If you’re an income investor in search for dividend shares to buy to overcome inflation, then you may want to look at the ones listed below.

Analysts are very positive on these dividend shares and are forecasting attractive yields from them in the coming years. Here’s what you need to know:

Adairs Ltd (ASX: ADH)

Adairs could be a dividend share to buy, particularly with its shares trading 40% lower in 2022. It is a leading furniture and homewares retailer behind the Focus on Furniture, Mocka, and eponymous Adairs brands.

The weakness in the Adairs share price has been driven by a combination of market volatility and the company’s underperformance in FY 2022 due to COVID headwinds.

While the latter is disappointing, analysts at Morgans are expecting the retailer to bounce back in FY 2023. Especially given the recent acquisition of Focus on Furniture and the launch of its new national distribution centre.

In light of this, the broker is forecasting big dividends from Adairs in the coming years. It has pencilled in fully franked dividends of 19 cents per share in FY 2022 and 26 cents per share in FY 2023. Based on the current Adairs share price of $2.42, this will mean yields of 7.9% and 10.7%, respectively.

Morgans also sees plenty of upside for the company’s shares with its add rating and $3.50 price target.

Telstra Corporation Ltd (ASX: TLS)

Another ASX dividend share to consider is Telstra. Australia’s largest telecommunications company could be a great option for income investors given its defensive qualities and attractive yield.

In addition, while Telstra still has plenty of work to do, its outlook is now arguably the most positive it has been in a decade. This is thanks to the success of its T22 strategy which ends this year and the potential of its upcoming T25 strategy.

Management is very confident in its plans and expects the T25 strategy to deliver solid and sustainable growth in the coming years. This could bode well for Telstra’s dividends.

In the meantime, the team at Morgan Stanley is expecting fully franked 16 cents per share dividends again in FY 2022 and FY 2023. Based on the current Telstra share price of $3.87, this will mean yields of 4.2%.

In addition, Morgan Stanley sees a lot of value in its shares at the current level. It has an overweight rating and $4.60 price target.

The post 2 ASX dividend shares that brokers are tipping as buys right now appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Is the Telstra share price a safe haven buy right now?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Is the Telstra share price a defensive buy during times of market uncertainty?

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 ADAIRS FPO. The Motley Fool Australia has positions in and has recommended ADAIRS FPO 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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Cryptocurrencies have suffered from a brutal sell-off the past few months, but the last fortnight has been especially bad for investors.

In the month of May alone, Bitcoin (CRYPTO: BTC) has lost more than 26% of its value in Australian dollar terms.

According to a Coinjar memo to clients on Wednesday night, we are well and truly in a bear market that started exactly a year ago.

“It’s all so clear in retrospect: May 2021 was the end of the bull run,” read the memo.

“Since then, monthly exchange users have been trending down and people have stopped Googling crypto. Even the burst to US$69,000 in November now looks like it was designed to engineer exit liquidity for the big players.”

The flight of capital out of digital assets is not just seen in the devaluation of volatile cryptocurrencies.

“Recent trends show that the amount being stored in DeFi [decentralised finance] protocols is rapidly decreasing and USDC is being cashed out for real USD.”

Why this winter might turn into an ice age

Crypto last went through a bear market over 2018 to early 2020.

Similar to the spectacular gains seen over the COVID-19 pandemic, 2017 was a massive year of gains. But then a “crypto winter” followed for two years.

Coinjar’s assessment is that the new 2022 winter is different.

“Unlike previous crypto winters, this one looks set to unfold against a much changed macroeconomic background,” read the memo.

“Cheap money has dried up and the appetite for risk is marginal. The revolutionary technologies to have emerged during this bull run – DeFi, NFTs, DAOs, layer 2s and, yes, stablecoins – have shown themselves to be largely unready for primetime.”

To add to this, regulators around the world are “sharpening their claws” against crypto and blockchain. 

“It’s hard to believe we’re going to V-shape our way out of this one.”

Why a sunny spring could follow the current freeze

Those who stuck with their investments through the 2018 winter saw their currencies skyrocket again after the coronavirus arrived.

And, believe it or not, prospects look even brighter this time around.

“When things collapsed in 2018, crypto was toxic,” read the Coinjar memo.

“Banks wouldn’t touch it, Google and Facebook both banned crypto advertising and the topic was about as conversationally welcome as an extended treatise on your bowel movements.”

Now there are actual sovereign nations who treat Bitcoin as currencies, even more that are forming crypto strategies, and big finance institutions offering crypto products.

“The biggest companies in the world [are] unleashing web3 projects and the slow, steady adoption by industries as diverse as high fashion, music, gaming, sports, energy, and more.”

Yes, those activities may slow down as crypto rugs up for another winter. But now is the time for consolidation, according to Coinjar.

“As the adage goes: bear markets are for building – and right now there’s a lot of building going on. What will emerge when the frost thaws?”

The post Is this the start of a long crypto winter? appeared first on The Motley Fool Australia.

More reading

• How are Australia’s Ethereum and Bitcoin ETFs faring on their first day?
• Bitcoin price plunges below US$30,000. What’s going on?
• Why should I buy Bitcoin ETF shares instead of just buying Bitcoin?
• ‘Slow motion meltdown’: How low will the Bitcoin price sink?
• Bitcoin just fell 10% in a day: Time to strike?

Motley Fool contributor Tony Yoo has positions in Bitcoin. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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) was out of form and tumbled notably lower. The benchmark index fell 1.75% to 6,941 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 edge higher

The Australian share market looks set to end the week in a subdued fashion following a mixed night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% higher this morning. In the US, the Dow Jones was down 0.3%, the S&P 500 dropped 0.1%, and the Nasdaq edged 0.05% higher. The Dow fell for a sixth straight day.

Oil prices rise

Energy producers including Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a good finish to the week after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 0.95% to US$106.73 a barrel and the Brent crude oil price is up 0.5% to US$108.07 a barrel.

CBA remains a sell

Commonwealth Bank of Australia (ASX: CBA) shares could be a sell according to analysts at Goldman Sachs. In response to the banking giant’s third-quarter update, the broker has retained its sell rating with an improved price target of $89.86. While the broker appears to have been impressed with CBA’s update, it still didn’t see enough to justify the premium its shares trade at.

Gold price falls

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a tough finish to the week after the gold price sank overnight. According to CNBC, the spot gold price is down 1.75% to US$1,820.9 an ounce. Traders were selling the precious metal after the US dollar strengthened.

Goodman shares named as a buy

The recent pullback by the Goodman Group (ASX: GMG) share price could have created a buying opportunity for investors. According to a note out of Goldman Sachs, its analysts have initiated coverage on the property company with a buy rating and $25.00 price target. It said: “Our view of GMG is supported by a solid outlook for the Industrial sector more broadly, with a number of favourable fundamentals underpinning future long-term demand for industrial space.”

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

More reading

• Why did the South32 share price beat the other ASX 200 miners today?
• 2 ASX 200 shares clocking multi-year highs on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why CBA, Incannex, Judo Capital, and Orica shares are rising
• Blockdown! Why is the Block share price crashing by 16% 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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If you’re looking for growth shares to buy, then you may want to consider the two listed below that brokers are bullish on.

Here’s what you need to know about these growth shares:

Cochlear Limited (ASX: COH)

The first ASX growth share for investors to look at is Cochlear. It is one of the world’s leading hearing solutions companies, which is a great position to be in given ageing populations around the world and the market’s significant barriers to entry.

Analysts at Morgans are very positive on the company, particularly given its improving earnings profile post-pandemic.

Morgans commented:

Cochlear maintains a dominant position in the implantable hearing solutions segment. While we continue to believe a full recovery from Covid-based disruptions still has time to play out, improving demand and strong pipeline, coupled with management’s increasing confidence, suggests an improving earnings profile.

The broker currently has an add rating and $244.50 price target on Cochlear’s shares. Based on the current Cochlear share price of $208.59, this implies potential upside of 17% for investors.

Nitro Software Ltd (ASX: NTO)

Another ASX growth share that analysts rate highly is Nitro. It is a technology company that provides businesses of all size with integrated PDF productivity and eSignature tools.

Unfortunately, the Nitro share price has fallen heavily this year despite reporting strong growth. This has been driven by significant weakness in the tech sector, particularly for loss-making companies.

And while Nitro is not expected to be profitable for a few more years, the team at Goldman Sachs believe investors should look beyond this. Especially given that it is well-funded and has a huge market opportunity to grow into in the future.

Goldman Sachs commented:

We appreciate that a material re-rate likely requires a change in sentiment towards unprofitable tech companies, however we think NTO screens attractively relative to tech peers and on a longer-term view. Our focus now shifts to NTO’s execution on its pipeline of new business and e-sign cross-sell opportunities, with concerns over balance sheet now eased. We see NTO as an attractive long-term growth opportunity at a discounted valuation.

Goldman has a buy rating and $2.35 price target on the company’s shares. Based on the current Nitro share price of $1.18, this suggests almost 100% upside for investors.

The post Analysts say these top ASX growth shares are buys appeared first on The Motley Fool Australia.

More reading

• 2 highly rated small cap ASX shares that analysts say have huge potential
• Analysts say investors should buy these top ASX shares
• Broker says the Cochlear share price is in the buy zone following Oticon acquisition
• Top brokers name 3 ASX shares to buy today
• 2 medical tech ASX shares Morgans loves right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Nitro Software 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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If you’re looking to combat rising inflation with some dividend shares, then the two listed below could be worth considering.

Analysts have recently named these ASX 200 dividend shares as buys. Here’s what you need to know about them:

BHP Group Ltd (ASX: BHP)

The first ASX 200 dividend share to look at is mining giant BHP.

It has been tipped as a top option for investors due to the high levels of free cash flows it is generating from its portfolio of world class operations. This is being underpinned by favourable commodity prices and bodes well for dividend payments in the near term.

For example, Citi recently upgraded the company’s shares to a buy rating with a $56.00 price target. While it wasn’t overly impressed with BHP’s production during the recent quarter, it commented that there is “too much cash flow to ignore.”

Citi is expecting this cash flow to support fully franked dividends per share of ~$4.86 in FY 2022 and then ~$4.89 in FY 2023. Based on the current BHP share price of $44.95, this implies yields of 10.8% and 10.9%, respectively.

National Australia Bank Ltd (ASX: NAB)

Another ASX 200 dividend share that analysts rate as a buy is banking giant NAB.

For example, the team at Goldman Sachs recently retained their conviction buy rating on the bank’s shares with a $34.17 price target.

Goldman Sachs likes NAB due to its balance sheet mix, which the broker feels provides the best exposure to the domestic system growth. It also highlights that NAB’s franchise is performing strongly, growing at or above system growth in most segments, and expects this to continue.

Its analysts are forecasting attractive dividends in the near term. They have pencilled in fully franked dividends of $1.52 per share in FY 2022 and $1.65 per share in FY 2023. Based on the current NAB share price of $30.82, this implies yields of 4.9% and 5.35%, respectively.

The post Brokers name 2 ASX 200 dividend shares to buy now appeared first on The Motley Fool Australia.

More reading

• NAB share price lifts amid Suncorp rumours
• Why GrainCorp, Link, NAB, and Pendal shares are sinking today
• The NAB share price is in reverse today. Here’s why
• Why are ASX 200 mining shares in the green today?
• Why are ASX 200 mining share prices slipping 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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Well, today has been quite an interesting day for the South32 Ltd (ASX: S32) share price. Soon after market open this morning, South32 shares shot up, climbing as high as $4.51 a share (up more than 2%). That stood in stark contrast to the broader S&P/ASX 200 Index (ASX: XJO), which opened deep in the red and has been steadily falling all day. The ASX 200 has now finished up the trading day down 1.75% at well under 6,950 points.

Saying all of that, South32 did end up falling back to earth. After climbing as high as $4.51 a share, the diversified miner is now back at $4.37 a share at the end of today’s trading session, down by 0.91%. But the strange thing is that most other ASX mining shares, especially the larger ones, had a far worse time of it today.

Take BHP Group Ltd (ASX: BHP). BHP shares ended the day down by 1.55% at $44.95 each. Fortescue Metals Group Limited (ASX: FMG) plunged by 2.76%. It was a similar story with Rio Tinto Limited (ASX: RIO), which lost 2.09%.

Energy share Woodside Petroleum Limited (ASX: WPL) was a standout loser, dropping by more than 3%. Even the ‘safe haven’ gold shares couldn’t save the resources sector. ASX 200 gold miner Northern Star Resources Ltd (ASX: NST) lost 2.75% today

So South32’s performance seems very mild compared to these sobering moves.

But why have investors spared South32 from the worst of the falls today?

What spared the South32 share price today?

Well, it’s hard to say. There’s been nothing out of South32 today, save for a share buyback notice. The company has consistently been executing share buybacks, which could lend support to a company’s share price.

But South32 has also been the recipient of some broker love this week, which could also be helping the market to put a floor under the company’s shares. As my Fool colleague James covered just yesterday, broker Morgans recently called South32 one of its “best ideas”. Morgans currently rates South32 as an “add”, with a 12-month share price target of $6.10. That’s almost 40% above its current share price.

This optimism comes from what Morgans sees as South32’s diverse portfolio of metals and minerals, many of which are “ESG-friendly”. It’s also expecting big things from the company when it comes to dividends over the coming few years.

So perhaps it was this bullish thesis that steadied investors’ hands when it came to the South32 share price today. No doubt such an optimistic share price prediction was warmly received by existing shareholders.

The post Why did the South32 share price beat the other ASX 200 miners today? appeared first on The Motley Fool Australia.

More reading

• 2 ASX 200 shares clocking multi-year highs on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Blockdown! Why is the Block share price crashing by 16% today?
• ASX 200 midday update: CBA’s Q3 update impresses, Xero and Block crash
• 5 things to watch on the ASX 200 on Thursday

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

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It was another red day for the Allkem Ltd (ASX: AKE) share price on Thursday.

The lithium miner’s shares dropped almost 5% to $10.70.

This means the Allkem share price is now down 25% from the record high of $14.27 it reached in April.

Is the weakness in the Allkem share price a buying opportunity?

Firstly, while the Allkem share price has fallen heavily in recent weeks, it is impossible to know if it has found a bottom yet. And given how high up the risk scale lithium miners are, their shares are likely to remain under pressure for as long as the market volatility continues.

But that aside, I think the Allkem share price is attractively priced for long-term focused investors.

This is due to the significant free cash flow its diverse operations are already generating and its plans to increase production materially in the coming years.

Growth plans

In respect to the latter, Allkem recently revealed plans to increase lithium production three-fold by 2026 in order to maintain a 10% share of the global lithium market over the next decade.

This means that Allkem remains well-placed to benefit greatly from the sky-high prices that lithium is commanding due to the seemingly insatiable demand from the electric vehicle and renewable energy markets.

Though, it is worth remembering that as supply increases and catches up with demand, those high prices are likely to fade.

Low costs

Fortunately for Allkem, it has some of the lowest costs in the industry. This should ensure that it remains highly profitable even when prices eventually pull back to more normal levels.

During the most recent quarter, Allkem reported a cash cost per tonne of US$349 for its Mt Cattlin spodumene concentrate and US$3,811 per tonne for its Olaroz lithium carbonate. This is meaningfully lower than the mid-to-long term prices being forecast by a leading broker.

A recent note out of Goldman Sachs reveals that its commodities team is forecasting the following for lithium prices.

Lithium spodumene concentrate:

• US$1,750 per tonne in 2023
• US$950 per tonne in 2024
• US$900 per tonne in 2025
• Long-run average of US$800 per tonne

Lithium carbonate:

• US$20,500 per tonne in 2023
• US$17,180 per tonne in 2024
• US$14,468 per tonne in 2025
• Long-run average of US$11,500 per tonne

Even using the long-run average prices, which are down materially from current levels, Allkem will be operating with very attractive margins.

This bodes well for its earnings in the coming years and ultimately dividends when the company stops investing in growth opportunities.

Foolish takeaway

All in all, with the Allkem share price trading at 9x FY 2023 earnings (based on Citi’s forecast of earnings per share of $1.18), I think it could be a top option for investors looking for opportunities in the resources sector.

The post Why I think the Allkem share price is in the buy zone appeared first on The Motley Fool Australia.

More reading

• Falling ASX 200 mining shares ‘an opportunity to invest in sector leaders’: broker
• Low charge: Is the party over for ASX lithium stocks?
• Expert warns investors about lithium and battery mineral ASX shares
• Here’s why ASX lithium stocks are rocketing higher today
• What will the lithium price be in 2025?

Motley Fool contributor James Mickleboro has positions in Orocobre 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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ASX bank shares have been popping onto investor radars this year amid a dawning era of rising interest rates.

With inflation running hot across most of the Western world, central banks have begun to ratchet up their official rates. The US Federal Reserve recently lifted rates by 0.50%, with numerous more rate hikes expected over the coming year as the latest US inflation numbers remain above 8%.

Last week, the Reserve Bank of Australia (RBA) boosted the official cash rate for the first time in more than a decade. The rate went from a historic low of 0.10% to the current 0.35%. RBA governor Philip Lowe flagged that more rate rises are expected to bring down Australia’s own fast-rising inflation level.

While higher interest rates will throw up headwinds for many companies, particularly growth stocks priced with far future earnings in mind, they can actually benefit ASX bank shares. That’s because higher rates can see the banks increase their lending margins.

But which ASX bank share is best placed to capitalise on higher rates?

For some insight into that question, we turn to Kate Howitt, portfolio manager of Fidelity’s Australian Opportunities Fund (courtesy of the Australian Financial Review).

The ASX bank share best set for rising rates

Howitt believes the ASX bank share investors should consider in an environment of rising interest rates is Judo Capital Holdings Ltd (ASX: JDO).

According to Howitt:

Newly listed Judo Bank provides the most direct leverage to rising rates. Its funding costs are anchored by the RBA’s fixed-rate Term Funding Facility, whilst its interest income automatically expands with rate rises. That will provide a significant boost to the bank’s margins, on top of the bank’s strong growth in lending.

As an added bonus, since Judo operates in the small and medium enterprise (SME) sector rather than the highly competitive mortgage sector, its rates-driven upside is less likely to be competed away.

How has Judo been performing?

After struggling for much of the year, the Judo share price has strongly outperformed the All Ordinaries Index (ASX: XAO) over the past few days. That strength is likely linked to two recent reports by Judo, indicating its loan book grew 4.1% in the March quarter and that it expects to achieve or beat all of its prospectus metrics for FY22.

The Judo share price closed on Thursday at $1.72, a gain of 5.85%. It is now up 10.6% since Monday’s close, while the All Ords has lost 2.5% over that same time.

The post The ASX bank share with ‘most direct leverage to rising rates’: fundie appeared first on The Motley Fool Australia.

More reading

• Why CBA, Incannex, Judo Capital, and Orica shares are rising
• 3 ASX All Ordinaries shares having a stellar run on Wednesday
• Why the Judo share price is defying the ASX selloff to charge 6% higher today
• This ASX 300 share is down 22% in 2022, and the CEO just bagged another $1 million worth

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

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If you’re wanting to invest after the recent (and ongoing) market weakness, then ETFs could be a good option if you’re not sure which individual shares to buy.

This is because ETFs allow you to buy multiple (sometimes even thousands) of shares through a single investment.

With that in mind, listed below are two ETFs that could be good long-term options for investors. Here’s what you need to know about them:

BetaShares Global Energy Companies ETF (ASX: FUEL)

The first ETF for investors to look at is the BetaShares Global Energy Companies ETF. This ETF provides investors with an easy way to gain exposure to the energy sector, which is booming this year thanks to sky high oil prices. This is by allowing investors to own a slice of some of the biggest energy companies in the world.

BetaShares notes that these companies are larger, more geographically diversified, and more vertically integrated than Australian-listed energy companies. Among the fund’s holdings are the likes of BP, Chevron, ConocoPhillips, ExxonMobil, Phillips 66, Royal Dutch Shell, and Total.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another exchange traded fund which could be worth looking at is the BetaShares NASDAQ 100 ETF. As you might have guessed from its name, this exchange traded fund gives investors access to the 100 largest (non-financial) businesses on Wall Street’s technology focused NASDAQ index.

Disappointingly, these shares (and therefore the ETF) have been absolutely smashed this year amid rising inflation and interest rates. However, this could be a fantastic long-term buying opportunity for investors. Particularly given how the shares included in the fund are many of the world’s greatest companies. These include Amazon, Apple, Alphabet, Facebook/Meta, Microsoft, Netflix, and Nvidia.

The post 2 high quality ETFs for ASX investors to buy after the market meltdown appeared first on The Motley Fool Australia.

More reading

• VAS: Were you better off buying the Nasdaq ETF?
• 3 fantastic ETFs for ASX investors to buy this week
• These 2 ETFs could help to protect ASX investors against inflation
• 5 ASX ETFs to combat inflation: fund manager
• Which ASX 200 shares have historically performed well during rising inflation?

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 BETANASDAQ ETF UNITS and BetaShares Global Energy Companies ETF – Currency Hedged. The Motley Fool Australia has positions in and has recommended BETANASDAQ ETF UNITS. 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 Treasury Wine Estates Ltd (ASX: TWE) share price closed lower today following another tough day for many ASX shares.

At the closing bell, the winemaking and distribution giant’s shares were exchanging hands at $10.78 apiece, down 3.49%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) ended the day down 1.75% at 6,941 points.

Treasury Wine expands operations

The Treasury Wine share price couldn’t seem to catch a break today, despite a seemingly positive announcement from the company.

Treasury Wines has unveiled a new $165 million state-of-the-art facility in the Barossa region of South Australia.

This is considered to be the largest premium winemaking site in the southern hemisphere, with capacity to produce more than 100 million litres of wine annually.

Treasury Wine further noted that its bottling operations in the Barossa are the biggest across its sites globally.

Up to 216 million bottles are packaged per year, operating four bottle lines, and exported to more than 70 countries. The site employs around 400 permanent team members and extends up to 600 during peak vintage periods.

Treasury Wine stated that the new facility provides it with the ability to increase premium winemaking capacity by 33%.

In addition, it also expands the company’s storage capacity.

What did management say?

Treasury Wines chief supply officer Kerrin Petty commented on what the new facility brings to the market. He said:

It’s a proud moment to unveil our new Barossa wine production facility, which has been two and a half years in the making through the challenges of the pandemic.

…The new site is purpose-built for premium winemaking with the flexibility to scale up or down production depending on demand, which is crucial given the ebbs and flows of wine production.

Sustainability has been front of mind throughout the entire project with the new infrastructure allowing us to manage the impacts of climate change on vintages and ensuring we can protect our most valuable grapes and produce the highest quality wine even in challenging years.

The new winemaking site also includes a 4,500m² Icon Cellar Building which represents global best practice for luxury winemaking and provides visitors with the VIP treatment to experience and tour the winemaking process.

What do the brokers think?

A number of brokers rated the Treasury Wine share price with similar price points following the company’s half-year results.

The team at Morgans cut its rating by 0.9% to $13.93, but believes there is still strong growth to come for Treasury Wine. This is due to the strong portfolio of “much loved iconic wine brands” and management’s recent restructuring.

Based on today’s price, Morgans’ 12-month price target implies a potential upside of around 29% for investors.

On the other hand, Citi also weighed in on Treasury Wine shares, cutting its rating by 0.1% to $13.78.

The broker thinks the company’s shares are currently trading at attractive levels. This is given the fact industry rival Pernod Ricard released a strong third-quarter update recently.

The French winemaker revealed its United States sales have accelerated, which could bode well for Treasury Wine’s North American business.

Treasury Wine share price review

Over the past 12 months, the Treasury Wine share price has been on a rollercoaster ride, posting an 8.5% gain.

However, when glancing at year to date, its shares are down almost 13%.

On valuation grounds, Treasury Wine presides a market capitalisation of approximately $8.06 billion.

The post Can a new $165m ‘state-of-the-art facility’ help restore the Treasury Wine share price? appeared first on The Motley Fool Australia.

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• Broker tips the Treasury Wine share price to pop 23% higher
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Motley Fool contributor Aaron Teboneras 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 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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