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ASX coal shares have dominated this year and a recent set of external catalysts could push the sector even higher.

Names such as Whitehaven Coal Ltd (ASX: WHC) and Yancoal Ltd (ASX: YAL) are well positioned to benefit from any further upside.

Meanwhile, the price of coal trades 4% higher on the month at US$410 per tonne, within reach of its all-time highs.

ASX coal shares to flame higher?

With the price of coal continuing along its upward trajectory, the question turns to what’s next for ASX coal shares.

Whitehaven reported solid fourth quarter production, growing production by 17% thanks to increased output at its Narrabri mine.

It also expects earnings before interest, tax, depreciation and amortisation (EBITDA) of around $3 billion in FY22, well up from last year’s result.

Fellow coal player New Hope Corporation Limited (ASX: NHC) also signalled a bright outlook for coal sales earlier in FY22.

It reported that it had “received more requests for metallurgical coal from existing and new European customers ahead of a European Union ban on Russian coal imports in August,” according to reporting from Reuters.

Coal shares were also helped by recent news that China may be willing to reverse its stance on Australian coal imports when procuring metallurgical coal exports.

This, combined with the surge in coal prices underscores a positive outlook for ASX coal shares.

Consequently, the sector continues to catch a bid today, propping up other names within the wider resources segment.

The 3 ASX coal players, Whitehaven, Yancoal and New Hope, are up 173%, 174% and 125% in the past 12 months respectively.

The post Could ASX coal shares be set for a boost? appeared first on The Motley Fool Australia.

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More reading

• 11-year high: Whitehaven share price surges 8% on record $3b profit
• ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update
• Will it flip? Rumours stir up interest in ASX 200 coal mining shares
• Here are the top 10 ASX shares today
• Why Data#3, Netwealth, New Hope, and Pilbara Minerals shares are pushing higher

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

A bear market occurs when the price of an asset or index falls by 20% (or more) from its all-time high. In the stock market’s case, this occurs every 3.6 years on average. In 2022, both the benchmark S&P 500 index and the technology-centric Nasdaq 100 index have crossed the bear-market threshold. The selling has been broad and relentless, especially for tech stocks, many of which have lost more than 50% of their value. But for long-term investors, that has created some interesting opportunities. 

These three companies are currently worth between $900 million and $2 billion, but they each have the potential to amass valuations of $5 billion by 2030. That opens the door to a significant amount of upside for investors. Here’s why.

1.Upstart: implied upside of 144%

Upstart Holdings (NASDAQ: UPST) is an artificial intelligence company that is changing the way banks assess potential borrowers. It says its algorithm can deliver loan decisions faster and more accurately than traditional methods of assessment, which have historically relied on Fair Isaac‘s FICO credit scoring system. 

Upstart has originated $25 billion worth of loans for its 60 bank and credit union partners since it started out, and it earns fees for doing so. But the company just entered the automotive loan segment, which is worth about $751 billion in originations annually, so it has only tapped a small slice of its potential so far. What’s more, Upstart could be eyeing business loans and mortgages in the future, which would take its opportunity to $6 trillion each year. 

Upstart is showing exceptional growth, increasing its revenue by a whopping compound annual rate of 96% between 2017 and 2021. But it’s set for a slowdown after cutting its 2022 revenue guidance amid challenges like rising interest rates and a weakening economy, though neither of these issues are likely to last for the long term. 

Upstart stock has taken investors on a rollercoaster ride. After listing publicly in December 2020 at $20 per share, it rose by over 20 times to an all-time high of $401 before crashing back to Earth, now trading at $24 per share. It has a $2 billion market valuation at the moment, so its stock price would need to rise by 144% to $59 in order to reach a $5 billion valuation by 2030. 

That’s only a fraction of Upstart’s all-time high, and considering the company’s potential, that goal seems very achievable by 2030. 

2. Lemonade: implied upside of 323%

Lemonade (NYSE: LMND) is another financial technology company using artificial intelligence to transform an age-old industry — this time, insurance. The company has developed a web-based bot that can interact with customers to write a quote in under 90 seconds, and pay claims within three minutes — all without human input in most circumstances.

In the two years between the first quarter of 2020 and the recent first quarter of 2022, Lemonade has more than doubled its customer base to 1.5 million, and more than tripled its in-force premium from $133 million to $419 million. It comes on the back of the company’s entrance into the car insurance market, its newest and potentially most lucrative segment. It could be worth over $316 billion in the U.S. during 2022 alone, from a pool of 198 million policyholders. 

Yet despite Lemonade’s strong growth, its stock has collapsed by 88% from its all-time high, and its market valuation now sits at a modest $1.1 billion. The company is losing quite a bit of money as it builds scale and expands its business, and investors have expressed little patience for this process amid the broader tech sell-off. But as the economy improves, so should the appetite for high-growth stocks.     

Lemonade had a market valuation of about $10 billion at its all-time high stock price, so it would have to regain half of that level to reach $5 billion. It has the potential and the growth rate to achieve that by 2030, and if it does, it would deliver investors a return of 323%.

3. Redfin: implied upside of 455%

In an economic environment where interest rates are rising, real estate prices will typically fall, so buying Redfin (NASDAQ: RDFN) stock is a contrarian play. But the company might be the future of the industry, and it’s too cheap to ignore right now.

Redfin has built an army of 2,750 real estate brokers across the U.S., and it represents 1.18% of all home sales by value. That significant scale allows the company to charge listing fees as low as 1%, far cheaper than the industry-standard 2.5%. Since Redfin started, it has saved sellers over $1 billion. 

The company also operates an iBuying segment that purchases homes directly from willing sellers, then attempts to flip them for a profit. It’s a risky practice especially if real estate prices are falling, and it dealt a catastrophic blow to Redfin’s key competitor Zillow Group (NASDAQ: Z)(NASDAQ: ZG) last year. Thankfully, Redfin’s iBuying business is much smaller, and it appears to have behaved less aggressively when acquiring properties, so there are no signs it will suffer a similar fate at this stage.

Redfin’s stock once traded at $96.59, but it has fallen 91% from that level to $8.43 today. That places its current valuation at just $900 million — less than half of its 2021 full-year revenue of $1.9 billion. In 2022, analysts expect revenue will grow further, to $2.5 billion. 

Redfin stock would need to rise 455% to $47 in order to amass a $5 billion valuation, and there’s a case that it might be there right now if not for the uncertainty in the real estate market. But that won’t last forever. As long as Redfin continues to grow steadily over the next eight years, it should find the target very achievable. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Prediction: These tiny growth stocks could be worth $5 billion by 2030 appeared first on The Motley Fool Australia.

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More reading

• Could ASX coal shares be set for a boost?
• Here’s what brokers are saying about the Rio Tinto share price
• Understanding these 2 metrics will make you a better growth investor
• 11-year high: Whitehaven share price surges 8% on record $3b profit
• Suncorp share price surges 6% as banking ditched in favour of insurance

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and recommends Lemonade, Inc., Redfin, Upstart Holdings, Inc., Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Fair Isaac and recommends the following options: short August 2022 $13 calls on Redfin. The Motley Fool Australia has recommended Upstart Holdings, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Suncorp Group Ltd (ASX: SUN) share price is sky high after the company accepted a near $5 billion takeover bid for its banking namesake.

The sale will see the financial services giant working exclusively in insurance. The move is said to support its goal to become Trans-Tasman’s leading insurance provider.

At the time of writing, the Suncorp share price is trading at $11.76, 5.95% higher than its previous close.

Let’s take a closer look at the transformative takeover announced today.

Suncorp share price leaps on $5b bank sale

The Suncorp share price is surging on news Australia and New Zealand Banking Group Ltd (ASX: ANZ) will be snapping up Suncorp Bank for $4.9 billion. That represents a $1.3 billion premium on the bank’s net tangle assets.

Suncorp expects to reap $4.1 billion of net proceeds from the sale. It plans to return most of the cash to shareholders.

The sale of Suncorp Bank is the company’s latest move to simplify its business. It follows the sale of its interest in RACT Insurance in December and its Australian Wealth business in March.

Suncorp chair Christine McLoughlin said:

Both [Suncorp’s banking and insurance] businesses will benefit from a singular focus on their growth strategies and investment requirements.

Our purpose of building futures and protecting what matters – the focus of our company for over 100 years – will remain at our core and enable our people to deliver on our vision to create the leading Trans-Tasman insurance company.

Suncorp will focus on its portfolio of insurance brands including AAMI, GIO, Shannons, Apia, Vero, and its own Suncorp brand following the transaction.

ANZ’s acquisition of Suncorp Bank will see it taking on $47 billion of home loans, $45 million in high-quality deposits, and $11 billion in commercial loans.

Suncorp and ANZ commit to Queensland

Both Suncorp and ANZ have doubled down on their commitment to the sunshine state upon announcing the takeover plan. Such sentiment is perhaps unsurprising given the raft of hurdles to be surpassed before the acquisition can go ahead.

The takeover is subject to the approval of the Federal Treasurer and the Australian Competition and Consumer Commission (ACCC). Notably, it’s also subject to amendments to Queensland’s State Financial Institutions and Metway Merger Act 1996.

Suncorp has today committed to establishing a Disaster Response Centre of Excellence to monitor and respond to extreme weather and natural disasters in the state. It will also maintain its head office in Brisbane.

Meanwhile, ANZ promises there will be no job losses or branch closures from the takeover for three years following its completion.

It will also allocate $15 billion of new lending to support Queensland-based renewable energy projects and green Olympic Games infrastructure, and $10 billion of new lending for Queensland energy projects over the next decade. Finally, the big bank has promised $10 billion of lending for Queensland businesses over the next three years.

The post Suncorp share price surges 6% as banking ditched in favour of insurance appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update
• Suncorp share price in focus amid $5b bank sale
• ANZ share price halted amid $5b Suncorp Bank deal and mega cap raise
• 5 things to watch on the ASX 200 on Monday
• What’s the outlook in FY23 for ASX 200 bank 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 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 Rio Tinto Limited (ASX: RIO) share price has started the week in positive fashion.

In early afternoon trade, the mining giant’s shares are up 1% to $94.19.

What’s driving the Rio Tinto share price higher?

Investors have been bidding the Rio Tinto share price higher today despite iron ore prices ending the week with another decline.

According to CommSec, iron ore futures fell by US$1.89 or 1.8% to US$103.07 a tonne on Friday. This means that the price of the steel making ingredient lost US$10.69 or 9.4% of its value over the week.

Offsetting this has been a largely positive reaction from brokers to the miner’s second quarter update at the end of last week.

What are brokers saying?

While consensus earnings estimates have been trimmed, the majority of the major brokers have reaffirmed their buy ratings.

For example, Citi has maintained its buy rating with a $120.00 price target, Goldman Sachs has held firm with its buy rating with a $124.10 price target, Macquarie has kept its outperform rating with a $120.00 price target, and Morgans has upgraded its shares to an add rating with a $113.00 price target.

In respect to the latter, Morgans is recommending “opportunistic accumulation on weakness.”

Its analysts acknowledge that Rio Tinto is facing some major near term headwinds. However, it expects these to ease later in the year, making now the time to pounce.

Morgans explained:

Lower metal prices and cost pressures are powerful headwinds, but we see a better outlook for metals by late 2022 and heading into 2023 as Chinese growth starts to stabilise and recover. A short-term downgrade cycle for commodity forecasts could weigh on the stock in the meantime, but we would view this as presenting a longer-term opportunity given the resilience of strong cash flow.

RIO’s flagship iron ore division is feeling pressure at both ends, with benchmark prices falling and costs continuing to rise. Still, it should see a better relative performance in the second half from increasing Gudai-Darri volumes and is still likely to generate substantial FCF and a healthy dividend.

The post Here’s what brokers are saying about the Rio Tinto share price appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 top ASX dividend shares to buy right now
• 5 things to watch on the ASX 200 on Monday
• Top ASX dividend shares to buy in July 2022
• Why BHP, Jumbo, Pendal, and Rio Tinto shares are sinking today
• Macquarie shares ‘a clear beneficiary’ of global green energy push: fundie

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 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Market pundits are comparing the recent throttling of technology stocks to the Dot.com bubble of the early 2000s. With the tech-heavy Nasdaq Composite down nearly 30% year to date, its easy to see why. But there’s a key difference between the two crashes. At the turn of the millennium, many internet companies saw their stock prices skyrocket purely on speculation.

The majority of these companies lacked any meaningful revenue to show their business models could be substantiated. In other words, they didn’t really have business models — just plans (see Pets.com). The CEO of UBS, Ralph Hamers, said this at the recent World Economic Forum:

It is not like 20 years ago. We had some models that were just models on paper and not real. In the last 20 years, we have been able to show that there are real changes happening in retail businesses, in financial businesses etc., and that trend is not going to stop because of what we see currently.

In the Dot.com meltdown, most internet companies were wiped out with the exception of a few mega winners like Amazon (NASDAQ: AMZN) and Booking Holdings (NASDAQ: BKNG).

Because many of today’s technology companies have proven business models, dozens of huge winners — instead of a handful — will come out of this valuation compression. And being able to distinguish the cream of the crop will be key for investors. 

To that end, let’s unpack two really important metrics for analyzing technology-driven businesses: recurring revenue and dollar-based retention rate.

Recurring revenue creates predictability and optionality

Recurring revenue is the backbone of every subscription company. Unlike one-off sales, recurring revenue is stable and can provide a high degree of predictability that you don’t get with lumpy revenue models.

The superiority of a recurring revenue business model is perfectly showcased in Adobe (NASDAQ: ADBE)‘s switch nearly 10 years ago from selling its software through priority licenses to cloud-based subscription access.

At first, the company struggled as customers tried to navigate the change. But within 3 years, the company was producing more annual revenue than ever, and 20% of its customer base was made up of first-time Adobe users.

So why is recurring revenue a strong indicator of a superior business?

Well, first of all it’s sticky. Just think of all the subscriptions you’re paying for right now that you rarely think about (and maybe even rarely use!). Second, it allows management teams to spend less time forecasting their yearly revenue and more on enhancing their services and expanding customer spending.

Getting customers to upgrade a one-time purchase is extremely difficult, but convincing them to upgrade a subscription to instantly unlock new features is much more compelling.

Today, 93% of Adobe’s total revenue is recurring, and in turn, the company has seen its operating margins balloon from 10% to over 30% since making the switch.

The ability of technology companies to focus on innovating and expanding their product offerings by using a recurring revenue model is one of the primary reasons beaten-down growth stocks look much more resilient today than those of the early 2000s. 

High retention indicates strong demand

Dollar-retention rate is a key indicator of quality because it showcases software demand and loyalty from existing customers. The metric not only reflects churn (cancelled subscriptions) but shows when customers are increasing their spending on the platform.

This is immensely important because getting your existing customers to spend more is much cheaper than trying to land new customers. In other words, high dollar retention equates to improving margins. So, what would be considered high retention?

First of all, anything under 100% should be a red flag that indicates the company is losing revenue from its existing customers (either due to subscription downgrades or churn). Anything over 100% indicates the business is retaining its customers and deriving more revenue from them.

Robotic process automation leader, UiPath (NYSE: PATH), reported a dollar-based net retention rate of 138% in its most recent investor presentation. This means that over the last quarter, the company increased revenue from existing customers by an impressive 38%.

You can compare a software company’s retention rate to that of its competitors to see how their product stacks up. Appian (NASDAQ: APPN), which offers low-code automation solutions, posted a much lower subscription retention rate of 117%, further substantiating the quality and demand of UiPath’s. 

It’s also worthwhile to compare the current retention to past reports. Consistently declining retention is likely a red flag. In the case of UiPath, there was a quarter-over-quarter decline from 145% to 137%. The company’s management team attributed this to macroeconomic headwinds, such as the war in Europe, and reduced enterprise budgets.

While a single-quarter decline is probably not a reason to write off the company, this trend should be monitored closely moving forward.

All in all, a high retention rate indicates that existing customers are sticking around and increasing their spending, which will ultimately improve the company’s bottom line.

Technology companies are stronger today than in the early 2000s

There are countless similarities between the tech-fueled crash of 20 years ago and the one currently unfolding. But I think this has created opportunity for investors. Technology businesses today are very clearly stronger than those of twenty years ago, and while there may be more near-term pain for growth investors, there will likely be a high number of big winners once we emerge from this bear market.     

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Understanding these 2 metrics will make you a better growth investor appeared first on The Motley Fool Australia.

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More reading

• 11-year high: Whitehaven share price surges 8% on record $3b profit
• ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update
• What’s the outlook for the Mineral Resources share price in FY23?
• What’s the outlook for Regis Resources shares in FY23?
• 2 All Ords ASX shares I think are underrated buys right now

Mark Blank has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adobe Inc., Amazon, and Booking Holdings. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2024 $420 calls on Adobe Inc. and short January 2024 $430 calls on Adobe Inc. The Motley Fool Australia has recommended Adobe Inc., Amazon, and Booking Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Shares in Whitehaven Coal Ltd (ASX: WHC) are soaring today after the company released its June quarterly report.

The Whitehaven share price soared nearly 8% to $6.04 in early trade — its highest level since July 2011.

Whitehaven shares are currently trading at $5.90, a 5.08% gain. In comparison, the S&P/ASX 200 Index (ASX: XJO) is trading 0.47% higher at the time of writing.

Let’s take a look at what Whitehaven reported.

Whitehaven share price soars

Here are some of the highlights from Whitehaven’s unaudited results:

• Expected full-year earnings before interest, tax, depreciation, and amortisation (EBITDA) of about $3 billion, subject to final audit. This compares to $0.2 billion in FY21
• Record average coal price of $514 per tonne in June quarter
• Coal price of $325 per tonne in FY22
• Net cash position of $1 billion at 30 June 2022.

What else did Whitehaven report in the quarter?

Whitehaven expects to produce a full-year EBITDA of $3 billion, which the company described as its “strongest ever full-year result”.

Underpinning this result was a better operational performance and record high coal prices. After hitting a new record in the June quarter, Whitehaven said coal prices remained “well supported”.

Managed run of mine (ROM) production for the June quarter was up 21% compared to the March quarter to 6.4Mt. The company achieved 20Mt total coal production in FY22, in line with guidance.

Total equity sales of produced coal jumped 23% compared to the previous quarter to 4.4Mt, while total equity sales hit 14.2Mt. This was down 2% from the previous financial year.

Management commentary

Whitehaven managing director and CEO Paul Flynn said:

With demand for high quality coal outstripping global supply, Whitehaven remains well placed to support energy security through transition and to deliver strong returns for shareholders.

Stronger operational performance has enabled us to deliver our FY22 production and sales guidance in spite of a tight labour market and COVID-related absenteeism.

A net cash position of $1.0 billion at 30 June, with ongoing strong cashflows, gives Whitehaven a
continuing strong balance sheet with cash reserves to fund future growth and also return capital to shareholders through franked dividends and share buy-backs.

Future coal price outlook

Whitehaven sees thermal coal prices well supported in the 2022 and 2023 financial years. However, the company expects more volatility amid global economic pressures with regard to metallurgical coal.

Whitehaven noted the NewC global coal quarterly index had jumped higher over the past seven quarters. This index is the benchmark price for seaborne thermal coal in the Asia-Pacific.

According to the company, global supply constraints, especially for thermal coal, continued in the June quarter. Whitehaven added:

Buying interest has continued from our customers in Northeast Asia who are focused on replenishment of stocks for the northern hemisphere summer period.

Interest from non-traditional buyers of Australian thermal coal also continued to progress, including from European end users.

The European coal import embargo from Russia is due to commence in August which is expected to tighten further the supply of high quality thermal coal.

Whitehaven share price snapshot

The Whitehaven share price has soared 173% in the past 12 months and is up almost 126% year to date.

In the past month, the company’s share price has gained 18%, while it has risen 17% in the past week.

For perspective, the ASX 200 has shed nearly 10% in the past year.

The post 11-year high: Whitehaven share price surges 8% on record $3b profit appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update
• Will it flip? Rumours stir up interest in ASX 200 coal mining shares
• Here are the top 10 ASX shares today
• Here’s why ASX 200 coal shares are firing up today
• ASX 200 midday update: Telstra completes acquisition, Lake Resources and Bega Cheese sink

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 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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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a gain. The benchmark index is currently up 0.45% to 6,636.3 points.

Here’s what is happening on the ASX 200 today:

ANZ to acquire Suncorp Bank

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has been halted today. This follows the launch of a $3.5 billion capital raising to fund the acquisition of the banking operations of Suncorp Group Ltd (ASX: SUN) for $4.9 billion. ANZ believes the acquisition will accelerate the growth of its retail and commercial businesses while also improving the geographic balance of its business in Australia.

Suncorp shares jump

The Suncorp share price is racing higher today after the insurance giant agreed to sell its banking operations to ANZ. Investors appear pleased with management’s plan to focus on its core insurance business. Management also revealed that it expects to return the majority of the proceeds from the sale to shareholders. It hasn’t advised how it would return the funds, but it would most likely be via a special dividend and/or share buyback.

Whitehaven Coal rises on quarterly update

The Whitehaven Coal Ltd (ASX: WHC) share price is rising on Monday after the market responded positively to the coal miner’s quarterly update. During the quarter, the company achieved a record average coal price of A$514 per tonne. This took its average coal price to A$325 per tonne for FY 2022. In light of the latter, Whitehaven expects to report FY 2022 EBITDA of approximately $3.0 billion. This is up materially from $0.2 billion in FY 2021.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Suncorp share price with a 6% gain. Investors appear pleased with the company’s decision to sell its banking operations. Going the other way, the worst performer has been the Megaport Ltd (ASX: MP1) share price with a 3% decline on no news.

The post ASX 200 midday update: ANZ to buy Suncorp Bank for $5bn, Whitehaven Coal’s update appeared first on The Motley Fool Australia.

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More reading

• Here’s how ANZ Bank performed during Q3 of FY22
• Suncorp share price in focus amid $5b bank sale
• ANZ share price halted amid $5b Suncorp Bank deal and mega cap raise
• 5 things to watch on the ASX 200 on Monday
• 2 rising ASX shares of companies with a market stranglehold

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 MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. 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 Mineral Resources Ltd (ASX: MIN) share price went through a few hair-raising moments in FY22.

Peaking at $65.38 on 30 July 2021, the company’s share price then fell to a 52-week low of $36.95 on 10 November.

However, it wasn’t long before its shares picked up momentum to hit an all-time high of $66.88 two months later.

But, once again, the share failed to hold ground and is now trading at $43.79 apiece – a 34.5% decline from its record high.

What’s ahead for Mineral Resources shares?

While no one knows where the Mineral Resources share price will be in FY23, we turn to our industry experts to get a clearer picture.

Analysts at Goldman Sachs upheld their buy rating with a price target of $65.40 for the company’s shares.

The broker believes there is significant value at the current price despite some downside risks at the present time.

They include lower lithium prices, pressure on low-grade iron ore price realisations, and cost performance at operating assets.

In addition, construction risks could spell uncertainty at Mineral Resources’ Wodgina, Kemerton, and Mt Marion lithium projects, as well as its Ashburton and Port Hedland iron ore projects

This is because of an expected drop in global commodities demand over the next 12 months.

At the same time, cost inflation for the mining sector is ramping up amid rising energy and labour costs.

Nonetheless, Goldman Sachs remains positive on commodities and the Australian mining sector over the medium term.

It is forecasting a recovery in China’s infrastructure and property construction sector for the rest of the calendar year. It believes Chinese government stimulus, higher infrastructure spending, and property policy easing will be key driving factors.

Furthermore, the team noted a more favourable AUD/USD exchange rate, as well as lithium pricing lags, is also providing support.

The team at UBS is also confident Minerals Resources shares will go higher. The broker raised its price target by 32% to $72.00 per share.

Based on the last closing price, this implies an upside of roughly 66% for investors.

Lastly, as reported by my Fool colleague Brooke, Jefferies also remains buoyant on the miner’s shares with a $65.00 a share rating.

The post What’s the outlook for the Mineral Resources share price in FY23? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX shares today
• 3 ASX lithium shares that flew in FY22, and 1 that sank
• $264 million! The 10 highest-paid CEOs on the ASX
• Could the Mineral Resources share price unload another 41% of upside?
• Why did the Mineral Resources share price fall 10% in the 2022 financial year?

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 Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is out of action on Monday.

This follows the announcement of a capital raising to fund the blockbuster acquisition of the banking operations of Suncorp Group Ltd (ASX: SUN) for $4.9 billion.

But that wasn’t the only thing the big four bank announced today.

In addition to its capital raising and acquisition announcement, ANZ has provided investors with an update on its performance during the third quarter of FY 2022.

How did ANZ perform during the third quarter?

For the three months ended 30 June, ANZ delivered a 5% increase in revenue over the prior corresponding period. This would have been up 6% excluding foreign exchange headwinds.

Management advised that this was underpinned by strong lending and margin momentum across all its major businesses during the three months. The bank’s deposits were flat excluding foreign exchange impacts.

The company’s investment in operational capacity and its processing resilience in the Australian Home Loan business has helped deliver consistently faster turnaround times across all channels. This means the bank is now in line with major peers for key customer segments.

Lending volumes grew $2.0 billion (3% annualised) in the third quarter, with particularly strong growth in June. In light of this, ANZ remains on track to grow in line with the Australian major banks before the end of the financial year and is delivering growth with an eye to maintaining margin performance and credit quality.

Margin improvements

Speaking of margins, ANZ’s group net interest margin (NIM) increased 3 basis points for the quarter and its underlying NIM was up 6 basis points to 164 basis points. This was largely driven by the impact of rising rates, partly offset by intense price competition in the home lending portfolios in Australia and New Zealand.

Pleasingly, with interest rates projected to increase further in the coming months, management expects this to be supportive for margins in the fourth quarter.

Another positive is that ANZ’s costs remain tightly managed, with ‘run-the-bank’ costs expected to be broadly flat for the second half. This is despite the banking giant facing inflationary pressures. In addition, ANZ continues to invest in the business at record levels, with investment expense expected to be slightly higher in the second half as it finalises its compliance with BS11 in New Zealand.

Also catching the eye was ANZ’s continued low level of individual provisions. The bank reported a $14 million credit provision charge for the third quarter.

On a collective basis, ANZ has maintained a collective provision balance of $3.78 billion. It advised that this reflects risks to the domestic and global economic outlook from factors such as higher inflation and interest rates over the quarter.

‘A pleasing quarter’

ANZ’s chief executive officer, Shayne Elliott, was pleased with the bank’s quarter. He said:

This was a pleasing quarter where all our businesses performed, particularly our home loan business in Australia. While rising inflation and interest rates are starting to impact some customers, household and business balance sheets remain strong and with a collective provision balance of $3.8 billion we are well-placed to continue to support economic growth into the future.

The post Here’s how ANZ Bank performed during Q3 of FY22 appeared first on The Motley Fool Australia.

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More reading

• Suncorp share price in focus amid $5b bank sale
• ANZ share price halted amid $5b Suncorp Bank deal and mega cap raise
• 5 things to watch on the ASX 200 on Monday
• Setting the pace: Why ASX 200 bank shares are feeling the pinch on Friday
• What’s the outlook for the ANZ share price in 2023?

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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The  Northern Star Resources Ltd (ASX: NST) share price recently fell to the lowest level since 2018.

Northern Star shares are currently trading at $6.77, a 0.3% gain. However, on Friday the company’s share price fell to $6.75. Northern Star shares were last trading at this low in late August 2018.

So what is happening to the Northern Star share price?

Gold price falls

Gold prices fell again on Friday by 0.1% to US$1708.17 per ounce, as my Foolish colleague James reported this morning.

This was the fifth week in a row the gold price fell. Fears of interest rate rises appeared to be impacting the gold price.

Commenting on the gold price, TD Securities global head of commodity strategy Bart Melek said in comments cited by mining.com:

The set-up for a deep liquidation event in gold is building.

With gold bugs falling like dominoes, prices are now challenging pre-pandemic levels, raising risks that the largest speculative cohort in gold will start to feel the pain under a hawkish Fed regime

After hitting a five year high of US$2028 per ounce on 3 August 2020, the gold price has fallen nearly 16%.

Meanwhile, multiple analysts are positive on the future of the Northern Star share price. Macquarie has recently placed an $11 price target on the company’s shares. Citi analysts have tipped the company’s share price to rise up to $12.10.

In today’s trade, the gold price is recovering slightly, up 0.22% to US$1707.40 per ounce according to CNBC.

Northern Star share price snapshot

The Northern Star share price has fallen 37% in the past year, while it is down more than 28% year to date.

For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has fallen nearly 20% in a year and 13% year to date.

Northern Star has a market capitalisation of nearly $7.9 billion based on the current share price.

The post Why is the Northern Star share price trading at near 4-year lows? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Why is the Newcrest share price slipping to a new 52-week low on Friday?
• 2 ASX 200 mining shares performing today amid a volatile gold price
• Why has the Newcrest share price lost its shine of late?
• What’s the outlook for Northern Star share price in FY23?

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 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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