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The Baby Bunting Group Ltd (ASX: BBN) share price is in the red on Friday after the company released its earnings for financial year 2022.

After opening at $4.87, 0.2% higher than its previous close, the nursery retailer’s stock has slipped to trade at $4.695. That represents a 3.4% fall.

Baby Bunting share price falls as sales surpass $500m

Here are the highlights of the company’s full-year earnings:

• Sales reached $507.3 million – 8.3% higher than that of the prior corresponding period (pcp)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 16.1% to $50.5 million
• Statutory net profit after tax of $19.5 million – a 14.6% increase
• Online sales represented 22.2% of all sales, coming in at $112.7 million
• Final dividend of 15.6 cents per share – a 10.6% increase on that of the pcp

Baby Bunting surpassed a major milestone in financial year 2022, boasting more than half a billion dollars of total sales for the period.

Its comparable store sales also grew, increasing 5% over the last 12 months and 25.2% over the last two years. Sales of its private label and exclusive products also increased to represent 45.3% of all sales.

Meanwhile, its core Australian business (excluding New Zealand start-up costs) brought in $31.1 million of pro forma after-tax profits – a 20% improvement.

What else happened in FY22?

The last financial year was a relatively quiet one for the baby-focused retailer.

The Baby Bunting share price slumped 3% when the company released its half-year results in February.

It also worked to enter the New Zealand market, opening its first store across the ditch today. Its establishment in the nation brought $1.5 million in one-off costs.

It also transitioned its digital technology to a headless architecture, switching over the Australian website in January, and launched its loyalty program ‘Baby Bunting Family’ across all channels in February. The company noted that 81% of sales are transacted by a loyalty member.

What did management say?

Baby Bunting CEO and managing director Matt Spencer commented on the company’s earnings, saying:

Baby Bunting has had a very successful year. Our total sales exceeded half a billion dollars for the first time. We continued to grow our market share at the same time as we delivered very strong gross profit growth.

Our future is looking bright.

We have started the new financial year in good shape. We are the clear leader in our category.

What’s next?

The company’s immediate future does, indeed, appear busy. Though, it hasn’t provided any earnings guidance, blaming economic uncertainty, inflation, and other global challenges.

It’s working to expand its market to a $3.5 billion market, targeting that beyond birth-to-three-years-old in certain categories and growing online.

It’s also looking to grow its Australian network by six stores in financial year 2023 and open another store in New Zealand in the second half.

Work has also begun on a Baby Bunting marketplace ­– expected to launch in the second half.

Finally, Baby Bunting provided a trading update for the period from 1 July to 10 August.

Its comparable store sales rose 15.3% in that time compared to the pcp. That’s expected to moderate as the company cycles periods impacted by lockdowns. Meanwhile, its total sales increased by 19.3%.

Baby Bunting share price snapshot

The Baby Bunting share price has underperformed the broader market so far in 2022. Though, it’s doing well compared to its sector.

The stock has fallen 15% year to date. Meanwhile, the All Ordinaries Index (ASX: XAO) has dumped 8%.

But, while the company isn’t included on the S&P/ASX 200 Index (ASX: XJO), it’s worth noting the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has fallen 19% since the start of 2022.

The post ‘Our future is looking bright’: Baby Bunting share price slips despite earnings milestone appeared first on The Motley Fool Australia.

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More reading

• 2 excellent ASX dividend shares experts rate as buys
• Experts name 2 ASX dividend shares to buy right now
• Here are 2 ASX dividend shares that brokers rate as buys
• Why cheap hamburgers could give beginner ASX share investors food for thought
• What I love about these 2 ASX dividend shares

Motley Fool contributor Brooke Cooper 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 Baby Bunting. 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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Global commodity markets continue to gyrate as several sectors look to have consolidated 2022’s gains.

Iron ore, the key ingredient in steelmaking, looked to have staged a small recovery after prices bounced from USD$101/T on 20 July to USD$119/T by 1 August.

They have since reversed course down to USD$111/T, and the question is whether the commodity can return to its March highs.

Can it get there?

There’s mixed opinion on the potential for iron ore’s recovery.

The medium-term outlook for steel demand is shrouded by several potential headwinds, particularly with respect to Chinese demand for the product.

“Steel mills have restarted some of their idled blast furnaces in recent days, encouraged by improved margins and a pickup in demand from the construction sector,” Reuters reported yesterday.

Analysts at Trading Economics weren’t as optimistic, however.

“Weak global demand will help turn the iron ore market to a significant surplus over the second half of 2022, which, in turn, poses a significant downside risk for prices,” they said.

Meanwhile, analysts at Morgan Stanley see “little reason to be bullish on iron ore” for the remainder of FY22.

The broker says a price recovery is contingent on demand for steel out of China, itself just recovering from widespread COVID-19 lockdowns.

As a result, it says there are as yet “no signs of a meaningful recovery” for iron ore.

The downside has been seen in the basket of iron ore-producing stocks this year, despite huge rallies in other markets.

Major iron ore players Fortescue Metals Group Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO) have had a difficult time on the chart this year to date, down 4.5% and 5%, respectively.

The post Can the iron ore price regain its March highs in 2022? appeared first on The Motley Fool Australia.

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More reading

• Why AMP, OFX, Rio Tinto, and Telstra shares are dropping
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• Why is the Rio Tinto share price sinking today?
• Are Fortescue shares a buy for income or are they a dividend trap?

Motley Fool contributor Zach Bristow 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 AMP Ltd (ASX: AMP) share price has been gradually rising over the past couple of months.

Since hitting a low of 95 cents on 1 July, shares in the financial services company are now 22% higher.

At Thursday’s market close, AMP shares were trading for $1.155 apiece, a 0.86% fall on the day.

Let’s take a look at what one broker recently said about the company.

AMP falling behind the pack?

While the AMP share price has been treading upwards, the team at Morgan Stanley believes the company is lagging behind its peers.

According to equity analyst Andrei Stadnik at Morgan Stanley, AMP Bank needs to re-invest in technology to stay competitive in the market.

Stadnik even went as far as to say that AMP is “sub-scale against even the regional banks”.

Recent sales figures indicate the company is becoming more efficient with its operations following a string of asset sales. This includes offloading its funds management arm earlier this year to Digital Bridge for up to $699 million.

However, this could play against AMP as it takes away the “best growth opportunity” it had beforehand.

In 2021, the global asset management market was valued at $250.12 billion. This is projected to increase four-fold to $1,113.53 billion by 2028, representing a compound annual growth rate (CAGR) of 23.78% from 2022 to 2028.

While Stadnik noted that the new AMP has a robust financial model, it isn’t the largest anymore and has a long road ahead to stabilise its books.

Morgan Stanley has an equal-weight rating on AMP shares with a target price of $1.10 apiece. Based on where it last traded as of yesterday, this implies a downside of around 5%.

It also stated that AMP is not cheap compared to the broader financial market, even when factoring in capital returns.

AMP announced a $1.1 billion capital return to shareholders on Thursday in its first-half result. This will consist of a $350 million share buyback program commencing immediately. The remaining $750 million will be returned in the following 2023 financial year through a mix of a special dividend or another share buyback.

However, given that asset sales reduce future earnings and AMP has returned capital to shareholders, the broker wasn’t more positive about the company.

About the AMP share price

Founded in 1849, AMP provides superannuation and investment products, financial advice, and banking products, including home loans and savings accounts.

Headquartered in Sydney, the company operates in both Australia and New Zealand.

Year-to-date, AMP’s stock has gained 14%. It is up by a similar amount over the past month, and has also gained 3.6% over the past year.

AMP presides a market capitalisation of roughly $3.81 billion with approximately 3.27 billion shares on issue.

The post Looking to buy AMP shares? Read this first appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why AMP, OFX, Rio Tinto, and Telstra shares are dropping
• AMP share price slides as $1.1b pledged to investors
• AMP share price in focus amid falling profits and $1.1b capital return
• Are AMP shareholders heading for a $1 billion pay day?

Motley Fool contributor Aaron Teboneras 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 Insurance Australia Group Ltd (ASX: IAG) share price is one to watch today after the company reported its FY22 results this morning.

The insurer reported a net profit after tax (NPAT) of $347 million during this period, an improvement from the loss of $427 million it recorded in FY21.

The IAG share price is up 0.43% so far this week. Yesterday shares closed at $4.61 each.

What did IAG report?

Among the highlights of the IAG report were:

• Gross written premiums up 5.7% from FY21, to $13.31 billion
• Net insurance profit down 41.8% from FY21, to $586 million
• Cash earnings down 71.5% from FY21, to $213 million
• Underlying insurance margin down 10bps, to 14.6%

IAG reported growth in its top line with gross written premiums, but its net insurance profit contracted 48.8%.

Gross written premium (GWP) growth was buoyed by an increase in the company’s business performance despite facing headwinds in the form of challenging investment markets and natural perils claims.

What else happened in FY22?

Diluted earnings per share (EPS) is up 13.33 cents. In FY21 it was a negative 17.82 cents.

IAG reported that COVID-19 had a material impact on the company’s performance in 1H22, reducing its gross written premiums and increasing insurance profits. In 2H22, no material impact was recorded.

A loss of $105 million was also reported for investment income on shareholders’ funds. The primary cause was due to increased rates and negative credit spreads for its fixed income portfolio, which caused a $68 million loss.

What did management say?

IAG managing director and chief executive officer Nick Hawkins said:

Our FY22 financial results reflect the quality of our underlying business as we build a stronger and more resilient IAG.

We had strong GWP growth, and the performance of our business was steady despite the challenging external environment. We are on track to deliver against our strategic priorities.

What’s next?

Gross written premiums were given a “mid-to-high single-digit growth”. The company expects growth in volume and customer numbers.

The insurance margin is tracked to be between 14% to 16%. This is supported by IAG’s business performance and higher yields on investments.

IAG is also looking to achieve a higher return on equity (ROE) of 12% to 13% over the medium term. A growing customer base of one million to 9.5 million in FY26 will support this, along with an insurance profit of $250 million by FY24.

IAG share price snapshot

The IAG share price is down 15.4% over the last 12 months.

Shares in the company are not beating the broader market, with the S&P/ASX 200 Index (ASX: XJO) down 6.82% over the same period.

IAG has a market capitalisation of $11.36 billion.

The post IAG share price on watch as company reports $347 million in earnings appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• IAG share price seesaws amid class action news
• Looking for value: The ASX shares this fundie is holding amid rising inflation
• Is the IAG share price a buy following the insurer’s latest update?
• Here are the top 10 ASX 200 shares today

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 positions in and has recommended Insurance Australia 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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The De Grey Mining Ltd (ASX: DEG) share price has turned a corner since 12 July having bounced from a low of 73.5 cents.

It now rests at $1 per share before the open on Friday, having stretched up 36% in that time.

Comparatively, the S&P/ASX 300 Metals and Mining Index (ASX: XMM) has gained around 6.5% in the same time, and the benchmark S&P/ASX 200 Index (ASX: XJO) around 6%.

Series of fortunate events

The company has released 5 price-sensitive updates in the last month of trade, starting with its quarterly cash flow and activities reports on 29 July.

Following on just 4 days later, it posted the slide deck of its presentation at the 2022 Diggers and Dealers conference.

Aside from that, ASX mining shares have also caught a bid over the past month, as explained above.

And how could we forget gold, the beloved yellow metal has spiked 6% from 20 July, after plunging to 52-week lows. The question is, can gold now retrace the losses from its previous high, as seen below?

It would be terrific for the company if it did – on August 1 De Grey announced a “major gold intersection” at its Diucon site extending its previous mineral resource estimate by 200 metres.

Hence with these factors combined it’s been a bullish 30 days of trading for the company’s shares.

Zooming out, and De Grey’s share price has followed a similar trajectory to gold over the past 12 months, all the way up until this point.

Note that it is down almost 17% in that time or more than 16% this year to date.

The post Why has the De Grey share price leapt 36% in a month? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
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• Here are the top 10 ASX 200 shares today

Motley Fool contributor Zach Bristow 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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Commonwealth Bank of Australia (ASX: CBA) will soon be paying out its final dividend for the 2022 financial year.

CBA reported its FY22 result earlier this week for the 12 months to June 2022. It included profit growth, which enabled dividend growth from the big four ASX bank share.

Reporting season is a great way for investors to get an insight into how a business has been performing. For the income-focused investors, we also get to find out how many dollars are headed our way.

CBA dividend yield for FY22

The big four ASX bank declared a final dividend of $2.10 per share, which was an increase of around 5% compared to the prior corresponding period.

Based on just this half-year dividend payment, shareholders will be getting a grossed-up dividend yield of around 3%.

But, CBA’s annual yield is made up of more than just one dividend. The full-year dividend was $3.85 per share, which was an increase of 10% over FY21.

Using the full-year payout, the FY22 dividend yield for CBA shares is 5.4%.

The dividend payout ratio was 68% of the bank’s cash earnings, or 75% after normalising for long run loan loss rates. It’s targeting a full year payout ratio of 70% to 80% of cash net profit after tax (NPAT) and an interim payout of around 70% of cash NPAT.

Profit growth

CBA said that the bank’s capital position and disciplined execution continue to support strong and sustainable returns to shareholders.

The big four ASX bank reported that its cash NPAT went up 11% to $9.6 billion and statutory NPAT grew by 9% to $9.67 billion. Profit generation can have a key influence on the CBA share price.

CBA said its profit was supported by operational performance and volume growth in core businesses as well as “sound” credit quality and the reduction of provisions related to the uncertainties associated with the impacts of the COVID-19 pandemic.

Interestingly, the bank’s business lending and business deposits grew faster than the consumer side.

The pre-provision profit, which excludes one-off items, grew by 3.1% to $13.2 billion.

One thing that detracted from profit growth was the net interest margin (NIM) which fell 18 basis points to 1.9%. This decline occurred due to a “large increase in low yielding liquid assets and lower home loan margins.” The bank said its medium-term outlook remains unchanged, with margins expected to increase in a rising rate environment.

Expected FY23 dividend yield

FY22 has already finished. We’re more than a month into FY23. So, a worthwhile question is what the yield will be for the new financial year.

According to CMC Markets, CBA is projected to pay a dividend of $4.25 per share in FY23. That payout would translate into a grossed-up dividend yield of 6%.

CBA share price snapshot

Over the last month, CBA shares have risen by 7.7%.

The post How big is the CBA dividend yield right now? appeared first on The Motley Fool Australia.

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More reading

• What does CommBank’s latest update mean for NAB shares?
• Is the CBA share price a buy after the bank’s FY22 results?
• Does this signify more bad news for ASX BNPL shares like Zip?
• The CBA share price looks downright expensive
• CBA share price slides today despite an 11% FY22 earnings leap

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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With international borders well and truly open, two years of pent-up demand and a desire to escape the winter has seen droves of Aussies pack their bags and take off to warmer climates. 

Two popular ASX travel shares riding this recovery are Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB).

These companies go head to head in the Australian leisure market. But while Flight Centre has a strong presence in corporate travel, Webjet is a big player in the business-to-business (B2B) hotel accommodation space. 

Fresh off an overseas trip, I’m keen to put these ASX travel shares under the spotlight to see which company might be the better buy.

The case to upgrade Flight Centre shares

For months now, Flight Centre has been the most heavily shorted share on the ASX. But it might not be all doom and gloom.

While borders were shut and revenue shrivelled up, Flight Centre acted swiftly to significantly reduce its cost base, realign and modernise its brands, and accelerate its investment in technology.

Most notably, the company cut its Australian brick-and-mortar store network in half, meaning it’s now emerged from COVID a much leaner business. Importantly, the company believes it’s still able to reach 95% of its customers despite these store closures. All the while, competing travel agents have shuttered up shop and exited the market for good.

With the travel environment more complex now than ever before, travellers are turning to experts – like those at Flight Centre – to navigate the complexity and provide peace of mind.

Flight Centre’s corporate travel business has also been making inroads since the pandemic, growing market share organically through new big account wins and high retention. The company’s FCM business won 12 of its largest 20 accounts during the pandemic. And since the first half of FY21, it’s secured accounts with an annual spend of around $4.5 billion. 

The case to double click on Webjet shares

Compared to Flight Centre, Webjet is a much more capital-light business since it doesn’t run a network of physical stores. Nor does it employ an army of salespeople to operate these stores.

Even still, it’s also emerged from COVID as a leaner, more cost-effective company. Its Webbeds ‘bed bank’ business has slashed costs by 31% compared to pre-pandemic levels and is on track to be 20% more cost efficient when it’s back operating at scale.

What’s more, Webbeds has its sights set on moving up one spot to become the number one global B2B accommodation provider. This strategy is seeing Webbeds target a greater market opportunity through channel expansion, diversifying into untapped domestic markets, and an increased presence in North America.

Webjet is also targeting significant market share growth in its online travel agency (OTA) business, which already captured more than 50% of the OTA flights market in Australia and New Zealand prior to COVID. As the structural shift to online continues to accelerate, Webjet is aiming to outperform the domestic bookings market by 1.5x, underpinned by its brand strength and unique technology.

Webjet’s financial year ends on 31 March, so the ASX travel share has already handed in its FY22 results. The company’s operating leverage was on full display, with revenue growing 63% in the second half compared to the first, while expenses only ticked up by 10%. 

Is there turbulence ahead for ASX travel shares?

I’ve presented the blue-sky scenario for these ASX travel shares but it’s important to be wary of the risks. After all, Flight Centre shares are attracting short interest for a reason. At the moment, 15% of Flight Centre shares are held as short positions, while Webjet’s short interest stands at around 7%.

It appears the market is concerned that the travel recovery may take longer than expected, hampered by inflation and rising living costs. 

At the same time, the industry is battling a lack of capacity from airlines, particularly on international routes, leading to higher airfares which could stifle demand. 

As the dust settles from COVID, more travellers have been opting to venture domestically rather than overseas. This is an unwelcome trend for travel agents as they earn higher margins on international travel.

Looking out over the longer term, there are also debates over the relevance of travel agents and if video conferencing tools have changed the corporate travel landscape for good.

Which is the better ASX travel buy?

Flight Centre is a proven performer with an aligned founder at the helm and a long history of creating shareholder value.

That said, I’m attracted to the scalability of Webjet’s model, its earnings potential, and the runway for organic growth ahead for its Webbeds business.

The post Better ASX travel buy: Flight Centre or Webjet? appeared first on The Motley Fool Australia.

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More reading

• It’s gained 60% in 2 years, does the Webjet share price still have room to grow?
• Are we flying first class with Flight Centre shares?
• These are the 10 most shorted ASX shares
• Why did the Flight Centre share price underperform the ASX 200 in July?
• 3 ASX 200 shares to buy for a post-COVID resurgence: experts

Motley Fool contributor Cathryn Goh 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 and Webjet Ltd. 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 you’re wanting to diversify your portfolio quickly, then exchange traded funds (ETFs) could help you achieve this. But which ETFs should you consider buying?

Listed below are two popular ETFs that are highly rated:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. It gives investors exposure to approximately 50 of the Asian region’s largest technology and ecommerce companies.

Through this ETF you’ll be buying a slice of tech giants such as Alibaba, Baidu, Infosys, JD.com, Kuaishou Technology, Meituan Dianping, Pinduoduo, Samsung, and Tencent Holdings.

In respect to Tencent, it is a multinational technology conglomerate and one of the largest companies in the region (and the world).

Tencent is best known for its communication and social platforms, Weixin, WeChat and QQ. These are the dominant platforms in the region by some distance. For example, earlier this year, the company revealed that WeChat users had reached 1,288 million.

The company also has plenty of other businesses such as Tencent Music, Tencent Meeting, and Tencent Games, to name just three.

BetaShares Global Cybersecurity ETF (ASX: HACK)

Another ETF for investors to consider buying is the BetaShares Global Cybersecurity ETF. This fund tracks the performance of an index covering the leading companies in the growing global cybersecurity sector.

With cybercrime on the rise and demand for cyber security services growing fast, the companies included in the fund appear well-placed for long term growth. This includes Accenture, Cisco, Cloudflare, Crowdstrike, and Okta.

In respect to CrowdStrike, it provides the popular Falcon platform that delivers incident response and forensic analysis services. These have been designed to help businesses understand whether a breach has occurred.

The post 2 exciting ETFs for ASX investors to buy today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has positions in and has recommended BETA CYBER ETF UNITS. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers 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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The Telstra Corporation Ltd (ASX: TLS) share price dropped into the red on Thursday. This followed the release of the company’s full year results for FY 2022.

The telco giant’s shares ended the day down by 1.25% to $3.96.

What did analysts say about the result?

Telstra delivered a result that was largely in line with the market’s expectations and its final dividend increase to 8.5 cents per share was a big (pleasant) surprise.

In light of this, the weakness in the Telstra share price appears to have been driven by its guidance for FY 2023.

Telstra has guided to EBITDA growth of 7.5% to 10% in FY 2023, which wasn’t quite as strong as analysts at Goldman Sachs were expecting.

The broker has commented:

Telstra reported FY22 EBITDA/EPS that were +1%/+9% vs. GSe, but in-line excl. $116mn of legacy network disposals. Lower Digicel & NBN one-off earnings expectations resulted in FY23 EBITDA guidance -1% vs. GSe prior. T25 targets were mostly re-iterated, except for returning D&IP to growth in FY24E (with the inter-capital fibre build being more IRU/cash focused). However, the key surprise was the 8.5¢ final dividend (GSe 8.0¢).

Is the Telstra share price good value?

While Goldman sees value in the Telstra share price, it doesn’t see enough to recommend it as a buy just yet.

According to the note, the broker has retained its neutral rating and $4.40 price target on the company’s shares. Based on the current Telstra share price, this implies potential upside of 11% for investors.

But that’s not including dividends. Goldman is forecasting a 17 cents per share fully franked dividend in FY 2023, which would mean a 4.3% yield. This would stretch the total return on offer with its shares to over 15%. Not bad for neutral!

The post Is the Telstra share price a buy after the telco’s FY22 results? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation 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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It’s not often that a company sees a massive geographic market shut down overnight.

But that’s exactly what happened to Treasury Wine Estates Ltd (ASX: TWE) in 2020.

It was a frightening time when the first wave of COVID-19 broke out around the world. 

There were no vaccines yet, and economies tanked around the globe after individual freedoms were curtailed to stop the spread.

In a not outrageous suggestion, the Australian government called for an independent study into the origins of the pandemic.

Unfortunately, China took exception to this. Beijing retaliated by imposing crippling tariffs on certain imported goods from Australia.

Wine was one of those newly taxed items, and instantly one of Treasury Wine’s biggest markets disappeared into thin air.

‘Successfully repositioned’ business

Fast forward two years, and Treasury’s management has done its best to pivot away from the world’s largest country.

Investment fund WAM Leaders Ltd (ASX: WLE) has high hopes for its holding, according to portfolio manager John Ayoub.

“Under the leadership of Tim Ford… Treasury Wine Estates has successfully repositioned itself away from China,” he said in a memo to clients.

“The business is now in a much stronger position than it was prior to the tariffs, allowing the company to shift back to a growth mindset.”

To demonstrate, Ayoub referred to how the acquisition of US business Frank Family Vineyards late last year “filled a key gap” in that country. 

“This transaction came with both cost synergies as well as revenue cross-sell and distribution synergies, and has created a new growth pillar for the US business.”

Defensive in economic downturns

The other tailwind for Treasury Wine is that it’s in an industry that should be resilient through imminent consumer belt-tightening from rising interest rates.

“In the current environment, Treasury Wine Estates is set to outperform,” said Ayoub.

“Wine consumption has proven defensive in previous economic downturns, the company is well positioned to pass through inflationary pressures and it has well-recognised brands and strong vintages that are in perennial demand.”

The company has an impressive array of new labels launching in the coming months.

“In fact, 4 August marked the release of the latest vintage Penfolds from Australia, California and for the first time, France,” Ayoub said.

“Later this year, we should also see the release of the inaugural Chinese Penfolds.”

Treasury Wine is scheduled to report its financials on Thursday. The stock price is currently pretty much where it started the year.

Shaw and Partners portfolio manager James Gerrish agreed last week that Treasury Wine has a bright future ahead of it.

“The stock is not overly cheap but solid year-on-year growth looks achievable to justify an FY23 PE of 22x,” he said.

“We like Treasury Wine Estates, plus it remains a potential takeover target although tight money markets may delay any action out of Europe.”

The post ‘Back to a growth mindset’: Expert names ASX share ready to take off appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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 Treasury Wine Estates 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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