The S&P/ASX 200 Index (ASX: XJO) is on course to start the week on a slightly positive note. In early afternoon trade, the benchmark index is up 0.1% to 7,316.1 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is up over 3% to $6.73. This follows news that the New Zealand Overseas Investment Office has issued its consent to the company’s proposed acquisition of a 75% interest in Mataura Valley Milk. Management expects the acquisition of the dairy nutrition business to provide A2 Milk with the opportunity to participate in nutritional products manufacturing and give it supplier and geographic diversification. It also expects the deal to strengthen its relationship with key partners in China.

Airtasker Ltd (ASX: ART)

The Airtasker share price is up 4% to $1.16. Investors have been buying the shares of the online marketplace for local services after it released a guidance update. According to the release, Airtasker achieved Gross Marketplace Volume (GMV) of $39.4 million in the fourth quarter. This represents a 39.1% increase compared to the prior corresponding period. In light of this strong quarterly performance, management expects to report GMV of $153.1 million for the full year. This exceeds both its prospectus forecast of $143.7 million and April’s upgraded guidance of $148 million to $152 million.

BetMakers Technology Group Ltd (ASX: BET)

The BetMakers share price has jumped 5% to $1.10. This follows news that Tabcorp Holdings Limited (ASX: TAH) intends to demerge its lotteries and Keno business. This will see two separate ASX-listed companies – Tabcorp and Lotteries & KenoCo. The former will retain its wagering, media, and gaming services businesses. The BetMakers share price had come under significant pressure since announcing a takeover offer for Tabcorp’s wagering and media assets. Investors appear relieved the deal will no longer go ahead.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

The Sydney Airport share price has rocketed 30% higher to $7.55. Investors have been scrambling to buy the airport operator’s shares after it received an $8.25 cash per share takeover offer from a consortium of infrastructure investors. This represents a 42% premium to its last close price. Sydney Airport is assessing the offer but notes that it has been made during a global pandemic, which has deeply affected the aviation industry and the Sydney Airport share price.

The post Why A2 Milk, Airtasker, BetMakers, & Sydney Airport shares are storming higher appeared first on The Motley Fool Australia.

More reading

• Why the BetMakers (ASX:BET) share price is up 5% at lunchtime
• Sydney Airport (ASX:SYD) jumps 37% on $22.6 billion buyout bid
• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
• Tabcorp (ASX:TAH) share price drops on demerger news
• Airtasker (ASX:ART) share price storms 5% higher after smashing FY 21 guidance

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 shares of and has recommended Betmakers Technology Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Airtasker Limited. The Motley Fool Australia has recommended A2 Milk and Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3jIyJCL

The BetMakers Technology Group Ltd (ASX: BET) share price opened 11.48% higher this morning to an intraday high of $1.165.

At the time of writing, shares in the betting technology company have pulled back to a gain of 5.26% or $1.10.

This follows an announcement out of Tabcorp Holdings Ltd (ASX: TAH), with intentions to demerge its lotteries and wagering businesses.

BetMakers released a subsequent response to the market outlining its plans moving forward.

What’s driving the BetMakers share price?

Back in late May, BetMakers submitted a proposal to acquire Tabcorp’s Wagering and Media business for an enterprise value of $4 billion.

Today, Tabcorp has decided to pursue a demerger of its lotteries and wagering business, instead of BetMakers’ acquisition proposal.

This move will see Tabcorp spin off its lotteries and wagering businesses into two standalone, ASX-listed companies with “distinct operating profiles, strategies and growth opportunities”.

With BetMakers’ acquisition plans coming to an end, this means the company has avoided the need to raise $4 billion to acquire Tabcorp assets.

The $4 billion would have otherwise come from $1 billion through debt financing and $3 billion worth of new BetMakers shares.

Pleasingly, BetMakers advised that it will continue discussions with Tabcorp regarding “commercial opportunities in international markets”.

In addition, BetMakers said that its “international growth plans have accelerated in recent weeks” underpinned by announcements including the progression of Fixed Odds betting in New Jersey and the completion of its Sportech acquisition.

What did management say?

In response to the announcement, BetMakers CEO Todd Buckingham said:

Having received clarity from Tabcorp regarding the planned direction for its Wagering and Media business, BetMakers will continue discussions with Tabcorp regarding international opportunities, and we believe these opportunities have the potential to be significant.

BetMakers remains firmly of the view that the Company’s opportunities in regulated wagering jurisdictions, and in particular Australia and the United States, are a clear priority and we will continue to explore all opportunities that can accelerate or capitalise on this foundation.

BetMakers share price snapshot

BetMakers’ ambitious offer to acquire Tabcorp assets took a significant toll on its share price, tumbling 34.5% to a low of $1.01 between 28 May and 7 June.

With the deal no longer progressing, the BetMakers share price is still down 30.6% from its record close of $1.60 on 27 May.

The post Why the BetMakers (ASX:BET) share price is up 5% at lunchtime appeared first on The Motley Fool Australia.

More reading

• Why A2 Milk, Airtasker, BetMakers, & Sydney Airport shares are storming higher
• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
• Tabcorp (ASX:TAH) share price drops on demerger news
• BetMakers (ASX:BET) builds out tech with more acquisitions
• BetMakers (ASX:BET) share price lifts on wagering milestone

Motley Fool contributor Kerry Sun 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 Betmakers Technology Group Ltd. The Motley Fool Australia has recommended Betmakers Technology Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3dGAVGU

The Sydney Airport (ASX: SYD) share price is rocketing this morning after the company announced that a consortium of infrastructure investors had proposed a $22.6 billion all-cash transaction for the buyout of Sydney Airport.

The Sydney Airport share price has started this morning’s session with a 37% jump into the green after the opening bell, before retreating slightly to the current price of $7.71, up 32.62%.

Let’s dive into what unfolded this morning.

What is the proposed deal?

In today’s release, the company advised that a consortium of infrastructure-focused investors from IFM Investors, Global Infrastructure Management and QSuper had offered $8.25 per share for a buyout of the famed Australian airport.

At these figures, the offer price represents a 42% premium on Sydney Airport’s closing price of $5.81 at the bell on Friday.

Sydney Airport also holds debt valued at close to $10 billion on its balance sheet — which the consortium must absorb — taking the company’s enterprise value to $30 billion and change.

The investor consortium mentioned its deal included a number of conditions. These included:

• UniSuper to reinvest its roughly 15% stake into the holding vehicle;
• Sydney Airport to provide access to the company books;
• A unanimous recommendation from the Sydney Airport boards that securityholders back the proposal; and
• Entry into a mutually acceptable scheme implementation deed between Sydney Airport and a company owned by the consortium members.

A move to proceed with the sale would align Sydney Airport with Australia’s other major airport operators, which are owned by consortiums of infrastructure investors.

What did Sydney Airport say?

Sydney Airport was quick to respond, claiming that the offer sat below its pre-pandemic share ranges when it hit a record high of $8.86 back in January 2020, before the COVID-19 pandemic took its toll on global travel.

In a release, it stated:

The boards are undertaking detailed analysis of, amongst other things, whether the proposal is reflective of the underlying value of the airport given its long-term remaining concession and the unexpected short-term impact of the pandemic.

At the time of writing, Sydney Airport is considering the proposal.

Sydney Airport share price snapshot

Today’s price action has catapulted the Sydney Airport share price into the green after closing in the red over the previous 5 days. Shares in the airport are now up 40.29% over the past 12 months and have lifted 20.44% year-to-date.

At a share price of $7.73, Sydney Airport has a market capitalisation of $15.7 billion and trades at a price-to-earnings ratio of 92.

The share price is trading near its 52-week high of $8.04, and has a 52-week range of $4.99 – $8.04.

The post Sydney Airport (ASX:SYD) jumps 37% on $22.6 billion buyout bid appeared first on The Motley Fool Australia.

More reading

• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• Broker names 2 ASX dividend shares to buy
• 3 worst ASX travel shares of financial year 2021
• Temple & Webster share price surges with other ASX COVID winners

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.

from The Motley Fool Australia https://ift.tt/36f91h6

At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small gain. The benchmark index is currently up 0.1% to 7,314.4 points.

Here’s what is happening on the market today:

Sydney Airport receives takeover approach

The Sydney Airport Holdings Pty Ltd (ASX: SYD) share price is rocketing higher today after receiving a takeover approach. The airport operator has received an unsolicited, indicative, conditional and non-binding proposal from a consortium of infrastructure investors to acquire it for $8.25 cash per share. Sydney Airport is assessing the offer but notes that it has been made during a global pandemic, which has deeply affected the aviation industry and the Sydney Airport share price. This offer represents a 42% premium to its last close price.

Tabcorp demerger

The Tabcorp Holdings Limited (ASX: TAH) share price is sinking on Monday after revealing plans to demerge its lotteries and Keno business. This will see two separate ASX-listed companies – Tabcorp and Lotteries & KenoCo. The former will retain its wagering, media, and gaming services businesses. This brings to an end the takeover approach by Betmakers Technology Group Ltd (ASX: BET).

A2 Milk receives acquisition approval

The A2 Milk Company Ltd (ASX: A2M) share price is charging higher today after providing the market with an update on its proposed acquisition of a 75% interest in Mataura Valley Milk. According to the release, the New Zealand Overseas Investment Office has issued its consent to the company’s proposed acquisition of the dairy nutrition business. As a result, completion of the transaction is now to set to occur with effect from the end of July.

Best and worst ASX 200 performers

The best performer on the ASX 200 by some distance is the Sydney Airport share price with a 30% gain. This follows the receipt of the aforementioned takeover approach this morning. The worst performer has been the Tabcorp share price following the announcement of its demerger plans. Its shares are down 5% at the time of writing.

The post ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps appeared first on The Motley Fool Australia.

More reading

• Tabcorp (ASX:TAH) share price drops on demerger news
• A2 Milk (ASX:A2M) share price on watch after acquisition update
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• 5 things to watch on the ASX 200 on Monday
• Why the Telstra (ASX:TLS) share price outlook suddenly improved last week

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.

from The Motley Fool Australia https://ift.tt/3qPNvt4

The Family Zone Cyber Safety Ltd (ASX: FZO) share price is rising. At the time of writing, shares in the cyber safety company are trading for 65 cents each – up 14.04%.

The massive price rise comes after the company announced “significant growth” and a “record quarter”.

Let’s take a closer look at today’s news.

Company Profile

Family Zone Cyber Safety is engaged in developing a universal cyber safety and parental control platform in the fast-growing cyber safety industry. Its platform allows for secure collaboration between “schools, parents, and cyber safety educators”.

Why the Family Zone share price is rising

In a statement to the ASX, Family Zone says its June quarter was a record for the company. There was 128% growth year-on-year (YoY) in student numbers to total 3 million. Around 2,000 schools were added to its platform, taking the total to 5,600 schools. The company now services approximately 5% of all US school districts.

In the last quarter, $5.8 million worth of contracts were signed plus an extra $1 million acquired through the purchase of NetRef. According to Family Zone, in annual value terms, this converts to roughly $3.3 million in contracts plus $630,000 through NetRef.

Investors are enjoying today’s news, judging by the rise in the Family Zone share price.

Management commentary

Family Zone Managing Director Tim Levy:

This was a breakthrough quarter. We added over 1 million students and 2,000 schools and now service more than 3 million students and 5% of US school districts. We broke sales records and most encouragingly ended the quarter with ~1,500 schools in trials.

Family Zone share price snapshot

Over the past 12 months, the Family Zone share price has increased by 120%. Last month, shares in the company jumped 7% on the news it had signed a contract with the largest school district in the US state of Texas.

Family Zone’s surge comes after its previous 52-week high achieved just 10 days ago on a capital raising announcement.

Family Zone has a market capitalisation of $273 million.

The post Family Zone (ASX:FZO) share price jumps 14% after record quarter appeared first on The Motley Fool Australia.

More reading

• 4 fast-growing ASX small cap shares that you may have overlooked
• Family Zone (ASX:FZO) share price jumps 8% after $23m capital raising

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.

from The Motley Fool Australia https://ift.tt/3hDxrWO

There are some good ASX share candidates that might be worth considering in July 2021.

We are already halfway through the 2021 calendar year. Share prices are changing all the time, so that can lead to different businesses being potential opportunities at different times.

The two ASX shares in this article are growing quickly and might be worth looking at for the longer-term:

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is an electronic donation business. It processes electronic payments for large and medium US churches.

It has large long-term goals, but in FY21 it processed approximately US$7 billion (which was up 39%). This led to operating revenue increasing by 40%.

The company deliberately chose the best tools when it first set up its systems. Not only did that mean that clients get the best software to use, but it also meant Pushpay had very scalable technology. This is translating into operating leverage for the business.

In FY21 alone, the earnings before interest, tax, depreciation, amortisation and foreign currency (EBITDAF) increased by 133% to US$58.9 million. As readers will see, that growth was quite a bit more than the operating revenue growth. The EBITDAF margin increased from 22% to 34% over the financial year.

Pushpay is expecting more operating leverage and growth in the future.

It’s also pursuing growth in other areas.

The company said that it’s investing between US$6 million to US$8 million in FY22 in the Catholic segment. It’s focused on establishing relationships and increasing engagement with key stakeholders. Two thirds of that money will be spent on product design and development expense, with the rest spent on sales and marketing.

The ASX share has a goal of acquiring more than 25% of the Catholic church management system and donor management system market over the next five years.

Pushpay also pointed out that the Catholic church is closely associated with many education providers and non-profit organisations, which presents further opportunities within the US and other international jurisdictions.

Adore Beauty Group Ltd (ASX: ABY)

UBS is one of the brokers that likes Adore Beauty at the current share price. It has a price target on Adore Beauty of $5.60, which suggests a potential upside of around 20% over the next 12 months.

The broker points to growth themes and growing market share where the business can grow. Returning customers also helps things.

In May, the company announced its FY21 third quarter highlights, which included revenue growth of 47% to $39.4 million. Adore Beauty also reported “strong” retention and re-engagement rates for new customers acquired during the COVID-19 period. It also launched its loyalty program in March, with signups ahead of expectations.

The ASX share said it’s on track to achieve FY21 revenue growth of between 43% to 47%.

Adore Beauty is seeing a structural shift in consumer behaviour towards online retail, based on continued strong retention of customer acquired during the COVID-19 lockdown.

The company is continuing to pursue disciplined investment to drive revenue growth and expand its online position. Its FY21 EBITDA will reflect the company’s continued investment, including in marketing and advertising.

Adore Beauty is investing in things like its range, adjacency expansion opportunities and private label development.

The post 2 impressive ASX shares that could be buys in July 2021 appeared first on The Motley Fool Australia.

More reading

• 2 top small cap ASX shares that might be buys
• 3 exciting small cap ASX shares to put on your watchlist
• ASX 200 flat, e-commerce ASX shares soar, Metcash rises
• 2 ASX shares that could be worth looking at this weekend
• Sell Nuix, AMP, Pushpay before EOFY? Expert weighs in

45Motley 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 PUSHPAY FPO NZX. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group Limited. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3dFXQCw

The West African Resources Ltd (ASX: WAF) share price is climbing following a production update for the month of June.

During late morning trade, the gold miner’s shares are swapping hands for $1.03, up 1.98%.

How is West African Resources performing?

Investors are snapping up West African Resources shares after the company provided a strong result.

According to its release, West African Resources advised it achieved gold production of 63,610 ounces for the June quarter. This represents another record quarter for the company’s operations at the Sanbrado mine in Burkina Faso.

The increase is primarily from the company’s key M1 South underground mine, yielding 33,480 ounces of gold from 103,550 tonnes of ore. Pleasingly, the gold mined reflected a 116% increase on the previous March 2021 quarter.

West African Resources stated that 855 meters of horizontal development was completed, providing ore access on several levels. A 182-meter decline was also developed, increasing the vertical depth by 26 meters to 341 meters below the surface.

Open pit production for the quarter stood at 738,000 tonnes at 1.7 grams per tonnes for 39,790 ounces. This includes the company’s M5, M1 South and M1 North pits.

A maintenance shutdown and mill reline was also finished during the quarter.

West African Resources executive chair and CEO, Richard Hyde commented:

The Sanbrado mine completed another record quarter of production with 63,610 ounces of gold produced.

The underground ramp-up continued to plan, with gold mined up 116% from the previous quarter to 33,480 ounces of gold from 103,550t of ore.

Solid progress was also delivered by open pit mining and processing under pinning the quarterly production result.

The company will release its June Quarterly Activities Report with production cost information before the end of this month.

About the West African Resources share price

Over the past 12 months, West African Resources shares have moved in circles, posting a gain of 15%. However, for 2021 alone, the company’s share price is down around 3%.

At current, West African Resources shares are sitting in the middle of its 52-week range of 72 cents to $1.23.

West African Resources has a market capitalisation of roughly $891 million, with more than 883 million shares on its registry.

The post Why the West African Resources (ASX:WAF) share price is rising today appeared first on The Motley Fool Australia.

More reading

• Could Tesla build 1 million vehicles this year?
• Top broker tips REA Group (ASX:REA) share price to hit $198
• Why the Oil Search (ASX:OSH) share price is beating the energy index
• Tabcorp (ASX:TAH) share price drops on demerger news
• Airtasker (ASX:ART) share price storms 5% higher after smashing FY 21 guidance

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 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.

from The Motley Fool Australia https://ift.tt/36bLfCC

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Rewind just five years, and many people doubted whether electric-car maker Tesla (NASDAQ: TSLA) could ever even get to the point that it was building 500,000 vehicles per year, let alone achieve it by 2020. Yet now Tesla’s doing such a good job ramping up production that we’re already talking about when the automaker could be building one million vehicles annually, and it may be coming sooner than you think. In fact, the company could potentially pull this off as early as this year — one year after its annualized production crossed 500,000 for the first time.

Here’s a closer look at Tesla’s stunning progress with building out its electric-vehicle production capacity recently — and why the company could potentially double its vehicle production this year.

Expanding production capacity

Tesla’s vehicle production capacity has expanded by leaps and bounds over the last two years. Size, it turns out, has not been a limiting factor for Tesla. Indeed, it has arguably been an accelerant recently.

The automaker’s aggressive capacity expansion started kicking up a notch in 2019, when the company broke ground, built, and started producing cars in a new factory in Shanghai — all in less than 12 months. By the end of the year, a factory less than 12 months old had a production capacity of 150,000 vehicles, increasing Tesla’s production capacity by nearly a third.

But Tesla’s capacity expansion really got aggressive in 2020, as Tesla’s newfound ability to generate positive cash flow seemed to inspire the company to take even bolder expansion bets. Throughout the year, Tesla installed enough new production lines and tooling to increase its production capacity by more than 60%. This came from a slight increase in production capacity at the company’s factory in Fremont, California and a tripling of its capacity at its new factory in Shanghai.

Of course, investors should note that production capacity doesn’t immediately translate to respective production levels. It takes time for production lines to ramp up to fully utilize installed tooling. Still, Tesla notably kicked off 2021 with production capacity for 1.05 million vehicles, setting the stage for some incredible growth.

It gets better in 2021

Of course, Tesla isn’t stopping at a production capacity of 1.05 million, particularly with deliveries more than doubling year over year for two quarters in a row. To capitalize on the growing demand for its vehicles, Tesla has two more new factories where it is building out even more capacity: one in Berlin, Germany, and another in Texas. Production is expected to start at both factories this year.

Considering this capacity buildout alongside the fact that Tesla has already produced about 387,000 vehicles during the first six months of 2021, it wouldn’t be surprising to see Tesla build close to one million vehicles this year. Even if production is closer to 900,000 by the end of the year, it’s highly likely Tesla will at least finish the year with an annualized production rate of one million vehicles on a run-rate basis.

All of this begs the question: With staggering growth like this, could we be underappreciating Tesla’s growth prospects for the next five years once again? Based on the stock’s pricey valuation, investors may be embracing the fact that that the company seems to be a growth machine better than they were five years ago. But it wouldn’t be surprising if Tesla continues to outperform expectations — particularly over the long haul.

How many new factories will Tesla build over the next five years?

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Could Tesla build 1 million vehicles this year? appeared first on The Motley Fool Australia.

More reading

• Wondering which US shares Aussies bought last quarter? Here’s the answer
• How big could Tesla get by 2030?
• FANG+ ETF (ASX:FANG) tumbles 10% on ex-dividend day
• How Tyler Winklevoss plans to go green with Bitcoin
• Tesla back on top as the most popular US share for ASX investors

Daniel Sparks 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 Tesla. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

from The Motley Fool Australia https://ift.tt/3dFWess

The REA Group Limited (ASX: REA) share price is pushing higher on Monday.

In morning trade the property listings company’s shares are up 1% to $172.03.

This leaves the REA Group share price trading just a touch short of its record high of $173.11.

Can the REA Group share price go even higher?

One leading broker that believes the REA Group share price can keep on climbing is Goldman Sachs.

According to a note out of the investment bank this morning, its analysts have retained their buy rating and lifted their price target on its shares to $198.00.

Based on the latest REA Group share price, this implies potential upside of 15% over the next 12 months.

Why is the broker bullish?

Goldman Sachs made the move after REA Group announced the completion of its acquisition of Mortgage Choice Limited (ASX: MOC) and a 34% stake in mortgage software company Simpology.

Commenting on the acquisitions, Goldman said: “We believe the increased focus on finance makes strategic sense for REA, as it looks to capitalize on its strong brand, digital traffic and property data to take share of the sizable, but fragmented mortgage broking industry in Australia. This market has strong near-term volume tailwinds, but also faces some potential regulatory headwinds relating to the proposed changes to trailing commission.”

Goldman also likes the company due to its “hybrid model”, which it expects to support significant market share gains in the future.

It explained: “REA is running a hybrid model, with a strong digital offering (consistent with local and global peers), but combining this with an extensive, offline broker network. This ensures REA can capture the full value of the leads generated on its portal, given a significant share of consumers do not want a digital-only experience.”

“We believe that through building out its network and investing heavily into digital tech, REA can substantially improve the overall consumer experience, with its broker network ‘competing‘ for the leads that it generates (similar to Opcity).”

Overall, it feels this “creates an opportunity for REA to grow its share of the A$2.4bn Mortgage Broker pool (FY20). We forecast REA’s share to grow from 3% in FY21E (excl. MOC) to 10% in FY25E, and generate A$41mn of EBITDA, or 5% of group EBITDA.”

In light of this, Goldman believes the REA Group share price is trading at an attractive level relative to its growth potential.

The post Top broker tips REA Group (ASX:REA) share price to hit $198 appeared first on The Motley Fool Australia.

More reading

• ASX 200 drops, Zip rises, Cettire up
• REA Group (ASX:REA) share price lower despite acquisition update
• Leading brokers name 3 ASX shares to buy today
• 4 quality ASX growth shares rated as buys
• 2 highly rated ASX growth shares

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

from The Motley Fool Australia https://ift.tt/3yknzYU

The Oil Search Ltd (ASX: OSH) share price continues to edge upwards this year-to-date, outpacing the Australian broad energy index since January 1.

The Oil Search share price has finished the last 5 trading sessions around 3% in the green to close last week at $3.86. It is up 0.13% to $3.87 in early trading today.

Let’s dive into what’s been happening in Oil Search’s growth story of late.

What has Oil Search been up to lately?

Back in late May, Oil Search shares surged following announcements the company was seeking a beneficial outcome with PNG Power Limited (PPL), after it had received an “unforeseen notice of termination” on 27 May 2021.

The termination notice concerned a PNG Biomass Purchase Agreement (PPA) which was signed between the two companies in 2015. It included the construction of a power plant and solar farm in a bid to add more renewable energy to the country’s Ramu power grid.

Oil Search said the PPA was aligned with the PNG government’s aim to diversify Papua New Guinea’s energy mix and contribute to sustainable, long-term job creation.

In the notice, Oil Search country manager Leon Buskens stated:

We intend to work with PPL to find a resolution to move forward together. We are ready to build the power plant and solar farm. We have met all obligations in the PPA under our control in order to reach Financial Close and we have strong funding support from international agencies who recognise the social benefits of this project.

We have a dedicated team ready to work with PPL to support them to meet their obligations. We are ready to be part of the power solution and the energy mix and help the country transition to 100% renewable by 2050.

Oil Search shares jumped from $3.64 to $4.21 in the 5 days following the announcement.

Mubadala divestiture

On June 25, Bloomberg LP reported Emirati sovereign wealth fund Mubadala sold 4.5% of its stake in Oil Search for a total of $362.8 million.

According to Bloomberg, Mubadala had originally acquired a 17.6% stake back in 2008 and the sale of 94 million shares in Oil Search lowered its stake to 4.94%. The shares were offered for $3.86 or best via broker Citi Group.

The company’s share price held up well following the sell-off, posting a 2.17% gain in the days following the announcement.

Oil Search share price snapshot

Having posted a year-to-date return of 2.39% in the green, the Oil Search share price has beaten the S&P/ASX 200 Energy Sector Index (ASX: XEJ)’s return which is up 2.17% at the time of writing.

Over the previous 12 months, Oil Search has posted a 20% return versus the Energy Index’s return of 8.85%.

Despite these returns, Oil Search shares have lagged behind the S&P/ASX 200 Index (ASX: XJO)’s 12-month return of 21.5%.

Over the previous 1 month, the company’s shares are in the red by 6.42% at the time of writing, whereas the S&P/ASX 200 Index has posted a return of about 0.3% in the green over this time.

At a share price of $3.87, Oil Search has a market capitalisation of $8 billion and pays a dividend of 7 cents per share.

Currently, the Oil Search share price is trading off its 52-week high of $4.62 but is above its 52-week low of $2.50.

The post Why the Oil Search (ASX:OSH) share price is beating the energy index appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Oil hits 3-year high! How are ASX energy shares reacting?
• Crude to $100 per barrel? 3 ASX 200 oil shares trading well below pre-COVID levels
• 5 things to watch on the ASX 200 on Thursday
• Experts say oil price could hit US$100 per barrel by end of 2021

from The Motley Fool Australia https://ift.tt/3hDuSUG