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If you’re looking for exposure to the healthcare sector, then the two shares listed below could be top options.

Here’s why analysts at Goldman Sachs believe they are well-placed for growth in the future:

Integral Diagnostics Ltd (ASX: IDX)

The first healthcare share to look at is diagnostic imaging services provider, Integral Diagnostics.

Goldman highlights that the recovery in imaging volumes from the COVID-19 pandemic is underway. Combined with easing cost pressures in FY 2023, the broker expects this to allow Integral Diagnostics to deliver strong earnings growth. The broker explained:

Looking forward, we expect the cost pressures to taper in FY23E (+7%), albeit with upside if management achieves their target of low-single-digit growth which, on our numbers, would result in favorable EBITDA growth of +23% in FY23E.

Goldman Sachs has a buy rating and $4.20 price target.

ResMed Inc (ASX: RMD)

Another ASX healthcare share that Goldman rates highly is ResMed.

Its analysts believe that ResMed is well-placed for growth thanks to a huge backlog of new patients waiting to be diagnosed. And while it acknowledges that there is a risk that these patients try alternative therapies, it doesn’t expect any shifts to substitutes to be material. The broker commented:

There is a 12-18 month backlog of new patients waiting to be diagnosed. While there is a risk these prospective patients may switch to alternative therapies (e.g. dental sleep, neurostimulation), the degree of movement towards these substitutes has been relatively minor against the size of the CPAP market. Instead, we believe the backlog of new patients may add upside risk to our estimates if there is a material realisation of incremental devices/masks sales to new patients in FY23/24 (supply chain pressures permitting).

Goldman currently has a buy rating and $34.40 price target on ResMed’s shares.

The post Goldman names 2 ASX healthcare shares to buy appeared first on The Motley Fool Australia.

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More reading

• 2 ASX shares to benefit from strong US dollar: expert
• Why I would invest $10,000 in these 3 ASX shares
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• ResMed share price drops despite US$1bn Medifox Dan acquisition
• Broker tips ResMed share price to jump 19%

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. The Motley Fool Australia has recommended Cochlear Ltd. and Integral Diagnostics 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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Are you interested in adding some ASX 200 shares to your portfolio following the market crash? If you are, you may want to look at the two listed below that have recently been named as buys.

Here’s what you need to know about these ASX 200 shares:

Cochlear Limited (ASX: COH)

The first ASX 200 share for investors to look at is Cochlear. It is one of the world’s leading hearing solutions companies with a portfolio of industry-leading implantable hearing devices.

Analysts at Morgans are very positive on the company, particularly given its improving earnings profile. The broker explained commented:

Cochlear maintains a dominant position in the implantable hearing solutions segment. While we continue to believe a full recovery from Covid-based disruptions still has time to play out, improving demand and strong pipeline, coupled with management’s increasing confidence, suggests an improving earnings profile.

The broker currently has an add rating and $244.50 price target on Cochlear’s shares.

Webjet Limited (ASX: WEB)

Another ASX 200 share for investors to look at is online travel agent, Webjet.

The team at Goldman Sachs is very positive on the company. The broker believes Webjet is well-placed for growth in the coming years as the travel market recovers from the pandemic. It explained:

We forecast WEB to report +11.9% CAGR growth in EBITDA over FY19-24e taking a through COVID view, driven by 1/ a fundamentally stronger Bedbanks business driven by cost outs and stronger market share growth, 2/ Opportunities for market share growth in the B2C business and 3/ A strong balance sheet with a Net cash balance of c. A$108mn as at end of FY22.

Goldman currently has a buy rating and $6.90 price target on Webjet’s shares.

The post Analysts name 2 top ASX 200 shares to buy today appeared first on The Motley Fool Australia.

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More reading

• ASX 200 travel shares take off again on Tuesday. Here’s why
• Down 20% in a year, is the Cochlear share price a bargain buy?
• Why are ASX 200 travel shares lifting off on Monday?
• Experts rate these ASX 200 blue chip shares as buys
• How did ASX 200 travel shares perform amid today’s sell-off?

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The ASX 200 big four bank shares are known to be great dividend payers. They’re a favourite among retiree investors because they typically dish out greater dividend yields than most ASX shares.

Wait, wait. Yes, it’s true that the ASX mining shares and ASX energy shares may pay stupendous dividends this year, and possibly next year, due to the current commodities boom. But that’s a cyclical thing.

When it comes to regular, reliable, and strong dividends over the long term you’d be … um, Foolish to ignore the big banks.

What dividend yields are the ASX bank shares paying now?

As my Foolish colleague Sebastian reported yesterday, the dividend yields of the big four ASX bank shares currently range from about 4.2% to 6.6%.

At the top is Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ pays a dividend yield of about 6.6% at current share price levels.

Next is Westpac Banking Corp (ASX: WBC) which pays about 6.2% in dividends.

Then there’s the business banking specialist National Australia Bank Ltd (ASX: NAB). Its dividend yield sits at about 5.2% at current share price levels.

Last but not least is Commonwealth Bank of Australia (ASX: CBA) at about 4.2%.

All of the big four ASX bank shares pay fully franked dividends. That means you get the maximum tax break possible when you do your tax return.

Retiree investors also love fully-franked dividends because they get paid in cash if their taxable income is beneath the taxable threshold. Bonus!

What about Macquarie dividends?

Should we look at Macquarie dividends too? Seems relevant given the company is often referred to as the ‘fifth bank’ amongst the big four?

According to Seb’s calculations, Macquarie pays 3.8% with 40% franking at the moment. That’s pretty good for a banking share that trades at almost twice the price of Australia’s largest banking business, CBA.

Remember, the dividend yield is calculated as a percentage of the share price. This week Macquarie is trading in the early $160s. (Fun fact: It was trading above $200 in January before the market correction began.)

So, what’s the outlook for ASX 200 bank dividends?

Well, to pay a strong dividend, any ASX business has to make a strong profit. That’s how dividend payouts are funded. And some experts believe there are revenue and cost headwinds for the banks.

According to a report in the Australian Financial Review (AFR), analysts have attributed the recent sell-off in ASX bank shares to “fears that sharp interest rate increases will cause an economic slowdown that flows through to the property market and hurts the banks’ customers”.

Furthermore, this would “potentially bring an end to years of bumper growth in lenders’ mortgage portfolios, fuelled by record low interest rates and a booming housing market”.

What do the brokers think?

The article quotes fund manager T. Rowe Price, which is “significantly underweight” on the Australian banks.

The manager “believes their earnings could weaken sharply in the next six to 12 months as slowing growth sparks an increase in non-performing loans”.

T. Rowe went even further in its gloomy outlook, saying it “would not be surprised if CBA and NAB suspended their most recent buybacks in light of developing macroeconomic conditions”.

Equity analyst Nick Vidale said:

As for the outlook for dividends, we think a good outcome for the banks in the coming years would be if they were able to hold dividends flat.

However, Plato Investment Management says ASX bank shares will remain good income stocks in the short term.

Plato’s managing director Don Hamson said:

We don’t expect dividend cuts in the near future … However, we are less bullish on the potential for further bank buybacks given increased market uncertainty, and the fact that all the big four bought back capital either on or off-market in the past year.

Concerns about rising loss provisions are way overdone. Similarly, we think speculation about a potential recession is way too premature.

Australia has very high employment rates and people with a job usually pay their mortgage.

Given ASX bank shares have been sold off, Plato reckons their dividend yields look even more attractive.

Broker UBS says the major Australian banks are in a good position to handle rising interest rates.

This is largely because the big banks are carrying $15 billion in collective provisions.

Head of Australian bank research at UBS John Storey, said:

There would need to be a substantial blow-up in credit provisions to derail the Australian banks earnings story.

The post What’s the outlook for ASX 200 bank dividends? appeared first on The Motley Fool Australia.

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More reading

• Is the NAB share price about to hit the comeback trail?
• How ANZ plans to fend off competition from other ASX 200 bank shares with fresh tech
• What’s going on with the Westpac share price this week?
• ‘Price makers’: 3 ASX 200 shares that can pass on rising costs in an inflationary environment
• Worried about a US recession? Here’s what the ASX 200 banks are forecasting

Motley Fool contributor Bronwyn Allen has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, Macquarie Group Limited, and 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 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 CSL Limited (ASX: CSL) share price finished higher today despite the S&P/ASX 200 Index (ASX: XJO) closing in the red.

At Wednesday’s market close, the global biotech’s shares rose 0.68% to $261.76 apiece.

By comparison, the benchmark ASX 200 index shed 0.20% to 6,508.5 points.

What drove CSL shares higher today?

With no announcements from the company, investors rallied the CSL share price throughout the day.

A rebound on the S&P/ASX 200 Health Care Index (ASX: XHJ) helped support this move after falling almost 2% in the past week.

Investors appeared to have focused on performing sectors as most of the market headed for another day of losses.

The recent volatility across the ASX has been impacted by the talk surrounding more possible rate hikes to combat inflation.

During the March quarter, inflation rose by 5.1% which was the highest level seen in many years.

And with the United States possibly facing a recession in 2023, this has sent investors packing.

Nonetheless, CSL shares continue to trade at attractive levels with many brokers believing its undervalued.

In particular, Citi remains positive on CSL shares due to its high-growth and defensive qualities.

As such, the broker has a buy rating and price target of $335. This represents an upside of roughly 28% based on the current share price.

On the other hand, Morgan Stanley has an overweight rating with a price target of $302 per share. While not as bullish as Citi, this still implies an upside of about 15% from where CSL trades today.

CSL share price summary

Since the start of 2022, the CSL share price has fallen by roughly 10%.

However, when looking further back, its shares are down almost 13% in the past 12 months.

CSL is the third largest company on the ASX with a market capitalisation of approximately $126.17 billion.

The post Why did the CSL share price beat the ASX 200 on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Broker names 2 of the best ASX 200 shares to buy now
• CSL share price ‘will be significantly bigger from this point’: fundie
• Top brokers name 3 ASX shares to buy next week
• Why I would invest $10,000 in these 3 ASX shares
• Brokers name 3 ASX shares to buy 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 CSL 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 National Australia Bank Ltd (ASX: NAB) share price traded rangebound today, closing 0.22% in the red at $26.99.

NAB shares started the year well before sliding off the cliff face in June. Investors have dragged the stock from a high of $31.55 on 1 June, bringing losses to 13% in a month.

In broad market moves, the S&P/ASX 200 Financials Index (ASX: XFJ) closed down 40 basis points on Wednesday.

Is the NAB share price about to hit back?

ASX bank shares have been beaten down in 2022 amid concerns over the sector’s exposure to mortgages, rising interest rates, and the Australian property market.

Analysts at JP Morgan recently updated their modelling following NAB’s completion of the Citi Australian consumer business acquisition on 1 June.

“This has driven a [less than] 1% increase to FY22E cash NPAT [net profit after tax] and ~2% increase to FY23/24 cash NPAT,” the JP Morgan team said.

It has an overweight rating on the bank and prices the share at $34.50 apiece, providing around $7 upside at the time of writing. JP Morgan notes:

We have an [overweight] recommendation on NAB reflecting stronger-than-peer revenue growth prospects, likely sound cost control, leverage to rising rates, and ongoing capital management.

The stronger revenue profile reflects NAB’s tilt towards small business banking, which should insulate it from ROE [return on equity] pressures in retail banking, as well as strong execution in its market leading SME [small to medium enterprise] franchise where it continues to take market share.

The broker also sees NAB’s pre-provision profit growth outshining its peers, and its valuation reflects the present value of the bank’s dividend stream plus a multiple of its tangible book value.

Meanwhile, 46.7% of brokers each have NAB rated as a buy and hold respectively, according to Bloomberg data. The remaining ~7% say to sell.

The consensus price target from this list is $32.23, meaning there’s still room for NAB to grow should this play out.

In the last 12 months, the NAB share price has held onto a 0.97% gain, despite sliding 6.4% into the red this year to date.

The post Is the NAB share price about to hit the comeback trail? appeared first on The Motley Fool Australia.

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More reading

• ‘Price makers’: 3 ASX 200 shares that can pass on rising costs in an inflationary environment
• Worried about a US recession? Here’s what the ASX 200 banks are forecasting
• How does the Macquarie dividend stack up against the ASX big four banks?
• 2 excellent ASX dividend shares that experts rate as buys this week
• Why are ASX 200 bank shares having such a cracking start to the week?

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 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.

Amazon (NASDAQ: AMZN)’s stock split has come and passed, and the company is now trading on a split-adjusted basis. Given the newly lowered share price, it is an excellent time to consider the bear and bull case for investing in Amazon’s stock. 

The bear case will center on its rapidly rising costs amid decelerating revenue growth. Meanwhile, the bull case will focus on higher-profit segments taking a more meaningful share of the revenue, making the stock arguably cheap. Let’s dive deeper. 

Bear case: Slowing revenue and rising costs is a poor combination

Amazon came through in the clutch for hundreds of millions of households when the coronavirus pandemic forced non-essential businesses to close their doors to in-person shoppers. Sales surged for Amazon as it became a prominent alternative for folks looking to avoid shopping at bricks-and-mortar stores. Indeed, revenue jumped $106 billion higher in 2020 from 2019.

Fulfilling an increase of that magnitude is no easy task. It required Amazon to double the size of its fulfilment network in 24 months.

AMZN Total Operating Expenses (Quarterly) data by YCharts.

Those investments in capacity are now weighing on profits as revenue growth is decelerating from pandemic highs. In its most recent quarter ended on March 31, revenue increased by 7%, or less than $8 billion from the same quarter in the year prior — its slowest rate of growth in several years. Meanwhile, total operating expenses rose by over $13 billion.

Unfortunately, management projects this trend to continue while it works to balance capacity with sales. Amazon forecasts revenue to grow by an even lower 5% in its second quarter. Worse yet, it expects operating income to fall to $1 billion, down from $7.7 billion in the same quarter last year. The estimates are midpoints.

There is no telling how far revenue growth will decelerate as economic reopening gains momentum, which will continue weighing on operating income in the near term. 

Bull case: More profitable segments are growing faster 

Amazon’s revenue growth is slowing after the surge at the pandemic’s onset. Internally, however, Amazon’s more profitable segments are taking more importance. Its Amazon web services segment accelerated growth to 37% in its most recent quarter, up from 32% in the prior year. That segment boasted an operating profit margin of 35% in Q1. Amazon is a leading force in the cloud services industry, which is estimated to reach $495 billion in spending in 2022.

Moreover, Amazon has developed a burgeoning advertising business. Revenue in this segment grew by 25% in Q1 to reach $7.9 billion. Marketers spent $763 billion globally in 2021, and it is reasonable to expect Amazon can take a more meaningful share of this market. Hundreds of millions of shoppers visit Amazon’s website, looking to spend money. Advertisers would love the opportunity to influence those decisions.

AMZN PE Ratio data by YCharts.

The rise of these more profitable revenue sources has improved Amazon’s operating profit margin from 0.2% in 2014 to 5.3% in 2021. Finally, to make the case more compelling, Amazon’s stock is as cheap as it’s been in a long time. At a price-to-earnings ratio of 51, it’s near the lowest in the previous five years.

Bulls win out 

Overall, the bull case is stronger than the bear. The temporary imbalance between capacity and sales will eventually balance. On the side of the bulls, the growth in Amazon’s web services and ad businesses will likely last long term. Couple that with an inexpensive valuation, and it makes Amazon stock an excellent buy right now.

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

The post Amazon stock post-split: Bear vs. bull appeared first on The Motley Fool Australia.

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More reading

• Nasdaq bear market: Where to invest $1,000 right now
• Why Meta, Amazon, and Apple shares were falling today
• Why Amazon stock crushed the market today
• 2 Warren Buffett stocks to buy and hold forever
• Amazon Just Split Its Stock: Here’s What Comes Next

Parkev Tatevosian has no position in any of the stocks mentioned. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Zip Co Ltd (ASX: ZIP) share price continued to sink to multi-year lows today.

For the first time since 2016, the buy-now pay-later (BNPL) company’s shares closed at less than 50 cents apiece.

To be precise, Zip shares lost 11.43% today to finish at 46.5 cents each, just marginally up on their intraday low of 46 cents apiece.

Why is there no end in sight for Zip shares?

With the S&P/ASX 200 Financials (ASX: XFJ) index also recording a 0.42% loss today, Zip shares seemed to bear the brunt.

It appears fears surrounding more interest rate hikes from the Reserve Bank of Australia (RBA) are weighing down investor confidence.

In the March quarter, inflation rose 5.1% which was the highest rate in many years.

Ultimately, this impacts consumer spending on discretionary items as the cost of debt increases on such expenses as mortgages and credit cards.

Some economists are predicting the RBA will further lift the official cash rate up to 2.5% by mid-2023. This is considerably higher than the current 0.85% interest rate that’s on offer for now.

Similarly, other shares in BNPL companies finished in the red today.

The Block Inc CDI (ASX: SQ2) share price finished 4% off its all-time low, closing at $84.63, down 1.59%.

As well, shares in Splitit Payments Ltd (ASX: SPT) and Humm Group Ltd (ASX: HUM) ended the day down 12.5% and 3.81%, respectively.

Zip provides business update

In a late afternoon release to the market, Zip provided more clarity on how it is tracking in the current trading environment.

Management noted that the company’s underlying business remains strong, with new onboard merchants as well as growth in customers and transaction volumes.

Importantly, the company said it is focusing on driving its credit losses below the 2% threshold of total transaction volumes (TTV).

Furthermore, Zip said that it is well placed to weather the current storm of rising interest rates with a number of initiatives underway. These include consumer fee increases, merchant repricing, increased customer repayment velocity, and more.

As of 31 March, Zip had $303 million available in cash and liquidity.

Zip share price snapshot

Over the past 12 months, the Zip share price has plummeted by 94%, with year-to-date down more than 89%.

In February 2021, the company’s shares reached their all-time high of $14.53 each.

Zip currently presides a market capitalisation of around $319 million.

The post Zip share price dives 11%, closing below 50c for first time in 6 years appeared first on The Motley Fool Australia.

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More reading

• Why Blackmores, Lake Resources, St Barbara, and Zip shares are dropping
• ASX 200 midday update: St Barbara and Zip drop to multi-year lows
• The Zip share price is down 90% in 2022. Why I won’t be buying
• Zip share price falling again as market experts argue for UK and US exit
• Why A2 Milk, Bubs, Evolution, and Zip shares are rising despite the selloff

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 ZIPCOLTD FPO. 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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ASX coal shares are on a rollercoaster as a new Queensland tax is adding to the volatility brought on by surging coal prices and climate concerns.

But there’s one ASX coal company that’s standing apart from its peers today — that’s Bowen Coking Coal Ltd (ASX: BCB). Its share price rocketed 21.43% to close at 25.5 cents today.

The gain is in contrast to fellow Queensland coal miners that are reeling from the shock news that the Palaszczuk government is hiking coal royalty rates.

ASX coal miners getting burnt in Queensland

The South32 Ltd (ASX: S32) share price tumbled 1.7% to $4.09 while the Whitehaven Coal Ltd (ASX: WHC) share price lost 1.67% to close at $4.70. Both have coal operations in Queensland.

But that is also true for the Bowen Coking with its flagship project in Queensland’s Bowen Basin.

New Hope for the Bowen Coking share price

Having said that, the project is still some way away from shipping its first coal. Bowen Coking announced yesterday that it had secured a US$55 million debt facility to fast-track its Burton Mine.

The facility, provided by Taurus Mining Finance Fund No. 2, will primarily be for the rebuilding of the Burton infrastructure.

Further, the company signed a A$70 million secured performance bonding facility agreement with New Hope Corporation Limited (ASX: NHC), with an additional A$40 million via convertible notes.

The total funding of around A$190 million will enable the ASX small cap miner to complete the acquisition of 90% of the Lenton Joint Venture (JV). The JV owns the Lenton Project and the Burton Mine.

ASX coal miners up in arms

South32 and Whitehaven are less fortunate as they will feel the impact of the royalty hike announced on Tuesday.

Royalties could go up as much as 40% when ASX coal miners receive more than $300 a tonne for their coal.

Coal miners in Queensland have been scathing of the state government’s decision which, they say, was implemented without industry consultation.

Windfall tax rattles industry

The higher royalty regime has three tiers. The first is a 20% tax for prices above $175 a tonne, then 30% above $225 a tonne, and 40% when it’s more than $300 a tonne.

The windfall tax could reap the Queensland government an extra $4.5 billion in the next three months alone if current spot prices are maintained.

ASX oil and gas shares will also be watching nervously. There’s debate about whether they too should be hit with extra taxes due to the surging prices of their commodities.

Is this a bullish sign for coal?

But it isn’t all bad news for coal miners. Last year’s power crisis in China due to a shortage of coal could repeat this year.

The Asian giant is trying to cap coal prices to avoid power blackouts this summer, according to reports by the Australian Financial Review. This is in response to surging demand and a lack of supply.

As we discovered the previous time Beijing tried that, price caps don’t work. If anything, this could be a signal for ASX coal share bulls to keep betting on the sector.

Meantime, Queensland premier Annastacia Palaszczuk will likely be rubbing her hands in glee.

The post Down 40% Tuesday, up 21% today, what’s going on with this ASX coal share? appeared first on The Motley Fool Australia.

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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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It’s been a big week for the BrainChip Holdings Ltd (ASX: BRN) share price this week. On Monday, BrainChip shares officially joined the S&P/ASX 200 Index (ASX: XJO).

The ASX 200 is of course the flagship index covering ASX shares. It represents the largest 200 companies on the ASX, weighted by market capitalisation. But an ASX share’s market cap changes every trading day (i.e. when its share price moves). As such, the index has to be continually rebalanced to ensure that it accurately reflects the ASX’s largest 200 companies.

The index provider S&P Global does this rebalancing every three months. And the latest rebalance took effect on Monday after being announced back on 3 June.

So yes, this was when BrainChip shares joined the ASX 200, alongside other ASX 200 newcomers like Lake Resources N.L. (ASX: LKE) and Core Lithium Ltd (ASX: CXO). These companies took the place of shares like Appen Ltd (ASX: APX) and Polynovo Ltd (ASX: PNV), which were kicked out of the ASX 200.

Conventionally, joining an index like the ASX 200 is viewed as a potentially positive catalyst for a company’s share price for a number of reasons. But has this been the case for Brainchip?

How has BrainChip’s first week as an ASX 200 share been?

It’s going well so far. Upon joining the ASX 200 on Monday, the BrainChip share price lifted. It ended its first day as an ASX 200 share up 1.1% at 92 cents. 

But since then, BrainChip shares have drifted lower. They just closed at 89 cents each, down 3.26% on yesterday’s close. So overall, BrainChip has lost ground since becoming a member of the ASX 200 index.

But this is a company that routinely gives investors spades of volatility. The BrainChip share price has now lost almost 30% over the past month alone. But even so, it remains up more than 35% over the past six months, and up close to 70% over the past year. 

At the company’s closing share price of 89 cents today, BrainChip shares have a market capitalisation of $1.57 billion. 

The post How has the BrainChip share price performed since joining the ASX 200? appeared first on The Motley Fool Australia.

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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 positions in and has recommended Appen Ltd and POLYNOVO FPO. 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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Owners of Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares may want to know how the big four S&P/ASX 200 Index (ASX: XJO) bank share is planning to get ahead of rivals with technology.

There is a lot of competition in the space. Not only are there the other big four ASX banks like Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Commonwealth Bank of Australia (ASX: CBA), but there are other challengers as well. Bank of Queensland Limited (ASX: BOQ) and Macquarie Group Ltd (ASX: MQG) are two other competitors.

But, ANZ is hoping to win customers while doing nothing. It’s putting effort and money towards upgrading its technology.

Maile Carnegie, group executive of ANZ’s Australian retail, wrote in a recent blog post:

While a rising interest rate environment will provide a temporary reprieve for banks, in the longer-term other trends will have more bearing on returns.

Those trends include intense competition in the lending market place, rising regulatory and compliance costs and capital overlays. We don’t see any sudden lessening in competition, quite the opposite. And it’s also unlikely we’ll suddenly be able to cut our regulatory and compliance costs.

Technology focus

ANZ is trying to improve its offering to customers by improving its speed of product to market, such as getting home loans to customers more quickly.

The big four ASX 200 bank share has been trying to simplify processes and “make it more friendly” for customers. The bank has had to fundamentally rebuild itself with its ‘ANZx’ program.

Carnegie said:

The ANZ Plus platform we launched recently is a result of that rebuild and is about providing better, faster, cheaper and more effective controls for this business as well as keeping pace with what our customers need.

We decided to rebuild half a century of systems technology and processes rather than wallpapering over the cracks. We did this because we knew tacking on automated controls to legacy systems just wasn’t going to work. It required a different solution.

The rebuild of the underlying technology is now complete and we are starting to see the rebuild of the customer applications that sit on top, starting with ANZ Plus savings and transaction accounts.

ANZ is expecting to be able to give customers more features and functionality in the coming weeks, followed by other offerings, including home loans. The big four bank plans to have beta testing for loans in late 2022.

The ASX 200 bank share thinks the new offering and underlying technology will help customers.

Latest view on the bank

One of the most recent opinions has come from Morgan Stanley. It reduced its ANZ share price target to $24.30, with a rating of ‘equal-weight’, which is like a hold rating.

The broker noted that ANZ’s net interest margin (NIM) could rise as the RBA increases interest rates. However, it could cause problems for the loan book in terms of arrears.

The post How ANZ plans to fend off competition from other ASX 200 bank shares with fresh tech appeared first on The Motley Fool Australia.

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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 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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