Are you looking for some ASX 200 mining shares to buy?

If you are, then look no further. The two listed below have been named as buys by analysts at Morgans. Here’s why it is bullish on them:

BHP Group Ltd (ASX: BHP)

Analysts at Morgans are positive on the Big Australian and see it as one of the best mining shares to buy. This is due to BHP being a lower risk option in the sector and its strong balance sheet and dividend profile.

It explained:

We view BHP as relatively low risk given its superior diversification relative to its major global mining peers. The spread of BHP’s operations also supplies some defence against direct Covid-19 impact on earnings contributors. While there are more leveraged plays sensitive to a global recovery scenario, we see BHP as holding an attractive combination of upside sensitivity, balance sheet strength and resilient dividend profile.

Morgans currently has an add rating and $48.30 price target on its shares. In addition, the broker expects dividend yields of 9% in FY 2022 and 7% in FY 2023.

South32 Ltd (ASX: S32)

Another mining share that Morgans is bullish on is South32. Its analysts have been pleased with the transformation of the miner’s portfolio in recent years. This has improved the quality of its earnings and also its ESG credentials.

Morgans commented:

S32 has transformed its portfolio divesting South African thermal coal and acquiring an interest in Chile copper, substantially boosting group earnings quality, as well as S32’s risk and ESG profile. Unlike its peers amongst ASX-listed large-cap miners, S32 is not exposed to iron ore. Instead offering a highly diversified portfolio of base metals and metallurgical coal (with most of these metals enjoying solid price strength). We see attractive long-term value potential in S32 from de-risking of its growth portfolio, the potential for further portfolio changes, and an earnings-linked dividend policy.

Its analysts have an add rating and $6.10 price target on South32’s shares. And, like BHP, the broker is expecting some big dividends in the near term. Morgans is forecasting dividend yields of 6% in FY 2022 and 8% in FY 2023.

The post Broker names 2 ASX 200 mining shares with big dividends to buy now appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most traded ASX 200 shares on Wednesday
• 2 top ASX dividend shares to buy according to analysts
• Why BHP, Block, Harvey Norman, and PointsBet shares are sinking
• Why is the BHP share price sinking 6% today?
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The DroneShield Ltd (ASX: DRO) share price has failed to take off in the past month.

Investor sentiment is waning off on the drone security company as the ASX heads towards bear market territory.

While DroneShield shares finished flat at 18 cents at yesterday’s market close, they are down 21% in a month.

In contrast, the All Ordinaires (ASX: XAO) is down 7% over the same time frame.

What’s dragging DroneShield shares lower?

The DroneShield share price has tumbled in recent times despite the current hype surrounding demand for drone technology products.

The Russian war in Ukraine has highlighted the importance for any military wishing to counter unmanned aerial systems (UAS).

However, sky-rocketing inflation along with a potential global economic slowdown has put a strain on DroneShield shares. This is because if the world does head into a recession next year as economists are predicting, countries will likely tighten up military spending.

Nonetheless, when war breaks out, DroneShield benefits from this just as it did from Ukraine.

The company supplied hand-held detection drone devices as well as its prized drone gun to the besieged country.

With further contracts possibly in the works, DroneShield shares could receive a much welcome boost.

What’s next for the company?

DroneShield put out a release yesterday advising that its equipment has been deployed at the World Economic Forum (WEF).

Located in Switzerland and held between 22 –26 May, this could be an opportune time to showcase its products.

The event attracts over 2,500 participants including world leaders and senior business executives.

DroneShield CEO, Oleg Vornik provided a brief outlook on the future, saying:

…The company continues to increase its presence in the tier 1 global events sector, as well as increasing the profile of the products with other key customers such as law enforcement and military personnel.

As stated in its quarterly results in April, the company has a sales pipeline of $155 million for 2022. This is expected to increase to $175 million in the following year, cementing its place in the multi-billion counter-drone market.

DroneShield share price snapshot

Despite its recent fall, the DroneShield share price is up around 9% from this time 12 months ago.

The company’s shares reached a 52-week high of 30 cents in early May before retracing 40% to current levels.

DroneShield has a market capitalisation of roughly $84.35 million, with approximately 432.54 million shares on its books.

The post The DroneShield share price has tumbled 21% in a month. What’s next? appeared first on The Motley Fool Australia.

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• Best ASX shares to buy in June 2022

Motley Fool contributor Aaron Teboneras has positions in DroneShield Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield Ltd. The Motley Fool Australia has recommended DroneShield 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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If you’re looking to increase your income with some dividend shares, then the ones listed below could be worth a look.

Both dividend shares are expected to provide investors with attractive yields in the near term. Here’s what you need to know about them:

Rural Funds Group (ASX: RFF)

The first ASX dividend share to look at is Rural Funds. It is an Australian agricultural property company with a portfolio of high quality assets leased to some of the biggest players in the sector.

Its property portfolio includes almond and macadamia orchards, premium vineyards, water entitlements, cropping and cattle farms.

In FY 2022, Rural Funds intends to reward its shareholders with a 11.73 cents per share distribution.

It also plans to increase its FY 2023 distribution by its annual target rate of 4% to 12.2 cents per share in FY 2023. And while rising funding costs could potentially prevent this increase, even a flat dividend would be attractive.

Based on the current Rural Funds share price of $2.54, Rural Funds’ FY 2022 dividend equates to a 4.6% yield.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share that looks set to provide investors with a generous dividend yield is Telstra.

This telco giant has been through a difficult time over the last decade, but at long last there is light at the end of the tunnel. In fact, earlier this year Telstra released its half year results and returned to growth for the first time in years.

This allowed the telco to maintain its fully franked interim dividend at 8 cents per share, with another 8 cents per share final dividend expected to be paid in the second half.

Looking ahead, with the company’s T22 strategy bearing fruit and management expecting its upcoming T25 strategy to underpin solid growth over the coming years, the outlook for the Telstra dividend has been improving greatly.

For now, the 16 cents per share dividend that Telstra expects to pay in FY 2022 represents a yield of just over 4.2% based on the current Telstra share price of $3.83.

The post Here are 2 ASX dividend shares with 4%+ yields appeared first on The Motley Fool Australia.

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More reading

• Despite recent volatility, brokers are predicting big things for the Telstra share price. Here’s why
• Here are the 3 most traded ASX 200 shares on Wednesday
• 2 top ASX dividend shares to buy according to analysts
• 2 ASX shares I want to buy more of for my portfolio
• Top ASX dividend shares to buy in June 2022

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 RURALFUNDS STAPLED and Telstra Corporation 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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No doubt you’re getting sick of the sea of red on your online ASX shares portfolio.

But it’s not just everyday retail investors feeling the pinch. The professionals aren’t faring much better in a rough market.

One of the most successful funds in recent years, the Cyan C3G Fund, revealed this week that it “suffered badly” in May to see a fall of 14%.

“Performance in May was incredibly frustrating,” portfolio managers Dean Fergie and Graeme Carson told clients in a memo.

“All but one of our holdings fell over the month, resulting in the overall poor performance.”

Cyan attributed the “severe selling pressure” to a perfect storm of supply constraints, central bank tightening and geopolitical issues.

“In the six weeks to early June, the S&P/ASX Emerging Companies (ASX: XEC) index has fallen 17%.” 

Normal programming will return sooner or later

But in the long run, the pair said fortunes would turn around.

“Logistics is improving, supply chains are opening up, costs are still a challenge but will subside as other parts of the supply chain normalise.”

A steep hike in interest rates will indeed temporarily result in depressed consumer spending. 

But the portfolio managers reminded clients that even a 150-basis point increase would result in a cash rate that’s still historically low.

“In terms of valuing companies on future earnings (which is what the stock market does), it is far from terminal, or perhaps not even particularly material,” read the document.

“We feel the market is being overly bearish on where long-term rates might land.”

Considering this, the Cyan team named three ASX shares that plunged last month that still have excellent underlying businesses (and it’s still holding onto):

Value of brands could exceed the company’s current valuation

Brewer Mighty Craft Ltd (ASX: MCL) watched in horror as its share price lost a quarter of its value last month.

It has lost even more in this week’s brutal sell-off, to be down 42% since the start of May.

For the Cyan team, this is purely a macroeconomic reaction — because the business is going gangbusters.

“It is currently being valued at $70 million by the market,” read the memo. 

“[But] it is expected to deliver more than $70 million in sales during this COVID-impacted year and strong profitable growth in FY23.”

The company has a 37% stake in fast-growing brand Better Beer, which is expected to sell 4 million litres this financial year and 10 million in the next.

“On those metrics — at $25 per litre of value (which is the general metric for valuing boutique beer brands that reach scale) — Mighty Craft’s ownership of the brand alone could be worth $90 million+.”

No debt, profitable, pays dividend

Cyan lost 15% on its Kip McGrath Education Centres Limited (ASX: KME) last month.

Kip McGrath runs an education and tutoring business in the English-speaking markets of Australia, New Zealand, the United States, the United Kingdom and South Africa.

The financials are healthy, according to Fergie and Carson, who noted it has no debt, is cash flow positive, profitable, and pays a dividend. 

The company is also forecast to grow revenue and earnings in excess of 20% next financial year. 

“It is potentially an M&A target and has recently successfully pushed into the US,” read the Cyan memo.

“The stock is down 40% from its highs of a few months ago and has delivered no negative news.”

‘Extremely attractive’ takeover target

Fergie and Carson have been fans of micro-investing platform RAIZ Invest Ltd (ASX: RZI) for a while, and a 15% loss in May hasn’t changed this view.

This is another ASX share that has no debt and holds $18 million in cash.

“Over the past 12 months, it has grown active customers by 50% to around 650,000, who collectively invest more than $1 billion,” read the Cyan memo.

“The company is profitable in its core operations in Australia and is pushing successfully into south-east Asia.”

May was just the continuation of a shocking run in 2022. Raiz shares have plunged almost 64% since the start of the year.

Similar to Kip McGrath, Raiz could make an “extremely attractive” takeover target.

“As a comparative valuation, Raiz’s US parent Acorns Grow is valued at ~$800 per customer,” the memo read.

“Completely ignoring Raiz’s 350,000 strong customer base Asia, its Australian business of 290,000 customers is presently being valued by the local market at just $170 per customer.”

The post ‘Frustrating’: Fund backs 3 great ASX shares with plunging prices appeared first on The Motley Fool Australia.

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More reading

• Here are 2 ASX dividend shares with 4%+ yields
• 3 ASX shares to buy for scary times
• Transurban shares poised for rapid dividend recovery: expert
• 2 ASX growth shares to buy for when the market rebounds
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Tony Yoo 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 Kip McGrath Education Centres Ltd. The Motley Fool Australia has positions in and has recommended Kip McGrath Education Centres 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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Share markets around the world are in a bit of a panic.

Investors are pulling out their money in droves due to fears that central banks can’t raise interest rates to combat inflation without sending us all into a recession.

But as legendary investor Warren Buffett is often quoted as saying, wise investors need to be greedy when others are fearful.

That is, buy up cheap ASX shares to hold for the long run while everyone else is running around like headless chooks.

Here are three such buy suggestions from experts:

Pizza for dinner, anyone?

Perhaps one could argue that as the economy hits a low point, more people will be dining out on fast food rather than the gourmet stuff.

If you believe in that theory, you would agree with Morgans advisor Jabin Hallihan who picked Domino’s Pizza Enterprises Ltd (ASX: DMP) as a buy.

“The fast food giant faces near term challenges of currency headwinds and inflation,” he told The Bull.

“However, the company offers growth opportunities in the key markets of Japan and Taiwan.”

The Domino’s share price has halved since the start of the year.

Hallihan’s team has a price target of $93 for the stock, which is more than 50% higher than the Wednesday closing price of $61.70.

Domino’s shares are somewhat divisive in the wider professional community. According to CMC Markets, six out of 14 analysts recommend it as a strong buy, but seven rate it a hold.

$10 lettuce, anyone?

With food prices skyrocketing due to global shortages triggered by shipping delays and the war in Ukraine, backing agriculture might not be a bad move.

Fat Prophets chief Angus Geddes likes the look of Elders Ltd (ASX: ELD) to take advantage of that angle.

“Elders is leveraged to the buoyant rural sector, and reported a strong 2022 interim result.”

The company, which supplies goods and services to agricultural producers, is seeing demand outstripping supply across its whole catalogue. 

“Elders has been winning market share from targeted acquisitions and from tweaks to its strategic positioning.”

Elders shares have dropped about 17% over the past three weeks.

Want to play the pokies, anyone?

While Australians may not gamble as much during an economic downturn, gaming provider Aristocrat Leisure Limited (ASX: ALL) is still a cheap buy in the long run for Hallihan.

“The slot machine maker remains a high quality growth business with long term opportunities,” he said. 

“We’re forecasting 16% growth in earnings before interest, taxes and amortisation in the coming year.”

Morgans recommends it as a buy with a target of $43.

That’s about a 30% premium on the Wednesday closing stock price of $33.01.

Most other analysts absolutely agree with Hallihan, with 11 of 16 recommending Aristocrat shares as a strong buy on CMC Markets.

Aristocrat shares have lost about a quarter of their value since the start of this year.

The post 3 ASX shares to buy for scary times appeared first on The Motley Fool Australia.

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• 2 ASX growth shares to buy for when the market rebounds
• Analysts name 2 ASX growth shares to buy with huge upside potential
• 2 top ASX growth shares with major upside potential
• Leading brokers name 3 ASX shares to buy today
• Watch out Domino’s! Pizza Hut is coming for a bigger slice of the pie

Motley Fool contributor Tony Yoo 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 Dominos Pizza Enterprises Limited and Elders 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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Transurban Group (ASX: TCL) shares are still trading about 15% below their pre-pandemic levels in February 2020.

Though, until this week’s broader selling action, the S&P/ASX 200 Index (ASX: XJO) toll road developer and operator was in the green for the calendar year.

Closing 1% lower yesterday, Transurban shares are now down 1% in 2022, which still compares favourably to the 13% year-to-date loss posted by the ASX 200.

At the current share price, Transurban has a market cap just shy of $43 billion and pays a dividend yield of 2.6%, unfranked.

Looking ahead, however, the company could be on track to return to the fatter dividend yields it paid before the pandemic lockdowns impacted its business model.

Well placed for population growth and urbanisation

Analysts at Morgans have placed Transurban shares among the top 12 ASX 200 companies it thinks will provide the highest risk-adjusted returns over the next 12 months “supported by a higher-than-average level of confidence”.

Transurban’s Australian and North American toll road operations and projects also see it listed among the broker’s most preferred sector exposures.

Andrew Tang, equity strategy analyst at Morgans, explained why Transurban shares made the broker’s top 12 list on Livewire.

According to Tang:

Transurban owns a pure-play portfolio of toll road concession assets located in Melbourne, Sydney, Brisbane, and North America. This provides exposure to regional population and employment growth and urbanisation.

Given very high [earnings before interest, taxes, depreciation and amortisation] EBITDA margins, earnings are driven by traffic growth – with the recovery from Covid – and toll escalation.

Approximately half of the tolls are indexed in line with the consumer price index (CPI) with the rest fixed at roughly 4% per year.

Morgans believes Transurban shares “will continue to be attractive to investors given its market cap weighting, [which is] important for passive index-tracking flows, the high quality of its assets, management team, balance sheet, and growth prospects”.

As for dividends, Tang said, “Watch for rapid recovery in DPS [dividends per share] alongside traffic recovery and WestConnex acquisition prospects.”

He said a negative overhang that investors should keep an eye on is “the contaminated soil disposal issues related to its West Gate Tunnel Project.”

How have Transurban shares performed longer term?

Over the past five years, the Transurban share price is up 12%. By comparison, the ASX 200 has gained 14% over that same time.

The post Transurban shares poised for rapid dividend recovery: expert appeared first on The Motley Fool Australia.

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• Tolls and phones: Wilsons unveils 3 ASX shares to buy for a slowing economy
• Will June be a good month for the Transurban share price?
• Transurban share price hit by broker downgrade
• Fund manager names 3 ASX shares with monopoly moats
• Here are 2 top ASX dividend shares to buy according to analysts

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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A number of growth shares have been beaten down this year amid the market volatility. While this is disappointing, it could have created a buying opportunity for investors once the volatility ends.

Here’s why these growth shares could be worth owning when the market rebounds:

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The first growth share to look at is Domino’s. It is one of the world’s largest pizza chain operators with stores across the ANZ, Asia-Pacific, and European regions.

While it has a sprawling network across these regions, management still sees scope for significant expansion over the next decade. It is aiming to more than double its network to 6,650 stores in existing markets by 2033.

And while trading conditions are not easy at present and the company is likely to be battling food and wage inflation, the selloff of its shares appears to have been overdone according to analysts at Morgans. Particularly given its aforementioned growth plans.

Morgans commented:

The engine of DMP’s growth is the rollout of new stores. Although near-term store rollout may be slower than DMP would like, the medium-term opportunity is absolutely undiminished, as evidenced by the reiteration of the 2033 outlook

In light of this, the broker has put an add rating and $93.00 price target on its shares.

TechnologyOne Ltd (ASX: TNE)

Another growth share to look at buying for the rebound is TechnologyOne. It is an enterprise software provider servicing the government, financial services, health and community services, education, and utilities and managed services markets.

TechnologyOne’s shares have fallen heavily this year despite it recently delivering a 19% increase in half year revenue to $172.5 million and a 23% jump in annual recurring revenue (ARR) to $288.5 million. Not even management reiterating its belief that it will grow its ARR to $500 million by FY 2026 has stopped the rot.

Analysts at Goldman Sachs appear to see this as a buying opportunity. Particularly given how the broker suspects that TechnologyOne could even outperform its ARR target, noting that the risks “are skewed to the upside.”

Goldman has a buy rating and $13.30 price target on the company’s shares.

The post 2 ASX growth shares to buy for when the market rebounds appeared first on The Motley Fool Australia.

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More reading

• I think these excellent ASX growth shares are buys for 2022 and beyond
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• Leading brokers name 3 ASX shares to buy today
• Watch out Domino’s! Pizza Hut is coming for a bigger slice of the pie

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 recommended Dominos Pizza Enterprises Limited and TechnologyOne 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) continued its slide with another sizeable decline. The benchmark index fell 1.3% to 6,601 points.

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

ASX 200 expected to finally rebound

The Australian share market is expected to rebound on Thursday following a solid night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 16 points or 0.25% higher this morning. On Wall Street, the Dow Jones rose 1%, the S&P 500 climbed 1.45%, and the Nasdaq jumped 2.5%. Futures contracts are pointing to further gains on Wall Street tonight.

US Federal Reserve lifts rates

As was widely expected, the US Federal Reserve has lifted rates by 0.75%. This is the biggest increase the central bank has made in almost 30 years. The Fed also stressed that it would stay tough on inflation. Looking ahead, according to CNBC, the “dot plot” of individual members’ expectations indicates that the Fed’s benchmark rate will end the year at 3.4%. This is up 1.5 percentage points from the March estimate.

Oil prices tumble

It could be a bad day for energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) after oil prices pulled back overnight. According to Bloomberg, the WTI crude oil price is down 2.6% to US$115.85 a barrel and the Brent crude oil price is down 2% to US$118.80 a barrel. Oil prices tumbled amid concerns that rising interest rates would impact demand.

Gold price pushes higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price pushed higher overnight. According to CNBC, the spot gold price is up 1.3% to US$1,836.70 an ounce. The precious metal rose despite the US Federal Reserve raising rates and thus lessening the allure of the safe haven asset.

Coronado Global added to the ASX 200

The Coronado Global Resources Inc (ASX: CRN) share price could be given a lift today from news that the coal miner has been added to the ASX 200 index. It has been added to the benchmark index as a replacement for Crown Resorts Ltd (ASX: CWN). The casino and resorts operator’s shares are being delisted following Blackstone’s takeover.

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

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• The Santos share price is up 27% this year. Is it too late to buy?
• Why is the WAM Capital share price down 20% in June?
• Why is the Woodside share price in the red today?
• Despite recent volatility, brokers are predicting big things for the Telstra share price. Here’s why
• Falling ASX share prices = bigger dividend yields. Here’s what you need to know

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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Fortunately for growth investors, there are plenty of shares on the Australian share market with strong long term growth potential.

Two that have been named as buys and tipped for strong growth are named below. Here’s why analysts are bullish on them:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX growth share for investors to look at is Aristocrat. It is a gaming technology company with a portfolio of world class poker machines and digital games.

It has been growing at a solid rate for well over a decade and has been tipped to continue this trend by the team at Citi. After smashing its forecasts during the first half, Citi is now forecasting a 35% increase in net profit in FY 2022 to $1,168 million.

Looking further ahead, the broker believes that Aristocrat “represents a compelling long-term growth story, with exposure to ongoing growth in mobile game penetration and potential to grow into new markets.”

In light of this, Citi has put a buy rating and $41.00 price target on the company’s shares. Based on the current Aristocrat share price of $33.01, this implies potential upside of 24% for investors.

NextDC Ltd (ASX: NXT)

Another ASX growth share that is rated highly by analysts is NextDC. It is a leading data centre operator which has been benefiting greatly from the structural shift to the cloud.

Pleasingly, this shift still has a long way to go. As a result, NextDC’s world class network of centres across key locations throughout Australia look well-placed to capture increasing demand.

But management isn’t settling for that. It has its eyes on edge centres (regional data centres) and the Asia market. The latter has seen the company open up offices in Singapore and Tokyo.

Goldman Sachs is a fan of NextDC and has a conviction buy rating and $14.20 price target on its shares. Based on the current NextDC share price of $9.78, this implies potential upside of 45%.

The post Analysts name 2 ASX growth shares to buy with huge upside potential appeared first on The Motley Fool Australia.

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More reading

• Experts name 3 ASX growth shares to buy next week
• Is it safe to buy ASX shares right now?
• Broker says Aristocrat share price is great value with 27% upside
• Why did ASX 200 tech shares fall today?
• 2 stellar ASX growth shares analysts are tipping as buys this month

Motley Fool contributor James Mickleboro has positions in NEXTDC Limited. 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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price closed lower today, finishing 1.82% down at $21.60.

The banking sector has been hit hard these past two months. A number of macroeconomic headwinds look set to plague the industry – namely inflation and interest rate rises.

Exchange Traded Funds (ETFs) tracking the sector have booked extensive losses this year to date, such as the Vaneck Australian Banks ETF (ASX: MVB), down 12%.

Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFJ) has tumbled almost 14% this year to date as well, as illustrated below.

Broker sees further upside for ANZ share price

Yet the team at JP Morgan are constructive on ANZ. The broker reiterated its overweight stance in a recent note.

The broker reckons ANZ will absorb any headwinds well and that some industry pressures are actually a net positive for the bank.

“Our overweight recommendation reflects ANZ’s reasonable [net interest margin] NIM leverage to rising interest rates on a broadly flat cost profile,” the JP Morgan team wrote.

NIMs are a critical measurement used in the evaluation of banking profits, based on net interest income (NII).

“Over the long term, we expect fewer headwinds than for some other peers due to ANZ’s lower exposure to competitive pressures on mortgage margin,” the broker added.

“In addition, we view valuation as attractive, given its significant [price to earnings] P/E discount to peers.”

Those at JP Morgan recently revised the price target down on ANZ, now valuing the company at $28.30 per share, down from $29 earlier.

At the current market price, this implies an upside potential of approximately 31%.

Meanwhile, 56% of brokers covering the stock have it rated as a buy, with 38% saying it’s a hold, according to Bloomberg data.

In the last 12 months, the ANZ share price has slipped more than 24% into the red.

The post Here’s why JP Morgan sees more than 30% upside in the ANZ share price appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy today
• Why are ASX 200 bank shares having another day to forget?
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 bank shares tumble: Citi says time to buy
• Brokers name 3 ASX shares to buy today

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 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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