ASX Real Estate Investment Trusts (REITs) have certainly had a rough couple of years on the whole. The global pandemic has been especially rough for this sector. Think about it. With work from home in force, offices closed and lockdowns coming and going, the profitability of office space, retail shopfronts and residential housing would have certainly taken a hit.

But how has this translated into the performance of ASX REITs? Let’s take a look.

So to kick things off, let’s check out the S&P/ASX 200 A-REIT Index (ASX: XPJ). It’s currently sitting at 1,596.9 points at the time of writing. That’s a good 66% or so above where it bottomed in the 2020 market crash, but still a little over 7% off of its pre-COVID high watermark that we saw in February 2020. Like many ASX shares, REITs have also taken a tumble more recently. Between new year’s eve 2021 and today, the index is down around 9.1%.

But let’s now dive deeper into some individual ASX REITs.

An ASX REIT share temperature check for 2022 thus far

To start with, let’s check out the ASX’s largest REIT, Goodman Group (ASX: GMG). Goodman is a commercial and industrial REIT known for its warehouses and logistics facilities. Goodman units have managed to shake off the pandemic rather well. It was only back at the end of 2021 that this company was hitting all-time highs. Even at today’s pricing, Goodman is a healthy 43% or so above its pre-COVID highs. In saying that, it remains down 12.3% year to date in 2022.

But other ASX REITs haven’t been so lucky. Shopping centre operator Scentre Group (ASX: SCG) is one that has struggled. It’s at $2.95 today so far, which is close to a quarter lower than its pre-COVID highs of around $4. Even so, it’s still up a reasonable, if not too dazzling, 5.7% over the past 12 months. But in 2022 so far, Scentre units have lost just over 9.2%.

National Storage REIT (ASX: NSR), which is a REIT that operates self-storage centres across the country, has done a little better. It’s down 8.75% over 2022 so far at the time of writing. However, it’s up a far healthier 30.6% over the past 12 months, and remains above its pre-COVID highs.

To wrap things up, let’s take a look at another REIT, Stockland Corporation Ltd (ASX: SGP). Stockland is a diversified REIT covering shopping centres, housing, retirement villages and industrial property. But unfortunately, this company hasn’t been a great performer of late. It’s down 9.1% in 2022 so far, as well as by 16.3% over the past year. It’s also a good 25% or so away from its own pre-COVID highs.

So all in all, it seems 2022 has been quite a harsh master to ASX REIT shares thus far. But then again, it’s only February, so who knows what the rest of 2022 will bring for the ASX REIT sector.

The post How are ASX Real Estate Investment Trusts (REITs) performing in 2022? appeared first on The Motley Fool Australia.

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

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Some ASX shares are dipping their toes into the world of non-fungible tokens (NFTs). This comes as companies begin to open up to the potential in blockchain technology.

Digital tokens are generated on a blockchain and act as an immutable record of ownership. Because of their characteristics, NFTs have been adopted across the art industry. More recently, brands have opened up to the economical potential of NFTs. Notably, even a number of ASX shares are delving into the new world of digital tokens.

Here’s a look at some of the Aussie companies taking a leap of faith in NFTs.

The ASX gaming share striking gold with NFTs

Outside of digital art, gaming has been touted as a powerful use case for NFTs. Mainly, the excitement for this use centres around individuals being able to actually own the digital assets used in the games they play. Playside Studios Ltd (ASX: PLY) is a game developer that is tapping into this new phenomenon.

The independent game developer’s maiden voyage into the digital token world took form in its ‘Dumb Ways to Die’ (DWTD) brand. This is a franchise that was acquired by the company in October 2021 for $2.25 million in cash.

Since then, Playside has announced the successful launch of its BEANS by DWTD NFT project. As we covered yesterday, the company reportedly netted $8.38 million in revenue from the launch of its first NFT collection — comprising of 10,000 2D characters.

Following on from this, Playside already has plans for future NFTs associated with the DWTD franchise. The $38 million raised by the company in November and December will partially fuel further developments.

Liquor gets a digital makeover

As my colleague, Brooke covered earlier in the year — Treasury Wine Estates Ltd (ASX: TWE) is another ASX share cracking the cask of a new market.

Through a partnership with luxury beverage NFT marketplace BlockBar, Treasury Wines has brought its iconic Penfolds brand to the digital world. Precisely 300 bottles of Penfolds 2018 Cabernet Sauvignon Shiraz have been matched with an NFT twin.

The NFTs will act as a redemption ticket for the real bottle at the owner’s convenience. Currently, the lowest price for a Penfolds NFT is 0.27 ETH — which is roughly A$1,185 based on Ethereum‘s (CRYPTO: ETH) price.

An ASX share counting Snoop Dogg as its neighbour

The final ASX share appearing in our compilation of Aussie companies with exposure to NFTs is Creso Pharma Ltd (ASX: CPH).

In its quarterly activities report released last week, Creso Pharma announced it was entering the metaverse. This entails the company buying digital land on a platform known as The Sandbox. The ownership of the digital land itself is tracked via NFTs.

Additionally, the company plans to develop a digital replica of its cannabis cultivation facility. The cannabis company strategically purchased a plot beside the illustrious Snoop Dogg.

The post Which ASX shares have exposure to NFTs? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Ethereum. The Motley Fool Australia owns Ethereum and 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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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) is on track to record a strong gain. The benchmark index is currently up 1.3% to 7,201.7 points.

Here’s what is happening on the ASX 200 today:

Macquarie’s record quarter

The Macquarie Group Ltd (ASX: MQG) share price is charging higher today following the release of its third quarter operational update. According to the release, the investment bank had a record quarter for the three months ended 31 December. The key drivers of its growth were its market-facing businesses, Commodities and Global Markets and Macquarie Capital. Their combined profit contribution was up “substantially” on the prior corresponding period. This is also the case on a year to date basis.

Suncorp half year results ahead of expectations

The Suncorp Group Ltd (ASX: SUN) share price is also storming higher today following the release of its half year results. The banking and insurance giant reported a net profit after tax of $388 million. While this was down 20.8% year on year, it was notably better than the market was expecting. According to a note out of Morgans, its analysts were expecting a first half net profit after tax of $300 million. Whereas the market consensus estimate was $286 million.

Nanosonics shares crushed

The Nanosonics Ltd (ASX: NAN) share price is sinking today after revealing that its sales deal with GE Healthcare in North America will be revised from today before coming to an end in June. The new sales model will see Nanosonics manage all inventory, ship, install and train the new trophon customers. These changes are expected to impact the company’s revenue by $13 million to $16 million in FY 2022. This is due to anticipated growth in the second half being deferred to FY 2023 as the transition to the new sales model is implemented. Nanosonics will also incur costs from building up its direct sales capabilities.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Flight Centre Travel Group Ltd (ASX: FLT) share price with a 6% gain. This appears to have been driven by optimism over Australia’s international border reopening. The worst performer has been the Nanosonics share price with a 9% decline following its update.

The post ASX 200 (ASX:XJO) midday update: Macquarie and Suncorp impress 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 Nanosonics Limited. The Motley Fool Australia owns and has recommended Nanosonics Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited and 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 Charter Hall Long WALE REIT (ASX: CLW) share price is bumping higher today, trading 1.54% in the green at $4.935 at the time of writing.

The real estate investment trust (REIT) released its half-year results for the period ending 31 December 2021 in an update today, detailing several investment highlights in the process.

As part of its progress this half, the property giant also increased its dividend by 5% on the same time last year. Let’s take a closer look.

Charter Hall share price rises as operating earnings lift 6%

The company outlined several financial and operational highlights for the period, including:

• Operating earnings of $97.8 million, or 15.31cps, up 5.6% on the prior corresponding period (pcp)
• Statutory profit of $589.6 million for the half
• Distributions of 15.24 cents per share, up 5.1% on pcp
• Net tangible assets (NTA) of $5.89, up 12.8% from $5.22 on pcp
• A $523 million net property valuation uplift – 8.3% higher than for 1H FY22.
• Balance sheet gearing of 30.8% and look through gearing of 38.1%

What else happened this quarter for Charter Hall?

During the half, Charter Hall completed $923 million of new property acquisitions. The company notes these additions enhance portfolio quality, sector diversification, and strengthen the quality and diversification of tenants.

Overall, the REIT’s property portfolio increased by approximately $1.42 billion to $6.98 billion for the half, boosted by its new acquisitions and “$532 million in property revaluation uplift”.

As a result, the company’s weighted average lease expiry (WALE) is now at 12.2 years, thereby providing long-term income security, according to the company.

Charter Hall’s property portfolio now stands at around $7 billion, up from $5.6 billion on 30 June 2021.

As well, 46% of its leases are now inflation-linked – resulting in a 3.3% weighted increase in 1H FY22 as CPI soared to multi-year highs last year.

The company also announced distributions of 15.24 cents per share, up 5.1% on the previous payment – and, importantly, well ahead of the inflation figure.

Subsequent to its progress this half, Charter Hall’s capitalisation rate has trimmed from 4.77% at 30 June 2021 to now rest at 4.38%.

Management commentary

Speaking on the announcement, Charter Hall Long WALE REIT Fund Manager Avi Anger said:

During 1H FY22 we successfully completed the acquisition of the ALE Property Group in partnership with Hostplus. This has seen us further improve the quality and diversity of CLW’s real estate portfolio and the resilience of CLW’s income through increasing our exposure to Australia’s leading hospitality operator, Endeavour Group. In addition, we further increased our exposure to the Industrial and Logistics sector with three high quality acquisitions, two of which were secured off-market. These acquisitions were a direct result of the depth of expertise and ability of the Charter Hall management platform which the REIT benefits from.

What’s next for Charter Hall?

Today Charter Hall’s board reaffirmed FY22 operating earnings per share (EPS) guidance of “no less than” 30.5 cents.

This, it says, reflects growth of no less than 4.5% over FY21’s operating EPS of 29.2 cents.

Aside from that, there was no other specific guidance provided by the REIT in its earnings release today.

Charter Hall share price snapshot

In the last 12 months, the Charter Hall share price has gained almost 5%. This year to date, it is down almost 3%.

The company has a market capitalisation of around $3.5 billion.

The post Charter Hall Long WALE REIT (ASX:CLW) just boosted its dividend. Here’s what you need to know appeared first on The Motley Fool Australia.

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

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We are in some strange times here at the dawn of 2022. The pandemic is not over after two long years and counting. But the generous government stimulus that has walked hand in hand with the pandemic looks to be winding up. That makes investing in ASX shares all the more difficult in these strange times.

The past two years have been an interesting time to invest. We’ve seen travel shares fall and rise, and tech shares rise and fall. So how does one position an investment portfolio in 2022? Is it finally time to let go of some COVID losers (or winners)? Let’s see what some investing experts reckon.

Elston Asset Management’s Bruce Williams and Investors Mutual Limited’s Simon Conn recently joined LiveWire for a ‘Buy Hold Sell’ interview. Let’s see how these investing experts are gauging the year ahead for ASX shares.

So both experts agree that we might continue to see some heightened volatility throughout the year as stimulus ends and central banks around the world look to start raising interest rates. Mr Williams says that we are looking at a “pretty volatile period” which will “change the expectations for not only companies but what we pay for them as well”.

Mr Conn agrees, stating that we might see a “big valuation adjustment” as interest and bond rates rise, particularly among high-growth ASX shares with stretched valuations.

ASX experts: Out with ASX retail shares, in with energy and consumer staples

Williams is also avoiding consumer discretionary shares, particularly those in the retail sector:

They’ve had a period of unbelievable demand because we’d had no other choice… In our view, it meant these companies are actually over-earning… And it’s really difficult to work out what underlying demand will be going forward.

Mr Conn agrees, saying that retail shares’ margins are “looking a bit inflated” and that the “valuations don’t reflect more normal underlying running conditions for a lot of the companies in that sector.”

Instead, both Mr Williams and Mr Conn are looking to other parts of the market in 2022, especially the consumer staple and communications sectors. Mr Conn names these ASX shares as having resilient demand, pricing power and current valuation. He likes Bega Cheese Ltd (ASX: BGA) right now, as well as TPG Telecom Ltd (ASX: TPG) and Telstra Corporation Ltd (ASX: TLS).

Meanwhile, Mr Williams is eyeing off energy and healthcare shares. He names Santos Ltd (ASX: STO) as a potential winner going forward, noting its “discipline” and strong balance sheet. For healthcare shares, Williams likes Ramsay Health Care Limited (ASX: RHC) for its long-term growth prospects.

So that’s how these two investing experts are positioning their ASX share portfolios in 2022. It’s certainly a plan for a different world to the one we’ve been living in over the past 2 years.

The post Is now the time to rid your ASX share portfolio of COVID losers? appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns Ramsay Health Care Limited and 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 Australia has recommended Ramsay Health Care Limited and TPG Telecom 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 Vulcan Energy Resources Ltd (ASX: VUL) share price has been a positive performer on Tuesday.

In morning trade, the lithium developer’s shares are up 1% to $9.11.

Where next for the Vulcan share price?

Although the Vulcan share price has rocketed materially higher over the last 18 months, one broker doesn’t believe it is too late to invest.

In fact, this broker appears to believe that Vulcan could be the best value lithium share on the Australian share market.

According to a note out of Germany-based Alster Research, its analysts have put a buy rating and $25.00 price target on the company’s shares.

Based on the current Vulcan share price, this implies potential upside of ~175% over the next 12 months.

What did the broker say?

Alster Research highlights that Vulcan has finalised its agreement with LG Energy Solution (LGES), the world’s second-largest battery maker. This will see LGES purchase between 41,000 to 50,000 tonnes of battery grade lithium chemicals over an initial term of five years from 2025.

In addition, the broker notes that Vulcan shares will be trading on the Frankfurt Stock Exchange (FSE) later this month. It expects this to be a positive catalyst.

The broker explained: “By finalizing the deal with LGES, Vulcan has now five definitive agreements with high-profile customers. We consider this as a clear sign for the high demand for battery metals from the phasing out of the combustion engine.”

“At this point, Vulcan has marketed its initial production volumes for the first 5-6 years. We expect the upcoming definitive feasibility study (DFS) to create some leeway. In the near term, we expect the admission to FSE as a catalyst for the stock, as future capital increases will be accessible to a broader audience. Thus, liquidity and interest will most likely increase. We confirm our PT of AUD 25.00, equivalent to EUR 15.81, and reiterate our BUY recommendation,” it concluded.

The post Lithium boom! Broker says the Vulcan (ASX:VUL) share price has 175% upside 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 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 Qantas Airways Limited (ASX: QAN) share price is rising again today. This comes after its CEO Alan Joyce welcomed Australia’s border reopening, declaring the country is “finally back open for business”.

At the time of writing, the airline’s shares are up 1.66% to $5.52. This follows a 4.6% jump on Monday when it was announced Australia would be opening up to fully vaccinated international tourists from 21 February.

Let’s take a look at this week’s news.

Restarting flights

Joyce has revealed the company is looking to restart flights from more overseas countries in the near future on the back of the border announcement.

In a report in the Australian Financial Review, Joyce was quoted as saying Australia is “finally back open for business”.

We know there are lots of international tourists who want to come to Australia.

There are also a lot of business travellers who will finally be able to be in the same room as their customers or local teams after almost two years apart. This means they can now book to come here with confidence.

We will be looking at our schedules to see if we can restart flights from more international destinations sooner or add capacity to those routes we are already flying. We have the flexibility to ramp up flights in response to demand.

As Motley Fool Australia reported Monday, the Qantas share price lifted at yesterday’s open amid news the reopening could be imminent.

Prime Minister Scott Morrison confirmed international visitors would be able to return after a cabinet national security meeting on Monday.

In a statement, the Government said:

Today’s announcement will give certainty to our vital tourism industry, and allow them to start planning, hiring and preparing for our reopening. 

In 2018-19, tourism generated more than $60 billion for the Australian economy, with more than 660,000 jobs dependent on the industry.

In other news, Qantas will soon fly to Broken Hill from Sydney for the first time. The airline will fly between the destinations with a 50 seat Q300 aircraft twice a week from April.

The company has also recently announced changes to its frequent flyer program. Fewer frequent flyer points will be required to book hotels or holiday packages. Qantas’ share price gained more than 4% after this news was announced on Friday.

Qantas share price snapshot

The Qantas share price is up almost 15% in the past year and around 9% year to date. In the past week, the company’s shares have soared 14%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 4% over the past year.

Qantas has a market capitalisation of about $10 billion based on today’s share price.

The post ‘Open for business’: Qantas (ASX:QAN) share price lifts amid CEO’s renewed optimism appeared first on The Motley Fool Australia.

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Motley Fool contributor Monica O’Shea 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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ASX shares, with only the rarest of exceptions, were hammered during the early days of the COVID-19 pandemic.

Few ASX investors will forget the 33% fall in the All Ordinaries Index (ASX: XAO) from late February through to late March 2020.

Since then, many ASX shares have rocketed back, propelling the All Ords back above pre-COVID levels.

But with international borders having remained all but shuttered, ASX tourism shares have broadly lagged behind that recovery.

But that all may be changing.

Yesterday the government reported that Australia’s international borders will reopen to all fully vaccinated travellers commencing on 21 February.

Well positioned to finally benefit

Commenting on the lifting of border restrictions and the impact on ASX shares in the tourism sectors, Alex Shevelev, senior analyst at Forager Funds Management, said:

This move continues the reopening of Australian borders to the world. Tourism operators, large and small, will now have more confidence to begin preparing for international arrivals. While the recovery will be gradual, the industry will be hoping that the initial trickle of tourists will be followed by a torrent of arrivals.

Shevelev pointed to cost cutting measures undertaken by many of the companies in the sector as potentially boosting their profit margins.

“Importantly, many operators have lowered their cost bases and will be more profitable when arrivals approach pre-COVID levels,” he said.

So which ASX shares are looking set to benefit?

According to Shevelev:

Companies like skydive and Great Barrier Reef tour operator Experience Co Ltd (ASX: EXP) … and Apollo Tourism & Leisure Ltd (ASX: ATL) have struggled through the COVID travel decimation for 2 years while working to improve their businesses. When tourists return, they will be well positioned to finally benefit.

How have these 2 ASX shares been performing?

The Apollo Tourism share price is up 47% over the past 12 months, but has fallen 17% so far in the new year.

Experience shares have gained 89% over the last 12 months and are flat so far in 2022.

As international tourists return to Australia, both ASX shares, as Shevelev says, look well positioned.

The post 2 ASX shares primed for Australia’s reopening: fund manager appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended EXPERNCECO FPO. The Motley Fool Australia owns and has recommended EXPERNCECO FPO. 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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Many eyes will be on the Megaport Ltd (ASX: MP1) share price tomorrow as the company releases its earnings for the first half of financial year 2022.

It will be the first chance the market has had to see, in detail, how the company’s ‘Scale Up, Scale Out’ growth strategy is advancing.

At the time of writing, the Megaport share price is $13.27, 30% lower than it was at the start of 2022. That makes it the worst performing S&P/ASX 200 Index (ASX: XJO) tech share of the year so far.

So, what might the market expect to hear from the company tomorrow? Let’s take a look.

Here’s what to look out for when Megaport reports

Owners of Megaport shares are likely anticipating the company’s earnings for the first half of this financial year, set to drop tomorrow.

They’ll follow from its financial year 2021 results. The last financial year saw Megaport deliver major boosts to its performance.

Its revenue increased 35% to $78 million, it recorded a 33% increase to its ports, and its monthly reoccurring revenue (MRR) grew 32% to $7.5 million.

However, the company recorded a net loss of $55 million for financial year 2021.

At the time, CEO Vincent English looked to the future, saying:

The Megaport mission for the coming year is to ‘Scale Up, Scale Out’. This is a commitment by everyone at Megaport to accelerate our growth and our innovation cycle to increase our lead in the network-as-a-service (NaaS) space … We will invest in revenue growth by making investments in further market expansion, product, and service innovation, and most critically, the people responsible for making Megaport the transformational technology company that is changing the way IT services are built today and tomorrow.

Unfortunately, that’s the closest thing to guidance for financial year 2022 the market got from Megaport.

Still, the strategy might be one point Megaport shareholders look for in the company’s half-year earnings tomorrow.

Since the end of financial year 2021, 2 quarterly updates have been released by the company, each showing notable growth.

It recorded 8% revenue growth for both the September and December quarters – reaching $24.6 million and $26.6 million respectively.

Its MRR also grew 14% over the September quarter and 7% over the December quarter.

However, the latter quarter’s performance disappointed some brokers.

As The Motley Fool Australia’s James Mickleboro reported, numerous brokers expected the company to post a higher investment spend and dropped their price targets for the stock when such expectations didn’t eventuate.

Such investment spend could be another metric worth seeking out in tomorrow’s announcement.

Megaport share price snapshot

Unfortunately, the Megaport share price has a long way to climb to reach its previous level.

It’s now officially lost all its 2021 gains and is trading 1.2% lower than it was this time last year.

Though, long term investors are still well and truly in the green. The Megaport share price is currently 488% higher than it was 5 years ago.

The post Own Megaport (ASX: MP1) shares? Here’s what to watch when the company reports tomorrow appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 Altium Limited (ASX: ALU) share price has been a positive performer on Tuesday.

In morning trade, the electronic design software company’s shares are up over 2% to $35.26.

Why is the Altium share price rising today?

The catalyst for the rise in the Altium share price on Tuesday appears to be a broker note out of Bell Potter.

According to the note, the broker has upgraded the company’s shares to a buy rating with a trimmed price target of $40.00.

Based on the current Altium share price, this implies potential upside of over 13% for investors over the next 12 months.

What did the broker say?

Bell Potter is expecting a strong result from Altium in FY 2022. In fact, it believes the company could outperform its full year guidance.

The broker explained: “There is no change in our forecasts for Altium which we last updated in early November. We continue to forecast FY22 revenue and EBITDA of US$218m and US$80m which is at the top end or slightly higher than the guidance ranges of US$209-217m and US$72-80m.”

As for the first half, Bell Potter expects Altium to report revenue and EBITDA growth of 24% and 29%, respectively, later this month.

An attractive tech share

While tech shares have fallen out of favour with investors this year, Bell Potter believes Altium remains a quality pick.

It commented: “We are obviously aware of the recent sell-off in tech but in Altium’s favour is positive earnings, no capitalising of R&D, a strong growth outlook and an expected satisfying of the Rule of 50 over the short to medium term.”

All in all, this could make the Altium share price good value at the current level according to Bell Potter.

The post Why this broker just upgraded Altium (ASX:ALU) shares to a buy rating 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 Altium. 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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