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The Westpac Banking Corp (ASX: WBC) share price has had a tough 12 months.

Since this time last year, the banking giant’s shares have lost 18% of their value.

This leaves the Westpac share price trading at $21.38, which is well short of its 52-week high of $26.44.

Will the Westpac share price recover?

While the Westpac share price performance has been disappointing, one leading broker continues to believe that it can recover.

In fact, the team at Goldman Sachs believe the bank’s shares can reach a new 52-week high over the next 12 months.

According to a recent note, the broker has a conviction buy rating and $26.55 price target on Australia’s oldest bank’s shares. This implies potential upside of 24% for investors over the next 12 months.

Why is Goldman so bullish?

Goldman named four key reasons why it thinks the Westpac share price is undervalued right now.

The first reason is the bank’s strong leverage to rising rates. It expects rate hikes to boost Westpac’s net interest margin quicker than peers. It explained:

WBC provides strong leverage to rising rates and will particularly benefit from the relative lack of domestic deposit repricing that we have seen to date post recent rates cash rate rises. Furthermore, its shorter-dated replicating portfolio (three-years for deposits versus five-years for peers), will also see the benefit of higher rates play through its NIM quicker than peers.

Another reason is its cost cutting plans. Although the broker feels that management is aiming for the stars with its targets, it suspects it could still hit the moon and make a meaningful reduction. Goldman said:

While we now expect the inflationary environment will make WBC’s A$8 bn expense target by FY24E unachievable, our like-for-like FY24E expense forecast of c. A$8.9 bn still implies an 18% reduction in reported expenses versus 1H22A annualised, and a 7% reduction in expenses, excluding large/notable items and the impact of potential asset sales, with some ground already made since the strategy’s launch in May-21.

Goldman also sees positives in the bank’s plans to offer rapid digital mortgage approvals. It said:

Importantly, WBC’s 27-Jul-22 market update highlighted that despite its focus on expenses, the business is still investing in its franchise, with the imminent launch of its “10-minutes to unconditional approval” digital mortgage, which we think will ultimately be leveraged into its broader mortgage processing capability, which currently appears inferior to peers, particularly as it relates to brokers. Initiatives like WBC being the first Australian bank to offer a payments “terminal-like” solution on Android mobiles also supports this view.

Finally, the valuation of the Westpac share price is just too cheap to ignore for Goldman Sachs. Its analysts believe the bank’s shares offer the most upside over the next 12 months. It concludes:

On our revised forecasts and target prices, WBC now offers the most upside of the banks over the next 12 months. Beyond this, we note the stock is trading at a 20% discount to peers, versus the historic average 2% discount.

The post Goldman Sachs names 4 reasons the Westpac share price is cheap appeared first on The Motley Fool Australia.

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More reading

• 2 excellent ASX 200 dividend shares that brokers love
• Is the Westpac share price a buy for the bank’s ‘surplus capital’?
• Unemployment falls, oil rises, and we’re back on the roads. Scott Phillips on Nine’s Late News
• Up 10%, why has the Westpac share price smashed other ASX banks this past month?
• Brokers say BHP and this ASX 200 share are buys

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. 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 Westpac Banking Corporation. 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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On Wednesday, the S&P/ASX 200 Index (ASX: XJO) ended its losing streak and pushed higher. The benchmark index rose 0.5% to 6,998.1 points.

Will the market be able to build on this on Thursday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise again on Thursday after Wall Street snapped a three-day losing streak. According to the latest SPI futures, the ASX 200 is expected to open the day 31 points or 0.45% higher this morning. On Wall Street, the Dow Jones rose 0.2%, the S&P 500 was up 0.3%, and the NASDAQ pushed 0.4% higher.

Travel results

A couple of ASX 200 travel shares will be handing down their results on Thursday. Travel agent Flight Centre Travel Group Ltd (ASX: FLT) and airline operator Qantas Airways Limited (ASX: QAN) are both scheduled to release their full year results and are expected to report sizeable losses. Consensus estimates are for net losses of $264 million and $1.2 billion, respectively. The market will no doubt be looking for signals that a return to profit is now on the cards.

Oil prices continue to rise

Energy shares including Santos Ltd (ASX: STO) and Woodside Energy Group Ltd (ASX: WDS) could have another decent day on Thursday after oil prices rose again on Wednesday night. According to Bloomberg, the WTI crude oil price is up 1.6% to US$95.21 a barrel and the Brent crude oil price is up 1.3% to US$101.54 a barrel. Oil prices lifted amid concerns that the United States will not consider additional concessions to Iran.

Woolworths results

The Woolworths Group Ltd (ASX: WOW) share price will be one to watch on Thursday when the retail giant releases its full year results. According to a note out of Citi, its analysts are expecting a net profit after tax of $1,523 million. The broker is also expecting a stronger outlook than the market is forecasting. It recently said: “We are ~4% above consensus for FY23e sales and ~5% above consensus for EBIT.“

Gold price edges higher

Gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) will be on watch following a mildly positive night for the gold price. According to CNBC, the spot gold price is up 0.2% to US$1,765.1 an ounce. Gold rose ahead of the Jackson Hole symposium.

The post 5 things to watch on the ASX 200 on Thursday appeared first on The Motley Fool Australia.

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More reading

• What boosted the Woodside share price on Wednesday?
• The Qantas factor: Rex shares hold steady despite deepening loss
• Could ASX 200 tech share Altium be in for another takeover approach?
• What’s been happening with the Nuix share price of late?
• Which 3 ASX mining shares are soaring more than 15% today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. 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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Are you looking for dividends shares to buy? If you are, then take a look at the two listed below which are rated as buys.

Here’s what you need to know about these growing dividend shares:

Dicker Data Ltd (ASX: DDR)

The first ASX dividend share that has been rated as a buy is leading technology hardware, software, and cloud distributor, Dicker Data.

It has been growing at a consistently solid rate for a decade and shows little sign of stopping any time soon. For example, during the first half of FY 2022, the company expects to report a 36% increase in revenue to $1,459 million and an 11% lift in operating profit before tax to a record of $51 million (excluding acquisition costs).

In response to this news, the team at Morgan Stanley retained their overweight rating with a trimmed price target of $14.00.

As for dividends, Morgan Stanley is forecasting fully franked dividends per share of 36.2 cents in FY 2022 and 42.2 cents in FY 2023. Based on the current Dicker Data share price of $11.68, this will mean yields of 3.1% and 3.6%, respectively.

Elders Ltd (ASX: ELD)

Another ASX dividend share that has been rated as a buy is Elders. It is a leading agribusiness company offering a range of services to rural and regional customers across the ANZ region.

After going through a very difficult period, the company has bounced back incredibly strongly in the last couple of years. This has seen the company report stellar earnings growth. This includes an 80% increase in first-half EBIT to $132.8 million last month.

The good news is that Goldman Sachs doesn’t believe that Elders’ growth is over and expects further growth in the near term. In addition, the broker likes the company due to its “strong track record; good industry structure; potential for positive earnings surprise; and an attractive valuation.”

Goldman Sachs currently has a buy rating and $21.00 price target on its shares.

In addition, it is forecasting dividends per share of 50 cents in FY 2022 and 53 cents in FY 2023. Based on the current Elders share price of $11.54, this implies attractive yields of 4.3% and 4.6%, respectively.

The post Analysts say these ASX dividend shares are buys now appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 ASX dividend shares to buy next week
• Analysts say these top ASX dividend shares are buys
• Here are the top 10 ASX 200 shares today
• Brokers name 2 ASX dividend shares to buy with 4%+ yields
• Brokers name 3 ASX shares to buy today

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 Dicker Data Limited. The Motley Fool Australia has positions in and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Elders Limited. 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 All Ordinaries Index (ASX: XAO) has been in a pendulum swing over the ASX reporting season. Here are three ASX healthcare companies that have gone under the radar.

Regis Healthcare Ltd (ASX: REG)

The Regis share price only lifted 0.32% to close at $1.59 after the company released its FY22 results today.

The ASX-listed residential care provider recorded a net loss after tax of $38.8 million. This is a major reversal of its net profit after tax (NPAT) of $19.9 million in FY21. It didn’t help that revenue only grew 3.4%.

One reason for the drop in Regis’ bottom line is likely the Australian government’s 2021-22 budget decision to remove Aged Care Approval Rounds. This means from 1 July 2024, consumers can choose an approved provider that best suits their needs. Consequently, the government will discontinue operational places/bed licenses from this date.

Given this discontinuation, the depreciation of the operational places needs to be adjusted from an indefinite period to the date of expiry, being 1 July 2024. The change brought about a $61 million negative impact on net profit.

However, this does not affect cash flow as Regis still declared a final dividend of 2.32 cents per share.

The dividend is 50% franked and payable on 30 September.

EBOS Group Limited (ASX: EBO)

The EBOS share price only increased 1.59% to close at $34.54 per share on Wednesday despite a strong set of FY22 results.

EBOS is a wholesaler and distributor of healthcare, medical and pharmaceutical products.

Revenue surged 16.6% to a record high of $10.7 billion due to strong performances from both the healthcare and animal care segments. Net profit after tax also rose from $202.6 million in FY21 to $228.2 million.

The healthcare distributor also declared a final dividend of NZ 49 cents per share, resulting in total dividends declared for FY22 to NZ 96 cents per share.

Despite the inflationary environment, the adverse impact of supply chain issues, and staff shortage, EBOS still managed to increase earnings before interest and taxation margin slightly in FY22.

Management emphasised the resilience of the business and expect another year of profitable growth in FY23. They believe the balance sheet is in sound shape to support expenditure needs as well as future growth opportunities.

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren share price went down slightly by 2.14% to $5.48 at the close of trade today on the back of company results for HY22.

Total revenue moved slightly from $234,000 to $283,000. Neuren’s net loss improved ever so slightly by 11% to $7 million.

Neuren is a biopharmaceutical company that engages in the development of new therapies for brain injury, neurodevelopment, and neurodegenerative disorders. So, it’s still spending money to develop commercial solutions.

The most notable development was in July when Neuren’s US partner Acadia Pharmaceuticals submitted an application to the US Food and Drug Administration (FDA) for trofinetide, a drug that could treat Rett syndrome in adults and pediatric patients aged two years and older.

While an application is promising, it’s still too early to know whether this will be a success or not. Such is the unpredictable nature of biotech companies.

The post Here are 3 ASX healthcare share results you might have missed appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares hitting new 52-week highs on Wednesday

Motley Fool contributor Raymond Jang 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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The Woodside Energy Group Ltd (ASX: WDS) share price went up more than 3%, adding to the ongoing rise over the last few weeks.

This gain compares to a 0.5% rise of the S&P/ASX 200 Index (ASX: XJO), so it was a day of useful outperformance for Woodside shareholders.

The oil and gas giant is highly sensitive to changes in the oil price. A higher commodity price means that Woodside can generate higher earnings for the same amount of resources produced.

According to CommSec, the oil price went up by around 4% overnight, so perhaps it is unsurprising that the Woodside share price rose by a similar amount.

Upcoming FY22 result

On 30 August, shareholders will receive the FY22 half-year result, revealing how much net profit after tax (NPAT) and cash flow the business generated. Investors will also learn how large the interim dividend is going to be.

Woodside has already given its 2022 second quarter report for the period ending 40 June 2022. In that, it revealed that it achieved an average realised price of $95 per barrel of oil equivalent. This helped it deliver revenue of $3.44 billion, a rise of 44% compared to the first quarter of 2022.

Construction starts on Pluto Train 2 project

The resources business announced today that construction has commenced on the Pluto Train 2 project, which it called a “key milestone supporting jobs and economic growth in Western Australia.”

This project will be the second liquefied natural gas (LNG) train at Woodside’s existing Pluto LNG onshore facility and will process gas from the Scarborough development. Pluto Train 2 will have an LNG capacity of around 5 million tonnes per annum. This boost could be helpful for the Woodside share price in the coming years.

Woodside said that, as the operator of Pluto Train 2 and Scarborough, it has made “commitments to the Western Australian Government in its community development plans to support positive and sustainable community outcomes in the Pilbara region.”

The CEO, Meg O’Neill, said that the gas processed through an expanded and efficient Pluto facility will “support the decarbonisation goals” of customers in Asia.

Bechtel will execute the engineering, procurement and construction of Pluto Train 2. It has already engaged a number of local and indigenous businesses to support delivery, with more awards anticipated as the project progresses.

Woodside share price snapshot

Over the past six months, Woodside shares have risen by 24.6%.

The post What boosted the Woodside share price on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Woodside share price having such a cracker of a day?
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today
• Why is the Woodside share price whizzing 5% higher on Friday?
• 5 things to watch on the ASX 200 on Friday

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.

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The S&P/ASX 200 Index (ASX: XJO) climbed 0.52% today, but three ASX 200 shares soared even higher on financial results.

The Home Consortium (ASX: HMC), Iluka Resources Limited (ASX: ILU) and Netwealth Group Ltd (ASX: NWL) share prices all lifted today.

Let’s take a look at what led to these ASX 200 shares outperforming the index.

Iluka

ASX 200 mining share Iluka rose 9.84% today on half-yearly results. The company reported a nearly 186% boost in net profit in its H122 results. Iluka’s earnings before interest, tax, depreciation, and amortisation (EBITDA) also soared 70.5% to $525.5 million. Net total cash lifted to $600.3 million.

Iluka managing director Tom O’Leary said: “in a macroeconomic environment characterised by inflation and uncertainty, we increased margins and strengthened our balance sheet“.

In positive news for dividend investors, Iluka lifted its interim fully-franked dividend by 108.3% to 25 cents per share.

Netwealth

Netwealth shares soared 7.02% today. This follows the ASX 200 financial services share reporting a 2.7% lift in net profit to $55.6 million. Revenue lifted 19.6%, while operating expenses jumped 30.7%. Netwealth declared a fully franked final dividend of 10 cents per share. Total dividends for FY22 were 20 cents, 8% more than FY21. Netwealth is predicting inflows of $11 to $13 billion in FY23.

Home Consortium

The Home Consortium share price rocketed 10.85% today amid its FY22 full-year results. The company lifted its funds management revenues by 490% compared to FY21. External assets under management also exploded 321% to $5.8 billion.

Commenting on this result, CEO David Di Pilla said:

We strengthened the capital position of our funds through opportunistic asset sales which took advantage of the disconnect between property and global capital markets.

The ASX 200 property share said it is “well positioned” going into FY23 with strong momentum.

Home Consortium delivered a fully-franked FY22 dividend of 12 cents per share, the same as FY21.

The post These three ASX 200 shares rocketed higher on earnings updates today appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• HMC Capital share price jumps 9% on explosive results
• Why Domino’s, Iluka, Netwealth, and WiseTech shares are storming higher
• Netwealth lifts full-year dividend on record inflows
• Netwealth share price rises 9% on strong revenue growth in FY22 results

Motley Fool contributor Monica O’Shea 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 Netwealth. The Motley Fool Australia has positions in and has recommended Netwealth. 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 Fortescue Metals Group Limited (ASX: FMG) share price is under the spotlight as its reporting time gets close.

Fortescue is one of the biggest iron ore miners in the world. It’s expected to make a fairly large profit in the upcoming result and pay a pretty big dividend.

As a resources business, Fortescue’s short-term success is heavily linked to the performance of the iron ore price. If the iron ore price rises, it doesn’t cost much more for Fortescue to mine the iron, aside from government payments, so extra revenue can largely fall to the net profit line of the accounts. But, the reverse is true when iron ore prices fall.

Insights into FY22 update

In the production report for the three months to June 2022, Fortescue said that it achieved average revenue of US$108 per dry metric tonne (dmt) and an average of US$100 per dmt in FY22.

The C1 cost was US$17.19 per wet metric tonne (wmt) for the fourth quarter and US$15.91 per wmt for FY22. As readers can see, there is a sizeable profit margin between the revenue and costs.

The company shipped 189 million wet metric tonnes of ore, up 4% year over year. The iron is shipped with 8% to 9% moisture, according to Fortescue.

Fortescue has already provided guidance for FY23 of iron ore shipments of between 187mt to 192mt, including approximately 1mt from Iron Bridge (its new, high-grade project).

There are a number of different analyst estimates for what Fortescue may reveal for FY22. Let’s look at one of them before getting into whether the Fortescue share price is a buy.

According to the numbers on CMC Markets, the market predicts Fortescue to generate $2.91 of earnings per share (EPS) in FY22. That would put the miner’s current valuation at under 7x FY22’s estimated earnings.

The projection for the annual dividend is $2.07 per share, which would represent a dividend payout ratio of just over 70% of net profit after tax (NPAT). In terms of a dividend yield, that would be a grossed-up yield of 15.4%.

Is the Fortescue share price a buy?

Before getting to some broker views, I’ll just share my two cents, seeing as I’m a Fortescue shareholder. I plan to own my shares for years to come because of the company’s green energy initiatives, as it aims to build up a green hydrogen industry and become a major exporter with a global network of projects.

However, considering Fortescue generates nearly all of its earnings from iron ore, and will continue to do so for multiple years, I think it’s important to ensure any investing is done with the iron ore operations and iron ore price in mind.

I think it’s possible that the iron ore price could fall to the US$90s – like it did in November 2021. Or even lower due to the weakening Chinese economy and issues facing the construction sector.

If the iron ore price and Fortescue share price were to suffer, I think that could prove to be an opportunistic time to buy. And I would consider buying more. My average purchase price of Fortescue shares is materially lower than where it is today, which is partly why I’m being picky about any further investing.

But, I’m not the only one being cautious on the iron ore price.

The broker Macquarie has an underperform rating on Fortescue, with a price target of just $14.50. It thinks the iron ore price could fall below US$90 by the end of 2022 due to lower demand from China.

UBS rates Fortescue as a sell, with a price target of $15.80. Higher mining costs is one of the reasons for the negativity, as well as uncertainty for the iron price. Fortescue’s guide is that the FY23 C1 cost is likely to be between US$18 and US$18.75 per wmt.

Fortescue share price snapshot

Over the last month, Fortescue shares have risen by around 5%.

The post Is the Fortescue share price a buy going into the FY22 result? appeared first on The Motley Fool Australia.

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More reading

• What’s with the Fortescue share price on Monday?
• Could this be set to boost ASX 200 iron ore shares?
• Why the Fortescue share price is on watch next week
• Worried about the iron ore price? Why the need for it ‘ain’t going anywhere’: broker
• 1 factor that could drag on Fortescue Future Industries’ green dream

Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. 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 Macquarie Group Limited. 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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ASX share market volatility has pushed down the valuations of some businesses. A company isn’t necessarily a buy just because it has fallen in price.

However, for businesses that we are interested in, a cheaper price gives us the opportunity to buy a small slice of the business at a lower entry point.

Investing is ultimately all about making returns. The lower the price we can buy a (good) asset, the better chance we give ourselves of making good returns.

There are plenty of good ASX growth shares to consider in my opinion. While plenty of businesses have seen a strong rise in the share price over the last couple of months, I believe that a number of them still represent very attractive value at the current levels.

Both of these businesses look like compelling opportunities to me:

RPMGlobal Holdings Ltd (ASX: RUL)

The company describes itself as a global leader in the provision and development of mining software solutions, advisory services and professional development to the mining industry. Its aim is to help mining clients extract more value at every stage of the mining lifecycle, enabling them to achieve safer, cleaner and more efficient operations in over 125 countries.

In terms of being better value, the RPMGlobal share price has dropped 26% in 2022. It’s currently been transitioning clients from perpetual license sales to subscription license sales over the last 12 months.

Its total contracted value (TCV) derived from software license sales for FY22, to the end of June 2022, totalled $55.9 million – this was an increase of $5.6 million from its last announcement to the market on 27 June 2022, just four days earlier, of $50.3 million.

The ASX growth share’s annually recurring revenue (ARR) from software subscriptions (excluding annually recurring maintenance and support revenue from past perpetual software licenses) finished the year at $32.8 million, up $10.9 million from the start of FY22.

RPMGlobal said that mining companies are accelerating their endeavours to move their technology solutions into the cloud and that it has a first-mover advantage, so it’s well-positioned to benefit most from this structural change. Its software sales pipeline continues to grow as its product range and customer base expands.

It has a number of major clients including Glencore, Anglo American, Rio Tinto Limited (ASX: RIO), BHP Group Ltd (ASX: BHP), Vale, Fortescue Metals Group Limited (ASX: FMG) and South32 Ltd (ASX: S32).

Pushpay Holdings Ltd (ASX: PPH)

This ASX growth share provides a donor management system, which includes donor tools, finance tools and a custom community app, a church management system and video streaming solutions to the faith sector, non-profit organisations and education providers. It is benefiting from the long-term shift of donations from cash to digital giving.

One of the first things to keep in mind with Pushpay is that it has received unsolicited, non-binding and conditional expressions of interest or approaches from third parties that want to buy the company. It’s in the process of assessing these approaches and has provided selected information to better inform those parties and to assist them to submit proposals.

A takeover offer could provide a useful boost to the Pushpay share price.

In FY23 to March 2023, it’s expecting to report annual operating revenue growth of between 10% to 15%, while investing in the business to support growth and enable future scale.

By FY25, it’s expecting to reach more than US$10 billion of total processing volume and more than 20,000 customers. It’s expecting the benefits from investing in its business from FY24, with underlying profit expected to grow faster than revenue. For example, in the long-term, the ASX growth share wants to reach a 25% market share of Catholic parishes – in FY24 it’s expecting a strong uplift in sales.

The company recently announced the Archdiocese of Seattle as a customer, which will use ParishStaq, the company’s integrated technology platform to help parishes and dioceses increase engagement and grow their communities. This represents an opportunity to reach 174 parishes and a Catholic population of over 600,000 people.

The post I think these 2 ASX shares are buys due to exciting growth potential appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Fortescue Metals Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended PUSHPAY FPO NZX and RPMGlobal Holdings. The Motley Fool Australia has positions in and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended RPMGlobal Holdings. 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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price, and that of other ASX-listed banks, could come under fire due to the threat of climate change.

This insight comes amid comments made by the Reserve Bank of Australia’s head of domestic markets, Jonathan Kearns, who recently spoke at a legal conference in Sydney, as originally reported by the Australian Financial Review.

Dr Kearns stated that climate change could make new home mortgages riskier for banks by extending their maturity dates while also devaluing the loan’s collateral, increasing debt leverage:

New housing mortgages are typically for 25 years, while business loans are often for three to five years. Over these horizons, the effects of climate change are likely to be significant but are also very uncertain. But if climate change makes a home’s location less desirable and significantly reduces its value, the borrower may have less opportunity to refinance or upgrade their property. The lender may then find that the loan on that property has a much longer realised maturity, and the collateral backing the loan has a lower value.

The National Recovery and Resilience Agency cites climate change as contributing to natural disasters in Australia It’s said to affect the frequency and severity of bushfires, cyclones, floods, and other events.

Climate change and the financial system

To mitigate the impacts of these disasters, Kearns stated that banks are seeking guidance from the Australian Prudential Regulation Authority (APRA) in the form of a climate vulnerability assessment (CVA), with results due some time this year:

Because of the substantial uncertainty they face, banks use scenario analysis to consider how their exposure to climate change depends on various parameters and behaviours. Individual bank results were provided to APRA in late May 2022, and APRA is looking to publish information on the outcomes and insights later this year after analysing these submissions. It is not only the banks that will learn from the CVA, but regulators will also learn how to better assess climate risk in the Australian financial system.

The CVA assessment and other developments in the banking industry could put climate change in renewed focus as it threatens to take a toll on the company’s fundamentals. In August, the Commonwealth Bank of Australia (ASX: CBA) said that $31.2 billion worth of its loans were at risk from natural disasters caused by climate change.

ANZ share price snapshot

The ANZ share price is currently down 18% year to date. By comparison, the S&P/ASX 200 Index (ASX: XJO) is 7.8% lower over the same period.

Shares in the bank closed at $22.81 apiece on Wednesday, gaining 1.6%.

The bank’s current market capitalisation is around $66 billion.

The post Could this pose a risk to the ANZ share price in the future? appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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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The Bitcoin (CYPTO: BTC) price currently stands at US$21,466 (AU$31,072).

That’s right about where the world’s original crypto was trading at this time yesterday.

With Bitcoin well-known for its volatility, the past 24 hours have seen the token trading in an unusually tight range.

According to data from CoinMarketCap, the Bitcoin price topped out at US$21,646 and hit lows of US$20,955 over the past full day.

Why the muted price action?

The reason may stem from Jackson Hole.

What does Jackson Hole have to do with Bitcoin?

If you’re not familiar with Jackson Hole, it’s located in the US state of Wyoming, surrounded by the Grand Teton mountains.

Aside from offering some of the best snow skiing in the world, the small town also hosts central bankers and leading policymakers from across the globe at its annual retreat.

So, what does this have to do with the Bitcoin price?

Cryptos have been moving closely in line with US stocks this year. This week, investors appear to be taking a wait-and-see attitude regarding what Federal Reserve chair Jerome Powell will say on Friday morning US time (Friday night in Australia).

With inflation running hot in the world’s number one economy, analysts widely expect Powell to reiterate the central bank’s determination to keep hiking interest rates until inflation cools.

Commenting on Powell’s upcoming speech at Jackson Hole, Laura Rosner-Warburton, a senior US economist at MacroPolicy Perspectives, said (quoted by Bloomberg):

That’s everyone’s top-of-mind question: How much will Powell micro-manage financial conditions? We have reached a point where the economy is showing signs of slowing. If we don’t see more slowing in the data and instead things bounce, then the Fed will have to more actively manage financial conditions.

Noelle Acheson, head of market insights at Genesis, added:

As August limps toward a weak close, market attention is turning to this week’s Jackson Hole symposium. A key question on traders’ minds is whether the Fed chairman will signal a potential reduction in the pace of hikes, double down on his nominal commitment to lowering inflation, or indeed try to convince the market that the Fed can have its proverbial cake and eat it, too.

Should Powell flag a more dovish path ahead for the Fed, risk assets and the Bitcoin price will likely benefit.

If the Fed instead leans towards further aggressive tightening, equities and the Bitcoin price will come under fresh pressure.

The post What on earth does Jackson Hole have to do with the Bitcoin price? appeared first on The Motley Fool Australia.

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• The Bitcoin price is down today but these 2 cryptos just rocketed 17%
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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 Bitcoin. The Motley Fool Australia has positions in and has recommended Bitcoin. 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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