$300 is a share price value that investors of CSL Limited (ASX: CSL) have seen before. Quite a few times actually. CSL shares first cracked the $300 mark way back in 2019. The healthcare giant even rose as high as $340 a share in February 2020.

But ever since, the CSL share price could be described as being stuck in the mud. The company is presently trading at $287.35 a share at the time of writing, the same pricing it was trading at in May 2020. The company has spiked above $300 a share a few times, most recently back in September this year.

But it never seems to last long. Today, the CSL share price remains down by 2.84% in the year to date. It’s also lost just over 7% over the past 12 months.

So could the remainder of 2022 finally see CSL shares crack the $300 mark and stay there?

Is the CSL share price heading back to $300?

Well, Rob Crookston, equity strategist at ASX broker Wilsons, thinks so.

In a recent memo, Crookston cited CSL as one of the ASX healthcare shares Wilsons is holding at the moment.

The broker has a 12-month share price target of $318.33 on CSL right now, implying a potential upside of close to 11% over the next year.

Crookston points to a forecasted compounded earnings growth of 19% that the broker reckons CSL will be able to achieve over the next three years as justification for this share price target.

The broker also likes CSL’s potential in the plasma collection market, which has just exceeded pre-COVID levels. It also points to the “supply-constrained market” and higher collection capacity for CSL’s immunoglobulin blood products.

So no doubt shareholders will welcome this bullish assessment on CSL shares’ immediate future. But we shall have to wait and see if CSL can indeed break the $300 share price market this year. With only six weeks or so of 2022 left, time is running out.

The post Can the CSL share price crack $300 before the year’s out? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL 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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The Invictus Energy Ltd (ASX: IVZ) share price is having another stunning day.

At the time of writing, the energy exploration company’s shares are up 58% to 38 cents.

This means the Invictus Energy share price is now up almost 250% since last Wednesday.

Why is the Invictus Energy share price rocketing higher again?

Investors have been scrambling to buy shares again on Monday after the company released another promising update relating to the Mukuyu-1 well in Zimbabwe’s Cabora Bassa Basin.

Last week, the company revealed that elevated mud gas peaks (up to 65 times above background gas baseline) were observed while drilling through a depth of 3,070 metres measured depth (mMD) with marked increases from C1 to C5 compounds (methane, ethane, propane, butanes and pentanes).

According to today’s release, drilling activities have continued to a depth of 3,618 mMD. Pleasingly, multiple zones were encountered with fluorescence and elevated gas shows (up to 135 times above background levels) in the Upper Angwa primary target.

In light of this, a working conventional hydrocarbon system has been confirmed in Cabora Bassa Basin. Management is now preparing to run wireline logging tools to evaluate multiple zones of interest.

‘Further encouraging signs’

Invictus Energy’s managing director, Scott Macmillan, commented:

We have had further encouraging signs from the Mukuyu-1 well since drilling recommenced with multiple zones encountering elevated gas shows and fluorescence in our Upper Angwa primary target. The evidence of hydrocarbon charge throughout the Upper Angwa reservoir intervals provides further validation of our subsurface model and the presence of a conventional working hydrocarbon system in the Cabora Bassa Basin.

We have continued to observe elevated gas shows and fluorescence through multiple reservoir intervals in the Upper Angwa until TD [total depth] was called, and we will now acquire the necessary wireline data whilst the borehole conditions are still conducive in order to evaluate the zones of interest observed to date.

The post Invictus Energy share price rockets again, up almost 250% in under a week appeared first on The Motley Fool Australia.

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• Guess which ASX energy share is rocketing 150% on an ‘exciting development’

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There’s a reason so many investors want to own Warren Buffett stocks.

The so-called Oracle of Omaha has trounced the market in his long history an investor. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has nearly doubled the annual return of the S&P 500 for nearly 60 years, and thanks to the magic of compounding, that means Berkshire has returned more than 100 times what the S&P 500 has in that time frame.

Luckily, for investors, Warren Buffett’s playbook is wide open, and he’s made it clear what kinds of stocks he favors. Here are five simple questions to ask to determine if a stock would get the Buffett stamp of approval.

1. Does it have an economic moat?

Buffett’s favorite concept in all of investing may be the “economic moat,” or what most investors call a sustainable competitive advantage. Buffett once said, “The most important thing [is] trying to find a business with a wide and long-lasting moat around it, protecting a terrific economic castle with an honest lord in charge of the castle.”

As he alludes to in that statement, this key attribute protects the company from competitors. Buffett likes stocks with well-known brands such as Coca-Cola or Apple; companies with limited competition and barriers to entry, like the railroad BNSF that he acquired a decade ago; or companies with strong market share and recurring revenue, like GEICO.

If you want to know if it’s a Buffett stock, ask yourself if the company can withstand competition over a long period of time.

2. Does it produce cash?

Buffett doesn’t generally waste his time with unprofitable growth stocks. He looks for companies that generate cash. 

Buffett likes to own businesses like insurers that produce cash in premiums that come in advance of claims. He refers to this as a “float” that allows him to reinvest that cash in stocks. He also likes sectors such as energy (for example, Chevron stock), which generate high levels of cash flow when oil prices rise. Buffett’s a fan of banks and financial companies like Bank of America and American Express that have reliable profit generation from commercial lending, and he’s known to invest in utilities and healthcare, which tend to generate steady cash flows.

What you’ll find among almost every Buffett stock is that they produce reliable cash flow, and many of them pay a dividend. 

3. Does it have a long track record? 

Warren Buffett doesn’t generally chase the latest trends whether they be dot-com stocks in the 1990s or cloud software stocks more recently.

Instead, he prefers to own companies with long track records and operating histories. Often, he’s studied these companies for years, or is well-acquainted with their brands. With Coca-Cola, for example, he had seen its success for 50 years before becoming an investor. When Buffett decided to invest in tech, he bought stock in IBM, because he’d followed it for decades and understood the business. While that investment didn’t pan out, it nonetheless reflects Buffett’s approach of studying a company for a long time.

Similarly, in financials, he prefers legacy banks over fintech, because banks have proven their business models over long periods of time. Not only are they less risky, but they also generate reliable cash flow.

4. Does it outperform in bear markets?

Historically, Berkshire has best demonstrated its fortitude during bear markets. Buffett hoards cash to buy stocks when they’re cheap, and he’s known for taking advantage of sell-offs like during the financial crisis when he took a high-yielding stake in preferred stock in Bank of America. Berkshire has also outperformed the stock market by a wider margin in bear markets, including this year.

Because many of Buffett’s favorite stocks have stood the test of time, they tend to do well in bear markets, and many of his favorite industries — including consumer staples, insurance, utilities, and healthcare — are known for being recession-resistant.

Buffett doesn’t exclusively buy recession-proof stocks. He owns cyclical stocks in industries like energy, banking, and industrials, but in general, he prefers to buy stocks that can outperform in bear markets or at least have demonstrated an ability to recover from them.

5. Is it a good value?

Finally, Buffett is a classic value investor. He wants to buy stocks that are trading below their intrinsic value, which is typically estimated with a discounted cash flow model.

The quality of the company is more important to the Berkshire chief than the price. He has famously said, “It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

However, if he finds a stock he likes, he’ll only buy it if he believes it’s a good value at the current price. In the bull market during the 2010s, Buffett often lamented that stocks had become too expensive. With prices now down, it wouldn’t be surprising to see Berkshire deploying its cash hoard, which is currently worth more than $100 billion.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is it a Warren Buffett stock or not? 5 simple questions to ask yourself appeared first on The Motley Fool Australia.

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Jeremy Bowman has no position in any of the stocks mentioned. Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Rio Tinto Limited (ASX: RIO) share price is rocketing higher today despite no news having been released by the iron ore giant.

And it’s not alone in its surge. It’s joined in the green by many of its S&P/ASX 200 Materials Index (ASX: XMJ) peers as the mining sector leads the market with a 3.43% gain.

The Rio Tinto share price is up 4.58% right now, trading at $107.335. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has lifted 0.01%.

So, what might be bolstering the iron ore giant’s share price and those of its peers on Monday? Let’s take a look.

What’s driving the Rio Tinto share price higher today?

The Rio Tinto share price is taking off again amid reports China will ease some COVID-19 restrictions.

Today’s gain follows the 4.4% leap posted by the stock on Friday amid the latest US inflation figures, finding the nation’s consumer price index lifted just 7.7% over the 12 months to 31 October.

News China will relax some of its COVID-19 restrictions broke over the weekend. The slight easing of the country’s restrictions will see close contacts quarantining for fewer days while secondary contacts will no longer be recorded, BBC News reports.

Some inbound travellers will also spend less time in quarantine under the changes and airlines will no longer face major consequences if a certain number of passengers test positive for the virus after landing, according to CNN Business.

The move doesn’t appear to represent the beginning of the end of Beijing’s strict COVID-zero measures. Indeed, restrictions were also tightened in Guangzhou over the weekend, the Associated Press reports, via PBS.

However, it might have been enough to bolster confidence in markets closely tied to China, such as iron ore. Iron ore futures lifted 2.9% to US$90.79 on Friday.

The Rio Tinto share price has gained 5% year to date and 13% over the last 12 months.

Comparatively, the ASX 200 has slumped 4% this year and 4% since this time last year.

The post Why is the Rio Tinto share price having such a cracking run on Monday? appeared first on The Motley Fool Australia.

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• Why are ASX 200 mining shares bolting out the gates on Monday?
• Why is the Rio Tinto share price having such a stellar start to the 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 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 Telix Pharmaceuticals Ltd (ASX: TLX) share price is having a volatile day.

The biopharmaceutical company’s shares were pushing higher in early trade but have now dropped into the red.

At the time of writing, the Telix share price is down 4% to $6.53.

What’s going on with the Telix share price?

The company’s shares are falling on Monday despite the announcement of a proposed acquisition.

According to the release, Telix has entered into an agreement with Sacramento-based Northern California PET Imaging Center to acquire Optimal Tracers.

Optimal Tracers is a radiochemistry development business providing radiochemistry process development services and research tracers for use in clinical trials.

Management highlights that the acquisition will bolster Telix’s in-house radiochemistry development capability, by adding a highly skilled team and establishing a U.S. based laboratory and production footprint for clinical trial doses.

Furthermore, it notes that the acquisition includes a facility with a radiation and pharmaceutical manufacturing licence that will be sufficient to cover the company’s key diagnostic and therapeutic isotope requirements for pre-clinical and clinical research purposes.

Telix will fund the acquisition from operational cash flow, with the purchase price “non-material”.

Should you buy the dip?

The team at Wilsons is likely to see the weakness in the Telix share price as a buying opportunity.

As we covered here earlier, its analysts see plenty of upside ahead for the company’s shares. Prior to today’s news, the broker had a buy rating and $8.15 price target on them, which implies potential upside of 24% for investors over the next 12 months.

Wilsons is positive on Telix due to its belief that its products offer better diagnosis and treatment opportunities. It commented:

Better diagnosis and treatment: Telix’s pipeline of products is based on molecularly-targeted radiation (MTR) employing the use of radioisotopes attached to targeting agents, which specifically bind to cancer cells. Using this technology, numerous forms of cancer are able to be precisely imaged and treated, potentially offering better-informed treatment decisions and more personalised cancer therapy.

Finally, another reason it is positive is the company’s significant market opportunity. It adds:

The company’s core prostate cancer imaging product, ILLUCIX, has an estimated Total Addressable Market (TAM) of US$1b. Our analysts estimate TLX can attain a 28% share of the PSMA-directed PET/CT market. After its first full quarter, ILLUCIX’s early commercial performance in the US has exceeded market expectations. Meanwhile, the TLX250-CDx agent (Phase III trial) has an estimated TAM of US$500m in the US.

The post Why Wilsons is tipping 24% upside for the Telix Pharmaceuticals share price appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in TELIXPHARM DEF SET. 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) is having a pretty pleasing start to the trading week so far this Monday. At the time of writing, the ASX 200 is in the green at around 7,160 points. But it’s ASX 200 mining shares that are really going nuts today.

Just take the BHP Group Ltd (ASX: BHP) share price. It’s currently up a whopping 5.08% at $44.23 a share at present. Shares in Rio Tinto Limited (ASX: RIO) are doing almost as well, up 4.77% at $107.53 apiece.

But it’s Fortescue Metals Group Limited (ASX: FMG) that is the clear leader. Fortescue shares have leapt an eye-watering 9.01% today so far. The iron ore giant is currently at $19.36 a share after closing at just $17.76 last Friday.

These significant gains appear to be concentrated in the iron ore sector, though. Woodside Energy Group Ltd (ASX: WDS) is doing well today. But the energy share is ‘only’ up by a far tamer 1.32% at the time of writing to $39.01 a share. After a stellar week last week, ASX gold shares are barely breaking even today.

So why are the big iron miners basking in the sun today?

Why are ASX 200 mining shares like BHP on fire today?

Well, no doubt a rising iron ore price is helping. Iron ore had a stellar end to the trading week last week, closing at US$89 per tonne, up a healthy 2.02%.

But further, we have recently seen the news that could indicate that China may finally be prepared to loosen its much-maligned ‘zero-COVID‘ policies.

According to reporting in the Australian Financial Review (AFR) over the weekend, China has just announced a relaxation of travel-related restrictions. These include reduced quarantine times for both inbound travellers and close contacts of infected persons.

It includes removing rules suspending flights if more than five passengers on board test positive for COVID. This could boost travel in and out of the country.

According to the report, financial markets have interpreted these changes as representing “a growing willingness by Beijing to reduce the economic impact of lockdowns and move towards reopening the country”.

China is, of course, one of the world’s largest consumers of iron ore, and there is little doubt that the economic sluggishness that its COVID-zero policies have caused has played a role in the weakness of the iron ore price over 2022 thus far.

Thus, it makes sense that investors are interpreting his news as good for the largest ASX 200 iron ore mining shares like BHP, Rio and Fortescue.

The post Why are ASX 200 mining shares going nuts on Monday? appeared first on The Motley Fool Australia.

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• 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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The Core Lithium Ltd (ASX: CXO) share price is rocketing higher on Monday. Indeed, the stock surged to an all-time high earlier today.

That’s despite no price-sensitive news having been released by the S&P/ASX 200 Index (ASX: XJO) lithium favourite.

Right now, the Core Lithium share price is $1.82, 8.98% higher than its previous close.

However, earlier today it leapt nearly 9.6% to $1.83 – the highest it’s ever been.

For comparison, the ASX 200 has lifted 0.02% right now while the S&P/ASX 200 Materials Index (ASX: XMJ) leads the market with a 3.6% gain.

So, what might be going right for the Core Lithium share price today? Let’s take a look.

Core Lithium share price hits new all-time high

The Core Lithium share price is among the best performers on the ASX 200 materials sector today.

While there’s been no price-sensitive news from the lithium developer today, it did release an announcement to the market.

The company revealed its chief financial officer Simon Iacopetta is stepping down after nearly four years in the job. He has committed to supporting the company while it undergoes a global search for his replacement. Iacopetta said:

My tenure at Core Lithium has been the highlight of my career to date. It has been hugely rewarding to see the Company move from an exploration opportunity to a project and now an operating mine … I am pleased to be leaving the business in very sound financial shape.

Meanwhile, the mining sector appears to be surging amid reports China will ease some of its COVID-19 restrictions.

While it hasn’t gone so far as to abolish its COVID-zero policy, the nation will ease quarantine times for close contacts and stop recording secondary contacts, BBC News reports.

The Core Lithium share price’s surge makes it the second-best-performing ASX 200 materials stock at the time of writing. It’s underperforming the Champion Iron Ltd (ASX: CIA) share price, which has soared 10% today.

The post Why did Core Lithium shares just crack a new all-time high? 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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The BHP Group Ltd (ASX: BHP) share price is having a top run today.

BHP shares are up 4.75% and are currently trading at $44.09. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.25% today.

So what is going on with the BHP share price?

Iron ore prices surge

BHP is not the only ASX 200 mining share rising today. The Rio Tinto Limited (ASX: RIO) share price is up 4.75%, while the Fortescue Metals Group Limited (ASX: FMG) share price is soaring 7.66%.

The iron ore price lifted 4.47% to US $93.5 in global markets on Friday, trading economics data shows.

Iron ore lifted amid news out of China. China is the world’s biggest steel producer and iron ore is used to make steel.

China has outlined a plan to rescue the property sector, Bloomberg reported. The measures are designed to ensure “stable and healthy development” in the sector, according to the publication.

Further, China has also slightly eased COVID-19 restrictions, boosting sentiment in commodities including iron ore.

Australian Prime Minister Anthony Albanese also had a “constructive” chat with Chinese Premier Li Keqiang in Cambodia on Sunday, Reuters reported. He said in quotes cited by the publication:

I say it was constructive, it was positive. I have said repeatedly about the relationship with China that we should cooperate where we can.

Another factor that can weigh on the iron ore price is the US dollar. A weaker US dollar makes commodities less expensive in other currencies, increasing demand. The US dollar tumbled late last week amid better than expected inflation data. However, the greenback is climbing today after the US Federal Reserve warned interest rate hikes could continue.

BHP highlighted its strength in the iron ore sector in an Annual General Meeting presentation late last week. BHP said:

We achieved record shipments from our iron ore business here in Western Australia for the third year running.

We are also increasing our output at Western Australian Iron Ore to 300Mtpa+, with
studies underway for a 330Mtpa option.

BHP share price snapshot

The BHP share price has surged 31% in the past year, while it has jumped 19% year to date.

For perspective, the ASX 200 has shed nearly 4% in the past year.

BHP has a market capitalisation of more than $223 billion based on the current share price.

The post Why is the BHP share price having such a ripper day? appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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 Super Retail Group Ltd (ASX: SUL) share price has jumped more than 15% over the past month. But despite the higher trading price, a Super Retail director bought shares in the S&P/ASX 200 Index (ASX: XJO) retail stock just last week.

Zooming out, there has been a lot of volatility on the ASX this year, and the Super Retail share price is still down 17% for the year.

Super Retail is the parent business of well-known Australian brands, including BCF, Supercheap Auto, Rebel and Macpac.

What’s going on with Super Retail shares?

Companies are currently facing several economic challenges, such as inflation and higher interest rates. How does this play out in terms of demand for retailers?

So far, there don’t seem to be many negative effects for Super Retail. The company recently gave a trading update showing like-for-like sales growth in FY23 compared to FY22.

It advised that in the first 16 weeks of FY23, Supercheap sales were up 23%, Rebel sales were up 20%, BCF sales were up 4%, and Macpac sales were up 76%. In total, like-for-like sales had increased by 20%.

However, Super Retail cautioned investors against “extrapolating this growth”, given the group was cycling against lockdowns in the prior comparative period (pcp).

Online sales represented 10% of the total FY23 sales to date. While sales were up, the group gross profit margin in percentage terms for the first 16 weeks of FY23 was in line with the gross profit margin delivered in the pcp.

Director buying

In a recent ASX announcement, Super Retail advised that director Peter Dobie Everingham had increased his holding of Super Retail shares.

Directors buying shares can be a buy signal, suggesting that the leadership thinks the company’s valuation is attractive.

With an on-market investment, Everingham purchased another 20,000 shares for a total cost of $201,716. This means that the cost was at a Super Retail share price of close to $10.10.

After that investment, Everingham now holds 60,000 shares.

Is there a good outlook for the Super Retail share price?

With so much volatility over the past year, it’s hard to say what will happen next with the ASX 200 share. The share price can perform very differently from the revenue and profit numbers reported by the business.

Super Retail CEO and managing director Anthony Heraghty said:

While current trading remains strong, the group expects higher mortgage rates and increased cost of living expenses will begin to impact consumer spending. The value proposition of the Group’s brands, our large active club member base and the resilience of our key auto and sports categories mean the Group is well positioned for more challenging retail trading conditions ahead.

As always, the Group’s first half result will be highly dependent on trading in the peak Christmas holiday period.

The broker Credit Suisse is particularly optimistic about the business. It has an outperform rating, with a price target of $14. Based on the current Super Retail share price of $10.50, that implies a possible upside of more than 33% in the next year.

The post This ASX 200 share has surged 15% in a month, and a director is still buying up big 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 positions in and has recommended Super Retail Group Limited. The Motley Fool Australia has positions in and has recommended Super Retail 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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Commonwealth Bank of Australia (ASX: CBA) shares are out of form on Monday.

At the time of writing, the banking giant’s shares are down almost 2% to $104.00.

This appears to have been driven by weakness in the banking sector and nervous investors selling shares ahead of the bank’s first quarter update tomorrow.

What is the market expecting from CBA tomorrow?

According to a note out of Citi this morning, it has responded to recent bank updates by trimming its expectations for CBA in FY 2023 and through to FY 2025. It commented:

CBA is set to provide its 1Q23 update on Tuesday, 15 November, closing out the results season for the Major Banks. Post recent results, we have made minor earnings revisions to our CBA forecasts, downgrading FY23-25E by ~2-5% reflecting earlier NIM leverage to deposits, mitigated by stronger asset headwinds; lower non-housing growth through FY23/24E; and slightly higher costs.

Nevertheless, the broker is expecting a first quarter result in line with consensus estimates. It is predicting a 9 basis points improvement in the bank’s net interest margin to 1.96% and core earnings growth of 6% over the second half average. It explained:

Our 1Q23 cash earnings forecast is in-line with consensus, and we forecast a quarterly NIM of 1.96%, ~9bps ahead of 2H22. At the core earnings line, we expect ~6% core earnings growth in 1Q23 vs the 2H22 average. We expect asset quality to be benign, with a quarterly charge of ~$220m in-line with consensus and more reflective of portfolio growth with new impaired assets likely to remain low, similarly to peers.

Are CBA shares good value?

Citi remains bearish on CBA’s shares and believes they are trading at too large a premium.

As a result, it has retained its sell rating and $85.50 price target on the bank’s shares. It concludes:

We retain our Sell call, with the valuation premium remaining disconnected from similar trends across the sector as volume growth slows.

The post Looking to buy CBA shares? Here’s what to watch in Tuesday’s update appeared first on The Motley Fool Australia.

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More reading

• Are ASX share investors getting their mojo back?
• Don’t panic! Here are 7 reasons we can avoid a recession: AMP
• Why are CBA shares so high right now?
• ASX 200 bank shares: Buy, hold, or fold?
• Top fund manager sounds alarm bells for bank shares

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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