The Super Retail Group Ltd (ASX: SUL) share price has been a strong performer over the last six months.

During this period, the retail conglomerate’s shares have charged an impressive 42% higher.

Can the Super Retail share price go even higher?

If you missed out on the stellar gains made by the Super Retail share price over the last six months, don’t worry. This is because one leading broker believes they can go a lot higher from here.

In response to its impressive trading update earlier this week, Goldman Sachs has reiterated its buy rating and lifted the price target on Super Retail’s shares to $14.80.

Based on the current Super Retail share price, this price target implies potential upside of 29% for its shares over the next 12 months. This potential return increases to almost 36% when you include the generous dividends the broker is expecting the company to pay.

Goldman Sachs has forecast a fully franked dividend of 78 cents per share in FY 2021. This equates to a 6.8% dividend yield at present.

Why is Goldman Sachs bullish on Super Retail?

The broker believes Super Retail is perfectly positioned to benefit from the current trading environment. It explained:

“SUL has continued to position itself extremely well to capture the unique trading environment we have seen over much of 2020, and in particular has made the most of the reopening of the Australian economy as households have increasingly shifted to outdoor activities and road travel over the summer period.”

“As we have noted before, while much of the consumer spending patterns seen over 2020 are unlikely to be sustained, we expect the international travel restrictions associated with the pandemic to provide a medium-term tailwind to SUL. Furthermore, the weakness experienced by SUL during the post bushfire period in 2H20 is likely to provide an easy base to cycle.”

In respect to its expectation for a big dividend this year, the broker commented:

“We forecast strong cash generation conditions to continue through 1H21, bringing forecast net cash to A$119mn in 1H21 and A$171mn in FY21. We forecast a recovery in dividend payout ratio to ~60% over FY21, translating to a forecast FY21 dividend of A$0.78 per share, implying a 6.7% [at the time] fully franked dividend before contemplating capital management.”

All in all, this appears to make the Super Retail share price one to watch in 2021.

More reading

• 2021 has its worries… even for an optimist
• ASX 200 drops 0.8%
• ASX 200 down 0.5%: JB Hi-Fi guidance impresses, Super Retail update, Ramsay surges
• Why the Super Retail (ASX:SUL) share price is surging higher today
• Why ARB, Mesoblast, Pushpay, & Super Retail shares are racing higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail 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 Funtastic Limited (ASX: FUN) share price is falling today after the company announced the sale of its confectionery business.

At the time of writing, the Funtastic share price is down 7.6% to 12 cents.

What’s lowering the Funtastic share price?

The Funtastic share price is dropping lower after investors took note of the company’s change in strategic direction.

In today’s release, Funtastic advised it is seeking to bring new products to market, expand e-commerce operations, and explore growth opportunities.

Based on management’s decision to overhaul the company’s existing portfolio, the company has sold off its confectionery business to Sweet Season Pty Ltd.

This follows its recent acquisition of Hobby Warehouse Group, which includes e-commerce businesses Hobby Warehouse, Toys’R’Us and Babies’R’Us.

The agreed sale of its candy business along with current inventory, went for the price of $1.05 million.

The company said that at the end of July 2020, the confectionery business recorded $4.2 million in revenue for the entire financial year. This accounted for 17.1% of total group revenue before the acquisition of Hobby Warehouse Group.

Net assets from the confectionery business amounted to $195,000 at the end of the same period. This represented just 4% of the total assets held by Funtastic.

What did management say?

Commenting on the divestment, Funtastic CEO and managing director Louis Mittoni said:

The sale of the confectionery business is part of the ongoing strategic review of all product ranges, customer segments and operations.

It accelerates materialisation of value for part of the business and will allow investment to build scale and to right-size the business, aligned with the planned growth and focus of the company to deliver our mission of encouraging children to engage with as many forms of play as possible and assist people to explore, create and live life more fully.

Funtastic share price snapshot

Over the past 12 months, the Funtastic share price has zoomed higher, reflecting gains of more than 470%.

The company’s shares took a dive during the March COVID-19 meltdown and were priced at just 0.7 cents per share. However, trading conditions improved, which saw its shares reach a 52-week high of 19.5 cents in October.

Based on the current share price, Funtastic commands a market capitalisation of around $101 million.

More reading

• 3 reasons the BHP (ASX:BHP) share price could be in the buy zone
• Why the Carbon Revolution (ASX:CBR) share price zoomed 8% higher
• Why the Botanix (ASX:BOT) share price is flying 6%
• These ASX shares are falling after being hit by broker downgrades today
• Here’s why the Redflex (ASX:RDF) share price rocketed 122% higher today

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade the BHP Group Ltd (ASX: BHP) share price is on course to end the week with a decline.

At the time of writing, the mining giant’s shares are down 2% to $45.96.

Despite this decline, the BHP share price is up an impressive 34% over the last six months.

Is it too late to buy BHP shares?

While it is unlikely the BHP share price will be generating another 34% gain over the next six months, one leading broker still sees enough value in its shares to recommend it as a buy.

According to a note out of Goldman Sachs, the broker has retained its buy rating and put a price target of $47.90 on the company’s shares.

This price target implies potential upside of 4.2% excluding dividends and 9.2% including them.

Why does Goldman rate BHP?

There are three key reasons why Goldman Sachs has held firm with its buy rating on the BHP share price.

It explained that one of these is its strong earnings and free cash flow.

“(1) Strong earnings growth and FCF: we forecast a c. 20% increase in EBITDA and c. 50% increase in FCF in FY21, equating to a c. 9% FCF yield, driven partly by a fall in capex to US$7bn as major minerals projects are completed, and lower unit costs, but mostly due to our positive view on met coal, copper and oil prices in CY 2021.”

Goldman also likes BHP for its strong production growth potential. Particularly with copper and oil.

“(2) Strong production growth: BHP’s group Cu Eq production should increase by 4-5% in FY22 and FY23, driven by a 250kt lift in copper volumes from Spence and Escondida, 4Mt of met coal with rebounding demand, and 10MMboe of oil volumes with new production from Mad Dog II and Atlantis Phase 3, and the recent 28% acquisition of Shenzi. BHP will likely also see a significant margin kicker in the Pilbara from the high grade South Flank deposit. Longer term, we have a positive view on BHP’s organic growth options, particularly in oil where we see possible 50% volume growth to +150MMboe driven by Trion, T&T North and Scarborough.”

And finally, another reason to be positive is its portfolio reshuffle.

“(3) Benefits from portfolio optimisation: ongoing with the announcement to divest thermal coal and Bass Strait gas.”

All in all, the broker expects this to underpin strong earnings over the next three years.

As a result, it is forecasting dividend yields of approximately 5% per annum through to FY 2023. Which could be very attractive for income investors in this low interest rate environment.

More reading

• These ASX shares are falling after being hit by broker downgrades today
• What a dramatic day in the US could mean for ASX shares in 2021
• ASX 200 rises 0.4%
• 4 ASX shares picked for returns in 2021 by brokers and fundies
• ASX 200 up 0.5%: BHP’s update, PolyNovo jumps, Ansell impresses

Motley Fool contributor James Mickleboro 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 Carbon Revolution Ltd (ASX: CBR) share price is on course to end the week with a strong gain.

In afternoon trade the carbon fibre wheels-focused advanced manufacturing company’s shares are up 8% to $2.96.

Why is the Carbon Revolution share price storming higher?

The catalyst for the strong gain by the Carbon Revolution share price on Friday was the release of its second quarter update this morning.

According to the release, as expected by management, Carbon Revolution’s sales continued to be impacted by COVID-19 headwinds during the second quarter. The quarter was also subject to manufacturing seasonality on another key customer program.

This led to the company reporting quarterly revenue of $5.6 million. This was down 52.8% on its first quarter revenue and 48.1% on the prior corresponding period.

Quarterly wheels sold were 1,972 for the three months, a decrease of 55.4% from the first quarter and 43.1% from the same period last year.

However, management’s commentary in relation to the second half appears to be the reason the Carbon Revolution share price is heading higher today. It advised that it expects wheel sales growth to return in the second half of FY 2021.

Outlook

Management is positive on the second half. It explained: “The business continues to monitor the local and global impacts and risks related to COVID-19. There remain uncertainties arising from the ongoing impacts of COVID-19 and the automotive industry’s response in the near-term. On the basis of all currently available information, the Company expects to deliver strong sales growth in FY21.”

Supporting its growth will be the company’s investment in its Mega-line manufacturing process. This process is expected to lower costs, increase capacity, and help the company secure larger programs.

Management commented: “The design of the Mega-line manufacturing process has progressed significantly and is now ready to proceed once new programs are awarded. The Company expects that significant new programs will be secured in the next 6 months and these new programs will underpin the decision to invest in the first mega line. This demand for Megaline capacity is anticipated to come from both existing and new customers.”

More reading

• Bell Potter names the ASX industrials shares to buy in 2021

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 Carbon Revolution Limited. The Motley Fool Australia has recommended Carbon Revolution 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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Botanix Pharmaceuticals Ltd (ASX: BOT) shares are lifting off today after the company released its quarterly report. At the time of writing, the Botanix share price is trading 6.06% higher at 17.5 cents.

What is driving the Botanix share price?

The Botanix share price is climbing higher today as the cannabinoid company released its quarterly report to the ASX.

In its clinical development sector, Botanix completed a successful meeting with the United States Food and Drug Administration (FDA) regarding clinical studies for its BTX 1801 synthetic cannabidiol product in the US. According to Botanix, the FDA provided feedback on how the company might obtain fast-track designation for the product’s new drug application (NDA).

Additionally, the FDA advised that the proposed drug development plan and data package presented were sufficient to initiate clinical development in the US and ultimately support an NDA submission. The FDA encouraged Botanix to request a fast-track designation for BTX 1801 following the submission of an IND application.

Furthermore, Botanix reported that its dermatology program, BTX 1702, is poised to commence. The company’s phase 1 clinical study will begin recruitment once travel and clinical trial restrictions across Australia and New Zealand cease.

Corporate update

During the quarter, Botanix had net cash flows of $2.8 million, with $2.2 million being invested in research and development.

Botanix retained $19.2 million in cash at the end of the quarter and claims to be in a strong financial position.

About the Botanix share price

Botanix is a clinical stage synthetic cannabinoid company focused on developing safe and effective treatments for serious skin diseases. It aims to leverage the anti-inflammatory, immune modulating and antimicrobial properties of synthetic cannabidiol to this point.

Investors will be anticipating the outcome of the company’s application for an R&D tax incentive refund of approximately $6.8 million. If received, funds will be invested into product development. In addition, Botanix continues to assess opportunities and partnerships in the development of new products that can be rapidly brought to market for antimicrobial or dermatological applications.

The Botanix share price has increased 75% over the past twelve months and is currently trading just shy of its 52-week high. Based on the current Botanix share price, the company has a market capitalisation of around $141 million.

More reading

• Why the Botanix (ASX:BOT) share price rocketed 22% to a record high today

Motley Fool contributor Daniel Ewing 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 market may be on a backfoot today but two ASX stocks in particular are underperforming after they got hit by broker downgrades.

The S&P/ASX 200 Index (Index:^AXJO) slipped 0.4% in after lunch trade. The big banks like Westpac Banking Corp (ASX: WBC) and major miners like BHP Group Ltd (ASX: BHP) are contributing to the decline.

No ASX stock insurance against a broker downgrade

But its more than the general market weakness that is dragging on the Insurance Australia Group Ltd (ASX: IAG) share price.

The analysts at Macquarie Group Ltd (ASX: MQG) believe insurers will exceed their first half hazards allowances when they hand in their interim results next month.

Blame La Nina for this. It probably contributed to the 100-year flooding event in Queensland this week.

Legal stoush adds to uncertainty

There’s also the uncertainty about the sector’s legal liability to business interruption insurance.

Many businesses have tried making claims on their policies due to COVID-19. But insurers are resisting due to the pandemic exclusion on policies.

While things are catastrophic for ASX insurers, its bad enough for the broker to downgrade its recommendation on the IAG share price.

Macquarie’s rating went to “neutral” from “outperform”.  The 12-month price target on the IAG share price is $5.10 a share.

ASX stock getting trashed on downgrade

Another stock to get a chop is the Cleanaway Waste Management Ltd (ASX: CWY) share price. Shares in the waste management group fell a further 1.3% to $2.35 at the time of writing after Credit Suisse cut its recommendation to “neutral” from “outperform”.

The CWY share price was already under pressure after its controversial and high-profile chief executive Vik Bansal resigned yesterday.

“We find the timing of the announcement surprising given CWY is currently navigating through the pandemic and the CEO’s solid track record of delivering transformation growth and synergies from acquisitions,” said the broker.

Who’s steering the ship?

The issue is there isn’t an obvious successor to Mr Bansal, who’s been credited for turnaround the CWY share price but who’s legacy has been marred by allegations that he created a toxic work culture.

Cleanaway’s chairman Mark Chellew will take on additional duties during the leadership transition. Outgoing chief financial officer Brendan Gill will delay his retirement to become the chief operating officer.

This event highlights the issue of succession risks for ASX stocks. Investors do not like uncertainty, particularly during these trying times.

Credit Suisse’s 12-month price target on the CWY share price is $2.45 a share.

More reading

• The latest ASX broker “buy” ideas that got a valuation upgrade
• Why Afterpay, Cleanaway, Mosaic Brands, & Perpetual shares are dropping lower
• ASX 200 down 0.2%: Zip shares drop, Lynas rockets, Fisher & Paykel Healthcare impresses
• Why the Contact Energy (ASX:CEN) share price has surged 10% higher today
• ASX dividends will be up 30% this year: fundie

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Macquarie Group Limited, and Westpac Banking. 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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The Redflex Holdings Limited (ASX: RDF) share price has been an incredibly strong performer on Friday.

The innovative intelligent transport solutions (ITS) technology company’s shares were up as much as 122% to a multi-year high of 89 cents at one stage.

At the time of writing, the Redflex share price is up 115% to 86 cents.

Why has the Redflex share price doubled in value today?

Investors have been fighting to get hold of Redflex shares today after it announced the receipt of a takeover approach.

According to the release, the company has entered into a binding scheme implementation agreement with Nasdaq-listed Verra Mobility Corporation.

This agreement will see Verra Mobility acquire 100% of the share capital of Redflex by way of a court-approved scheme of arrangement in an all-cash offer of 92 cents per share. This values Redflex at $146.1 million.

Verra Mobility’s offer represents a 130% premium to Redflex’s last close price of 40 cents and a 132% premium to its one-month volume weighted average price (VWAP).

What now?

The Redflex board of directors unanimously considers the scheme to be in the best interests of shareholders and recommends that they vote in favour of the scheme. This is subject to an independent expert concluding, and continuing to conclude, that the scheme is in the best interests of shareholders and there being no superior proposal.

Redflex Chairman, Adam Gray, commented: “The Board of Redflex has reviewed over the past year a wide range of strategic alternatives with a view to achieving maximum value for Redflex shareholders. After careful consideration the Board has come to the unanimous conclusion that the Scheme is in the best interests of shareholders.”

“The Scheme provides Redflex shareholders with an opportunity to realise certain and immediate value for their shares, at a significant premium to recent trading and at an attractive valuation multiple. We are pleased that a leading industry player such as Verra Mobility has recognised the strategic value of our company,” he concluded.

More reading

• Brokers name 3 ASX shares to buy right now
• PayPal stock could surge 23% to $300 on its cryptocurrency move, according to this analyst
• Here’s why the Novatti (ASX:NOV) share price is soaring 8% higher
• Dacian Gold (ASX:DCN) share price falls despite solid update
• Why the Aussie Broadband (ASX:ABB) share price rocketed 20% higher today

Motley Fool contributor James Mickleboro 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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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of UBS, its analysts have retained their buy rating but trimmed the price target on this gaming technology company’s shares to $35.50. The broker has been looking into the company’s Digital business and believes it grew strongly in the first quarter of FY 2021. However, it has reduced its forecasts to account for foreign exchange headwinds. The Aristocrat Leisure share price is trading at $31.16 this afternoon.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Analysts at Morgan Stanley have retained their overweight rating and lifted the price target on this banking giant’s shares to $26.20. According to the note, the broker believes that bank shares have the potential to outperform the market this year thanks to their earnings recovery and strong balance sheets. In addition to this, the broker expects banks to benefit from solid home loan growth and a reduction in impairment charges. The ANZ share price is fetching at $24.57 on Friday.

Corporate Travel Management Ltd (ASX: CTD)

Another note out of Morgan Stanley reveals that its analysts have reiterated their overweight rating and $21.50 price target on this corporate travel specialist’s shares ahead of earnings season. According to the note, the broker is expecting Corporate Travel Management to outperform in FY 2021. Especially with the economy re-opening and the sizeable cost reductions it made in FY 2020. In fact, the broker suspects the company’s profitability could even return to pre-COVID levels. The Corporate Travel Management share price is trading at $16.82 this afternoon.

More reading

• Risk vs uncertainty: why one is a lot worse
• ASX dividends: Are miners the new bank shares?
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• ASX banks to steal the dividend crown from mining stocks by next year

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and 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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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.

Paypal Holdings Inc (NASDAQ: PYPL) made headlines late last year when the company announced a move into cryptocurrency. One analyst believes that the full measure of that opportunity isn’t yet baked into its price and could drive PayPal stock to a new all-time high.

BTIG analyst Mark Palmer upgraded the stock to buy from neutral (hold), saying it would gain traction from its nascent cryptocurrency platform, which could add more than $1 billion in revenue to PayPal’s coffers by 2022. 

PayPal is using crypto brokerage Paxos to power its cryptocurrency transactions. The company “has seen its trading volumes rise impressively in recent weeks,” according to Palmer. The analyst goes on to posit that “the vast majority” of the increase in trading volume is the result of transactions by PayPal customers.

Late last year, PayPal announced the launch of a service that would allow users to buy, sell, and hold cryptocurrency in their PayPal account. In addition, users could learn about digital currencies and track prices, all without ever leaving the app. 

But that’s just the beginning. PayPal will accept cryptocurrency as a payment method beginning this year and plans to extend its crypto service to Venmo users.

Tangential evidence suggests that Palmer is right on the money. Investors need look no further than Square Inc (NYSE: SQ) to get a sense of the opportunity resulting from cryptocurrency transactions. In the third quarter, Square generated total net revenue of $3.03 billion, up 140% year over year, but excluding bitcoin revenue, net revenue was $1.4 billion, up just 25%. That suggests that crypto has effectively doubled Square’s net revenue. 

This highlights the massive potential resulting from PayPal’s move. Additionally, its stock has doubled over the past year on the accelerating adoption of digital payments, so it isn’t far-fetched to think PayPal could gain another 23% in the coming year.

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

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• If you thought 2020’s tech share rally was impressive, hold on for 2021!

Danny Vena owns shares of PayPal Holdings and Square and has the following options: long January 2022 $75 calls on PayPal Holdings. Danny Vena has no position in any cryptocurrencies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings and Square and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Novatti Group Ltd (ASX: NOV) share price is soaring higher in mid-afternoon trade. This comes after the company announced its Visa Prepaid cards are now supported by a major global payments platform. At the time of writing, the Novatti share price is up 8.3% to 26 cents.

What’s driving the Novatti share price?

The Novatti share price is picking up steam after the company reported news of its partnership with Apple Inc. (NASDAQ: AAPL)’s Apple Pay. In the company’s release, Novatti advised Apple Pay has now been included in its physical and digital Visa cards ecosystem.

The latest addition will allow consumers to conveniently make purchases in-store and online through Apple Wallet. The software, stored on an Apple device, contains credit card information input by the user, acting as a virtual wallet.

Novatti noted that the Apple Pay integration followed extensive testing to ensure a smooth transition. It also highlighted that major Australian Banks have already adopted Apple Pay into their services.

Quick take on Novatti

Established in 1994, Novatti is a digital banking and payments company that enables fast and secure payments. The business has partnership agreements with an array of companies that include Telstra Corporation Ltd (ASX: TLS), Cathay Pacific, Hutchison Telecom, and others.

Visa awarded Novatti with a principal issuer licence in September 2019, which paved the way for its Visa Prepaid cards.

Words from the managing director

Novatti managing director Mr Peter Cook hailed the addition of Apple Pay, saying:

By partnering with Apple Pay, Novatti is providing its clients with even greater flexibility and coverage in their choice of mobile device, and therefore, the opportunity for Novatti’s platforms to scale further.

By increasing the reach of Novatti’s Visa Prepaid cards, we aim to further scale our card issuing and transactions.

Novatti share price snapshot

The Novatti share price has lifted nearly 24% over the last 12 months.

The company’s shares hit an all-time low of 8.3 cents in March due to COVID-19 weakening global markets. In June, however, the Novatti share price accelerated to a 52-week peak of 42 cents, before stabilising around the mid-20-cent mark.

More reading

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• Why the Aussie Broadband (ASX:ABB) share price rocketed 20% higher today
• Why the Medadvisor (ASX:MDR) share price is up 11% this week
• The latest ASX broker “buy” ideas that got a valuation upgrade
• Why the Ioneer (ASX:INR) share price is up 16% this week

Aaron Teboneras owns shares of Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Visa. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Apple. 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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