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The S&P/ASX 200 Index (ASX: XJO) is having a subdued finish to the week. In afternoon trade, the benchmark index is down 0.25% to 7,794.4 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

AVITA Medical Inc (ASX: AVH)

The AVITA Medical share price is down a further 14% to $3.41. Investors have been scrambling to the exits since the release of a first-quarter sales update from the regenerative medicine company on Thursday. That update reveals that management now expects commercial revenue to be in the range of US$11 million to US$11.3 million for the quarter. This compares to its previous guidance of US$14.8 million to US$15.6 million. The revision in guidance is attributable to a slower-than-expected conversion rate of new accounts for its expanded label of full-thickness skin defects.

Cettire Ltd (ASX: CTT)

The Cettire share price is down 4% to $3.22. This follows the release of the online luxury products retailer’s third quarter update this morning. Initially, the market cheered on the update, sending Cettire’s shares rocketing higher. However, it seems that eventually it started to focus less on its stunning sales growth and more on its softer earnings. Despite almost doubling its sales, Cettire’s underlying EBITDA only came in at $6 million. This is significantly less than its quarterly average during the first half of FY 2024.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s Pizza share price is down 4% to $41.80. Investors have been selling the pizza chain operator’s shares following the release of its strategy presentation. While Domino’s laid out big plans for sustainable long term growth, it seems that not everyone in the market is as confident as management. Domino’s shares are now down approximately 30% since the start of the year.

Star Entertainment Group Ltd (ASX: SGR)

The Star Entertainment share price is down 8% to 50.2 cents. This follows the release of a trading update from the struggling casino and resorts operator. Unfortunately for shareholders, the company reported net revenue of $419.2 million for the three months. This is down 4.6% from $439.5 million in the prior corresponding period. Management blamed the weakness on its Premium Gaming Rooms (PGRs) revenue, which was down sharply across all of its properties during the quarter. Also falling during the quarter were its earnings. Star’s EBITDA was down 11.5% to $37.9 million for the period.

The post Why Avita Medical, Cettire, Domino’s Pizza, and Star shares are falling today appeared first on The Motley Fool Australia.

More reading

• Star Entertainment share price tumbles alongside sinking revenues
• Cettire share price jumps 13% on explosive Q3 sales growth
• Why Avita Medical, Netwealth, Peninsula Energy, and Zip shares are sinking today
• Why did this ASX All Ords stock just crash 16%?
• Here are the top 10 ASX 200 shares today

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week in the red. At the time of writing, the benchmark index is down 0.25% to 7,793.7 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are rising:

Boral Ltd (ASX: BLD)

The Boral share price is up 2.5% to $6.18. This follows news that the building products company could finally be taken over by Seven Group Holdings Ltd (ASX: SVW). This morning Boral accepted an improved offer from its suitor. It has offered 0.1116 Seven Group shares and $1.70 cash per share, together with a 30 cents per share fully franked dividend to all existing and new shareholders following completion of the offer. Boral’s Bid Response Committee’s has provided a “unanimous recommendation that Boral shareholders should accept SGH’s takeover offer (Offer) or sell their Boral shares on-market.”

FBR Ltd (ASX: FBR)

The FBR share price is up 4% to 2.7 cents. This morning, this robotics company announced that its shares have commenced trading on the OTCQB Venture Market on Wall Street. The structure provides U.S. investors with live-market access to OTC-listed securities during North American trading hours, in U.S. dollar denominated terms. Management made the move as it believes that FBR’s planned activities in the U.S. will increase exposure and generate increased interest from U.S. domiciled retail and institutional investors. This listing on the OTCQB Venture Market means the company can improve accessibility to FBR for that investor base.

Origin Energy Ltd (ASX: ORG)

The Origin Energy share price is up 2% to $9.72. This has been driven by news that the energy giant is making a major renewable energy acquisition. Origin has entered into an agreement with Virya Energy to acquire its Yanco Delta Wind Farm for up to $300 million. The Yanco Delta Wind Farm is one of the largest and most advanced wind and energy storage projects in New South Wales. Management believes the acquisition will accelerate its strategy to expand renewable energy and storage in its portfolio. The purchase price comprises an upfront payment of $125 million and an additional variable payment of up to $175 million. The latter is conditional on the project achieving certain development milestones.

Regis Resources Ltd (ASX: RRL)

The Regis Resources share price is up 5% to $2.18. This has been driven by another rise in the gold price to a record high. This has lifted the whole sector. So much so, the S&P/ASX All Ordinaries Gold index is up over 1.5% in afternoon trade.

The post Why Boral, FBR, Origin, and Regis Resources shares are pushing higher today appeared first on The Motley Fool Australia.

More reading

• Which ASX companies are deploying dividends to secure a $1.9 billion deal?
• Origin shares fall despite ‘highly strategic’ $300m renewable energy acquisition
• 5 things to watch on the ASX 200 on Friday
• Top brokers name 3 ASX shares to buy today
• These ASX 300 mining stocks could rise 25% to 50%

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.

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Three of the big four S&P/ASX 200 Index (ASX: XJO) bank shares underperformed the benchmark this week.

Though following a strong run higher since October, the big bank stocks are still well ahead of the benchmark for the full year.

As of early afternoon trade on Friday, the ASX 200 is up 0.1% for the week.

As for the banks:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are down 0.9%
• National Australia Bank Ltd (ASX: NAB) shares are down 0.6%
• Westpac Banking Corp (ASX: WBC) shares are up 0.6%
• Commonwealth Bank of Australia (ASX: CBA) shares are down 1.4%

But as I said, longer-term investors in the ASX 200 banks shares don’t have anything to complain about.

Here’s how they’ve performed over the past 12 months:

• NAB shares are up 21%
• ANZ shares are up 22%
• Westpac shares are up 18%
• CBA shares are up 17%

All four stocks have smashed the 6% returns posted by the ASX 200 over this same time.

Here’s what happened over the week.

ASX 200 bank shares in the news

On Wednesday, the Motley Fool reported on the further potential upside forecast for the Westpac share price by Ord Minnet.

The broker noted that, “Over the next five years, we assume rational competition returns for pricing loans and customer deposits.”

According to Ord Minnet’s analysts:

As margins shrink and bad debts creep higher, earnings growth will be challenging for the Australian banks in the short term, but the current share price paints too bleak a picture on the medium-term earnings power of Westpac.

The broker has a $28 price fair value estimate price target on Westpac shares, some 7% above current levels.

NAB also made headlines on Wednesday following a series of executive changes.

The ASX 200 bank share reported that Rachel Slade will take the position of group executive of business and private banking on 29 April. Ana Marinkovic will step in for Slade to take over her current role of group executive of personal banking.

NAB also announced that Cathryn Carver will be appointed group executive of corporate and institutional banking, commencing on 1 July.

NAB CEO Andrew Irvine said the three executives, “understand the importance of using technology and data to make NAB easier and simpler to bank with”.

And on Thursday, CBA provided a somewhat sobering outlook for Australian household spending.

The monthly household spending index (HIS) for March increased by 0.2%. But CBA noted this was largely driven by holiday spending, with Easter falling at the end of March this year.

“Much of the spending lift in March can be attributed to the earlier-than-usual Easter holidays with people travelling and entertaining at home,” CBA chief economist Stephen Halmarick said.

Halmarick added:

Beyond Food & Beverage and Transport, gains in other categories were modest, and another fall in spending on Household Goods suggests consumers are prioritising spending on essentials.

The ASX 200 bank share’s economist believes the data should help enable the RBA to begin cutting interest rates in September.

The post What happened with the big 4 ASX 200 bank shares this week? appeared first on The Motley Fool Australia.

More reading

• Buy these ASX dividend stocks for passive income
• Do the dividends from ANZ shares still come fully franked?
• Are Westpac shares undervalued by the market?
• NAB shares push higher on leadership changes
• How to earn $3,000 in passive income with less than $3,000 in savings

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.

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South32 Ltd (ASX: S32) shares are trading at $3.33 on Friday, up 0.3% for the day so far.

This diversified ASX 200 mining share has been on a bit of a tear of late.

South32 shares have risen 15.22% over the past 13 trading days.

As the chart below shows, South32 shares closed at $2.89 apiece on 26 March.

That wasn’t far off the stock’s 52-week low of $2.75, which it reached on 21 February.

Had you put $10,000 into South32 shares 13 days ago, they’d be worth $11,522.40 now.

So, many of us missed a nice little buy-the-dip opportunity there.

But not to worry.

One top broker reckons it’s not too late to buy South32 shares.

Here’s why.

Should you buy South32 shares?

Top broker Goldman Sachs has a buy rating on South32 shares with a 12-month price target of $3.80.

That implies a potential 14% upside for investors who buy the ASX mining stock today.

In a new note last week, Goldman said South32 shares have a net asset value (NAV) of $3.80. The NAV measures the value of a company’s assets less its liabilities, divided by the number of shares outstanding.

Goldman said that South32 and Rio Tinto Ltd (ASX: RIO) look undervalued on a price-per-NAV basis compared to the two biggest mining shares, BHP Group Ltd (ASX: BHP) and Fortescue Ltd (ASX: FMG).

The broker noted that South32 has reported reduced Australian manganese production and sales in CY24 against increased low-grade 37% manganese pricing.

This may go some way to explaining why the broker has reduced its earnings per share (EPS) estimate for FY24 from 13 cents per share to 10 cents per share.

But don’t worry about that, because the future looks bright.

Goldman is estimating a three-fold increase in EPS the very next year.

For FY25, Goldman expects EPS of 31 cents per share, rising to 36 cents per share in FY26.

Why does Goldman Sachs say buy?

In addition to viewing the South32 share price as undervalued, Goldman is also bullish on copper, aluminium and metallurgical coal and South32 mines all three of them.

Goldman explains:

Buy rated on: (1) Improving FCF in 2H FY24: GS are bullish copper, aluminium, and met coal (~65% of S32 NTM EBITDA) in CY24E. (2) Attractive valuation trading at ~0.8xNAV on our estimates plus potential +A20cps upside based on recently announced sale of the Illawarra metallurgical coal operation to Golden Energy and Resources (GEAR) and M Resources for a total consideration of up to US$1.65bn (~A52cps), assuming the transaction completes as planned in 1H FY25; …

Looking ahead, Goldman expects South32 to report a fall in net debt to approximately US$500 million by the end of June.

That’s well below South32’s net debt target of US$1 billion to US$1.5 billion through the cycle.

As a result, the broker reckons South32 may announce the resumption of its on-market share buyback at about US$250 million per annum when the miner releases its FY24 results.

The broker also expects an improving dividend yield from 2% in FY24 to 6% in FY25, assuming South32 pays its minimum dividend payout ratio of 40% of earnings.

Goldman also predicts upside potential from various base metal growth projects.

The broker said:

… there are numerous growth projects/options that should provide long dated base metals growth; Sierra Gorda brownfields (4th milling line & oxide projects), battery grade manganese sulphate from the Clarke deposit at Hermosa + the Peake copper prospect, and copper/gold/cobalt from the Ambler Metals JV in Alaska.

The post Up 15% in 13 days, is it too late to buy South32 shares? appeared first on The Motley Fool Australia.

More reading

• Here are the top 10 ASX 200 shares today
• Own ASX 200 mining shares? Here’s the 5-year forecast for commodity prices
• Here are the top 10 ASX 200 shares today
• Why is the South32 share price having such a cracker run today?
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Bronwyn Allen has positions in BHP Group and South32. 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.

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There’s no holding back the rocketing gold price of late, which has proven to be excellent news to investors in S&P/ASX 200 Index (ASX: XJO) gold stocks.

The yellow metal gained again overnight, trading at new all-time highs of more than US$2,387 per ounce. It’s since retraced a touch, at US$2,383 per ounce.

As you’d expect, a series of new record highs for the gold price has seen investors snapping up ASX 200 gold stocks. And it’s seeing the sector strongly outperform again today.

In early afternoon trade on Friday, the ASX 200 is down 0.3%. The S&P/ASX All Ordinaries Gold Index (ASX: XGD), on the other hand, is up a welcome 1.7% at this same time.

Here’s how these top ASX 200 gold stocks are tracking today:

• Northern Star Resources Ltd (ASX: NST) shares are up 0.9%
• Newmont Corp (ASX: NEM) shares are up 0.3%
• De Grey Mining Ltd (ASX: DEG) shares are up 2.6%
• Ramelius Resources Ltd(ASX: RMS) shares are up 1.9%
• Gold Road Resources Ltd (ASX: GOR) shares are up 1.8%
• Evolution Mining Ltd (ASX: EVN) shares are up 1.5%
• Bellevue Gold Ltd (ASX: BGL) shares are up 2.3%

That’s some solid outperformance on a day when the benchmark index is going backwards.

But if you think that’s something, have a look at the past month’s returns.

One month ago the gold price stood at US$2,158 per ounce, some 10% below current levels.

Over that same month:

• Northern Star shares have gained 10.1%
• Newmont shares have gained 13.5%
• De Grey Mining shares have gained 4.4%
• Remelius Resources shares have gained 26.1%
• Gold Road shares have gained 15.3%
• Evolution Mining shares have gained 22.6%
• Bellevue Gold shares have gained 25.2%

For some context, the ASX 200 has gained 1.1% over this same period.

Here’s what’s driving the gold price to yet another new record high.

Gold price in uncharted territory

It appears the gold price is getting a lift today from modestly lower-than-expected inflation data out of the United States overnight.

After the US consumer price index (CPI) data came in hotter than consensus expectations on Wednesday, the March producer price index (PPI) for final demand increased by 2.1%, below consensus expectations of 2.2%.

This looks to have again increased confidence that the US Fed will begin cutting interest rates over the coming months.

Gold, which pays no yield itself, tends to perform better in low and falling-rate environments.

Commenting on the gold price moves in response to the latest US inflation data, Nicky Shiels, head of metals strategy at MKS PAMP said (quoted by Bloomberg):

The PPI is enough to provide some relief to the hot CPI print yesterday. Overall, US bonds are trading as though Fed rate hikes are coming while gold is trading as though the Fed remains in rate cutting mode, so any dovish print going forward is fuel to accelerate the established bull trend.

The yellow metal is also enjoying support from strong ongoing central bank buying.

And gold’s haven status has come to the fore as investors seek a safe store of wealth amid rising geopolitical tensions in the Middle East and Eastern Europe.

The post Gold price smashes record highs again adding more shine to ASX 200 gold stocks appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why Computershare, Core Lithium, Northern Star, and Vulcan Energy shares are storming higher
• Northern Star share price tumbles on difficult quarter
• Is it too late to get on board the ASX gold train?

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.

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There could be some big returns on offer in the healthcare sector for Australian investors according to analysts.

For example, the three ASX 200 healthcare stocks listed below have all been named as buys by analysts and tipped to deliver double-digit from current levels.

Here’s what they are saying about them:

CSL Ltd (ASX: CSL)

The first ASX 200 healthcare stock that could be a buy is CSL. It is the biotechnology giant behind the CSL Behring plasma therapies business, the CSL Seqirus vaccines business, and the CSL Vifor iron deficiency and nephrology business.

Macquarie is feeling very bullish about the company due to the positive medium term outlook for CSL Behring’s immunoglobulins. As a result, earlier this week, it upgraded the company’s shares to an outperform rating with an improved price target of $330.00. This implies potential upside of 17% for investors over the next 12 months.

But its shares may not stop there. It is also worth noting that Macquarie sees scope for CSL’s shares to rise beyond $500 within three years.

ResMed Inc. (ASX: RMD)

Over at Morgans, its analysts think that ResMed would be a great option for investors looking for healthcare exposure. ResMed is the global leader in sleep disorder treatment solutions.

This is a great area of the market to be in given the huge addressable market. It has previously been estimated that 1 in 5 people suffer from sleep apnoea. However, the vast majority of these sufferers are undiagnosed. This gives ResMed a huge growth runway even with the emergence of weight loss wonder drugs.

In fact, Morgans’ analysts recently stated that they “see these products having little impact on the large, underserved sleep disorder breathing market, and do not view them as category killers.”

Morgans has an add rating and $32.82 price target on its shares. This suggests potential upside of 13% for investors.

Telix Pharmaceuticals Ltd (ASX: TLX)

Finally, the team at Bell Potter think that Telix could be an ASX 200 healthcare stock to buy. It is the radiopharmaceuticals company behind the increasingly popular Illuccix prostate cancer imaging agent.

Its analysts believe Telix is well-positioned for growth over the coming years and are forecasting revenue increasing from $502.5 million in FY 2023 to $993.7 million in FY 2026. The broker is also expecting its EBITDA to grow at an even quicker rate. It has pencilled in EBITDA of $211.1 million in FY 2026, which compares favourably to FY 2023’s EBITDA of $58.4 million.

This morning, the broker reiterated its buy rating and $14.50 price target on the company’s shares. This implies potential upside of approximately 13% from where its shares trade today.

The post 3 ASX 200 healthcare stocks that could deliver big returns for investors appeared first on The Motley Fool Australia.

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More reading

• 3 unexpected ASX shares owned by top-performing fund managers
• 5 things to watch on the ASX 200 on Friday
• Why are so many top fundies overweight on CSL shares?
• Can the CSL share price really reach $500 in just 3 years?
• Why two brokers have named this ASX 200 stock as a best buy

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

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It turns out everyone loves ASX dividends! I mean, who would have thought it? Most ASX investors enjoy a good dividend payment for the same reasons any of us like to see labour-free passive income drop into our pockets.

Most of the time, ASX dividends are used to pay bills, buy more ASX dividend shares, or (less admirably) a big night out.

But today, we’ve got a reminder that dividends can be used as a dealmaker too.

One of the biggest deals currently sitting on the ASX is the takeover attempt on ASX 200 construction materials company Boral Ltd (ASX: BLD) by Seven Group Holdings Ltd (ASX: SVW). Seven has been after Boral for years now, with the two playing a fairly vigorous game of corporate cat and mouse.

Seven has amassed a stake in Boral of almost 80% over the past year or two but wishes to seal the deal with a full takeover.

Before today, the most recent development was the rejection last month of Seven’s full takeover offer of 0.1116 Seven shares, as well as $1.50 in cash, for every Boral share owned. As we covered at the time, this valued Boral at approximately $6.07 a share.

Boral rejected this offer last month, citing concerns that the offer “does not represent appropriate value for minority shareholders”.

But it appears that a fresh offer from Seven has finally clinched Boral’s approval. The secret ingredient, or sauce, if you will? ASX dividends.

ASX dividends clinch Seven-Boral deal

In an ASX release this morning, Seven detailed an improved offer for Boral shares to 0.116 Seven shares, and a buffed-up $1.70 in cash per share. That $1.70 in cash includes a provision that will see Seven pay all shareholders, existing and new, a special dividend worth 30 cents per share, fully franked, upon completion of the deal.

Boral has also announced that it will pay a fully-franked dividend of 26 cents per share to investors, as well as potentially conducting a $350 million share buyback program on Boral’s remaining outstanding stock.

If Boral pays out this dividend, Seven has said that its cash offer per share will reduce to $1.44 per share to reflect this.

In light of these new dividend proposals, as well as the reality that Seven controls nearly four-fifths of Boral’s stock, Boral has finally consented to the deal and recommended shareholders vote in favour of it. Here’s some of what the company said:

[Boral] believes that the SGH [Seven Group Holdings] Offer represents the most attractive outcome available to Boral Shareholders, particularly when measured against the risks of remaining as a minority shareholder now that SGH has a total interest of 78.8% in Boral.

Accordingly, the [Boral Bid Response Committee] unanimously recommends that Boral Shareholders ACCEPT the SGH Offer or sell their Boral Shares on-market.

So it appears that a slew of new ASX dividends has finally won the day for Seven, and Boral’s ASX future now looks limited.

The Boral share price is up 1.82% in response today to $6.14 a share, while the Seven share price is flat at $40.03.

The post Which ASX companies are deploying dividends to secure a $1.9 billion deal? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Boral share price falls after rejecting Seven Group takeover

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

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BHP Group Ltd (ASX: BHP) shares will be on watch next week.

That’s because the mining giant will be releasing its hotly anticipated quarterly update.

Ahead of the release on Thursday 18 April, let’s take a look at what the market is expecting from the Big Australian.

What is expected from BHP?

According to a note out of Goldman Sachs, it is expecting BHP to have a reasonably solid quarter.

For example, copper production is expected to come in at 457kt for the three months. This is up 4.1% on the previous quarter and 12.5% year on year. It is also largely in line with the consensus estimate of 459kt.

Also expected to increase quarter on quarter is metallurgical coal production. Goldman expects BHP to report production of 7.3Mt for the three months. This would mean an increase of 27% on the previous quarter and 5.8% on the same period last year. Goldman’s estimate is also ahead of the consensus estimate of 6.8Mt.

For nickel, the broker is forecasting production of 17.6kt for the period. This will be down 10.2% on both the prior corresponding period and year on year. It is also well short of the consensus estimate. That is 19.8Mt, which implies modest growth on previous periods.

Finally, let’s now take a look at iron ore, which is of course the biggest contributor to BHP’s earnings.

Unfortunately, Goldman believes that the miner’s iron ore shipments will be short of expectations for the quarter. It has pencilled in shipments of 66.8Mt for the three months, which is down 5% from the previous quarter and largely flat year on year. The consensus estimate for iron ore shipments is 70.2Mt.

Are BHP shares in the buy zone?

Interestingly, despite predicting below consensus iron ore shipments and nickel production, Goldman Sachs is one of the more bullish brokers out there.

Its analysts currently have a buy rating and $49.20 price target on BHP’s shares. This implies potential upside of 8.3% for investors from current levels.

In addition, the broker is forecasting fully franked dividend yields of 4.8% and 4.2% in FY 2024 and FY 2025, respectively.

Combined, investors buying at current levels would generate a total return beyond 12% over the next 12 months if Goldman Sachs is on the money with its recommendation.

This means that a $20,000 investment could be in excess of $22,400 this time next year if all goes to plan.

The post Own BHP shares? Here’s your quarterly update preview appeared first on The Motley Fool Australia.

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More reading

• Here are the iron ore and lithium price forecasts through to 2027
• How BHP stock could unseat the world’s top copper producer
• Why top brokers say Rio Tinto stock is a better buy than BHP
• In this bull market, where are the bargain buys to be found?
• The BHP share price is down 12% in 2024. What’s next for the iron ore price?

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.

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The S&P/ASX 200 Index (ASX: XJO) stock IDP Education Ltd (ASX: IEL) has suffered significantly over the past year, dropping by 40%, as we can see in the chart below. Despite this significant fall, UBS thinks the education and language testing business can recover and deliver a 50% share price rise.

Of course, just because a share price is predicted to rise a large amount doesn’t mean it’s guaranteed to happen.

In this article, I’ll look at why UBS sees an opportunity with the IDP Education share price and how much it thinks profit can grow.

Potential headwinds

UBS acknowledged that changes in government policies in Canada — such as a tightening of spousal visas — created uncertainty for the education provider in FY24 and FY25.

We have previously covered some of the other issues in Canada, which the ECP Growth Companies Fund investment team explaining as follows:

IDP Education underperformed as the Canadian government opened up its SDS immigration visa requirements to 4 new English language tests, increasing competition for IDP’s IELTS [International English Language Testing System] business.

It is uncertain how much market share IELTS could lose over the next few years, however market estimates point to an 8% to 15% EPS impact.

UBS also pointed to UK news that suggests a “potential tightening of study work rights.”

In Australia, we’ve just heard that international student fees are going to increase, according to reporting by the Australian Financial Review. This comes after new measures were announced to stop non-genuine students.

UBS said these countries were “targeting the problem of non-genuine students”. However, the broker thinks IDP’s competitors are more exposed to these changes, which could result in some offsetting market share benefits for IDP, or potential “consolidation”.

The broker noted that the UK could implement further changes, though there has already been a tightening of restrictions on students’ ability to bring in independents.

Any tightening announcement should be the “last major piece of negative regulatory news”, though any US changes could “impact the growth angle”.

Despite these headwinds, UBS thinks the ASX 200 stock may generate net profit after tax (NPAT) of $162 million in FY24, $179 million in FY25 and $226 million in FY26.

Ongoing profit growth?

The broker has forecasted that the IDP Education net profit could continue to grow in FY27, with NPAT of $271 million, and then reach $312 million in FY28.

Based on UBS’ profit estimates, the IDP Education share price is valued at 28x FY24’s estimated earnings, 26x FY25’s estimated earnings, 20x FY26’s estimated earnings, 17x FY27’s estimated earnings and 15x FY28’s estimated earnings.

Despite the challenges IDP Education is facing, it’s pleasing to see the business predicted to see steadily growing profit, which is usually a very supportive driver of pushing the share price higher.

According to the projections, the dividend could also increase each year between FY24 and FY28, but I’m not going to focus on that because the IDP Education share price performance could be the key factor in total shareholder returns.

IDP Education share price target

UBS currently has a share price target of $25.30 on the company. A price target tells us where the broker thinks the share price will be in 12 months.

At the current IDP Education share price, the price target implies it could rise 54%. That would be a big return – even half that would probably outperform the ASX share market quite nicely.

The post Top broker tips one of the ASX 200’s worst performers of the past year to surge 50% 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 positions in and has recommended Idp Education. The Motley Fool Australia has recommended Idp Education. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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NextDc Ltd (ASX: NXT) shares have gotten plenty of attention this week.

The S&P/ASX 200 Index (ASX: XJO) tech stock entered a trading halt yesterday, after closing on Wednesday at $16.71 a share. Shares are expected to resume trading on Monday.

The trading halt preceded NextDC’s announcement of a massive $1.32 billion capital raising.

The funds will be raised via a 1 for 6 entitlement share offer. New shares will be issued for $15.40 apiece. Or almost 8% below where NextDC shares closed on Wednesday.

The $1.32 billion will help NextDC expand its operations to meet the record demand it’s experiencing for its data centre services.

CEO Craig Scroggie said, “NextDC continues to see significant growth in demand for its data centre services underpinned by powerful structural tailwinds.”

Scroggie said that amid this strong demand growth, “We have decided to bring forward the development and fitout of key assets in Sydney and Melbourne to ensure we are able to meet this growth in demand.”

Which brings us to nuclear power.

NextDC shares need power

The rapid rise of artificial intelligence (AI) looks set to match or even dwarf the impact of the internet in the 1990s and 2000s.

But AI doesn’t live in a real cloud. Instead, it requires an ever growing amount of computing power, which is increasingly housed in massive data centres.

And in a world intent on weening itself off of fossil fuels while still struggling to provide reliable baseload power with renewables, that poses a potential growth obstacle for NextDC shares.

Which has Scroggie casting his eye on nuclear energy.

“We need power, we need transmission networks, we need green energy, we need more solar, we need more wind and, frankly, we need nuclear,” he said (quoted by The Australian Financial Review).

Scroggie added:

We have to find net zero power options that are capable of supporting energy needs when the sun is not shining and the wind is not blowing and batteries [are] not going to cut it.

And the new generation of data centres required to support our AI co-pilots (or soon-to-be pilots) requires a lot more juice.

According to Scroggie, the new data centres NextDC is planning to support AI will use 10 times as much energy as current facilities.

“We’re going from general purpose computing to high-performance computing. That will see a generational change both in the scale and the density of computers,” he said.

Indeed, having the right ESG credentials on its data centres could offer NextDC shares a significant boost.

As JP Morgan analyst Bob Chen pointed out (quoted by The AFR):

One thing that is also important here is the customers of these data centres, typically your global cloud service providers like Microsoft, Amazon, Google, also have an ESG mandate and are increasingly preferring operators that can source green energy.

The post Own NextDC shares? Here’s why the company is spruiking nuclear power appeared first on The Motley Fool Australia.

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More reading

• Up 16% in 2024! Are ASX tech shares now overvalued?
• What’s happening with the NextDC share price following today’s $1.3 billion announcement?
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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.

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