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The recent pullback in Harvey Norman Holdings Ltd (ASX: HVN) shares could provide an opportune entry point for passive income investors.

Shares in the S&P/ASX 200 Index (ASX: XJO) retail stock have come under some pressure amid investor angst over a possible recession.

A recession could see sales slow down further if consumers delay the purchase of some big-ticket discretionary items, like TVs, computers, or that new sofa.

Since reporting a decrease in sales on 27 February, Harvey Norman shares are down more than 13%, currently trading for $3.61 apiece.

But as I said, longer term, this pullback could mean ASX 200 investors buying shares today will be earning a lot more passive income tomorrow.

So, just how much would you have to invest in Harvey Norman shares for $1,000 in passive income?

How many Harvey Norman shares would yield $1,000 in passive income?

The ASX 200 retailer has a lengthy track record of delivering two fully franked dividends each year.

Now, before we dive into how many Harvey Norman shares will deliver that handy $1,000 of passive income, do take note that the yields we’re discussing are trailing yields. These are based on the dividend payments of the past 12 months. Future yields may be higher or lower, depending on a range of company-specific and wider macroeconomic factors.

With that said, Harvey Norman paid out a final dividend of 17.5 cents per share on 14 November. The interim dividend of 13 cents per share hit investors’ bank accounts on 1 May.

That works out to a full-year dividend payout of 30.5 cents per share. At the current Harvey Norman share price, that equates to a trailing yield of 8.4%, fully franked.

To garner my $1,000 in passive income I’d need to buy 3,279 Harvey Norman shares. Or $11,903 worth.

Now I likely won’t make that full investment all in one go.

But that’s okay.

Investing is a long game.

If I invest $500 a month, or whatever I’m able to set aside, I’ll get to my passive income goal eventually.

The post How much do I need to invest in Harvey Norman shares for $1,000 a year in passive income? appeared first on The Motley Fool Australia.

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More reading

• Turning ASX shares into a $40,000 annual passive income generator
• How much would I need to invest in ASX shares for a retirement income of $65,000 per year?
• No savings at 40? Here’s how I’d aim to build a passive income of $3,000 a month
• Buy Telstra and this ASX 200 dividend share for passive income: brokers

Motley Fool contributor Bernd Struben 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 Harvey Norman. The Motley Fool Australia has positions in and has recommended Harvey Norman. 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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Zip Co Ltd (ASX: ZIP) shares are plummeting amid news the buy now, pay later (BNPL) industry will soon face greater regulation in Australia.

But there’s little need to worry about the impact on the company, co-founder and chief operating officer (COO) Peter Gray says.

Zip was “well-placed to continue with business as usual” in the face of increased regulation, Gray told ABC Radio. In fact, the BNPL share isn’t expecting to lose a single customer as a result of the shift.

The Zip share price tumbled to a low of 53 cents this morning – a 7.8% drop.

It’s since recovered slightly to trade just 5.2% lower at 54.5 cents at the time of writing.

For comparison, the All Ordinaries Index (ASX: XAO) is down 0.31% right now.

Let’s take a closer look at what might be weighing on the ASX BNPL share today.

Could ASX BNPL share Zip be a regulatory winner?

In news reportedly announced by Minister for Financial Services Stephen Jones today, the BNPL industry will soon fall under the Credit Act.

That means providers will need to hold a credit licence and undergo checks to ensure consumers can afford to pay off BNPL debt before providing the products.

And while the changes sound like they could be dire for ASX BNPL shares, Zip might be in a position to benefit.

Gray applauded the Government’s move, saying the company had been advocating for such changes for years. He told ABC Radio:

It’s likely to be a competitive advantage for our business in Australia, given how well placed we are in our business practices that we’ve adopted since inception.

As I touched on, it’s business as usual for us, whereas many of the competitive peer set really will have to make some significant changes to the way they operate their business.

The company already holds a credit license and completes affordability checks on all its customers. It also has “robust” hardship, dispute, and complaint resolution processes in action, Gray noted.

That’s good news for shareholders, the insider said.

Investors “should be encouraged” that the changes could be a “positive differentiator” for the company, even carrying the potential to increase its market share.

Of course, it would likely take more than a competitive shift to see Zip shares regain all they’ve lost in recent years. The stock is currently 96% lower than it was at its 2021 peak.

The post Could Zip shares be a winner of more regulation in the BNPL sector? appeared first on The Motley Fool Australia.

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More reading

• Credit call: ASX BNPL shares slump as regulation arrives
• Here are the 10 most shorted ASX shares
• The Zip share price has zoomed 12% higher in a week. Is this the beginning of a turnaround?
• Here are the 10 most shorted ASX shares
• What’s the outlook for the Zip share price in May?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Zip Co. 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 BHP Group Ltd (ASX: BHP) share price is bucking the wider selling trend today.

Shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner closed Friday trading for $44.16. At the time of writing, BHP shares are swapping hands for $44.20.

That puts the BHP share price a whisker into the green at 0.09% higher, while the ASX 200 is down 0.4%.

A range of factors impacts the big miner’s share price performance. But with iron ore still counting as BHP’s number one revenue earner, that’s a big one for investors to keep an eye on.

What’s the outlook for the iron ore price?

Iron ore is currently trading for US$105 a tonne.

That’s up from a recent low of just under US$100 a tonne on 5 May and a recent high of just over US$134 a tonne on 15 March,

Those are some unusually large price swings for the industrial metal, which in turn has seen some volatility in the BHP share price.

Most of that has to do with China. Namely, the uncertainty surrounding the outlook for steel demand from China’s mills to supply to the nation’s oft-booming but currently wobbling real estate sector.

With that in mind, ANZ Group Holdings Ltd (ASX: ANZ) senior commodity strategist Daniel Hynes has downgraded the bank’s short-term outlook for the iron ore price.

“We see the risk of another leg down for prices as relatively high,” Hynes said (quoted by The Australian Financial Review).

ANZ now has a short-term price target of US$95 a tonne on iron ore, 9.5% below the current price. Should the iron ore price take that next leg down, it would throw up some additional headwinds for the BHP share price in the three months ahead.

While Chinese home sales ticked up over the first quarter, spurred by government stimulus measures, new housing starts fell by 28%. Which bodes poorly for short-term steel demand.

Compounding the short-term outlook is an increase in the supply of iron ore.

According to Hynes:

Without any improvement on the horizon, steel mills are likely to start reducing output in coming months. This is likely to lead to further weakness in the iron ore market.

We expect the market to move into surplus in the second quarter, compounded by a rise in supply. This should see the stubbornly persistent market deficit haunting end users over the past two years return to surplus in 2023.

But the iron ore price – and by connection the BHP share price – is expected to increase in the second half of the year.

According to ANZ, that’s based “on expectations of a stabilisation in demand as China’s housing market improves”.

BHP share price snapshot

The BHP share price is down 7% over the past 12 months.

Longer-term, shares in the ASX 200 miner are up 34% over five years.

The post Here’s what ANZ’s iron ore forecast could mean for the BHP share price in 2023 appeared first on The Motley Fool Australia.

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More reading

• 5 ASX 200 shares to buy according to brokers
• The copper price could explode. This is the ASX share to take advantage
• Neutralised? What it means for ANZ shares and their reinvested dividends
• Why BHP shares made our headlines this week
• Buy these ASX shares with big dividend yields: Goldman Sachs

Motley Fool contributor Bernd Struben 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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Qantas Airways Limited (ASX: QAN) shares have been strong performers over the last 12 months.

As you can see on the chart below, since this time last year, the airline operator’s shares have soared over 18%.

Have you missed the flight on Qantas shares?

With Qantas shares flying high and smashing the market, investors may be wondering if they are too late to the gate on this one.

The good news, though, is that one top broker doesn’t believe it is too late. In fact, its analysts believe even greater returns await investors that commence boarding today.

According to its latest best ideas list, Morgans has an add rating on Qantas shares with a price target of $8.35. This implies potential upside of 29% for investors over the next 12 months.

Why is Morgans bullish?

Morgans is bullish on Qantas due to its positive outlook, lower costs, and attractive valuation. In respect to the latter, the broker highlights that the company’s shares are trading at a significant discount to pre-COVID levels despite being a much stronger company now. It explains:

QAN is now our preferred pick of our travel stocks under coverage given it has the most near-term earnings momentum. Looking across travel companies globally, airlines are now in the sweet spot given demand is massively exceeding supply. QAN is trading at a material discount compared to pre-COVID multiples, despite having structurally higher earnings, a much stronger balance sheet, a better domestic market position, a higher returning International business and more diversification (stronger Loyalty/Freight earnings).

The strong pent-up demand to travel post-COVID should result in a healthy demand environment for some time, underpinning further EBITDA growth over FY24/25. QAN’s balance sheet strength positions it extremely well for its upcoming EBITaccretive fleet reinvestment and further capital management initiatives (recently announced a A$500m on-market share buyback at its 1H23 result). There is also likely upside to our forecasts and consensus if QAN achieves its FY24 strategic targets.

The post Have I missed the flight on Qantas shares? appeared first on The Motley Fool Australia.

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More reading

• Back to 100%: The deal driving Qantas shares into the green on Friday
• Why Goldman Sachs rates these ASX 200 shares as top buys
• Why Qantas shares are Morgans’ top pick in the travel sector
• Buyback bender: These ASX All Ords shares can’t get enough of their own stock
• Qantas shares: High-flying potential or grounded expectations?

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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ASX shares can be a great tool to use to unlock a second income of $1,000 per month. I wouldn’t be concerned even if I had no savings because of the potential of compounding.

Bank savings accounts are finally offering a decent interest rate. Having money parked in a high-interest savings account can earn a decent rate. But, I think there’s less compounding potential than ASX shares – businesses can grow their profit while paying a (growing) dividend. Investors can decide to spend those dividends and still get growing passive income or decide to re-invest the dividends for even stronger wealth-building.

The first step, and perhaps the hardest, is to save money to invest. That requires spending less than you earn, one way or another.

I’d try to save at least $750 a month by making some changes with my spending choices, though each household’s finances are different – some people may be able to save $500 per month while others may be able to invest $2,000 per month or even more.

When we’ve got some cash, we need to decide where to invest it. Receiving $1,000 per month is equivalent to $12,000 per year. Getting that much of a second income could require a portfolio worth $300,000 (at a 4% dividend yield or 4% withdrawal rate).

Where to invest it?

There are three different ways that I’d consider investing my savings to build my portfolio.

I’ll just mention that all of the financial numbers mentioned below are just for demonstration and generally don’t account for tax, as I’d need a crystal ball to know what future returns are going to be and what’s the best option for each individual circumstance.

Index-based ETFs

Index-based exchange-traded funds (ETFs) are funds that allow people to invest in a portfolio of businesses. They’re usually low-cost, offer good diversification and track the returns of the share market.

An example is the Vanguard MSCI Index International Shares ETF (ASX: VGS) is an ETF that invests in the global share market, owns more than 1,400 businesses and has produced average returns per year of more than 10% over the long-term, though past performance is not a guarantee of future performance.

I would keep investing $750 per month in this ETF and re-invest the distributions until I’d reached a minimum of $300,000. If the VGS ETF returned an average of 10% per annum, then this would take 15 years.

To unlock a second income, I’d then sell 4% of the ETF’s value each year to get $12,000 per annum out of the portfolio.

ASX growth shares

Another option could be to choose ASX growth shares that may be able to grow in scale significantly and create wealth. If an investor chooses right, they may be able to grow their wealth the most with this path, but it can also come with more risk.

It’s very hard to say what the future returns of each individual growth share are going to be.

I believe there are some growing businesses that could pay much larger dividends in the future, funded by the growing profit. Those ASX growth shares could pay the required dividends for a second income in 10 or 15 years. I’d look at names like Lovisa Holdings Ltd (ASX: LOV), Johns Lyng Group Ltd (ASX: JLG), Healthia Ltd (ASX: HLA) and Bailador Technology Investments Ltd (ASX: BTI).

Some ASX growth shares don’t pay dividends but are very promising to me, such as Xero Limited (ASX: XRO), Temple & Webster Group Ltd (ASX: TPW) and Volpara Health Technologies Ltd (ASX: VHT). They may pay dividends in the distant future, but buying these sorts of names could require selling 4% of the $300,000 portfolio value to unlock $12,000 of a second income.

I would also consider investing in a growth-focused ETF like the Vaneck Morningstar Wide Moat ETF (ASX: MOAT) if I were thinking with a growth mindset and then sell 4% of the value each year.

ASX dividend shares

A final option to consider could be to choose ASX dividend shares that could deliver solid capital growth and are already paying a good dividend yield.

If these ASX dividend shares keep growing their profit and dividend, we could just live off the dividends and not need to think about selling any of the portfolio. Plus, there would probably be some helpful franking credits coming from these names to boost the yield.

Three of my favourite ideas for an ASX dividend share portfolio that could also deliver growth would be Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW) and Wesfarmers Ltd (ASX: WES). I’d also consider names like Premier Investments Limited (ASX: PMV) and Sonic Healthcare Limited (ASX: SHL).

Foolish takeaway

I think each of the avenues I’ve talked about can help unlock a second income. The ETF route (including the MOAT ETF) would probably be the simplest path, as I wouldn’t need to worry about which ASX shares to own.

However, the ASX dividend shares route is the one I’m pursuing with my real portfolio because I like the cash flow and franking credits that are created by that route.

For my own portfolio, I like the long-term record that Soul Pattinson and Brickworks have already demonstrated for dividends and wealth creation, and I think that can continue.

The post No savings? Here’s how I’d target a second income of $1,000 per month from scratch appeared first on The Motley Fool Australia.

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More reading

• $10k invested in Vanguard MSCI Index International Shares ETF (VGS) 5 years ago is worth how much?
• No savings at 40? Here’s my 3-step plan for $1,500 of passive income a month
• Could buying the Vanguard Australian Shares Index ETF (VAS) at under $90 help me retire early?
• 3 reasons to buy Wesfarmers shares today
• 2 of the best ASX 200 blue chip shares to buy: Morgans

Motley Fool contributor Tristan Harrison has positions in Bailador Technology Investments, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bailador Technology Investments, Brickworks, Healthia, Johns Lyng Group, Lovisa, Temple & Webster Group, Vanguard Msci Index International Shares ETF, Volpara Health Technologies, Washington H. Soul Pattinson and Company Limited, and Xero. The Motley Fool Australia has positions in and has recommended Brickworks, Volpara Health Technologies, Washington H. Soul Pattinson and Company Limited, Wesfarmers, and Xero. The Motley Fool Australia has recommended Bailador Technology Investments, Healthia, Johns Lyng Group, Lovisa, Premier Investments, Sonic Healthcare, Temple & Webster Group, VanEck Morningstar Wide Moat ETF, and Vanguard Msci Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX buy now, pay later (BNPL) shares are attracting attention today amid news the industry will soon be regulated under the Credit Act.  

That means companies offering interest-free products that allow consumers to pay for purchases in instalments will need to hold a credit licence and will have to assess users’ ability to afford such debts.

Right now, stock in iconic ASX BNPL provider Zip Co Ltd (ASX: ZIP) is down 6.6%, trading at 53.8 cents.

Meanwhile, shares in Block Inc (ASX: SQ2) – the owner of former-market darling Afterpay – are slipping 1.63% at $87.75.

Smaller ASX BNPL share Splitit Inc (ASX: SPT) is also down, trading 2.61% lower at the time of writing.

Let’s take a closer look at the regulations apparently set to take the industry by storm.

ASX BNPL shares slump amid talks of greater regulation

Financial Services Minister Stephen Jones will outline the government’s plan to regulate BNPL providers under the Credit Act this morning, ABC News reports.

“BNPL looks like credit, it acts like credit, it carries the risks of credit,” Jones will reportedly tell the Responsible Lending and Borrowing Conference.

Under flagged changes, BNPL providers will need to meet responsible lending obligations. That means they’ll have to determine if consumers can afford to pay back BNPL debt before allowing the use of their products.

The industry is currently exempt from major regulation as participants don’t charge interest.

News of the changes comes on the back of a Treasury paper released in November 2022.

It put forward three suggested regulatory paths for BNPL products, with the government apparently taking the middle ground. It’s gunning for more than an affordability test but not as far as to regulate providers like credit card providers.

ABC News quoted Jones as saying:

The plan will protect people from the spirals of harm that unregulated, unrestricted lending can cause.

Simon Docherty, chief customer officer at Frollo, said recent research by the fintech found usage of BNPL services has jumped 25% year-on-year. Meanwhile, one in four users has resorted to using a credit card to pay off BNPL debt.

How much such changes will impact ASX BNPL shares will likely vary between providers. Zip, for instance, already holds a credit licence and conducts affordability tests on consumers in Australia, as my Fool colleague Bernd reported last year.

The post Credit call: ASX BNPL shares slump as regulation arrives appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Here are the top 10 ASX 200 shares today
• The Zip share price has zoomed 12% higher in a week. Is this the beginning of a turnaround?
• Did the Sezzle share price really just leap 3,000%?!
• Here are the 10 most shorted ASX shares

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

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It’s been a disappointing start for many ASX shares and the All Ordinaries Index (ASX: XAO) so far this Monday. At the time of writing, the All Ords has slipped by 0.34%, dragging the Index down to around 7,445 points. But let’s talk about one ASX All Ords share that is spectacularly defying this gloom today.

The Bigtincan Holdings Ltd (ASX: BTH) share price is on fire today. This ASX All Ords tech share has added a pleasing 16% so far this session, putting the company at 58 cents a share. That’s after Bigtincan shares closed at 50 cents each last Friday.

So what’s happening with this ASX All Ords share that has enticed investors so decisively today?

Well, Bigtincan put out a rather interesting ASX release this morning which looks like it is responsible for this big jump in value.

All Ords share in takeover fight

In this announcement, Bigtincan revealed that “recent media speculation” has been well-founded, and that the All Ords share has been on the receiving end of a takeover offer. Here’s what the company had to say:

In response to recent media speculation Bigtincan confirms that… it has received a confidential, non-binding, incomplete and indicative offer from Siris Capital Group, LLC (“Siris”) at an indicative offer price of $0.80 per share (the “Siris Proposal”).

Bigtincan’s independent board committee (“IBC”) does not consider it to be in the best interests of shareholders to progress that Siris Proposal at this time. Bigtincan has received other confidential approaches since that announcement.

The IBC will, with the assistance of its financial and legal advisers, continue to carefully consider any proposals that maximise shareholder value and continue to ensure it remains in compliance with its confidentiality and continuous disclosure obligations. There is no certainty that any such proposals will lead to a transaction.

That’s exciting news for shareholders, to be sure. What is likely to be really stoking these fires is the revelation that “Bigtincan has received other confidential approaches since that announcement”.

Shareholders tend to love a bidding war and it looks like multiple suitors are interested in a potential takeover.

Share price snapshot

Investors seem to have been speculating that something like that has been going on for a few weeks now.

It was only back on 10 May that Bigtincan shares were going for 41 cents each, down 24% in 2023. But since that day, this ASX All Ords share has rocketed more than 40%, leaving it with a year to date performance of 8.3% right now:

In saying that though, Bigtincan shares still remain down by more than 60% from their 2021 highs of around $1.50 per share.

It certainly looks like this ASX All Ords share will be very interesting to watch for the next few weeks and months. Who knows what might lie in store for Bigtincan going forward?

At the current Bigtincan share price, this ASX All Ords share has a market capitalisation of $350 million.

The post Guess which ASX All Ords share is soaring 16% amid a fresh takeover bid appeared first on The Motley Fool Australia.

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More reading

• Credit call: ASX BNPL shares slump as regulation arrives
• Buy this ASX tech share for big returns: Goldman Sachs
• Own Flight Centre shares? Broker says travel giant is ‘on the cusp of an earnings upgrade cycle’
• ASX 200 lithium shares could be winners as Biden calls critical clean energy metals the ‘third pillar of the Australia-US alliance’
• Why is this ASX lithium share crashing over 10% today?

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

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Are you looking for options in the tech sector? If you are, then Objective Corporation Limited (ASX: OCL) could be the ASX tech share to buy this week.

That’s the view of analysts at Goldman Sachs, which are feeling very positive about the public sector software provider.

Why is Objective Corp an ASX tech share to buy?

Goldman Sachs recently attended Objective Corp’s inaugural investor day event and came away feeling comfortable that the company is well-placed to deliver on expectations in FY 2023. It explains:

We attended Objective Corp’s inaugural Investor Day on Friday 19 May in Sydney. OCL did not provide a quantitative trading update given the significant deal skew to May/June each year (in line with typical public sector procurement processes), although we came away incrementally more comfortable with our assumption for ARR growth to accelerate to +14% y/y in 2H23E (vs +12% in 1H23) given the positive commentary around customer adoption of new products and resilience of public sector demand.

The good news is that Goldman doesn’t believe this ASX tech share will stop growing at a strong rate any time soon. In fact, the broker is expecting its growth to go up a gear in FY 2024 and FY 2025. It said:

In our view OCL is well placed to deliver robust and defensive earnings growth driven by (1) R&D and new product cycles accelerating the contribution from newer products including Nexus, Build and RegWorks; (2) cycling of revenue/earnings headwinds from model transition away from perpetual / services revenue and towards subscriptions; and (3) cost management into FY24, with +350/+250bps margin expansion driving +23%/+32% FY24/25 EPS growth when comping trough FY23E earnings.

Big returns ahead

In light of the above, Goldman Sachs sees plenty of value in this ASX tech share.

The note reveals that its analysts have a buy rating and $14.90 price target, which implies potential upside of 17% for investors over the next 12 months.

The post Buy this ASX tech share for big returns: Goldman Sachs appeared first on The Motley Fool Australia.

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• Own Flight Centre shares? Broker says travel giant is ‘on the cusp of an earnings upgrade cycle’
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• Why is this ASX lithium share crashing over 10% 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 Objective. 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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Much to the dismay of short sellers, Flight Centre Travel Group Ltd (ASX: FLT) shares have been on fire this year.

Since the start of 2023, the travel agent giant’s shares are up over 46%.

Where next for the Flight Centre share price?

Unfortunately for those that are shorting the company, Morgans is tipping its shares to rise even further over the next 12 months.

This is due to its analysts’ belief that the travel agent is on the cusp of “an earnings upgrade cycle which may continue for the next few years.”

In light of this, the broker currently has an add rating and $26.25 price target on the travel agent’s shares.

Based on the current Flight Centre share price of $21.22, this implies potential upside of approximately 24% for investors.

What else did the broker say?

Morgans has been impressed with Flight Centre’s recovery from the pandemic and believes the company is well-placed for strong earnings growth in the coming years. This is thanks to pent-up demand and its low cost base. It commented:

FLT’s group cost margin is now at an historic low reflecting permanent and structural cost base changes and growth in lower cost and highly scalable models (Independents and Online).

With greater confidence in the travel recovery and the benefits of FLT’s transformed business model starting to emerge, we think FLT is now at the cusp of an earnings upgrade cycle which may continue for the next few years. We have upgraded our forecasts and move to an Add rating with our new SOTP valuation of A$26.25.

All in all, the broker appears to believe this makes Flight Centre shares great value despite their heroics so far in 2023.

The post Own Flight Centre shares? Broker says travel giant is ‘on the cusp of an earnings upgrade cycle’ appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• Flight Centre shares rise despite co-founder sales
• Here are the 10 most shorted ASX shares
• Flight Centre shares are trading around 52-week highs. Too late to buy?
• 2 ASX 200 travel stocks (not Qantas!) just upgraded by Citi

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 Flight Centre Travel Group. 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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S&P/ASX 200 Index (ASX: XJO) lithium shares have enjoyed a strong rebound since lithium prices bottomed on 24 April.

Lithium stocks, big and small, came under pressure late in November when prices began to nosedive from all-time highs, tumbling more than 70% before finding support.

Prices for the battery-critical metal have since leapt around 25%, helping lift the fortunes of the lithium miners.

And most of the top lithium miners have continued to outperform over the past month.

Here’s how these five leading ASX 200 lithium shares have performed since 24 April (as at market close on Friday):

• Pilbara Minerals Ltd (ASX: PLS) shares are 18%
• Core Lithium Ltd (ASX: CXO) shares are up 15%
• Allkem Ltd (ASX: AKE) shares are up 33%
• IGO Ltd (ASX: IGO) shares are up 7%
• Liontown Resources Ltd (ASX: LTR) shares are up 3%

In early morning trade today, all of the above ASX 200 lithium shares are in the red.

Yet despite this morning’s slip, the medium and longer-term outlook for the critical metal miners got another healthy boost over the weekend, courtesy of United States President Joe Biden.

How might the US help lift ASX 200 lithium shares?

On Saturday, Biden attended the Quadrilateral Security Dialogue (Quad) summit in Hiroshima.

Following on the heels of the G7 summit earlier in the day, Biden met with prime minister Anthony Albanese to discuss a range of issues. These included the need for Western nations to diversify their supply chains of critical clean energy metals.

This is encompassed under the Australia-US Climate, Critical Minerals and Clean Energy Transformation Compact, which runs parallel with the US$369 billion (AU$555 billion) Inflation Reduction Act (IRA).

In a sound bite that should pique the interest of investors in ASX 200 lithium shares, Biden said (quoted by The Australian Financial Review):

We are going to establish climate and energy as the third pillar of the Australia-US alliance. This will enable the expansion and diversification of clean energy supply chains, especially as it relates to critical materials.

Together, the leaders added that Biden will seek to have Australia added as a “domestic source” under the US Defense Production Act. Atop other potential advantages for ASX 200 lithium shares, this would open the door to new US investments in their projects.

Why is Biden eager to tap into Australia’s critical minerals?

China has long dominated the supply chain of a range of metals crucial for technology and the world’s push towards electrification, such as rare earth elements and lithium, which has potential national security ramifications.

And ASX 200 lithium shares look to be among the beneficiaries of the US push to diminish China’s dominance.

While Australia has the fifth-largest lithium reserves on the planet, it is currently the world’s biggest lithium producer.

And while there are sure to be numerous ups and downs along the way, that leaves ASX 200 lithium shares well-positioned to take advantage over the medium and longer term of this new “third pillar” of Australia’s alliance with the world’s top economy.

The post ASX 200 lithium shares could be winners as Biden calls critical clean energy metals the ‘third pillar of the Australia-US alliance’ appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• 5 things to watch on the ASX 200 on Monday
• Could another lithium price boom be around the corner? Experts weigh in
• 5 ASX 200 shares to buy according to brokers
• If I invest $10,000 in Pilbara Minerals shares, how much passive income will I receive?

Motley Fool contributor Bernd Struben 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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