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The Talga Group Ltd (ASX: TLG) share price is having a tough finish to the week.

At the time of writing, the ASX 300 stock is down 13% to 56.5 cents.

This leaves the battery materials developer’s shares trading within touching distance of a multi-year low.

Why is this ASX 300 stock crashing?

Investors have been heading to the exits today after the company announced the completion of a mining study into the expansion options for its Vittangi Graphite Project in Sweden.

The release notes that the mining study forms part of a wider integrated scoping study aimed at expanding the ASX 300 stock’s existing initial 19,500 tonnes anode per annum (tpa) production of low-emission graphite anode products for lithium-ion battery markets.

According to the release, the study found mine plans supporting 0.6Mtpa, 1.0Mtpa, and 2.0Mtpa Run of Mine (RoM) ore production from existing indicated and inferred JORC resources of 35.0Mt at 23.8%Cg.

However, it also warns that “there is a low level of geological confidence associated with Inferred mineral resources and there is no certainty that further exploration work will result in the determination of Indicated mineral resources or that the production target itself will be realised.”

The study also found that a transition to underground mining and optimised development plan negates the need for multiple open pits, with the potential to increase life of mine beyond 40 years at a lower 0.6Mtpa mining rate.

Big investment required

But to get to the above, it will take a significant investment and there is no certainty that it will be able to raise the required funds. The release states:

To achieve the range of outcomes indicated in the Interim Report, capital funding in the order of €520 – €1,100 million [A$848 million to A$1.8 billion] plus contingencies may be required. Investors should note that there is no certainty that the Company will be able to raise that amount of funding when needed.

This compares to the current Talga market capitalisation of approximately A$210 million.

Nevertheless, the ASX 300 stock’s CEO, Martin Phillips, is positive on the company’s prospects and appears optimistic that today’s study is a big step forward for it. He commented:

Our large-scale Swedish graphite project is a key alternative source of strategic raw materials to support the EU’s ambitions and the demand from key export markets. The completed mining study underpins the Scoping Study underway to outline expansion options to supply the global battery anode market beyond our initial 19,500tpa project.

The post Why is this ASX 300 stock crashing 13% today? appeared first on The Motley Fool Australia.

More reading

• Bell Potter says this speculative ASX stock could rise 200%+

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 Scott Phillips.

The Telix Pharmaceuticals Ltd (ASX: TLX) share price is racing higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) biopharmaceutical company closed yesterday at $15.74. At the time of writing, shares are trading 10.6% higher at $17.41 after touching a high of $17.44 apiece in early trade.

For some context, the ASX 200 is up 0.44% at this same time, while the S&P/ASX 200 Health Care Index (ASX: XHJ) is up 1%.

Here’s what’s grabbing investor interest today.

ASX 200 healthcare share rockets on trial results

Investors are bidding up the Telix Pharmaceuticals share price today after the company announced positive results from its ProstACT SELECT clinical cancer trial.

Telix is testing the efficacy of TLX591, an investigational anti-PSMA1 radio-antibody-drug conjugate (rADC) therapy. TLX591 is being developed to treat adult patients with PSMA-positive metastatic castrate-resistant prostate cancer (mCRPC).

According to the release, SELECT is a radiogenomics study intended to evaluate lesion concordance between Ga (gallium)-based PSMA-PET imaging and TLX591 dosimetry for the purpose of validating PET imaging for patient selection for rADC therapy.

(Quite a mouthful, I know!)

The company said the new positive clinical results build on prior data from the ProstACT SELECT trial, which demonstrated a favourable safety profile and biodistribution.

The study reported a median radiographic progression-free survival (rPFS) of 8.8 months, which Telix called an encouraging signal of the potential efficacy of TLX591 in this patient population.

The trial involved 23 patients with previously treated, progressive mCRPC who received two 76 mCi intravenous infusions of TLX591 14 days apart.

Commenting on the results sending the Telix Pharmaceuticals share price soaring today, Nat Lenzo, nuclear oncologist and lead recruiter of the SELECT trial, said:

We are encouraged by this rPFS result, which compares favourably to small molecule radioligand therapy (RLT) Phase I and II studies at similar stages of development.

This is a compelling signal of the potential efficacy of TLX591 in this heavily pre-treated population. The results further support the development of this candidate in an earlier mCRPC patient population which is the focus of the ProstACT Global Phase III trial and where there remains significant unmet need for effective treatment.

David Cade, chief medical officer at Telix, added:

TLX591 is a radio-ADC with significant potential advantages compared to small molecule radiopharmaceuticals in treating prostate cancer. TLX591 is differentiated by a patient-friendly dosing regimen with far lower cumulative radiation exposure compared to small molecule radioligand therapies.

The company is currently preparing to enrol patients at its first US sites for the Phase III ProstACT Global trial.

Telix Pharmaceuticals share price snapshot

With today’s intraday gains factored in, the Telix Pharmaceuticals share price is up a whopping 69% so far in 2024.

But it could well have further to run.

Following on today’s announcement, Wilsons has placed a $20.00 price target on Telix Pharmaceuticals shares. That represents a potential 17% upside from current levels.

The post Why is the Telix Pharmaceuticals share price soaring 11% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Telix Pharmaceuticals. The Motley Fool Australia has recommended Telix Pharmaceuticals. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The ANZ Group Holdings Ltd (ASX: ANZ) share price is up 0.7% in early trading amid news the ASX bank share has sold its remaining shareholding in AmBank. The S&P/ASX 200 Index (ASX: XJO) is up 0.8% in morning trade, so ANZ shares are slightly underperforming the market.

AmBank is one of the largest financial institutions in Malaysia. It has been operating for more than 40 years. The Malaysian bank has more than three million customers and over 9,000 employees. Services include banking, underwriting of general insurance, life insurance, and asset management services.

ANZ sells remaining shares of AmBank

The ASX bank share announced it has agreed to sell its remaining 5.2% of the issued shares of AMMB Holdings Bhd, otherwise known as AmBank, through a block trade at a price of MYR4.10 per share.

ANZ disclosed the sale proceeds will increase its common equity tier 1 (CET1) ratio by approximately 5 basis points. This is in addition to the 16 basis points of capital released from the sale of the initial block of 16.5% of AmBank shares in March 2024. The sale announced in March was done at MYR3.85 per share, so it has risen 6% in two months.

The AMMB share price has risen by 16% in the past 12 months, according to Google Finance. ANZ appears to be capitalising on a price close to the highest level since the onset of the COVID-19 pandemic.

The settlement of this sale is anticipated to occur on 5 June 2024.

The bank said the sale proceeds will have “no material impact” on net profit after tax (NPAT).

ANZ said after the March sale that its capital management considerations would include the capital release from the sale. The ASX bank share did not reference any ‘capital management’ during today’s sell-down announcement.

Management comments

The ANZ chief financial officer Farhan Faruqui said:

The sale of our equity stake in AmBank is a significant milestone in delivering on our strategy to simplify the bank. We have valued our partnership with AmBank and wish the group well for the future.

ANZ share buyback

When the ASX bank share announced its FY24 half-year result earlier in May, it revealed its intention to buy back up to $2 billion of shares as part of its capital management plan.

The bank called the buyback “appropriate”, taking into account its “strong capital position”. ANZ said the share buyback is expected to reduce ANZ’s level 1 and level 2 CET1 ratios at March 2024 by 54 basis points and 46 basis points.

The post ANZ shares rise as the bank boosts its capital coffers appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Scott Phillips.

Rio Tinto Ltd (ASX: RIO) shares are marching higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) mining stock closed yesterday trading for $127.66. In morning trade on Friday, shares are swapping hands for $128.41 apiece, up 0.6%.

For some context the ASX 200 is up 0.7% at this same time.

This comes amid news that the miner’s low carbon aluminium production in New Zealand has received a multi-decade new lifeline.

Rio Tinto shares in the green on smelter agreement

Rio Tinto shares are in the green after the company reported that New Zealand Aluminium Smelters (NZAS) has signed 20-year electricity arrangements that secure the future of the Tiwai Point aluminium smelter.

The smelter makes up around 13% of New Zealand’s total power demand. Back in 2021, Rio Tinto said the facility would be closed this year amid concerns over high energy costs.

Under the new agreement Tiwai Point, owned and operated by NZAS, will continue to produce high-purity, low-carbon metal, backed by a “diversified mix” of renewable electricty.

NZAS has inked contracts with Meridian Energy, Contact Energy and Mercury NZ to set pricing for an aggregate of 572 megawatts (MW) of electricity. That’s enough to meet the smelter’s full electricity needs.

Rio Tinto expects the agreements to commence in July and run until at least 2044.

Commenting on the deal that could be offering some tailwinds to Rio Tinto shares today, Rio’s Aluminium CEO Jérôme Pécresse said:

We are pleased the long-term future of the Tiwai Point smelter has been secured with these agreements, which were reached with a genuinely collaborative spirit between all parties.

They give us confidence that our New Zealand workforce and assets can continue competitively producing the high purity, low-carbon aluminium needed for the global energy transition.

This is an exciting new chapter, and we would like to thank everyone involved.

“This is a fantastic outcome for New Zealand and the Southland region,” Meridian Energy CEO Neal Barclay added. “It’s further proof that large industrial businesses can utilise New Zealand’s renewable energy advantage and create low carbon sustainable products, high value jobs and export dollars for our country.”

The agreement stipulates that in the event of future power shortages, NZAS could be asked to cut its electric use by up to 185 megawatts to ensure national energy security.

The agreements remain subject to regulatory approvals and other standard conditions.

In other news

Rio Tinto shares could also be getting a boost from the announcement of a separate transaction.

The ASX 200 miner reported it has entered into an agreement to acquire Sumitomo Chemical Company Limited’s 20.64% interest in NZAS for an undisclosed price.

Once that transaction is complete, Rio Tinto will own 100% of NZAS.

The post Rio Tinto shares marching higher amid an ‘exciting new chapter’ for production appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Scott Phillips.

If you’re hunting for an income boost, then it could pay to look closely at the ASX shares listed below.

That’s because analysts are feeling bullish on these income options and recently put the equivalent of buy ratings on their shares.

Here’s what sort of dividend yields and gains you could expect to receive from these ASX income shares:

Deterra Royalties Ltd (ASX: DRR)

The first ASX income share that analysts think investors should be buying is Deterra Royalties.

It is focused on the management and growth of a portfolio of royalty assets across a range of commodities, primarily bulks, base, and battery metals. Its portfolio includes royalties held over Mining Area C, its cornerstone asset, in the Pilbara region of Western Australia, as well as five smaller royalties including Yoongarillup/Yalyalup, Wonnerup, Eneabba and St Ives.

Morgan Stanley is positive on the company and believes its portfolio has positioned it to reward shareholders with some big dividends in the near term.

For example, it is forecasting fully franked dividends per share of 32.7 cents in FY 2024 and then 39 cents in FY 2025. Based on the current Deterra Royalties share price of $4.54, this will mean sizeable dividend yields of 7.2% and 8.6%, respectively.

Morgan Stanley currently has an overweight rating and $5.60 price target on its shares. This implies potential upside of 23% for investors.

Inghams Group Ltd (ASX: ING)

Another ASX income share that analysts think could be a buy for investors right now is Inghams.

It is one of the largest integrated protein producers across Australia and New Zealand, providing chicken, turkey, and plant‑based protein products.

Morgans thinks investors should invest in Inghams while its shares are cheap. The broker notes that “ING remains undervalued trading on a low PE multiple, especially for what is a market leader, with a vertically integrated operating model and assets that are difficult and costly to replicate.”

Another positive is that its analysts are forecasting some big dividend yields in the near term. They expect the company to be in a position to pay fully franked dividends of 22 cents per share in FY 2024 and then 23 cents per share in FY 2025. Based on the current Inghams share price of $3.47, this equates to dividend yields of 6.3% and 6.6%, respectively.

Morgans has an add rating and $4.40 price target on its shares. This suggests that upside of 27% is possible over the next 12 months.

The post 2 ASX income shares with 20%+ upside and 6%+ 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 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 Scott Phillips.

Earnings season is traditionally in February and August. However, not all ASX 200 stocks operate with the standard financial calendar.

As a result, this month there have been a number of result releases from popular companies.

The team at Wilsons has been running the rule over these updates and has given its verdict on them and their shares. Let’s see what the broker is saying about three stocks:

Aristocrat Leisure Limited (ASX: ALL)

Wilsons was impressed with this gaming technology company’s performance during the first half of FY 2024. It said:

Aristocrat’s (ALL) 1H24 result was an impressive, double-digit beat to consensus earnings expectations, which demonstrated the quality of the business underpinned by its ability to consistently gain market share.

And with management speaking positively about the ASX 200 stock’s outlook, Wilsons thinks that its shares could still be cheap. It adds:

ALL is still ‘cheap’ despite its recent rally with the company trading on a forward PE of ~18x. This multiple is attractive given ALL’s competitive strengths and the long runway for double-digit EPS growth, underpinned by continued share gains in land-based gaming and the accelerating performance of Aristocrat Interactive within the fast-growing real money gaming industry.

Webjet Ltd (ASX: WEB)

Another ASX 200 stock that impressed the broker this month was online travel agent Webjet.

While it was pleased with its performance in FY 2024, the thing that really caught its eye was its plan to demerge the WebBeds business. It said:

WEB reported FY24 full year EBITDA growth of +40% to $188m, which was towards the top-end of the company’s $180-190m guidance range and broadly in line with expectations. The major news however was WEB’s plans to demerge its B2B (WebBeds) and B2C segments (principally Webjet.com.au) into two separately ASX-listed companies in FY25.

Wilsons believes that the market is undervaluing the WebBeds business and appears to believe that the demerger will unlock this value. It explains:

To estimate the current ‘implied’ market valuation of WebBeds, we have conducted a sum-of-the-parts analysis of the combined WEB group. Our analysis assumes that Webjet OTA will trade on an FY25e EV/EBITDA multiple of ~8.6x – directly in line with the global peer average. Presuming this is accurate, WEB’s headline market multiple of ~13x implies WebBeds is valued at an implied FY25 EV/EBITDA multiple of ~15x – well below the average comp multiple of ~26x. This suggests that WebBeds is undervalued by the market in the current group structure. As such, we are confident that the proposed demerger, if successful, is likely to drive a re-rate of WebBeds valuation multiple (and thus WEB’s sum-of-the parts multiple), unlocking ‘hidden value’ for WEB shareholders.

Xero Ltd (ASX: XRO)

Finally, this cloud accounting platform provider is another ASX 200 stock that impressed this month with its results. It commented:

Xero’s (XRO) FY24 result was an impressive beat to consensus expectations, which has strengthened our conviction in our investment thesis. In the result, XRO showcased its ability to balance top line growth with profitability following recent cost outs. Notably, the company achieved its ‘rule of 40’ target several years earlier than expected by the street, with revenue growth of +22% and a free cash flow margin of 20%.

Based on this performance and its positive long term growth outlook, the broker feels that Xero’s shares are attractively priced. Particularly given its potential to outperform consensus estimates. It adds:

In summary, we expect continued double-digit subscriber growth, combined with price increases and a leaner cost base, to underpin significant long-term earnings growth that is not fully appreciated by the market in our view. Therefore, despite XRO’s high forward PE multiple of ~78x, the company still offers attractive value at current levels considering consensus EPS growth of ~34% p.a. (CAGR) to FY30 with potential for upgrades on top of this.

The post Wilsons gives its verdict on Webjet and these popular ASX 200 stocks appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

You don’t just have to buy houses to invest in real estate.

You can also do it by buying ASX real estate shares or real estate investment trusts (REITs).

The good news is that the Australian share market is home to a number of quality options that give investors access to all corners of the property market.

But which ASX real estate shares could be top options? Listed below are two that analysts rate among their best ideas. They are as follows:

Cedar Woods Properties Limited (ASX: CWP)

Morgans currently has Cedar Woods Properties on its best ideas list. It is a leading, national developer of residential communities and commercial developments.

The broker believes the ASX real estate share is well-positioned in the current environment due to its lower priced stock. It explains:

CWP is a volume business and the demand for lots looks to be improving, with margins to invariably follow. CWP’s exposure to lower priced stock in higher growth markets sees further potential to drive earnings. On this basis, we see every reason for CWP to trade at NTA and potentially at a premium, were the housing cycle to gain steam through FY25/26.

Morgans currently has an add rating and $5.60 price target on its shares. Based on its current share price of $4.36, this implies potential upside of 28% for investors from current levels.

Another positive is that the broker expects Cedar Woods Properties to provide investors with attractive dividend yields in the near term. It is forecasting dividends per share of 18 cents in FY 2024 and 20 cents in FY 2025. This equates to yields of 4.1% and 4.6%, respectively.

Healthco Healthcare and Wellness REIT (ASX: HCW)

Another ASX real estate share that could be a top option for investors is the Healthco Healthcare and Wellness REIT.

It is Australia’s largest diversified healthcare REIT with a portfolio including investments in hospitals, aged care, childcare, government, life sciences, and primary care and wellness property assets.

Bell Potter is very positive on the company’s long term outlook and feels its shares are too cheap at present. It said:

HCW has underperformed the REIT sector last 3 months following bond yield reversion and is attractively priced at 20% discount to NTA (but only REIT to record flat to positive valuation movement at 1H24) with double digit 3 year EPS CAGR given high relative sector debt hedging and ability to grow its $1bn development pipeline via attractive YoC spread to marginal cost of debt. Longer term, HCW has significant scope for growth with an estimated $218 billion addressable market where an ageing and growing population should underpin long-term sector demand.

Bell Potter has a buy rating and $1.50 price target on its shares. Based on its current share price of $1.14, this implies potential upside of 31% for investors. In addition, it is forecasting dividend yields of 7% in FY 2024 and 7.3% in FY 2025.

The post Best ASX real estate shares to buy right now 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 Scott Phillips.

Nothing reassures an investor quite as much as an insider buying amid a sell-off, especially when the ASX 200 stock plunges 30% in less than six months. If they can see a reason to buy, maybe there’s still a point in sticking with it.

Shares in Eagers Automotive Ltd (ASX: APE) have hit a couple of speed bumps this year. At the end of Thursday’s trading, the automotive retailer traded at $10.13 per share — within sneezing distance of its recently set 52-week low of $9.87.

However, shareholders may find solace in a rich lister’s seemingly insatiable appetite for Eagers.

Billionaire not stopping ’til he gets enough

While others might be losing hope, Nick Politis — Eagers’ non-executive director and Sydney Roosters chair — is reaching deep into his pockets.

According to today’s ASX notice, Politis feathered his nest by buying another 100,000 shares in the ASX 200 company. The buy was filled through an on-market trade on Tuesday, giving the wealthy businessman a grand sum of 72,819,048 pieces of the Eagers Automotive pie.

However, this is not Politis’ first time pulling out the chequebook in May. As my colleague Sebastian Bowen noted last week, the board member made two earlier purchases this month. The first purchase occurred on 9 May, nabbing 50,000 shares. The second investment captured 200,000 shares on 22 May.

The non-executive director’s stake is now worth $734.74 million.

Politis is visibly undeterred by the disclosure of profit-squeezing factors in Eagers’ recent trading update.

Perhaps the rich-lister sees it as a symptom of the economy and not a problem with the company itself. After all, fellow ASX-listed Peter Warren Automotive Holdings Ltd (ASX: PWR) described similarly difficult conditions in a release six days later.

Is this ASX 200 stock a misplaced buy?

Politis, and no doubt other buyers of Eagers, are likely banking on better times beyond the short term. If they’re right, the current share price could look like a decent deal.

However, Eagers Automotive still trades at a forward premium to some of its peers. For example, Peter Warren Automotive, Autosports Group Ltd (ASX: ASG), and MotoCycle Holdings (ASX: MTO) all trade at a 20% to 38% forward discount relative to Eagers.

Maybe being the biggest demands a premium over its competitors.

Nevertheless, Politis appears to be in it for the long haul, holding a 27% stake.

The post Guess which ASX 200 billionaire is buying up big again appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Eagers Automotive Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Investors with a high risk tolerance might want to consider adding the two ASX penny stocks in this article to a balanced portfolio.

That’s because although they are high risk investments, they have the potential to offer high rewards.

Let’s take a closer look at them and see why analysts are tipping them as buys right now:

Pointsbet Holdings Ltd (ASX: PBH)

This sports betting company has been given the thumbs up by analysts at Bell Potter.

It thinks Pointsbet could be an ASX penny stock to buy based on its current valuation. The broker feels that the market is undervaluing its operations and sees it as a potential takeover target for a bigger player. It explains:

We determine our price target for PointsBet through a sum-of-the-parts (SOTP) and there is no change in the $0.63 valuation. The components of this valuation are $150m for the Australian business ($0.46/share), $25m for the Canadian business ($0.08/share) and $30m in corporate cash ($0.09/share). We note we ascribe no value for the Banach technology which PointsBet can continue to use for in-play betting in Canada and, to a lesser extent, Australia. We also believe PointsBet is a potential takeover target given its market position (fifth largest in Australia), simplified structure (Australia and Canada), proprietary technology and good Balance Sheet.

Bell Potter has a buy rating and 63 cents price target on its shares. Based on its current share price of 50.5 cents, this implies potential upside of 25% for investors over the next 12 months.

PYC Therapeutics Ltd (ASX: PYC)

Another ASX penny stock to look at according to Bell Potter is PYC Therapeutics. It is clinical-stage biotechnology company developing multiple drug candidates for rare inherited diseases.

The broker highlights that PYC recently reported highly encouraging first clinical data for its lead drug candidate, VP-001, in patients with a rare form of blinding eye disease. It feels that the positive readout provides significant validation for the individual asset and broader PYC platform. It also feels that successful readouts in other phase 1/2 trials would provide considerable de-risking.

In light of this, this month Bell Potter initiated coverage on the ASX penny stock with a speculative buy rating and 17 cents price target. This implies potential upside of 70% for investors from current levels. The broker commented:

We initiate coverage of PYC with a speculative BUY recommendation and $0.17 valuation. Pro-forma cash balance was ~$84m as at 31 March 2024, providing runway into 2H CY25 to achieve the above-mentioned Phase 1/2 clinical trial readouts. PYC have multiple shots on goal with three highly promising drug candidates for rare diseases. We also see value in the company’s internal platform and potential to continually generate differentiated RNA therapeutics for inherited diseases.

The post 2 ASX penny stocks to consider buying while their prices are this cheap 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 positions in and has recommended PointsBet. 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 Scott Phillips.

Now could be a good time to buy Xero Ltd (ASX: XRO) shares.

That’s the view of analysts at Goldman Sachs, which have responded positively to some news from the other side of the world.

Xero’s UK boost

Goldman notes that the ASX tech stock has just announced changes to its UK plans. Commenting on the plan changes, the broker said:

Xero announced changes to its UK plans: (1) Increase price by +7% to +12% across its product portfolio effective 12 September 2024, consistent with 2023 changes from a quantum and timing perspective (vs. AU 2 months earlier); (2) Announced improvements in payroll functionality (i.e. greater functionality for salaried employees with flexible working hours; easier to transition to XRO from another provider); (3) Streamlining of plan structure similar to AU (Ignite, Grow and Comprehensive plans), but priced in a manner implying much less upsell opportunity (vs. AU tiers) given plan pricing is similar (or cheaper when including add-ons such as Xero Expense or Payroll); and (4) Migration of legacy plans expected to occur by March 2025 (in-line with AU) which implies a slightly faster migration timeline.

And while the changes were not unexpected, the price increases are a touch greater than it was forecasting. As a result, it sees the move as a positive and supportive of its revenue growth estimates.

In addition, and importantly, the broker doesn’t believe these changes will negatively impact subscriber growth. This is because it will allow Xero to make a greater investment in its platform. It adds:

Although we believe this pricing update was somewhat expected following the Australian plan announcement, we view it as another incremental positive for Xero and very supportive of our FY25/26 revenue forecasts. Although some may also see this as a ‘pull-forward’ of future price rises, and potentially at the expense of subscriber growth, we would disagree, noting that the higher near term revenues as a result of these changes will also allow for greater product investment, underpinning future subscriber/ARPU growth in the UK. We leave our earnings unchanged, forecasting +5.5%/+2% ARPU growth in ANZ/International in FY25 (vs. the FY24 exit run-rate, adjusting for idle-subscribers), with this growth reflecting the significant announced AU/UK price rises.

Big returns expected from this ASX tech stock

In light of the above, the broker has reiterated its conviction buy rating and $164.00 price target on the ASX tech stock.

Based on its current share price of $134.03, this implies potential upside of 22% for investors over the next 12 months.

The post UK boost: Why this ASX tech stock is a strong buy appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.