Tag: Motley Fool

Well, things were looking up for the CSL Ltd (ASX: CSL) share price. Until 12 February earlier this month, that is. 

Between late October and 12 February, CSL shares were on a tear. This ASX 200 healthcare stock rose more than 32% between those two dates. But after the company released some bitterly disappointing test results for a new cardiovascular drug, investors lost a lot of their confidence.

Since 12 February, CSL shares have tanked by more than 6.6%, falling from over $300 each to the $285.50 we see today (at market close).

Not even a confident earnings report earlier this month could restore investor enthusiasm. As we covered at the time, those earnings revealed that CSL was able to record an 11% rise in revenues, as well as a 20% increase in net profits for the six months ending 31 December. Investors were also treated to a 12% dividend pay rise.

Check out the CSL share price’s movements below for yourself:

So with CSL shares coming off the boil and seemingly not getting back on, ASX investors might be asking themselves whether CSL shares have further to fall. After all, it was only in late October that this healthcare giant got as low as $228.65 a share.

Does the CSL share price have further to fall?

Well, let’s see what some ASX experts think.

Following the release of CSL’s earnings, my Fool colleague James covered the views of ASX broker Morgans. Morgans did trim its price target for CSL shares following its disappointing trial results. But it still rates the company as an add following its earnings, with a price target of $315.40. If realised, that would represent an upside of more than 10% from current prices.

Morgans was happy with what CSL reported earlier this month and evidently sees significant value in the company’s share price at its current levels.

But Morgans isn’t the only expert that is eyeing off the healthcare giant right now. eToro analyst Josh Gilbert shares a positive view. Here’s some of what he recently said about CSL right now:

CSL shareholders will have reason to smile today with the release of a solid half-yearly report… [These] results show that the business continues to move in the right direction, and there is plenty to be positive about. With solid profit growth, a healthy dividend, solid guidance, and interest rate cuts not far away, CSL will be on investors’ watchlists.

So it appears that at least two ASX experts reckon CSL shares are more likely to head up than down going forward. But, as always, we’ll have to wait and see if that turns out to be the case.

The post Has the CSL share price got further to fall? appeared first on The Motley Fool Australia.

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More reading

• What is the dividend growth rate of CSL stock?
• ASX blue chip shares: The best of the best for February 2024
• Top brokers name 3 ASX shares to buy next week
• If I could buy only one ASX stock this February earnings season, it would be…
• Top brokers name 3 ASX shares to buy today

Motley Fool contributor Sebastian Bowen has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. 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.

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IGO Ltd (ASX: IGO) shares have taken a real beating over the last 12 months.

During this time, the ASX lithium stock has lost over 40% of its value. As a comparison, the ASX 200 index is up approximately 6% over the same period.

It appears that the company’s directors believe the selling has been overdone.

That’s because no less than four of them have been picking up IGO shares this month.

Insiders buying this ASX lithium stock

According to a series of change of director’s interest notices, the four directors dipped into the market a day after the release of the company’s half-year results last week.

The largest purchase came from the ASX lithium stock’s new CEO, Ivan Vella.

Vella, who has been in the top job since December, made two purchases of 35,000 and 6,500 shares on 23 February through on-market trades. This represented investments of $254,569.18 and $47,283.18, respectively.

Also making a large investment in IGO shares was the company’s chair, Michael Nossal. He snapped up 25,000 IGO shares through an on-market trade on the same day for a total consideration $180,840.46.

Non-executive director, Debra Bakker, also made a sizeable investment. She picked up 7,000 shares for a total consideration of $50,400.00 through an on-market trade on 23 February.

Finally, fellow non-executive director, Tracey Arlaud, bought 3,093 shares through an on-market trade the same day. Arlaud paid a total of US$14,722.68 according to the notice.

Should you buy?

Insider buying is often regarded as a bullish indicator. After all, who know a company better than those inside its c-suites.

Goldman Sachs is likely to be supportive of the aforementioned purchases. Last week, the broker retained its buy rating with an $8.00 price target.

The post 4 directors are buying the dip on this ASX lithium stock appeared first on The Motley Fool Australia.

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More reading

• IGO share price dodges a fall as profits crater 53%
• Buy this ASX stock for ‘the best lithium mine in the world’
• Here are the top 10 ASX 200 shares today
• Why ASX nickel shares are ending the week with a spring in their step
• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution

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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Investors in the iShares S&P 500 ETF (ASX: IVV) will no doubt be rejoicing today. This exchange-traded fund (ETF) has just hit a new all-time high. Yep, IV units closed at $51.68 yesterday, but opened at $51.70 this morning before pushing up to $51.74 each – this index fund‘s new all-time high.

Of course, today’s new high watermark is just the latest in a series of fresh new highs for the iShares S&P 500 ETF.

This fund has been on an extraordinary run in recent months. IVV units are now up more than 11% in just 2024 so far, as well as up a whopping 30.7% over the past 12 months. Investors have also enjoyed a gain of over 95.5% over the past five years.

Like most of the recent IVV highs, today’s fresh top can probably be attributed to a recent surge in some of the US’s top tech stocks. Last night alone saw Tesla gain 3.87%. And NVIDIA stock has risen a whopping 17% since only Wednesday (US time) last week. If we add some recent weakness in the Australian dollar against the US dollar, we have a potent recipe for an iShares S&P 500 at record highs.

Index funds like the iShares S&P 500 ETF are particularly popular for investors who like to passively invest by following a dollar-cost averaging strategy.

But many investors might be wondering whether they should keep buying this popular ASX ETF. After all, gains like the ones we’ve seen with IVV units are quite uncommon (11% in three months for example). And many investors don’t like buying assets when they’re being priced at all-time highs.

So what’s the right way to invest here?

Should investors stop buying the iShares S&P 500 ETF at record highs?

Well, the wisest thing for investors, particularly those passive investors who’ve committed to buying IVV units at periodic intervals, is arguably to continue their strategy. Making a decision to stop buying this ETF because it is at a certain price is in effect, engaging in market timing. And that’s something that passive investors are trying to avoid in the first place.

The reality is that none of us knows what an index fund like IVV will do next. Today’s all-time high might prove to be the highest it goes in 2024. If that’s the case, then you’ll look like a genius if you stop buying today.

But there’s just as a good chance that today’s new high will be supplanted by another record tomorrow, next week or next month. If that turns out to be the case, you’ll look like a fool for halting your buys.

As such, true passive investors should continue to stick to their strategy. As they say, ‘time in the market is better than timing the market’.

But don’t take it from me. Take it from legendary investor Warren Buffett. Here’s some of what he told investors in his 2014 letter to the shareholders of his company Berkshire Hathaway:

Investors, of course, can, by their own behavior, make stock ownership highly risky. And many do. Active trading, attempts to ‘time’ market movements, inadequate diversification, the payment of high and unnecessary fees to managers and advisors, and the use of borrowed money can destroy the decent returns that a life-long owner of equities would otherwise enjoy.

The commission of the investment sins listed above is not limited to ‘the little guy.’ Huge institutional investors, viewed as a group, have long underperformed the unsophisticated index-fund investor who simply sits tight for decades.

In 2017, he added this advice:

Consistently buy an S&P 500 low-cost index fund… Keep buying it through thick and thin, and especially through thin.

Whilst we are clearly in a ‘thick’ period right now, Buffett’s advice is clear.

The post Should I buy the iShares S&P 500 ETF (IVV) at all-time highs or wait? appeared first on The Motley Fool Australia.

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More reading

• One ASX share to buy today to ride the 30% forecast surge in the S&P 500
• Shares vs. property: Beginner investors choosing Aussie shares, ASX ETFs and rentvesting
• 5 ASX shares to buy and hold forever in your investment portfolio
• 5 reasons to buy an ASX index fund today
• 8 popular ASX ETFs smashing new 52-week highs

Motley Fool contributor Sebastian Bowen has positions in Berkshire Hathaway and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway, Nvidia, Tesla, and iShares S&P 500 ETF. The Motley Fool Australia has recommended Berkshire Hathaway, Nvidia, and iShares S&P 500 ETF. 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 300 shares are slightly lower on Tuesday afternoon, down 0.17% as earnings season continues.

As reported in The Australian, various stocks are receiving broker upgrades after the companies released their 1H FY24 earnings results yesterday.

Let’s take a look at this trio in the ASX 300.

ASX 300 shares upgraded following half-year reports

Adairs shares upgraded as dividends resume

The Adairs Ltd (ASX: ADH) share price is $2.15, up 1.9% amid news of two broker upgrades today.

Morgans has raised its rating on the ASX 300 retail stock to add, with a 12-month share price target of $2.40. Wilsons has bumped up its rating to market-weight with a $2 price target.

Yesterday Adairs reported an 18.9% decline in statutory net profit after tax (NPAT) to $17.7 million for 1H FY24. Perhaps investors were expecting worse given the 13.35% rise in the Adairs share price yesterday.

Adairs also announced the resumption of dividends after not paying a final dividend in FY22. The ASX 300 retailer will pay a fully franked interim dividend of 5 cents per share (cps), down from 8 cps in 1H FY23.

Mayne Pharma share price up 22% in two days

The Mayne Pharma Group Ltd (ASX: MYX) share price is $6.57, up 8.87% at the time of writing.

Wilsons has raised its rating on the ASX 300 stock to overweight. However, its new 12-month share price target is well below today’s value at $7.38.

Yesterday, Mayne Pharma reported a 43% increase in revenue to $188 million and underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $8 million. The 1H FY24 EBITDA contrasts starkly with last year’s 1H FY23 EBITDA loss of $25.7 million.

Investors were pleased and pumped up Mayne Pharma shares by 13.74% during the session on Monday.

Wilsons tips 25% potential upside on ASX 300 healthcare share

The Nanosonics Ltd (ASX: NAN) share price is 4.94% higher on Tuesday at $2.76.

JP Morgan has upgraded the ASX 300 healthcare stock to neutral with a $2.80 share price target. Wilsons has also upgraded Nanosonics shares to overweight with a more ambitious $3.45 price target.

Yesterday, the infection prevention company reported a 2% decline in revenue to $79,638 million and a 41% decline in NPAT to $6,168 million in 1H FY24. As my colleague James reported, softer sales and significantly higher expenses put a drag on the company’s earnings.

ASX 300 investors punished the stock yesterday to the tune of a 13.92% fall in the share price. Perhaps they overdid it, if today’s near-5% bump is anything to go by.

The post 3 ASX 300 shares receiving broker upgrades today (one with 25% potential upside) appeared first on The Motley Fool Australia.

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More reading

• Nanosonics share price crashes 14% on first-half profit crunch
• Why Alumina, Kogan, Mayne Pharma, and Suncorp shares are racing higher
• Why Nanosonics, NIB, Santos, and TPG shares are falling today
• Adairs share price rockets 12% as dividend payments resume
• 2 ASX stocks that could explode in February

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen 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 Adairs, JPMorgan Chase, and Nanosonics. The Motley Fool Australia has positions in and has recommended Adairs and Nanosonics. 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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Woodside Energy Group Ltd (ASX: WDS) shares are pushing higher on Tuesday.

In afternoon trade, the energy giant’s shares are up 1% to $30.32.

This follows the release of Woodside’s full-year results for FY 2023 and the announcement of its final dividend.

Woodside results summary

During FY 2023, Woodside delivered a strong operational result, which was undone by falling energy prices.

The company reported a 17% decline in operating revenue to US$13,994 million after lower prices across all commodities offset higher sales volumes.

And with production costs rising slightly year on year, the company’s underlying net profit after tax was down 37% to US$3,320 million. This excludes non-cash post-tax asset impairments of US$1,533 million relating to Shenzi asset.

The Woodside dividend

It will come as no surprise to learn that the company was forced to cut its dividend in FY 2023 in line with its dividend policy.

As a reminder, the Woodside dividend policy is to pay a minimum of 50% of underlying net profit after tax with a target payout ratio of between 50% and 80%.

The Woodside board cut its fully franked final dividend by 58% to 60 US cents per share, bringing its FY 2023 dividend to a total of US$1.40 per share. This is down 45% year on year but represents approximately 80% of underlying net profit after tax.

Based on current exchange rates, this equates to 91.8 Australian cents per share for the final dividend and A$2.14 per share for FY 2023.

And based on the current Woodside share price of $30.32, it means yields of 3% and 7%, respectively, for investors.

Commenting on the dividend, chairman Richard Goyder AO said:

We achieved strong financial performance in 2023. While oil and gas prices eased from 2022’s record highs, robust product demand continued. In 2023, we recorded an annual net profit after tax of $1.7 billion and an underlying net profit after tax of $3.3 billion. Based on this, the Board has determined a fullyfranked final dividend of 60 US cents per share, resulting in a total full-year dividend of 140 US cents per share.

When is pay day?

Woodside shares will be trading ex-dividend for its final distribution next week on 7 March.

After which, it will be paid to eligible shareholders the following month on 4 April.

The company’s dividend reinvestment plan remains suspended.

The post Here’s everything you need to know about the Woodside dividend appeared first on The Motley Fool Australia.

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More reading

• Woodside share price rises despite 74% decline in FY23 profits
• 5 things to watch on the ASX 200 on Tuesday
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• Woodside shares rise on $2.1 billion sale and partnership
• 2 cheap ASX stocks that offer more than 8% dividend yields

Motley Fool contributor James Mickleboro has positions in Woodside Energy Group. 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 Brickworks Limited (ASX: BKW) share price is currently up 1% and hit a peak of $29.80 earlier today. In the past three months, it has gone on an impressive run, rising by 18%.

The building products business hasn’t reported yet, its reporting period ends on 31 January 2024, a month later than most other businesses. It’s due to hand in its 2024 half-year result on 21 March 2024.

It hasn’t made any announcements since the company’s property update in December. Let’s look at what’s going on.

Why has the Brickworks share price soared?

There has been a lot of excitement in the building products space after a number of takeover bids, which has enabled investors to put a price on Brickworks’ manufacturing earnings and potential.

CSR Ltd (ASX: CSR) entered into a binding scheme implementation deed this week with Saint-Gobain for a cash price of $9 per share. The CSR share price is up 33% this year.

Boral Ltd (ASX: BLD) received a takeover offer from Seven Group Holdings Ltd (ASX: SVW). The Boral share price is up 10% in the last month and 66% in the past year.

Adbri Ltd (ASX: ABC) has entered into a scheme implementation deed with CRH. The Adbri share price is up 58% in the last three months.

Brickworks hasn’t received a takeover offer, but the Brickworks share price has gone up 20% from 11 December 2023.

The company seems to be feeding off the excitement about the sector.

If all three of CSR, Boral and Adbri are taken off the ASX, then Brickworks will be one of the few larger building product businesses.  

What next?

Brickworks and Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) are going to report their results in a few weeks, so we’ll get a good look at both businesses under the ‘hood’.

The business has recovered a long way from its COVID-19 low in April 2020 – it’s up by 140%.

The post How did the Brickworks share price just hit an all-time high? appeared first on The Motley Fool Australia.

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• Buying Soul Patts shares? Here’s what you’re really buying
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Motley Fool contributor Tristan Harrison has positions in Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company 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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Looking to bank the all-time high Ampol Ltd (ASX: ALD) dividend?

If you don’t own shares in the S&P/ASX 200 Index (ASX: XJO) energy stock already, then you’d better hurry!

Investors wanting to land that record dividend will need to own Ampol shares at market close this Thursday, 29 February. Ampol shares trade ex-dividend on Friday, 1 March.

If you own shares when the closing bell rings on Thursday, you can expect to see that passive income hit your bank account on 27 March.

Here’s what else you need to know.

Ampol dividend hits new all-time highs

Ampol reported its full-year results on Monday.

The highlight for passive income investors was the fully franked final dividend of $1.20 per share, which came coupled with a special dividend of 60 cents per share, also fully franked.

That works out to a fully franked final dividend of $1.80 per share. That’s up 16% from the final dividend of $1.55 per share paid out last year. And it represents the highest dividend ever paid by the ASX 200 energy stock.

At the current Ampol share price of $38.93, this equates to a fully franked pending yield of 4.6% from the final dividend alone.

Ampol also paid an interim dividend of 95 cents per share on 27 September. That sees the ASX 200 energy stock trading on a yield (partly trailing, partly pending) of 7.1%, with potential tax benefits from those franking credits.

In 2023 Ampol will have returned 89%, or $655 million, of its net profit after tax (NPAT) to shareholders.

Ampol CEO Matt Halliday said the company’s strong balance sheet enabled it to deliver “our highest ever dividends to shareholders”.

Ampol share price leaps to new record

Atop the record Ampol dividend declared on Monday, the Ampol share price hit a fresh all-time high today.

Ampol shares traded as high as $39.10 in earlier trade.

The current $38.93 per share (if maintained) will still mark a new record closing high.

The post Looking to bank the record Ampol dividend? Time is running out! appeared first on The Motley Fool Australia.

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More reading

• 25 ASX 200 shares with ex-dividend dates next week
• 1 ASX 200 dividend stock I’m buying for superior passive income in 2024
• How these 4 ASX 200 shares just gained major broker upgrades
• On the hunt for passive income? Here’s what you need to know about the record Ampol dividend
• ASX 200 energy stock Ampol charging higher on record 2023 sales

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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If I think about the Warren Buffett method, the ASX share Lovisa Holdings Ltd (ASX: LOV) looks like an exciting business to own.

Warren Buffett is one of the world’s greatest investors, perhaps the best of all time. He recently credited Charlie Munger as being the architect of Berkshire Hathaway.

One of the main rules that helped the duo produce such strong returns is that they went for wonderful businesses purchased at fair prices.

Buffett really likes See’s Candies, a high-quality chocolate and sweets business within Berkshire Hathaway. It made strong profits for its size, but Berkshire Hathaway wasn’t able to re-invest for more growth to take it global. Instead, that profit was used to help grow other areas of Berkshire Hathaway.

With Lovisa, an affordable jewellery retailer, it’s very different – the ASX share has great growth potential.

Why Lovisa shares are so compelling

Firstly, let me note that the Lovisa share price is up 35% in the past month and 72% in the past three months. It would have been cheaper to buy a few weeks ago, and I’m not expecting strong gains in the short term after its impressive rally.

But the business continues to display lots of exciting elements.

In the FY24 first-half result, it reported revenue growth of 18.2% to $373 million, a gross profit margin of 80.7% (up 40 basis points) and a dividend that was 31% higher at 50 cents per share.

The business is investing heavily in store growth, which is growing its scale. Entering new markets could lead to a sizeable store network in a few years.

There are a number of markets where it has 10 stores or less, including Canada, Mexico, Italy, the Netherlands, Spain, China, Vietnam, Hong Kong and Taiwan. In Australia, it has 175 stores, while in a huge market like the US, it has 207 stores.

I think Lovisa has lots of potential to double its store count over the next seven or eight years. In the FY24 first-half period, it added 53 net new stores.

Despite the recent tricky trading conditions, the ASX share managed to deliver comparable store sales growth of 0.3% year over year in the first seven weeks of the second half of FY24 – total sales were up 19.6% in the same period compared to FY23.

New sales come at such a high margin, that it makes a lot of sense to open stores across numerous markets. I believe ongoing growth will help its underlying margins. If the company stopped opening (and spending on) new stores, I think its increasing operating leverage would be more apparent over the subsequent year or two.

The right call, in my mind, is to open as many (highly) profitable stores as it can worldwide, which it’s doing. Growing its digital sales could also be helpful if done at a good profit margin.

Foolish takeaway

The ASX share is certainly not cheap right now. But, the broker UBS thinks Lovisa could generate earnings per share (EPS) of $1.45 in FY28, which would put the current Lovisa share price at 21 times FY28’s estimated earnings.

Ongoing store growth makes me excited by this business, particularly if same-store sales can remain positive for the foreseeable future.

The post I’d use the Warren Buffett method and buy this ASX stock appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• I’d aim to turn a $20,000 savings account into $25,400 of passive income
• Here are the top 10 ASX 200 shares today
• Here’s how these 3 ASX 200 shares just earned substantial broker upgrades
• A once-in-a-decade chance to get rich from ASX 200 shares?

Motley Fool contributor Tristan Harrison has positions in Lovisa. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway and Lovisa. The Motley Fool Australia has recommended Berkshire Hathaway and Lovisa. 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) has followed Wall Street’s lead and dropped into the red. In afternoon trade, the benchmark index is down 0.25% to 7,633.2 points.

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

Coles Group Ltd (ASX: COL)

The Coles share price is up 5.5% to $16.76. This follows the release of the supermarket giant’s half-year results. Coles reported a 3.7% increase in sales revenue to $22.2 billion and a 4.1% lift in underlying EBITDA to $1.9 billion. Management also revealed that the second half has started strongly with supermarket sales up 4.9% during the first eight weeks of the third quarter.

G8 Education Ltd (ASX: GEM)

The G8 Education share price is up almost 12% to $1.25. This morning, this childcare operator released its full year results and reported a 9.1% increase in revenue to $983.4 million and a 53.1% jump in statutory net profit after tax to $56.1 million. G8 Education’s second half performance was significantly stronger than the first, which bodes well for FY 2024.

Helia Group Ltd (ASX: HLI)

The Helia share price is up 11% to $4.82. This follows the release of the mortgage insurance company’s FY 2023 results. Helia reported statutory net profit after tax growth of 37% to $275.1 million and underlying net profit after tax growth of 7% to $247.7 million. This allowed the company to declare a fully franked final dividend of 15 cents per share and an unfranked special dividend of 30 cents per share.

Reece Ltd (ASX: RCE)

The Reece share price is up almost 16% to $27.87. Investors have been buying the plumbing parts company’s shares after it delivered a stronger than expected half-year result. Reece revealed a 2.5% lift in sales revenue to $4,537 million and a 6% increase in adjusted net profit after tax to $224 million. A fully franked interim dividend of 8 cents per share was declared.

The post Why Coles, G8 Education, Helia, and Reece shares are storming higher appeared first on The Motley Fool Australia.

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More reading

• Up 45% in a year, this ASX 200 insurance stock is going gangbusters on strong earnings
• Guess which ASX 300 stock is surging 14% amid mounting profits
• Everything you need to know about the new Coles dividend
• Coles share price jumps 6% on strong half-year sales growth
• 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. 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 BHP Group Ltd (ASX: BHP) share price is trailing the S&P/ASX 200 Index (ASX: XJO) today.

Shares in the mining giant are down 0.5% at the time of writing in afternoon trade on Tuesday, more than twice the 0.2% losses posted by the benchmark index at this same time. In earlier trade, BHP stock was down more than 1.2%.

And it’s not just the BHP share price dragging on the ASX 200 today.

The Fortescue Metals Group Ltd (ASX: FMG) share price is down 1.0% and Rio Tinto Ltd (ASX: RIO) shares are also down 1.0%.

So, what’s going on?

BHP share price hit by slumping iron ore outlook

BHP, alongside rivals Fortescue and Rio Tinto, are under pressure today following a 4% overnight drop in iron ore prices. The industrial metal is trading for just over US$115 per tonne, down from US$140 per tonne at the beginning of 2024.

Iron ore counts as the biggest revenue earner for all three ASX 200 miners.

BHP is listed on several international exchanges atop the ASX. And the iron ore price slide saw the BHP share price tumble by 1.9% on the NYSE overnight.

Much of the recent weakness in the iron ore price stems from falling expectations for a big uptick in demand from China, Australia’s top export market for the steel-making metal.

Many analysts had expected steel output in China to rebound following the nation’s Lunar New Year holiday period. But the data shows production remains subdued as China’s steel-hungry real estate sector continues to struggle.

Commenting on the market dynamics pressuring the BHP share price today, ANZ Group Holdings Ltd (ASX: ANZ) analysts said (quoted by Mining.com), “Inventories of iron ore at major Chinese ports rose. Supply concerns also eased, with a cyclone threatening WA ports now tracking away from the state’s iron ore hub.”

Also adding to easing supply concerns is Brazilian iron ore giant, Vale. The company reported that its production remains on track despite inclement weather, while it may also look to boost shipments to markets outside of China.

The post Why is the BHP share price trailing the ASX 200 on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• Here’s the BHP dividend forecast through to 2026
• Top brokers name 3 ASX shares to buy next week
• Better buy: Fortescue or BHP shares?
• 3 ASX 100 and ASX 200 shares I’d buy now for a $1,820 passive income in 2024!
• Top brokers name 3 ASX shares to buy today

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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