The Webjet Limited (ASX: WEB) share price has taken off in 2022 despite volatility impacting the S&P/ASX 200 Index (ASX: XJO).

Since the beginning of the year, the online travel agent’s shares have risen by 17% following positive investor sentiment. In contrast, the benchmark index has fallen by 2% over the same time frame.

At yesterday’s market close, Webjet shares finished the day 4.83% higher to $6.08 a pop.

What’s driving Webjet shares higher?

With the re-opening of Australian borders for fully-vaccinated tourists set on 21 February, the Webjet share price has soared.

The announcement made on 7 February by the Morrison government sent Webjet shares 6.17% higher on the day. This was followed by another 7.44% gain on 8 February.

While COVID-19 continues to be on a steady decline, there is hope that the world is starting to move to a post-pandemic phase.

Some countries like Denmark and Sweden have even completely removed restrictions and accepted to live with the virus.

In the United Kingdom where Webjet operates, the British government ended the mask mandate and vaccine passports. Fully vaccinated travellers are no longer required to take a test on or before arrival. This means that passengers can freely travel to the country, encouraging a resurgence in the tourism industry.

Looking ahead, Webjet is scheduled to report its FY22 results towards the backend of May 2022.

Is this a buying opportunity?

The good news for investors is that a number of brokers believe that the Webjet share price is attractively valued.

The team at Morgans raised its price target by 6.5% to $6.60, which implies a potential upside of 8.5%.

In addition, Ord Minnett also lifted its outlook by 2.7% to a more bullish price of $7.31 apiece. This represents a potential upside of 20% from where it trades today.

Lastly, Swiss investment firm, UBS increased its appraisal on Webjet shares by 1.5% to $6.95. Its analysts clearly believe that there is still significant value in the online travel agent and that a recovery is inevitable.

Webjet share price summary

It’s been a rollercoaster 12 months for Webjet investors, with its shares up 27% over the period.

Based on valuation grounds, Webjet has a market capitalisation of around $2.31 billion, with approximately 380.51 million shares on issue.

The post The Webjet (ASX:WEB) share price has climbed 17% so far this year. Is it still a bargain? appeared first on The Motley Fool Australia.

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• Why the Webjet (ASX:WEB) share price is a seriously undervalued ASX share: expert
• These were the best performing ASX 200 shares last week
• Broker says buy Webjet (ASX:WEB) instead of Flight Centre shares

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 Webjet 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 ASX share market is known for being more volatile than other asset classes like term deposits and bonds. But ASX dividend shares may be able to provide a steady stream of passive investment income over time.

Some businesses have quite volatile dividend movements like Fortescue Metals Group Limited (ASX: FMG) and Woodside Petroleum Limited (ASX: WPL).

But, there are others which are building a reputation for consistent dividends and long-term growth. These two ASX dividend shares may be options for steady passive income:

Pacific Current Group Ltd (ASX: PAC)

Pacific Current describes itself as an asset management outfit that aims to apply its strategic resources, including capital, institutional distribution capabilities and operational expertise to help its partners grow. At the end of January 2022, it had investments in 16 boutique asset managers globally.

One of the most important investments in the portfolio is its holding of shares of the now-listed GQG Partners Inc (ASX: GQG).

The business regularly tells investors about the total funds under management (FUM) managed by the asset managers within the portfolio. In the three months to 31 December 2021, the total FUM rose from A$150.1 billion to $165.4 billion. Excluding the new investment in Banner Oak, FUM grew by 5%. GQG growth continued, while Victory Park and EAM posted “particularly strong” inflows.

The ASX dividend share said it was expecting A$3 billion to A$8 billion of gross new commitments/inflows over the next 18 to 24 months for non-GQG boutiques when it released its FY21 result. In the first half of FY22, these boutiques had already received A$2.2 billion of gross new commitments. This caused Pacific to increase its estimate of new commitments to a range of $5 billion to $8 billion.

Pacific is expecting 2022 to be another strong year for many of its investments.

It’s currently rated as a buy by the broker Ord Minnett. With FY23 projections in mind, the Pacific Current share price is valued at 11x FY23’s estimated earnings with a potential grossed-up dividend yield of 8.7%.

Charter Hall Long WALE REIT (ASX: CLW)

This real estate investment trust (REIT) has one of the longest weighted average lease expiries (WALE) on the ASX. This means that its tenants are signed up for the long-term.

At 31 December 2021, it had a WALE of 12.2 years. The REIT noted that this provides long-term income security.

Charter Hall Long WALE REIT was one of the few S&P/ASX 200 Index (ASX: XJO) shares that increased its payment to shareholders during the difficult economic COVID times of 2020.

But the growth has continued. The Charter Hall Long WALE REIT’s operating earnings per security (EPS) increased 5.6% in the first six months of FY22, funding a 5.1% increase of the distribution to 15.24 cents per security.

The property portfolio is now worth $7 billion, with 46% of leases being inflation-linked and achieving a 3.3% weighted average increase of 3.3% in the first half of FY22. The other 54% of leases have fixed increases – the average fixed increase was 3.1%.

Management say that the ASX dividend share continues to grow, diversify and improve the quality of the portfolio with a view to providing reliable and growing returns to investors. Minimal rental relief has been required since the onset of COVID-19. The net tangible assets (NTA) per unit is now $5.89, which is materially above the current Charter Hall Long WALE REIT share price.

FY22 operating EPS is expected to be no less than 30.5 cents, reflecting growth of no less than 4.5% over FY21.

It’s currently rated as a buy by Citi, with a price target of $5.71. The broker is expecting the REIT to pay a distribution yield of 6.2% in FY22.

The post 2 ASX dividend shares that could provide steady passive income appeared first on The Motley Fool Australia.

More reading

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• These 3 ASX 200 shares are topping the volume charts on Wednesday

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group 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 Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price could be vastly overvalued and heading sharply lower.

That’s the view of one leading broker which has reiterated its sell rating this morning.

Why is the Fortescue share price overvalued?

According to a note out of Goldman Sachs, in response to the mining giant’s softer than expected half year results, its analysts have retained their sell rating and cut their price target to $14.70.

Based on the current Fortescue share price of $21.15, this implies potential downside of 30% over the next 12 months.

What is the broker saying?

Goldman has warned that Fortescue’s dividend cut with its half year results might be something that investors need to get used to.

Its analysts commented: “The interim dividend of A86cps was a 70% payout, in-line with GSe, but is the start of lower payout ratios going forward (GSe 50% from FY23) in our view, with FMG indicating iron ore sustaining capex will remain elevated at US$1.5bn (US$8/t) in FY23 and Fortescue Future Industries (FFI) spend will likely increase as projects advance (Pilbara decarbonisation and green hydrogen).”

In addition, the broker continues to believe that the Fortescue share price trades on unreasonably high multiples compared to peers BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

Goldman explained: “The stock is trading at a significant premium to BHP & RIO; c. 1.9x NAV vs. RIO at c. 1.0x NAV, c. 5x EBITDA (vs. BHP & RIO on c. 4x), and c. 5% FCF vs. BHP & RIO on c. 10%, which we think is unwarranted considering the lack of diversification and risks around future capital spend and returns.”

Combined with widening low grade iron ore discounts, execution risks on the Iron Bridge project, and uncertainties around the FFI business, Goldman sees the Fortescue as a clear sell.

The post Broker warns that Fortescue (ASX:FMG) share price could fall 30% appeared first on The Motley Fool Australia.

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• Fortescue (ASX:FMG) share price slips on FY22 half-year results

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 Bruce Jackson.

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The fund manager Wilson Asset Management (WAM) has told investors about two compelling ASX shares that it has in its portfolio.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

There’s also one called WAM Capital Limited (ASX: WAM) which targets “the most compelling undervalued growth opportunities in the Australian market”.

The WAM Capital portfolio has delivered an investment return of 15.9% per annum since its inception in August 1999, before fees, expenses and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAO) return of 8.4% per annum over the same timeframe.

These are the two ASX shares that WAM Capital outlined in its most recent monthly update:

Champion Iron Ltd (ASX: CIA)

Champion Iron is headquartered in Canada. It is described by WAM as a premium iron ore miner which is exploring the Bloom Lake and Fire Lake projects in the Canadian province of Quebec.

The fund manager pointed out that in January, Champion Iron announced its third quarter update, which showed that its growth project ‘phase II’, remained on track for completion in April.

The ASX share also announced its first dividend of C$0.10 per share, whilst also investing for growth.

Champion Iron has increased its leverage to higher iron ore prices as it progresses its growth projects, which are expected to double output this year.

WAM is bullish on Champion Iron and expect “considerable” free cash flow to be generated by the completion of the phase II project.

BWX Ltd (ASX: BWX)

BWX is an Australian-based company that is engaging in developing, manufacturing and marketing beauty and personal care products.

The ASX share has a number of brands in its stable – Sukin, Andalou Naturals, USPA, Mineral Fusion, Flora & Fauna, Nourished Life and now Go-To Skincare.

WAM says that the company’s expansion in the US and UK is gaining traction. Coupled with new products and a large distribution network, this is driving growth in their share of the market.

The fund manager is unfazed by the resignation of the CEO David Fenlon, who is moving into a non-executive director position on the BWX board.

Business continuity has been demonstrated by the appointment of the successor – the BWX chief operating officer – Rory Gration.

The post 2 ASX shares this expert rates as a buy appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BWX 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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There is an ASX share that’s plunged this year that still has plenty of supporters among professional investors.

The IDP Education Ltd (ASX: IEL) share price has nose-dived almost 20% so far this year, and almost 30% since its high in mid-November.

The company is in the international student placement and English testing industry, which understandably has been pummelled by the COVID-19 pandemic.

Montgomery Investment Management chief investment officer Roger Montgomery, for one, believes this depression is temporary.

“IDP has a solid pipeline of leads and, with borders reopening, the future is looking bright,” he said in a blog post.

“We believe IDP is a very high-quality company.”

A victim of its own success?

Montgomery attributed the recent poor stock performance to the half-year results, which didn’t meet analyst expectations.

In this instance, he thought that IDP might have been a victim of its own past success in exceeding previous guidance.

“The initial market reaction was quite severe, pushing the share price well below its November 2021 high,” he said.

“Broker expectations were arguably optimistic… When a company misses analyst expectations, who’s fault is it – the company’s or the analysts’?”

Montgomery feels that, once the market catches up with the scale of opportunities that IDP can adopt, analysts will change their minds.

“From raising prices and margins in the India International English Language Testing System (IELTS) business, and from growing student placement volumes as Australian, UK, Canadian and US borders reopen fully, and universities chase international student revenue – we believe more optimistic forecasts will be re-integrated into analyst thinking.”

Plenty of tailwinds for IDP Education

In the testing business, recovery of lost business in China and increasing revenue per student in India are two possible tailwinds.

“The above factors point to meaningful upside potential for the IELTS operation’s earnings over the next 3 to 5 years.”

Over in the student placement division, the business actually grew 62.3% year on year. But Montgomery feels like the market wanted more.

“IDP management noted they have never seen such a supportive environment for chasing student volumes, one where all destination markets have very pro-student visa and work-rights regulations.”

Montgomery is not the only one who is bullish.

Goldman Sachs this week lifted its stock price target for IDP Education to $35, a 24% premium on the current level.

UBS is even more generous, setting a price target of $35.90.

In its report, Goldman Sachs stated there were one-off costs in the last half that shouldn’t repeat in the future.

“We expect a stronger than usual second half for IDP, driven by an emerging recovery in Australian student placements, continued strength in multi-destination student placements and greater than initially forecast synergies in the Indian IELTS operations.”

IDP Education shares closed Wednesday at $28.34.

The post This unloved ASX share can only shoot up from here appeared first on The Motley Fool Australia.

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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. owns and has recommended Idp Education Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re in the process of building an income portfolio, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares could be in the buy zone right now:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is this footwear focused retailer. It is the company behind a collection of popular retail brands including HYPE DC and The Athlete’s Foot. In addition, Accent has the exclusive licence for a number of brands in Australia such as Reebok.

It could be a top option for income investors following a recent pullback which has left it trading close to 52-week lows. This has been driven by concerns over its performance in FY 2022 due to lockdowns and other COVID headwinds.

And while its underperformance is expected to impact its profits and therefore its dividends this year, analysts at Bell Potter expect a big rebound in FY 2023. It is for this reason the broker has a buy rating and $2.75 price target on the company’s shares.

Its analysts are also currently forecasting dividends per share of 5.4 cents this year and then 11 cents in FY 2023. Based on the current Accent share price of $2.05 this will mean yields of 2.6% and 5.4%, respectively.

Charter Hall Social Infrastructure REIT (ASX: CQE)

Another ASX dividend share for investors to consider is the Charter Hall Social Infrastructure REIT. It is a high quality real estate investment trust with a focus on properties with specialist use, limited competition, and low substitution risk.

Among its portfolio you will find bus depots, police and justice services facilities, and childcare centres. The latter is the company’s main focus. In fact, the Charter Hall Social Infrastructure REIT is the largest owner of early learning centres in Australia.

Goldman Sachs is a fan of the company and currently has a conviction buy rating and $4.17 price target on its shares.

It is also forecasting dividends per share of 17.1 cents in FY 2022 and 17.5 cents in FY 2023. Based on its current share price of $3.87, this implies yields of 4.4% and 4.5%, respectively.

The post Analysts name 2 ASX dividend shares to buy with attractive yields appeared first on The Motley Fool Australia.

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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 Accent Group. 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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Could BHP Group Ltd (ASX: BHP) be the best ASX dividend share?

It’s certainly one of the biggest in the world. After the recent unification of the UK business under the ASX business, it now has a market capitalisation of $244 billion according to the ASX.

In the FY22 half-year result, BHP decided that it was going to pay US$7.6 billion out as a total dividend to shareholders. In per-share terms, the dividend per share was US$1.50. This represented a dividend payout ratio of 78%.

Is the BHP the best ASX dividend share?

BHP is now the biggest dividend payer on the ASX. But the biggest may not necessarily mean the best.

In terms of growth, BHP did reveal a very big increase to the dividend. The FY22 half-year dividend was grown by 49% to US$1.50 per share. There may not be many S&P/ASX 200 Index (ASX: XJO) shares that grow the dividend as much as BHP in this reporting season.

However, assuming BHP maintains a similar dividend payout ratio, the dividend can change quite significantly year to year. That’s because the profit can change quite a lot too.

Attributable profit rose 144% to US$9.4 billion, net operating cash flow rose 42% to US$13.28 billion. Earnings per share (EPS) went up 144% to US$1.866.

We only have to go back to FY20 see an example of when profit and dividends can go backwards. FY20 attributable profit fell 4% to US$7.96 billion, whilst the dividend per share fell 10% to US$1.20.

So, the dividend can grow a lot. But it can also fall as well, depending on what happens to commodity prices and BHP profit.

Diversification

There are some commodity businesses that just rely on one type of commodity like Fortescue Metals Group Limited (ASX: FMG) or Evolution Mining Ltd (ASX: EVN).

But BHP doesn’t focus on just one commodity. It has a few different commodities, which means there are different commodity cycles going on within the business. BHP has iron ore, copper, nickel and coal operations. It’s divesting its petroleum division to Woodside Petroleum Limited (ASX: WPL), whilst working on it’s Jansen potash project to open up a new earnings stream.

So, whilst the BHP dividend can be volatile, it may be less than something like Fortescue which just cut its half-year dividend by 41%.

Is the BHP share price a buy?

Opinions are mixed on the business after the result. Macquarie reckons it’s a buy, with a price target of $54. Whilst it’s expecting a grossed-up dividend yield of 12.7% in FY22, the FY23 grossed-up dividend yield is expected to fall to 8.5%.

Morgans rates the business as a ‘hold’, with a price target of $48.70. This broker is expecting a grossed-up dividend yield of 11.1% in FY22 and 8.5% in FY23.

The post Is BHP (ASX:BHP) the best ASX dividend share? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• Losing sleep over falling ASX share prices? Here’s how one expert says investors can ‘take advantage of sell-offs’
• Why BHP, Fortescue, Netwealth, and Santos shares are falling
• These 3 ASX 200 shares are topping the volume charts on Wednesday

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group 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 Bruce Jackson.

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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) was back on form and charged higher. The benchmark index rose 1.1% to 7,284.9 points.

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

ASX 200 to open lower

The Australian share market looks set to give back some of yesterday’s gains on Thursday following a subdued night on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 9 points or 0.1% lower this morning. In late trade on Wall Street, the Dow Jones is down 0.1%, the S&P 500 is up 0.2%, and the Nasdaq has fallen 0.1%.

Telstra’s half year results

The Telstra Corporation Ltd (ASX: TLS) share price will be one to watch this morning when it releases its half year results. According to a note out of Morgans, its analysts expect a 7% decline in revenue for the period. However, thanks to its expectation for an 11% reduction in expenses, it is forecasting a 4% increase in underlying EBITDA.

Oil prices rise

Energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a decent day after oil prices rebounded. According to Bloomberg, the WTI crude oil price is up 1.4% to US$93.39 a barrel and the Brent crude oil price is up 1.4% to US$94.64 a barrel. Oil prices rose after Russian-Ukraine tensions flared up again.

Wesfarmers half year update

The Wesfarmers Ltd (ASX: WES) share price will be in focus when it releases its half year results. Morgans is expecting the conglomerate to deliver a result in line with its guidance. It has forecast a 15% decline in net profit after tax to $1,199 million. This is being driven largely by weakness from the Kmart Group segment due to lockdowns, staff shortages, and supply chain disruptions.

Gold price rises

It could be a good day for gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) after the gold price stormed higher. According to CNBC, the spot gold price is up 0.9% to US$1,872.4 an ounce. Concerns over the Russia-Ukraine situation boosted the safe haven asset.

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

More reading

• Here are the top 10 ASX shares today
• Losing sleep over falling ASX share prices? Here’s how one expert says investors can ‘take advantage of sell-offs’
• Why BHP, Fortescue, Netwealth, and Santos shares are falling
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• Is now the time to buy the dip in ASX 200 shares?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited and 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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The small end of the Australian share market is home to a number of companies with the potential to grow materially in the future.

Three that investors might want to get better acquainted with are listed below. Here’s why they should be on your watchlist:

Adore Beauty Group Limited (ASX: ABY)

The first small cap ASX share to look at is Adore Beauty. This week the company released its half year results and revealed an 18% increase in revenue to $113.1 million. This was driven by a 13% increase in active customers to 876,000 and strong returning customer growth. And while there are concerns about its slender margins, management appears confident they will improve at scale. It also believes the company “is well positioned to capture market share in a large and growing market benefitting from structural tailwinds.”

Morgan Stanley remains positive on the company. It currently has an overweight rating and $4.00 price target on its shares.

Booktopia Group Ltd (ASX: BKG)

Another small cap ASX share to watch is Booktopia. This online book retailer has been growing at an explosive rate in recent years. This has been driven by the shift to online shopping and supported by the opening of its new distribution centre. The latter is allowing the company to capture heightened demand and ship more books than ever.

While its shares are out of favour with investors at present, Morgans remains positive. It recently put an add rating and lofty $2.78 price target on its shares. This is more than double the current Booktopia share price.

Whispir Ltd (ASX: WSP)

A final small cap ASX share to watch is Whispir. It is a software-as-a-service company that provides a communications workflow platform that automate interactions between organisations and people. The company notes that its offering enables organisations to improve their communications through automated workflows to ensure stakeholders receive accurate, timely, useful and actionable insights. Among its users are the Australian Government, Changi Airport, Monash University, Nespresso, and Takata. Management estimates that it has a total addressable market of US$4.7 billion in just the United States market.

Canaccord Genuity is bullish on Whispir. It has a buy rating and $3.50 price target on its shares. It feels that the company’s shares could rerate once it demonstrates growth in North America.

The post 3 high risk, high reward small cap ASX shares named as buys appeared first on The Motley Fool Australia.

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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 Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited and Booktopia Group Limited. The Motley Fool Australia has recommended Adore Beauty Group Limited and Whispir 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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If you’re looking for shares with major upside potential, then you may want to check out the ones listed below.

Earlier today, brokers gave their verdict on these shares and, pleasingly for investors, they are feeling very bullish. Here’s what you need to know:

Atomos Ltd (ASX: AMS)

Morgans is very positive on this video equipment developer. This morning the broker responded to its half year results by retaining its add rating but slightly trimming its price target to $1.87. This implies almost 100% upside for the Atomos share price from current levels.

The broker commented: “AMS’ 1H22 result saw a beat on EBITDA (A$3.2m vs A$2.5m MorgansE) although further upside was impacted by higher variable freight costs and supply chain disruptions – no surprise there given the global operating environment.”

“While it appears the market continues to question AMS’ ability to hit FY22 guidance, we look to a period of lower promotional activity, pull-through of demand from out-of-stock devices in 1H, higher contribution from 100% margin software sales, and the release of Series 2 (S2) products (higher margin) within the period, off a largely fixed cost base. We are comfortable with guidance at the lower end. We have made only marginal changes to forecasts and remain comfortable with our forecasts,” it added.

Lifestyle Communities Limited (ASX: LIC)

This retirement communities company’s shares could be in the buy zone according to the team at Goldman Sachs. In response to its half year update, the broker retained its conviction buy rating and lifted its price target to $24.50.

This suggests potential upside of 33% from the current Lifestyle Communities share price of $18.46.

Goldman commented: “Overall, we saw the result as very solid: LIC delivered a settlement number in line with our expectations despite ongoing lockdown conditions through the half and the number of resales continues to grow YoY. In our view, the business is well capitalised to organically increase its development pace to support a higher settlement number: although gearing reached 40% in the half, this should unwind as a number of communities move from development phase to settlement phase.“

Outside this, the broker expects the company to outperform for three reasons. These are a step up in the pace of land acquisitions, structural growth in demand for land lease, and fundamental valuation support for cap rates.

The post Brokers name 2 ASX shares with at least 30% upside potential appeared first on The Motley Fool Australia.

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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 Atomos Ltd. The Motley Fool Australia has recommended Atomos 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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