The Magellan Financial Group Ltd (ASX: MFG) share price has had a difficult 2021. In the year to date, Magellan shares have dropped 45%.

But that’s the past. What does the next year look like for Magellan in 2022?

Performance heading into 2022

The investment performance of some of Magellan’s biggest funds has disappointed. For example, over the last three years the Magellan Global Fund (Open Class) (ASX: MGOC) has returned an average of 13.1% per annum over the last three years, underperforming the global benchmark by an average of almost 5% per annum.

Despite that, Magellan’s funds under management (FUM) continues to rise. In November 2021, the total FUM increased by $1.6 billion to $116.4 billion. However, within that, was a mixed performance of FUM. The higher margin retail FUM dropped around $80 million to $30.23 billion, whilst the lower margin institutional FUM rose around $1.7 billion to $86.2 billion.

However, leadership changes may also be impacting investor thoughts about the business and the Magellan share price.

The company’s CEO Dr Brett Cairns resigned for personal reasons. He has been replaced by the chief financial officer (CFO) by Ms Kirsten Morton to be the interim CEO. Investors also learned that Magellan’s chair and chief investment officer (CIO) Hamish Douglass had separated from his wife, though they don’t intend to sell any shares.

Growth avenues

Magellan points to other parts of its business, away from the main global shares strategy, that can produce FUM growth with “significant opportunities” and the combined FUM is around $30 billion.

Those five areas are: global listed infrastructure, Airlie Funds Management, sustainable and ESG strategies, the MFG Core series of exchange-traded funds (ETFs) and FuturePay.

Magellan said that infrastructure has a significant runway, the Australian funds have a substantial opportunity to build a retail franchise, the ESG strategy has total capacity of around $20 billion (with only $500 million of FUM at its AGM), there is growing demand for cheaper ETF products and the FuturePay product is tapping in the huge retirement capital and the desire for reliable income.

Magellan Capital Partners is another area with the potential to create long-term growth which currently includes the sizeable investments in the businesses Barrenjoey and Guzman y Gomez.

Price targets on the Magellan share price

Different analysts have different thoughts on the company.

UBS has a sell rating on the fund manager, with a price target of $29.50. The broker is concerned about lower revenue due to potential outflows of FUM and/or cutting the fees for clients.

However, the brokers at Macquarie Group Ltd (ASX: MQG) think it’s a buy with a price target of $38. However, the fund manager looks historically cheap to Macquarie and the dividend yield – an almost 8% partially franked yield in FY22 on the broker’s numbers – is supportive for the business valuation.

The post What is the outlook for the Magellan (ASX:MFG) share price in 2022? appeared first on The Motley Fool Australia.

More reading

• Move over Magellan (ASX:MFG). This global equities manager is gunning for pole position
• The Magellan (ASX:MFG) share price has had a shocker this year. Could this help reverse the slide in 2022?
• Top brokers name 3 ASX shares to sell next week
• These were the worst performing ASX 200 shares last week
• Why Alcidion, Magellan, Redbubble, and Seven West shares are dropping

Motley Fool contributor Tristan Harrison owns Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you’re looking for a big boost to your passive income in 2022, then the high yield ASX 200 dividend shares listed below could be worth considering.

Here’s what you need to know about them:

BHP Group Ltd (ASX: BHP)

This mining giant could be an ASX 200 dividend share to buy in 2022.

The Big Australian’s shares are currently trading well below their recent highs. This has been driven by investors selling down the mining giant’s shares due to weakness in iron ore prices.

The good news is that BHP isn’t a one trick pony and other commodities that it mines have been rising in price in recent months. This is helping BHP continue to generate significant free cash flows again, which is expected to underpin big dividends in the near term.

For example, the team at Macquarie expect fully franked dividends per share of ~$3.85 in FY 2022 and ~$2.85 in FY 2023. Based on the current BHP share price of $40.66, this will mean yields of 9.5% and 7%, respectively.

Macquarie has an outperform rating and $52.00 price target on BHP’s shares.

Westpac Banking Corp (ASX: WBC)

Another ASX 200 dividend share to look at is Westpac. This banking giant’s shares have also come under pressure recently and are now trading notably lower than their 2021 highs. This has been driven by concerns over the bank’s margin outlook and cost cutting plans.

The team at Morgans believe this is a buying opportunity, particularly given its attractive valuation and generous dividend yield.

Morgans recently explained: “WBC shares have been sold off heavily following the FY21 result announcement, such that out of the major banks, WBC is now trading on the lowest FY22F P/NTA multiple, the lowest FY22F P/E multiple and the highest FY22F dividend yield. Such multiples or yields could only be justified if WBC is a value trap, which we think it is not.”

The broker has pencilled in fully franked dividends per share of $1.23 in FY 2022 and then $1.62 in FY 2023. Based on the current Westpac share price of $20.96, this will mean yields of 5.9% and 7.7%, respectively.

Morgans has an add rating and $29.50 price target on the bank’s shares.

The post 2 high yield ASX 200 dividend shares to buy appeared first on The Motley Fool Australia.

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• Woodside (ASX:WPL) share price dips amid corporate watchdog’s mega-merger verdict
• ASX 200 (ASX:XJO) midday update: CSL sinks, Qantas’ $1.1bn+ first half loss
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• 2 blue chip ASX 200 shares named as buys in December

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

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When investors think about the Fortescue Metals Group Limited (ASX: FMG) share price, they may be increasingly be focused on the green hydrogen push.

For readers that are unaware, Fortescue is one of the largest iron ore miners. But it’s now pushing into numerous green industry sectors.

Indeed, the company recently officially announced that it was transitioning from a pure resources company to a vertically integrated green energy and resources group.

It has an overarching green, fully renewable hydrogen initiative. Fortescue boasts that it now has the largest portfolio of green hydrogen, green ammonia, green iron ore, green iron and other green product developments in the world.

Some investors are loving the green shift

The Fortescue share price has gone up by more than 20% over the last month. Looking at the other two big miners, the Rio Tinto Limited (ASX: RIO) and BHP Group Ltd (ASX: BHP) share prices are up 10.2% and 13.1% respectively over that same time period. Fortescue is outperforming.

Speaking to the media, Fortescue CEO Elizabeth Gaines recently said according to The Australian:

If you track our share price over the last three, four years or longer, it will just match the benchmark. But more recently, in the last two to three months, we’ve seen that decoupling. We’ve actually outperformed the fall in the iron ore price and we outperform the peers.

Fortescue founder Dr Andrew Forrest says that Fortescue has approximately 170,000 shareholders. This number has doubled compared to a year ago. The increasingly green industrial business is seeing more environmental and ESG funds investing in Fortescue. The company’s leadership says that there are strong tailwinds of support across the investment community and the company is grateful for that.

Other investors are not a fan of Fortescue’s decarbonisation plans

However, whilst there may be a growing number of investors that are backing Fortescue, The Australian noted that there are some analysts and institutional investors that are feeling blue about the shift from Fortescue.

The newspaper reported that Morgans analyst Adrian Prendergast said to clients:

Questions are emerging over how much focus [Fortescue] is placing on renewables versus its core iron ore business.

The next five years in iron ore are likely to be more difficult than the last five years, warranting more focus or even possibly diversification into other mature markets. We…have lost conviction in the overarching strategy and capital framework.

Dr Forrest is not perturbed by some of the doubts by some quarters.

He pointed out to The Australian that Fortescue Future Industries has already made good progress with creating a green hydrogen fuel fell for a heavy truck and an ammonia-fuelled ship engine. Green trucks and trains will be operating at sites next year.

When talking about the huge sums of money needed to fund all of these deals, Dr Forrest said that he doesn’t need to own all of these green energy assets, just create them with FFI.

Fortescue Future Industries will create the renewable energy projects, then sell them at a profit to infrastructure investors and fund managers after cutting a deal to buy enough energy from the projects to produce green hydrogen. Reportedly, customers are “already lining up” for the offtake agreements.

Fortescue share price snapshot

Despite the resurgence of Fortescue shares in recent times, it’s still down 24% in 2021 with the iron ore price down roughly half from the peak earlier in the year.

The post What do investors really think of Fortescue’s (ASX:FMG) green hydrogen push? appeared first on The Motley Fool Australia.

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• This broker is bearish on the Fortescue (ASX:FMG) share price

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 Flight Centre Travel Group Ltd (ASX: FLT) share price has dropped 16% in a month.

How much of that decline is down to the new variant of Omicron is for each investor to guess. But, it adds a bit more uncertainty ahead for the ASX travel share sector which was talking about being in the middle of a demand and profitability recovery.

What has Flight Centre said about Omicron?

There have not been any official ASX announcements from Flight Centre over the last couple of months since the annual general meeting (AGM).

However, a few weeks ago the Australian Federation of Travel Agents chief executive Dean Long was quoted in the Australian Financial Review, who said a couple of weeks ago:

This is the worst-case scenario that we’re experiencing since they’ve reopened the border. The number one barrier to people booking travel was the fear of not returning home. Then on Saturday, our clients’ worst fear came to fruition.

Mr Long also said, at the time, that inquiries for overseas trips had fallen off a cliff.

The AFR had a small quote from Flight Centre CEO Graham Turner who said:

Countries can’t keep locking down, shutting borders every time there’s a new variant. This does look like an overreaction, but it’s very early days yet.

What are other investor thoughts on ASX travel shares and the Omicron variant?

Drummond Capital Partners chief investment officer Nick Reddaway suggested that the new variant isn’t the vaccine-breaking problem that the market had feared.

Though, there are other things to consider such as renewed COVID-19 restrictions in Europe, an increasingly aggressive Fed and ongoing Chinese property market doldrums.

Indeed, Mr Reddaway was quoted by the AFR as saying that Omicron may actually be a positive:

There is also an upside scenario where omicron becomes the globally dominant variant, doesn’t evade immune response and is less severe than delta, which would be a boon for global equity markets.

Is the Flight Centre share price an opportunity?

Credit Suisse seems to think so, rating the business as a buy with a price target of $23.30. The broker is still expecting a difficult year for the company in FY23, but is expecting profitability to return strongly in FY23. On Credit Suisse’s numbers, the Flight Centre share price is valued at 13x FY23’s estimated earnings.

However, other brokers are much less optimistic on the business. Ord Minnett rates the business as a sell, with a price target of just $13.72. This broker thinks that the longer-term isn’t as good for Flight Centre’s operating model, which could come with lower commissions and so on, which could harm profit margins.

On Ord Minnett’s estimates, the Flight Centre share price is valued at 35x FY23’s estimated earnings.

The post How is Omicron affecting the Flight Centre (ASX:FLT) share price and outlook? appeared first on The Motley Fool Australia.

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• Zip (ASX:Z1P) shares just topped these end-of-year rankings
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• Is the Flight Centre (ASX:FLT) share price good value after falling 16% in a month?
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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 Flight Centre Travel 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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On Thursday, the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped into the red. The benchmark index fell 0.4% to 7,295.7 points.

Will the market be able to bounce back from this on Friday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to end the week in a positive fashion. According to the latest SPI futures, the ASX 200 is expected to open the day 23 points or 0.3% higher this morning. This follows a mixed night of trade on Wall Street, which late on sees the Dow Jones up 0.1%, but the S&P 500 down 0.7% and the Nasdaq down 2.4%. The latter does not bode well for ASX 200 tech shares on Friday.

Corporate Travel Management shares to return

The Corporate Travel Management Ltd (ASX: CTD) share price is due to return from its trading halt this morning. The corporate travel specialist’s shares were halted so it could raise $100 million via a $75 million institutional placement and a $25 million share purchase plan. The proceeds will be used to acquire the Australia and New Zealand corporate and entertainment travel businesses of Helloworld Travel Limited (ASX: HLO).

Oil prices storm higher

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could end the week on a positive note after oil prices pushed higher. According to Bloomberg, the WTI crude oil price is up 2.3% to US$72.51 a barrel and the Brent crude oil price is up 1.8% to US$75.20 a barrel. Oil prices were boosted by record U.S. implied demand and falling crude stockpiles.

Annual general meetings

A number of ASX 200 shares are holding their annual general meetings this morning and could provide updates. This includes banking giant National Australia Bank Ltd (ASX: NAB) and agricultural chemicals companies Incitec Pivot Ltd (ASX: IPL) and Nufarm Ltd (ASX: NUF).

Gold price jumps

Gold miners Newcrest Mining Ltd (ASX: NCM) and St Barbara Ltd (ASX: SBM) could have a strong finish to the week after the gold price jumped. According to CNBC, the spot gold price is up 1.8% to US$1,796.9 an ounce. The gold price stormed higher after the US dollar weakened.

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

More reading

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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 Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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If you don’t have the funds to build a truly diverse portfolio, then exchange traded funds (ETFs) could be a quick fix.

This is because ETFs give investors access to a large number of different shares through just a single investment.

With that in mind, listed below are three ETFs that could be good options in 2022. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The BetaShares Asia Technology Tigers ETF tracks the performance of many of the largest technology companies that have their main area of business in Asia (excluding the Japan market). Among the ETF’s holdings are Alibaba, JD.com, Pinduoduo, Samsung, Taiwan Semiconductor, and Tencent. Given how these companies are among the fastest growing in the region and revolutionising the lives of billions of people, they have been tipped to generate strong returns in the future.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF to look at is the BetaShares Global Cybersecurity ETF. It provides investors with exposure to the leaders in the global cybersecurity sector. This includes companies such as Accenture, Cisco, and Cloudflare, Crowdstrike, and Okta. BetaShares notes that the cybersecurity sector is heavily under-represented on the ASX. As a result, this ETF ensures that Australian investors don’t miss out on the growing demand for these services.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Finally, if you’re interested in gaining exposure to the US tech sector, then the BetaShares NASDAQ 100 ETF could be a great way to do it. This ETF provides investors with access to the 100 largest non-financial shares on the NASDAQ index. This means you’ll be owning a slice of giants such as Amazon, Apple, Facebook/Meta, Microsoft, Netflix, and Tesla.

The post 3 ETFs for ASX investors in 2022 appeared first on The Motley Fool Australia.

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• Why is the BetaShares Asia Technology Tigers ETF (ASX:ASIA) struggling this month?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia owns and has recommended BETA CYBER ETF UNITS and BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. 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 Aspen Group Limited (ASX: APZ) share price climbed today following the release of its portfolio valuations for the first half of FY22.

The property group also announced the date it would pay dividend distributions to shareholders.

At the close of trade, the Aspen share price was up 5.76% trading at $1.75.

What’s the latest on Aspen’s property portfolio?

Aspen owns and operates 18 residential, retirement and short-stay properties across Australia, valued at more than $200 million.

This morning, the company released a revaluation of 6 properties — 5 located in New South Wales and one in the Northern Territory — representing “about a quarter” of its property portfolio. The company said the value of these properties had jumped around $17 million higher since 30 June this year.

In today’s release, Aspen attributed the 45% valuation increase to “an increase in adopted net income of 25% and reduction in average capitalisation rate (weighted by net income) of about 95bps”.

Aspen said this equated to an increase in net asset value (NAV) per security of around 9%.

Dividends distribution

Also today, the company announced that it would advise shareholders about its performance, outlook and updated distribution policy when it released its half-year results next year.

Shareholders can expect a total dividend distribution payment of 3.10 cents to be paid on 25 February next year.

The company has also reiterated that its distribution reinvestment plan has remained suspended.

Aspen share price snapshot

The Aspen share price has rocketed more than 45% higher in the past 12 months and is up 44% since the start of 2021.

Based on its current share price, the company has a market capitalisation of more than $233 million.

The post Here’s why the Aspen (ASX:APZ) share price shot up 6% today appeared first on The Motley Fool Australia.

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• Here’s why EML (ASX:EML) shareholders are suing their own company
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• Why ASX 200 shares could add ~$70bn during the Santa Rally

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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It was a relatively good day to be a shareholder of EML Payments Ltd (ASX: EML) shares this Thursday. Despite the losses of the broader S&P/ASX 200 Index (ASX: XJO), the EML share price ended up closing 1.55% higher at $3.27 a share.

That move comes despite news today that some EML shareholders have banded together to file a class action against EML. It will be heard in the Supreme Court of Victoria.

Shine Lawyers allege that an Irish subsidiary of EML, PFS Card Services Ireland Limited (PFS), “made misleading representations regarding their corporate governance and regulatory compliance”. According to the law firm, “thousands of Australian investors who put money into EML Payments” have joined the class action.

EML faces class action from its own shareholders

This relates to the well-publicised issues EML had with the Central Bank of Ireland earlier this year. Back in May, it became public that the Irish Central Bank had raised concerns over EML’s PFS business. The Central Bank alleged that the company was failing to adequately comply with anti-money laundering and counter-terrorism financing regulations. As we covered at the time, this had big implications for the entirety of EML’s European business dealings.

The reaction from shareholders was brutal. Within a day, the EML share price had lost more than 46% of its value. Even today, after EML has received something of an all-clear from the Central Bank, EML shares remain down around 37% from where they were before the concerns were aired publically.

Shine Lawyers point to the fact that “the revelation caused EML Payments Limited’s share price to plunge 46 per cent in a day, yet it took the Brisbane-based company four days to request a trading halt” as the reason for the class action.

Here’s some of what Joshua Aylward of Shine Lawyers class Action Practise, had to say:

The Central Bank of Ireland raised the alarm over potential non-compliance with anti-money-laundering and counter-terrorism financing regulations with PFS on May 13… This suggested the company’s European operations could be in jeopardy, but EML failed to disclose this to the Australian share market in a timely manner…

It is alleged that EML’s conduct showed disregard for its regulatory obligations and to the thousands of Aussies who invested their money into its businesses.

The class action is open to any investor that purchased EML shares between 19 December 2020 and 18 May 2021.

The post Here’s why EML (ASX:EML) shareholders are suing their own company appeared first on The Motley Fool Australia.

More reading

• Could the best be yet to come for the EML Payments (ASX:EML) share price?
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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. owns and has recommended EML Payments. The Motley Fool Australia owns and has recommended EML Payments. 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 Bank of Queensland Limited (ASX: BOQ) share price is testing its shareholders’ patience this year. Despite putting the pedal to the metal for the first three-quarters of the year — rising nearly 30% — shares in the 158-year-old bank are now only up 5.7% year-to-date.

For context, the S&P/ASX 200 Index (ASX: XJO) has handed out a gain of 9.1% (before dividends). An even more comparable comparison is the ASX financials sector. The overall sector has pulled a gain of more than 18% since the start of 2021, mostly thanks to the majority of the big four conjuring up 15% or more increases.

Nonetheless, as we get closer to crossing the threshold from one year to the next, it’s time to slide the Bank of Queensland share price under the microscope and get a sense of where it could be heading in 2022.

New year, same old bank

Many of us like to create New Year’s resolutions, though few follow through on the idealised ambitions. In 2022, shareholders will be watching that the bank follows through on its pre-commitments.

This follows a barrage of shareholder complaints regarding the Bank of Queensland’s lack of current technology at the annual general meeting (AGM) on Tuesday.

To which the bank admitted it had underinvested in during the past. However, chair Patrick Allaway gave shareholders the commitment that a digital transformation would be underway as part of a new strategy launched last year.

As part of the grilling for the bank’s outdated tech, Australian Shareholders’ Association’s Kelly Buchanan said:

For years and years, BoQ has been promising to get on top of its antiquated technology system. How can your long-suffering shareholders be confident, that with the acquisition of ME Bank, this time it’s different?

While current technology seems to be a problem for numerous major Australian banks, the Bank of Queensland has the added complexity of recently tieing up a substantial amount of money in the acquisition of ME Bank. That investment came to a total of $1.325 billion.

What are analysts expecting for the Bank of Queensland share price?

It appears brokers are optimistic about a good year for the Bank of Queensland share price. In fact, two brokers currently have price targets that are above the financial institution’s current valuation.

Firstly, the team at Citi has a buy rating on the bank, alongside a $10 price target. This would suggest a potential upside of 25% to the current Bank of Queensland share price.

Secondly, analysts at Goldman Sachs are expecting good things from the Aussie bank in 2022. The broker also has a buy rating and a $9.67 price target.

Finally, based on its latest earnings the Bank of Queensland share price is trading on a price-to-earnings (P/E) ratio of ~12.8 times. While this is above the industry average, investors could be paying a premium for the bank’s impressive growth between FY20 and FY21.

The post What’s on the cards for the Bank of Queensland (ASX:BOQ) share price in 2022? appeared first on The Motley Fool Australia.

More reading

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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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The team at Bell Potter has been busy this week looking at its top ASX share picks for 2022.

On this occasion, I’m going to look at what the broker is saying about the fast-moving consumer goods (FMCG) sector. Here are its top picks in the sector for next year:

What did the broker say?

Bell Potter’s analyst, Jonathan Snape, notes that investing in the sector can be high risk and volatile.

He commented: “Investments in the Agricultural & FMCG sector should be considered high risk and come with volatility. For this reason we tend to focus on stocks where we see either: a structural uplift in ROIC through the cycle, cyclical growth stories, or counter-seasonal crop exposures.”

With that in mind, here are the picks:

A2 Milk Company Ltd (ASX: A2M)

Bell Potter is sticking with this embattled infant formula company. The broker currently has a buy rating and $7.70 price target on its shares. This is due to its belief that A2 Milk’s earnings can grow materially in the coming years.

It explained: “We see the scope for EPS to double by FY26e, if A2M can execute on the China offline expansion strategy, while recovering 50% of the lost sales (from FY20-21) in English label IMF. The catalyst to regaining lost English label sales is likely to be boarder reopening and the return of international students. Exiting the loss making US assets or navigating a turnaround at the MVM asset would likely accelerate this turnaround. We do not see the current share price as reflecting this potential.”

Bega Cheese Ltd (ASX: BGA)

This dairy company is another consumer goods share that Bell Potter is a fan of. Particularly given its recent acquisition of the Lion Dairy & Drinks business. Bell Potter has a buy rating and $6.45 price target on its shares.

The broker commented: “The acquisition of Lion Dairy & Drinks (LDD) and targeted synergy base is expected to drive a material step change in returns for BGA over the next three years. In addition, we see BGA benefiting from recent upward moves in both commodity price drivers (SMP returns up +32% since Jun’21) and price increases on private label milk for only the second time in 20 years.”

Synlait Milk Ltd (ASX: SM1)

A final consumer goods share that Bell Potter has on its list for 2022 is dairy processor Synlait Milk. It has a buy rating and $4.40 price target on the company’s shares. The broker believes the company is well-placed for a recovery in earnings after a difficult period.

Bell Potter explained: “SM1’s FY21 performance is reflective of a business that completed the commissioning of major capital works, while experiencing an unfavourable shift in sales mix and the added complexity of unwinding IMF inventory positions accumulated over 2H20-1H21. Looking into FY22-24e, a stabilisation in A2M demand, commencement of a material new nutritionals contract at Pokeno and execution against the consumer based strategy in liquids and cheese are expected to drive a material recovery in operating earnings and the share price.”

The post Broker names 3 ASX consumer good shares to buy in 2022 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 A2 Milk. 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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