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The Firefinch Ltd (ASX: FFX) share price won’t be returning to trade on Monday.

This morning the struggling gold miner requested that its suspension continue until the end of July.

What’s going on with the Firefinch share price?

The Firefinch share price was halted and then suspended originally while it prepared to release an update on the operational performance and production guidance of the Morila Gold Project in Mali.

However, with that now released, the company has requested that its suspension continue while it seeks to finalise funding.

Management notes that this funding is being designed to place the company in a more robust and sustainable working capital position. It will also support the capital investment required to take the operations to a long term sustainable and profitable operation of scale.

Operational update

In respect to its operational update, things have not been going well for the company and its Morila Gold Project. The release reveals that gold production during the June quarter was estimated to be 13,300 ounces. This compares to guidance of 17,000 ounces to 20,000 ounces.

Management advised that this has been driven largely by poor equipment availability, which has been exacerbated by the delayed delivery of additional mining equipment. This delay is a result of sanctions imposed on the State of Mali restricting the movement of goods.

Unfortunately, this also means that its production ramp up is behind schedule and its calendar year guidance has been withdrawn.

Costs rising

But it gets worse. Firefinch has experienced significant cost pressures in the last quarter. This has included material increases in diesel prices, the cost of explosives, and other consumables

Management is hoping to offset this by creating a new mine plan to target 8,000 to 9,000 ounces of gold production per month in the short term. The company is also cutting costs by reducing its board and putting capital projects on hold. Combined, this is expected to move the operation to positive operating cashflow.

But in order to achieve its goals, it expects to require funding via a capital raising. Firefinch is currently in the process of determining how much it will require and the structure of this capital raising.

Management commentary

Firefinch’s executive chairman, Dr Alistair Cowden, remains positive on the company’s longer term outlook. He said:

A confluence of events, including cost inflation, ECOWAS sanctions and contractor performance has resulted in underperformance at Morila. The Board has acted decisively to address this with management changes, cost cutting, a pivot in the mining strategy and the acceleration of a new mine plan to inform the way ahead.

I also want to make it clear that the orebody has not underperformed, rather production has not ramped up as fast and as cost effectively as planned. Morila is a world-class gold deposit with extensive operational infrastructure and which has produced over 7.5 million ounces of gold and has a current resource of 2.5 million ounces. This asset, together with our stake in Leo Lithium, provides a solid underpinning to the Company.

The post What’s going on with the Firefinch share price? appeared first on The Motley Fool Australia.

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More reading

• Leo Lithium share price fails to roar and sinks 26% following demerger
• Leo Lithium shares hit the ASX this week. Here’s what you need to know
• Why BrainChip, Firefinch, Magellan, and Westpac shares are dropping

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 South32 Ltd (ASX: S32) share price tumbled into a bear market last month despite perceptions that miners are better placed to weather economic turmoil.

Runaway inflation, the war in Ukraine, and strong balance sheets should put ASX mining shares in investors’ good books.

But these weren’t enough to save the South32 share price from losing more than 20% in June. This means the diversified miner is officially in a bear market, which is defined as a peak-to-trough drop of 20% or more.

The South32 share price steps into a bear trap

The recent retreat in commodity prices is mainly to blame. Worries of a global economic slowdown, or even a recession, is dragging on metal prices.

This is why Dr Copper dived to its lowest level since February last year. Copper consumption is closely linked to economic activity and is seen as a bellwether for other metals. The red metal has lost around 25% of its value since its high in early March.   

That’s bad news for other industrial metals. The price of nickel shed 3.9% and zinc fell nearly 10% last week, the Australian Financial Review reported.

The South32 share price is sensitive to the weakness. The company produces a range of metals, including copper, zinc, nickel, and alumina, among others.

Conflicting market signals

But herein lies the irony. Markets have been pricing in both higher for longer inflation and weaker commodity prices for some weeks now.

Inflation expectations have been pumped up by soaring input prices – this means commodities. Rising prices are forcing central banks, including ours, to hike interest rates. That, in turn, is putting the broader S&P/ASX 200 Index (ASX: XJO) under pressure.

But if commodity prices weaken, this should theoretically flow through to slowing inflation. If so, markets may be overestimating how far the US Federal Reserve, and its global counterparts, can hike rates.

It’s difficult to see how both the falling prices of the South32 share price (and Dr Copper) and inflation expectations can be right at the same time!

Can bad news be good news for the South32 share price?

As we speak, we might already be seeing some of this inflation expectation unwind. The ASX 200 is gaining ground today following a positive lead from Wall Street on Friday. At the time of writing, it’s up 1.72% in early trade. The rally is fuelled by a retreat in bond yields – a signal that investors are paring bets on where interest rates will peak in the US.

That is not only good news for all risk assets but also ASX miners like South32 because lower rates are good for equities.

Let’s hope the renewed enthusiasm is enough to offset the falls in commodities.

The post South32 crashes into bear market in June as recession fears bite appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• The Xero share price lost 14% last month. Here’s the tea
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Embattled ASX 200 retail shares primed for a comeback: experts

Motley Fool contributor Brendon Lau has positions in South32 Ltd. 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.

What happened

Shares of Meta Platforms (NASDAQ: META) dipped 16.7% in June, according to data from S&P Global Market Intelligence. The social media conglomerate that owns Facebook, Instagram, and WhatsApp is slowing down hiring this year and was probably affected by the broad market sell-off in technology stocks last month. Shares of the stock are now down more than 50% this year, marking one of the worst drawdowns in the company’s history.

So what

There was no official news from Meta Platforms this month, but, being one of the most valuable companies in the world, there was plenty of other news to dig into.

First, on June 30, Reuters reported that CEO Mark Zuckerberg told employees the company would be slowing down hiring this year. That’s better than layoffs, which a lot of technology companies are going through right now, so I don’t think it’s a huge concern for Meta Platforms shareholders, but the stock was still down big following the news. Zuckerberg and the executive staff are scaling back hiring because they’re seeing what they’re calling one of the worst business drawdowns in the company’s history. Since Facebook and Instagram both make money selling digital advertising space, an economic downturn is likely to hurt its bottom line — less consumer spending means less spending on advertising.

This may already be showing up in Meta’s financial results. Revenue grew only 7% year over year last quarter, one of the slowest in the company’s history, and could be headed for worse results in the next few quarters. It’s also dealing with Apple‘s new iOS privacy changes, which severely impeded Meta’s ability to target advertisements effectively. Investors are also probably worried about TikTok, the gigantic social network that exploded out of China a few years back. It’s very popular among younger social media users and could threaten Instagram’s business this decade.

Lastly, the downturn in the Nasdaq 100 Index put a hurt on Meta’s stock, as it did for most technology companies last month. The index was down a little less than 10% in the month.

Now what

Down so much this year, Meta Platforms now trades at a market cap of “only” $450 billion. With $40 billion in free cash flow generated over the past 12 months, the stock trades at a very cheap price-to-free cash flow (P/FCF) multiple. While there are some short-term concerns to be worried about with Meta’s business, now could be a solid time to buy if you’re a long-term believer in the company. 

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

The post Why Meta Platforms sank 16.7% in June appeared first on The Motley Fool Australia.

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More reading

• Why Meta Platforms plunged on Tuesday
• 2 oversold stocks to buy in the Nasdaq bear market
• Why Meta, Amazon, and Apple shares were falling today
• Better buy: Twitter vs. Meta Platforms

Brett Schafer 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 Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple. 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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Financial year 2022 was brutal for the Kogan.com Ltd (ASX: KGN) share price, falling by around 75%.

Since peaking in October 2020, Kogan shares have dropped around 90%.

Why has the market hurt the ASX e-commerce share so much? Investor sentiment has turned against the business and other ASX growth shares.

There were a few key events in FY22 as the business went lower and lower. Let’s look at some of those events in the last financial year.

FY21 result release

The company started FY22 somewhat positively with the release of its FY21 result. It reported that gross sales went up 52.7% to $1.18 billion, gross profit increased 61%, and ‘adjusted’ earnings per share (EPS) grew by 27.2% to 41 cents per share.

However, the company noted that its statutory net profit after tax (NPAT) fell 86.8% to $3.5 million.

Excess inventory in the second half of FY21 “significantly” increased storage costs. This led to variable costs more than doubling from $20.1 million in FY20 to $44.9 million in FY21. Subsequently, the company incurred elevated marketing costs through promotional activity to “rebalance inventory levels”.

There were also ‘logistics detention charges’, known as demurrage costs, amounting to $7.7 million. This was due to warehousing and supply chain interruptions from late 2020 to April 2021.

In a trading update for July 2021, the first month of FY21, the company said gross sales had grown 5.1% year on year. Kogan made ‘adjusted’ earnings before interest, tax, depreciation and amortisation (EBITDA) of $2.1 million for the month, reflecting high operating costs. But it said those costs were gradually reducing.

Furthermore, in the first 18 days of August 2021, the company saw gross sales go 24.5% higher than July 2021. Gross profit also went up 25% for the equivalent number of days.

However, the optimism was short-lived for the Kogan share price.

Losses in the FY22 first half

In February 2022, the company reported its result for the first half. Profitability reduced in HY22.

While HY22 gross sales went up 9.4% to $698 million, gross profit fell 8.1% to $108.1 million. Kogan made a $2 million EBITDA loss and a statutory net loss of $11.9 million. Losses are not particularly helpful for the Kogan share price.

Kogan said it had experienced continuing supply chain interruptions ongoing from COVID and “associated fluctuations” in consumer demand.

Although, one of the positives in the report was that its active customer numbers had grown 9.4% year on year to 4.07 million.

The final kick in the teeth for the Kogan share price

At the end of April 2022, the company released its quarterly update for the three months to March 2022.

The company said that consumer demand did not meet expectations, pointing to a slowdown in e-commerce activity in Australia.

In the FY22 third quarter, gross sales dropped 3.8% year on year to $262.1 million, while gross profit fell 11.2%. Adjusted EBITDA was a loss of $0.8 million. However, Kogan First members rose by 264% year on year to 328,000.

On top of this, investors need to figure out how inflation and interest rates may affect the Kogan share price and other ASX growth shares.

However, in a glimmer of hope for future profitability and perhaps the Kogan share price, the company said it will recalibrate its operating costs in line with current activity levels to support a return to historical operating margins.

The post Why did the Kogan share price go backwards in FY22? appeared first on The Motley Fool Australia.

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More reading

• Why did the Kogan share price sink 22% in June?
• Best ASX shares to buy in July 2022
• Kogan shares slide 7% nearing a 52-week low
• Why is the Kogan share price jumping 12%?
• Why is the Kogan share price soaring 6% on Monday?

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 positions in and has recommended Kogan.com ltd. The Motley Fool Australia has positions in and has recommended Kogan.com 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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June turned out to be a month to forget for S&P/ASX 200 Index (ASX: XJO) bank shares. And some of the market’s biggest names were the hardest hit.

Here’s how some of the major ASX 200 bank shares performed last month:

• Commonwealth Bank of Australia Ltd (ASX: CBA) – fell 13.4%
• Westpac Banking Corp (ASX: WBC) – fell 18.3%
• National Australia Bank Ltd (ASX: NAB) – fell 12.4%
• Australia New Zealand Banking Group Ltd (ASX: ANZ) – fell 12%
• Macquarie Group Ltd (ASX: MQG) – fell 11.5%
• Bank of Queensland Limited (ASX: BOQ) – fell 11.2%
• Bendigo and Adelaide Bank Ltd (ASX: BEN) – fell 12.9%

For context, the ASX 200 slipped 8.9% over the course of June. Meanwhile, the S&P/ASX 200 Financials Index (ASX: XFJ) slumped 11.8%.

Did interest rates weigh on ASX 200 bank shares?

Australia’s biggest banks were thrust into the spotlight in early June when the Reserve Bank of Australia hiked the benchmark interest rate for a second consecutive month. The rate was lifted 0.5% in June to 0.85% in an effort to tackle inflation.

On top of that, RBA Governor Philip Lowe noted further rate hikes are likely over coming months.

Readers might be wondering how news of a rate rise has weighed on ASX 200 bank shares, given it’s normally good news for the sector.

Indeed, rate hikes allow banks to increase net interest margins (NIM), thereby potentially boosting their profitability.

However, higher rates and inflation also increase the risk of mortgage foreclosures – particularly given 23.1% of new residential mortgage loans funded during the March quarter had a debt-to-income ratio of at least six times.

Increasing rates could also see house prices fall.

Both happenings would spell bad news for banks’ loan books.

In other banking news from last month, neobank Volt buckled at the knees last week. It’s leaving the Australian market, citing funding issues as the cause of its downfall.

What did ASX banking giants get up to last month?

There was plenty of news out of ASX 200 banks last month as well.

Both NAB and Macquarie underwent capital raises in June.

NAB announced a $1 billion capital notes offer on 6 June. Macquarie announced its own capital notes offering – worth $400 million – on 28 June.

ASX 200 insurance and banking giant Suncorp Group Ltd (ASX: SUN) was also in the spotlight late last month amid rumours it’s looking to spin out its banking arm. The company responded to such speculation, saying:

Suncorp, from time to time, reviews its strategic alternatives in relation to all of its businesses and is currently doing so in respect of its banking operations.

Suncorp was also the best performing ASX 200 bank share in June, falling just 3.2%.

The post June was a terrible month for ASX 200 bank shares. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Why did the Westpac share price crash 18% in June?
• Could the CBA share price turn over a new leaf in July?
• Why did the CBA share price crash 13% in June?
• Why this fundie favours NAB and Westpac shares out of the big four
• Westpac tips another big RBA rate hike next week

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 Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Macquarie Group Limited and 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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The Link Administration Holdings Ltd (ASX: LNK) share price is trading lower on Monday morning.

In early trade, the administration services company’s shares are down 2% to $3.72.

Why is the Link share price sinking?

Investors have been selling down the Link share price on Monday following the release of a takeover update.

This relates the receipt of an amended proposal from Dye & Durham last week which saw the suitor reduce its takeover offer from $5.50 per share to $4.30 per share.

Dye & Durham reduced its offer to reflect a proposed undertaking to the ACCC in order to obtain approval, the current state of the financial markets, and the values of the shares of both Link and PEXA Group Ltd (ASX: PXA).

What’s the latest?

As you might have guessed from the Link share price weakness this morning, today’s update has not been a positive one.

According to the release, the Link board has carefully considered Dye & Durham’s proposal. This includes considering feedback from stakeholders, changes in share market valuations, and alternatives available to Link if the transaction does not proceed.

After considering all these factors, the Link board does not believe it is able to recommend a $4.30 per share transaction.

Though, it is continuing to engage with Dye & Durham. And if an undertaking is proposed by Dye & Durham to the ACCC which Link considers will satisfy the the competition regulator’s concerns, it would be willing to consider a higher bid.

Nevertheless, in light of these developments, the company has cancelled the scheme meeting that was scheduled for next week.

What are the alternatives?

The release notes that if the scheme does not proceed, Link intends to evaluate alternatives for the business.

One potential alternative is an in specie distribution of a minimum of 80% of Link’s shareholding in PEXA.

The post Link share price drops on takeover rejection appeared first on The Motley Fool Australia.

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More reading

• Why Imugene, Link, Metcash, and Sayona shares are racing higher
• Link share price pushes higher despite revised takeover offer
• Down 20% this week, why is the Link share price outperforming today?
• Why Humm, Inghams, Link, and Smartgroup shares are falling
• ASX 200 midday update: BHP’s NSW coal update, Link takeover on the rocks

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 Link Administration Holdings Ltd. 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 Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price has been hurting over the last 12 months.

While the Soul Pattinson financial calendar is actually for the 12 months to 31 July 2022, we’re going to look at the past year as most individuals and businesses have their financial year-end at 30 June 2022. That makes it an opportune time to review what has happened.

So, what has happened?

Soul Pattinson share price pain

By mid-September 2021, Soul Pattinson shares had climbed to almost $40. But, they have been on a mostly downward trend since then, dropping around 40%.

As an investment house, a large amount of the underlying value of Soul Pattinson is dictated by the movements in prices of the ASX shares that it owns.

The investment house owns stakes in a number of prominent ASX shares including Brickworks Limited (ASX: BKW), New Hope Corporation Limited (ASX: NHC), Macquarie Group Ltd (ASX: MQG), Commonwealth Bank of Australia (ASX: CBA), and BHP Group Ltd (ASX: BHP). It also holds many more ASX shares and unlisted assets.

Looking at several of these names, there has been volatility and declines for plenty of them, hurting the underlying value of Soul Pattinson. For example, Brickworks, one of the company’s biggest holdings, has seen a decline of around 25% over the past 12 months.

Another impact on the Soul Pattinson share price this year may have been the rise of inflation, leading to rising interest rates.

As an ASX dividend share that has grown its dividend every year for the past 20 years, some income-seekers may now be less inclined to go for a ‘defensive’ ASX share like Soul Pattinson and choose other investments.

Certainly, one of the main highlights for the company was the acquisition of the listed investment company (LIC) Milton.

Milton merger

Soul Pattinson decided to buy the LIC by offering shareholders new shares to the value of 10% of the adjusted net tangible asset (NTA) value of Milton.

The investment house said there were several advantages to the combination. These included greater portfolio diversification, more cash available for future investment into growth asset classes, access to new investment classes including private markets, real assets, credit and international shares, and higher cash generation from increased portfolio dividends.

FY22 half-year result

Aside from Soul Pattinson acquiring 100% of electrical engineering business Ampcontrol, the latest market-sensitive news from the business was its 2022 half-year result.

It said that its group regular profit after tax (NPAT) went up from $90.2 million to $343 million. Net cash flow from investments was $182.6 million, up from $85.million. Excluding the acquisition of Milton, on a like-for-like basis, this cash flow metric increased by 81%.

Soul Pattinson’s pre-tax net asset value went up 3.4% for the period, outperforming the “market” by 8.6%.

In March, Soul Pattinson managing director Todd Barlow said:

Valuations across a range of asset classes are becoming more reasonable and we continue to see “strong” opportunities to deploy capital across private equity and structured credit.

The post The rise and fall of the Soul Pattinson share price over the past year appeared first on The Motley Fool Australia.

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More reading

• Why did the Soul Pattinson share price go backwards in June?
• Own Soul Patts shares? Here’s how much of its portfolio is exposed to coal
• This is what I’d do with these 3 battered ASX shares: fund manager
• 3 high-quality ASX 200 shares trading at 52-week lows right now
• 3 reasons why I think the Soul Pattinson share price is an excellent buy right now

Motley Fool contributor Tristan Harrison has positions in Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool 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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The Westpac Banking Corp (ASX: WBC) share price had a month to forget in June.

Over the period, the banking giant’s shares lost a disappointing 18% of their value.

This means the Westpac share price is now down 24% since this time last year.

What happened to the Westpac share price in June?

Investors were selling down the Westpac share price last month in response to market volatility and the Reserve Bank’s cash rate hike.

While rate hikes are generally good news for the banks as it boosts their interest income, the market wasn’t expecting central banks to move as quickly as they appear to be planning.

For example, at June’s meeting, the RBA elected to increase rates by 50 basis points to 0.85%. It is now expected to do the same at July’s meeting later this week, lifting the cash rate to 1.35%.

But the market doesn’t expect Governor Lowe to stop there. Current cash rate futures are indicating that rates will end the year at 3%. Which is incredible when you consider that just a few months ago the cash rate was at a lowly 0.1%.

But with inflation running wild, Philip Lowe and his team are doing everything necessary to bring it under control. This has many fearing that aggressive rate hikes could bring about a recession and cause a spike in bad debts and mortgage defaults, which wouldn’t be good news for Westpac and the rest of the big four banks.

Is this a buying opportunity?

One leading broker that doesn’t appear overly concerned is Citi. It recently retained its buy rating with a generous $29.00 price target on the bank’s shares.

Based on the current Westpac share price, this implies potential upside of almost 50% for investors over the next 12 months.

The post Why did the Westpac share price crash 18% in June? appeared first on The Motley Fool Australia.

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More reading

• Why this fundie favours NAB and Westpac shares out of the big four
• Westpac tips another big RBA rate hike next week
• Volt gets packing as ASX 200 bank shares prove to be a formidable force
• Westpac share price inches ahead despite broker cutting its price target by 16%
• Analysts name 2 ASX dividend shares to buy today

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

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The Wesfarmers Ltd (ASX: WES) share price has struggled in 2022. So much so that it hit 52-week lows last month.

It trades 29% down since January and took another plunge in June along with the broader market. Before the market open on Monday, the Wesfarmers share price rests at $42.15.

What’s in store for Wesfarmers shares in July?

The outlook for consumer cyclical shares has been choppy in 2022 as the economy moves from pandemic fear to inflation.

Add in interest rates and the recipe isn’t too inviting for investors. The S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has slipped 24% this year to date and trades more than 6% down in the past month.

Meanwhile, talks of inflation and interest rates have been a key driver for shares like Wesfarmers this year.

Uncontrolled inflation is a peculiar theme in that it affects both the real economy and the financial markets in equally destructive ways.

As the cost of goods and services increases, consumers supposedly have less disposable income to spend on discretionary items.

However, the team at Morgans reckons Wesfarmers is well positioned to “navigate through a more cautious consumer environment”.

In the light of rising prices on just about everything, Morgans also reckons that Kmart and Bunnings will stand out as “consumers focus on value”.

“[T]he core Bunnings division remains a solid performer as consumers continue to invest in their homes,” Morgans said in a recent note. Bunnings contributes roughly 60% of group operating income.

“We see the pullback in the share price as a good entry point for longer term investors.”

With that in mind, it’s going to be an interesting month for Wesfarmers shares in July.

The post What’s the outlook for Wesfarmers shares in July? appeared first on The Motley Fool Australia.

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More reading

• Experts name 2 ASX dividend shares to buy next week
• Broker names 3 of the best ASX shares to buy in July
• How does the Woolworths dividend compare to Wesfarmers over the last 5 years?
• Why I think the current Wesfarmers share price is a steal
• 4 ASX dividend shares to buy that aren’t banks or miners: expert

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 positions in and has recommended 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 Rio Tinto Limited (ASX: RIO) share price went through quite a lot of volatility in June. But can it turn things around in July?

This ASX mining share is one of the biggest resource businesses in Australia with large iron ore mining operations. It also has exposure to a number of other commodities including bauxite, aluminium, copper and titanium dioxide.

Interestingly, the Rio Tinto share price is now back to where it was at the start of 2022.

The ASX resource share has been making moves to position itself for future growth. This is what brokers are focused on now, and what could influence the company in July and beyond.

Gudai-Darri mine

A few weeks ago, Rio Tinto noted that it had delivered its first ore from the Gudai-Darri iron ore mine. This was the miner’s first ‘greenfield’ mine in the Pilbara, Western Australia, in more than a decade.

Rio Tinto says that Gudai-Darri will help underpin future production of its Pilbara product. Production from the mine will continue to ramp up through the rest of the year and is expected to reach full capacity during 2023.

This mine has an expected life of more than 40 years and an annual capacity of 43 million tonnes. A feasibility study to support an expansion of the new hub is also progressing.

Rio Tinto says that Gudai-Darri is the company’s most technologically advanced iron ore mine, with autonomous trucks, trains and drills, as well as the world’s first autonomous water trucks. It also has a 34MW [megawatt] solar farm that is expected to supply about a third of the mine’s average electricity demand once construction is complete in August.

Broker thoughts on the Rio Tinto share price

No one can know what a share price will do in any given year, or even a month. But, brokers do release price targets which indicate where they think a company’s share price may be in 12 months.

Macquarie recently reduced its target for Rio Tinto shares to $124, but it still has an outperform/buy rating. That implies a rise of more than 20% based on the iron ore price and a lower Australian dollar.

Morgan Stanley has an overweight/buy rating on the Rio Tinto share price. The price target is $119.50, which implies a possible rise of around 20%. The broker likes this ASX mining share because of its high-quality iron ore product and the aluminium in the portfolio.

Both brokers are expecting big dividends from Rio Tinto.

Macquarie predicts a grossed-up dividend yield of 16.1%, while Morgan Stanley’s projected grossed-up dividend yield is 16.2%. So, both of them are expecting big dividend income in the current financial year.

Rio Tinto share price snapshot

Rio Tinto shares have fallen 13.5% over the last month and 20% in the last 12 months.

The post What is the outlook for the Rio Tinto share price in July? appeared first on The Motley Fool Australia.

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More reading

• Why did the Rio Tinto share price plunge 11% in June?
• ASX 200 midday update: Regis Resources jumps, BHP and Rio Tinto drop
• These ASX 200 mining shares are digging a deeper hole on Friday
• How have ASX 200 mining shares fared over June?
• Own Rio Tinto shares? Here’s how the company is ‘canning’ carbon emissions

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 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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