Tag: Fool

The Core Lithium Ltd (ASX: CXO) share price is surging higher today.

Shares in the All Ordinaries Index (ASX: XAO) lithium stock closed yesterday trading for 11 cents. In morning trade on Wednesday, shares are swapping hands for 12.5 cents apiece, up 13.6% at the time of writing.

This comes following the release of the lithium miner’s quarterly update covering the three months to 30 June.

Read on for the highlights.

Record quarterly shipments boost Core Lithium share price

Investors are bidding up the Core Lithium share price after the miner reported it had achieved record quarterly shipments of 33,027 dry metric tonnes (dmt) of spodumene concentrate.

The Spodumene concentrate, at 4.8% grade was sold at an average price of US$1,078/dmt. That’s 16.5% higher than the prior quarter, which management said reflected “the marginal increase” in spodumene concentrate price over the three-month period.

As expected, spodumene concentrate production declined by 18% to 20,563dmt as the Core’s Run-of-Mine (ROM) stockpiles are now fully depleted, with all processing activities completed as planned.

The company’s operational sites are now being maintained in a state of readiness until such time as market conditions (lithium prices) improve.

The miner reiterated its revised FY 2024 guidance for production of 95,020dmt and operating costs of $1,396/dmt.

The quarter just past also saw Paul Brown take over as CEO, commencing on 4 June.

As at 30 June, Core Lithium had $87.6 million in cash.

What did management say?

Commenting on the results lifting the Core Lithium share price today, Brown said:

We are pleased that we have managed a difficult FY24 with several positive achievements to carry forward into FY25. The June quarter saw record quarterly spodumene concentrate shipments and our lowest quarterly operating costs.

Brown added:

With the suspension of operations and the site moving to care and maintenance, the Company has significantly reduced its cost base across the business…

Looking ahead, we intend to put Finniss in a position where it can restart as a longer life lower cost operation and restore shareholder value through sensible exploration and potential corporate opportunities.

The miner also said that discussions with interested parties are continuing regarding the potential sale of 5,178 wmt of spodumene concentrate in FY25.

Core said its FY 2025 exploration will be focussed on advancing and testing targets with the potential to host lithium deposits “of meaningful scale” within trucking distance of its Finniss lithium processing plant.

The company’s FY 2025 exploration program also includes advancing gold, uranium, niobium, and REE prospects within its Central Australian tenement holdings outside the Finniss region.

Core Lithium share price snapshot

With today’s intraday gains factored in, the Core Lithium share price remains down 87% over 12 months.

The post Core Lithium share price rockets 14% amid ‘positive achievements’ appeared first on The Motley Fool Australia.

More reading

• Why Champion Iron, Core Lithium, Encounter Resources, and Rio Tinto shares are dropping
• Here’s the lithium price forecast through to 2027
• Why Atturra, Bravura, Core Lithium, and Opthea shares are racing higher today
• Top 5 investment themes exciting ASX shares investors in FY25
• Here 3 ASX lithium shares to watch for FY25

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.

Westpac Banking Corp (ASX: WBC) shares and the rest of the big four banks have delivered very strong returns for investors over the past 12 months.

Over the period, Westpac shares are up over 30%, ANZ Group Holdings Ltd (ASX: ANZ) shares are up over 20%, Commonwealth Bank of Australia (ASX: CBA) shares are up 30%, and National Australia Bank Ltd (ASX: NAB) shares are up almost 40%.

While this is great news for shareholders, one leading broker believes now could be the time to take profit and move on.

What is the broker saying about Westpac and other bank shares?

Bell Potter has been busy running the rule over the big four banks. It believes they are expensive now and investors should be underweight with their exposure to the sector before a correction comes. It explains:

The ASX 200 banks index has outperformed the broader index over the past 12 months, generating total returns of 40% (vs the market of 16%). In our view, the banks are too expensive at current levels. Our recommendation is an underweight to the banks as we expect the sector is due a correction without a significant change to the earnings outlook.

Why are they expensive?

The broker highlights that the big four banks look overvalued when compared to global peers. This is even after factoring in the resilient Australian economy and strong historical performances. It adds:

Australian banks appear overvalued compared to global peers. Despite their strong historical performance and the resilience of the Australian economy and housing market, their current Return on Equity (ROE) figures do not justify the elevated Price/Book (P/B) ratios. The current ROE, often in the low-to-mid-teens, seems insufficient to support P/B ratios that are considerably higher than those of global peers with superior ROEs.

One key example is US banking giant JP Morgan (NYSE: JPM), which is performing stronger than Commonwealth Bank but trades at a sharp discount. Bell Potter explains:

For instance, consider JP Morgan (JPM), a high-quality US bank. JPM currently generates an ROE of ~15% and trades on a P/B of 1.7x. In contrast, CBA generates an ROE of ~13% but trades on a P/B of 2.7x. Given the current fundamentals, we struggle to reconcile this 60% premium for CBA over JPM (and other global banks).

Historically expensive

Westpac and the big four bank shares are not just expensive compared to global peers, but also compared to their own historical multiples according to the broker.

It highlights that their valuations imply strong earnings growth is coming. However, the market is actually forecasting earnings to be going backwards in FY 2025. Bell Potter’s analysts explain:

In our view, bank sector valuations are expensive. Most valuation metrics point to elevated prices. The sector forward Price/Earnings (P/E), Price/Book (P/B) and P/E Rel Market all point to the banks being overvalued. P/E, P/B and PE Rel are all above their long-term averages.

For cyclicals, an elevated P/E ratio can sometimes be attributed to temporarily depressed forward “E” (earnings) due to the earnings cycle. However, we would argue that earnings are not weak or cyclically low. The elevated P/B ratio indicates that current market prices may exceed the underlying value of these banks. Above-average multiples could be justified if earnings growth is expected to be above average, but consensus has earnings going backwards in FY25 and low single growth in FY26.

Overall, it seems that now could be a good time to take some profit off the table.

The post Westpac and the other big four bank shares are ‘due a correction’ appeared first on The Motley Fool Australia.

More reading

• NAB share price hits 9-year high amid yet another strong day for ASX 200 banks
• Westpac and three other ASX 200 bank shares smashing new multi-year highs today
• Is now the time to take some profits on CBA shares?
• Prepare for earnings! What ASX bank share buyers can learn from Wells Fargo results?
• ASX 200 shatters record. Why it could still be ‘relatively cheap’ to invest

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended JPMorgan Chase. 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.

It has been a great day to have ASX gold shares in your investment portfolio.

In morning trade, the gold sector is charging higher with solid gains being seen across the board.

Here’s a summary of how some ASX gold miners are performing today:

• The Bellevue Gold Ltd (ASX: BGL) share price is up 3%.
• The Evolution Mining Ltd(ASX: EVN) share price is up 1.5%.
• The Newmont Corporation(ASX: NEM) share price is up 2.5%.
• The Northern Star Resources Ltd (ASX: NST) share price is up 3%.
• The Ramelius Resources Ltd (ASX: RMS) share price is up 2.5%.
• The Regis Resources Ltd (ASX: RRL) share price is up 3%.

This has driven the S&P/ASX All Ords Gold index 2.6% higher this morning.

Why are ASX gold shares rising?

Investors have been bidding gold stocks higher today after the price of the gold price stormed to a record high overnight.

According to CNBC, the spot gold price settled up 1.6% at an all-time closing high of US$2,467.8 an ounce. And during the session, the precious metal hit a new intraday record high of US$2,474.5 an ounce.

This was driven by optimism over the outlook for interest rates after June’s softer US inflation data and some recently dovish comments from the US Federal Reserve Chair, Jerome Powell.

In fact, the share market is so confident that rates are going lower that they are now pricing in a 100% probability of a rate cut in September according to the CME FedWatch tool.

Is it too late to invest?

UBS analyst Joni Teves doesn’t believe that it is too late to invest. Teves commented:

Interest to ‘buy-the-dip’ remained prevalent among investors amid strong sentiment towards gold, which is likely why the market was quick to rally on soft U.S. data prints and dovish Fed expectations. With the market sitting just above the psychological $2400 level, we think risks are skewed to the upside. We think positioning remains lean and there’s space for investors to build gold exposure.

And as I mentioned here earlier this, Bell Potter believes that Capricorn Metals Ltd (ASX: CMM) shares are cheap at current levels.

It has a buy rating and $6.53 price target on the ASX gold share. It explained:

CMM’s management team has a track record of capital efficient project funding, development, commissioning and operation. In our view, FY25 and FY26 should benefit from higher revenue and EPS increases by 32% and 6% respectively. CMM is a sector leading gold producer with a strong balance sheet, a management team with an excellent track record of delivery and clear organic growth options to lift group production to 270kozpa.

The post ASX gold shares race higher after gold price hits record high appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• Goldman Sachs says this ASX gold stock is a buy
• 5 things to watch on the ASX 200 on Tuesday
• Why Aussie Broadband, Bellevue Gold, Lifestyle Communities, and Star shares are falling
• Where to invest $10,000 into ASX 200 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 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.

I love finding ASX growth shares that have the capability to deliver impressive financial growth in their results, leading to pleasing share price growth.

It’s easy enough to identify highly-followed businesses with fairly (or very) expensive valuations that reflect their potential growth for the foreseeable future, such as Xero Ltd (ASX: XRO) and WiseTech Global Ltd (ASX: WTC).

Investors may be able to outperform the market if we can find stocks that represent growth at a reasonable price (GARP). In other words, the valuation is appealing for how much earnings growth they may be able to deliver in the next few years.

With that in mind, I believe these three ASX growth shares are very compelling to buy this month.

Close The Loop Ltd (ASX: CLG)

This company works in multiple countries, enabling increased product and economic circularity. One of its main offerings is collecting and refurbishing old electronics.

Close The Loop is a key partner of HP, which has a publicly stated goal of achieving 75% circularity for its products and packaging by 2030. HP ships approximately 40 million PCs annually, with an estimated 300 million HP PCs in the current market, in addition to its various printers and other products.

Close The Loop is the first provider to be appointed as ‘HP Platinum Global Certified Renew Partner’. There is significant potential here.

The ASX growth share hopes to work with other original equipment manufacturers (OEMs) in the future, which could unlock further growth for the business. A new IT refurbishment plant in Mexico will be running by October 2024.

The ASX growth share will also construct a second TonerPlas line after the government awarded $2.2 million in funding. Tonerplas is an additive that increases the longevity of asphalt, which is formulated from a mixture of post-consumer soft plastics and print toner.

According to Commsec, the company is expected to grow its earnings per share (EPS) by 23% between FY24 and FY26. It’s valued at under 7x FY24’s forecast earnings.

Collins Foods Ltd (ASX: CKF)

This ASX growth share is a multinational franchisee operator of KFC outlets in Australia, the Netherlands and Germany.

KFC is a strong brand, and Collins Foods is benefiting from the continuing growth of KFC outlet numbers. In the FY24 result, the ASX share increased revenue by 10.4%, and underlying net profit after tax (NPAT) increased by 15.6%.

During the HY24 period, the company added nine new builds in Australia, bringing the total to 279, and 11 restaurants in the Netherlands (eight acquired and three new builds).

If the Australian and European KFC networks keep growing, then its scale benefits and margins can continue improving. I liked that underlying profit rose faster than revenue, displaying operating leverage.

The forecast on Commsec suggests EPS could grow to 65.8 cents by FY26 (with 21% EPS growth in FY26). This puts it at just 13x FY26’s estimated profit.

Corporate Travel Management Ltd (ASX: CTD)

This ASX growth share provides corporate travel management services. Although the business is facing an uncertain economic environment at the moment, management is confident in the longer term.

From FY25, Corporate Travel aims to grow its revenue by 10% per annum over the next 10 years, partly through winning $1 billion in new clients each year. Any acquisitions made would be in addition to this growth.

The company is working on efficiencies and cost savings to help improve its earnings before interest, tax, depreciation and amortisation (EBITDA) margin. It wants 50% of every new dollar of revenue to fall to EBITDA. This could mean EBITDA grows at a compound annual growth rate (CAGR) of 15% over the next five years.

According to Commsec, the company is projected to grow its EPS by 25% between FY24 and FY26. This would put it at 13x FY26’s estimated earnings.

The post 3 of the best growth-focused ASX shares to buy in July appeared first on The Motley Fool Australia.

More reading

• 2 ASX investments I think all retirees should have
• I’d buy this ASX growth share in a heartbeat
• Here are the top 10 ASX 200 shares today
• 2 ASX shares to watch while they’re still dirt cheap
• ASX passive income: How to make $1,000 per month

Motley Fool contributor Tristan Harrison has positions in Close The Loop and Collins Foods. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Close The Loop, Corporate Travel Management, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Corporate Travel Management, WiseTech Global, and Xero. The Motley Fool Australia has recommended Close The Loop and Collins Foods. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

If you are in the process of building a retirement portfolio, then you may want to check out the quality ASX 200 shares listed below.

They have been named as buys and tipped to generate great returns for investors. Here’s what you need to know about them:

CSL Ltd (ASX: CSL)

The first ASX 200 retirement share that could be a top option for investors right now is CSL. It is a biotechnology giant with operations spanning plasma therapies, vaccines, and kidney disease treatments.

Morgans sees value in its shares at current levels and highlights that they are trading at a discount to long-term averages. The broker has an add rating and $315.35 price target on its shares. It commented:

While shares have struggled of late, we continue to view CSL as a key portfolio holding and sector pick, offering double-digit recovery in earnings growth as plasma collections increase, new products get approved and influenza vaccine uptake increases around ongoing concerns about respiratory viruses, with shares trading at 25x, a substantial discount (20%) to its long-term average.

And while Morgans’ price target isn’t far off now, it is worth noting that analysts at Macquarie are even more positive. They have an outperform rating and $330.00 price target on its shares. And with the broker tipping strong earnings growth over the coming years, it sees scope for its shares to rise to $500 within three years.

QBE Insurance Group Ltd (ASX: QBE)

Another ASX 200 share that could be a good option for a retirement portfolio is insurance giant QBE Insurance.

Goldman Sachs thinks highly of the company and feels that trading conditions are very favourable right now. So much so, it recently put a buy rating and $20.50 price target on its shares. This implies potential upside of 20% for investors over the next 12 months.

It believes that the company is well-placed thanks to the commercial rate cycle. It said:

QBE is a global commercial insurer with three main geographical operations across Australia Pacific, International (encompassing Europe) and North America. We are Buy-rated on QBE because 1) QBE has the strongest exposure to the commercial rate cycle. 2) QBE’s achieved rate increases continue to be strong & ahead of loss cost inflation. 3) North America on a pathway to improved profitability. 4) Valuation not demanding. 5) Strong ROE.

Another positive is that the broker is expecting QBE to provide investors with good dividend yields in the near term. It is forecasting yields of 5.25% in FY 2024 and then 5.6% in FY 2025.

The post 2 ASX 200 retirement shares to buy now appeared first on The Motley Fool Australia.

More reading

• CSL shares hit new 52-week high! What’s next?
• Investing in ASX shares? Why CEO pay DOES matter when misaligned
• Could investing $10,000 in ASX shares make you a millionaire?
• ASX 200 re-writes history. Which companies are leading the charge?
• Buy these quality ASX dividend shares for passive income

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

The ASX stock Step One Clothing Ltd (ASX: STP) has all the factors needed to continue beating the market, in my eyes. I think the ASX dividend share could be an excellent investment opportunity.

Step One describes itself as a “leading direct-to-consumer online retailer for innerwear.” It offers an “exclusive range of high-quality, organically grown and certified, sustainable, and ethically manufactured innerwear that suits a broad range of body types.”

The Step One Clothing stock price has increased more than 40% in the year to date, as shown in the chart below. That compares to a rise of 5% for the S&P/ASX 200 Index (ASX: XJO) in 2024.

However, the business has dropped around 25% since 12 April 2024, making it significantly cheaper and giving investors an opportunity to invest at a much better valuation. Let’s explore.

Strong revenue growth

One of the main things that can drive a business significantly higher is the speed of revenue growth.

If its revenue can rise by more than 10% per year over the long term, it gives the earnings and share price a good chance of growing at a compound annual growth rate (CAGR) of at least 10% per year, too.

Step One Clothing reported in the FY24 first-half result that its total revenue increased by 25.5% to $45.1 million. It also added 182,000 new customers in the HY24 period.

One compelling thing about the business is that it’s delivering rapid growth in overseas markets.

Australia only saw 8.9% revenue growth to $26.2 million, but the United Kingdom experienced 38% revenue growth to $14.6 million, while United States revenue jumped 256% to $4.1 million.

There’s no guarantee it will continue ramping up sales in the UK and US in the short term, but the ASX dividend stock’s progress is very promising. It can expand into other countries like Canada in the future.

Improving profit margins

For a business to become successful, I believe it needs to grow more than just revenue. It should also grow profit.

It’s particularly beneficial for shareholders if profit margins can rise. Investors usually value businesses based on the profit generated, so if margins rise, then profit can soar faster than revenue.

The HY24 result saw the gross profit margin improve by 0.5 percentage points to 81.2%, and the earnings before interest, tax, depreciation and amortisation (EBITDA) margin improved by 1.7 percentage points to 22.5%.

While total HY24 revenue rose 25.5%, the net profit after tax (NPAT) increased by 34.7%, thanks to the NPAT margin improving by approximately 5.1 percentage points to 27%.

In my eyes, the company has a very promising future if margins keep increasing.

Excellent dividends

The company has been very generous to shareholders in terms of dividend payouts. In recent results, the ASX stock has provided shareholders with payments, which equate to a dividend payout ratio of 100%.

Step One Clothing said of the HY24 result:

The company’s funding level following this dividend distribution is deemed sufficient to support future expansion and ensure ongoing financial stability. The company is targeting a full year payout ratio of 100% of NPAT.

The dividend is fully franked to the maximum extent possible, demonstrating the board’s commitment to aligning the interests of its investors with the company’s financial success.

According to the forecasts on Commsec, at the current Step One share price, it could pay a grossed-up dividend yield of 6.4% in FY25 and 6.9% in FY26.

The post 1 market-beating, dividend-paying ASX stock that’s a steal right now appeared first on The Motley Fool Australia.

More reading

• 1 ASX dividend stock down 28% to buy right now
• Top ASX shares to buy in July 2024

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.

The BHP Group Ltd (ASX: BHP) share price will be on watch on Wednesday.

That’s because the mining giant has just released its fourth quarter update.

Let’s see how the Big Australian performed during the three months ended 30 June.

BHP share price on watch following Q4 update

BHP revealed that iron ore production came in at 69Mt for the fourth quarter. This was up 13% from the third quarter. This was driven by record monthly and quarterly production at WAIO as a result of the strong underlying performance at the mines and the benefits of Port Debottlenecking Project 1. This underpinned iron ore sales of 68.4Mt for the quarter.

For the full year, BHP’s iron ore production increased 1% to a record 260Mt. Sales for the year rose 3% to 260.7Mt with an average realised price of US$101.04 per wmt. This is up 9% from US$92.54 per wmt in FY 2023.

Also growing quarter on quarter was BHP’s copper production. It reported production of 505kt, which was an 8% increase from the third quarter. This reflects higher concentrator grade and throughput at Escondida and record production at Carrapateena following the commissioning of Crusher 2 in the previous quarter.

For FY 2024, total copper production increased 9% to 1,865kt with an average realised price of US$3.98 per pound. The latter is up 8% year on year.

Elsewhere, metallurgical coal and energy coal production was down 18% and 10%, respectively, for the quarter. This reflects divestments and unfavourable weather.

This ultimately led to metallurgical coal falling 23% year on year. Whereas energy coal production still rose 8% from FY 2023.

Finally, nickel production was up 22% in the fourth quarter and 2% in FY 2024.

Management commentary

BHP’s CEO, Mike Henry, was pleased with the way the miner finished the year. He said:

We finished the year with a strong fourth quarter, achieving several production records and we are meeting current production and unit cost guidance for all commodities. WAIO continued its strong performance, delivering a second consecutive year of record production on the back of ongoing incremental improvements along its supply chain as we progress toward our medium-term goal of increasing production to greater than 305 Mtpa.

We achieved a strong performance across our copper business globally, underpinned by the highest production in four years at Escondida and another year of record production from Spence in Chile. Successful integration at Copper South Australia has delivered additional production tonnes, and exceeded the annualised synergies planned at the time of the OZL acquisition.

FY 2025 guidance

BHP sees potential for another record year of iron ore production in FY 2025. It is forecasting production of 255Mt to 265.5Mt.

In addition, copper production could be set for an increase in FY 2025. BHP is guiding to production between 1,845kt to 2,045kt.

The BHP share price is down 5% over the last 12 months.

The post BHP share price on watch after record-breaking FY24 iron ore production appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Wednesday
• No savings? I’d use the Warren Buffett method to earn lifelong passive income with ASX shares
• Why are BHP and other ASX 200 mining shares getting hammered on Tuesday?
• BHP share price marching higher amid legal cost sharing agreement with Vale
• It’s official, Aussies are getting richer! Here’s how

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.

If you are on the lookout for new income portfolio additions, then read on.

That’s because listed below are four ASX dividend stocks that analysts believe could be quality picks for investors this month. Here’s what they are expecting from them:

Aurizon Holdings Ltd (ASX: AZJ)

Over at Ord Minnett, its analysts think that Aurizon could be an ASX dividend stock to buy.

It is a rail freight operator that transports a range of commodities, including mining, agricultural, industrial and retail products across a network spanning thousands of kilometres.

Ord Minnett expects this network to support partially franked dividends of 18.6 cents per share in FY 2024 and then 24.4 cents per share in FY 2025. Based on the current Aurizon share price of $3.66, this will mean dividend yields of 5.1% and 6.7%, respectively.

Ord Minnett has an accumulate rating and $4.70 price target on its shares.

Inghams Group Ltd (ASX: ING)

Analysts at Morgans think that Inghams could be an ASX dividend stock to buy. It is Australia’s leading poultry producer and supplier.

It likes the company due to its leadership position and attractive valuation. It also expects some great yields from its shares in the near term. Morgans is forecasting fully franked dividends of 22 cents per share in FY 2024 and FY 2025. Based on the current Inghams share price of $3.62, this will mean dividend yields of 6.1%.

Morgans has an add rating and $4.25 price target on its shares.

Telstra Group Ltd (ASX: TLS)

The team at Goldman Sachs thinks this telco giant could be a top ASX dividend stock to buy right now.

Especially after the company increased its mobile plans. The broker believes its mobile business will underpin low risk earnings and dividend growth in the coming years.

In respect to the latter, Goldman is forecasting fully franked dividends of 18 cents per share in FY 2024 and then 19 cents per share in FY 2025. Based on the current Telstra share price of $3.83, this equates to yields of 4.7% and 5%, respectively.

Goldman has a buy rating and $4.30 price target on Telstra’s shares.

Transurban Group (ASX: TCL)

Finally, analysts at Citi think that Transurban could be an ASX dividend stock to buy.

It builds and operates toll roads in Australia and North America. Among its portfolio are CityLink in Melbourne and the Eastern Distributor in Sydney.

Thanks partly to its positive exposure to inflation, the broker is expecting Transurban to be in a position to pay dividends per share of 63.6 cents in FY 2024 and then 65.1 cents in FY 2025. Based on the current Transurban share price of $12.94, this will mean yields of 4.9% and 5%, respectively.

Citi has a buy rating and $15.50 price target on its shares.

The post Buy Telstra and these ASX dividend stocks this week appeared first on The Motley Fool Australia.

More reading

• Here is the earnings forecast out to FY28 for Telstra shares
• Why analysts rate these ASX dividend shares as buys
• Top brokers name 3 ASX shares to buy next week
• Buy Coles and these ASX 200 dividend stocks in July
• Why I keep buying shares of this 5%-yielding ASX dividend stock

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Goldman Sachs Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Aurizon. 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 were out of form on Tuesday. The mining giant’s shares tumbled 2.5% to $116.81.

Investors were hitting the sell button in response to a second quarter update which fell short of the market’s expectations.

Has this created a buying opportunity for investors? Let’s see what analysts at Goldman Sachs are saying about the miner.

What is the broker saying?

Goldman highlights that Rio Tinto’s update was a touch on the mixed side with positives and negatives. It commented:

RIO reported Pilbara iron ore shipments of 80.3Mt, ahead of GSe (+2%) but in line with consensus. IOC production missed by c.15% (2.2Mt) on lower mining rates and maintenance; regional wildfires are likely to impact 3Q volumes. Pilbara 1H’24 realised price of US$105.8/t was lower than GSe at US$106.5/t. Pilbara cash cost guidance is unchanged at US$21.75-23.5/t (GSe US$23.3/t) with June H costs expected to be above the top end due to lower 1H volumes.

The good news is that the broker still believes that Rio Tinto can achieve its guidance for the full year. It adds:

For RIO to hit the midpoint of Pilbara shipments guidance of 323-338Mt (GSe 331Mt), a 2H run-rate of 345Mtpa is required, which we believe is achievable.

Are Rio Tinto shares a buy?

In response to the update, Goldman has reaffirmed its buy rating with a trimmed price target of $136.10. Based on its current share price of $116.81, this implies potential upside of 16.5% for Rio Tinto’s shares over the next 12 months.

In addition, the broker is expecting dividend yields of approximately 5.5% in both FY 2024 and FY 2025, which boosts the total potential 12-month return to approximately 22%.

Goldman continues to believe that its shares are good value compared to peers. It said:

Compelling relative valuation: trading at c. ~0.8x NAV (A$144.0/sh) vs. peers (BHP ~0.9x NAV and FMG ~1.3x NAV) and c. ~5.5x NTM EBITDA at GSe base case, below the historical average of ~6-7x. 2.

It also highlights its attractive free cash flow (FCF) and dividend yield. The broker adds:

FCF/dividend yield in 2024E (c. 6%/6% yield) & 2025E (c. 7%/6% yield) driven by our bullish view on aluminium and copper in 2H24 (~30% of group EBITDA in 2024 increasing to 45-50% by 2026) and constructive view on iron ore.

And finally, Goldman likes Rio Tinto due to its production growth potential. It explains:

RIO is a FCF and production growth story in our view, with forecast Cu Eq production growth of ~4-7% in 2025 & 2026 driven by the ramp-up of the Oyu Tolgoi UG copper mine & a recovery at Escondida and Bingham, higher Pilbara Fe shipments with the ramp-up of new mines, and a rebound in aluminium production + the acquisition of Matalco.

The post Should you buy Rio Tinto shares after the miner’s update? appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
• Why are BHP and other ASX 200 mining shares getting hammered on Tuesday?
• Why Champion Iron, Core Lithium, Encounter Resources, and Rio Tinto shares are dropping
• Rio Tinto shares fall on soft second quarter update
• 5 things to watch on the ASX 200 on Tuesday

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 Goldman Sachs Group. 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.

Yesterday’s ASX session was a fairly muted one for investors. Tuesday saw the All Ordinaries (ASX: XAO) Index lose 0.23% of its value to finish at 8,243.3 points. But it was a far more dramatic day for DroneShield Ltd (ASX: DRO) stock.

Droneshield shares started the day by printing yet another new record high of $2.72 a share. But that was in the first minutes of trading, and it was all downhill from there. By mid-afternoon, the company had seemingly inexplicably lost more than 30% of its value. Droneshield even got down to $1.79 a share at one point.

The stock was suspended from trading for a couple of hours but returned to trading about an hour before the closing bell. When said bell rang, the company closed at $2.02 a share, down a horrid 22.31% for the day.

As we covered at the time, it was initially hard to see what was going on with Droneshield stock. There wasn’t any news or announcements from the company we could point to.

So it was speculated this was just a severe case of everyone trying to take their money off the table at once.

After all, this was a stock that was up by more than 615% year to date at one point yesterday. The company was also up almost 80% over just the preceding month.

But now that the dust has settled somewhat, we have a clearer picture of what went on during Tuesday’s trading session.

What on earth happened to DroneShield stock on Tuesday?

Naturally, after yesterday’s unexpected stock price plunge, Droneshield was sent a ‘please explain’ share price query by the ASX after its shares were temporarily halted from trading.

When asked to give its best explanation for what went on yesterday afternoon, Droneshield pointed the finger at an article that was released, discussing its shares. This article, the company asserted, included the following:

• Share price performance over the recent period;

• Comparison of DRO’s market cap to several large companies across different industries in the Australian market;

• Statements by two fund managers on their opinion of DRO’s valuation being overheated;

• Statements from two stock analysts on their outlook for DRO;

• Brief summary of DRO’s business;

• Reference to DRO being a popularly traded stock on several broker platforms; and

• A historical sale of DRO’s shares held by one of DRO’s Directors’, Jethro Marks.

The company also told investors that “There is no new information or change of circumstance around the business”. It also affirmed it was complying with all ASX listing rules.

What’s next?

Given the rather unusual and unexpected nature of yesterday’s events, we’ll only know how investors will react when the market opens today. It’s arguably possible that we’ll see a big rise upward for Droneshield stock. But then again, it’s equally possible that there will be another sell-off, or not much movement at all.

It is worth noting that Droneshield shares were still being heavily sold when they returned to trading yesterday afternoon after the company had made its case. But it’s unclear how investors will react today after everyone has had a breather. We’ll soon find out.

The post What’s next for Droneshield stock after Tuesday’s 22% drop appeared first on The Motley Fool Australia.

More reading

• Big ASX news! DroneShield share price crashes 31%
• Top 10 most traded ASX shares and US stocks in June
• Are ASX small-cap shares back in vogue amid a big shift?
• Would I be crazy to buy DroneShield shares now at over $2?
• 3 ASX small-cap shares that soared 250% to 675% in FY24

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended DroneShield. 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.