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S&P/ASX 200 Index (ASX: XJO) supermarket shares are taking off on Tuesday amid the release of the latest household spending data.

The Australian Bureau of Statistics (ABS) found household spending rose in May, lifting 7.9% higher than it was at the same time last year.

The news might have increased sentiment for ASX 200 supermarket shares. They’re currently leading the S&P/ASX 200 Consumer Staples Index (ASX: XSJ). In turn, the consumer staples sector is out in front of the broader market.

Let’s take a closer look at what’s going on with ASX 200 supermarket shares today.

ASX 200 supermarket shares outperform

ASX 200 favourites Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) are outperforming most of their peers on Tuesday.

The Woolworths share price is currently leading the company’s home sector with a 2.2% gain. That brings the stock up to trade at $37.23 apiece.

Meanwhile, the Coles share price is coming in second best with a gain of 2.05%. It’s trading at $18.69.

Their gains have helped boost the consumer staples sector into the top spot. The sector is up 1.33% at the time of writing. For comparison, the ASX 200 is up just 0.12% right now.

The latest news from the ABS may have boosted the market’s interest in the supermarket giants.

Though, the Woolworths share price might be being lifted by its addition to Goldman Sachs’ conviction list.

The broker likes the supermarket giant’s core business, adjacent revenues, and valuation, my Fool colleague James reported earlier today.

The consumer staples sector is also being driven higher by shares in Endeavour Group Ltd (ASX: EDV) – which hit a new 52-week high today, Graincorp Ltd (ASX: GNC), and Elders Ltd (ASX: ELD).

They’ve gained 0.7%, 0.3% and 0.3% respectively at the time of writing.

The post ASX 200 supermarket shares lead as household spending jumps appeared first on The Motley Fool Australia.

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More reading

• Why Eagers Automotive, Viva Energy, Woolworths, and Zip shares are rising
• Why Goldman Sachs added Woolworths shares to its conviction list
• Here’s why the Coles share price had a volatile FY22
• 5 things to watch on the ASX 200 on Monday
• Why ‘superior operations’ puts Woolworths shares in this broker’s buy basket

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 positions in and has recommended COLESGROUP DEF SET. The Motley Fool Australia has recommended Elders Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Looking for some growth shares to buy this week? Then take a look at the three listed below that are rated as buys.

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

Aristocrat Leisure Limited (ASX: ALL)

The first ASX growth share to look at is Aristocrat Leisure. It owns a portfolio of popular world class poker machines and mobile games. In addition, management is planning an expansion into the potentially lucrative real money gaming market. Combined with its share buyback, this all bodes well for its earnings per share growth in the coming years.

Morgans is a fan of the company and has an add rating and $43.00 price target on its shares. The broker said: “It has delivered revenue growth of 17% pa over the past five years and 80% of revenue in FY21 was recurring. We expect ALL to continue to take market share in all its product segments.”

Life360 Inc (ASX: 360)

Another ASX growth share that has been tipped as a buy is Life360. It is the company behind the popular Life360 app, which is the world’s leading real time, location-sharing app used by families to stay safe and communicate. At the last count, there were over 30 million monthly active users on its platform.

Bell Potter is positive on Life360 and has a buy rating and $7.50 price target on its shares. It notes that the company “has the potential to leverage its large and growing user base to enter new markets and disrupt the legacy incumbents.” This includes “insurance, item & pet tracking, senior monitoring, home security and/or identity theft.”

Nitro Software Ltd (ASX: NTO)

Another ASX growth share that analysts rate highly is Nitro Software. It is a technology company that provides businesses of all size with integrated PDF productivity and eSignature tools via the Nitro Productivity Suite.

Goldman Sachs is very bullish on Nitro due to its strong growth potential. As a result, it currently sees “NTO as an attractive long-term growth opportunity at a discounted valuation.” Goldman has a buy rating and $2.35 price target on the company’s shares.

The post Here’s why analysts are tipping these ASX growth shares as buys appeared first on The Motley Fool Australia.

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More reading

• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• Why is the Life360 share price soaring 12% today?
• Here are 3 excellent ASX growth shares for investors to buy in July
• 2 appealing ASX All Ords growth shares getting discounted today
• Could there be another 19% upside to the Aristocrat Leisure share price?

Motley Fool contributor James Mickleboro has positions in Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Life360, Inc. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX 200 energy shares were the clear winners in FY22. Prices for energy commodities and raw materials were sent to record highs amid a number of external catalysts.

In particular, Brent Crude oil nudged multi-year highs of US$123 per barrel back in March. It has been in sideways territory since.

Meanwhile, energy’s darling child – natural gas – is buoyantly trading well above historical averages.

The European TTF Dutch gas contract has increased 375% year over year. UK gas is up 162%. Not to mention coal, which has gained 194% in 12 months.

More upside for ASX 200 energy shares in FY23?

Michael Cembalest is the chairman of market and investment strategy at JP Morgan. He recently released his annual commentary on the future of the energy market.

In it, Cembalest noted that while there’s somewhat of a paradigm shift occurring in energy markets, beneath the surface, all might not be that different.

Cembalest notes fossil fuel’s share of global primary energy is declining slightly faster than previously. This is partially due to “large investments in wind and solar power used for electricity generation”.

“Even so … fossil fuel reliance across the developed and developing world is still high.”

The International Energy Agency also projects that 66% of the world may be reliant on fossil fuels by 2050.

“[G]lobal gas and coal consumption in 2021 were already above pre-COVID levels, and global oil
consumption should surpass pre-COVID levels sometime next year,” Cembalest added.

“Looking further out, some forecasts of oil demand in 2030 and 2040 are not that different from today.”

That looks like bullish sentiment for the ASX 200 energy sector, that’s for sure.

Fossil fuels fill the energy gap

Dr Phillip Hofflin of Lazard Asset Management echoes this sentiment.

Hofflin notes that modern renewable energy represents only 6% of the global supply. This leaves a large gap that fossil fuels currently fill.

“[W]hat attracted us to the sector … was really a combination of, firstly, the very low prices … and secondly, the fact that there was just no CAPEX around the world in energy,” he told Livewire.

Hofflin likes energy giants Woodside Energy Group Ltd (ASX: WDS) and Whitehaven Coal Ltd (ASX: WHC).

However, many ASX 200 energy shares such as Santos Ltd (ASX: STO), Yancoal Australia Ltd (ASX: YAL), and Beach Energy Ltd (ASX: BPT) are also positioned to benefit from a strengthening energy market.

Bell Potter named Beach Energy a speculative buy in a recent note. The broker valued it at $2 per share.

The broker said:

BPT should continue to benefit from elevated crude prices in the short term, though operating leverage from its Western Flank asset will shrink as gas and LNG production from its growth projects ramp up over the next two years.

Shown below is a graph comparing the share price growth of several ASX 200 energy shares.

The post What’s the outlook for ASX 200 energy shares in FY23? appeared first on The Motley Fool Australia.

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More reading

• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Worley shares dip despite deal with Santos
• These were the best (and worst) performing ASX 200 sectors of FY22
• What were some of the key lessons for ASX investors in FY22?

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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FY22 was a year to forget for ASX tech shares investors, with the S&P/ASX All Technology Index (ASX: XTX) falling about 35% compared to the S&P/ASX 200 Index (ASX: XJO), which fell about 10%.

The big question is, when does this trashing of ASX tech shares turn into a buying opportunity?

Have ASX tech shares bottomed yet?

If we take a look at the past four weeks, we see that ASX 200 shares have continued to fall by 1.1%. But the tech index is up 4%. What does that mean?

It may simply be a blip, or it could indicate a lift in confidence. Perhaps it’s even a sign that the bottom for ASX tech shares has been reached — and passed? Draw your own conclusions.

There are other positive indicators, too.

As my Fool colleague Zach reported last week, government bond yields are inversely related to the valuation of risk assets like ASX shares. As yields fall, valuations increase.

In addition, these yields are often interpreted as a reflection of financial investors’ attitudes towards risk.

Yields on long-dated bonds have wound back in recent weeks. This has led to a re-rating of tech shares in the near term, according to Zach.

The United States treasury note 10-year yield finished at 2.96% overnight, down from a high of 3.44% on 14 June. The Australian 10-year yield is 3.44%, also down from 4.09% in mid-June.

So, that’s all very interesting…

Overarching themes for ASX tech share investing in FY23

Investors brave enough to consider buying ASX tech shares in today’s volatile market could probably use some advice.

Alex Pollak is the founder and chief investment officer at Loftus Peak. The company is a specialist investor in global industry disruption and runs a listed managed fund on the ASX.

While Pollak’s commentary in a recent article published on the ASX website focuses on international tech stocks, his broader advice has relevance for ASX tech shares investors, too.

Go for quality in tech shares

Pollak says:

In today’s macroeconomic environment, company quality is key. Companies with strong balance sheets, good cashflows and current earnings are poised to best tolerate the high interest-rate environment. 

Quality in tech companies also distinguishes today’s market from that of 2000 during the dot-com bubble. 

Go for size in tech shares

Pollak also says that investing in large tech companies is likely to provide more safety in today’s macroeconomic environment.

That’s one of the reasons why he likes global companies, which are typically listed on overseas exchanges.

Pollak says:

As monetary policy tightens and interest rates rise, economic growth will temper while the cost of capital for companies increases. This can be a lethal combination for smaller tech companies that have yet to establish their business models or a path to profitability, because plugging the funding gap with fresh debt and equity will become much more costly. 

Pollak points to the 17.8% underperformance of the Russell 2000 against the S&P500 over the past year. The Russell 2000 is an index of small to mid-cap US companies.

He says: “Quality companies will more easily pass on to consumers the cost increases caused by inflation and supply-chain disruption.”

Go for growth and disruption in tech shares

Pollak likes tech shares that are well-positioned to benefit from long-term industry disruption.

He says: ” … the promising outlook of quality global technology companies benefitting from secular trends remains a hard act to follow”.

Pollak explains:

Where quality mitigates the effect of the inflation and supply-chain disruption, positive secular industry trends provide a path onwards and upwards. 

During the GFC, a number of key disruptive trends were working their way through the economy. Smartphones were becoming ubiquitous, the fledgling e-commerce sector was growing strongly, online advertising was taking shape and TV, movie and music streaming began to benefit from faster download speeds. 

In the end, the disruptive secular trends benefiting these companies outstripped the macroeconomic headwinds. This resulted in stock outperformance. 

The secular trend in technology today is towards increased computational power — that is to say, semiconductor devices, solid-state storage and networking products. 

In terms of best tech share picks, Pollak highlights three international companies, Nvidia Corporation (NASDAQ: NVDA), Advanced Micro Devices, Inc. (NASDAQ: AMD), and the Taiwan Semiconductor Manufacturing Co Ltd (NYSE: TSM).

He likes them because they have strong balance sheets and cash flow, do not require additional financing, and are buying back their own shares.

What about ASX tech shares?

Here are some recent recommendations on ASX tech shares from a couple of expert brokers.

As we reported last week, Citi says the two ASX 200 tech shares likely to navigate a softening economy and demand weakness best are NextDC Ltd (ASX: NXT) and WiseTech Global Ltd (ASX: WTC).

Bell Potter’s best ASX tech share picks are TechnologyOne Ltd (ASX: TNE), Life360 Inc (ASX: 360), and Nitro Software Ltd (ASX: NTO).

Let’s go back to that four-week patch test for ASX tech shares. How are these picks doing to date?

• NextDC share price up 9.4%
• WiseTech share price up 11.8%
• TechnologyOne share price up 2.1%
• Life360 Inc share price up 28.6%
• Nitro Software share price up 6.9%.

Make of this what you will.

The post Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23 appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• These were the best (and worst) performing ASX 200 sectors of FY22
• What were some of the key lessons for ASX investors in FY22?
• ASX 200 midday update: Zip scraps Sezzle merger, Lake Resources’ short seller attack
• Broker gives its verdict on the WiseTech share price

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 Advanced Micro Devices, Life360, Inc., Nvidia, Taiwan Semiconductor Manufacturing, and WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. The Motley Fool Australia has recommended Nitro Software Limited, Nvidia, and TechnologyOne 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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What a wild Tuesday it is shaping up to be for the S&P/ASX 200 Index (ASX: XJO) today. The ASX 200 initially soared after market open this morning to a high of just under 6,650 points, but has since descended back to earth. The index is currently up just 0.13% at 6,610 points.

But let’s dig deeper into these market moves and take a look at the ASX 200 shares that are currently at the top of the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

South32 Ltd (ASX: S32)

ASX 200 diversified miner South32 is our first share to take a gander at this Tuesday. So far today, 9.55 million South32 shares have been bought and sold on the markets. There’s been no major news or announcements out of the company itself that might easily explain this volume.

However, the South32 share price itself has made some big moves today. It’s currently down by 0.7% at $3.60 but has been playing jump rope with the breakeven line for most of the day. It’s probably this volatility that has resulted in South32 making this list today.

Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals is next up today. So far, this ASX 200 lithium stock has seen a notable 14.73 million of its shares change owners.

In this case, it looks as though Pilbara’s nasty share price tumble that has occurred is responsible for this volume. Pilbara shares have copped a beating today, with the lithium company defying the market with a hefty slump of 2.4% to $2.24 a share.

Core Lithium Ltd (ASX: CXO)

Another ASX 200 lithium stock is our final and most traded share to check out today. In Core Lithium’s case, a sizeable 17.36 million shares have been traded on the markets thus far. Again, it looks as though we have a share price fall to blame for this elevated trading volume.

Unfortunately for Core Lithium investors, this company has really copped a bad hand this Tuesday, with the Core Lithium share price down a painful 5.98% to 86 cents. Ouch.

The post Here are the 3 most heavily traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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More reading

• Has a turnaround already begun for ASX tech shares? Experts reveal the outlook for FY23
• These were the best (and worst) performing ASX 200 sectors of FY22
• What were some of the key lessons for ASX investors in FY22?
• Why is the Core Lithium share price powering down 6% today?
• ASX 200 midday update: Zip scraps Sezzle merger, Lake Resources’ short seller attack

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

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If you’re wanting to strengthen your portfolio with some new blue chip ASX 200 shares, then the two listed below could be great options.

Along with these blue chips, they have recently been named as buys by the team at Morgans. Here’s what the broker is saying about them:

ResMed Inc (ASX: RMD)

The first blue chip ASX 200 share that Morgans rates highly is ResMed. It is a medical device company with a focus on the sleep treatment market. The broker likes ResMed due to its very positive long term growth outlook. It commented:

While we believe the next few quarters will likely be volatile, as Covid-related demand for ventilators continues to slow and core sleep apnoea volumes gradually lift, nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.

Morgans has an add rating and $37.95 price target on ResMed’s shares.

Wesfarmers Ltd (ASX: WES)

Another blue chip ASX 200 share that Morgans rates highly is Wesfarmers. Morgans is a fan of the conglomerate due to its strong retail brands and highly regarded management team. The broker also sees recent weakness as an opportunity for investors to pick up shares at an attractive level. It said:

WES possesses one of the highest quality retail portfolios in Australia with strong brands including Bunnings, Kmart and Officeworks. The company is run by a highly regarded management team and the balance sheet is healthy. While COVID-related staff shortages are proving to be a challenge, the core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes. We see the pullback in the share price as a good entry point for longer term investors.

Morgans has an add rating and $58.40 price target on the company’s shares.

The post Broker names 2 more blue chip ASX 200 shares to buy in July appeared first on The Motley Fool Australia.

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More reading

• What’s the outlook for the Wesfarmers share price over the rest of 2022?
• Does the FY23 outlook make ASX retail shares look like bargains?
• What’s the outlook for ASX 200 healthcare shares in FY23?
• Why did the ResMed share price finish down in FY22?
• 4 ‘quality’ ASX shares to buy in scary times: expert

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 ResMed Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended ResMed Inc. and Wesfarmers 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 Worley Ltd (ASX: WOR) share price is backtracking today, taking a breather from its recent 52-week high.

This comes after the engineering group announced it has been awarded a contract from energy giant, Santos Ltd (ASX: STO).

At the time of writing, Worley shares are swapping hands at $13.47, down 2.18%.

Worley expands partnership with Santos

Investors are selling off Worley shares despite the company announcing positive news to the ASX.

In its release, Worley advised it has won a professional services contract to support Santos’ Bayu-Undan carbon capture and storage (CCS) project.

Under the deal, Worley will provide front-end engineering and design (FEED) services for the Bayu-Undan offshore facilities and pipeline.

The scope of work includes re-purposing the Bayu-Undan facility along with other offshore sections from hydrocarbons to carbon dioxide service.

Furthermore, Worley will also provide FEED services for the life extension of the facility and pipeline to ensure safe operation.

The Bayu-Undan CCS project is expected to store up to 10 million tonnes of carbon dioxide per annum. To put that into perspective, that’s about 1.5% of Australia’s total carbon emissions for the year.

The CCS project could be one of the largest in the world and help Australia transition to a low-carbon future.

Worley stated it will use its Perth team to execute the work, whilst receiving support from its global branches.

Worley CEO, Chris Ashton commented:

We are excited to strengthen our relationship with Santos and support this important carbon capture and storage project. This project is one of the ways we are helping our customers to decarbonize and re-purpose existing assets as we deliver a more sustainable world.

Worley share price recap

Over the past 12 months, the Worley share price has gained close to 20% following a rally in energy prices.

The company’s shares reached a 52-week high of $15.69 in early June before treading lower in the weeks after.

Worley presides a market capitalisation of roughly $7.21 billion with 523.7 million shares outstanding.

The post Worley shares dip despite deal with Santos appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday
• Why is the Santos share price glowing green at the end of the week?
• Why are ASX 200 energy shares making a comeback on Friday?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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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It hasn’t been the easiest of years for ASX share investors so far.

With the majority of ASX shares struggling as they’re faced with rising inflation and higher interest rates for the first time in a decade, the All Ordinaries Index (ASX: XAO) has fallen 14% in 2022.

Despite the market turmoil, Aussie retail investors remain upbeat, with many looking to buy the dips.

That’s according to social investment network eToro’s latest Retail Investor Beat. The quarterly report surveys 10,000 retail investors across 14 countries, including 1,000 in Australia.

Here’s how the Aussie investors responded.

75% of ASX share investors confident with their investments

Despite the majority of ASX shares sliding over the past quarter, 58% of Australian retail investors said they’re ‘quite confident’ with their investments with another 17% saying they’re ‘very confident’.

Which is not to say they don’t have concerns.

The top concern among Aussie respondents is rising inflation, with 52% citing that as a chief worry. Also high on the list is the state of the global economy, named by 43% of retail investors. Atop those, 42% were concerned about international conflict, while rising interest rates were alarming to 38% of respondents.

Yet few ASX share investors opted to sell during the past quarter’s selloffs.

Of those surveyed, only 7% of retail investors chose to sell, while 68% held onto their investments, and 25% went bargain hunting, buying the dips when prices retraced.

In terms of how Australian retail investors repositioned their portfolios, 20% favoured cash, 17% named domestic equities, 16% said commodities, and 14% went for crypto.

Breaking that into sectors, the survey revealed that ASX share investors increased their allocations to energy by 17%, technology by 17%, utilities by 15%, healthcare by 15%, and financial services by 14%.

Eyeing the next bull market

Commenting on the survey results, eToro’s global market strategist Ben Laidler said:

Despite a barrage of setbacks across global financial markets, retail investors in Australia and around the globe have found the strength to look past the short-term volatility and use these drops in prices to bolster their portfolios for the long-term.

With bull markets ultimately built on the shoulders of bear markets and near four times the length and magnitude, staying the course and repositioning their portfolios should serve these investors well.

eToro’s Australian market analyst Josh Gilbert pointed out the importance of time in the markets for ASX share investor strategies.

According to Gilbert:

The reality is that investment strategies depend on an investor’s risk profile and timeline. Most retail investors are Millennials and Gen Z that have a much longer time horizon. Therefore, they are generally happier to buy these assets at the current discounts with the view of holding for many years until markets eventually recover.

The post ASX share investors confident despite market turmoil: survey appeared first on The Motley Fool Australia.

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More reading

• What’s the outlook for the Wesfarmers share price over the rest of 2022?
• Are falling BNPL shares pushing the ASX banks higher today?
• These were the best (and worst) performing ASX 200 sectors of FY22
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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Wesfarmers Ltd (ASX: WES) share price has sunk by more than 20% over the past six months. But could the next six months offer hope for this S&P/ASX 200 Index (ASX: XJO) retail share?

While Wesfarmers may not be an often-mentioned name in a typical Aussie household, plenty of the businesses within the Wesfarmers stable are famous retailers in the country.

Some of the businesses that Wesfarmers operates include Bunnings, Kmart, Target, Officeworks, Catch, and Priceline. The Priceline name is a recent addition after the acquisition of Australian Pharmaceutical Industries (API).

However, Wesfarmers also has other businesses in areas like safety, chemicals, energy, fertilisers, lithium, and other industrial sectors.

Latest outlook according to Wesfarmers

Wesfarmers will report its FY22 results on 26 August during the upcoming earnings season.

However, earlier this year Wesfarmers said that the Australian economy was in a favourable shape, with strong employment and high levels of accumulated household savings.

It is continuing to “actively manage” increasing inflationary pressures and it said it will “leverage its scale” to mitigate the impact of rising costs.

Specifically in relation to its retail businesses, Wesfarmers said it will increase its focus on price leadership. Time will tell what this means for margins and volume.

For example, Wesfarmers said in a recent presentation that Bunnings is aiming to deliver more value. It will “go harder on lowest prices that matter the most”, but be disciplined about it.

The hardware business is leveraging its volume to purchase at the lowest cost. Its own-brand products can provide “greater value” in selected categories.

Bunnings is the key business for Wesfarmers because it generates the lion’s share of operating profit. Therefore, it can have the biggest impact on the Wesfarmers share price.

Growth prospects in FY23

Bunnings sees opportunities to grow in various ways. For households, it’s expanding in-room furniture and storage, garden and décor, and kitchen and bathroom. It has identified growth opportunities with in-home services, pet ‘durables’, and recreation.

Wesfarmers is also taking aim at commercial customers. Beaumont Tiles and Tool Kit Depot are two growth opportunities.

With Kmart Group, Wesfarmers notes that it’s uniquely positioned in this inflation environment to extend its low price leadership. The full-year sales benefit of store conversions will be seen in FY23. It’s also looking to grow online sales, reduce costs, and convert revenue growth into profit growth.

It’s a similar story for Officeworks. It wants to offer the best value, become more efficient, and grow the profit.

Wesfarmers Health is the new division that includes Priceline, Soul Pattinson Chemists, Clear Skincare Clinics, and so on. The company points out that healthcare is an important, large sector with long-term growth tailwinds. The population aged over 65 in Australia is expected to double to 8.9 million by 2060.

The company also notes that customers are becoming more interested in health and wellness, particularly preventative health.

Broker thoughts on the Wesfarmers share price

Macquarie currently rates Wesfarmers as underperform, which is essentially like a sell rating. The price target is $43.30, implying a single-digit decline over the next year. The suggestion is that it will be a struggle for Wesfarmers to grow sales, with households changing their spending to services.

According to Macquarie, the Wesfarmers share price is valued at 22 times FY23 estimated earnings.

The broker Ord Minnett is also negative on the business. It has a ‘lighten’ rating and a price target of $41.20, suggesting a high single-digit decline over the next year.

While it thinks the decline largely reflects the worsening situation for the retailer, it decided to reduce its expectations.

The post What’s the outlook for the Wesfarmers share price over the rest of 2022? appeared first on The Motley Fool Australia.

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More reading

• Does the FY23 outlook make ASX retail shares look like bargains?
• Analysts name 2 ASX 200 blue chip shares to buy
• What’s the outlook for ASX 200 dividend shares in FY23?
• 5 worst ASX energy shares of FY22
• Analysts name 2 excellent ASX dividend shares for income investors to buy

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 positions in and has recommended Wesfarmers Limited. 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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It’s been a bumpy ride for ASX shares and the S&P/ASX 200 Index (ASX: XJO) so far this Tuesday. At the time of writing, the ASX 200 has gained 0.17% at just over 6,610 points after initially surging to almost 6,650 points this morning. But it’s a bit of a different story when it comes to the ASX banks today.

Most ASX bank shares are doing very well this Tuesday. Take the Commonwealth Bank of Australia (ASX: CBA) share price. It’s currently up a rosy 0.98% at $93.46. National Australia Bank Ltd (ASX: NAB) is doing even better, having risen more than 1.3% to back over $28. The gains are more muted for Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ), but both are still in the green.

We haven’t had any news out of the banks themselves today that could easily explain why some are displaying such a strong performance. However, we do have some news out of the buy now, pay later (BNPL) space that could be playing a part here.

It’s been a tough few weeks (and months) for ASX BNPL shares. Earlier this week, my Fool colleague Brooke looked at how some BNPL shares, including Zip Co Ltd (ASX: ZIP) and Sezzle Inc (ASX: SZL), fell more than 90% over FY2022. Indeed, the Sezzle share price lost a painful 97% over the financial year just passed.

Are ASX bank shares getting a BNPL boost?

BNPL and bank shares are not interchangeable of course. But nor are they completely independent from each other. For one, BNPL products arguably compete against the credit offerings of banks, most obviously credit cards. A case can be made that BNPL successes come at the expense of the banks.

So that might be why we are seeing some strength in ASX bank share prices today. For this Tuesday we got the news that the long-mooted merger that was planned between BNPL players Zip and Sezzle has been abandoned. As my Fool colleague covered this morning, Zip and Sezzle have agreed to leave each other at the altar.

This merger was first gazetted back in February. It would have seen Zip buy out Sezzle for what was then a $491 million, all-scrip deal. This would have resulted in Sezzle shareholders receiving 0.98 Zip shares for every Sezzle share owned.

But as both companies’ share prices plummetted in the months following this announcement, concerns grew and ultimately sunk the deal. So perhaps investors are treating the loss of what would have been a more consolidated, larger BNPL share as a positive for the ASX banks today.

In CBA’s case, the news might be especially positive. CBA owns a stake in the Swedish BNPL giant Klarna. It built out its position across 2019 and 2020, although it might have to take a $2 billion hit to its investment in 2022. If Klarna doesn’t have to compete against a merged Zip and Sezzle, it could be good news for CBA.

Whatever the reason, it’s certainly been a good day to hold some ASX bank shares today.

The post Are falling BNPL shares pushing the ASX banks higher today? appeared first on The Motley Fool Australia.

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More reading

• Outlook for Zip share price ‘uncertain’ following scrapped merger: UBS
• Why Allkem, Kogan, Metcash, and Sezzle shares are sinking
• Down 9%, can CBA shares bounce back in FY23?
• Why Eagers Automotive, Viva Energy, Woolworths, and Zip shares are rising
• ASX 200 midday update: Zip scraps Sezzle merger, Lake Resources’ short seller attack

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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