ASX 200 tech shares are broadly off to a strong start in the second quarter of the 2023 financial year (Q2 FY23).

The S&P/ASX 200 Index (ASX: XJO) is up 2.7% in the early days of Q2 FY23. Using that as our benchmark, let’s check how tech stocks are tracking since the end of September.

Embattled buy now, pay later (BNPL) stock Block Inc (ASX: SQ2), which acquired Afterpay in January, has handily beaten that return, gaining 4.9% so far in Q2.

Accounting software provider Xero Ltd (ASX: XRO) hasn’t managed to hold onto to some strong gains posted in the first week of the quarter. It’s currently down 0.5% since the closing bell on 30 September.

Meanwhile, ASX 200 tech share WiseTech Global Ltd (ASX: WTC), which provides cloud-based software solutions for the logistics sector, has also edged out the benchmark, up 3.8% so far in Q2.

And we’ll leave off with administration services company Link Administration Holdings Ltd (ASX: LNK), our top performer in Q2, up 10.8% so far.

How have these companies performed heading into the new quarter?

The first three quarters of the calendar year (as opposed to financial year, which ends on 30 June), were less than kind to ASX 200 tech shares.

Over the nine months through to 30 September:

• The Xero share price fell 49.7%
• The WiseTech share price dropped 13.3%
• The Square share price (commencing from its 20 January ASX listing) slid 52.1%, and
• The Link share price fell 49.7%

The benchmark index dropped 14.4% over the same period.

While there are company and sector-specific differences that impact these ASX 200 tech shares in unique ways, one factor threw up some gale-force headwinds for all.

Yep, we’re talking about central banks aggressively ratcheting up interest rates for the first time in more than a decade to combat soaring inflation.

This has seen the Reserve Bank of Australia (RBA) raise rates from the historic low of 0.10% to the present 2.60%. The US Federal Reserve has hiked rates to 3.25%, and other leading global central banks have also moved to rapidly raise their own rates.

What’s the outlook for ASX 200 tech shares in Q2?

With the interest rate dilemma in mind, the broad outlook for ASX 200 tech shares in the new quarter will hinge on the rate rises we see from the RBA and the highly influential Fed — and to a lesser extent other global central banks.

Tech stocks are particularly vulnerable to rate increases, as most of these companies are priced with distant future earnings growth in mind. As interest rates rise, so too does the present cost of investing in those future earnings.

As we wrote last week, 5 October, ASX 200 tech shares had a stellar two-day run “as signs emerge that a series of rate increases in the US, the world’s biggest economy, is having some impact on slowing the pace of inflation. That could mean the US Fed won’t need to hike rates as aggressively as the market has priced in”.

Their performance was further boosted by a lower-than-expected 0.25% rate hike from the RBA on 4 October.

But that picture was flipped upside down a few days later.

Yesterday, 10 October, ASX 200 tech shares led the charge lower.

Why?

Because the September jobs data out of the US, the world’s top economy, was stronger than expected. Unemployment is at 50-year lows and wages are growing at 5% annually.

This seemingly good news wasn’t good news for the rate-sensitive tech sector, as markets rapidly repriced in further sharp rate increases from the Fed.

Those expectations were bolstered by Fed Governor Christopher Waller. “Until we see any signs of inflation beginning to moderate, I don’t know how we pause,” he said.

So, investors wondering how ASX 200 tech shares are likely to perform in the new quarter would do well to keep a close eye on inflation expectations out of the United States and here in Australia.

Once central banks can start easing off their hawkish paths, the well-placed companies should enjoy some strong runs, like we just witnessed last week.

The post What’s the outlook for ASX 200 tech shares in the second quarter? appeared first on The Motley Fool Australia.

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More reading

• Despite recent volatility, Core Lithium shares delivered a 16% gain in Q1. Here’s how
• 5 things to watch on the ASX 200 on Wednesday
• A mortgage ‘battleground’ is coming. UBS names ASX 200 bank shares best placed to win
• Here are the top 10 ASX 200 shares today
• Could ASX 200 shares represent a ‘phenomenal opportunity’ right now?

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 positions in and has recommended Block, Inc., Link Administration Holdings Ltd, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, 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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The Core Lithium Ltd (ASX: CXO) share price saw multiple peaks and troughs over the first quarter of financial year 2022, ultimately closing the period 15.7% higher than it started.

There was plenty of news from the S&P/ASX 200 Index (ASX: XJO) lithium favourite in that time, with its stock’s major driver being an update on its exploration activities.

After ending June trading at 95.5 cents, the Core Lithium share price rocketed to reach $1.105 at the final close of September. For comparison, the ASX 200 gained 1.4% over the September quarter.

However, in that time, the stock hit an all-time high of $1.69 and a low of 82.5 cents – marking a variance of more than 100%.

So, what exactly has been going right for the Core Lithium share price lately? Let’s take a look.

What drove the ASX 200 lithium developer in Q1?

The Core Lithium share price had a good, albeit volatile, run in the first quarter of financial year 2022 as the company continued to prepare for the maiden sale of lithium from its Finniss Project.

It noted its plans to tender the project’s production on a digital exchange platform, as its ASX 200 lithium peer Pilbara Minerals Ltd (ASX: PLS) is known to do, late last month.

Additionally, it welcomed a new CEO following the shock exit of former managing director Stephen Biggins in March. Gareth Manderson took up the company’s reins in August after a 28-year stint in the mining and minerals sector.

Core Lithium also announced assay results from a diamond drilling campaign conducted at the Finniss’ BP33 deposit. In early August, the lithium developer reported the campaign found “world-class high-grade lithium intersections”.

Later that month, it revealed it had found gold at shallow depths at the project.

Finally, the company’s final close of the quarter was remarkably underwhelming for its share price, which was put in the freezer on 29 September. It was unfrozen last week on news of a successful $100 million institutional placement.  

Core Lithium share price snapshot

The Core Lithium share price has been on a roll lately.

As of the final close of September, the stock was 76% higher than it was at the start of 2022. It’s also currently 165% higher than it was 12 months ago.

Meanwhile, the ASX 200 has dumped 12% year to date and 9% over the last 12 months.

The post Despite recent volatility, Core Lithium shares delivered a 16% gain in Q1. Here’s how appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• A mortgage ‘battleground’ is coming. UBS names ASX 200 bank shares best placed to win
• Here are the top 10 ASX 200 shares today
• Why is the Core Lithium share price in the green today?
• Could ASX 200 shares represent a ‘phenomenal opportunity’ 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 Tuesday, the S&P/ASX 200 Index (ASX: XJO) had a poor day and dropped into the red. The benchmark index fell 0.35% to 6,645 points.

Will the market be able to bounce back from this on Wednesday? Here are five things to watch:

ASX 200 expected to fall

The Australian share market looks set to fall again on Wednesday after another poor night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 25 points or 0.4% lower this morning. In late trade on Wall Street, the Dow Jones is down 0.1%, the S&P 500 is down 0.95%, and the Nasdaq is down 1.55%.

Oil prices drop

Energy shares Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a tough day after oil prices pulled back overnight. According to Bloomberg, the WTI crude oil price is down 3.1% to US$88.31 a barrel and the Brent crude oil price has fallen 2.8% to US$93.49 a barrel. Global recession fears and a COVID outbreak in China weighed on prices.

Bank of Queensland results

The Bank of Queensland Ltd (ASX: BOQ) share price will be on watch today when the regional bank releases its full year results for FY 2022. A note out of Goldman Sachs reveals that its analysts are expecting the bank to report a modest 0.5% increase in cash earnings to $534.5 million. This is expected to allow the Bank of Queensland board to declare a final dividend of 23 cents per share.

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could have a better day after the gold price edged higher overnight. According to CNBC, the spot gold price is up 0.1% to US$1,677.2 an ounce. Gold rose slightly after the US dollar softened.

Commonwealth Bank AGM

The Commonwealth Bank of Australia (ASX: CBA) share price could be worth watching today. That’s because Australia’s largest bank is holding its annual general meeting. And while it doesn’t usually provide a trading update at the event, it could provide some commentary on current operating conditions and the impact that rising rates are having on its margins.

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

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More reading

• A mortgage ‘battleground’ is coming. UBS names ASX 200 bank shares best placed to win
• Looking to buy CBA shares? Here’s what to watch at tomorrow’s AGM
• Here are the top 10 ASX 200 shares today
• Own CBA? Here’s why you should also buy NAB shares: expert
• Could ASX 200 shares represent a ‘phenomenal opportunity’ right now?

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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ASX 200 bank shares have had a difficult year on the charts, encountering substantial volatility.

Following a strong start to the year in January, the banking basket has travelled largely sideways to date.

As seen in the chart below, the S&P/ASX 200 Banks Index (ASX: XBK) has wormed its way to around a 5% loss in 2022 so far.

Buying opportunities?

Despite the market volatility, and mounting pressure on the financials sector from the recent surge in interest rates, some analysts think selective opportunities remain in the ASX 200 banking space.

However, some experts are warning the market mechanics of the Australian residential mortgage market could create a potentially dire situation.

Analysts at investment bank UBS, led by John Storey, allude to this theme in a recent note to clients. The broker highlights that around $500 billion in fixed-rate mortgages are set to roll over by 2024. That’s approximately 25% of the entire Australian mortgage book.

The flood of consumers facing residential interest rates at their highest levels since 2013 may trigger a “battleground” scenario, UBS warns.

In any case, it will create an impending headwind that households must endure, the note said, although the broker is broadly optimistic:

Overall, we are cautious on the impact of weaker housing and interest rates but customers, in our view, can take it.

We are positive on the net interest margin environment, but competition will take some of the edge off likely increases.

Despite this, the “flow-on effects” to small and medium-sized businesses need to be closely examined, it said.

Nevertheless, the broker came in with a string of upgrades this week and believes the trio of Macquarie Group Ltd (ASX: MQG), Westpac Banking Corporation (ASX: WBC), and Bendigo and Adelaide Bank Ltd (ASX: BEN) are well positioned to capitalise on this mortgage activity.

It upgraded the three shares to buys on valuations of $185, $27, and $10 respectively, with each price target representing considerable upside on their current share prices.

What do the numbers say?

In terms of where these shares sit in the ASX 200 banking basket, some numbers are seen below, taken from Refinitiv Eikon data.

Bendigo looks attractively priced at 0.68 times price-to-book (P/B) ratio with a 7.5% company return on equity (ROE).

In addition, USB’s picks are all forecast to deliver solid dividend yields looking ahead, according to Refinitiv. Let’s check the figures:

Company Name	P/E	P/Book	Dividend yield	ROE
Westpac Banking Corp	15.75	1.07	7.9%	7.4%
Australia and New Zealand Banking Group Ltd	10.72	1.09	8.4%	10.9%
Commonwealth Bank of Australia	17.54	2.22	5.7%	12.8%
National Australia Bank Ltd	14.81	1.56	6.6%	11.1%
Bendigo and Adelaide Bank Ltd	10.50	0.68	9.3%	7.5%
Bank of Queensland Ltd	10.85	0.68	9.1%	7.9%
Macquarie Group Ltd	12.96	2.06	4.5%	18.0%

A comparison of each bank’s share price performance over the last 12 months, relative to the benchmark index, is illustrated below.

The post A mortgage ‘battleground’ is coming. UBS names ASX 200 bank shares best placed to win appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Morgans names 2 ASX 200 blue chip shares to buy
• Can perennial ASX 200 banking bridesmaid Westpac finally find love?
• Could ASX 200 shares represent a ‘phenomenal opportunity’ right now?
• Looking to buy Rio Tinto shares? Here’s why this fundie says there is ‘something terribly wrong’

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. 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 Commonwealth Bank of Australia (ASX: CBA) share price is under the microscope this week as the big S&P/ASX 200 Index (ASX: XJO) bank share holds its annual general meeting (AGM).

AGMs are important – not only do shareholders get to vote on certain matters, such as directors, but other issues can also be raised. Plus, the company’s leadership can tell shareholders about expectations and perhaps performance for the year ahead.

Banks are increasingly coming under pressure to limit their lending to fossil fuel businesses. Indeed, that’s one of the things that shareholders will be voting on.

Climate resolution

There has been a resolution put to CBA by Market Forces that calls for banks like CBA to “disclose information demonstrating how their financing will not be used for the purposes of new or expanded fossil fuel projects”.

Market Forces pointed out that the big four banks of CBA, Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and National Australia Bank Ltd (ASX: NAB) recently co-financed a $1.4 billion deal for Santos Ltd (ASX: STO) for the Barossa gas project.

Market Forces notes that funding these fossil fuel projects is happening even though CBA, NAB, and Westpac said they were going to restrict some direct financing for new oil and gas fields.

Will van de Pol, asset management campaigner from Market Forces, said:

Despite committing to support the Paris Agreement and net zero emissions by 2050, all of Australia’s big four banks are still financing companies with coal, oil and gas expansion plans that undermine those climate goals.

It’s unacceptable to a growing number of retail shareholders and institutional investors that Commonwealth Bank, ANZ, NAB and Westpac are exposing themselves to heightened risk by financing companies that are worsening the climate crisis.

However, reporting by the Australian Financial Review suggests that CBA shareholders may reject that proposal.

What might affect the CBA share price?

It could be one of the most interesting AGMs of the past decade, and it could influence the CBA share price.

We’re in a very different time now compared to the start of the year when interest rates were a lot lower.

CBA is the biggest lender in Australia. It has a huge loan book that is focused on mortgages.

With the lending rate cranking up at a very fast pace, there has been a lot of focus on how much this could help CBA’s net interest margin (NIM). That’s the profit that a bank makes on its lending, comparing the loan rate to the cost of funding (such as savings accounts).

If CBA tells investors about what its expectations for the NIM are for FY23, it would be very illuminating for how much profit it could generate and whether competition in the lending space is still detracting from lending profit. A higher NIM could be helpful for the CBA share price.

I’ll be curious to see how optimistic, or not, the comments from the CBA boss are. If he talks about households and businesses still being in a strong financial position, then that could suggest the Reserve Bank of Australia (RBA) will need to keep going to rein in spending and inflation.

If the commentary is muted and cautious, then that may be good news for the RBA. But, it could also raise questions about future loan arrears in 2023.

We live in interesting times, so it’ll be curious to see how much colour we actually get from CBA tomorrow. Either way, one expert thinks that CBA is the ‘go-to’ bank as an investment.

The post Looking to buy CBA shares? Here’s what to watch at tomorrow’s AGM appeared first on The Motley Fool Australia.

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More reading

• Own CBA? Here’s why you should also buy NAB shares: expert
• What’s the outlook for ASX dividend shares for the rest of 2022?
• Were ASX 200 bank shares a safe place to park cash in Q1?
• The Westpac share price has fallen the most of the ASX 200 big four banks over the past year. So, is it a cheap buy?
• Is CBA the best ASX 200 bank share to buy for dividend income?

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 recommended Westpac Banking Corporation. 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) dumped early gains today to end the day in the red. The index closed 0.34% lower at 6,645 points.

The S&P/ASX 200 Energy Index (ASX: XEJ) was the market’s biggest weigh, falling 1.6% amid lower oil prices. The Brent crude oil price fell 1.8%to US$96.19 a barrel while the US Nymex crude oil price dropped 1.6% to US$91.13 a barrel.

The S&P/ASX 200 Materials Index (ASX: XMJ) also slumped 0.1% following a rough night for the iron ore price. Iron ore futures fell 1.8% as most Australians slept to trade at US$97.35 a tonne. Meanwhile, gold futures dumped 2% to US$1,675.20 an ounce.

Meanwhile, the S&P/ASX 200 Consumer Staples Index (ASX: XSJ) and the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) slipped 0.03% and 0.16%, respectively, amid the latest Westpac Banking Corp (ASX: WBC) consumer sentiment data, finding the measure fell by 0.9% to a near historic low of 83.7 in October.

All in all, two of the ASX 200’s 11 sectors closed in the green today. But which share topped all its peers? Keep reading to find out.

Top 10 ASX 200 shares countdown

Today’s top-performing ASX 200 share was none other than newbie Johns Lyng Group Ltd (ASX: JLG). The company was added to the index in the September rebalance.

Today’s biggest gains were made by these shares:

ASX-listed company	Share price	Price change
Johns Lyng Group Ltd (ASX: JLG)	$5.96	5.86%
Allkem Ltd (ASX: AKE)	$14.82	4.73%
Orica Ltd (ASX: ORI)	$13.39	4.36%
Graincorp Ltd (ASX: GNC)	$8.72	4.18%
Nufarm Ltd (ASX: NUF)	$5.19	2.98%
Mineral Resources Limited (ASX: MIN)	$72.78	2.78%
Lynas Rare Earths Ltd (ASX: LYC)	$7.81	2.63%
Corporate Travel Management Ltd (ASX: CTD)	$17.04	2.28%
Idp Education Ltd (ASX: IEL)	$27.95	2.12%
Paladin Energy Ltd (ASX: PDN)	$0.775	1.97%

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

• Strong growth lies ahead for these ASX 200 shares: Goldman Sachs
• Why is the Core Lithium share price in the green today?
• Could ASX 200 shares represent a ‘phenomenal opportunity’ right now?
• Looking to buy Rio Tinto shares? Here’s why this fundie says there is ‘something terribly wrong’
• Why has the Whitehaven share price already dived 7% so far this week?

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 Idp Education Pty Ltd and Johns Lyng Group Limited. The Motley Fool Australia has recommended Corporate Travel Management Limited, Johns Lyng Group Limited, and Westpac Banking Corporation. 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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Are you interested in adding some ASX 200 growth shares to your portfolio this month? If you are, you may want to look at the two listed below that have recently been named as buys by Goldman Sachs.

Here’s what the broker is saying:

Breville Group Ltd (ASX: BRG)

The first ASX 200 growth share that Goldman Sachs rates as a buy is Breville. It is the kitchen appliance manufacturer behind a growing portfolio of brands such as Breville, Kambrook, Lelit, and Sage.

Breville has been an impressive performer over the last decade, delivering strong sales and profit growth and stellar returns for investors. This has been driven by its earnings accretive acquisitions, international expansion, and consistent investment in research and development.

Goldman Sachs believes this solid growth can continue and is forecasting an earnings before interest, tax, depreciation and amortisation (EBITDA) compound annual growth rate of 7% between FY 2023 and FY 2025. It recently commented:

We see BRG as having a three-pronged growth strategy: 1) building on secular growth of the portioned and roast & ground (R&G) coffee market and achieving market share gains; 2) new market entry; and 3) options – ecosystem revenue streams.

Goldman has a buy rating and $24.70 price target on its shares.

IDP Education Ltd (ASX: IEL)

Another ASX 200 growth share that Goldman Sachs is tipping as a buy is IDP Education.

This language testing and student placement company is the co-owner of the IELTS test, which is the English test trusted by more governments, universities and organisations than any other.

While demand for testing and student placement services softened during the pandemic, it has rebounded very strongly over the last 12 months. This led to the company recording stellar sales and profit growth for FY 2022.

Goldman Sachs is confident that IDP’s growth can continue in the coming years. This is thanks partly to strong underlying system demand. It commented:

IEL is trading c.40% below its 5-yr average P/E premium to the ASX200 Industrials with a forecast 37% FY22-25E EPS CAGR, we remain Buy-rated. We have upgraded EPS in FY23/FY24 by 1.7%/0.8% on the back of the stronger FY22 result, continued strong revenue growth and margin expansion. The balance sheet is in a resilient position with c.A$40mn of net cash to facilitate any bolt-on acquisitions or ramp up in organic investment in new offices and technology.

Goldman has a buy rating and $35.50 price target on the company’s shares.

The post Strong growth lies ahead for these ASX 200 shares: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• Could ASX 200 shares represent a ‘phenomenal opportunity’ right now?
• Here are the 10 most shorted ASX shares
• Experts name 2 ASX 200 shares to buy before the market takes off
• 5 things to watch on the ASX 200 on Thursday
• ‘Standout buy’: Expert names 3 human capital ASX shares to boom

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 positions in and has recommended Idp Education Pty Ltd. 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 wanting to bolster your portfolio with some ASX 200 blue chip shares, you may want to look at the two listed below.

Both have recently been named as buys by Morgans. Here’s why they could be the blue chip shares to buy this month:

Macquarie Group Ltd (ASX: MQG)

The first blue chip ASX 200 share that Morgans rates as a buy is Macquarie.

It is a global provider of banking, financial, advisory, investment, and fund management services,

Morgans is a fan of the company due to its exposure to a number of long term structural growth areas and its ongoing market share gains in Australian mortgages. It explained:

We continue to like MQG’s exposure to long-term structural growth areas such as infrastructure and renewables. The company also stands to benefit from recent market volatility through its trading businesses, while it continues to gain market share in Australian mortgages.

Morgans has an add rating and $215.00 price target on Macquarie’s shares.

Wesfarmers Ltd (ASX: WES)

Another blue chip ASX 200 share that Morgans rates highly is Wesfarmers.

It is the conglomerate behind a diverse range of high quality businesses operating in supermarkets, department stores, home improvements, office supplies, pharmacies, resources, chemicals, energy and fertilisers, and industrials and safety products.

Morgans likes the company due to its strong brands and its highly regarded management team. It also feels that recent weakness has created a buying opportunity for investors. The broker explained:

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. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the pullback in the share price as a good entry point for longer term investors.

Its analysts currently have an add rating and $55.60 price target on its shares.

The post Morgans names 2 ASX 200 blue chip shares to buy appeared first on The Motley Fool Australia.

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More reading

• What’s driving the Wesfarmers share price on Tuesday?
• Could ASX 200 shares represent a ‘phenomenal opportunity’ right now?
• What’s the outlook for ASX dividend shares for the rest of 2022?
• Can you buy Bunnings Warehouse shares on the ASX?
• Can the Macquarie share price crack the $200 mark again?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited. 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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National Australia Bank Ltd (ASX: NAB) shares could be a great place to look for bank share opportunities. Owners of Commonwealth Bank of Australia (ASX: CBA) shares may want to know why another bank could be a strong idea.

Businesses are all different sizes. But, it’s important to keep in mind that it’s the return on our own money that is the most important metric. A 10% return from company A is better for our portfolio than an 8% return from company B, even if company B is twice the size of company A.

Over 2022 to date, the S&P/ASX 200 Index (ASX: XJO) has dropped by 12%. The CBA share price has only declined by 8%. The NAB share price is flat in 2022, meaning that it has significantly outperformed.

One expert thinks that NAB could still be a great pick to buy now, as reported by my colleague Tony Yoo.

NAB shares are a leading idea alongside CBA

Shaw and Partners portfolio manager James Gerrish, talking on a Market Matters Q&A, pointed out that NAB is smaller than CBA, but it’s also a commercial and business-focused bank.

Gerrish said, according to Yoo:

[NAB] has been the big improver in recent years and we have identified NAB as our number two pick in the sector, while viewing it as complementary to a holding in CBA.

But on CBA, the expert said:

CBA…is a housing-focussed bank. The best in the sector by a large margin, and our go to.

It’s the most expensive, however, the returns they have achieved over time mean that its place at the top of the tree is well justified.

They have the best technology and capital efficiency and these are important.

[It’s] a core holding that we up weight/down weight but rarely sell.

Which one is better?

In 2022 to date, NAB has been the better bank to own.

Despite its outperformance, NAB shares still look better value to me.

For starters, its price-to-earnings (P/E) ratio is lower, and the potential dividend yield is bigger.

According to CommSec numbers – which are provided by third parties, not from the bank’s team – CBA is expected to generate $5.58 of earnings per share (EPS), which puts the CBA share price at 17x FY23’s estimated earnings.

CBA could pay an annual dividend per share of $4.19, which translates into a projected grossed-up dividend yield of 6.4%.

Let’s compare that to NAB. CommSec numbers suggest that NAB shares could generate $2.39 of EPS, putting it at 12x FY23’s estimated earnings. In FY23, the projection for the annual dividend is $1.63. This puts the potential forward grossed-up dividend yield at 7.9%.

Assuming both businesses were to produce similar profit growth in the next 12 months, NAB’s growth would come at a cheaper price, and the yield is better.

I think both banks are worthwhile long-term investments, though they wouldn’t be top of my wishlist.

It will be interesting to see how these two banks, which are currently seen as higher quality compared to their peers, perform during this period of rising interest rates. The performance of their loan books could be key if borrowers get into trouble.

The post Own CBA? Here’s why you should also buy NAB shares: expert appeared first on The Motley Fool Australia.

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• What’s the outlook for ASX dividend shares for the rest of 2022?
• Were ASX 200 bank shares a safe place to park cash in Q1?
• The Westpac share price has fallen the most of the ASX 200 big four banks over the past year. So, is it a cheap buy?
• If you’d bought $2,000 of NAB shares at the end of FY22, here’s how much you’d have now
• Is CBA the best ASX 200 bank share to buy for dividend income?

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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The All Ordinaries index may be struggling on Tuesday, but that hasn’t stopped a couple of shares from racing higher.

In fact, these All Ords shares have managed to climb to 52-week highs or better today. Here’s what you need to know:

Dalrymple Bay Infrastructure Ltd (ASX: DBI)

The Dalrymple Bay Infrastructure share price jumped to a 52-week high of $2.39 on Tuesday.

Investors were buying the coal export terminal operator’s shares after it released an update on pricing and commercial terms for all existing customers for a ten-year term.

According to the release, in the near term, Dalrymple Bay Infrastructure will receive a terminal infrastructure charge of $3.02 per tonne in 2021-22 and $3.18 per tonne in 2022-23. This represents a 23% and 29% increase, respectively.

Looking ahead, the terminal infrastructure charge will be escalated annually for inflation, with the new pricing and commercial terms applying from 1 July 2021 to 30 June 2031 under revised agreements with each existing user.

In light of this, the company has lifted its distribution guidance to 20.1 cents per share for the 12 months ending 30 June 2023. After which, it will target 3% to 7% growth per annum for the foreseeable future. This is up from its previous target of 1% to 2% growth.

IGO Ltd (ASX: IGO)

The IGO share price actually went one better and climbed to a new all-time high of $15.68 on Tuesday. This means the battery materials miner’s shares have now risen approximately 32% in 2022.

Today’s gain was achieved despite there being no news out of the company and the All Ords dropping into the red. Though, it is worth noting that a number of battery materials shares pushed higher today along with the IGO share price.

The good news for investors is that it may not be too late to join the IGO party. Last month, Macquarie put an outperform rating and $21.00 price target on the company’s shares.

The post 2 ASX All Ords shares smashing new 52-week highs today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares smashing all-time highs on Thursday
• What’s the outlook for ASX 200 mining shares in Q2?
• Top brokers name 3 ASX shares to buy today
• 5 things to watch on the ASX 200 on Friday

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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