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The AVZ Minerals Ltd (ASX: AVZ) share price rocketed out of the gates this morning.

In early trade, the lithium explorer’s shares were up 19% to $1.18.

The AVZ Minerals share price has since pulled back but remains up 6.5% to $1.06.

Why did the AVZ share price rocket higher?

Investors were bidding the AVZ share price higher this morning after the lithium explorer provided an update on the Manono Lithium and Tin Project in the Democratic Republic of the Congo.

According to the release, the Minister of Mines has awarded a mining licence to AVZ’s 75% owned Dathcom Mining SA business for the flagship Manono Project.

The mining licence will cover the entirety of the Roche Dure mineral resource (401 million tonnes at Li20 1.65%) and the Carriere de l’Este exploration target. It does, however, exclude a portion of the land holding to the north. AVZ intends to have discussions with the government in the near future regarding this land.

The company is now advancing its early works program ahead of a final investment decision to commence major works and first production toward the later months of 2023.

“A watershed moment”

AVZ’s Managing Director, Nigel Ferguson, was pleased with the news. He said:

“The receipt of the Ministerial Decree to award the Mining Licence is leading to a watershed moment for AVZ and our partners, with the official award of the Mining Licence from CAMI expected in a matter of days.

This paves the way for AVZ to start developing what is arguably one of the most important new mining projects in the world that will significantly contribute to the global green energy transition, while also uplifting the lives of the Congolese people who will contribute and receive sustained benefits from the Project for many decades to come.”

The post AVZ share price rockets 19% on ‘watershed moment’ appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Friday
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why is it such a mixed day of trade for ASX lithium stocks?
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

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 Macquarie Group Ltd (ASX: MQG) share price zoomed ahead of the ASX big four bank shares over the last few months, but some experts think its outlook is less certain.

Shares in the home-grown investment bank jumped over 13% in the past two months and closed at $203.43 yesterday.

Macquarie Group share price beating its peers

This compares with the National Australia Bank Ltd (ASX: NAB) share price gain of just under 11%. NAB was the strongest performer among the big four banks.

The Commonwealth Bank of Australia (ASX: CBA) share price added 8%, while the Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) share prices advanced around 6% each.

Outlook getting cloudier

But this could be as good as it gets for the Macquarie Group share price, according to UBS. The broker initiated coverage on its shares with a neutral recommendation and warned of downside risk to its earnings per share (EPS).

“One of the attractions of the MQG investment case is the diverse product and country mix split between annuity and risk based earnings streams, adding stability to the group’s earnings profile,” said UBS.

“MQG’s revenue in the Macquarie Capital division (20% of group) appears elevated.”

Macquarie’s earnings risk building

This is because of investment income and gains on asset sales. Further, high merger and acquisition advisory fees and lower credit impairment charges also bolstered the division’s revenue.

“As activity levels stabilize, we anticipate some revenue normalisation and a high water mark level for division profits,” added UBS.

“CGM (40% of group) also has revenue streams which are episodic and difficult to forecast.”

CGM is the group’s Commodities and Global Markets division. It is benefitting from very strong commodity prices and high levels of volatility due to the war in Ukraine and other COVID-induced supply chain disruptions.

Reasons to like the Macquarie Group share price

However, UBS does acknowledge several positives that could attract investors to the Macquarie Group’s share price.

“The group’s value proposition to stakeholders is differentiated among global [investment banks], with a leading position in infrastructure investments and renewable energy, complimented [sic] by its top 3 global commodities franchise,” said the broker.

“Tailwinds in alternative assets, integrated capabilities in renewables advisory, and a history of stable earnings and prudent capital management are all positives.”

What are Macquarie shares worth?

Unfortunately, from UBS’ perspective, the good news is already priced into the Macquarie Group share price.

The broker’s 12-month price target on the shares is $205 a pop. That leaves little room for price appreciation.

On the other hand, not all brokers think the upside for Macquarie is lacklustre. JP Morgan is urging investors to buy Macquarie Group shares ahead of the company’s profit results on Friday.

In early trade on Wednesday, Macquarie shares are climbing nearly 1% at $205.42.

The post What is the outlook for the Macquarie share price in May? appeared first on The Motley Fool Australia.

More reading

• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• Can ASX 200 banks live up to the $11 billion ‘big expectation’ when they report this month?
• Own Macquarie shares? Here’s what to watch when the bank reports this week
• Why is the Macquarie share price getting hammered today?
• Own the Vanguard Australian Shares High Yield ETF? Here’s what you’re invested in

Motley Fool contributor Brendon Lau has positions in Australia & New Zealand Banking Group Limited, Commonwealth Bank of Australia, Macquarie Group Limited, National Australia Bank Limited, and Westpac Banking Corporation. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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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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 leading electric vehicle maker Tesla (NASDAQ: TSLA) jumped in morning trading on Tuesday, up 1.5% as of 12:04 p.m. ET.

You may be able to thank government officials in China for that.

So what

The mega-city of Shanghai, as you’ve probably heard, suffered an outbreak of COVID-19 in March. In response, the government imposed strict quarantines during March and April, which — among other things — essentially shut down production at the city’s factories. Tesla’s Shanghai Gigafactory went dark for 22 days.

The good news is that, according to news reports, this latest coronavirus outbreak now appears to be under control in Shanghai. PBS reported on Monday that new cases in the city fell below 10,000 per day over the weekend, and government authorities are beginning to relax restrictions on movement in the metropolis.    

However, the better news came from Reuters which, in an exclusive report, says it’s seen a letter from Tesla to the Shanghai government that confirms that the government had assisted Tesla in restarting production, even as the wider lockdown remained in place. The city government provided decontamination teams to help sterilize the factory, and buses to shuttle its 6,000 workers from home to the factory and back to reduce the chances that they would get infected.  

Now what

The Shanghai Gigafactory resumed production on April 19. Granted, Reuters notes that, by its calculations, Tesla lost about 50,000 vehicles’ worth of production during the 22 days it was shut down. But here’s the thing:

That actually sounds like good news to me.

Consider: Tesla’s Shanghai Gigafactory produced 484,100 vehicles in 2021. The company has said it wants to expand production toward one million cars a year. But if a 22-day shutdown — about 6% of the year — prevented the production of 50,000 Teslas, this implies that Gigafactory Shanghai is now capable of producing as many as 830,000 cars annually.

In short, the real story here wasn’t that China helped out Tesla. It was that Tesla already has greater production capacity in China than many investors may realize. That’s good news for the automaker, and a good reason for Tesla’s stock price to be rising Tuesday.

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

The post Why Tesla stock popped on Tuesday appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock dropped, then popped on Monday
• Elon Musk just sold $5.6 billion of Tesla shares. What’s the deal?
• Why Tesla stock is bouncing back today
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• Why Dogecoin is rising today

Rich Smith 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 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.

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

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The JB Hi-Fi Limited (ASX: JBH) share price is falling on Wednesday.

In morning trade, the retail giant’s shares are down 2.5% to $51.26.

Why is the JB Hi-Fi share price falling today?

The JB Hi-Fi share price is falling today despite the release of a strong sales update.

According to the release, the retailer continued to experience heightened customer demand and strong sales growth during the third quarter of FY 2022.

The JB Hi-Fi business was once again the star of the show, reporting total sales growth of 11.9% year on year during the quarter. This was underpinned by an 11.1% jump in comparable store sales growth.

In light of this strong quarter, the JB Hi-Fi Australia business’ year to date sales are now up 1.9% year on year.

Over in New Zealand, the JB Hi-Fi business delivered a much-improved performance. It reported a 4.8% increase in sales during the third quarter. This has reduced JB Hi-Fi New Zealand’s year to date sales decline to just 1.8%.

Finally, The Good Guys business was also on form during the quarter. It reported a 5% increase in comparable store sales, bringing its total quarterly sales growth to 5.5% year on year. This means that year to date sales are now up 1.1% over the prior corresponding period.

What about the fourth quarter?

Pleasingly, JB Hi-Fi’s sales momentum has continued into fourth quarter. Though, management hasn’t provided any numbers. Nor has it provided any guidance for the full year.

It commented: “Whilst the Group is pleased with the continued sales momentum, the end of financial year remains an important trading period. In view of the ongoing disruption to stock availability and operations arising from Covid-19 and other local and global uncertainties, the Group does not currently consider it appropriate to provide FY22 sales and earnings guidance.”

Judging by the JB Hi-Fi share price performance today, it appears that some investors were expecting an even stronger update or more colour on its margins.

The post JB Hi-Fi share price falls despite strong Q3 sales growth appeared first on The Motley Fool Australia.

More reading

• Here are the ASX retail share winners and losers of the last quarter
• 2 high-yielding ASX 200 dividend shares rated as buys by brokers
• Why is the JB Hi-Fi share price having such a rough start to the week?
• How retirees can maximise returns from ASX dividend shares: fund manager

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 Medibank Private Ltd (ASX: MPL) share price has risen by around 5% over the past month. But can the leading private health insurer’s shares keep going up?

Medibank has materially outperformed the S&P/ASX 200 Index (ASX: XJO), which has fallen by around 3% over the last month.

This week, the company gave a presentation at the Macquarie Australia conference and provided an update on its outlook for FY22.

Medibank presentation

The company says that private health insurance participation growth remains “strong”.

It notes there has been a shift in customer attitudes towards private health insurance. And by the direction of the Medibank share price, it appears to be a positive one.

Medibank says that private health insurance is an improving proposition given concerns about public hospital wait times. Further, it is reportedly seen as “more affordable and better value”, and consumers continue to invest in their health and wellbeing.

The ASX share points to six consecutive quarters of industry policyholder growth. The rolling 12-month policyholder growth increased from 2.68% in September 2021 to 2.79% in December 2021.

‘New to industry’ and younger cohorts are “major contributors” to policyholder growth, which Medibank says are positive signs for industry sustainability. There has also been a “significant” improvement in policyholder lapses.

Outlook for the private health insurer

For those interested in the Medibank share price, here’s what the company expects in the coming months.

Medibank says it expects industry participation growth to be higher than pre-pandemic levels over the medium term.

Growth will be supported by population growth, continuing shifts in consumer attitudes towards health and “strong bipartisan support” for the role of private health.

However, Medibank says that affordability is still key for growth. It has deferred its April 2022 premium increase of 3.1% for six months.

The ASX share says it’s on track to achieve resident policyholder growth of between 3.1% to 3.3% in FY22. It also continues to gain market share, which increased to 27.36% as at 31 December 2021. This was a rise of 14 basis points over the 2021 calendar year.

As at 30 April 2022, the financial year-to-date resident policyholder growth was 2.3%.

The company sees further growth opportunities. Target markets include corporate and regional customers. It thinks it can improve retention, particularly in its AHM business. It points to productivity and cost discipline, which can provide opportunities to invest for growth.

The ASX share is also targeting ‘inorganic’ growth.

The underlying average net claims expense per policy unit is forecast to be around 2.3% among resident policyholders in FY22.

Finally, the FY22 health insurance management expenses are expected to be around $530 million. The FY22 productivity target of $15 million in health insurance management expenses is “on track”.

Medibank share price targets

Two of the recent ratings from brokers have been positive.

Ord Minnett rates the business as ‘accumulate’ with a price target of $3.50, implying an upside of around 10%.

Likewise, Credit Suisse rates Medibank as ‘outperform’, with a price target of $3.50. This broker thinks that the current environment is supportive for Medibank earnings.

On Ord Minnett’s numbers, the Medibank share price is valued at 21x FY22’s estimated earnings with a projected grossed-up dividend yield of 5.3%.

Thus, using Credit Suisse numbers, the Medibank share price is valued at 20x FY22’s estimated earnings with a projected grossed-up dividend yield of 6.25%.

The post The Medibank share price has leapt 5% in a month. Could it be on the comeback trail in May? appeared first on The Motley Fool Australia.

More reading

• This ASX 200 healthcare share has a fully franked dividend yield over 4% right now
• Why is the Medibank share price trailing NIB over the past year?
• Why did the Medibank share price go backwards in March?

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 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 Temple & Webster Group Ltd (ASX: TPW) share price is on the slide on Wednesday.

In morning trade, the online furniture and homewares retailer’s shares are down 4.5% to a 52-week low of $5.16.

Why is the Temple & Webster share price falling?

Investors have been selling down the Temple & Webster share price this morning after the ecommerce company released a trading update and announced the launch of its new online business.

In respect to the latter, the company has now officially launched its The Build business and website. This will see Temple & Webster go head-to-head with Bunnings and Mitre 10 online in the $26 billion home improvement market

Temple & Webster is launching The Build with an initial range of more than 20,000 products across 39 categories. These include bathroom fixtures, kitchen fixtures, indoor and outdoor lighting fixtures, ceiling fans, blinds & curtains, and wallpaper.

New categories such as flooring and tiling, outdoor living and landscaping, tools and building/renovation equipment will be added in the coming months.

Management notes that home improvement spending online is significantly lower than other markets. It estimates that only 4% is online in Australia at present, whereas the UK has an online penetration rate of 25%.

Though, it will be some time until the business is profitable, which could be what is weighing on the Temple & Webster share price today.

Management is targeting The Build to make a material revenue contribution and be EBITDA positive in FY 2026. In the meantime, an initial investment across FY 2022 and FY 2023 of ~$10 million will be made to support marketing, people and working capital.

Trading update

Temple & Webster revealed that its second half performance has been in line with management’s expectations.

It revealed that revenue for the period 1 January to the 30 of April was up 23% on the prior corresponding period. This is slightly lower than the 26% growth that was previously reported for 1 January to 6 February.

In addition, it advised that it continues to expect an EBITDA margin of 3% for FY 2022, which is in line with its 2% to 4% guidance range. Though, this guidance excludes The Build business.

The post Temple & Webster share price tumbles despite launching into $26bn home improvement market appeared first on The Motley Fool Australia.

More reading

• 3 fantastic ASX growth shares with major upside potential
• 2 beaten-up ASX shares with massive upside: experts
• 2 great ASX shares to buy in April: experts
• Is this why the Temple & Webster share price surged over 6% 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 positions in and has recommended Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group 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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So it’s finally happened.

After more than 11 years, the Reserve Bank of Australia has increased the cash rate.

Incredibly, there was an entire generation of investors and homeowners who have never directly experienced interest rates going up. 

With more rate rises expected later this year, it’s an uncomfortable feeling that they will have to get used to.

“We expect another increase in the cash rate in June (probably of 0.25% but it could be up to 0.4%), a rise in the cash rate to 1.5% by year end, and to 2% next year,” said AMP Ltd (ASX: AMP) chief economist Dr Shane Oliver.

For those reading The Motley Fool, I’m sure you’re keen to find out what the consequences are for ASX shares.

While no one has a 100% accurate crystal ball, some experts have looked back at past situations to figure out what might happen in 2022.

Rates and shares: not a simple relationship

Intuitively, one might think rising rates will cause the share market to fall. People have less money to spend or invest, so less demand for goods, services, and stocks.

But historically it hasn’t been as simple as that, according to Oliver.

“There is an ambiguous relationship between rising interest rates and the Australian share market,” he said on the AMP blog.

“While higher rates place pressure on share market valuations by making shares appear less attractive, early in the economic recovery cycle this impact is offset by still improving earnings growth.”

Certainly, on some occasions, share prices have fallen with increasing rates. But other times, the All Ordinaries Index (ASX: XAO) has done the opposite.

“For example, between 2003 and 2007, shares went up as interest rates rose, with shares only succumbing in 2008 after multiple rate hikes over several years and with the GFC.”

ASX shares to tread water in 2022

Oliver suspects 2022 will be one of those times when ASX shares will not plunge because of interest rates alone.

“Firstly, rising rates from a low base are normally not initially bad for shares, as they go with improving economic conditions,” he said.

“Secondly, rising interest rates are only really a major problem for shares when rates reach onerous levels (i.e. above “normal”), contributing to an economic downturn.”

Also, even if the RBA cash rate hits 1.5% by the end of the year, returns paid out of bank deposits would still be less than 2%. This would mean plenty of demand for shares from investors seeking decent yields.

“Finally, given the high short term correlation between Australian shares and US shares, what the [US Federal Reserve] does is arguably far more important than local interest rates,” said Oliver.

“And this is perhaps a bigger risk given higher inflation in the US.”

While rising rates may not bring down the stock market on its own, Oliver admitted it will be a bumpy ride.

“An environment of rate hikes will likely result in a continued period of volatility for shares.”

Has the RBA lost credibility?

T Rowe Price Group Inc (NASDAQ: TROW) associate portfolio manager Scott Solomon felt blindsided by the magnitude of RBA’s move on Tuesday.

“The Reserve Bank of Australia pivoted [to] hawkish and did so with a bang, raising rates to 35 basis points, which was higher than what [the] market anticipated,” he said.

“This comes after more than 12 months of dovish commentary — including a very firm view of no hikes until 2024 — and underwhelming economic forecasts.”

For Solomon, the central bank has lost credibility because of this.

“It’s very difficult to foresee RBA’s future actions based on its statements and forecasts,” he said.

“The market had been screaming about factors that would imply and demand potential rate hikes and the RBA had in the past responded with a call for patience, and grim economic forecasts followed by reminders of how inflation is different in Australia.”

He added the RBA must now further address market concerns to calm a volatile situation.

“I think what the market wants is an answer to what caused the RBA to finally flip the switch.”

The post What rising interest rates can do to ASX shares appeared first on The Motley Fool Australia.

More reading

• The AMP share price soared 21% in April. Here’s why
• These were the best performing ASX 200 shares in April
• These were the best performing ASX 200 shares last week
• 3 ASX All Ordinaries shares that soared more than 9% today
• Here are the top 10 ASX shares today

Motley Fool contributor Tony Yoo 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 A2 Milk Company Ltd (ASX: A2M) share price has been in the trenches for close to 2 years now.

It’s tumbled around 76% since July 2020 and hasn’t shown many signs of easing yet. In fact, it slumped another 15.5% last month.

But could the future be brighter for the S&P/ASX 200 Index (ASX: XJO) milk and infant formula company? Let’s take a look at what experts are expecting from the A2 Milk share price in the future.

The A2 Milk share price was trading at $4.34 at Tuesday’s close.

What does the future hold for the A2 Milk share price?

The former market darling has been plagued by a slew of issues over the last few years, starting with its changed position in the Chinese market. That’s recently been exacerbated by the country’s declining birth rate.

A2 Milk also outlined continued margin pressures and supply chain issues born from COVID-19 in its most recent half year results.

But such gloom could soon be in the company’s rearview mirror according to some experts.

Its expansion in New Zealand and the United States, as well as its entrance into Malaysia, Singapore, and Vietnam has Catapult Wealth’s Tim Haselum excited, reports The Motley Fool Australia’s Tony Yoo.

Further, Haselum thinks merger and acquisition activity could be on A2 Milk’s horizon due to its “strong net cash position”.

Meanwhile, Credit Suisse is warning lockdowns in China could impact the company’s bottom line in the short term. Though, the broker expects it could grow its market share in future years, my Foolish colleague Tristan Harrison reports.

It has slapped the company with a neutral rating price target of $5.15 to $5.75 – representing a potential upside of 34%.

Other brokers have varied targets for the A2 Milk share price. Citi has slapped it with a target of $4.80 while Morgans expects it to reach $6.39.

A2 Milk’s management predicts the second half of this financial year will be a better one for the company’s revenue.

However, that likely won’t be reflected in its earnings, with the extra cash earmarked to go to the company’s growth strategy.

The post What’s the outlook for the A2 Milk share price in May? appeared first on The Motley Fool Australia.

More reading

• The A2 Milk share price plunged 15% in April. What went wrong?
• Despite continuing woes in China, here’s what to like about A2 Milk shares
• It’s time to buy these 2 fallen ASX shares again: expert
• Is there still hope for the A2 Milk share price in 2022?
• These were the worst performing ASX 200 shares last week

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 A2 Milk. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rio Tinto Limited (ASX: RIO) share price fell by 7% in April. What could happen in May 2022?

Well, at the time of writing, it’s down another 1% since the beginning of the month.

The company reported its 2022 first-quarter production numbers a couple of weeks ago. So, let’s look at what the company announced.

Rio Tinto’s first quarter

The ASX mining company revealed that Pilbara iron ore production was 71.7mt for the quarter. That represented a decline of 6% year on year and a 15% decline quarter on quarter.

Year on year, Rio Tinto’s bauxite production was flat at 13.6mt, aluminium production was down 8% to 736kt, mined copper was up 4% to 125kt, titanium dioxide slag production was down 2% to 273kt, and Iron Ore Canada (IOC) iron ore pellets and concentrate production was up 3% to 2.4mt.

Rio Tinto admitted that the first quarter was “challenging”. It said that “ongoing mine depletion was not offset by mine replacement projects, with delayed commissioning of Gudai-Darri“. Gudai-Darri’s first ore is still forecast for the second quarter of 2022.

The ASX mining share also blamed ongoing commissioning challenges at the Mesa A wet plant that continue to impact the production ramp-up at Robe Valley.

However, the full-year shipment guidance remained unchanged.

Comments on the iron ore market

One of the biggest influencers on the Rio Tinto share price can be the iron ore price.

The mining giant said that iron ore prices had been volatile since the start of the year, with the Platts 62% Fe index up 33% to US$158 per dry metric at the end of the first quarter.

Rio Tinto said that since February 2022, “supply concerns due to the war in Ukraine has outweighed muted demand growth and a crackdown on speculative trading behaviour in China. China’s economy is getting a boost with infrastructure spending, but COVID-19 lockdowns pose downside risks to near-term construction activity.”

The miner is expecting commodity demand to be underpinned by the global energy transition, which is creating new demand for its production and near-term Chinese policies that “are becoming more growth focused.”

However, Rio Tinto noted that rising interest rates globally pose risks to economic growth. Other risks include a prolonged war and other geopolitical tensions, and extended labour and supply shortages.

What is the outlook for the Rio Tinto share price?

No one can know what a share price is actually going to do, but analysts have a guess where they think share prices will be in 12 months from now.

Some brokers are confident on Rio Tinto shares. The broker Macquarie rates Rio Tinto as a buy, with a price target of $140. That’s a potential upside of around 25%. It’s optimistic because of the performance of the iron ore price.

Citi is another broker that rates it as a buy, with a price target of $135. Citi is also confident because of the strong iron ore price.

However, UBS is only neutral on the Rio Tinto share price. The price target is $104, implying a possible decline of 7%. It thinks it will need a good performance over the rest of the year to meet the guidance.

The post After dropping 7% in a month, can the Rio Tinto share price stage a comeback in May? appeared first on The Motley Fool Australia.

More reading

• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• What’s the outlook for ASX 200 mining shares in May?
• The Rio Tinto share price delivered a disappointing performance in April. Here’s why
• ASX 200 mining shares just had their best trading day in 5 weeks. What’s next?
• Why is the Rio Tinto share price rebounding strongly on Thursday?

Citigroup 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. 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 interest rates now heading north, it may be worthwhile taking a look at ASX shares representing retailers Australians just can’t live without.

After all, even if the economy slows down, consumers still have to eat food, wear clothes and have a drink.

The analysts at Morgans certainly thinks so, and are currently pretty keen on two particular retailer stocks:

‘A good entry point for longer term investors’

Wesfarmers Ltd (ASX: WES) owns an enviable stable of retail brands in Australia — Bunnings, Kmart, Target and Officeworks.

The share price has taken a beating just recently though, dropping more than 17% this year so far and almost 25% since August.

According to Morgans analyst Andrew Tang, this is a blessing in disguise.

“We see the recent pullback in the share price as a good entry point for longer term investors,” he said in Morgans Best Buys memo for May.

“The company is run by a highly regarded management team and the balance sheet is healthy.”

Staff shortages are admittedly a challenge for every business right now, but especially so for one of Australia’s biggest employers.

But Tang’s not worried about that in the long run.

“The core Bunnings division (>60% of group EBIT) remains a solid performer as consumers continue to invest in their homes.”

Other analysts are torn about Wesfarmers shares.

According to CMC Markets, nine out of 15 are on the fence, labelling it a hold. There are four votes each on the buy and sell sides.

The retail giant does hand out a 3.42% dividend yield, as a nice sweetener for those who take the plunge.

Are Australians drinking at home or the pub?

Endeavour Group Ltd (ASX: EDV) runs big retail brands like Dan Murphy’s and BWS.

But it also has a hospitality division, which operates a large network of pubs around Australia.

While the retail business went gangbusters during COVID-19 lockdowns, Tang admits the hotels division suffered from low patronage.

But that just gives it plenty of upside for the coming period.

“With the Australian economy now largely reopened and we move into a ‘living with COVID’ environment, this should be positive for the hotels outlook.”

Endeavour did cop a short-term blow to its stock price on Tuesday as it announced that the managing director for Dan Murphy’s had departed to return to the UK.

The share price is still up more than 12% so far this year, and a pleasing 26.4% higher than it was 12 months ago.

Much like Wesfarmers, the wider analyst community is also divided on Endeavour.

According to CMC Markets, four out of 13 rate it as a strong buy with one other supporting it as a moderate buy. Four analysts each label it as hold and sell respectively.

The post 2 retail ASX shares Morgans rates as a buy now appeared first on The Motley Fool Australia.

More reading

• Is the Wesfarmers share price a buy or a sell in May?
• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• Endeavour share price struggles amid Dan Murphy’s leadership resignation
• Why did the Wesfarmers share price lag the ASX 200 in April?
• Analysts name 2 ASX 200 dividend shares to buy next week

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

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