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The Archer Materials Ltd (ASX: AXE) share price is surging today on some positive news.

Archer Materials shares are currently up 7.53% to 78.5 cents. In early afternoon trade, the company’s share price soared as high as 13% to 82.5 cents. For perspective, the S&P/ASX All Technology Index (ASX: XTX) has gained just 0.49% at the time of writing.

So what could be impacting the Archer Materials share price today?

Quantum computing chip patent

The Archer Materials share price is surging on news the company has been granted an Australian patent.

The patent is for the company’s 12CQ quantum computing chip and gives Archer exclusive commercial rights to the invention in Australia.

The company said the patent is a “significant early-stage milestone” in the development of the chip.

Commenting on the news, Archer CEO Dr Mohammad Choucair said:

We are excited about the grant of the 12CQ chip Australian patent. Patent protection in major markets is a central element in Archer’s strategy to develop the 12CQ chip.

Obtaining Australian patent approval effectively protects the 12CQ chip technology and prevents others from copying, making, or selling our devices in Australia.

Archer said it is the only company listed on the ASX — and one of only a few global players — developing qubit processor chip technology. The technology could enable quantum processors in mobile devices.

The company now has patents for its technology in Australia, the US, China, South Korea, Japan, and 12 countries in Europe. Commenting further on the Australian patent, Choucair added:

With the focus on quantum technologies in Australia now stronger than ever, we believe that the granting of the Australian patent related to Archer’s 12CQ chip will contribute to strengthening quantum computing and technology innovation in Australia.

Share price snapshot

The Archer Materials share price has climbed more than 16% in the past year but it has lost around 28% in the year to date.

In the past month, the company’s shares have lost almost 10%. However, the Archer Materials share price has surged 15% in a week.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned nearly 2% in the past year.

Archer Materials has a a market capitalisation of about $199 million based on today’s share price.

The post Archer Materials share price leaps 7% on patent news appeared first on The Motley Fool Australia.

More reading

• Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking
• Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’?
• Why is the Sayona Mining share price crashing 21% today?
• Should you buy Amazon shares now or wait until after the stock split?
• Is the Webjet share price an opportunity that can soar?

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. At the time of writing, the benchmark index is down 0.1% to 7,140.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

Incitec Pivot Ltd (ASX: IPL)

The Incitec Pivot share price is down over 4% to $3.58. This follows the release of the fertiliser and commercial explosives manufacturer’s half-year results. Incitec Pivot reported a 48% increase in revenue to $2,548 and a record half-year profit of $384 million. As strong as this was on paper, its earnings still fell short of consensus estimates.

Openpay Group Ltd (ASX: OPY)

The Openpay share price is down 10% to 26.5 cents. The catalyst for this was the completion of a placement of shares to sophisticated and institutional investors. Openpay has raised $18.25 million from the placement at an 18.6% discount of 24 cents per new share. It will now seek to raise a further $2 million from retail shareholders at the same price. These funds will be used to accelerate the buy now pay later provider’s pathway to profitability in the ANZ market.

PolyNovo Ltd (ASX: PNV)

The PolyNovo share price is down 7% to $1.23. As I mentioned here earlier, short sellers have been increasing their positions in this medical device company despite its chairman loading up on shares this month. They appear to believe the company’s underperformance will continue this year.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is down 18% to 23 cents. Investors have been selling this lithium explorer’s shares following the release of a disappointing pre‐feasibility study for the North American Lithium operation in Canada. That study found that the project has a pre‐tax net present value of A$1 billion, which was lower than many were expecting. It also uses long run spodumene price inputs well ahead of what analysts at Goldman Sachs are forecasting.

The post Why Incitec Pivot, Openpay, PolyNovo, and Sayona Mining shares are sinking appeared first on The Motley Fool Australia.

More reading

• Why is the Sayona Mining share price crashing 21% today?
• Why the Openpay share price is sinking 13% to a new low today
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Incitec Pivot share price fizzles despite half-year earnings increasing tenfold
• These are the 10 most shorted ASX shares

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 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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The Ethereum (CRYPTO: ETH) price is up 3% since this time yesterday, currently trading for US$2,028 (AU$2,860).

That boost will surely be welcomed by holders of the world’s number two crypto by market cap. But the digital token has a long way to go before recouping the losses it’s posted over the past six months,

So far in 2022, the Ethereum price is down 46%. And it’s lost 59% since the 16 November all-time highs of US$4,892.

While many crypto investors will have lost money on the sharp selloff, which has mirrored the selloff in risk assets like high growth tech shares, only a few will have found themselves reduced to millionaire status from billionaire.

Ethereum price collapse knocks founder from billionaire’s list

The top dogs in the crypto world haven’t been immune to the big price drops.

In fact, the 59% Ethereum price fall since its highs saw Vitalik Buterin tweet, “I’m not a billionaire anymore,” on Friday.

The now 28-year-old Buterin first described the Ethereum blockchain in a 2013 whitepaper when he would have been a teenager. In 2014, he went on to co-found the crypto along with other backers.

As crypto prices soared, so too did Buterin’s wealth. The Age reports that his digital wallet contained US$1.5 billion worth of Ether in November when the token was trading near its highs.

Does Buterin still ‘welcome a bear market’?

In late February, when the Ethereum price had already tumbled from its record highs but was still trading around US$2,790, Buterin made news when he said many crypto professionals would “welcome a bear market“.

According to Buterin (quoted by Bloomberg):

The people who are deep into crypto, and especially building things, a lot of them welcome a bear market. They welcome the bear market because when there are these long periods of prices moving up by huge amounts like it does – it does obviously make a lot of people happy – but it does also tend to invite a lot of very short-term speculative attention…

The winters are the time when a lot of those applications fall away and you can see which projects are actually long-term sustainable, like both in their models and in their teams and their people.

Despite the sharp retrace in the Ethereum price since February (or perhaps because of it), Buterin hasn’t given up on his project.

Following on his admission that he’s off the billionaire’s list, at least for now, he tweeted, “Note to trolls: no, ethereum was not a mistake.”

The post Ethereum price rout knocks founder from billionaire’s list. Does he still ‘welcome a bear market’? appeared first on The Motley Fool Australia.

More reading

• Why Ethereum and Dogecoin are recovering nicely today
• Own crypto or NFTs? Here’s why the ATO could have you in their sights come tax time
• Why is the Ethereum price down 48% this year?
• Why Bitcoin, Ethereum, and Dogecoin are falling today
• Why Bitcoin and Ethereum popped on Tuesday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum. The Motley Fool Australia has positions in and has recommended Ethereum. 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 Sayona Mining Ltd (ASX: SYA) share price has taken a tumble in afternoon trade.

At the time of writing, the lithium explorer’s shares are down 21% to 22 cents.

Why is the Sayona Mining share price sinking?

Investors have been selling down the Sayona Mining share price following the release of an update on the company’s North American Lithium (NAL) operation in Québec, Canada.

Sayona Mining owns 75% of this operation, with Piedmont Lithium Inc (ASX: PLL) owning the balance.

According to the update, the pre‐feasibility study (PFS) found that the operation has a pre‐tax net present value (NPV) of approximately A$1 billion with a life of mine of 27 years, an internal rate of return (IRR) of 140%, capex of A$100 million, and capital payback within two years.

This NPV appears to have fallen well short of what the market was expecting.

What else?

It is also worth noting that this estimate is based on an 8% discount rate with an average spodumene concentrate price of US$1,242 per tonne, and cash costs per tonne of US$590.

However, the pricing used to underpin the NPV could prove to be a touch on the optimistic side, which could also be weighing on the Sayona Mining share price today.

As I mentioned here recently, Goldman Sachs estimates the following for lithium spodumene concentrate prices:

• US$1,750 per tonne in 2023
• US$950 per tonne in 2024
• US$900 per tonne in 2025
• Long run average of US$800 per tonne

Goldman’s long run average spodumene price is almost 36% lower than what Sayona Mining has used for its PFS despite management calling it “conservative.” And while Goldman’s forecasts could ultimately prove inaccurate, they do pose a risk to valuations.

The post Why is the Sayona Mining share price crashing 21% today? appeared first on The Motley Fool Australia.

More reading

• Here’s why the Sayona share price is up 10% today
• Lighting up the market: ASX lithium stocks surge again on Tuesday
• Why are ASX lithium shares off to such a flying start this week?
• Here’s why ASX lithium stocks are rocketing higher 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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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.

It has been a trying time for Amazon.com (NASDAQ: AMZN) investors. The stock is down 35% on the year and is down some 43% from its all-time highs. With rising interest rates to start the year, high-growth technology stocks sold off hard.

And last week, poor retail earnings reports from Walmart and Target seemed to confirm investors’ worst fears over inflation’s effect on retail sales. Since these are the two businesses Amazon dominates, it sold off hard.

But with the company repurchasing stock and a stock split on the horizon, is now the time to buy when others are fearful?

Current woes in the retail segment

The hints of last week’s retail destruction were actually forecast by Amazon back in its April first-quarter earnings report. Total sales growth decelerated to just 7%, down from 44% a year ago, despite accelerating cloud growth. Operating income actually declined from $8.7 billion a year ago to just $3.7 billion. When stripping out operating profit from Amazon Web Services (AWS), Amazon’s North American and international retail operations actually tallied a combined $3.8 billion operating loss. Keep in mind that this includes things like advertising and Prime subscriptions, which may be high-margin, so the losses in its pure retail business were likely even worse.

As was confirmed by Walmart and Target, Amazon struggled as revenue growth decelerated amid the economic reopening. Meanwhile, freight and logistics costs rose sharply due to rising fuel prices. And since Amazon had so aggressively expanded its capacity during the pandemic, it found itself with more capacity and employees than it needed as e-commerce revenue slowed.

As if this weren’t bad enough, management guided to even lower overall growth next quarter, of 3% to 7%, and for operating income to get worse — somewhere in the range of a loss of $1.0 billion to a gain of $3.0 billion.

But AWS is a bright spot

If investors looked under the hood a bit, they might have been a bit more enthusiastic about Amazon Web Services, the company’s leading cloud computing platform. Enterprises generally save money and become more agile when they switch to the public cloud over building their own data centers, so this shift should continue even if there is an economic slowdown.

Last quarter, AWS revenue accelerated 37% from the 32% growth in the year-ago quarter, while AWS operating income grew 53% as margins expanded. The margin expansion was largely due to Amazon extending the useful life of its server hardware, but that should be a permanent change.

Over the past 12 months, AWS by itself has generated nearly $21 billion in operating income, up 43%. For 2022, AWS operating profit could be more than $25 billion, putting net profit somewhat higher than $20 billion. Amazon’s market cap right now is $1.1 trillion, or about 55 times that figure.

Even with interest rates higher today, given AWS’s leading position and the long-term growth prospects of the cloud, that wouldn’t be a crazy price to pay for AWS alone.

And newer innovations could help customers deal with inflation

With its inventive culture, Amazon also has a lot of projects going on besides its e-commerce platform and cloud computing. New initiatives such as Just Walk Out technology, and the Project Kuiper initiative for satellite-delivered broadband, could help. Just Walk Out, which allows for a cashier-free retail experience, has the potential to materially lower costs at Amazon Fresh grocery stores and other third-party retailers that adopt the platform.

Lower costs could enable Amazon Fresh stores and other retailers to lower prices, helping with inflation and labor shortages for consumers. Ditto for Project Kuiper, which has the potential to deliver broadband to underserved communities at lower costs than traditional solutions.

Since these projects don’t generate material revenue yet, they are largely overlooked by investors.

A historically low valuation

Meanwhile, Amazon stock is currently trading at a low valuation, at least relative to its history, on both enterprise value-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) and price-to-sales metrics. While Amazon has traded at a lower price-to-sales ratio in the last 10 years, that was before it broke out AWS in its financial results, starting in 2015:

AMZN EV to EBITDA data by YCharts.

Another indication that Amazon may be undervalued is that management is actually repurchasing itw own stock, which the company does only rarely. The last time it did so was in 2011-2012, during another swoon in the stock price. That wound up being a good buying opportunity for long-term investors.

It all adds up to a good-looking buy today

Amazon will split its stock on June 3, which isn’t very far from now. While stock splits usually lead to increased interest from retail investors, this is anything but a normal period. Should the U.S. economy dive into a deep recession, it’s possible Amazon shares could go lower.

However, barring that extreme scenario, an awful lot of bad news appears priced in today. While the near term is highly uncertain, the cloud business alone could be a good buy; meanwhile, I’d suspect the retail business will improve — possibly as soon as Prime Day in the third quarter and the holiday shopping season.

Furthermore, new innovations like Just Walk Out and Project Kuiper give investors new potential businesses to look forward to which aren’t accounted for at all in the current price. Add in share repurchases, and I suspect investors with a five- or 10-year time horizon will feel pretty good about buying Amazon shares at today’s prices. If you have the capital and a long time horizon, there’s no need to wait for the split.

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

The post Should you buy Amazon shares now or wait until after the stock split? appeared first on The Motley Fool Australia.

More reading

• Is the Webjet share price an opportunity that can soar?
• ‘Storm in a teacup’: Why the Imugene share price is lifting 14% today
• 3 ASX All Ordinaries shares starting the week with new 52-week highs
• Leading brokers name 3 ASX shares to buy today
• Broker reveals undervalued ASX sector with post-election tailwinds

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Billy Duberstein has positions in Amazon. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.

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

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The Webjet Limited (ASX: WEB) share price has certainly seen a lot of volatility since the onset of the COVID-19 pandemic.

Borders are now opening and travel is returning. Does this mean that the business is an opportunity that could fly higher? Or has the recovery been priced in?

Firstly, let’s have a look at what the company recently said in its result and also its outlook comments.

Webjet FY22 earnings recap

Webjet reported that it was profitable in the second half of FY22, delivering positive cash flow. However, for the year overall, it still made a statutory net loss after tax of $85 million and an underlying net loss of $38.4 million

The company achieved that second-half profitability in WebBeds, thanks to the North American and European markets. Costs were down 31% when compared to pre-COVID levels and it’s on track to be 20% more cost-efficient when back at scale.

The Webjet online travel agency (OTA) business was profitable in FY22 despite COVID-19 impacts, including the Omicron variant.

What about the company’s start to FY23? Webjet said that all of its businesses were profitable in April, with “indications of a further strong uplift in May”. As at May 2022, the ASX travel share said that WebBeds total transaction value (TTV) was ahead of May 2019. Further, Webjet OTA bookings were tracking at around 80% of pre-COVID levels and GoSee TTV was tracking at around 75% of pre-COVID levels.

Reopening and recovery

The size of the recovery could be important for the Webjet share price. Management sees “significant” growth potential in all of its businesses as travel markets reopen.

Webjet said that not only is it seeing strong signs of demand with daily customer search activity but it’s also seeing “demonstrable indicators of confidence in the recovery”. The company says its supply partners are investing in capacity for the future. It pointed to aircraft orders by Qantas Airways Limited (ASX: QAN) and Regional Express Holdings Ltd (ASX: REX) as examples.

The ASX travel share also said that FY23’s first-quarter revenue and earnings before interest, tax, deprecation and amortisation (EBITDA) was also “well ahead” of the fourth quarter of FY22.

For WebBeds, 14 of its top 25 markets are now trading at, or above, pre-COVID booking volumes. Some markets continue to have meaningful restrictions, particularly in the Asia-Pacific region.

Based on the bookings trajectory, Webjet said that it is expecting to be back at pre-COVID booking volumes in the second half of this new financial year (FY23).

Finishing his comments on the outlook for the company, Webjet managing director John Guscic said:

We believe there are significant growth opportunities in all our businesses and are excited for what the future holds.

What do brokers think of the Webjet share price?

Ord Minnett is quite optimistic about the future, with a price target of $7.48, implying a potential upside of more than 20%.

It’s attracted to the recovery of business travel and suggests that Webjet could capture more market share here.

However, Webjet noted that the OTA margins have been impacted due to the loss of ‘overrides’ and commissions payable on international travel.

But Macquarie analysts have a different opinion on the Webjet share price with a price target of $5.80, implying a slight decline. It notes that international travel could continue to suffer, though it could do better in the longer term with cheaper costs at scale.

The post Is the Webjet share price an opportunity that can soar? appeared first on The Motley Fool Australia.

More reading

• The Flight Centre share price has taken off 5% in a week. Is travel really ‘back, baby’?
• These are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy today
• Webjet share price tipped to rise: Broker says it ‘hasn’t wasted a crisis’

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 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 Imugene Limited (ASX: IMU) share price is soaring ahead today.

At the time of writing, Imugene shares are swapping hands for 22.8 cents, a 13.75% gain. In contrast, the S&P/ASX 200 Health Care Index (ASX: XHJ) is 0.87% in the red today. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is falling 0.1%.

Let’s take a look at the letter from the company to shareholders released today.

Imugene share price lifts

Imugene has written to shareholders to discuss the company’s share price in the last few months. For perspective, Imugene shares have dived 43% year to date.

Company leaders said Imugene is “as strong as it has ever been in its history”. Imugene highlighted it has $100 million in cash and three unique platform technologies supporting six unique assets.

Imugene informed shareholders it expects to have 10 clinical studies supported by five to six United States Food and Drug Administration (FDA) investigational new drug applications. The drugs are targeting greater than 10 disease areas. The company also has two supply agreements with major pharmaceutical companies and two industry collaborations.

Imugene advised the market that multiple shareholders have reached out to the company about the recent cancelling of a supply agreement with MSD. On 2 May, the company’s share price plunged nearly 14% on the back of this news. In a letter dated today, executive chair Paul Hopper and CEO and managing director Leslie Chong said:

The reaction to this has been out of all proportion to the news, and is really a storm in a teacup.

We recently announced that this trial is open ahead of schedule and can be expedited by obtaining the drug elsewhere, the cost of which is not material.

Turbulent times

Imugene noted “we are living in turbulent times” and biotech share prices have dropped dramatically since December last year. The company highlighted the sector has plunged about 65% from its peak in February 2021. Furthermore, April was the worst month on record for US biotech shares since 1997. Hopper and Chong added:

In addition, investors around the world have been spooked by the Ukraine Russia tensions, hawkish comments from the US Federal reserve, stubborn inflation and a worsening COVID situation in China.

Hopper and Chong said they remain and will continue to be large shareholders of the company and emphasised the “exciting times” ahead.

Share price snapshot

The Imugene share price has descended nearly 44% in the past year, but it is up 1.1% in a month.

In comparison, the benchmark ASX index has returned 2% over the past year.

In the past week alone, Imugene shares have surged 30%.

Imugene has a market capitalisation of $1.16 billion based on the current share price.

The post ‘Storm in a teacup’: Why the Imugene share price is lifting 14% today appeared first on The Motley Fool Australia.

More reading

• Imugene share price surges 18% to lead the ASX 200 on Thursday
• 2 ASX All Ordinaries shares having a cracking day, despite the carnage
• ASX 200 midday update: Aristocrat’s earnings beat, Webjet flops, retailers smashed
• Here’s why the Imugene share price just got a boost
• Why Imugene, Integrated Research, Monash IVF, and Step One shares are sinking

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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After a strong start to the week, the All Ordinaries Index (ASX: XAO) has slipped into the red on Monday afternoon. But not all is dire. Some of its constituents smashed their 52-week highs earlier today. In fact, one All Ordinaries share penned a new record high on Monday morning.

At the time of writing, the benchmark index is down 0.01%.

Let’s take a look at what’s driving these ASX All Ordinaries shares to multi-year highs.

3 ASX All Ordinaries shares hitting long-forgotten heights

Stanmore Resources Ltd (ASX: SMR)

First off the block is Stanmore Resources. The All Ordinaries share reached a new record high of $2.84 earlier today despite no news having been released by the company.

For those who aren’t acquainted with Stanmore Resources, the company is a coal producer with operations in the Bowen and Surat basins.

Thus, its stock might be rising alongside thermal coal prices. The black rock’s value surged another 1.2% on Friday, reaching US$417.25 a tonne, according to CommSec.

That sees the commodity nearing the all-time high of $435 it hit back in March.

Elders Ltd (ASX: ELD)

The Elders share price leapt nearly 12% earlier today to reach its highest point in more than 12 years today. The All Ordinaries share traded at $15.32 at its intraday high on Monday.

Its gains followed the release of the company’s half year results within which it upgraded its financial year 2022 guidance.

The agribusiness posted a 38% jump in sales revenue, an 80% increase in earnings before interest and tax (EBIT), and a 40% boost to its dividend for the first half.

It now expects its full year EBIT to be 30% to 40% higher than that of financial year 2021.

Grange Resources Limited (ASX: GRR)

Finally, the Grange Resources share price reached a new mutli-year high on Monday. The All Ordinaries share leapt to $1.67 today – marking its highest point since 2008.

The company mines iron ore and produces iron ore pellets. Thus, its gains might have been born from rising iron ore futures.

It rose 2.5% to reach US$134.36 on Friday following news that China cut its benchmark reference rate for mortgages more than the market expected, according to CommSec.

The post 3 ASX All Ordinaries shares starting the week with new 52-week highs appeared first on The Motley Fool Australia.

More reading

• Why BrainChip, Codan, Elders, and Karoon Energy are storming higher
• ASX 200 midday update: Elders and Codan rocket, Incitec Pivot disappoints
• Elders share price jumps 9% on stellar first-half profit growth
• 5 things to watch on the ASX 200 on Monday
• 2 high quality ASX 200 dividend shares analysts have named as buys

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 recommended Elders Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Aussie Broadband Ltd (ASX: ABB)

According to a note out of Ord Minnett, its analysts have retained their buy rating and $5.10 price target on this broadband provider’s shares. The broker has been looking at industry data and was pleased to see market share gains for Aussie Broadband. Another positive is a shift towards higher margin plans across the industry. The Aussie Broadband share price is trading at $4.12 on Monday.

BWX Ltd (ASX: BWX)

A note out of Citi reveals that its analysts have retained their buy rating on this personal care products company’s shares with a trimmed price target of $2.76. Citi took away positives and negatives from BWX’s investor day. The company’s long term margin guidance was ahead of expectations, but its revenue targets were either lower than planned or withdrawn. Nevertheless, Citi remains positive and believes the company’s Sukin brand is likely to appeal in a high inflation environment. It also estimates that the company’s shares trade at just 11x FY 2023 earnings. The BWX share price is fetching $1.42 this afternoon.

Woolworths Group Ltd (ASX: WOW)

Analysts at Goldman Sachs have retained their buy rating and $41.70 price target on this retail giant’s shares. This follows news that Woolworths has signed an agreement to acquire a controlling stake in MyDeal.com Au Ltd (ASX: MYD). While Goldman acknowledges that the deal is immaterial and MyDeal adds just 0.1% to Woolworths’ revenue, it sees potential for it to bolster its marketplace capabilities. The Woolworths share price is trading at $34.83 today.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Is the Woolworths share price a buy following the latest acquisition or a no deal?
• 5 things to watch on the ASX 200 on Monday
• Woolworths share price lifts following $218m online marketplace deal
• ASX 200 midday update: BHP, IGO, and Woolworths charge higher
• Here’s why the MyDeal share price is rocketing 56% today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Aussie Broadband Limited and Goldman Sachs. The Motley Fool Australia has recommended Aussie Broadband Limited and BWX 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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There is one undervalued ASX sector that’s set to benefit from federal Labor taking government that few are thinking about.

That is the ASX-listed childcare space. Operators could see a boost to demand under an Anthony Albanese government, according to Canaccord Genuity.

Why this ASX sector is outperforming today

This probably explains why the Mayfield Childcare Ltd (ASX: MFD) share price surged 9.6% to a record high of $1.49.

The G8 Education Ltd (ASX: GEM) and Evolve Education Group Ltd (ASX: EVO) share prices are also beating the market. They are up 3.5% to $1.19 and 0.7% to $0.70, respectively, at the time of writing.

In contrast, the S&P/ASX 200 Index (ASX: XJO) lost its morning gain to trade at breakeven.

Undervalued ASX sector getting a Labor boost

Canaccord said:

The election result over the weekend should be positive for childcare demand, in our view, with childcare being one of the key policies put forward by the Labor party.

The policy is aimed at making childcare more affordable by increasing the percentage of fees covered by the government.

The new federal government plans to increase the maximum childcare subsidy to 90%. It will also increase the subsidy rate for one child in every family and households with incomes up to $530,000.

Additionally, Labor will ask the competition watchdog to design a price regulation mechanism and ask the Productivity Commission to look at ways of moving to a 90% flat subsidy for everyone.

Demand outpacing supply

Albanese is promising that around 96% of families will be better off under its plan and no family will be worse off.

It’s worth noting that demand for childcare was already growing strongly before any policy changes were announced.

Canaccord added:

We believe these [policy] changes will have a meaningful impact on demand in MarQ’22 and beyond.

Meanwhile, new supply has come on but not at the rates we have seen previously. Moreover, there has been an increase in closures.

Which ASX childcare shares to buy

But not all shares in this undervalued ASX sector are a buy, according to Canaccord.

The broker is recommending investors buy G8 shares and Mayfield Childcare shares. These shares are trading on attractive valuations and Canaccord is expecting them to post solid earnings growth in 2022.

Its 12-month price target on G8 is $1.42 a share and on Mayfield Childcare is $1.76 a share.

Canaccord is more cautious about the Evolve Education share price. While it looks cheap on a long-term basis, the broker is concerned about the performance of its New Zealand operations.

The broker rates Evolve Education as a hold with a price target of NZ$0.90 a share.

The post Broker reveals undervalued ASX sector with post-election tailwinds appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau 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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