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S&P/ASX 200 Index (ASX: XJO) healthcare shares are widely gaining today.

Together, the 12 ASX 200-listed healthcare shares are up an average of 0.6%, with 7 in the green and 5 in the red.

This comes as the broader index is under pressure amid fears the new Omicron COVID-19 variant could derail the global economic recovery and Australia’s own nascent reopening plans. At time of writing the ASX 200 is down 0.4%, having recovered from earlier losses of 1.2%.

Today’s top 3 ASX 200 healthcare share performers

Leading the ASX 200 healthcare shares higher is Ansell Limited (ASX: ANN).

At time of writing, the Ansell share price is up 3.7% to $33.07 per share. Ansell provides health and safety protection solutions. And with the rise of the new Omicron variant, it may be the company’s strong focus on gloves that’s seeing investors hit the buy button.

Coming in at number 2 today, is Healius Ltd (ASX: HLS). The Healius share price is up 2.7% to $4.88 per share. Healius has a large network of pathology laboratories, collection centres, medical centres, day hospitals and imaging sites throughout Australia.

Also well into the green today, and coming in as the third best ASX 200 healthcare share performer, is Sonic Healthcare Limited (ASX: SHL). The Sonic share price is up 2.48% to $42.63 per share. Sonic is a global pathology provider with a significant footprint in diagnostic imaging within Australia.

With investors jittery about emerging COVID variants, all 3 shares are handily outperforming the index today.

What’s the deal with Omicron?

The new COVID variant officially received its Greek designation over the weekend. Last week, it still held the more obscure label of B.1.1.529. But the World Health Organization’s (WHO) decision to label the variant gives some credence to its potential to throw a spanner into the world’s grand reopening and economic recovery plans.

The virus appears to have mutated in South Africa and has already spread into parts of Europe, Asia, and the United States. Two cases have been reported in Australia. The travellers, returning from Africa, tested positive and have been quarantined.

There’s no evidence yet that Omicron is more deadly than Delta, but early research indicates it may be more transmissible.

Australia has joined a growing list of nations to temporarily ban travel from South Africa and neighbouring nations.

While this has seen ASX 200 travel shares hammered over the past 2 trading days, many ASX 200 healthcare shares, like the 3 listed above, have seen increased investor interest.

How have these 3 ASX 200 healthcare shares been performing this year?

The Sonic Healthcare share price has gained more than 29% in 2021.

Healius shares just edge out these gains, up 30% year-to-date.

Ansell has been trending lower since July. Despite today’s bounce, shares in the ASX 200 healthcare company are down 5% this calendar year.

The post ASX 200 healthcare shares jump amid Omicron fears appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps
• Why a leading broker is bullish on these 3 ASX shares
• Analysts name 3 ASX shares to buy now
• Top brokers name 3 ASX shares to buy today
• 2 ASX 200 shares that could be top buys for growth

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 Ansell Ltd. and Sonic Healthcare Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AMP Ltd (ASX: AMP) share price has been the talk of the town in recent years.

It tumbled as allegations of misconduct were hurled at – and admitted to by –the financial services provider during the Financial Services Royal Commission in 2018.

Since its highest close in March 2018, the AMP share price has tumbled 81% to trade at $1.01 at the time of writing.

So, what might AMP have to do to boost its stock into recovery mode? The Motley Fool Australia analyst, Ed Vesely sat down with our chief investment officer, Scott Phillips last month to discuss just that.

The entirety of the pair’s chat can be found here, and evaluations of plenty of other stocks can be found on The Motley Fool Australia’s YouTube channel, here.

Otherwise, readers can find a breakdown of their conversation below.

A quick note before we start: Vesely and Phillips discussed AMP more than a month ago. Some of the specifics may have changed in the time since but the fundamentals remain valid.

The good and the bad of AMP shares

The Motley Fool Australia’s analysts often chat with Phillips about both the good and the bad of a stock.

However, Vesely only had a few positives to note about AMP and its share price.

Firstly, the company’s stock is cheap. Though, that doesn’t mean it’s good value. It’s also a renowned brand with strong historical appeal.

Another thing Vesely likes about AMP is its banking division. The company’s bank provides a significant portion of AMP’s revenue and a large share of its profits.

That’s just about all the company is doing right, according to Vesely, who noted:

I think that tells you how good AMP bank is, but I think it also tells you how poorly the rest of the business has actually performed.

The rest of AMP’s business is made up of its wealth management division, AMP Capital, and its New Zealand business.

The wealth management section – which includes its financial advisory services, platform administration, and managed investment products – was the division that copped the most heat during the Royal Commission.

Now, AMP’s investment management firm, AMP Capital has involved itself in AMP’s current troubles. Vesely stated:

The source of the problem for AMP [is it’s] got the investment management side of things trying to push their products through the investment advisory network, which has been, of course, AMP aligned and AMP focused.

Additionally, it’s not just in recent years that AMP has been underperforming.

Between 1999 and 2017, AMP’s revenue dipped by 33%.

Vesely also stated that since 2018, AMP’s revenue has dropped another 80%.

So, what can AMP do to right its slump?

Still, there might be a way to boost AMP’s shares back into the green. Here’s what Vesely said:

This is a company that financially, operationally, and I suppose from a branding perspective, is really on its knees right now…

He noted that there is potential that AMP’s management team and its relatively new CEO, Alexis George can improve the company’s business. However, Vesely warned:

There’s a very real chance that investment outflows in the business will continue to go in the wrong direction…

He also stated that new competition from advisors like Hub24 Ltd (ASX: HUB) could be dire for AMP: 

[Investors] can use those platforms, they’re independent, they can provide fearless advice and say: ‘this is what we do, we don’t have any products or any managed funds to sell you’, so that’s a good thing and I think that’s becoming more and more attractive, and if the likes of AMP have to compete on price now, and they’ve got all that baggage with the history through the Royal Commission, I think it’s going to be a hard stop for a number of years yet.

Finally, Vesely had some potentially contentious advice for AMP:

I personally think, Scott, and maybe many people won’t agree, I think that the most value that shareholders can get out of the business today would be if management decide to actually sell off each of the segments, including AMP Bank. They should actually return that capital to shareholders and just wind it up… I just think that there’s probably a lot more potential for each of these businesses to be operating under different names.

The opinions expressed in this article were as at 8 October 2021 and may change over time.

The post What is the AMP (ASX:AMP) share price looking like? Motley Fool Analyst Ed Vesely weighs in appeared first on The Motley Fool Australia.

More reading

• AMP (ASX:AMP) share price on watch after revealing $325 million impairment charge
• How is the AMP (ASX:AMP) share price performing against the financial sector in 2021?
• These 3 ASX 200 shares are topping the volume charts on Monday
• ASX 200 (ASX:XJO) midday update: Lithium miners jump, Flight Centre tumbles
• AMP (ASX:AMP) share price lifts as company retains control of office fund

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. Motley Fool contributor Edward Vesely has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Hub24 Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Shares in Tuas Ltd (ASX: TUA) jumped from the open following a company announcement. The Tuas share price is currently 5.81% higher at $1.64.

Tuas has been catching bids today after announcing its subsidiary, TPG Singapore, has been awarded additional 5G network spectrum by Singaporean authorities.

Why is the Tuas share price charging higher?

Tuas announced that in the recent “quantity stage” of the 2.1 GHz spectrum auction conducted by the Singaporean authorities, TPG Singapore was provisionally awarded 10 MHz of spectrum in the 2.1 GHz band for a price of $31.72 million.

The total spectrum will be awarded in 2 paired lots of 5 MHz. An assignment stage of the auction is yet to occur, per the release. This will determine the position of the lots within the spectrum band.

Moreover, the licence of the 2.1 GHz spectrum is 15 years in duration. Providers require the licence for standalone 5G network use. TPG Singapore “intends to move quickly to commence rolling out 5G equipment to make use of this spectrum.”

Tuas is the 100% owner of TPG Singapore. That’s after the latter was spun off from TGG Telecom Ltd when it merged with Vodafone Hutchison Australia.

The announcement comes amid the Tuas share price climbing 90% in the past 3 months. It reached a 52-week high, before blowing off some froth and settling at its current price.

This upward swing has some experts constructive on Tuas. For instance, portfolio manager at Wilson Asset Management Tobias Yao was recently quoted as saying, “The reason we like TPG Singapore is the fact that we think the value offering is very, very attractive.”

Yao added that Wilson Asset Management expects Tuas to gain market share in Singapore and expand into other parts of Southeast Asia.

Speaking on today’s announcement, Richard Tan, CEO of TPG Singapore, said:

We are delighted that we were able to secure this important 5G band which is well supported by the global device ecosystem. Our customers can look forward to very competitively priced 5G services when we embark on our network upgrade, commencing in the first half of 2022.

Tuas share price snapshot

In the past 12 months, the Tuas share price has gained 140%. It has rallied 118% just this year to date.

Over the past month, Tuas shares are up 12% and have started the week on a positive note.

Tuas shareholders are well ahead of the S&P/ASX 200 Index (ASX: XJO) return of around 10% in the past year.

The post Tuas (ASX:TUA) share price jumps 5% on acquisition news appeared first on The Motley Fool Australia.

More reading

• Experts say Tuas (ASX:TUA) share price is a buy even after its 50% surge

The author Zach Bristow has no positions 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 Bruce Jackson.

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The Fortescue Metals Group Limited (ASX: FMG) share price is currently up around 2%. This is on the day on a high level of ASX share market volatility relating to the Omicron COVID-19 variant.

Despite the volatility, there is some company-specific news about Fortescue today.

Fortescue links up with a digital auction platform

According to reporting by the Australian Financial Review, the large iron ore miner is planning to sell some of its iron ore through the GLX Connect platform, which is a commodity trading service.

This is the same platform that has enabled Pilbara Minerals Ltd (ASX: PLS) to achieve some very high prices for sale of its lithium.

If the deal goes ahead, then Fortescue will also become a shareholder in GLX Digital, the owner of the auction platform. The iron ore miner will initially get less than 1% of the shares, but could get more as it conducts auctions on the platform.

One of the attractions of GLX Connect is that it empowers the seller by allowing it to design and manage its own auction terms. It also allows the seller to “manage counter-party risk by choosing who is invited to participate in auctions.”

The participants in the auction are supposedly attracted to the precise terms, including the volume and delivery schedules.

The AFR reported that access to the platform will cost Fortescue US$100,000 a year for three years, though the deal hasn’t been signed yet.

However, at least to start with, Fortescue is only going to sell a small amount on the platform.

Time will tell whether this has an impact on the Fortescue share price over the longer-term.

A spokesman for the iron ore miner said to the AFR:

Fortescue is exploring the potential to trial new platforms to complement our existing sales and marketing channels. The majority of Fortescue’s products will continue to be sold via existing contractual seaborne arrangements, as well as our portside sales entity FMG Trading Shanghai.

Other initiatives to get a better price

It was also reported that Fortescue is now selling at least six different iron ore products, with one of those being a higher grade offering. When the Iron Bridge project is finished, that is expected to lead to another, higher quality product.

The AFR reported that Fortescue is working at Chinese ports to sell smaller volumes of iron ore to new, smaller customers that may not want to buy the same volume as Chinese steel mills. Some of these deals are being done in Chinese currency, rather than US dollars.

Is the Fortescue share price good value?

Opinions are mixed on the business. One of the latest opinions comes from Credit Suisse, which is ‘neutral’ on the business but the price target is $13.50 – approximately 20% lower than today. The broker is expecting the iron ore price to hit a low in December.

Then there’s Morgan Stanley which rates Fortescue as a sell/underweight with a price target of just $12.50 on concerns of a lower iron ore price and a bigger discount for Fortescue’s lower grade iron.

One of the most positive brokers about the business is Macquarie Group Ltd (ASX: MQG) with a buy/outperform rating and a price target of $21.

The post Could this help Fortescue (ASX:FMG) mitigate the risks of falling iron ore prices? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• When might Fortescue (ASX:FMG) Future Industries become profitable?
• These were the best performing ASX 200 shares last week
• Is the Fortescue (ASX:FMG) dividend really worth 28% in November?
• Here are the top 10 ASX shares today

Motley Fool contributor Tristan Harrison owns shares of Fortescue Metals Group Limited. 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 Bruce Jackson.

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The PayGroup Ltd (ASX: PYG) share price was well into the green in early morning trade, up 2.2%. It’s since given up those gains and is currently down 2.2%

PayGroup shares may be getting impacted by the wider Omicron variant led market selloff, which is seeing the All Ordinaries Index (ASX: XAO) down 0.6% at time of writing.

Below, we take a look at the Software as a Service (SaaS) company’s half year results for the 6 months ended 30 September (1HFY22).

What half year results were reported?

The PayGroup share price is wobbling despite the company reporting an 83% increase in statutory revenue of $12.8 million.

New contracts signed reached a record $9.6 million, up 78% on the prior corresponding period.

Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.5 million, excluding one-off expenses and acquisition costs, slipped from $1.8 million in 1HFY21. PayGroup said that this figure incorporates continued investment in its platform capabilities for future growth.

The company said that it is currently servicing more than 2,500 enterprise customers.

Commenting on the half year results, PayGroup’s managing director Mark Samlal said:

Our strong operational performance and continued investment in our platform underpins our ability to scale the payroll business, expand margins and execute on key monetisation opportunities going forward.

We have made significant progress to date and are excited by the organic opportunities in FY22 and beyond. This is reflected in the growth of our current pipeline, which is 6 times larger than 12 months ago. We are highly confident that we have the right foundations in place and remain focused on delivering on key organic opportunities to drive sustainable long-term growth.

Samlal also reaffirmed the company’s guidance. “We have affirmed FY22 ARR [annual recurring revenue] guidance of at least $37 million and provided FY22 statutory revenue guidance of $26 million, which represents more than 95% of the exit ARR announced at FY21,” he said.

PayGroup share price snapshot

The PayGroup share price has struggled in 2021, down 28%. That compares to 10% year-to-date gain posted by the All Ords.

Over the past month, PayGroup shares are down 16%.

The post PayGroup (ASX:PYG) share price wobbling on half year revenue surge appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• With the IAG (ASX:IAG) share price trading around decade-lows, is now the time to buy?
• Succession: What’s happening with the search for the next Westpac (ASX:WBC) boss?
• Here’s why this top broker is tipping 40% upside for the AGL (ASX:AGL) share price
• ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps

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 Bruce Jackson.

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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:

Adairs Ltd (ASX: ADH)

According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on this homewares retailer’s shares to $4.80. The broker notes that Adairs is acquiring Focus on Furniture for $80 million. Morgans is pleased with the purchase and expects it to complement its core business and provide network expansion opportunities. All in all, the broker feels Adairs’ shares are cheap at the current level, particularly given the company’s attractive growth and dividend profile. The Adairs share price is trading at $3.66 today.

Aristocrat Leisure Limited (ASX: ALL)

A note out of UBS reveals that its analysts have retained their buy rating and $53.60 price target on this gaming technology company’s shares. UBS has been looking at Aristocrat’s market position and notes that it is outperforming other gaming machine manufacturers significantly with four of the top five premium cabinets in the market. This bodes well for its future growth. The Aristocrat share price is fetching $44.72 this afternoon.

Siteminder Ltd (ASX: SDR)

Analysts at Ord Minnett have commenced coverage on this hotel commerce platform provider’s shares with a buy rating and $7.36 price target. According to the note, the broker is a fan of the company and its evolution towards offering a range of global solutions to the hotel market. All in all, the broker believes Siteminder is well-placed to deliver strong revenue growth over the coming years. The Siteminder share price is trading at $6.08 on Monday afternoon.

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

More reading

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• Could ASX 200 retail shares deliver some dividend surprises in 2022?
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• ASX retail shares in focus as CBA forecasts bumper Black Friday weekend

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. owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Insurance Australia Group Ltd (ASX: IAG) share price is being hammered by investors recently. The insurance giant is navigating its way through challenging market conditions caused by the COVID-19 pandemic.

At midday on Monday, IAG shares are swapping hands for $4.40, a drop of 0.57%. In the past month alone, IAG shares have fallen by nearly 11%, weighed down by negative investor sentiment.

What’s happened with IAG shares?

There are a couple of possible catalysts as to why the IAG share price has failed to produce decent gains over the last 12 months.

In its recent trading update, the company revealed a rise in net natural perils claim costs. It blames severe storm and hail activity experienced in October, mainly across South Australia and Victoria.

As such, the insurer is estimating the net natural perils claim costs for FY22 to be around $1,045 million. This is a significant increase from the previous assumption of $765 million.

Following the $280 million setback, IAG has been forced to downgrade its FY22 insurance margin guidance range between 10% to 12%. Previously, the insurance margin level was in the 13.5% to 15.5% range.

In addition, the Australian Securities and Investments Commission (ASIC) has commenced civil penalty proceedings in the Federal Court of Australia.

The allegations relate to IAG’s failure to pass on the full discount to a large number of NRMA home, motor, caravan and boat insurance customers between March 2014 and September 2019.

It’s worth noting that IAG self-reported the issue to ASIC following a review it conducted in 2019. Since then, IAG has embarked on a remediation program for the affected policyholders. More than 80% of the impacted customers have been provided refunds.

What do the brokers think?

A number of brokers have rated the company with comparable price points since IAG released its business update on 2 August.

Leading Australian investment firm Morgans cut its 12-month IAG share price target by 5% to $5.36. Following suit, Macquarie had a similar stance, reducing its rating by 5.3% to $5.40.

However, Citi had a slightly improved outlook compared to the other brokers, slashing just 2.6% to $5.60.

About the IAG share price

Looking at the last 12 months, the IAG share price is down more than 17%, with year to date hovering 6.38% below. It’s worth noting, however, the company’s shares have lost about 50% of their value since July 2019.

In contrast, the S&P/ASX 200 Index (ASX: XJO) has gained around 10% from this time last year and in 2021. The benchmark index also reached a record high of 7,632.8 points in mid-August.

This shows that the ASX 200 has outperformed IAG shares. The ASX 200 historically tracks about 6% higher each year.

Based on valuation metrics, IAG has a market capitalisation of around $10.89 billion, with approximately 2.47 billion shares on issue.

The post With the IAG (ASX:IAG) share price trading around decade-lows, is now the time to buy? appeared first on The Motley Fool Australia.

More reading

• November hasn’t been a great month so far for the IAG (ASX:IAG) share price
• Is the IAG (ASX:IAG) share price set to outperform? Here’s what Motley Fool Australia analyst Drew Flowers says
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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 no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Insurance Australia Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Westpac Banking Corp (ASX: WBC) CEO Peter King has steered the ship of the big four bank through rough waters over the past two years. However, succession plans have become a key point of business according to reports.

A prepared replacement for the top job of Australia’s oldest bank is believed to be well in the works. This follows a significant downfall in the Westpac share price after it published its full-year results at the beginning of the month. Despite a 105% increase to $5,352 million in cash earnings, the Aussie lender missed consensus estimates of $5,420 million.

Shares in Westpac are down ~18% on the ASX since reporting its latest financial results. Though, King’s succession plans are believed to have been in the works well before the recent share price weakness.

Let’s have a look at the latest details.

Who might be in the running for CEO?

Having been at the helm since the swift departure of previous Westpac CEO, Brian Hartzer, King’s replacement is now an important consideration for the company.

According to The Australian, there are whispers that Westpac’s institutional bank chief Anthony Miller is a potential candidate for the role. Miller has a career that spans two decades — with senior positions at Goldman Sachs and Deutsche Bank prior to joining Westpac.

Although, another word on the grapevine suggests that chair John McFarlane might look outside of the bank for a CEO successor. At this stage, there are no hints as to whom might be of interest outside of the company.

Another internal potential contender for the top job is rumoured to be the current chief financial officer, Michael Rowland. The former KPMG Australia partner and Australia and New Zealand Banking Group Ltd (ASX: ANZ) CEO has been responsible for the finances at Westpac for over a year now.

The question of who might step in if Peter King were to step down could be a topic of discussion at Westpac’s 2021 annual general meeting (AGM). Based on the announcement made to the ASX, Westpac will hold this year’s AGM on 15 December at 10 am Sydney time.

Westpac’s run on the ASX

Westpac has been the worst-performing of the big four banks since the beginning of the year. From the first day of 2021, Westpac shares have climbed 7.4% in value. Meanwhile, the other big banks are up by more than 10%.

The pain for Westpac shareholders is a recent occurrence. Prior to the end of October, Westpac was a high flyer on a year-to-date basis, notching up a return of more than 30% since the beginning of the year.

However, pessimism towards the ASX-listed lender has reemerged as growth begins to cool off based on its latest results.

The post Succession: What’s happening with the search for the next Westpac (ASX:WBC) boss? appeared first on The Motley Fool Australia.

More reading

• Morgans rates these ASX 100 shares as buys
• Westpac (ASX:WBC) share price slips amid ‘material shortcomings’ finding
• Macquarie (ASX:MQG) is now a big four bank
• After falling 15% in a month, is the Westpac (ASX:WBC) share price good value?
• Is the CBA (ASX:CBA) share price premium relative to other big banks justified?

Motley Fool contributor Mitchell Lawler 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 Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The AGL Energy Ltd (ASX: AGL) share price could offer a lot of upside, according to one leading broker.

AGL shares have dropped 9% over the last month and 36% over the past six months.

The broker certainly isn’t expecting all of that drop to be recovered. But with the share price low, the broker is predicting a strong market performance from AGL over the next year.

AGL share price target

A price target is where the broker sees the share price trading in 12 months from the time of the broker note.

The broker that is currently feeling very optimistic about the AGL share price is Ord Minnett. Its price target on AGL is $7.55. That’s a potential increase of around 45% if the broker is right.

Ord Minnett thinks that AGL shares have gone low enough that the retail division alone makes the business attractive, even if the market isn’t excited about Accel Energy as an energy generator with coal and gas energy assets.

The broker also notes the recent deal activity for Meridian Energy Ltd’s (ASX: MEZ) Australian business for a total of $729 million. Shell Energy is going to own the retail business, Powershop Australia.

Ord Minnett thinks that the retail division of AGL could be worth more than $10 per share based on the Meridian Energy deal.

Plan to de-merge

AGL has a plan to create two separately listed energy companies, this could have a growing influence on the AGL share price with a demerger targeted for the middle of 2022.

AGL Australia will be Australia’s largest multi-product retailer. It will be carbon neutral for scope 1 and 2 emissions, with a clear pathway to full carbon neutrality for electricity supply. It is connected to 30% of Australian households with 4.5 million services. AGL Australia plans to invest in flexible and decentralised energy trading, storage and supply services.

Meanwhile, Accel Energy would be Australia’s largest electricity generator. It supplies a fifth of the national electricity market with an expected 33.5TWh of electricity generation. It has decarbonisation target with 16,000 hectares of land for energy hubs. It has a 1GW wind farm portfolio and 1600MW wind development portfolio.

What are the benefits?

The broker thinks there will be more investor interest in the separated businesses, which could be a boost for the AGL share price.

AGL itself says that the demerger will enable each business to set and execute its own strategy at a time of great change in the energy industry.

Accel Energy plans to invest in transition energy assets.

Management believes that a demerger would also allow investors to have greater transparency in valuing each business and choosing the sort of exposure they wish to have.

The energy business said:

The expectations surrounding climate action have increased materially and this is one of the key drivers for AGL’s consideration to pursue a demerger. AGL sees the demerger as a mechanism to allow both leading businesses to focus on their different but important roles within Australia’s energy transition to a low carbon future.

The post Here’s why this top broker is tipping 40% upside for the AGL (ASX:AGL) share price appeared first on The Motley Fool Australia.

More reading

• Does the AGL share price really offer a 14% dividend yield?
• The AGL (ASX:AGL) share price has lost 8% so far this month. What’s next?
• The AGL (ASX:AGL) share price is at all-time lows. Here’s why this fundie still thinks it’s poor value
• Own AGL (ASX:AGL) shares? Is Australia’s biggest emitter taking climate change seriously enough?
• These ASX 200 shares could be set to face fresh pressure over climate action

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 Bruce Jackson.

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It has been a very eventful day so far for the S&P/ASX 200 Index (ASX: XJO). At lunch, the benchmark index is down 0.3% but well off its intraday lows at 7,257.2 points.

Here’s what is happening on the ASX 200 today:

Travel share volatility

The travel sector has been very volatile on Monday. The likes of Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) sank notably lower in early trade before recovering a good portion of these declines. Concerns over the impact that the Omicron variant could have on travel markets is behind this volatility.

Healthcare shares outperform

One area of the market performing positively today is the healthcare sector. Shares including Healius Ltd (ASX: HLS) and Sonic Healthcare Limited (ASX: SHL) are recording solid gains at the time of writing. These two companies have been generating significant revenue from COVID-19 testing. Investors appear to believe the emergence of the Omicron variant will underpin strong demand for testing for some time to come.

Oil prices rebound

Energy shares including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) are performing relatively positively considering the 13% decline in the WTI crude oil price to US$68.15 on Friday night. This better than expected performance appears to have been driven by a rebound in oil prices this morning. According to Bloomberg, the WTI crude oil price is now back up to US$70.94 a barrel. Santos and Woodside shares are down around 1% at lunch.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price with a 4% gain. The prospect of lockdowns in Europe could be boosting this pizza chain operator’s shares. The worst performer has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 6% decline. While lockdowns in Europe could boost Domino’s sales, they would have the opposite effect on this shopping centre operator’s performance.

The post ASX 200 (ASX:XJO) midday update: Omicron hits Flight Centre, Domino’s jumps appeared first on The Motley Fool Australia.

More reading

• Flight Centre (ASX:FLT) share price crashes 11% amid omicron fears
• These are the 10 most shorted ASX shares
• When could Webjet (ASX:WEB) earnings return to pre-COVID levels?
• ASX energy shares on watch after Omicron sparks oil price crash
• 5 things to watch on the ASX 200 on Monday

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 recommended Dominos Pizza Enterprises Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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