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The Chimeric Therapeutics Ltd (ASX: CHM) share price has jumped 6% into the green during afternoon trade, and currently trades at 33.5 cents.

Chimeric shares are rallying after the company announced a key update regarding its CAR Technology.

Read on for more details.

What did Chimeric Therapeutics announce?

Chimeric advised that the European Patent Office has granted the company a patent covering its chimeric antigen receptor (CAR) technology.

CAR Therapy is being developed for patients with Glioblastoma, where it is currently being studied in a phase 1 trial at City of Hope Medical Centre in the US.

The patent covers “certain applications” of the CAR technology using cholorotoxin (CLTX), and also the company’s clinical-stage label CHM 1101.

It was published in the “European Patent Bulletin dated September 22, 2021”, according to Chimeric, under patent number EP 3,362,470 B1.

Effectively the patent grants protection for CAR over these “applications” that will use CLTX and CHM 1011 until 2036.

In addition, Chimeric also “holds the exclusive worldwide license” to commercialise the patent, and “related patent applications filed in other global territories” for the compound.

This is an important milestone for clinical-stage biotechnology companies, as they need to secure the rights to sell their compounds if they can successfully develop them.

Investors appear to love the news and are pushing the Chimeric Therapeutics share price towards its previous high of 35 cents on 7 September.

What did management say?

Speaking on the patent milestone, Chimeric’s CEO and managing director, Jennifer Chow said:

We are pleased to see the continued advancement of the strong intellectual property portfolio underpinning Chimeric’s CLTX CAR T program, on this occasion in a geography that holds significant market potential.

Chimeric share price snapshot

The Chimeric Therapeutics share price has had a very difficult year to date and has posted a return of 14% since listing in January.

However, over the last month, it has stepped a further 1.5% into the green and is also up another 3% this past week.

It is still early days for Chimeric, but it is still trading ahead of the S&P/ASX 200 index (ASX: XJO)’s year to date gain of 12%.

At the time of writing, Chimeric Therapeutics has a market capitalisation of $105 million.

The post The Chimeric (ASX:CHM) share price jumps 6% on patent success appeared first on The Motley Fool Australia.

More reading

• Aussie Broadband (ASX:ABB) share price hits new high, up 27% this month
• Top brokers name 3 ASX shares to sell today
• Senex (ASX:SXY) share price leaps 5% amid sustainability push
• Why the Zip (ASX:Z1P) share price is up 11% in 2 days
• AMP Capital’s chief economist on Evergrande and ASX 200 resource shares

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 Aussie Broadband Ltd (ASX: ABB) share price moved into uncharted territory today, reaching a new all-time high. This comes despite the broadband provider not releasing any new information since its Share Purchase Plan offer booklet last week.

At the time of writing, Aussie Broadband shares are flat at $5.04 apiece. It’s worth noting that its shares hit a record high of $5.12 during early morning trade.

What’s driving Aussie Broadband shares recently?

September has been a busy month for the Aussie Broadband share price so far.

The company announced a 10-year deal with VicTrac to swap access to their respective fibre networks. VicTrack is a government business enterprise of the Victorian Government and operates the state’s fibre assets.

The swap will significantly increase the geographic reach of Aussie Broadband’s fibre network, especially into regional Victoria. This is expected to translate to an additional revenue stream for the company.

Aussie Broadband managing director, Phillip Britt touched on the strategic move, saying:

Smart partnerships like this one with VicTrack enable us to not only expand our network beyond what was originally planned, but also frees up capital to improve our reach in other states.

This is a win for Aussie Broadband, a win for VicTrack and most importantly, a win for our customers and their access to high speed, quality internet connections.

The company also updated the ASX with its capital raising program, successfully raising $114 million in an institutional placement.

In addition, Aussie Broadband released its Share Purchase Plan offer booklet to eligible investors to raise a further $10 million.

The proceeds from both placements will be used towards funding a number of initiatives for the company. These include acquisitive growth by mergers and acquisitions, new business product and technology development, and increasing fibre and network assets.

Aussie Broadband share price snapshot

A positive 12 months has led Aussie Broadband shares to accelerate 160%, with most of these gains coming in year-to-date.

Based on today’s price, Aussie Broadband presides a market capitalisation of roughly $1.10 billion, with 218.8 million shares on issue.

The post Aussie Broadband (ASX:ABB) share price hits new high, up 27% this month appeared first on The Motley Fool Australia.

More reading

• Aussie Broadband (ASX:ABB) share price lifts on share purchase plan
• ASX 200 falls, Macquarie jumps, Aussie Broadband climbs
• Aussie Broadband (ASX:ABB) share price edges higher on capital raise update
• ASX 200 flat, Aussie Broadband shares halted, Openpay rises
• 2 ASX shares to take off after excellent reporting seasons

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. owns shares of and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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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Yesterday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

Commonwealth Bank of Australia (ASX: CBA)

According to a note out of Morgan Stanley, its analysts have an underweight rating and $90.00 price target on this banking giant’s shares. The broker has been looking into the banking sector and believes Australia may need to take macroprudential measures to slow the build-up of household debt relative to income. It believes this could result in a slowdown in loan growth. As a result, it doesn’t appear to be in a hurry to change its rating on the shares of Australia’s largest bank. The CBA share price is trading at $100.91 on Thursday.

Premier Investments Limited (ASX: PMV)

A note out of Goldman Sachs reveals that its analysts have a sell rating and $21.10 price target on this retail conglomerate’s shares. While the broker has only had a quick look at the retailer’s full year results this morning, it looks unlikely to change its rating after a proper review. Goldman notes that Premier Investments fell short of its sales, earnings, and dividend estimates for FY 2021. The broker also has concerns over the slow recovery of the Smiggle business. The Premier Investments share price is fetching $27.61 today.

Vicinity Centres (ASX: VCX)

Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $1.59 price target on this shopping centre operator’s shares. This follows a look at the REIT sector following a series of recent takeover offers for infrastructure companies. While the broker does see takeover appeal, it isn’t enough for a change of rating. The Vicinity share price is trading at $1.70 on Thursday.

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

More reading

• Why Bapcor, Brickworks, News Corp, & Premier Investments are rising
• ASX 200 (ASX:XJO) midday update: Transurban falls, Premier Investments jumps
• Premier Investments (ASX:PMV) share price surges on FY21 results, NPAT up 97%
• 2 top ASX growth shares that could be buys
• CBA (ASX:CBA) share price slumps amid RBA concerns of sector vulnerabilities

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 Premier Investments 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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Shares in Senex Energy Ltd (ASX: SXY) are lifting on Thursday, up 4.7% to $3.55 per share at the time of writing.

Today’s Senex share price surge comes after the company released its FY2021 annual report to the market punctuated by increased reserves and strong free cash flow generation prospects.

Why is the Senex share price surging on Thursday?

Senex this morning provided its annual report for the year ended 30 June 2021. The energy group had already released its full-year results and FY2022 outlook on 19 August.

However, today’s report, combined with rising energy demand, has helped boost the Senex share price higher on Thursday.

The Aussie natural gas producer doubled production levels and tripled its earnings before interest, tax, depreciation and amortisation (EBITDA) in FY2021.

The group also upped its 2P and 3P reserves during the year. Senex boasted 2P reserves of 767 pentajoules (PJ) and 3P reserves of 1,016 PJ as at year-end. That, alongside a bolstered balance sheet on the back of its Cooper Basin business sale, has helped strengthen Senex’s position going into FY2022.

The Aussie energy group had previously announced a full-year dividend of 5 cents per share, bringing the total FY21 dividend to 13 cents per share (inclusive of a 4 cents per share special dividend).

Investors appear pleased with this morning’s annual report release with the Senex share price climbing higher. Shares in the gas producer are outpacing the S&P/ASX 200 Index (ASX: XJO) which is up more than 1% at the time of writing.

Senex also used its annual report release to highlight its commitment to sustainability and a low carbon future. The group is targeting a “low-cost, low-carbon, high-return business with a long-life asset base and high growth trajectory”.

Investors look to be buying into the company’s vision and strong FY2021 showing with the Senex share price now up more than 40% year to date.

The post Senex (ASX:SXY) share price leaps 5% amid sustainability push appeared first on The Motley Fool Australia.

More reading

• Why the Senex (ASX:SXY) share price is pushing higher today
• Why Novonix, ResMed, Senex, & Weebit Nano shares are charging higher
• ASX 200 down, Flight Centre rises, Redbubble falls

Motley Fool contributor Ken Hall 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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The S&P/ASX 200 Index (ASX: XJO) is having a day to remember on the ASX boards this Thursday. At the time of writing, the ASX 200 is up a healthy 0.98 % to 7,369 points. But one ASX 200 share is doing one better. That would be the Zip Co Ltd (ASX: Z1P) share price.

Zip shares are on fire today, up a sizeable 4% to $6.77 at the present time. Ever since finding a new 2021 low of around $6.10 a share on Tuesday, the Zip share price is now up more than 11% since then. That’s a pretty decent return for just two days.

So what’s going on with Zip shares this week?

Zip share price bags some BNPL gains

Well, we did get an announcement out of the company yesterday, which seems to have been well-received by investors. As we covered at the time, Zip announced that it has made a US$50 million “strategic investment” in the Indian buy now, pay later (BNPL) company ZestMoney. According to Zip, ZestMoney is one of the “largest and fastest growing” BNPL players in India, with 11 million registered users and 10,000 merchants using the platform.

This US$50 million investment will give Zip a minority shareholding in ZestPay, but the company has also negotiated terms that would allow a greater ownership in the future, as well as a board seat and a say over future decisions.

Since the Zip share price rose by 4.5% yesterday, and is up another 4.15% so far today, we can probably say that investors approve of this ZestPay announcement.

Another factor that may be helping Zip shares today is sentiment over tech shares in general. The tech sector is leading the ASX 200’s gains today, with the S&P/ASX All Technology Index (ASX: XTX) up a very robust 2.96% so far this Wednesday.

Other ASX tech shares like Afterpay Ltd (ASX: APT), Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC) are all up by more than 2% so far today, with Afterpay up more than 4%. Big rises in the US tech space overnight are probably responsible.

Zip shares are now up a healthy 21.5% year to date in 2021 so far. However, it’s ‘only’ up by roughly 8.8% over the past 12 months.

At the current Zip share price, the company has a market capitalisation of $3.82 billion.

 

The post Why the Zip (ASX:Z1P) share price is up 11% in 2 days appeared first on The Motley Fool Australia.

More reading

• Why Champion Iron, Fortescue, Lake Resources, & Zip are racing higher
• ASX 200 (ASX:XJO) midday update: Evergrande news boosts market, Zip’s Indian investment
• Zip (ASX:Z1P) share price higher on India BNPL investment news
• The Zip (ASX:Z1P) share price is down 10% in a week. Here’s why
• These are the 10 most shorted ASX shares

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. owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, WiseTech Global, and Xero. 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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S&P/ASX 200 Index (ASX: XJO) iron ore shares got a bit of a reprieve overnight with the price of iron ore surging 17% to US$109 per tonne.

The way the iron ore price has been jumping around, the price chart is beginning to look more like Bitcoin than a global commodity!

The lift has helped drive 2 of the 3 ASX 200 iron ore giants into the green today.

The Fortescue Metals Group Ltd (ASX: FMG) share price is up 1.3% and Rio Tinto Ltd (ASX: RIO) is up 0.5%.

The BHP Group Ltd (ASX: BHP) share price has given back its modest lunchtime gains and is currently down 0.3% for the day, at $38.56 per share.

What’s lifting the iron ore price?

The big boost in ore prices offering a tailwind to ASX 200 iron ore miners was likely spurred by news that China Evergrande Group (HKG: 3333) would make good on the interest payment it owes bond holders today. Many analysts had been forecasting a possible default, putting pressure on iron ore prices.

As reported on Tuesday, Evergrande was due to pay roughly US$83.5 million (AU$116 million) of interest on its 5-year dollar bond today.

If that sounds like a lot of interest to pay, it is. That’s because Evergrande is has approximately US$300 billion worth of liabilities.

AMP’s Shane Oliver on Evergrande

Presenting at AMP Capital’s webinar yesterday, Shane Oliver, head of investment strategy and chief economist at AMP Capital shared his insights into the Evergrande crisis.

Oliver said:

People are worried about some sort of Lehman moment. I think it’s a risk. But at the end of the day, I think it’s not something major Western banks are heavily exposed to. Nothing like the situation with Lehman. The bigger risks are if it goes bust in an out of control fashion that led to liquidation of all its assets.

According to Oliver, this would likely lead to “sharp falls in property prices in China and a flow on effect to other property developers as Chinese lenders” cut back their willingness to pour money into real estate. He said this “could lead to a major problem for the Chinese economy”.

However, Oliver doesn’t expect this to happen, saying the Chinese authorities will likely sort that out. At the moment, they want to send a message to property developers not to take on too much debt, he believes.

“At the end of the day, they will support their economy. Not with a bailout for China Evergrande, but some sort of restructuring… which minimises the fallout,” he said.

What about other ASX 200 resource shares?

Oliver expects that, “ultimately we’ll see more stimulus coming out of China, which will help support commodity prices”.

While falling iron ore prices are unlikely to return to US$220 per tonne any time soon, Oliver noted that they’re still historically high. And still high enough to make the big miners profitable.

But it’s not all bad news for ASX 200 resource shares.

Oliver pointed out that “gas price and coal prices are all at very high levels. As well as aluminium and copper; all very strong.”

Taking iron ore out of the picture, Oliver said, “In fact, there’s good reason to believe a new commodity super cycle has begun, which should benefit Australia.”

It should also benefit ASX 200 resource shares like Whitehaven Coal Ltd (ASX: WHC).

On that back of soaring coal prices, Whitehaven’s share price is up a whopping 88% in 2021.

By comparison the ASX 200 has gained 10% year-to-date.

The post AMP Capital’s chief economist on Evergrande and ASX 200 resource shares appeared first on The Motley Fool Australia.

More reading

• Top broker tips Fortescue (ASX:FMG) share price to rise 36%
• Fortescue (ASX:FMG) share price jumps 4%, iron ore back above US$100 a tonne
• Should investors buy Fortescue (ASX:FMG) shares in September 2021 for the 16% dividend yield?
• Here are the 3 most heavily traded ASX 200 shares this Wednesday
• Evergrande on investors’ minds and miners in focus. Scott Phillips on Nine’s Late News

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 Suncorp Group Ltd (ASX: SUN) share price is in the green today after the company successfully completed a $405 million capital raise.

The capital raise was increased from $375 million following strong demand. It saw Suncorp providing capital notes 4 for $100 apiece.

At the time of writing, the Suncorp share price is $12.41, 1.97% higher than its previous close.

Let’s take a closer look at today’s news from banking, insurance, and investment institution.

Suncorp’s successful capital raise

The Suncorp share price is in the green today after it bumped up its capital notes offering by $30 million.

The capital notes 4 first distribution will be at a rate of around 2.9% and will be paid on 17 December 2021. From then on, the notes will come with a distribution rate of around 2.04% per annum. Suncorp plans to hand out fully franked distributions.

5,251 investors participated in the offer, with four investors putting in more than $10 million each.

The positive news comes at a great time for the Suncorp share price. It fell 2.25% yesterday alongside shares in other ASX-listed insurance providers.

The dip came after a 5.9 magnitude earthquake hit Mansfield at around 9.15am yesterday, causing damage to parts of Melbourne and Victoria.

Victorian Deputy Premier James Merlino later advised that the state was aware of 46 reports of damage to properties.

However, Australasia’s insurance industry publication, insuranceNEWS.com.au, reported that Insurance Australia Group Ltd (ASX: IAG) had received more than 100 claims yesterday, with Allianz Australia reportedly racking up 70 claims.

Suncorp share price snapshot

Today’s gains have added to the Suncorp share price’s recent strong performance on the ASX.

It is currently 26% higher than it was at the start of this year. It has also gained 45% since this time last year.

The post Here’s why the Suncorp (ASX:SUN) share price is lifting today appeared first on The Motley Fool Australia.

More reading

• Here’s why ASX 200 insurers are underperforming the market this Wednesday
• 2 excellent ASX dividend shares named as buys
• 5 things to watch on the ASX 200 on Wednesday
• Climbing mortgage stress: Are the CBA, ANZ, NAB and Westpac share prices in danger?
• The next ASX 200 shares that could undertake a big capital return

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 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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The Woodside Petroleum Limited (ASX: WPL) share price is trading higher on Thursday, up 1.73% to $21.80.

Woodside shares have remained resilient amid broader market volatility, where the S&P/ASX 200 Index (ASX: XJO) plunged 2.1% on Monday to a 3-month low of 7,248.

The ASX 200 is about to break even for the week. The Woodside share price has managed to climb 3.1% over the same time period.

Woodside share price rallies on strong oil prices

Oil is gaining momentum in September, especially after OPEC’s monthly oil market report on 15 September.

In the report, it said:

… the recovery in various fuels is expected to be stronger than anticipated and further supported by a steady economic outlook in all regions. Oil demand in 2022 is now projected to reach 100.8 mb/d, exceeding prepandemic levels.

Crude oil prices started the month at around US$68.28 a barrel. They have climbed to US$71.8 at the time of writing despite the noise surrounding the Evergrande crisis and the global economy.

According to S&P Global, analysts at Australia and New Zealand Banking Group Ltd (ASX: ANZ) believe that oil sentiment could receive a “further boost” after the United States announced plans to relax air travel restrictions for vaccinated foreign passengers.

ANZ analysts that if the US reopened international borders, it could “add more than 190,000 barrels of jet fuel demand in November”.

In other tailwinds for the Woodside share price, Hurricane Ida has caused major disruptions across offshore oil and gas operators in the Gulf of Mexico. This adds to the narrative of tightening supply as demand picks up.

The US Bureau of Safety and Environmental Enforcement reported on 22 September that approximately 16.18 per cent of oil production in the Gulf of Mexico was currently offline.

It said that undamaged facilities would be back online immediately. However, those that sustained damage would take longer to return to operations.

The post Oil prices rise, Woodside (ASX:WPL) share price hits 1-month high appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 jumps as Evergrande confirms it will meet next interest repayment
• Woodside (ASX:WPL) share price rallies 3% as oil weighs in on Evergrande crisis
• ASX 200 rebounds into positive territory led by energy and materials shares
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Kerry Sun 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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The S&P/ASX 300 Index (ASX: XKO) is pushing higher today, following a rebound after Monday’s heavy loss.

During mid-afternoon trade, the ASX 300 is up 1.21% to 7,386.5 points.

Let’s take a look at which ASX companies are making headlines today.

News Corp (ASX: NWS)

The News Corp share price is topping the charts, up 7.86% to $32.39 during afternoon trade.

With no news coming out of the media company, it appears investors are in agreeance with Goldman Sachs’ latest appraisal.

The multinational investment broker reaffirmed its “buy” rating with a 12-month price target of $44.50 on its shares.

Novonix Ltd (ASX: NVX)

The Novonix share price is storming 7.63% to another all-time high of $6.49.

The company hasn’t released any market-sensitive news of late, however, anticipated demand in lithium-ion batteries seems to be the catalyst. Furthermore, the spot price for lithium carbonate has roared to 153,000 Chinese yuan per metric tonne (roughly A$32,700).

Novonix was also added to the ASX 300 Index on Monday. This means that fund managers are able to invest in the company.

AGL Energy Ltd (ASX: AGL)

The AGL share price is also pushing ahead on Thursday, up 6.69% to $6.06.

Australia’s largest electricity provider also hasn’t released any new market-sensitive material since the release of its full-year results.

However, analysts at JPMorgan upgraded the company’s shares from “Neutral” to “Overweight”. Although, the firm cut its price target by 3.2% to $7.55. Based on the current share price, this implies an upside of around 24.5%.

Which ASX companies are heading the other way?

Paladin Energy Ltd (ASX: PDN)

The Paladin share price is down 4% to 84 cents. Investors are selling the company’s shares after the spot price of uranium cooled off.

Paladin shares have plunged 18% in a week but are still up more than 500% for the year. In 2021, its shares have risen 240%.

Telix Pharmaceuticals Ltd (ASX: TLX)

Also being weighed down by investors today is the Telix share price, down 3.97% to $6.53.

The biopharmaceutical company provided investors with a United States FDA update for its prostate cancer imaging investigational product, Illuccix. It noted that the approvals process has been extended for a further 3 months.

The post Which ASX 300 shares are the top movers today? appeared first on The Motley Fool Australia.

More reading

• The News Corp (ASX:NWS) share price is leaping 8% today. Here’s why
• Why Bapcor, Brickworks, News Corp, & Premier Investments are rising
• ASX 200 (ASX:XJO) midday update: Transurban falls, Premier Investments jumps
• Telix (ASX:TLX) share price sinks 6% on FDA update
• AGL (ASX:AGL) share price climbs as shareholders vote for greater carbon cuts

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 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 disappointing month for the Fortescue Metals Group Limited (ASX: FMG) share price.

At the time of writing, the mining giant’s shares are trading a fraction higher for the day at $15.38

This means the Fortescue share price is down 24% since the start of September.

Is the weakness in the Fortescue share price a buying opportunity?

One thing that you hear a lot in investment circles is never to try and catch a falling knife. This term is used to caution investors against buying a company’s shares that are in the process of tumbling lower.

While the Fortescue share price certainly has the hallmarks of a falling knife, one leading broker doesn’t believe it is.

In fact, this morning it suggested that investors consider taking advantage of the pullback.

What was said?

According to a note out of Bell Potter, its analysts have retained their buy rating but trimmed their price target on the company’s shares to $20.87.

Based on the current Fortescue share price, this implies a potential return of 36% over the next 12 months before dividends.

And with Bell Potter forecasting a $2.45 per share fully franked dividend in FY 2022, this potential return stretches to over 50% including dividends.

Why is the broker bullish?

The note reveals that Bell Potter believes the Fortescue share price has been oversold.

The broker commented: “We have run a range of iron ore price scenarios and conclude that the 44% fall in the FMG share price from its closing high $26.30/sh on 29th July to its close yesterday of $14.75/sh looks overdone.”

This is due to the broker’s belief that the company can maintain its strong margins and dividends despite the recent iron ore price weakness.

Bell Potter explained: “We find that FMG is in a strong position to maintain strong margins, earnings and dividends. EBITDA margins remain >60% over the forecast period under our new Base Case. Lower forecast iron ore prices do not impact FMG’s ability to fund its near or medium term capital or debt servicing requirements under a range of scenarios.”

“As a result we leave our assumed dividend payout ratio of 80% unchanged. While our valuation of FMG is sensitive to our long-term iron ore price assumption (which we have left unchanged at US$95/dmt), the bearish near-term scenarios we have run indicate that competitive dividend yields (>5%, fully franked under our lowest case) look like remaining key supports for the FMG share price at current levels,” it added.

The post Top broker tips Fortescue (ASX:FMG) share price to rise 36% appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price jumps 4%, iron ore back above US$100 a tonne
• Should investors buy Fortescue (ASX:FMG) shares in September 2021 for the 16% dividend yield?
• Here are the 3 most heavily traded ASX 200 shares this Wednesday
• Evergrande on investors’ minds and miners in focus. Scott Phillips on Nine’s Late News
• Why Champion Iron, Fortescue, Lake Resources, & Zip are racing higher

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 Bruce Jackson.

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