Tag: Motley Fool

Energy markets continue to rally despite recent pullbacks and investors have been rewarding ASX energy shares accordingly — including the Beach Energy Ltd (ASX: BPT) share price.

The benchmark for the sector, the S&P/ASX 200 Energy Index (ASX: XEJ), is up 28% this year to date after a volatile June.

The Beach Energy share price has been a benefactor of this rally. The ASX gas and oil share has been a consistent gainer these past 12 months, up 41% in that time, or 39% this year to date, as seen below.

How high can the Beach Energy share price go?

Analysts at UBS reiterated their buy rating on Beach Energy last week. The UBS team now reckons that Beach can reach a valuation of $1.95 per share.

That’s up 8% from UBS’ last rating of $1.80 per share.

Surging gas prices are the key element underlining the broker’s upgrade. And it’s quite easy to see why.

US natural gas has reversed from lows to trade at US$6.45/MMBtu, while Dutch and UK gas are up 303% and 103% year on year respectively.

Returns for each of these contracts are plotted alongside the Beach Energy share price below.

Compared to the other ASX energy giants, “Beach Energy has the most production exposure (56%) to east coast domestic gas”, the broker wrote in its research note.

Although, it also acknowledged that Beach has “some sales restrictions on a material portion of uncontracted gas from H2 2023”.

Those at UBS join another 13 brokers in rating the Beach Energy share price a buy right now, according to Bloomberg data.

Curiously, Macquarie and Canaccord Genuity are both neutral, whereas Morgan Stanley is underweight.

The consensus price target from this list is $1.92 per share, not too far off UBS’ objective. Time will tell if it continues its upward ascent to $1.95 per share.

At the time of writing on Thursday, Beach Energy shares are down 3.21% to $1.73.

The post Can the Beach Energy share price hit $1.95? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 energy shares surging today?
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX shares today
• ASX 200 energy shares are having a ball today, what’s fuelling it?
• 5 things to watch on the ASX 200 on Tuesday

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 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 Starpharma Holdings Ltd (ASX: SPL) share price has jumped out of the gates and is trading higher on Thursday.

At the time of writing, investors are bidding Starpharma 5% higher to 70 cents apiece.

Support comes following a company announcement on sales of its Viraleze label in the UK after a temporary pause.

What did Starpharma announce?

The company advised that its Viraleze nasal spray has been relaunched by LloydsPharmacy in the UK.

According to Starpharma, the Viraleze nasal spray physically traps and blocks cold/respiratory viruses in the nasal cavity. It is registered in over 30 countries but is not approved for sale or supply in Australia.

Sales of the product were paused in the UK back in 2021. It was to address correspondence from the UK Medicines and Healthcare products Regulatory Agency (MHRA) in relation to promotional claims.

After successful resolution of the issues raised, Viraleze is now ready to be stacked back onto UK shelves.

The relaunch will see Starpharma supply LloydsPharmacy exclusively with Viraleze under its existing sales and distribution agreement.

Management commentary

Speaking on the announcement, CEO of Starpharma, Dr Jackie Fairley said:

We are delighted to relaunch Starpharma’s innovative nasal spray, Viraleze, in the UK through LloydsPharmacy’s extensive online and retail network. Viraleze will be particularly useful in the winter cold and flu season given its broad-spectrum of activity against multiple cold and respiratory viruses. Viraleze is supported by multiple publications in peer-reviewed, international journals and was presented at leading, international antiviral conference, CROI, earlier this year.

In the last 12 months, the Starpharma share price has slipped more than 53% into the red.

The post Starphama share price lunges 5% on product relaunch appeared first on The Motley Fool Australia.

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More reading

• Is it time to load up on beaten-down growth stocks (like Tesla)?
• Can the Beach Energy share price hit $1.95?
• Why I think the current Wesfarmers share price is a steal
• Why is the Paradigm share price rocketing 20% higher today?
• Broker rates these 2 top ASX 200 shares as buys in July

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 positions in and has recommended Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings 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 Wesfarmers Ltd (ASX: WES) share price is at a very attractive level, in my opinion.

Wesfarmers shares have fallen by almost 30% in 2022 to date. Is the long-term value of Wesfarmers really worth almost a third less than it was at the start of the year? I don’t think so.

Economic cycles happen. They’re happening all the time. We’re in a cycle right now. I believe that it’s a good time to invest when there’s pessimism about the outlook.

A lot of Wesfarmers’ earnings come from retailers such as Bunnings, Officeworks, Catch, Kmart, and Target. It’s true that retailers can find it difficult to grow earnings if their customers are doing it tough during a downturn.

However, I believe Wesfarmers is higher-quality than what some investors are giving it credit for. Short-term pain could be a long-term opportunity.

After the current volatility, I think the Wesfarmers share price looks good value for a few key reasons.

Wesfarmers share price at an attractive valuation

One of the easiest ways to value a business is by looking at the share price in relation to the multiple of earnings that it’s priced at.

After such a big drop in the Wesfarmers share price, the price-to-earnings (P/E) ratio now looks much more manageable.

According to CMC, the company is valued at 22 times FY22 estimated earnings and 20 times FY23 estimated earnings.

Based on the earnings projections, Wesfarmers is expected to grow its profit in FY23 and then again in FY24. Profit growth could help the company regain investor sentiment.

While it could certainly drop further, the Wesfarmers share price is currently close to a multi-year low.

Besides being cheaper, another benefit of a lower share price is that it also boosts the potential dividend yield on offer.

Based on dividend estimates on CMC, Wesfarmers is predicted to pay a grossed-up dividend yield of 5.5% in FY22 and 6% in FY23.

Market-leading retailers

Bunnings, Officeworks, and Kmart are all very strong competitors in their respective categories.

Bunnings is very strong in the home improvement and hardware segment. It earns big returns for Wesfarmers every year. In the FY22 half-year result, Bunnings generated a return on capital (ROC) of 79%.

It proved its strength a few years ago when Woolworths Group Ltd (ASX: WOW) and Lowe’s Companies Inc (NYSE: LOW) tried to challenge Bunnings with the Masters business. But Bunnings was too strong and Masters was closed.

Officeworks and Kmart are both good earners for Wesfarmers as well, but don’t earn as much. In HY22 the Officeworks ROC was 19.6% and the Kmart Group ROC was 24.5%.

Bunnings continues to be improved through acquisitions (including Beaumont Tiles) and growth through e-commerce.

Diversification plays

I like that Wesfarmers is a diversified business with operations across several sectors.

I think this makes Wesfarmers more resilient in downturns, while also giving management a wider array of potential investments to look at.

Lithium is one of the promising areas of the business with the Mt Holland project.

Healthcare and beauty is now another possible area of growth for the business after the acquisition of Australian Pharmaceutical Industries (API). This business, which is the owner of the Priceline Pharmacy network, is the foundation of the new health segment.

It will be interesting to see what other opportunities Wesfarmers finds in the healthcare space.

The Wesfarmers share price is $42.34 in early trading on Thursday, down 0.77%

The post Why I think the current Wesfarmers share price is a steal appeared first on The Motley Fool Australia.

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More reading

• 4 ASX dividend shares to buy that aren’t banks or miners: expert
• ASX 200 retail shares in the doldrums today despite improving sales data
• Are these blue chip ASX 200 shares in the buy zone?
• Why Appen, BWX, Imugene, and Wesfarmers shares are dropping
• Wesfarmers share price tumbles on broker downgrade

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 recommended Lowe’s. 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 Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price isn’t letting the market weakness hold it back today.

In morning trade, the biopharmaceutical company’s shares are up 20% to $1.15.

Why is the Paradigm share price surging higher?

The catalyst for the strong rise by the Paradigm share price on Thursday has been the release of a positive announcement.

According to the release, the company has received official acceptance of an Australian patent application for the “treatment of bone marrow pathologies with polysulfated polysaccharides.”

Paradigm’s patent will expire in over 15 years on 6 August 2038.

The release notes that the first claim of the accepted patent refers to a method of improving knee function where the subject has a bone marrow lesion and osteoarthritis in a knee by administering pentosan polysulfate sodium (PPS).

It is also worth noting that there is only one FDA approved manufacturer of PPS, Bene pharmaChem. Pleasingly, Paradigm has an exclusive, sub-licensable, global supply agreement with Bene pharmaChem for the manufacture and commercial use of PPS for multiple indications extending for 25 years post first marketing approval.

What about in the US?

Readers may recall that earlier this year the company revealed that the US patent office rejected its patent application.

However, the release notes that this Australian patent was the same one the US rejected. Furthermore, the US rejection was not a final rejection.

In light of this, the market appears optimistic that Paradigm’s next attempt to get its US patent application accepted may be successful. Paradigm intends to file its response to the US patent and trademark office by the end of July.

Paradigm’s Chairman, Paul Rennie commented:

It is very exciting for the Company’s strategic plans to have a patent which claims the treatment of people with osteoarthritis and bone marrow lesions with pentosan polysulphate sodium (PPS) and we expect further acceptance and grants in other territories in the coming months. We continue to work in partnership with our patent attorneys to proactively prosecute new patents to extend our protection on the use of PPS in disease indications with unmet medical needs.

The post Why is the Paradigm share price rocketing 20% higher today? appeared first on The Motley Fool Australia.

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More reading

• Leading brokers name 3 ASX shares to buy today

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 S&P/ASX 200 Index (ASX: XJO) could be the place to look for shares that are leaders in their industry, while also being good value.

But which ASX shares should investors go for? The broker Ord Minnett has named some companies it thinks are opportunities to buy.

Recent volatility makes it tricky to know which shares are the best value. However, brokers like to name share price targets, which is their best guess about where a share price will be in 12 months.

While a share price target is certainly not a guarantee of returns, it can indicate how much potential an ASX share may have in the broker’s eyes.

These two are rated as buys by Ord Minnett and seemingly have good upside potential.

ResMed Inc (ASX: RMD)

ResMed is an expert in helping people with sleep apnea. The company says it has innovative solutions that treat and keep people out of hospital, empowering them to live healthier, higher-quality lives.

It says it has digital health technologies and cloud-connected medical devices that can transform care for people with sleep apnea, chronic obstructive pulmonary disease (COPD), and other chronic diseases. It operates in more than 140 countries.

Ord Minnett recently focused on the news that the ASX 200 share will acquire Medifox Dan for approximately US$1 billion. This company specialises in software solutions for professional and non-professional care, therapeutic practices and child, family and youth welfare facilities. It also has digital solutions for modern training and education management.

Medifox Dan made pro forma net revenue of US$83 million in 2021, with pro forma adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of approximately $35 million.

While Ord Minnett rates ResMed as a buy with a price target of $35, it thought the acquisition price was high considering what’s going on globally with the decline of share prices.

At the time of writing, the ResMed share price is up 0.8% at $31.05.

Hub24 Ltd (ASX: HUB)

Hub24 is a platform business in the financial technology (fintech) world. It has different segments including Hub24, Xplore, HUBconnect and Class.

The company boasts that it is Australia’s fastest-growing platform provider. Hub24’s market share has grown to around 5%, with an ongoing strong share of net flows.

It aims to lead the wealth industry as the best provider of an integrated platform, technology and data solutions.

The ASX 200 share is growing quickly. In the quarter for the three months to 31 March 2022, it saw net inflows of $2.6 billion, which was an increase of 36.4% year on year. Total funds under administration (FUA) was $68.3 billion at 31 March 2022 – platform FUA of $51 billion was up 43.3% year on year.

The financials are showing rapid growth. FY22 first-half platform segment revenue rose 76% to $77.3 million, while underlying net profit after tax (NPAT) went up 103% to $14.2 million.

It’s currently rated as a buy by Ord Minnett, with a price target of $30. The broker thinks Hub24 has an attractive long-term future and can continue to achieve attractive inflows.

The Hub24 share price is up 0.59% to $20.41 in early trading on Thursday.

The post Broker rates these 2 top ASX 200 shares as buys in July appeared first on The Motley Fool Australia.

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More reading

• Why Goldman Sachs sees 13% upside for the ResMed share price
• This is what I’d do with these 3 battered ASX shares: fund manager
• Goldman names 2 ASX healthcare shares to buy
• 2 ASX shares to benefit from strong US dollar: expert
• Why I would invest $10,000 in these 3 ASX shares

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 Hub24 Ltd and 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 Hub24 Ltd and ResMed Inc. 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 Core Lithium Ltd (ASX: CXO) share price has continued to head south in June.

Shares in the Australian lithium producer are trading at 97.5 cents this morning, down 1%.

This means that the Core Lithium share price has lost 30.5% since this time last month.

Let’s take a look at what could be driving the fall.

What’s happening with Core Lithium?

Investors are continuing to offload Core Lithium shares after heavy losses across the lithium sector in the past month.

The prominent investment firm, Goldman Sachs sent shockwaves across the lithium industry with its bearish report in late May.

The broker forecasted that lithium prices would drop to US$16,400 per tonne in 2023, before rebounding in the following year.

At the time of writing, the price for lithium carbonate is around US$71,200 per tonne.

Notably, when the report came to light, the Core Lithium share price plummeted 20.43% to $1.11 along with other ASX lithium shares on 1 June.

And while its shares moved in circles in the following weeks, the company’s Finniss Lithium Project update drew more wrath from investors.

When released on 21 June, Core Lithium shares sank 6.51% with another 15.42% decline the next day.

Evidently, this caused its shares to register a three-month low of 82 cents on 23 June.

On the upside, Core Lithium is targeting first production of spodumene concentrate by the end of the 2022 calendar year.

If they keep to this schedule, it could bode well for the lithium developer should prices remain stable.

Core Lithium share price summary

Despite its recent falls, the Core Lithium share price has stormed 67% higher in 2022.

When looking at the longer term, the company’s shares are up an astonishing 320% over the past 12 months.

For context, the S&P/ASX 200 Materials (ASX: XMJ) index has tumbled 4% in 2022, and 5% since this time last year.

Based on today’s price, Core Lithium commands a market capitalisation of roughly $1.7 billion.

The post Down 30% in a month, what’s been driving the Core Lithium share price lower? appeared first on The Motley Fool Australia.

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More reading

• Why have ASX lithium shares had such a lousy month in June?
• Here are the top 10 ASX shares today
• Guess which sector is delivering the biggest gain across the ASX 200 today
• Why is the Core Lithium share price racing 13% higher?
• Here are the top 10 ASX shares today

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 positions in and has recommended Goldman Sachs. 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 Apple (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 2.4%. As of 12:42 p.m. ET today, the stock was up 1.3%.

The catalyst that sent the stock higher on a mixed market day was news that iPhone demand may be holding up better than investors expected, which could spell additional upside for the stock.

So what

After initiating supply chain checks in China, Wedbush analyst Daniel Ives concluded there have been “steady with slight improvements, despite the zero-COVID-driven demand issues.” The Chinese government has acted swiftly, initiating lockdowns for some of the country’s largest cities to curb the spread of the pandemic, which has caused intermittent delays in the manufacturing sector. 

Apple has not been immune as the iPhone factories were temporarily shuttered earlier this year.  

However, Ives’ checks suggest iPhone sales could surprise to the upside. “We believe iPhone demand is holding up slightly better than expected,” the analyst wrote, “despite the various supply issues that have plagued Apple and the rest of the tech sector.” Furthermore, Ives believes that worry over the iPhone supply chain and production issues should peak in the June quarter, giving way to optimism regarding the coming launch of the iPhone 14, which is expected this fall.

Now what

It’s important to note that any protracted economic downturn would weigh on the tech giant’s stock, at least in the short term. With an average iPhone selling price of roughly $825, consumers would likely put off upgrading to the latest device, which in turn would pressure Apple’s revenue.

The iPhone is by far the biggest contributor to Apple’s revenue. In the March quarter, iPhone sales topped $50.5 billion, up 5.4% year over year, accounting for roughly 52% of the company’s total revenue. In the event of a recession, sales could temporarily stall, which would spook investors. 

That said, Apple dominates the global smartphone market, taking home roughly 44% of worldwide smartphone revenue last year. Additionally, with more than $192 billion in cash and marketable securities on its balance sheet, the company has the resources to weather any economic storm, and should be viewed as a safe haven for investors with a long-term outlook. 

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

The post Why Apple stock climbed on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Why Apple was a sour stock on Tuesday
• 2 monster Warren Buffett stock-split stocks to buy right now
• Why Meta, Amazon, and Apple shares were falling today
• Apple Is Starting to Walk and Talk Like a Bank. Could It Ever Become One?
• Apple stock: The bull and bear cases today

Danny Vena has positions in Apple. 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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Lithium shares were once the golden child of the ASX, but the last month dragged many deep into the red.

In fact, many of the market’s favourites have tumbled by more than 20% since the start of June, seemingly driven by experts’ bearish sentiment and concerns about demand.

Here’s how some of the ASX’s most renowned lithium shares performed over the last 30 days, as of Wednesday’s close:

• Pilbara Minerals Ltd (ASX: PLS) – down 22%
• Core Lithium Ltd (ASX: CXO) – down 29.6%
• Allkem Ltd (ASX: AKE) – down 22.7%
• Liontown Resources Limited (ASX: LTR) – down 21.1%
• Sayona Mining Ltd (ASX: SYA) – down 27.2%
• Lake Resources NL (ASX: LKE) – down 48.7%

For context, the S&P/ASX 200 Index (ASX: XJO) has slipped 7.4% so far in June, while the S&P/ASX 200 Materials Index (ASX: XMJ) has fallen 9.9%.

Read on to learn what went so wrong for shares involved in the battery-making commodity.

What weighed on ASX lithium shares this month?

ASX lithium shares suffered a major downturn on the first day of June and failed to recover throughout the month.

The sell-off event came amid news Goldman Sachs expects demand for lithium to fall in the future, while a Chinese electric vehicle manufacturer reportedly announced its plan to source its own lithium from mines in Africa.

On top of that, Argentina set a reference price for lithium carbonate exports.

Interestingly, my Fool colleague James Mickleboro pointed out, Goldman Sachs had been bearish on lithium for months before the sell-off.

Additionally, other brokers have shown far more optimism about the future of lithium prices, as The Motley Fool Australia’s Brendon Lau reported.

The rollercoaster for lithium stocks continued later in the month. They plunged once more last week amid reports Germany was considering not banning petrol and diesel cars by 2035.  

Here’s what went down with lithium stocks in June

The inclusion of some well-known ASX lithium shares in the ASX 200 wasn’t enough to turn the tide this month. Core Lithium and Lake Resources both made it into the all-important index. Meanwhile, Mineral Resources Limited (ASX: MIN) was bumped into the S&P/ASX 50 Index (ASX: XFL) on 20 June.

Neither was news Pilbara Minerals accepted an “unprecedented” pre-auction bid for its next lithium cargo. The company also announced it expected to increase its production by 54% in the third quarter.

Meanwhile, Liontown signed offtake agreements with Tesla and Ford. It also approved the development of its Kathleen Valley lithium project this month.

Finally, Sayona announced the discovery of a potentially world-class deposit and the planned restart of its North American Lithium operation this month.  

The post Why have ASX lithium shares had such a lousy month in June? appeared first on The Motley Fool Australia.

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More reading

• Top broker says the Liontown share price can rise 150%
• 5 things to watch on the ASX 200 on Thursday
• 3 excellent ASX growth shares that analysts are excited about
• Volt gets packing as ASX 200 bank shares prove to be a formidable force
• Here are the top 10 ASX shares today

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 positions in and has recommended Goldman Sachs and Tesla. 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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Buy now, pay later (BNPL) shares have been falling lately, but could they be on the verge of facing more regulation?

BNPL shares on the ASX include ZIP Co Ltd (ASX: ZIP), Sezzle Inc (ASX: SZL), and Block Inc (ASX: SQ2).

Let’s take a look at what is impacting BNPL shares?

What’s going on in the BNPL sector?

The Zip share price has plummeted 94% in the past year, while Sezzle shares have dived 97%. Block shares have sunk nearly 47% since joining the ASX on 1 February.

Now, it appears ASX BNPL shares could be facing tighter regulation. Federal Financial Services Minister Stephen Jones is planning to introduce legislation within a year to regulate the industry, ABC 7.30 reported.

Jones said:

Whatever you do in the financial services space, there’s big voices with deep pockets.

I don’t want to have an argument about whether this is credit or not, it clearly is.

The publication noted Australians exhausted nearly $12 billion on BNPL companies in FY21. This is more than double what was spent three years prior to the 2021 financial year.

However, a recent report shows that the BNPL market is pivotal for competition, as my Foolish colleague Zach reported this week.

The report highlighted that BNPL companies garner 4% of revenue from merchant fees, while credit cards depend on interest rates and late fees for profits.

Share price recap

Block shares have fallen 19% in the past month, while Zip shares have descended nearly 47% and Sezzle shares have dived 50% in this time frame.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has shed nearly 7% in a month.

The post Could ASX BNPL shares be set for imminent regulation as spending swells to $12 billion? appeared first on The Motley Fool Australia.

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More reading

• Here’s why ASX 200 tech shares are taking a beating on Wednesday
• Zip shares sink 6% despite BNPL spend doubling this financial year
• Down 6%, what is dragging the Block share price lower on Wednesday?
• Why are ASX tech shares struggling today?
• Why this economist believes ASX 200 BNPL shares are key to keeping the market competitive

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 positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. 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 Macquarie Group Ltd (ASX: MQG) share price has been on a bumpy ride in 2022, trading 18% down so far this year to date.

ASX investors have pushed the Macquarie share price a further 8% into the red in this past month of trade, with the final trading day of June yet to complete.

In broader market moves, the S&P/ASX 200 Financials Index (ASX: XFJ) has also slipped 11% in the past month.

How’s July look for the Macquarie share price?

ASX banks have traded down in June amid uncertainty on Australia’s housing and mortgage markets looking ahead.

In addition to the traditional banking model, Macquarie’s operations are spread across several adjacent markets. These include capital markets, commodities, real assets, infrastructure, and asset management.

Analysts have recognised this strength and reckon there’s more to look forward to if the investment bank can stick to its track record.

The Wilsons team of analysts wrote in a recent note that “the medium to long-term opportunity for the [Macquarie] group is significantly stronger than other large cap financials on the market”.

Meanwhile, JP Morgan reckons the bank’s annuity division looks set to strengthen due to growth in Macquarie Asset Management (MAM).

JP Morgan is overweight on Macquarie and values the bank at a price of $218 per share.

In a research note, the broker said:

MAM [is] well placed to benefit from structural demand for alternative asset classes and MIM to benefit from several recent acquisitions, including Waddell & Reed.

Growth should be supported by significant deployment of capital into all operating divisions, given a healthy capital surplus.

We still see modest upside to our valuation, particularly given our forecast of a greater than 15% ROE in FY23-25.

In assigning a buy rating, JP Morgan joins another eight analysts telling their clients to buy Macquarie shares at today’s price, according to Bloomberg data.

Macquarie opened today’s session at $166.64, down 0.86% on yesterday’s close.

Meanwhile, four rate it a hold, whilst Credit Suisse has the sole sell rating. From this list, the consensus price target is $203 per share, suggesting considerable upside should that materialise.

In the past 12 months, the Macquarie share price has clipped a 7% gain.

The post What’s the outlook for the Macquarie share price in July? appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 ASX 200 financials shares to buy
• Macquarie share price slips amid move to fortify war chest by $400 million
• How much have Macquarie shares paid in dividends in the last 5 years?
• 2 ASX 200 dividend shares analysts rate highly
• Can Macquarie shares deliver an attractive dividend yield AND 30% upside in 2022?

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 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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