The Australia and New Zealand Bank Group Ltd (ASX: ANZ) share price will be on watch this morning.

This follows the release of an update on the banking giant’s recent equity raising.

Why is the ANZ share price on watch?

The ANZ share price will be on watch after the bank revealed that it has completed the retail component of its fully underwritten pro-rata accelerated renounceable entitlement offer to raise a total of approximately $3.5 billion.

This follows the institutional component of the entitlement offer, which was completed on 20 July and raised gross proceeds of approximately $1.7 billion.

According to the release, eligible retail shareholders subscribed for approximately 60.8 million new shares, raising approximately $1.15 billion.

This represented a strong participation rate of approximately 64% of the new shares offered under the retail entitlement offer to eligible retail shareholders. ANZ advised that approximately 217,000 applications were received from shareholders who elected to partially or fully take-up their entitlements.

The remaining entitlements not taken up by eligible retail shareholders or from ineligible retail shareholders, which account for approximately 36.4 million new shares, will be offered for sale for the benefit of those shareholders in the retail shortfall bookbuild.

Why is ANZ raising funds?

ANZ launched the equity raising to fund the acquisition of Suncorp Bank from Suncorp Group Ltd (ASX: SUN) for a purchase price of $4.9 billion.

ANZ CEO Shayne Elliott believes the acquisition will “a cornerstone investment” for the bank. He previously explained:

The acquisition of Suncorp Bank will be a cornerstone investment for ANZ and a vote of confidence in the future of Queensland. With much of the work to simplify and strengthen the bank completed, and our digital transformation well-progressed, we are now in a position to invest in and reshape our Australian business. This will result in a stronger more balanced bank for customers and shareholders.

We have admired the transformation that has occurred under the leadership of Steve Johnston and Clive van Horen and believe Suncorp Bank is a natural fit with ANZ given its culture, risk appetite and customer focus.

The post ANZ share price on watch following equity raising update appeared first on The Motley Fool Australia.

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More reading

• Can ANZ’s latest acquisition help it catch up to the other ASX 200 bank shares?
• 2 ASX 200 dividend shares analysts rate as buys
• Could the ANZ share price really offer more than 20% upside?
• Why did the ANZ share price have such a stellar run today?
• Here are the top 10 ASX 200 shares today

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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Zip Co Ltd (ASX: ZIP) shares are in focus as buy now, pay later (BNPL) companies look to improve their businesses. Block Inc (ASX: SQ2) shares are also in the spotlight as the company plans for growth.

Different businesses can reach in different ways, as they think about the best way to traverse the difficult economic situation that is happening with inflation and rising interest rates.

As reported by my colleague Mitchell Lawler, Zip is working on its ‘Operation Blue Sky’ plan. This looks to reduce business costs and make Zip economically viable without needing external capital.

What are the goals of this plan?

They include “the removal of $30 million in employee costs, stepping back global expansion, conducting more stringent lending scrutiny, and holding off on new product launches,” as my colleague put it.

How is Zip going with profitability?

In the fourth quarter of FY22, Zip said its cash transaction margin remained “strong” at 2.4%. This is up from 2.3% in the third quarter.

The company has been focused on improving its unit economics. It’s been taking action to deliver better credit outcomes across credit decisioning, portfolio management, and collections.

In the United States, Zip’s actions have helped it trend towards short-term targets despite “further deterioration in consumer confidence and the external environment”.

Zip US saw loss rates decrease to 2.7% of total transaction value (TTV). It exited the quarter with an expected loss rate of 2.2% for the late June cohort.

Management expects continued fine-tuning and optimisation will mean losses go below the target of 2% on a cohort basis before the end of 2022.

In Australia, the company experienced “a peak” in losses, with previous actions taken now “positively” impacting performance. This has resulted in a decrease in arrears roll rates, which is a forward indicator of losses. Zip expects the losses to trend down over the course of FY23.

Zip also decided not to go ahead with the acquisition of Sezzle Inc (ASX: SZL) so it would reach breakeven faster and earlier than anticipated.

Profitability could be important for Zip shares to regain some of their lost ground in 2022.

How does Block plan to deal with this environment?

For Block, which owns Afterpay, the business has three areas of focus. These are designed to allow Block to both grow and be resilient through what’s happening.

Block chief financial officer Amrita Ahuja explained:

There’s three top strategic investments for the Square business for some years now and into 2022. [These] are growing up market with larger sellers, who we’ve seen generally have greater resilience through macro volatility, growing our omni channel capabilities, which obviously again helps us navigate shifts in spending patterns across channels; and growing globally, which enables us to see a broader range of sellers, including outside of the United States.

And ultimately, it’s that breadth of these systems, including the Square ecosystem, which has enabled us to be resilient through macro changes as we’ve seen, even during the pandemic, which obviously impacted the Square business particularly, and has enabled us to grow at a pace faster than the broader industry.

Foolish takeaway

Zip shares are down 75% in 2022. Time will tell whether the BNPL player is able to recapture investor positivity.

Zip is working hard on improving its profitability, so we’ll see how successful it is at that.

Zip will report its full-year FY22 results on 25 August.

The post How does Zip’s ‘Operation Blue Sky’ stack up against Block’s battening down of the hatches? appeared first on The Motley Fool Australia.

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More reading

• Why is the Zip share price behaving so strangely on the ASX today?
• Here are the top 10 ASX 200 shares today
• Why is the Zip share price tumbling 6% on Tuesday?
• Could Block’s ‘superpower’ be an Achilles’ heel for Zip shares?
• These are the 10 most shorted ASX shares

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 Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. 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 Thursday, the S&P/ASX 200 Index (ASX: XJO) snapped its winning streak with a small decline. The benchmark index fell 0.2% to 7,112.8 points.

Will the market be able to bounce back from this on Friday and end the week on a high? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to end the week on a mildly positive note. This is despite it being a poor night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open 10 points or 0.15% higher this morning. In afternoon trade in the United States, the Dow Jones is down 0.3%, the S&P 500 is down 0.1%, and the Nasdaq is trading flat.

Oil prices push higher

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) could have a good finish to the week after oil prices strengthened overnight. According to Bloomberg, the WTI crude oil price is up 2% to US$89.91 a barrel and the Brent crude oil price is up 2.3% to US$95.83 a barrel. Traders were bidding oil higher after data showed that US crude stocks fell materially more than expected last week.

Cochlear results

The Cochlear Limited (ASX: COH) share price will be one to watch on Friday. This morning the hearing solutions company is scheduled to release its full year results. According to a note out of Citi, its analysts are expecting the company to report a net profit after tax of $299 million. This is ahead of the market consensus estimate of $287.9 million.

Gold price edges lower

Gold miners including Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a reasonably subdued finish to the week after the gold price edged lower overnight. According to CNBC, the spot gold price is down 0.3% to US$1,771.50 an ounce. A stronger US dollar appears to be weighing on the precious metal. In other news, Newcrest is scheduled to release its results today.

Xero remains a buy

According to analysts at Goldman Sachs, the Xero Limited (ASX: XRO) share price remains good value following the cloud accounting company’s trading update. This morning the broker retained its buy rating with a slightly trimmed price target of $111.00. While the broker acknowledges that its UK subscriber weakness persists, it expects the issues causing this to be resolved soon.

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

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More reading

• 3 ASX 200 shares inking new multi-year highs today
• Why did the Coles share price just smash its all-time high?
• Here are the top 10 ASX 200 shares today
• Why Blackmores, Codan, Lake Resources, and Xero shares are falling today
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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 Cochlear Ltd. and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended Cochlear Ltd. 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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Looking for some small cap shares to add to your portfolio? Then have a look at the two listed below.

Here’s why analysts think they could be in the buy zone:

Readytech Holdings Ltd (ASX: RDY)

The first highly rated small cap ASX share to look at is ReadyTech. It is an enterprise software company serving market verticals including higher education and local government.

ReadyTech has been growing at a strong rate for several years and continued this trend in FY 2022. Earlier this week, the company reported a 56.5% in revenue to $78.3 million and 45.5% jump in underlying EBITDA to $28.6 million.

Another positive was that the company’s recurring revenue increased to 76% of total revenue from 65% a year earlier. This bodes well for the future and helped underpin an increase in the company’s FY 2026 organic revenue target to over $160 million. This is more than double its current revenue.

In response to the update, the team at Goldman Sachs reiterated its buy rating with a $4.30 price target. Goldman believes that ReadyTech “remains materially undervalued relative to profitable SaaS peers.”

Serko Ltd (ASX: SKO)

Another small cap ASX share to consider is Serko. It is the online travel booking and expense management provider behind Zeno Travel and Zeno Expense platforms.

The company’s Zeno Travel platform provides artificial intelligence-powered end-to-end travel itineraries, cost control, and travel policy compliance to corporate customers. Whereas the Zeno Expense platform allows businesses to automate and streamline their expense administration function, identify out-of-policy expense claims, and prevent fraud.

It also has a game-changing deal with travel booking giant Booking.com which is beginning to take shape now COVID headwinds are easing. It is partly for this reason that Citi is very positive on Serko.

So much so, it currently has a high risk buy rating and $5.10 price target on its shares.

The post 2 exciting small cap ASX shares that analysts rate as buys appeared first on The Motley Fool Australia.

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More reading

• ReadyTech share price slips despite earnings increase
• 2 exciting ASX tech shares to buy now according to analysts
• ‘The smaller you get, the worse the performance has been’: Should ASX small-cap shares be avoided right now?
• Experts name 2 exciting small cap ASX shares to buy with huge upside potential
• Experts name 2 ASX growth shares to buy

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 Readytech Holdings Ltd and Serko Ltd. The Motley Fool Australia has recommended Readytech Holdings Ltd and Serko Ltd. 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 market may have closed lower today but that has not stopped three ASX 200 shares from hitting new multi-year highs.

The S&P/ASX 200 Index (ASX: XJO) slipped 0.2%, with most sectors closing in the red on Thursday.

But it isn’t all bad news – especially not for the Brambles Limited (ASX: BXB) share price. Shares in the logistics group jumped 3.6% to a two-and-a-half-year high of $12.84.

Strong results pushing this ASX 200 share to a high

Brambles continued to bask in the afterglow of its pleasing full-year results, which were released yesterday. Not only did it manage to deliver a 9% constant currency increase in sales to US$5.6 billion, but it also delivered fatter margins.

The global supply chain indigestion could not derail the company’s growth – showing how defensive its business is.

How important Brambles is to its customers is also evident in the fact that it could push through price increases during these volatile economic times.

Burning bright ahead of profit results

Another ASX 200 share that reached for the sky today was the Whitehaven Coal Ltd (ASX: WHC) share price.

Shares in the coal miner gained 2.2% to $6.93 – which is a more than 10-year high. Investors are banking on great things when it hands in its profit results later this month.

Expectations are set high as energy prices have soared following Russia’s invasion of Ukraine. A coal shortage in China is giving the miner an extra boost too.

The positive macroeconomic backdrop helped this ASX 200 miner achieve a record average coal price of $514 a tonne in the June quarter.

Whitehaven is expecting its FY22 earnings before interest, tax, depreciation and amortisation (EBITDA) to hit around $3 billion. That’s 15 times what it made the year before!

The ASX 200 share that hit a record high

The Coles Group Ltd (ASX: COL) share price is the third ASX 200 share scaling new heights. The supermarket giant inched up 0.4% to hit a record high of $19.38 on Thursday.

Coles is yet to release its full-year results, but investors are feeling confident about a good outcome. While most companies are feeling the heat from high inflation, supermarkets benefit from higher prices. This is because they can charge more at the checkout, which means increased sales.

The March quarter sales update from Coles showed as much. Its supermarkets delivered a 3.9% increase in sales when compared to the same period last year.

Throw in the fact that consumer staple shares like Coles have defensive qualities, and you can understand the attraction given rising rates and a slowing economy.

The post 3 ASX 200 shares inking new multi-year highs today appeared first on The Motley Fool Australia.

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More reading

• Why did the Coles share price just smash its all-time high?
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why are ASX 200 coal shares having such a top run on Thursday?
• Why is the Zip share price behaving so strangely on the ASX today?

Motley Fool contributor Brendon Lau 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 COLESGROUP DEF SET. 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 NRW Holdings Limited (ASX: NWH) share price had a huge day today.

NRW shares lifted 6.25% to $2.38 before entering a trading halt. In late afternoon, the construction and mining contractor released an announcement related to a takeover plan.

Let’s take a look at what took place today.

What happened?

NRW entered a trading halt today pending a response to media speculation. Rumours emerged that NRW had launched a takeover offer of Maca Ltd (ASX: MLD), The Australian reported.

However, just before market close, NRW advised Maca had knocked back its proposal.

NRW confirmed it approached the board of Maca with a confidential merger proposal on 11 August. Under the deal, NRW would have acquired all of Maca’s shares for $1.085 per share.

However, NRW said Maca “does not consider the merger proposal as superior to the current conditional Thiess takeover offer”.

As my Foolish colleague Brooke reported at the time, Thiess launched a $350 million takeover bid at 1.025 per share in July.

Commenting on today’s news, NRW managing director Jules Pemberton said: “We are disappointed that the Board of MACA has indicated that it is not willing to entertain our compelling proposal.”

NRW share price lifts on earnings

Earlier today, NRW reported full-year financial results. Highlights included:

• Earnings before interest, tax, depreciation and amortisation (EBITDA) lifted 2% on FY21 to $272.4 million
• EBITA lifted 30.1% on the previous year to $157 million.
• Statutory net profit of $97.4 million, a 79.4% boost
• Normalised earnings per share of 22.5 cents, a 30.3% lift on FY21
• Fully franked dividend of 7 cents per share, a 40% lift in FY21

The EBITA result was higher than the previously forecast guidance of between $150 and $155 million.

Depreciation and amortisation fell 21% as a result of the sale of Boggabri assets in July 2021.

During the year, NRW secured “major order wins”, boosting the order book to a record $5.2 billion.

What did management say?

Commenting on the results, NRW managing director and CEO Jules Pemberton said:

These are the best results NRW have reported despite the challenging conditions the business has encountered over the last 12 months.

Apart from the earnings highlight, the strong cashflow underlines the quality of those earnings and our ability to deliver a disciplined approach to balance sheet management

What’s ahead?

NRW is predicting FY23 EBITDA in the range of $162 million to $172 million. This assumes projects will face current resource and supply chain pressures. NRW expects these pressures could ease during the 2023 financial year.

NRW has secured $2.3 billion worth of work for the FY23.

Share price snapshot

The NRW share price has soared nearly 43% in the past year and 35% in the year to date.

NRW has a market capitalisation of nearly $1.1 billion based on the current share price.

The post Results and trading halts: What went down for the NRW share price on Thursday? appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares celebrating Friday with new 52-week highs
• NRW share price leaps 11% on guidance upgrade for FY22
• Why Appen, Centuria Industrial, NRW, and Sayona Mining shares are pushing higher
• Maca share price leaps 23% on Thiess takeover news

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 Westpac Banking Corp (ASX: WBC) share price has lifted 10.05% over the past month.

In comparison, the S&P/ASX 200 Banks Index (ASX: XBK) and the S&P/ASX 200 Index (ASX: XJO) are up 7.64% and 6.96% respectively.

Shares in the other three big banks — Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) — have climbed between 6.36% and 7.52% over the same period.

So Westpac has clearly outperformed its ASX peers in the banking sector and the broader market. What is going on?

Let’s look into what might be behind the price surge.

What’s going on with the Westpac share price?

The banking giant has not released any price-sensitive news to support its share price acceleration this month.

In fact, on Monday, Westpac shares dipped 1.06% when it announced its third-quarter results. My Foolish colleague James Mickleboro observed that its Q3 earnings report lacked detail around its profits and margins, which could have spearheaded a small sell-off for its share price.

However, after the Q3 results were posted, investment bank Goldman Sachs issued a note stating that Westpac’s earnings were beating forecasts.

The broker said:

While no earnings update was provided, the CET1 ratio, RWA and capital deduction disclosures did imply that the quarterly cash earnings performance may have been run-rating slightly better than what was implied by our previous 2H22E forecasts.

The Goldman Sachs analysts rated Westpac a buy and upgraded its price target to $26.55, giving it an 18.73% upside at the time of writing.

And yesterday, Goldman Sachs doubled down on its bullish stance towards Westpac, noting that the bank had the most potential out of any listed share in the S&P/ASX 200 Banks Index.

The broker listed four reasons, saying:

We continue to see WBC as our preferred exposure to the A&NZ Financials reflecting: i) its strong leverage to rising rates, ii) while we think its A$8 bn FY24 cost target will now be unachievable, we still forecast a 7% reduction in underlying expenses, iii) its recent market update highlighted that the business is still investing effectively in its franchise, and iv) our 12-mo TP implies a 23% TSR, and we note the stock is trading at a 20% discount to peers, versus the historic average discount of 2%.

Finally, It News reported today the bank acquired the westpac.com website address today from a company in the semiconductor industry. Previously the westpac.com address directed visitors towards a business listed as being in South Korea. Today it redirects them to the westpac.com.au address.

Westpac share price snapshot

The Westpac share price closed 0.8% lower today, trading at $22.34 apiece. Shares in the bank are currently down 13.48% over the past 12 months. Meanwhile, the S&P/ASX 200 Banks Index is down only 2.76% over the same period.

Westpac’s market capitalisation is $78.22 billion based on the current share price.

The post Up 10%, why has the Westpac share price smashed other ASX banks this past month? appeared first on The Motley Fool Australia.

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More reading

• Brokers say BHP and this ASX 200 share are buys
• Is the Westpac share price a buy following the bank’s latest update?
• 5 things to watch on the ASX 200 on Tuesday
• Westpac share price slips following release of Q3 update
• Westpac share price on watch following Q3 update

Motley Fool contributor Matthew Farley 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 OZ Minerals Limited (ASX: OZL) share price has barely moved since the BHP Group Ltd (ASX: BHP) bid was announced last week.

BHP wanted to buy OZ Minerals with a bid of $25 cash per share.

OZ Minerals’ response? The board unanimously rejected the bid and said it “significantly undervalued” the company. The OZ Minerals share price soared 35% on the news to $25.59.

While explaining the reasons behind the rejection, OZ Minerals managing director and CEO Andrew Cole said:

We have a unique set of copper and nickel assets, all with strong long-term growth potential in quality locations. We are mining minerals that are in strong demand, particularly for the global electrification and decarbonisation thematic and we have a long-life resource and reserve base. We do not consider the proposal from BHP sufficiently recognises these attributes.

OZ Minerals also pointed out that if BHP bought it, BHP would get “significant synergies and other benefits” in both South Australia and Western Australia. It also said there is significant growth and diversification opportunity for BHP’s global copper portfolio.

What growth potential does OZ Minerals have?

Cole gave a presentation earlier this week about the company’s major projects in South Australia.

He pointed to a number of projects where there is growth potential to more than double production. That includes expansions at Prominent Hill and Carrapateena in South Australia, as well as Carajas East Province, Carajas West Province and Gurupi Province.

Cole said the company has “unique organic growth pipeline ideally placed to deliver production into a copper market with long-term structural supply challenges and distinguishes OZ Minerals from other peers which lack growth optionality”.

OZ Minerals pointed out that copper and nickel demand for electric vehicles is expected to grow by seven times between 2020 to 2040. Copper and nickel are reportedly the most widely used metals in clean energy.

The copper miner also noted that there is a growing need for grid expansion. Between 2020 and 2040, demand for electricity grids is expected to double.

Where is the OZ Minerals share price headed?

The business got a huge boost from the BHP bid.

BHP didn’t exactly say it wouldn’t bid any higher. But, it pointed out that the offer price was a 32.1% premium to the last closing price and it was “materially above” the average broker price targets.

It’s possible that BHP may not have expected that offer to be accepted, but it wasn’t given access to due diligence despite the offer.

A further offer from BHP would likely be a boost for the OZ Minerals share price, but the BHP leader didn’t say what it would do next.

BHP CEO Mike Henry said:

Our proposal represents compelling value and certainty for OZ Minerals shareholders in the face of a deteriorating external environment and increased OZ Minerals operational and growth related funding challenges.

We are disappointed that the board of OZ Minerals has indicated that it is not willing to entertain our compelling offer or provide us with access to due diligence in relation to our proposal.

The broker Morgans thinks that BHP will come back with a better offer, because of the benefits that BHP would get from the deal. However, its price target is $25.40, implying little movement.

The broker Credit Suisse has a price target of $28, implying a possible rise of close to 10%.

The OZ Minerals share price closed 0.65% lower at $25.84 on Thursday.

The post The OZ Minerals share price has barely moved since rocketing on BHP’s takeover bid. So, what now? 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 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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With the S&P/ASX 200 Index (ASX: XJO) losing 0.21% to 7,112.8 points by the end of today’s trading session, it certainly wasn’t a great day for many ASX 200 shares. But the Coles Group Ltd (ASX: COL) share price was not among them.

Today was, in fact, a great day for Coles shares. The supermarket giant ended up recording a gain of 0.36% to $19.38, so a healthy outperformance of the broader market. But it was even better for investors during intra-day trading.

This company rose as high as $19.50 a share around midday today. That happens to be both a new 52-week high and an all-time record high for the Coles share price.

Today’s move means that Coles shares are now up a healthy 8.2% in 2022 so far. That’s a marked outperformance of the ASX 200 as well, which remains 6.3% in the red over 2022.

So what happened today that pushed Coles to these new record highs?

Why did Coles shares hit a new record high today?

Well, if you (understandably) suspect earnings, that isn’t the case. Coles isn’t scheduled to report its FY22 full-year numbers until next Wednesday (24 August).

In fact, there wasn’t any fresh news or announcements out of the company today at all, or indeed since 11 August.

So we don’t have a smoking gun for Coles’ new highs today.

As such, let’s look at what happened to Coles’ consumer staples peers. Woolworths Group Ltd (ASX: WOW) shares didn’t do as well as Coles today, losing 0.25%.

But Endeavour Group Ltd (ASX: EDV) also had a positive day, gaining 0.6%. Treasury Wine Estates Ltd (ASX: TWE) had a corker (no pun intended), lifting 4.04%.

So we are seeing some market-defying moves in Coles’ consumer staples sector.

Consumer staples shares such as Coles are often good performers on days when the market is falling. This is due to a perception that these companies are ‘safer’, given that they sell life’s needs, not wants.

So it’s possible this was the reason why Coles shares had such a cracking day of trading this Thursday. We also can’t discount the possibility that some investors are taking a bet that what Coles will report next week will impress the markets.

Whatever the reasons for the positive performance of the supermarket operator, no doubt investors will be happy.

At the last Coles share price, this ASX 200 blue chip has a market capitalisation of $25.8 billion, with a dividend yield of 3.15%.

The post Why did the Coles share price just smash its all-time high? appeared first on The Motley Fool Australia.

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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 positions in and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended Treasury Wine Estates 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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The National Australia Bank Ltd (ASX: NAB) share price has been rising in recent days after last week’s profit update.

For readers who didn’t see it, NAB reported the profit it generated in the third quarter of FY22, which was $1.85 billion of statutory net profit after tax (NPAT) and $1.8 billion of cash earnings. The cash earnings represented 6% growth year over year.

Cash earnings before tax and credit impairment charges went up by 10%.

However, part of the growth came from the acquisition of the Australian consumer business of Citigroup.

Including the acquisition, compared to the FY22 first half quarterly average, cash earnings before credit impairment charges and tax increased 3%. Excluding the acquisition, it only grew by 2%.

NAB has done a lot of work on improving its operational performance. The CEO said the bank’s performance was “pleasing” for the quarter and highlighted the “ongoing execution” of its strategy.

The NAB share price has risen by 5.4% since the update, closing at $31.42 on Thursday.

Expert view on the update

Despite the growth, some experts felt that the quarterly numbers weren’t quite good enough.

Brad Potter, Tyndall’s head of Australian shares, said in a podcast released on Livewire that NAB’s update was “slightly disappointing” for a business that was trading at such a “high premium”. But, the bottom line was “okay”.

He noted that NAB is not demonstrating profit margin growth yet after the recent interest rate rises.

However, Potter did say that asset quality is “pristine” and NAB is writing back excess provisions that it took during the COVID-19 pandemic. There is little mortgage stress and he doesn’t think this will be an issue unless unemployment rises “substantially”.

Potter said:

Over the next 12 months at least, banks have a net interest margin tailwind and, when combined with few bad debt issues, earnings should be reasonably strong.

What’s going to happen next for NAB?

Many experts acknowledge that banks like NAB can benefit from rising interest rates because they will help the net interest margin (NIM). That’s the margin that NAB makes on its lending (e.g., mortgages) compared to the cost of funding for those loans (e.g., savings accounts).

NAB thinks its customer base is well positioned to deal with whatever happens next.

NAB CEO Ross McEwan said:

As the economy changes, continued low unemployment and healthy household and business balance sheets are helping mitigate the impacts of higher inflation and higher interest rates. The majority of our customers are well placed to manage these challenges, including approximately 70% of customer home loan repayments ahead of schedule.

Our business is also in good shape for this evolving environment. Balance sheet settings remain strong and we are well advanced on our FY22 term wholesale funding task with $34 billion raised by the end of June. Investments to deliver simpler, more digital experiences for customers and colleagues are supporting balanced growth and productivity benefits which are expected to exceed $400 million in FY22.

Predictions for the NAB share price

The broker Macquarie believes NAB will start seeing the benefit of an improving NIM in the final quarter of FY22. But it did say that the third quarter wasn’t quite as good as investors were expecting.

Macquarie also noted NAB’s rising market share. Its price target for NAB shares is $29.50, which would represent a fall of 6% over the next 12 months.

The broker UBS thought that the third quarter was pretty good, though the NIM wasn’t as good as hoped. UBS has a price target of $33 for NAB shares, implying a rise of around 5%.

It won’t be too long until investors get to see how NAB performed over the past full year. The bank will report its annual result for the year to 30 September 2022 on 9 November.

The post The NAB share price has gained 5% since last week’s update. What’s next? appeared first on The Motley Fool Australia.

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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 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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