Is it possible that the EML Payments Ltd (ASX: EML) share price could rise to $4.80 by the end of 2021?

If that were to happen, EML Payments shares would rise by around 50%.

Brokers have price targets on ASX shares. That’s where analysts believe that a share price will be in 12 months from now. So, not necessarily where the price will be at the end of the year.

A broker with a $4.80 price target for the EML Payments share price

UBS is very optimistic on where EML Payments is headed. It has a price target on the payments business of $4.80.

That’s despite the latest update relating to PFS and the Central Bank of Ireland (CBI). UBS thinks that a risk could be related to growth regarding new customers.

The broker believes that the drop has been overdone by the market.

Based on UBS’ earnings estimates, the EML Payments share price is valued at 24x FY23’s expected profit.

What did the CBI say?

A few weeks ago, EML said that it had received correspondence from the CBI about PFS Card Services about regulatory concerns and potential directions, including but not limited to the remediation plan and material growth.

EML said the directions could materially impact the European operations of the Prepaid Financial Services business.

CBI advised that PFS Card Services’ proposed material growth policy, which has been requested and approved by the PFS Card Services board, is “higher than what the CBI would want to see”.

CBI has also proposed that certain limits be applied to programs that, if implemented, could have a negative impact on the PFS Card Services business. EML said it was going to present to the CBI a “significant and detailed” analysis of limits applied across almost 27,000 programs along with a proposed recalibration of limits of certain programs.

CBI has invited PFS Card Services to provide it with submissions by 28 October 2021. The CBI and PFS Card Services are in ongoing dialogue about the concerns raised about CBI and PFS’ remediation plan. This remediation plan remains on track.

However, EML did say that this does not concern EML’s Australian or North American operations, or the operations of PFS’ UK subsidiary, or its other businesses.

Other opinions on the EML share price

UBS isn’t the only broker that rates EML Payments as a buy.

The brokers Ord Minnett and Macquarie Group Ltd (ASX: MQG) both rate EML as a buy, with price targets of $4.02 and $4.55 per share.

Whilst both brokers note the negative of the latest CBI correspondence, they think the issues can be resolved and things look promising for EML beyond that.

Macquarie’s profit projection is particularly optimistic for FY23. Based on Macquarie’s numbers, the EML share price is valued at 19x FY23’s estimated earnings.

The post Can the EML (ASX:EML) share price hit $4.80 by the end of 2021? appeared first on The Motley Fool Australia.

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• Why Clinuvel, EML, Regal, & Whitehaven Coal shares are sinking
• These 3 ASX 200 shares are the most popular by trading volume today

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. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of 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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Stagflation is not a phenomenon anyone wants to see.

The term is a portmanteau of ‘stagnation’ and ‘inflation’, which indicates a time when inflation is running rampant even though economic growth is slow and unemployment is high.

Unfortunately, the macroeconomic equivalent of quicksand is starting to be mentioned in investing circles once again.

According to Ophir Asset Management co-founders Steven Ng and Andrew Mitchell, 2 forces are currently threatening to ignite stagflation.

“Inflation pressures have remained stubbornly high because some sectors are struggling to find workers, some supply chains remain backed up, and energy costs are sharply rising,” they said in a memo to clients.

“The momentum of economic growth has slowed globally after the initial rebound from COVID-19-induced lockdowns.”

Freight delays and costs are going through the roof

To demonstrate the labour shortages, Ng and Mitchell took freight as an example.

They showed how cargo costs on the world’s most important routes, such as Shanghai to New York City and Shanghai to Los Angeles, have multiplied 5 to 6 times since the pandemic hit.

“Some of the companies we analyse and hold globally have been recently talking about difficulties getting delivery of goods out of port in Los Angeles and Long Beach to their customers. These ports handle around 40% of cargo entering the US.”

As economies reopen as vaccination rates plateau, consumers are rapidly spending their lockdown savings.

“A surge in demand has seen retailers restocking from low inventory levels to try and get ahead of any supply issues before holiday season.”

This combination of high demand and congested ports might result in “a messy September quarter reporting season for some US companies”.

“The issues have not been so much the physical capacity at port but finding the workers to unload and truck drivers for transport as well as the restricted operating hours,” the Ophir co-founders said.

“Incredibly, President Biden himself has gotten involved to help solve this problem with expanded operating times just announced.”

Global growth is slowing, but will it be stagnant?

Economic growth is definitely slowing, but Ng and Mitchell are unsure it could trigger stagflation.

“We see global growth slowing but it is a far sight from stagnant,” their letter read. 

“The IMF just released its global growth forecasts for 2021 and 2022 at 5.9% and 4.9% respectively, well above long-term trend levels, with US growth rates even higher at 6.0% and 5.2%.”

Higher inflation could last well into next year, but the Ophir founders don’t think it’s long-lasting.

“Lumber prices have rolled over and based on the latest available data there’s perhaps some early evidence that used car and freight prices may be peaking.”

So ultimately, the talk of stagflation will die down over the next few months, according to Ng and Mitchell.

But the current concerns will put enough of a brake on stock market exuberance to provide for a “more normalised growth environment” as we start the post-COVID era next year.

The Ophir team said this would be “positive” for its investment process.

“When growth is scarcer, or at least not outright bullish, investors are willing to pay up for growth,” said Mitchell and Ng.

“And that is our job: to be first to identify the companies whose better days and years are still ahead of them, but are as yet undiscovered by the market.”

The post Stagflation is scary. Should investors be worried it’s coming? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 latest data this week on the ASX’s most shorted shares shows that once again, Flight Centre Travel Group Ltd (ASX: FLT) is topping the list. The most recent data, released last Thursday, found 9.77% of Flight Centres shares are in short positions.

While the travel agency’s top spot might have made sense at the height of the pandemic – when uncertainty surrounding the travel sector reigned free – it’s less explainable now.

Nevertheless, short sellers have continued to back their favourite.

At Wednesday’s close, the Flight Centre share price is $21.65, 4.7% lower than it was at the end of Tuesday’s trade. The drop was seemingly driven by a trading update within the company’s annual general meeting presentation.

Let’s take a look at what may be causing Flight Centre to keep its crown as the market’s most shorted stock.

Why are short sellers interested in Flight Centre?

That’s the golden question, and one that’s hard to answer.

As my Foolish colleague recently reported, it could be due to the travel agency’s recovery from COVID-19, or lack thereof.

Flight Centre’s market capitalisation is currently near where it was before COVID-19 practically shut down global travel. However, the Flight Centre share price is still 36% lower.

That’s due to the company adding a huge number of new securities over the course of the pandemic.

Additionally, the company’s earnings are still far below their pre-pandemic levels.

Over financial year 2019, Flight Centre brought in around $3 billion of revenue. It also reported a statutory net profit of approximately $264 million.

For comparison, over financial year 2021 the company’s revenue was around $396 million and it posted a $433 million statutory loss after tax.

As The Motley Fool Australia has previously reported, this likely leads some to believe that the company’s stock is overvalued.

Seemingly highlighting this, was Flight Centre’s latest trading update, released yesterday.

For the month of September, Flight Centre’s leisure travel sales were just 14% of what they were before the pandemic. The company’s corporate travel leg performed significantly better. It reached 41% of pre-COVID sales.

For the business to be cash flow positive, those figures need to reach 40% and 50% respectively.

Though, Flight Centre’s short sellers are at an ideological stalemate with the company’s retail investors. The latter assumably believe the Flight Centre share price hasn’t had its hay day yet.

What’s next for Flight Centre?

As a result, many eyes will be on Flight Centre’s short position when international travel returns to normal.

Sky News recently quoted the company’s CEO, Graham Turner as saying travellers are still wary of promises of normality:

[T]here’s a lot of deposits, a lot of bookings, but generally, people, I think, still need a little bit more certainty in certain areas.

Previously, Prime Minister Scott Morrison flagged that the nation’s international borders should be open by Christmas.

Meanwhile, New South Wales will start allowing international travel in November, with no quarantine requirements for returning vaccinated travellers.

The post Travel is opening up. So, why is the Flight Centre (ASX:FLT) share price still the most shorted on the ASX? 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. 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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The BHP Group Ltd (ASX: BHP) share price has been out of form in recent months following weakness in the iron ore price.

This means the mining giant’s shares are now down 10% since the start of the year. This compares to a year to date gain of 23% in August.

Is the BHP share price in the buy zone?

One leading broker that sees a lot of value in its shares at the current level is Morgans.

According to a note this week, the broker has upgraded the Big Australian’s shares to an add rating with an improved price target of $46.05.

Based on the current BHP share price of $38.57, this implies potential upside of just over 19% for investors.

In addition, the broker is forecasting a ~$3.96 per share fully franked dividend in FY 2022. If we include this in the equation, the total potential return stretches to almost 30%.

What did the broker say?

While the broker still has concerns about the iron ore market, it appears to believe the sell down of the company’s shares has been overdone.

Morgans commented: “Our cautious view on iron ore remains, but the relative value on offer in BHP has grown as: 1) BHP’s share price has fallen (now implying a US$61/t iron ore price), 2) the value of the petroleum demerger has grown with WPL’s share price outperformance (the guided 52/48 WPL/BHP merger split suggests the value attributed to BHP has grown US$3.8bn), and 3) BHP’s robust dividend profile of +10% at the current share price.”

“With these factors in mind, and BHP now trading at a sizable discount to our target price, we upgrade our rating to Add (from Hold),” it concluded.

All in all, this could make the mining giant one to consider if you’re looking to invest in the resources sector.

The post Top broker upgrades BHP (ASX:BHP) share price 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. 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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If you’re wanting to add some ASX dividend shares to your portfolio, then the two listed below could be ones to consider.

Here’s what you need to know about these dividend shares:

Accent Group Ltd (ASX: AX1)

The first ASX dividend share to look at is this footwear focused retailer.

Thanks to the popularity of brands such as The Athlete’s Foot, HYPE DC, and Platypus, Accent has been growing at a strong rate in recent years. And while it will be hard to top this in FY 2022 because of lockdowns, its long term outlook remains very positive.

Bell Potter is a fan of the company. It has a buy rating and $2.90 price target on its shares. The broker is also forecasting dividends per share of 9.3 cents in FY 2022 and 13.3 cents in FY 2023.

Based on the latest Accent share price of $2.47, this represents yields of 3.8% and 5.4%, respectively.

Telstra Corporation Ltd (ASX: TLS)

Another dividend share to look at is this telco giant. It could be a top option due to to its improving outlook which is being underpinned by the success of its T22 strategy. Telstra has also just announced its T25 strategy which has a focus on growth.

That strategy will see Telstra aim for sustained growth and value by targeting mid-single digit underlying EBITDA and high-teens underlying earnings per share compound annual growth rates (CAGR) from FY 2021 to FY 2025.

Analysts at Goldman Sachs are positive on the company. They have a buy rating and $4.40 price target on its shares. And pleasingly, after years of cuts, Goldman believes it won’t be long until the Telstra dividend starts to grow again.

The broker is forecasting 16 cents per share dividends for FY 2022 and FY 2023, before an increase to 18 cents per share in FY 2024 and then 19 cents per share dividend in FY 2025. It also believes there’s upside potential in FY 2024.

Based on the current Telstra share price of $3.75, this will mean yields of 4.25% for the next couple of financial years.

The post 2 top ASX shares with generous fully franked dividend yields appeared first on The Motley Fool Australia.

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

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was on form and recorded a solid gain. The benchmark index rose 0.5% to 7,413.7 points.

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

ASX 200 expected to rise

The Australian share market looks set to rise again on Thursday. 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 decent night on Wall Street, which in late trade sees the Dow Jones up 0.4%, the S&P 500 up 0.35%, but the Nasdaq down 0.05%. The Dow Jones hit a record high during the session.

Oil prices rise

Energy shares including Oil Search Ltd (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could rise today after oil prices pushed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.6% to US$84.25 a barrel and the Brent crude oil price has risen 0.7% to US$85.71 a barrel. Oil prices rose after US crude stockpiles dwindled.

ANZ notable items

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be one to watch after it revealed a couple of large and notable items impacting its second half profits. According to the release, the banking giant expects its second half statutory and cash profit for FY 2021 to be impacted by two charges totalling $129 million after tax. It notes that this is the equivalent of 3 basis points of CET1 capital at level two. The majority of this related to remediation charges of $113 million after tax.

Gold price higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) could have a good day after the gold price pushed higher. According to CNBC, the spot gold price is up 0.9% to US$1,785.5 an ounce.

Wesfarmers AGM

Wesfarmers Ltd (ASX: WES) is holding its annual general meeting later today and is likely to provide a trading update at the event. Also scheduled to hold annual general meetings are casino and resorts operator Crown Resorts Ltd (ASX: CWN) and energy company APA Group (ASX: APA).

The post 5 things to watch on the ASX 200 on Thursday 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 owns shares of and has recommended APA Group and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be one to watch on Thursday.

This follows the release of an announcement by the banking giant after the market close.

Why is the ANZ share price on watch?

All eyes will be on the ANZ share price after it revealed a couple of large notable items that will impact its second half profits.

According to the release, the banking giant expects its second half statutory and cash profit for FY 2021 to be impacted by two charges totalling $129 million after tax. It notes that this is the equivalent of 3 basis points of CET1 capital at level two.

What are the charges?

The majority of the notable items relate to remediation charges. ANZ expects remediation charges of $113 million after tax in the second half. This reflects banking product reviews in the Australia Retail and Commercial division.

The remaining $16 million after tax is for unspecified restructuring charges.

While this may disappoint some shareholders, others may be relieved that it isn’t anywhere near as bad as what rival Westpac Banking Corp (ASX: WBC) recently announced.

Last week, Australia’s oldest bank revealed that its second half results would be hit by $1.3 billion of notable items.

This comprises $965 million for asset write downs, $172 million in additional provisions relating to customers refunds, $267 million for separation and transaction costs for the Westpac Life Insurance business, and $24 million for costs relating to other divestments.

The ANZ share price is up 23% since the start of the year. Shareholders will no doubt be hoping this announcement doesn’t stifle its impressive run.

The post ANZ (ASX:ANZ) share price on watch after revealing $129 million profit hit appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro owns shares of 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 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 Ramsay Health Care Ltd (ASX: RHC) share price surged throughout Wednesday. This comes as the private hospital operator provider made an important announcement to investors on the ASX.

At Wednesday’s closing bell, Ramsay shares finished the day 0.81% higher to $67.29.

What did Ramsay announce?

In its statement, Ramsay advised that the NSW Ministry of Health that is lifting restrictions on non-urgent elective surgery. The change is for all private and public facilities within Greater Sydney and will come into effect on 25 October.

Overnight elective surgery will be capped at 75% across the board. However, private facilities within this region can exceed the cap if they are providing surgery for public patients.

In addition, the Victorian Department of Health and Human Services also made some amendments to their policy for surgical operations. Last week, only category 1 and category 2 elective surgeries have been allowed to take place across private and public hospitals.

Day surgeries can be performed in metropolitan Melbourne. There are no current restrictions on public health services or public hospitals and emergency surgery.

While a weight has been lifted off Ramsay’s shoulders, it noted there will be a material impact on its earnings for FY22. This is a result of surgical restrictions in Australia along with operating in a challenging COVID-19 environment.

About the Ramsay share price

It’s been a bumpy road for Ramsay shares, navigating their way through persistent lockdowns and government-mandated restrictions. Certainly, the ASX Health Care Index (ASX: XHJ) has moved sideways since this time last year, up 1%.

When compared against the Ramsay share price, over the past 12 months, its shares have moved just 3.7% higher. However, when looking at year-to-date, its shares are up more than 8%.

Based on today’s price, Ramsay commands a market capitalisation of roughly $15.4 billion and has 228.88 million shares on hand.

The post Ramsay (ASX:RHC) share price finishes higher as COVID surgery restrictions ease appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care 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 Endeavour Group Ltd (ASX: EDV) share price enjoyed a rather pleasant day on the ASX boards this Wednesday. Endeavour shares closed up a healthy 1.19% to $6.79. That’s quite a bit better than the broader S&P/ASX 200 Index (ASX: XJO), which finished with a 0.53% bump today.

So what’s going on with Endeavour – the owner of the popular bottle shop chains BWS and Dan Murphy’s – that might have prompted this spurt of outperformance?

Well, today saw Endeavour release a trading update covering the first quarter of the 2022 financial year (Q1 FY2022), covering 1 July to 30 September. This might have influenced investor sentiment on Endeavour shares today.

Endeavour sales shaken by lockdowns

So Endeavour reported some interesting metrics this morning. On the top line, the company announced that its total sales for the period came in at $2.936 billion, a 1.2% drop from the same quarter last year which brought in $2.971 billion in revenue. This comprised $2.654 billion in retail sales (down 0.2% from Q1 FY2021) and $282 million in hotels sales (down 9.9%).

Endeavour Group managing director and CEO, Steve Donohue laid the blame for this sharp drop in hotels revenue at the feet of the COVID-induced lockdowns. Here’s some of what he had to say:

COVID-19 continued to impact our trading environment during Q1 FY22. While Retail trading momentum was sustained across the start of the financial year, our Hotels business was significantly disrupted by the lockdowns in the key states of Victoria and New South Wales. Nationally, approximately 40% of our hotels were closed across the quarter and various trading restrictions were in place across the country.

In other news, Endeavour also reported that its online sales growth continues to rise. The company logged $305 million in online sales over the quarter, up 34.4% over Q1 FY2021’s $227 million.

The number of customers using Endeavour’s loyalty programs also continues to tick up. The Dan Murphy’s-based My Dan’s scheme now stands at 5.9 million members, up from last year’s 4.8 million. The BWS store chain also saw a 44.2% scan rate for the Everyday Rewards scheme, up from the previous metric of 42.4%.

Endeavour share price snapshot

Judging from today’s moves in the Endeavour share price, investors seem to have taken at least some heart from this trading update. At the current pricing, Endeavour shares have a market capitalisation of $12.01 billion and a dividend yield of 1.01%.

The post Endeavour (ASX:EDV) share price rises following quarterly update 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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The Macquarie Group Ltd (ASX: MQG) share price edged higher to finish in the green today, closing the session at $196.32.

That earmarks Macquarie for its third all-time high in three consecutive days this week, as the banking giant now extends its rally in the past month to a 9% gain.

Here we uncover what’s been driving this price action for the company.

What’s been fuelling the Macquarie share price lately?

Zooming out and taking a birds-eye view over a longer time frame, it’s clear that Macquarie shares have been on an upward trajectory for about a month now.

As we commenced the walk through October, Macquarie released an investor presentation that gave some colour on its outlook for the coming periods.

In the presentation, the bank explained that it anticipates a slight down-step in earnings from the second half of FY21, although still expects a substantial jump in operating profit in Q1 FY22.

Aside from this, Macquarie also reckons it will record a significant growth period from the same time last year in H1 FY22.

Macquarie is also firm on the belief that its pivot into renewables will soon begin to yield positive returns, particularly as secular energy trends divert energy consumption towards greener alternatives.

The bank has a $2 billion exposure to the renewables sector, with another $45 million ready to put into the field, per its investor presentation.

Brokers vote Macquarie is a buy

In addition to these factors, several brokers are bullish on the Macquarie share price and feel there is plenty more upside yet to be priced in.

Analysts at Morgan Stanley have a $240 price target on Macquarie shares, a figure the broker justifies due to Macquarie’s renewables exposure.

In its report, Morgan Stanley exclaimed that “Macquarie’s critical scale in renewables should command a further ‘green premium’ and reduce its cost of capital”.

Fellow analysts at peer investment bank JP Morgan are also bullish on Macquarie, albeit with a tighter price target of $190.

The broker models a 15% net profit after tax (NPAT) growth in FY22, alongside a 15% return on equity for shareholders from FY22–24.

JP Morgan reckons that Macquarie’s annuity divisions will continue to drive strong medium-term growth, in addition to the accretive benefits earned on recent divestments.

It also feels that Macquarie Asset Management is well positioned to capitalise on structural demand pull from investors for exposure to alternative asset classes such as infrastructure, managed futures or commodities.

After hitting another record high today, the Macquarie share price has climbed 42% this year to date, and around 46% in the past 12 months.

The post Another day, another all-time high for the Macquarie (ASX:MQG) share price appeared first on The Motley Fool Australia.

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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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