Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Appen Ltd (ASX: APX)

According to a note out of Citi, its analysts have retained their buy rating and $14.80 price target on this artificial intelligence data services company’s shares. While it acknowledges that Appen is likely to have started the year off slowly based on data out of its largest customer, Meta (Facebook). It reminds investors that January is traditionally a quiet period and suggests that they don’t judge the whole year on this month. The Appen share price is trading at $8.66 on Wednesday.

GUD Holdings Limited (ASX: GUD)

A note out of Credit Suisse reveals that its analysts have retained their outperform rating and lifted their price target on this diversified products company’s shares to $17.00. This follows the release of a first half result that was ahead of expectations. Outside this, the broker is positive on its outlook and believes recent acquisitions have made the company stronger. So much so, it suspects a guidance upgrade could be coming in a couple of months. The GUD share price is fetching $12.95 today.

Macquarie Group Ltd (ASX: MQG)

Analysts at Citi have retained their buy rating and $226.00 price target on this investment bank’s shares following the release of its third quarter update. Citi was impressed with the company’s results and notes that its Commodities and MacCap businesses are powering ahead. And while it continues to expect Macquarie’s earnings to peak in FY 2022 and then decline in FY 2023 and FY 2024, it still sees enough value to maintain its buy rating. The Macquarie share price is trading at $197.65 today.

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

More reading

• Is the ASX value shares party just getting started?
• The ASX 200 just hit 3-week highs. What’s next?
• GUD (ASX:GUD) share price on watch after reporting 32% revenue growth
• Why Appen, Nanosonics, Nearmap, and Temple & Webster are sinking
• Why Flight Centre, Macquarie, Super Retail, and Suncorp shares are racing higher

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 Appen Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. 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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The online accounting software company Xero Limited (ASX: XRO) has long been a market darling here on the ASX boards. Xero shares have risen from under $20 five years ago to the $115.18 they are commanding today (at the time of writing). That’s a five year gain of 540%. That’s notwithstanding the rather flat year Xero has had more recently though.

Over the past 12 months, Xero shares have gone backwards by roughly 11.8%, including the 21.5% the shares have lost over 2022 thus far. Still, Xero has been one of the best growth shares to own on the ASX over the past five years, which earned it a place in the once-famed WAAAX group.

Xero’s share price growth has arguably been fuelled by this company’s stunning growth numbers. Just two months ago, Xero reported its half-year results for the six months ending 30 September 2021. The company reported a 23% increase in both revenues (to NZ$505.7 million) and subscribers (3 million), as well as a gross margin of 87.1%.

So numbers of this calibre might elicit a question: why isn’t Xero paying its loyal investors a dividend? As most investors would be aware of, dividends are quite a common occurrence on the ASX boards. ASX shares that don’t pay a dividend are relatively rare. Especially well-known ASX 200 names like Xero.

So let’s see why Xero hasn’t shown investors the money just yet.

Xero cash: Where are the dividends?

So digging deeper into Xero’s results, and we might get our clue. In November, the company also reported earnings before interest, tax, depreciation and amortisation (EBITDA) of NZ$981 million. That was down 19% compared to the previous year’s corresponding half. But Xero also reported a net loss of NZ$5.9 million for the period.

This indicates that Zero is still very much in its ‘growth phase’ of development, and is continuing to plough its revenues back into the business for future growth. As such, it’s arguably the case that Xero’s management sees better value in reinvesting its cash into the business, rather than sending it out the door in the form of a dividend. 

So on the above numbers, it’s possible that Xero could afford to pay its investors a dividend. It did report positive earnings, after all. But that’s not what the company appears to be focused on. If Xero continues to grow its revenues and subscribers at something even close to the numbers it reported in November for the next few years, then a dividend is a distinct possibility one day. But for now, it seems that management’s priorities lie elsewhere.

At the current Xero share price, this company has a market capitalisation of $17.2 billion.

The post Show me the money! Why Xero (ASX:XRO) shares don’t pay a dividend appeared first on The Motley Fool Australia.

More reading

• 3 ASX tech shares to pounce on NOW while they’re cheap
• Are ASX tech shares ‘yesterday’s growth spot’?
• ‘Plenty of bargains’ following ASX tech shares sell-off: expert
• 2 ASX 200 shares that could be top buys for growth
• 3 excellent ASX tech shares Goldman Sachs rates as buys

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. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. 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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Key points

• Qantas CEO Alan Joyce has renewed his attack on Western Australia’s border closures
• WA borders will remain closed until future notice
• The Qantas share price finished in the green on Wednesday

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Qantas Airways Limited (ASX: QAN) is in the news again today — or more so, its CEO.

After speaking out against Western Australia’s border stance on Friday, Qantas boss Alan Joyce has delivered another barb today.

Since Friday, the Qantas share price has jumped almost 10%, finishing today’s session at $5.52, up 0.55% on yesterday’s close.

So what exactly is going on with the travel-or-not-to-travel conundrum. Let’s take a look…

WA compared to North Korea

You may have heard by now that Australia is planning to open its borders to fully-vaccinated travellers from 21 February.

However, Western Australia has decided to not follow suit.

WA’s borders remain closed under the state’s coronavirus travel restrictions with its initial plans to reopen by 5 February on hold indefinitely.

Direct international travellers to WA will still need to quarantine for 14 days and provide PCR tests.

Last week, Qantas CEO Alan Joyce went on record, comparing WA’s border to the North-South Korean divide.

According to the ABC, Joyce said: “The fact that you can travel to London but you can’t travel to Perth, I think there is something fundamentally wrong with the federation.”

However, Western Australian premier Mark McGowan is sticking to his decision.

Joyce reaffirms comments on WA closure

Today, Joyce reiterated how WA’s decision to close itself off has affected the rest of the country.

According to the ABC, Joyce said, “[I]t feels like we have a part that is like North Korea, that is very restricted in parts of what the people can do in terms of travel.”

Just yesterday, Joyce announced Qantas would restart international flights “sooner or add capacity to those routes we are already flying”.

According to the Australian Bureau of Statistics (ABS), Australia hosted 9.5 million visitors in 2019, “the highest on record”. And, between 2018-19, tourism injected more than $60 billion into the economy.

Minister for Home Affairs Hon Karen Andrews MP said Australia’s opening would breathe life into the tourism industry which accounted for 660,000 jobs in the two years prior to the pandemic.

How is this affecting the Qantas share price?

In the last week, the Qantas share price has jumped by more than 12%.

In 6 months, it has increased by 22% — hitting a 52-week-low of $4.25 in September followed by a high of $5.85 in November.

The airline giant has a market capitalisation of $10.37 billion based on today’s share price.

The post Qantas v the WA government: here’s the latest appeared first on The Motley Fool Australia.

More reading

• ‘Open for business’: Qantas (ASX:QAN) share price lifts amid CEO’s renewed optimism
• Why are ASX travel shares Flight Centre (ASX:FLT), Qantas and Webjet lifting off today?
• Frequent flyer: what changed for the Qantas (ASX:QAN) share price today?
• Why is the Qantas (ASX:QAN) share price taking off this week?
• Are ASX travel shares finally emerging from the COVID storm?

Motley Fool contributor Alice de Bruin 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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In late trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another strong gain. At the time of writing, the benchmark index is up 0.9% to 7,251.7 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are falling:

Bapcor Ltd (ASX: BAP)

The Bapcor share price is down 9% to $6.44 following the release of its half year results. The auto parts retailer reported a 1.9% increase in revenue to $900.1 million but a 14.7% decline in net profit after tax to $60.7 million. Management advised that its earnings were impacted by the transition to its Victoria distribution centre and support provided to staff.

Mineral Resources Limited (ASX: MIN)

The Mineral Resources share price has tumbled 9% to $52.64. Investors have been selling this mining and mining services company’s shares after its half year results fell well short of expectations. Mineral Resources delivered an underlying net loss after tax of $36 million for the six months. This compares to the consensus estimate of a $105 million profit.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down a further 6% to $4.51. Investors have been selling this infection prevention specialist’s shares this week amid a shock announcement relating to its sales agreement with GE Healthcare in North America. With immediate effect, Nanosonics will take everything in-house. Goldman Sachs was very disappointed. It notes that “GE has played a critical role in driving adoption of NAN’s trophon system over 10+ years and, in FY21, GE constituted 60% of NAN’s Group sales.” In response, the broker has retained its sell rating and slashed its price target to $3.80.

Syrah Resources Ltd (ASX: SYR)

The Syrah share price has returned from its trading halt and dropped 10% to $1.48. This follows the completion of the institutional component of its $250 million capital raising. Syrah has raised $192 million from institutional investors at $1.48 per new share. This represents a discount of 10.3% to its last close price. These funds will support the initial expansion of its Vidalia active anode material (AAM) facility in Louisiana, USA.

The post Why Bapcor, Mineral Resources, Nanosonics, and Syrah shares are falling today appeared first on The Motley Fool Australia.

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• Could climbing costs crash the ASX lithium share party?
• Syrah Resources (ASX:SYR) share price sinks 11%. Here’s why
• ASX 200 (ASX:XJO) midday update: CBA impresses, Mineral Resources delivers a shocker
• Down but not out: Bapcor (ASX:BAP) share price slumps on sluggish first half
• Mineral Resources (ASX:MIN) share price slides as lower iron ore prices bite

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 Nanosonics Limited. The Motley Fool Australia owns and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Bapcor. 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Tuesday night to discuss the market’s pleasant surprise from Suncorp Group Ltd (ASX: SUN) earnings, the ongoing inflation battle for costs that will take time to fall, and an ex-RBA board member’s expectation for 4 rate rises in 2022.

The post Suncorp surprises, and 4 rate rises on the cards. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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• Own Suncorp (ASX:SUN) shares? Here’s what analysts are saying about the company’s latest results
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Motley Fool contributor Scott Phillips 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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A shot has been fired across the bow of ASX lithium shares today following a concerning admission from Mineral Resources Limited (ASX: MIN).

Troubling high costs for lithium exportation were revealed in the mining company’s half-year results this morning. Consequently, the lithium producer took a wrecking ball to its profits during the period. The outcome was a 96% reduction in net profits.

What could this mean for ASX lithium shares more broadly?

Inflation takes its pound of flesh from ASX lithium shares

Investors have been quick to pile into the growth opportunity presented by ASX lithium shares. This has been driven by an underlying native of attractive supply and demand dynamics. Many estimates put supply ahead of demand over the coming years.

This investment thesis has left lithium investors smitten during the last 18 months, as the projections have played out in real-time. In the last year alone, the price of spodumene concentrate has increased by nearly six-fold. Unsurprisingly, many ASX-listed lithium shares have moved multiples higher in response.

However, today’s news from Mineral Resources reminds the market that there’s more to consider than the sale price of a commodity. The other piece of the financial puzzle takes shape in the form of costs.

Ultimately, the difference between these two variables is what determines the success of a mining company. In a worrisome development, one of the biggest Aussie lithium producers has indicated a drastic change to its cost structure.

According to its results, Minerals Resources experienced a 60% increase in lithium production costs year on year. The company’s spodumene mine, Mt Marion, recorded costs of $570 to $615 per tonne during the period. Additionally, increased shipping costs constituted 40% of the increase in costs.

Evidently, the pressure of beefed expenses paired with a reduction in overall revenue has hit this ASX lithium share’s price today.

No doubt investors will be watching with bated breath over the coming weeks as more lithium shares reveal whether inflationary pressures have been taking a bite out of mining profits.

The post Could climbing costs crash the ASX lithium share party? appeared first on The Motley Fool Australia.

More reading

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• The ASX 200 just hit 3-week highs. What’s next?
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• Forget toilet paper, now we’re ‘panic buying’ lithium! Here’s how ASX lithium shares are tracking

Motley Fool contributor Mitchell Lawler 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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Next week the Treasury Wine Estates Ltd (ASX: TWE) share price will come into focus when it releases its half year results.

Ahead of the release of Wednesday 16 February, let’s take a look to see what the market is expecting from the wine giant.

What should you expect from Treasury Wine’s half year results?

At present, the market consensus estimate is for the Penfolds owner to report revenue of $1,251 million and EBITS of $259 million for the first half of FY 2022. This will be down 11.3% and 7.9%, respectively, over the prior corresponding period.

According to a note out of Goldman Sachs, while it is still expecting a decline year on year, it believes the company will outperform the market’s expectations.

On the top line, the broker is forecasting a 7.7% reduction in revenue to $1,301.9 million. This comprises a 2.8% decline in Penfolds revenue to $444.5 million, a 13.5% decline in Americas revenue to $440.5 million, and a 6% fall in Premium Brands revenue to $416.8 million.

Goldman also expects Treasury Wine’s EBITS to come in ahead of consensus estimates at $265.3 million. This represents a 6% decline over the prior corresponding period and is largely being driven by weaker earnings from its Penfolds business, which it expects to offset strong earnings growth in the Americas segment.

What else should you watch out for?

Goldman has named three key items that it will be watching out for. These are Penfolds sales outside of Australia, the Americas business post commercial transition, and its inventory.

In respect to Penfolds, it explained: “This is as a key indicator of longer-term progress, in our view. Management noted strong growth on this front during the FY21 results. The sustainability and acceleration of this progress will be key towards meeting longer-term expectations for the brand.”

As for the Americas, it commented: “The sustainable growth in Americas in the focus portfolio, following the divestment of commercial brands and acquisition of FFV, will be another key focus area for us in the 1H22 results.”

“We expect inventory to remain elevated at >70% of sales till end of FY23. While intake has been managed to take into account the shift in sales mix in Asia following the closure of the Chinese market, we expect intake to be an indicator of the longer-term outlook for sales growth,” Goldman concludes.

Is the Treasury Wine share price in the buy zone?

Despite expecting the company to outperform expectations during the first half, Goldman only has a neutral rating on the Treasury Wine share price.

Though, it is worth noting that its price target of $11.80 implies decent upside from current levels.

The post What to expect when Treasury Wine (ASX:TWE) uncorks its results next week appeared first on The Motley Fool Australia.

More reading

• Which ASX shares have exposure to NFTs?
• This calls for a toast! 2 alcohol ASX shares to buy right now
• Analysts name 2 ASX 200 blue chip shares with 30% upside
• Treasury Wine (ASX:TWE) share price lifts amid latest tariff battle
• The Treasury Wine (ASX:TWE) share price has plunged 25% from its 2021 highs. What’s next?

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 Treasury Wine Estates 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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After underperforming growth shares for the better part of 10 years, value shares are shining bright in the new year.

Since the opening bell on 4 January, the S&P/ASX 200 Growth Index is down 7%. Meanwhile, the S&P/ASX 200 Value Index has gone the other way, up 6%.

All together the S&P/ASX 200 Index (ASX: XJO) is down 5% in 2022.

Why are value shares outperforming growth shares?

Much of the shift in investor sentiment has come following the realisation that inflation is running higher than most economists had forecast last year. That’s leading to inevitable interest rate rises, which hits growth shares harder, as they’re more dependent on future earnings.

The prospect of rising interest rates helped propel the steep losses among tech shares last month. And in turn, it’s seen ASX value shares benefit.

In The Australian Financial Review, Perennial Value portfolio manager Stephen Bruce said:

Now that better growth and higher inflation seem to have become entrenched, the rate tightening cycle has finally started. This has meant the de-rating of the expensive parts of the market. How far this continues will be a function of growth, inflation and rates.

Is the ASX value shares party just getting started?

While ASX value shares have well-outpaced growth shares in 2022, what can investors expect going forward?

Dougal Maple-Brown, head of Australian equities at Maple-Brown Abbott, believes there’s a long way to go yet:

We’ve had a pretty good run. Value has underperformed for almost a decade, but the one-year numbers are now looking really good. We think there’s still something left in the tank because while the extremes have been hit, there are some stocks out there with a lot of excess still. The valuation dispersion is still very wide even though it’s come back a fair bit, so we think there’s a long way to go.

Bruce also believes the brighter run for ASX value shares is a long way from over:

Given how historically low rates are and how extreme valuation dispersion in market has become, there could potentially be a long way for this to run yet.

Flows are definitely starting to improve, but there hasn’t been any massive shift back towards value yet. I think investors, both retail and institutional, have all become very underweight value over the last number of years. So potentially, there could be a significant reallocation if this rotation continues.

By the numbers

To give you some idea of how leading ASX growth shares have stacked up against value shares, Pointsbet Holdings Ltd (ASX: PBH) – a growth share favourite that gained 1,137% from 20 March 2020 through to 19 February 2022 – is down 28% in the new year.

Fellow growth share, Appen Ltd (ASX: APX) has struggled as well, down 22% so far in 2022.

Then there’s leading ASX value share, QBE Insurance Group Ltd (ASX: QBE), which has seen its shares gain 7% year-to-date.

The post Is the ASX value shares party just getting started? appeared first on The Motley Fool Australia.

More reading

• Why Appen, Nanosonics, Nearmap, and Temple & Webster are sinking
• Why Appen, ANZ, Magellan, and REA shares are falling
• Is there more pain ahead for the Appen (ASX:APX) share price?
• These were the best performing ASX 200 shares last week
• Brokers name 3 ASX shares to buy today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Appen Ltd and Pointsbet Holdings Ltd. The Motley Fool Australia owns and has recommended Appen Ltd. The Motley Fool Australia has recommended Pointsbet 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 S&P/ASX 200 Index (ASX: XJO) has doubled down on yesterday’s gains so far this Wednesday. At the time of writing, the ASX 200 has risen a pleasing 0.8% and is currently sitting at 7,244 points.

But let’s dig a little deeper and have a look at the ASX 200 shares that are currently sitting at the top of the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume so far on Wednesday

Telstra Corporation Ltd (ASX: TLS)

Telstra is our fisrt share up today. So far, a hefty 15.1 million shares of this ASX 200 telco have found a new home. That’s despite the Telstra share price doing a whole lot of not much so far this Wednesday.

Telstra is currently flat at $4.06 a share after going as high as $4.10 a share and as low as $4.03 earlier this morning. There have been no other pieces of news out of Telstra, so we have to assume it is this volatility, as well as Telstra’s relatively low share price compared to its market capitalisation, that is behind this volume.

AMP Ltd (ASX: AMP)

ASX 200 financial services company AMP is our next share to check out today. This wealth manager has seen an impressive 19 million of its shares bought and sold on the markets thus far this Wednesday.

There’s been no major news or announcements out of AMP thus far. As such, we can probably put this high volume down to the movements of the AMP share price itself. The company is currently up a pleasing 3.89% to around $1 a share at the time of writing. It’s this decisive move that is almost certainly behind this elevated volume we see.

Sydney Airport (ASX: SYD)

For the last time, Sydney Airport is our most traded ASX 200 share of the day, with a whopping 40.35 million shares having traded owners on the markets. I say for the last time because today is the final day that Sydney Airport will call the ASX home.

The company is scheduled to delist from the ASX boards this afternoon after the successful takeover bid from the Sydney Aviation Alliance was accepted by both regulators and shareholders over the past month or two. So today’s volume is probably a consequence of this, er, imminent departure.

The post Here are the 3 most heavily traded ASX 200 shares this Wednesday appeared first on The Motley Fool Australia.

More reading

• Own AMP (ASX:AMP) shares? This could be the next blow for the company’s demerger plans
• Last hurrah: Investors clamour over Sydney Airport (ASX:SYD) shares on final day of trade
• ASX 200 (ASX:XJO) midday update: CBA impresses, Mineral Resources delivers a shocker
• 3 ASX tech shares to pounce on NOW while they’re cheap
• The ASX 200 just hit 3-week highs. What’s next?

Motley Fool contributor Sebastian Bowen owns Telstra Corporation 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 owns and has recommended Telstra Corporation 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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