Transurban Group (ASX: TCL) maybe a road toll operator, but will rising fuel prices impact the share price?

Transurban shares climbed 2% on Thursday to finish the day at $13.22.  For perspective, the S&P/ASX 200 Index (ASX: XJO) lifted 1.05%.

Let’s take a look at what is likely at play for the company.

Could rising petrol prices impact toll road revenue?

Transurban builds and operates toll roads in Sydney, Melbourne and Brisbane.

Oil prices have recently hit 13-year highs amid the Russian invasion of Ukraine. Brent crude oil prices reached nearly US$140 per barrel in early March. The international benchmark Brent Crude is priced at US$99.65 per barrel at the time of writing, according to Bloomberg.

However, broker Macquarie believes there is scant evidence fuel price increases will impact the road toll operator.

Macquarie has placed a $14.96 price target on the company’s shares. This is 13% higher than Thursday’s close.

Macquarie, quoted in the Financial Review, said:

Transurban has always remarked, in their experience, there is a very weak relationship to fuel price movements. This appears to be supported by academic research which cites elasticity of negative 0.04.

In October 2007, when fuel increased 18 per cent, M4 and M5 (Sydney motorways) traffic was either stable or higher. In theory, it should have fallen 0.7 per cent assuming the elasticity holds.

The team at Morgans also recently placed an add rating and $14.29 price target on the company’s shares, my Foolish colleague James reported. The company said:

We think TCL will continue to be attractive to investors given its market cap weighting (important for passive index tracking flows), the high quality of its assets, management team, balance sheet, and growth prospects. 

Transurban share price snapshot

The Transurban share price has lifted just 1% in the past 12 months, while it has lost 4% year to date.

In the past month, Transurban shares have gained nearly 3%, while they have soared nearly 6% in the past week

Transurban has a market capitalisation of about $40.6 billion based on its current share price.

The post Worried about how rising petrol prices might impact the Transurban (ASX:TCL) share price? Read this appeared first on The Motley Fool Australia.

More reading

• The Transurban (ASX:TCL) share price has gained under 2% in 3 years. Have the dividends been worth the wait?
• Why this broker says the Transurban (ASX:TCL) share price can drive 14% higher
• Top brokers name 3 ASX shares to buy next week
• Why brokers rate these ASX 200 dividend shares as buys
• Which new investments are predicted to help the AFIC (ASX:AFI) share price and dividends?

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 Bruce Jackson.

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If you’re looking for ASX shares to buy and hold, then you may want to consider the two listed below.

Both have been named as buys and tipped for big things in the future. Here’s what analysts are saying:

Lovisa Holdings Limited (ASX: LOV)

The first ASX share to look at this fast-fashion jewellery retailer. Lovisa has been growing at a solid rate for a number of years and appears well-placed to continue this trend thanks to its global expansion.

The team at Morgans appear confident that this will be the case and are particularly bullish on Lovisa’s future. Especially after the release of a “remarkable” first half result last month.

In respect to the future, the broker said: “LOV may just prove to be one of the biggest success stories in Australian retail. With ambitious (and financially well-incentivised) new leadership in place, we think now is the time LOV steps up to become a global force. Investment will be needed to expand LOV’s network in the US and Europe and to take it into new markets, but the returns could be stellar.”

Morgans has an add rating and $24.00 price target on its shares.

Xero Limited (ASX: XRO)

Another ASX share to consider buying is Xero. It is a leading cloud-based business and accounting software provider which boasts over 3 million subscribers globally.

Xero’s shares have come under significant pressure this year after being caught up in the tech selloff. While this is disappointing, the team at Goldman Sachs sees this as a buying opportunity.

It commented: “The ASX All Tech index has largely fallen in line with increasing real yields, with sector valuation now below pre-COVID levels while fundamentals are arguably stronger given the pandemic accelerated cloud/ technology adoption.”

In fact, Goldman is forecasting a 24% compound annual growth rate for Xero’s gross profit between FY 2021 and FY 2025. It has also previously suggested that Xero has what it takes to deliver strong growth over multiple decades.

As a result, the broker is very positive on the future and recently retained its buy rating with a trimmed price target of $135.00.

The post Brokers name 2 excellent ASX shares to buy and hold appeared first on The Motley Fool Australia.

More reading

• Guess how much $5,000 invested in Xero (ASX:XRO) shares 10 years ago would be worth now
• Hero to Xero? The Xero (ASX:XRO) share price is now down 36% in 2022
• Top brokers name 3 ASX shares to buy next week
• ASX 200 (ASX:XJO) midday update: Block falls, Nickel Mines jumps
• 3 excellent ASX growth shares analysts believe have huge upside potential

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. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended Lovisa Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The BHP Group Ltd (ASX: BHP) share price was on the rebound today, posting its first gains in more than a week.

Shares in the world’s second-largest miner were swapping hands for $45.68, up 1.11% at the market close today.

What’s driving BHP shares higher?

There may be a few factors contributing to the BHP share price move into positive territory today.

Firstly, the ascent of iron ore prices is providing a strong support base for the company’s margins. This is particularly important given the majority of revenue come from the steelmaking ingredient, BHP’s key commodity.

Currently, the price of iron ore is fetching US$141.50 a tonne, up 3.66% in the past 24 hours.

It’s worth noting that in the financial year ending 31 December 2021, iron ore accounted for more than half of the total group revenue from BHP.

In addition, the S&P/ASX 200 Resources (ASX: XJR) index has also pushed ahead, advancing 0.97% to 5,534.1 points.

The sector represents 48 of the largest companies in the S&P/ASX 200 that are members of the energy, metals and mining industry.

A positive shift in investor sentiment toward the index is likely to have propelled BHP shares forward.

In addition, commodity prices spiked when Russia attacked Ukraine on 24 February.

Lastly, analysts at Macquarie updated their outlook on BHP shares last month. The broker raised the 12-month price target by 6% to $54 apiece, representing a potential upside of around 20%.

BHP share price summary

Despite remaining relatively unchanged for the past 12 months, BHP shares have stormed 10% higher in 2022.

Investors heavily sold off the company’s shares in August 2021 after reaching an all-time high of $54.55. Since then, its shares hit a 52-week low of $35.56, before surging to late August levels of around the $45 mark.

Based on today’s price, BHP presides a market capitalisation of roughly $231.09 billion and has approximately 5.06 billion shares outstanding.

The post BHP share price rebounds after 9-day slide. Here’s why appeared first on The Motley Fool Australia.

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• Why are ASX 200 mining shares having such a dire day?
• Why is the BHP (ASX:BHP) share price down 4% today?
• Cash machines: 6 ASX 200 shares with the highest dividend yields right now

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 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 Bruce Jackson.

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Who will end up owning Australian Pharmaceutical Industries Ltd (ASX: API) has been one of the biggest questions on the markets over the past year or so. API, the company behind the Priceline chain of pharmacies, has been sought after by both Wesfarmers Ltd (ASX: WES) and Woolworths Group Ltd (ASX: WOW). Now, it looks as though it will be Wesfarmers shares that will end up with API alongside them.

The ASX 200 industrial and retail conglomerate has lobbed a series of bids API’s way over the past 12 months. The most recent (and perhaps winning) bid being $1.55 per API share. But these were turned into a bidding auction or sorts when Woolies entered the fray with a higher bid of $1.75 per share. But the grocery giant bowed out of the courtship at the start of this year. As such, this leaves Wesfarmers as the only company that looks like it will take API’s hand.

Wesfarmers shares looking set to take in API

This merger took another step forward today as well. Hence why the Wesfarmers share price was in focus. As revealed by the Australian Financial Review (AFR) today, 97% of the proxy votes received by both API and Wesfarmers thus far have been in affirmation of the takeover. The vote closes tomorrow. These positive votes included some major institutional investors. These included Investors Mutual. Investors Mutual has a 4.2% stake in API, so its vote has obvious sway.

Another major API investor in Australian Ethical Investments Ltd (ASX: AEF) has reportedly already given its own green light.

According to the report, API shareholders’ votes “were understood to be nearly 90 percent favouring [the] deal”. This, together with the already-mentioned blessings of Wesfarmers shareholders, “make the scheme irrevocable”.

So it looks as if Wesfarmers is set to add yet another retail business to its bulging portfolio of brands. Wesfarmers already owns K-Mart, OfficeWorks and (of course) Bunnings.

The Wesfarmers share price had a positive day today, recording a gain of 0.32% by market close at $50.64 a share. That gives this ASX 200 blue-chip share a market capitalisation of $57.42 billion, with a dividend yield of 3.36%. 

The post Wesfarmers (ASX:WES) shares in focus as API deal looks all but sealed appeared first on The Motley Fool Australia.

More reading

• Own Wesfarmers (ASX:WES) shares? Here’s how the numbers are looking in the API takeover vote
• Why my 2 biggest ASX shares are about to disappear: fund manager
• Is the Wesfarmers (ASX:WES) share price a buy for the 5% dividend yield?
• 3 blue chip ASX 200 shares analysts are tipping as buys
• What’s the difference between lithium hydroxide and spodumene and which ASX shares are involved with each one?

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 owns and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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A seismic shift has taken place over recent years with the rise of environmental, social, and governance (ESG) investing.

Investors can opt to concentrate on one ESG element, such as social responsibility, or incorporate all three into their decision-making.

ESG is even now considered an investment ‘factor’ that professionals use to benchmark and weight portfolios against – not unlike value or growth factors.

The ESG sector has underperformed so far in 2022. However, this isn’t surprising given the enormous rally that commodities have staged, as seen below.

New ESG trends emerging

Gone are the days when the mantra of ‘creating shareholder value’ was front and centre of public companies’ earnings transcripts.

The public – not just investors – are starting to hold ASX companies and even entire industries accountable for ESG.

This has resulted in the formation of a novel and widening market that is presenting more and more opportunities. That’s the expert opinion of Anthony Miller, chief executive of Westpac Institutional Bank.

Westpac economists conducted a survey in 2019, and again this year, to assess the state of the ESG market.

“Our new research, which expands on the approach in 2019, reveals a market that has grown not just in size, but in diversity and sophistication,” Miller wrote in a Westpac report titled Financing for sustainability: Asia Pacific’s evolving ESG market.

“The majority of investors and issuers in the region are taking climate matters into their own hands and are actively pursuing the decarbonisation of their businesses and portfolios through sustainable finance.”

Other findings in the new survey also show a behavioural shift in sustainable financing for both investors and issuers.

“A sustainable approach to business has become a core corporate requirement,” Miller added. He noted that ASX investors are becoming increasingly aware of the impacts of climate risks and litigation on their assets.

Assets under management (AUM) designated to ESG themes has also spiked considerably. About 66% of investors now hold more than 25% of their AUM in sustainable investments, the Westpac study finds.

Not only that, but 50% of investors anticipate allocating the majority of their net worth to sustainable investments by 2025.

But what are the benefits?

Perhaps the biggest benefits to ESG investing is the mitigation of climate risk and proper diversification, Miller says.

“That main driver is now improved management of ESG risk (24% of respondents), although investing for sustainability or impact outcomes continued to rank second (23%) and remains a strong motivator.”

The greater diversity of products has ensured more sophisticated investors are participating in the ESG segment. The presence of “non-financial benefits” is starting to weigh heavily, too.

Westpac’s institutional boss explains:

Among investors, the reputational and financial benefits they derive from sustainable investments are a significant driver of demand.

Over three quarters (77%) agree or strongly agree that their sustainable investments have performed better financially than equivalent traditional investments, and 83% agree or strongly agree that their sustainable investments have had a greater positive impact on their organisation’s reputation than traditional investments.

Quite importantly, Miller notes that both investors and issuers say ESG investing has been beneficial to them.

That’s all fine and dandy, but someone has to bear the costs, seeing as the two parties are on opposite sides of the transaction. Just who that is, Miller doesn’t speculate.

Westpac Banking Corporation (ASX: WBC) shares finished today’s session slightly down by 0.04% to $23.68.

The post What are the real benefits of ESG investing? Here’s what Westpac says appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why has the Westpac share price rallied 8% in a week?
• Own Westpac shares? Here’s why change is afoot
• 2 ASX dividend shares analysts say are buys now
• Why ASX 200 bank shares are storming higher 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 recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bitcoin (CRYPTO: BTC) price is up 5% over the past 24 hours.

The world’s first crypto is currently trading for US$41,012 (AU$56,764). That gives it a market cap of US$781 billion, according to data from CoinMarketCap.

The Bitcoin price is now up 2% over the past 7 days, though it remains down 14% year-to-date.

How will the Bitcoin price fare as interest rates rise?

Yesterday (overnight Aussie time) the US Federal Reserve raised its official interest rate by 0.25%. This was the first rate rise from the world’s most watched central bank since 2018.

So, does this mean that the Bitcoin price is likely to continue higher amid a series of expected interest rate increases?

Not so fast.

It’s not only Bitcoin that’s gained following the US rate hike. Most growth shares leapt higher as well.

The tech-laden Nasdaq, for example closed up 3.8%. And here in Australia technology shares led the charge, with the S&P/ASX All Technology Index (ASX: XTX) up 3.5% in the final minutes of trading.

The risk-on sentiment was spurred not by the rate rise. But by US Fed Chair Jerome Powell’s bullish outlook for the US economy, the world’s largest.

What the experts are saying

According to Marcus Sotiriou, an analyst at digital asset broker GlobalBlock (quoted by Bloomberg):

Whenever we see stock market relief, crypto tends to do well, especially lately. At the end of the day, the key driving force behind prices is macro, so I expect a struggle for a sustainable uptick.

Joel Kruger, a strategist at crypto exchange LMAX Digital is decidedly bearish on the outlook for the Bitcoin price as rates rise.

“Rates going higher will strangle equity markets. So, if we see a mass exodus out of risk assets, it’ll weigh on everything… New lows in stocks could contribute to a decline in crypto assets,” he said.

Kruger forecast that if the Fed pursues a hawkish tightening cycle, the Bitcoin price could fall to US$20,000.

With interest rates moving higher in an effort to stem fast rising inflation, Ryan Nauman, market strategist at Zephyr, is doubting that the range bound Bitcoin price can live up to its billing as a potential inflation hedge.

“Investors are still trading it short-term in this range and it can’t really bust out. It makes me more sceptical of its long-term viability as an inflation hedge and whether it’s a competitor to the US dollar as a reserve currency,” he said.

The post What’s ahead for the Bitcoin price in 2022 amid rising interest rates? appeared first on The Motley Fool Australia.

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• Why this expert says Bitcoin isn’t ‘a safe haven asset’, at least not yet
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• Fancy getting your paycheque in crypto? You’re not alone

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bitcoin. The Motley Fool Australia owns and has recommended Bitcoin. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price climbed today, but can it get higher?

The bank’s shares nudged over the $10 mark on Thursday to close at $10.03, a 0.5% gain.

Let’s take a look at what is happening at Bendigo Bank.

Broker upgrade

Credit Suisse has recently upgraded the bank to “outperform”, The Australian reported. The analysts have an $11.10 target price on the bank.

This is 10% more than the current share price. Bendigo Bank will be offering a fully franked dividend of 26.5 cents per share on 31 March. This is 12.8% more than the prior corresponding half of H1 FY21.

Morgans has also recently upgraded the bank’s shares to equal weight from underweight, as my Foolish colleague Aaron reported recently. Jarden Australia has also lifted its price target on the bank’s shares.

Bendigo Bank reported positive H1Y22 results in the latest reporting period and its shares jumped nearly 2% on the back of these results. Profit surged a massive 31.7% to $321.3 million. Bendigo Bank revenue increased 8.5% while cash earnings jumped by 18.7% to $260.7 million.

Many ASX bank shares also jumped today. The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price climbed 1.32%, National Australia Bank Ltd (ASX: NAB) jumped 1.27%, and Commonwealth Bank of Australia (ASX: CBA) leapt 1.33%.

The US Federal reserve raised interest rates by 0.25% in a meeting on Wednesday in America. AMP chief economist Shane Oliver said the Reserve Bank of Australia will follow in their footsteps, the Sydney Morning Herald reported.

Dr Oliver stated:

The RBA will soon follow the Fed in starting to raise interest rates. We expect the first hike to come in June taking the cash rate to 0.25 per cent, with three hikes in total this year taking it to 0.75 per cent by year end.

Bendigo Bank share price snapshot

The Bendigo Bank share price has gained nearly 3% in the past 12 months but has surged 10% this year to date.

In the past month, Bendigo Bank shares have fallen 0.4%, but have risen 8% in the past week.

Bendigo Bank has a market capitalisation of $5.6 billion based on the current share price.

The post Can the Bendigo Bank (ASX:BEN) share price stick above the $10 mark? appeared first on The Motley Fool Australia.

More reading

• Is the Westpac (ASX:WBC) share price the cheapest bank to buy right now?
• Here’s why the Bendigo Bank (ASX:BEN) share price is sliding 5% today
• Time is running out to secure the Bendigo Bank (ASX:BEN) dividend. Here’s why
• Up 11% in two weeks. What’s been driving the Bendigo Bank (ASX:BEN) share price lately?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It was an eventful day of trade for the Life360 Inc (ASX: 360) share price.

Early on in the day, the location technology company’s shares were up as much as 14% to $5.97. However, by the end of the session, the Life360 share price was trading broadly flat at $5.23.

This is despite the ASX 200 index rising 1.05% and the S&P/ASX All Technology Index storming 3.3% higher for the day.

In light of the Life360 share price missing out on the rally today, it is still down 45% since the start of the year.

Is the weakness in the Life360 share price a buying opportunity?

The team at Bell Potter believes the Life360 share price is great value at the current level.

In fact, based on a note released this morning, the broker sees almost 100% upside for investors over the next 12 months.

According to the note, Bell Potter has retained its buy rating and $10.00 price target on the company’s shares.

What did the broker say?

Although Bell Potter expects some impact on sales of its Tile products due to privacy/stalker concerns around Apple AirTags, it is still forecasting overall strong growth in FY 2022.

It commented: “We expect the strong growth in the core business of Life360 (i.e. ex Jiobit and Tile) shown in Q3 and Q4 of last year to continue into Q1 this year. Specifically, we expect the year-on-year growth in AMR (annualised monthly revenue) – excluding Jiobit and Tile – to be c.50% in March 2022 which is similar to the reported y-o-y growth of 48% in September and 51% in December 2021. We also forecast similarly strong y-o-y growth in Q1 revenue – excluding Jiobit and Tile – of 48% to US$34.0m.”

“Conversely, however, we expect the Q1 revenues of both Jiobit and Tile to be relatively flat y-o-y due mainly to continued supply constraints and some potential temporary easing of demand for Tile products given the privacy concerns around Apple AirTags. In our view, however, relatively flat revenues in these businesses are not a bad result given the current constraints and/or headwinds,” it added.

The post Life360 (ASX:360) share price gives back 14% gain, but this broker remains bullish appeared first on The Motley Fool Australia.

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• Broker names the 3 best ASX tech shares to buy today
• Glitch! Why are ASX tech shares getting hammered on Monday?

Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Life360, Inc. 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 Bruce Jackson.

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On Wednesday, we looked at three ASX shares that brokers have given buy ratings to this week. Unfortunately, not all shares are in favour with brokers right now.

Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why they are bearish on them:

Air New Zealand Limited (ASX: AIZ)

According to a note out of Macquarie, its analysts have retained their underperform rating but lifted their price target on this airline operator’s shares slightly to NZ$1.15 (~A$1.08). This follows news that New Zealand is opening its borders sooner than previously expected. While Macquarie acknowledges that this is a positive, it appears to believe it may be too soon to get excited. The broker expects it to take a bit of time before capacity rebounds and travel is booming again. The Air New Zealand share price is trading at $1.37 today.

Insurance Australia Group Ltd (ASX: IAG)

A note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $3.90 price target on this insurance giant’s shares. Following the floods, the broker has concerns that IAG is at risk of elevated catastrophe budget increases in FY 2023. It suspects that this could further increase the cost of capital for the insurer. The IAG share price is fetching $4.58 on Thursday afternoon.

Seven West Media Ltd (ASX: SWM)

Analysts at Goldman Sachs have downgraded this media company’s shares to a sell rating with a 60 cents price target. According to the note, the broker made the move on valuation grounds and due to its belief that Seven West Media will fall short of the market’s earnings estimate in FY 2023 and FY 2024. It also sees less long term opportunities to offset total TV revenue declines than peers. The Seven West Media share price is trading at 63 cents on Thursday.

The post Top brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Is it time to sell IAG (ASX:IAG) shares following the recent flood events?
• Top fund manager rates these 2 small cap ASX shares as buys
• Why is the IAG (ASX:IAG) share price edging higher today?
• Top brokers name 3 ASX shares to sell today
• Air New Zealand (ASX: AIZ) share price plummets 16% in a month

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 owns and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Xero Limited (ASX: XRO) share price has made strong gains since its debut on the ASX in 2012.

The cloud accounting platform provider had a minuscule market capitalisation of NZ$55 million (A$51.49 million) when it was listed on the New Zealand stock exchange (NZX) through an initial public offering (IPO) on 5 June 2007.

The IPO raised $15 million from various investors, notably falling short of its $18 million target. Xero shares were valued at a price of NZ$1 each (A$0.94).

However, when Xero dual-listed on the ASX on 8 November 2012, its value accelerated to almost $450 million.

In February 2018, Xero decided to transition to a sole listing on the ASX, leaving behind the NZX. At that time, the company’s market capitalisation had soared to about $4.5 billion.

At today’s valuation, Xero is now worth more than $14.9 billion.

Below, we take a look at the power of long-term investing. We will calculate how much you would have made if you invested $5,000 in Xero shares a decade ago.

What was the Xero share price in 2012?

If you had invested $5,000 in Xero shares in 2012, you would have bought them for about $4.48 apiece. This would have given you approximately 1,116 shares, without topping up along the way.

Fast-forward to today and the current Xero share price is $100.06. This means that those 1,116 shares would be worth an astonishing $111,666.96 (1,116 shares x $100.06). When looking at percentage terms, this implies a gain of about 2,230%.

If you are wondering about dividends, the company has chosen not to pay a percentage of its profits to date. Instead, it has reinvested in the business, which seems to have paid off for shareholders.

How has Xero compared against the ASX 200?

On average, the ASX 200 has returned 5.31% to shareholders in the past decade.

The most significant gain was achieved in 2019 when the index grew 23.02%. On the other hand, the biggest fall came in 2011, down 10.84%. You might be thinking that 2020 would be on the list, but during that year, the ASX 200 rebounded sharply.

The Xero share price has historically outperformed the ASX 200 by a long shot. In the past 10 years, the company has delivered a yearly average return of 36.43% since 2012.

Should you invest $5,000 in Xero shares right now?

Two brokers have rated Xero at different share price points in the past month.

The first was Macquarie, whose analysts raised their rating of Xero shares from underperform to neutral. However, they slashed their 12-month price target by 23% to $100 per share, which is in line with Xero’s price today.

Following suit, the team at Citi also lowered its outlook by 17% to $132.60. It appears the broker believes Xero shares are undervalued at their current price. If they’re right, that’s a potential upside of 32.5% over the next 12 months.

The Xero share price is up 3.3% today to $100.12.

The post Guess how much $5,000 invested in Xero (ASX:XRO) shares 10 years ago would be worth now appeared first on The Motley Fool Australia.

More reading

• Hero to Xero? The Xero (ASX:XRO) share price is now down 36% in 2022
• ASX 200 (ASX:XJO) midday update: Block falls, Nickel Mines jumps
• 3 excellent ASX growth shares analysts believe have huge upside potential
• 3 beaten-up ASX tech shares that ‘tick all the boxes’: fundies
• Leading brokers name 3 ASX shares to buy today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. 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 Bruce Jackson.

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