2.11%
ResMed Inc (ASX: RMD)	$34.25	2.06%

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

• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why Block, Nanosonics, Pilbara Minerals, and Weebit Nano shares are racing higher
• Why are ASX lithium shares powering higher today as the resource sector bleeds?
• ASX 200 takeover target dives 15% after its deal is laid to rest
• Another 52-week high: Are Wesfarmers shares stretched, or could they be a buy?

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, Nanosonics, PolyNovo, and ResMed. The Motley Fool Australia has positions in and has recommended Block, Nanosonics, and ResMed. 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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It’s been a very shaky start to the trading week for the S&P/ASX 200 Index (ASX: XJO) so far this Monday. After starting with a big plunge this morning, the ASX 200 has worked its way back toward the breakeven line so far today. However, the Index is still in the red, currently down by an anaemic 0.01% at just over 7,320 points. 

But rather than trying to figure all of that out, let’s instead check out the shares that are presently at the top of the ASX 200’s share trading volume charts, according to investing.com. 

The 3 most traded ASX 200 shares by volume this Monday

Sayona Mining Ltd (ASX: SYA)

The first cab off the rank today is the ASX 200 lithium stock Sayona Mining. So far this Monday, a decent 25.9 million Sayona shares have changed hands as it currently stands. This looks like a consequence of the company’s share price performance this session, seeing as there is nothing out of Sayona itself to speak of today.

But Sayona has had a rough time of it on the ASX. The company has shed a notable 4% so far today, putting the company at 19.5 cents a share at present. With a sell-off of that size, no wonder we are seeing Sayona grace our list this Monday.

South32 Ltd (ASX: S32)

Next up we have ASX 200 mining giant South32 to check out. At this point of the day, a significant 36.4 million South32 shares have been exchanged on the share market. It’s not too difficult to see where this high trading volume is coming from.

As we covered this morning, South32 is on the nose today after the company gave a less-than-impressive production update. South32 reported that production of almost all of its primary commodities fell significantly over the March quarter, including silver, aluminium and nickel.

The South32 share price has plunged more than 7% on this news so far today, which easily explains why we are seeing so many shares flying around.

Pilbara Minerals Ltd (ASX: PLS)

Our third and final share worth a look at this Monday is another ASX 200 lithium stock. Pilbara Minerals has had a hefty 37.4 million shares bought and sold on the markets today. Pilbara is having the opposite reaction to Sayona from investors today.

While Sayona shares are down by 4%, Pilbara has climbed an impressive 3.86% at present to $4.18 a share. As my Fool colleague went through this afternoon, this could be a result of news that the Chilean government is looking to nationalise its own lithium assets.

But it’s this sharp appreciation that has probably enticed so many Pilbara shares to the markets this Monday.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

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More reading

• Why Block, Nanosonics, Pilbara Minerals, and Weebit Nano shares are racing higher
• Why BHP, InvoCare, Lake Resources, and South32 shares are dropping today
• Why are ASX lithium shares powering higher today as the resource sector bleeds?
• ASX 200 takeover target dives 15% after its deal is laid to rest
• Another 52-week high: Are Wesfarmers shares stretched, or could they be a buy?

Motley Fool contributor Sebastian Bowen 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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Woodside Energy Group Ltd (ASX: WDS) shares could come under increasing pressure if the experts at broker outfit Citi are correct.

As an ASX energy share giant, the company is heavily affected by what energy prices are doing. But, there are also other risks to consider, such as the work on huge projects being on time and on budget. Governments can also change the operating landscape. With that in mind, investors need to be aware of what Citi thinks could happen.

Lower profit possible

According to reporting by The Australian, Citi has a price target of $30 on the company, which implies a possible fall of around 10%.

The problem, according to analyst James Bryne, is the potential change to the petroleum resources rent tax (PRRT).

As recently reported:

The PRRT allows concessions on expenses relating to exploring and developing gas fields. Under the current system, these can be carried forward and deducted as tax credits against future liabilities. But the Greens want the government to eliminate $284 billion of accumulated credits that enable gas companies to reduce their tax liability.

The suggestion is to remove all of these tax credits, which would mean gas companies start paying from 1 July, and for the government to apply a 10% royalty to all offshore projects subject to the tax.

Citi has suggested that change could mean that the market’s expectations for Woodside’s earnings per share (EPS) could reduce by 10% to 15%, hurting the underlying value of the business by 5% to 10%.

Despite that, Citi analyst Bryne increased his expectations for 2023 net profit after tax (NPAT) because of the recent strong result, though somewhat offset by the “moderated ramp-up profile for Mad Dog production”.

Citi also increased the 2024 and 2025 net profit forecasts slightly thanks to “higher trading volumes”.

Is this going to hurt Woodside dividends?

The Australian also reported that Citi believes a fall in the net profit could lead to a reduction of the potential dividends as well. This could also hurt the Woodside share price if investors aren’t getting the dividend income they were expecting. Bryne said:

Over the coming years, we expect a theme of ASX Energy to be a redirection of capital budgets away from Australia, by both organic and inorganic means.

It seems understandable that if Woodside sticks to a certain dividend payout ratio in percentage terms, then a fall in profit would mean lower dividends as well.

However, not every broker is as pessimistic as Citi about the company’s prospects. The broker JPMorgan recently raised its rating to neutral, with a price target of $33.85, which is slightly higher than where it is today.

Woodside share price snapshot

Over the past year, the Woodside share price has risen by around 10%.

The post Could the bountiful dividends from Woodside shares be at risk? appeared first on The Motley Fool Australia.

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More reading

• Passive income plan: I’d invest $100 a week in ASX 200 shares to earn $7,500 of annual dividends
• The Woodside share price is sliding today. Here’s why
• 5 things to watch on the ASX 200 on Friday
• Could the Woodside share price face ‘long-term harm’ from this government tax plan?
• 5 things to watch on the ASX 200 on Wednesday

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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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It’s been a pretty dreary start to the week for most ASX shares so far this Monday. At the current point of the trading day, the All Ordinaries Index (ASX: XAO) has shed a miserly 0.05%. That puts the Index at just under 7,520 points. But one little ASX share is shining brightly today in the face of this broader market negativity.

The Duratec Ltd (ASX: DUR) share price is on fire today. Right now, Duratec shares are up a healthy 8.7% at exactly $1 each. But earlier this morning, the Duratec share price climbed as high as $1.03 a share, up around 12% at the time. Not only is $1.03 a share a new 52-week high for Duratec, but it’s also an all-time, record high. Yes, Duratec shares have never been higher than they were this morning:

So what’s going so right for this investment holding company?

Duratec shares hit record high as company reveals earnings bump

Well, it seems this fresh new high for Duratec is a result of an ASX announcement Duratec released to investors this morning before market open. In this announcement, the company revealed some changes to its revenue and earnings guidance for the 2023 financial year.

It was only back in February that Duratec declared that it was expecting to bring in between $420 million and $460 million in revenue for FY2023. But this morning, the company revised this target range to between $465 million and $495 million.

In terms of earnings before interest, tax, depreciation and amortisation (EBITDA), Duratec previously flagged EBITDA for FY2023 to come in between $32 million and $35 million. But this has also been revised, to a range of $36 million and $39 million.

In FY2022, the company pulled in a total of $310 million in revenue and $19.3 million in EBITDA.

So no wonder investors are in such a good mood today.

Duratec credited these optimistic revisions to the company’s “ability to convert key project awards to delivery in better–than–expected timeframes and a strong growth and profit contribution from Wilson’s Pipe Fabrication”.

Duratec managing director Phil Harcourt also had this to say:

We are very pleased to be delivering a strong result for FY23 and outperforming initial expectations through a combination of contributing factors. These include the recent approval of contract variation claims, commencement of recently secured projects, increased productivity and reduction in risk allowance on a number of projects and a stronger than anticipated contribution from Wilson’s Pipe Fabrication...

We continue to focus on maintaining and growing our order book, through the continually sourcing of identified opportunity and tendering at the required level to support the Company’s growth into the future.

So this explains why Duratec shares are having such a stellar time on the ASX today. No doubt shareholders will be impressed by what the company has come up with.

At the current Duratec share price, this All Ords share has a market capitalisation of $224.2 million, with a dividend yield of 2.5%.

 

The post Earnings upgrade: This little ASX share is leaping 12% to record highs today appeared first on The Motley Fool Australia.

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More reading

• Why are ASX lithium shares powering higher today as the resource sector bleeds?
• ASX 200 takeover target dives 15% after its deal is laid to rest
• Is the Vanguard Australian Shares High Yield ETF (VHY) a strong ASX buy for passive income?
• Another 52-week high: Are Wesfarmers shares stretched, or could they be a buy?
• South32 share price tumbles 9% on lower production and guidance downgrades

Motley Fool contributor Sebastian Bowen 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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It has been a great day for some ASX lithium shares on Monday.

Although the resources sector as a whole is having an off-day, a good number of lithium miners and developers are roaring higher.

Here’s a summary of how some of ASX lithium shares are performing today:

• The Core Lithium Ltd (ASX: CXO) share price is up 2.5% to 98 cents.
• The Liontown Resources Ltd (ASX: LTR) share price is up 1% to $2.75.
• The Mineral Resources Ltd (ASX: MIN) share price is up 2% to $80.33.
• The Pilbara Minerals Ltd (ASX: PLS) share price is up 4.5% to $4.21.

Why are some ASX lithium shares charging higher?

While there has been no news out of these ASX lithium shares today, as we covered here on Friday briefly, there has been some major news in the industry in the last few days.

That news is that the Chilean government plans to create a state-owned lithium company that owns controlling stakes in local lithium producers.

This sent the shares of lithium giants Albemarle Corporation (ASX: ALB) and Sociedad Quimica y Minera de Chile (ASX: SQM) crashing down to earth on Friday on Wall Street.

Bloomberg notes that the government will respect existing arrangements with the two companies, but then move to a state-controlled model once contracts expire in 2030 and 2043, respectively. Alternatively, the two mining giants could opt to give up a majority stake in their operations before then.

So why are some shares rising?

It is worth noting that not all ASX lithium shares are rising today. For example, Allkem Ltd (ASX: AKE) is flat, Lake Resources N.L. (ASX: LKE) is down 4.5%, and Argosy Minerals Limited (ASX: AGY) is down 3.5%.

The difference between these shares and the ones rising above is the location of some of their operations.

The ASX lithium shares that are rising have operations in low-risk jurisdictions, whereas the three listed above all have operations in Argentina.

This appears to indicate that some investors are concerned that Argentina might see what Chile is doing and try to replicate it. In light of this, it may have led some investors to switch out of these shares and into largely Australian-based lithium shares.

The post Why are ASX lithium shares powering higher today as the resource sector bleeds? appeared first on The Motley Fool Australia.

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More reading

• Here’s why Pilbara Minerals shares will be in the spotlight this week
• These are the 10 most shorted ASX shares this week
• Invested $3,000 in Mineral Resources shares in 2018? Here’s how much dividend income you’ve received
• 3 things ASX investors should watch this week
• Analysts say Pilbara Minerals and this ASX dividend share are buys

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 S&P/ASX 200 Index (ASX: XJO) and ASX shares have not had the pleasant start to the trading week that many of us hoped they would. At the time of writing, the ASX 200 has started the week off with some red ink, with the index currently still down by 0.02% at just over 7,328 points.

But one ASX 200 share is doing far worse than the broader market today. That would be funeral services provider InvoCare Limited (ASX: IVC).

InvoCare shares are having a shocker today. The company closed at $12.11 at the end of last week. But the company opened at $10.21 this morning and fell as low as $10.07 a share by mid-morning (down around 15%). At present, the InvoCare share price has recovered a little. But it is still down a meaty 9.33% at $10.98 a share.

So what on earth is going on with this company today that would elicit such a savage reaction from investors?

Why was this ASX 200 share down 15% today?

Well, it seems all of this is related to the takeover offer InvoCare received last month. As we covered at the time, InvoCare shares soared when news that the company had been approached by the Singaporean Blue Eternal, and private equity firm TPG Asia.

Under an indicative proposal, TPG offered to acquire 100% of the InvoCare shares on issue for a price of $12.65 in cash per share.

At the time this was made public, InvoCare shares soared by an impressive 37% to close to the offered pricing.

The company has stayed around that price level ever since. Well, until today.

This morning, just before the market open, InvoCare announced that TPG had withdrawn its proposed offer of $12.65 a share.

Investors clearly ramped up the price they were willing to pay for Incovare shares following the offer. In light of its dissolution, it makes sense that the company would be pulled back to the pricing levels it commanded before the offer was made public.

So this probably explains why the InvoCare share price is having such a disappointing start to the week today.

What’s next for InvoCare shares?

In its announcement this morning, InvoCare stated that “the Board remains willing to consider any proposal that represents fair value in the interests of all shareholders”.

It also revealed that TPG, despite withdrawing its offer, had requested that Genevieve Gregor be nominated to the InvoCare board. The company said it would “consider this request in due course”. 

But regardless, it seems that this chapter in InvoCare’s history has now come to a close. Investors seem disappointed, but who knows what the future may bring?

InvoCare shares have now lost all of the gains they have made in 2023 and are down by 0.36% year to date. At the current share price, Invocare has a trailing dividend yield of 2.23%.

 

The post ASX 200 takeover target dives 15% after its deal is laid to rest appeared first on The Motley Fool Australia.

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More reading

• Another 52-week high: Are Wesfarmers shares stretched, or could they be a buy?
• Fortescue share price plummets 5% amid weaker production
• Guess which ASX 200 stock just upped its guidance by as much as 60%
• Are BHP shares a buy following the ASX 200 miner’s latest update?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen 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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Vanguard Australian Shares High Yield ETF (ASX: VHY) is an exchange-traded fund (ETF) that is known for paying a higher dividend yield for investors. But is it a buy for passive income?

The aim of this ETF is to provide low-cost exposure to ASX shares that have a higher forecast of dividends relative to other ASX shares.

Diversification is kept in mind, with the allocation of the portfolio to any one industry to 40% of the total ETF and 10% in any one company. Australian real estate investment trusts (REITs) are excluded from the index.

How big is the dividend yield?

Vanguard tries to make it easier for investors to see how much passive dividend income might come from the ETF in the next 12 months.

The ETF provider’s March 2023 fund characteristics metrics suggest that the forecast dividend yield for Vanguard Australian Shares High Yield ETF is 5.5% or 7.5% when grossed up to include the franking credits.

Those projections are reportedly sourced by Vanguard from FactSet. An ETF simply passes through the dividend income it receives from the underlying companies, so that’s why it needs to know what the dividend forecasts are for those businesses.

Which ASX shares does it own?

At the end of March 2023, it owned a total of 72 positions.

The biggest 10 holdings made up more than 60% of the Vanguard Australian Shares High Yield ETF portfolio. So let’s look at those names:

BHP Group Ltd (ASX: BHP) – 10.7% of the portfolio

Commonwealth Bank of Australia (ASX: CBA) – 8.9%

National Australia Bank Ltd (ASX: NAB) – 6.7%

Woodside Energy Group Ltd (ASX: WDS) – 6.4%

Westpac Banking Corp (ASX: WBC) – 5.8%

Wesfarmers Ltd (ASX: WES) – 5.8%

ANZ Group Holdings Ltd (ASX: ANZ) – 5.3%

Telstra Group Ltd (ASX: TLS) – 5%

Macquarie Group Ltd (ASX: MQG) – 4.7%

Rio Tinto Ltd (ASX: RIO) – 4.5%

So, a lot of the ETF’s dividend income is going to come from those names I’ve just mentioned.

Is the Vanguard Australian Shares High Yield ETF a buy for passive income?

Clearly, the ETF is designed to capture a lot of dividends, and it has been effective at doing that because of the nature of the businesses involved.

Vanguard’s performance table says that in the five years and ten years to March 2023, it paid an average distribution return of around 6%, excluding the franking credits.

So, if investors are only focused on the income, then it does what it says on the tin.

However, I think that it’s worth pointing out that over the five years to March 2023, the Vanguard Australian Shares High Yield ETF only produced capital growth of an average of 3.4%. In the prior ten years, it made an average return per annum of 1.1%.

I don’t think there’s as much compound growth potential with many of these large businesses that are paying large dividends. So, if I were focused on total returns, I’d rather focus on an ASX dividend share that can deliver more growth. I like to target businesses where I think they can deliver good total returns, including useful dividends, such as Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and Brickworks Limited (ASX: BKW).

The post Is the Vanguard Australian Shares High Yield ETF (VHY) a strong ASX buy for passive income? appeared first on The Motley Fool Australia.

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More reading

• 2 fantastic ETFs for ASX investors to buy next week
• 5 steps to bring in $1,000 per month in passive income
• How I’d invest $20,000 to earn reliable passive income today
• One possible investing route to earning $1,000 monthly passive income
• Want $1,000 of passive income? Check out these ASX shares

Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks, Macquarie Group, Telstra Group, Washington H. Soul Pattinson and Company Limited, and Wesfarmers. 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 S&P/ASX 200 Index (ASX: XJO) has kicked off the trading week on a bit of a sour note so far this Monday. At the time of writing, the ASX 200 has clearly had a big weekend and gotten out of the wrong side of the bed this morning, with the index down by 0.14% at just over 7,320 points. But let’s talk about Wesfarmers Ltd (ASX: WES) shares.

The ASX 200 may have started the week off on the wrong foot, but no one seems to have told Wesfarmers. Shares in this ASX 200 industrial and retail conglomerate are currently defying the market, gaining 0.63% today to $52.36 apiece.

A new 52-week high for this ASX 200 blue-chip share

Not only that, but this Monday has seen Wesfarmers shares hit a new 52-week high. This morning, the Wesfarmers share price climbed as high as $52.46. That’s the company’s new 52-week high watermark.

It’s not too difficult to see why investors might be flocking to Wesfrmers shares today. The company announced some big news this morning, revealing that it has made an offer to acquire the skincare clinic operator Silk Laser Australia Ltd (ASX: SLA).

Wesfarmers has offered $3.15 a share for Silk Laser, which is a 30% premium to where this company closed last week. As we also covered this morning, this bid has seen the Silk Laser share price climb a whopping 25% following news of this bid.

So both Wesfarmers and Silk Laser investors clearly approve of this takeover offer.

But with Wesfarmers shares at a new 52-week high, this might cause some consternation. Wesfarmers is an ASX 200 share that has been on an absolute tear lately.

Not only are Wesfarmers shares up a hefty 15.3% year to date in 2023 so far, but the company is also now almost 30% higher than the 52-week low of $40.03 that we saw in the middle of last year:

So perhaps there might be some investors wondering if Wesfarmers shares are still worth buying today. One could argue that the company’s shares are stretched after rocketing so much higher in 2023.

Are Wesfarmers shares still a buy at a new 52-week high?

Well, at least two ASX brokers have recently given the Wesfarmers share price a buy rating and share price targets well above today’s new high.

As we covered earlier this month, ASX broker Morgans recently gave Wesfarmers shares an add rating, replete with a 12-month share price target of $55.6. That implies an upside of 6.2% from where the shares are right now.

Commenting on this recommendation, Morgans had this to say:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks.

The company is run by a highly regarded management team and the balance sheet is healthy. We believe WES’s businesses, which have a strong focus on value, remain well-placed for growth despite softening macro-economic conditions.

So that’s pretty optimistic from this ASX broker.

But it’s not just Morgans that still likes the look of Wesfarmers right now. As we covered last week, fellow ASX broker UBS also rates Wesfarmers as a buy, with a share price target of $55.50.

We also recently looked at fund manager TMS Capital and its high-conviction view on Wesfarmers. TMS Capital reckons Wesfarmers’ Mt Holland lithium project could end up being in the top tier of global lithium mines, helping the company to access another avenue of earnings in the future, potentially worth up to $1 billion annually.

So a bevvy of ASX experts still like what they see with Wesfarmers shares right now, despite this company’s new 52-week high.

No doubt Wesfarmers shareholders will be comforted by these bullish views today.

At the current Wesfaremers share price, this ASX 200 blue chip share has a market capitalisation of just under $60 billion, with a dividend yield of 3.6%.

The post Another 52-week high: Are Wesfarmers shares stretched, or could they be a buy? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. 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 Wesfarmers. The Motley Fool Australia has recommended Silk Laser Australia. 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 South32 Ltd (ASX: S32) share price is plummeting on Monday after the company revealed a disappointing quarterly production and downgraded its guidance for numerous operations.

The stock in the diversified mining company is down 9.1% at the time of writing, trading at $4.045.

South32 share price falls on lower quarterly production

Here are the key takeaways from the S&P/ASX 200 Index (ASX: XJO) stock’s quarterly production update:

• Payable copper production fell 18% quarter-on-quarter (QoQ)
• Manganese and metallurgical coal production fell 15% and 16% respectively
• Payable silver production dropped 19%
• While payable production of lead and zinc saw the biggest falls, tumbling 24% and 23% respectively
• Alumina and aluminium production also slumped 9% and 3% respectively
• Finally, nickel production fell 6%

The company’s production was hampered by wet weather and other temporary impacts last quarter. Though, it notes improved market conditions supported higher prices across most commodities.

Other positives included its copper equivalent and aluminium production, which lifted 7% and 15% respectively in the financial year to date. The improvements were driven by previous investments in the company’s portfolio.

What else happened last quarter?

Weather took its toll on South32’s operations last quarter. Mozal Aluminium, Cannington, Sierra Gorda, and its South African Manganese operation were each impacted by flooding and wet weather.

Cannington was hit particularly hard, with mining operations temporarily suspended during the period.

Meanwhile, Australian Manganese achieved record production. Its Eastern Leases South extension was approved during the quarter, extending its operation’s life to at least financial year 2028.

The company also exercised its earn-in right to acquire a 50.1% interest in the Chita Valley copper exploration project.

What did management say?

South32 CEO Graham Kerr commented in the release driving the company’s share price lower today, saying:

We remain well positioned to capitalise on improved market conditions, with higher production volumes expected to finish the 2023 financial year and operating unit cost and capital expenditure guidance held largely unchanged.

We continue to reshape our portfolio towards commodities critical to a low-carbon future, progressing construction and development studies at Hermosa and adding the prospective Chita Valley copper project to our portfolio of greenfield options.

What’s next?

Production guidance downgrades at numerous operations are also likely weighing on the South32 share price today.

While much of its full-year guidance remains unchanged, it did downgrade its production forecast for its Mozal Aluminium and Cannington operations by 4% and 6% respectively.

Guidance also dropped 4% at Brazil Alumina on a conveyor outage, 7% at Cerra Matoso on less access to higher-grade iron ore, and 7% at Illawarra Metalogical Coal amid challenging strata conditions at its Appin mine.

It also upped its production guidance at its Australia Manganese operation by 3% on improved primary outputs.

Meanwhile, its operating unit cost guidance has been held steady, except at Cannington and Illawarra Metallurgical Coal, where it was increased due to lower planned volumes.

Finally, the company has revised its full-year underlying net finance costs guidance to US$190 million – up from US$150 million – as a reflection of its balance sheet at the end of the quarter.

South32 share price snapshot

Today’s fall included, the South32 share price has gained 3% so far this year. Though, it’s trading 8% lower than it was this time last year.

For comparison, the ASX 200 has risen 5% year to date and is trading flat year-on-year.

The post South32 share price tumbles 9% on lower production and guidance downgrades appeared first on The Motley Fool Australia.

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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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Wesfarmers Ltd (ASX: WES) shares may get an impressive earnings boost from lithium in the coming years. Hence, I’m going to outline some of the most interesting features of the growth plans for the business below.

A few years ago, Wesfarmers acquired the ASX-listed Kidman Resources for $776 million, which had a 50% interest in the Mt Holland lithium project based in Western Australia. The project could have one of the world’s most significant lithium deposits.

The joint venture that Wesfarmers is involved with is called Covalent Lithium.

What’s so attractive about lithium?

Wesfarmers could have decided to invest in any resource, such as copper or nickel.

But, what attracted the ASX share was that there’s a “strong demand outlook” for battery grade lithium. This is being driven by “increasing penetration of battery electric vehicles (BEV) and battery energy storage systems (BESS).”

Wesfarmers’ research suggests that the forecast BEV and BESS demand growth of 18% per annum between 2022 to 2030 is thanks to a significant investment in BEV and lithium-based battery infrastructure.

The company noted that the lithium supply response is impacted significantly by how long it takes to get a new mining operation going.

Mt Holland

Wesfarmers believes the Mt Holland resource enables a “low-cost, long-term lithium production business.” Using Wesfarmers chemicals, energy and fertilisers (WesCEF), Covalent Lithium will be an “integrated producer of premium, battery-grade lithium hydroxide for the electric vehicle market.” I think it’s an exciting development for Wesfarmers shares.

Located in the Western Australia Goldfield region, the goal is that it will produce around 380 kt per annum of spodumene concentrate, which will then be transported to the Kwinana refinery to be refined into 50,000 tonnes per annum of battery-grade lithium hydroxide.

In terms of progress on the project, using an update from approximately a month ago, the concentrator is more than 85% complete and early commissioning has commenced, while the refinery civil works have been completed. A majority of the long-lead items have arrived at the refinery.

First production from the Mt Holland concentrator is expected by the end of 2023, while the first production from the Kwinana refinery is expected in the first half of the 2025 calendar year.

How much earnings could lithium generate for Wesfarmers?

The fund manager TMS Capital recently suggested that Mt Holland could generate over $1 billion of earnings for the company each year.

TMS Capital suggests that a full-year contribution will occur in FY25.

Commsec numbers currently have a projection of $2.43 of earnings per share (EPS) for the 2025 financial year.

That implies a valuation of 23 times FY25’s estimated earnings. That’s a reasonable valuation for Wesfarmers shares in my opinion, for a diversified, growing business with increasing exposure to areas with promising tailwinds like lithium and healthcare.

The post How lithium could unlock billions for Wesfarmers shares appeared first on The Motley Fool Australia.

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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 positions in and has recommended Wesfarmers. 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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