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The Wesfarmers Ltd (ASX: WES) share price edged higher on Friday, up 0.53% to $57.28. In comparison, the S&P/ASX 200 Index (ASX: XJO) fell 0.76% to 7,403 points.

However, when looking from late August, the share price paints a different picture.

Below, we recap on Wesfarmers most recent result and how its shares have performed since.

What did Wesfarmers report for FY21?

Wesfarmers delivered its full-year results for the 2021 financial year to investors before market open on 27 August. The Wesfarmers share price closed the previous day at a near all-time high of $63.96.

Across the board, Wesfarmers recorded a robust performance with growth in several key metrics. This included:

• Revenue from continuing operations up 10% on the prior corresponding period to $33,941 million;
• Earnings before interest and tax (EBIT) from continuing operations jumped 18.8% to $3,776 million;
• Net profit after tax lifted 16.2% to $2,421 million; and
• Fully franked final dividend of 90 cents per share, bringing the full-year dividend to 178 cents apiece, up 17.1% year-on-year.

The strong result largely came from the company’s Bunnings and Kmart Group businesses, with Officeworks slightly behind.

Wesfarmers managing director Rob Scott commented:

Bunnings, Kmart Group and Officeworks delivered strong sales and earnings growth for the year. While customer demand remained resilient, sales growth in Bunnings, Officeworks and Catch moderated from mid-March as the businesses began to cycle elevated demand following the onset of COVID-19 in the prior year.

Pleasingly, sales growth from mid-March remained strong on a two-year basis across all of the Group’s retail businesses.

How has the Wesfarmers share price reacted?

On the day of the annual report, Wesfarmers shares fell 2.75% to finish at $62.20. The following week was not so kind to the conglomerate’s shares as they fell consecutively to register a loss of 7.27% from 30 August to 3 September.

Since then, Wesfarmers shares have had mixed trading days.

The Wesfarmers share price has lost around 10% over the last 3 weeks, while the S&P/ASX 200 Index(ASX: XJO) has fallen just 1.5%.

A number of brokers weighed in after the company released its full-year results.

Analysts at Macquarie slapped a “neutral” rating on the Wesfarmers share price, cutting its outlook by 3.3% to $61.35. On the other hand, Morgans and Credit Suisse raised their price targets by 5.2% to $59.00 and 2% to $59.91, respectively.

However, the most recent broker note came from Citi which also raised its view on Wesfarmers shares by 4.3% to $49.00. Based on the current share price, this implies a downside of around 15% on Citi’s assessment.

The post How has the Wesfarmers (ASX:WES) share price been performing since reporting results? appeared first on The Motley Fool Australia.

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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 Wesfarmers 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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With the Delta variant paralysing much of Australia, the market is currently very much focused on COVID-19 recovery shares.

However, multiple professionals have warned investors not to get sucked in by every pandemic recovery beneficiary.

Forces at play during the current lockdowns are very different to the investing environment during the first and second waves last year.

No big government bazooka this time

According to Ophir Funds co-founders Andrew Mitchell and Steven Ng, companies rebounded quickly during the 2021 financial year because of “mammoth” government stimulus.

“It was on a scale not seen since World War II,” they wrote in their latest letter to clients.

“It mostly covered April to September last year and was designed to help get the economy back on its feet given the nationwide lockdown in the June quarter.”

Despite this, most ASX-listed companies have been reluctant to provide guidance for the 2022 financial year. Mitchell and Ng have no doubt why this uncertainty reigns.

They wrote: “Australian governments brought the big bazooka in 2020. But so far this year it’s been more like the peashooter!

“Business support payments are much more targeted at the non-listed SME segment and are a fraction of those provided in 2020. Individual COVID disaster payments, on a per-employee basis, are closer but still trail what was provided last year.”

While there might be some pent-up consumer demand when the Delta-induced lockdowns end, the Ophir team thinks it might be overstated.

The ASX shares to avoid for COVID recovery

While Mitchell and Ng generally reckon ASX shares exposed to the ‘reopening’ economy will be rewarded by investors, they will steer clear of one type of business.

“We’ve been conscious not to be in positions that are overly reliant on government-supported demand,” they said.

Sage Capital’s latest memo to clients was along the same lines.

“With the consumer more supported than stimulated by government spending in this round of lockdowns, consumer discretionary company earnings will suffer for the first half of fiscal 2022.”

The Ophir team is also avoiding stocks that rocketed up in November last year.

“We … believe cyclically orientated businesses are unlikely to get the same boost they did last year on the initial vaccine news given earnings and economic growth momentum appears to be peaking, which sees us with a greater balance between these and more defensive type companies.”

With both the US Federal Reserve and Reserve Bank of Australia planning to reduce quantitative easing, Mitchell and Ng are “more cautious” on high-growth stocks on high valuations.

So, which ASX recovery shares do we go for?

Sage Capital is sticking to reopening beneficiaries that have the market power to set their own prices. And one sector stands out with these criteria.

“In this context, we remain long insurers with the pricing power to drive premiums higher.”

Ophir agrees with this sentiment, although Mitchell and Ng think the inflated costs will be temporary.

They wrote: “We continue to scan our portfolios to ensure the companies we invest in have some pricing power in reserve, should these higher costs become more pervasive.”

The post The COVID recovery ASX shares to avoid appeared first on The Motley Fool Australia.

More reading

• 2 ASX growth shares analysts rate as buys right now
• 2 ASX travel shares to consider buying
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• 5 things to watch on the ASX 200 on Monday
• 2 buy-rated ASX dividend shares with 4%+ yields

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

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Are you looking to add a growth share or two to your portfolio? If you are, then the two listed below could be worth considering.

Here’s why these growth shares are rated as buys:

Appen Ltd (ASX: APX)

The first ASX growth share to look at is Appen. It is a developer of high-quality, human annotated datasets for artificial intelligence (AI) and machine learning models. It undertakes these activities through a team of over one million skilled contractors that collectively have expertise across countless languages.

While demand for its offering has softened during the pandemic, management appears confident it will rebound in the near future as major investments by tech giants in AI and machine learning resumes.

The team at Citi appear confident this will happen and remain bullish on its long term outlook. The broker currently has a buy rating and $18.80 price target on Appen’s shares

Temple & Webster Group Ltd (ASX: TPW)

Another ASX growth share to look at is Temple & Webster. It is Australia’s leading online retailer of furniture and homewares. The company runs a drop-shipping model which sees almost 200,000 products sent directly to customers from suppliers. This is complemented by a growing private label range which is sourced directly by Temple & Webster from overseas suppliers.

This business model is working very well for the company. So much so, last month Temple & Webster released its full year results and revealed an 85% increase in revenue to $326.3 million and a 141% jump in EBITDA to $20.5 million.

Positively, the shift to online shopping is still only getting started in this category. This and its leadership position give the company a significant runway for growth over the next decade and beyond.

Morgan Stanley is positive on the company. It currently has an overweight rating and $16.00 price target on its shares.

The post 2 ASX growth shares analysts rate as buys right now appeared first on The Motley Fool Australia.

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• Why Appen (ASX:APX) and this ASX growth share could be buys

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 Appen Ltd and Temple & Webster Group Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The ASX travel share sector could be a good place to look for recovery ideas as earnings start heading into profitable territory again.

It has been a difficult 18 months for the ASX travel share sector with limited travel, restrictions and big losses.

However, there may be light at the end of the tunnel with talk of borders reopening and a growing number of people being vaccinated – bringing the opening up targets of NSW and VIctoria closer.

With that in mind, these two ASX travel shares could be ones to consider:

Webjet Limited (ASX: WEB)

Webjet is currently rated as a buy by the broker UBS with a price target of $6.35. The broker believes that Webjet’s medium-term outlook is looking stronger. UBS believes that Webjet may be able to increase its market share.

According to UBS, Webjet shares are valued at 19x FY23’s estimated earnings.

A few weeks ago the ASX travel share told investors that its divisions had been profitable before the lockdowns in Australia and New Zealand. The WebBeds business was profitable in July and August, it was also on track to be profitable in September. WebBeds has seen strong demand as travel restrictions ease in North America and Europe. Management suggested this showed significant upside as more international markets reopen.

Its online travel agency and Online Republic businesses were profitable in April and May, but both have been impacted by lockdowns. Webjet believes that both businesses will return to profitability as soon as domestic markets reopen.

Webjet thinks that it can expand into new market segments and benefit from customers buying travel online. Management said the business is on track to reduce costs by at least 20% once the company gets back to scale. Once markets reopen, Webjet thinks it will have lower costs and greater profitability.

Corporate Travel Management Ltd (ASX: CTD)

Corporate Travel is currently rated as a buy by the broker Morgans, with a price target of $25.25.

Morgans was attracted to the Corporate Travel Management’s last few months of FY21 which revealed a good performance in the northern hemisphere. Market share growth and a return to profitability in the second half of FY21 were highlights.

In the second half of FY21, the ASX travel share generated underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $8.1 million, with $13.6 million of positive EBITDA generated in the fourth quarter of FY21.

The business points to the acquisition of Travel & Transport in the US as a very helpful reason why it will be a much larger business after COVID travel restrictions are removed. It thinks it’s now the fourth largest corporate travel business in the world.

In North America, FY21 fourth quarter revenue increased 47% to $39.6 million compared to the third quarter result.

Corporate Travel Management managing director Jamie Pherous said:

Through our recent acquisitions, realised synergies and permanent reductions of our cost base we expect the business will deliver material accretion to group earnings after COVID-19.

According to Morgans, the Corporate Travel Management share price is valued at 22x FY23’s estimated earnings.

The post 2 ASX travel shares to consider buying appeared first on The Motley Fool Australia.

More reading

• Is it too late to buy Qantas (ASX:QAN) and other ASX travel shares?
• To buy, hold or sell? Experts weigh in on the Webjet (ASX:WEB) share price
• Why the Webjet (ASX:WEB) share price has soared 24% in 4 weeks
• Is the Corporate Travel (ASX:CTD) share price a buy right now?
• These are the 10 most shorted ASX shares

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 owns shares of and has recommended Corporate Travel Management 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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If you’re in the process of building an income portfolio, then you might want to look at the shares listed below.

Here’s why these ASX dividend shares are rated highly by a top broker:

Charter Hall Social Infrastructure REIT (ASX: CQE)

The first ASX dividend share to look at is the Charter Hall Social Infrastructure REIT. This real estate investment trust has a focus on social infrastructure properties such as childcare centres and government sites.

Thanks to strong demand for these properties and favourable revaluations, the Charter Hall Social Infrastructure REIT reported a 103% increase in statutory profit to $174.1 million in FY 2021.

This allowed the company to increase its distribution to 19.71 cents per share, which comprises a distribution of 15.7 cents and a special distribution of 4 cents.

Pleasingly, management expects to grow its distribution further (excluding its special distribution) in FY 2022. It has guided to a full year distribution of 16.7 cents per share. Based on the current Charter Hall Social Infrastructure REIT share price of $3.70, this will mean a 4.5% yield.

Its result and guidance went down well with the team at Goldman Sachs. In response the broker put a buy rating and $3.81 price target on the company’s shares.

South32 Ltd (ASX: S32)

Another dividend share that is highly rated is this mining giant. While many of its peers have fallen heavily recently, the South32 share price has been surging higher.

This is due to the positive outlook for the key commodities it produces. South32 has exposure to a diverse group of commodities, including alumina, aluminium, energy coal, metallurgical coal, manganese ore, nickel, silver, lead, and zinc.

It is thanks to its exposure to aluminium that Goldman Sachs is very positive on the company. Its analysts believe the metal is in the early stages of a multi-year bull market and expect it to underpin strong free cash flows in the coming years.

So much so, Goldman believes South32’s shares will provide fully franked dividend yields above 10% in FY 2022 and FY 2023.

The broker currently has a conviction buy rating and $3.80 price target on its shares. This compares to the latest South32 share price of $3.39.

The post Top broker names 2 ASX dividend shares to buy appeared first on The Motley Fool Australia.

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• 3 reasons this broker says the South32 (ASX:S32) share price is a buy

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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On Friday the S&P/ASX 200 Index (ASX: XJO) finished the week on a disappointing note. The benchmark index fell to 0.75% to 7,403.7 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to fall again

The Australian share market looks set to fall heavily again on Monday. According to the latest SPI futures, the ASX 200 is expected to open the day 68 points or 0.9% lower this morning. This follows a disappointing end to the week on Wall Street, which saw the Dow Jones fall 0.5%, the S&P 500 drop 0.9%, and the Nasdaq tumble 0.9%.

Oil prices drop

Energy producers including Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could have a poor start to the week after oil prices dropped on Friday night. According to Bloomberg, the WTI crude oil price is down 0.9% to US$71.97 a barrel and the Brent crude oil price has fall 0.45% to US$75.34 a barrel. Oil prices fell after US supply from storm hit areas returned to the market.

Transurban wins WestConnex bidding

The Transurban Group (ASX: TCL) share price is likely to be in a trading halt today amid reports it has won the bidding for the remainder of WestConnex. According to the AFR, the toll road operator is understood to have made a $10 billion bid with its Sydney Transport Partners consortium, bringing its ownership to 100%. A $4 billion capital raising is expected to be launched today.

Gold price falls

It could be a subdued start to the week for gold miners Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) after the gold price dropped on Friday night. According to CNBC, the spot gold price fell 0.3% to US$1,751.40 an ounce. The gold price lost around 2% last week.

Iron ore prices tumble again

The shares of BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG), and Rio Tinto Limited (ASX: RIO) could be under pressure again on Monday after iron ore prices tumbled further. According to Metal Bulletin, the spot benchmark iron ore price has tumbled 5% to US$101.95 a tonne.

The post 5 things to watch on the ASX 200 on Monday appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell next week
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• 2 ASX dividend shares to buy next week
• How has the Fortescue (ASX:FMG) share price performed since reporting results?
• These were the best performing ASX 200 (ASX:XJO) shares last week

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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If you’re looking to boost your income with some dividend shares, then you might want to consider the ones listed below.

Here’s why analysts have given them buy ratings:

Aventus Group (ASX: AVN)

The first ASX dividend share to look at is Aventus. It is a fully integrated owner, manager, and developer of large format retail centres with a portfolio of 20 centres valued at $2.3 billion.

Across these centres the company has a diverse tenant base of 593 tenancies, with national retailers representing 88% of the total portfolio.

Aventus has continued to experience solid demand for its tenancies despite the pandemic. This led to the company reporting an occupancy rate of 98.8% in FY 2021. This underpinned a 9.6% increase in funds from operations to $110 million for the year.

The team at Goldman Sachs is very positive on the company. It currently has a buy rating and $3.40 price target on its shares. Goldman is also forecasting dividends of 17.8 cents per share in FY 2022 and then 19.4 cents per share in FY 2023.

Based on the current Aventus share price of $3.27, this will mean yields of 5.4% and 5.9%, respectively.

Westpac Banking Corp (ASX: WBC)

This banking giant’s shares may have risen strongly this year, but a number of leading brokers still believe they are good value.

This is thanks largely to its strong capital position, improving trading conditions, and its bold cost reduction targets. In respect to the latter, Westpac is aiming to reduce its cost base to $8 billion in the coming years. This will be a sizeable reduction from $12.7 billion currently.

It is largely for this reason that Citi is a big fan of the bank. The broker currently has a buy rating and $30.00 price target on its shares. This compares to the latest Westpac share price of $25.88.

Citi is forecasting fully franked dividends of $1.16 per share in FY 2021 and then $1.30 per share in FY 2022. This represents yields of 4.5% and 5%, respectively, over the next couple of years.

The post 2 buy-rated ASX dividend shares with 4%+ yields appeared first on The Motley Fool Australia.

More reading

• How has the Westpac (ASX:WBC) share price performed since reporting results?
• Westpac (ASX:WBC) share price slides amid further savings rates cuts
• Why this fund manager sees limited growth potential for ASX 200 banks
• What this broker thinks of the Westpac (ASX:WBC) share price
• Could liar loans crash the housing market?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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 AVENTUS RE UNIT. 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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If you have a penchant for investing in small cap shares, then you might want to look at the three listed below.

Here’s why these are highly rated by analysts right now:

Audinate Group Limited (ASX: AD8)

The first small cap ASX share to look at is Audinate. It is the leading digital audio-visual networking technologies provider behind the Dante audio over IP networking solution. Management notes that Dante is the evolution of AV systems, converging all previous connection types into one. The solution is the clear industry leader, with the number of Dante enabled products manufactured by its customers eight times greater than its nearest rival.

UBS is a fan of the company. It currently has a buy rating and $11.75 price target on Audinate’s shares.

Bigtincan Holdings Ltd (ASX: BTH)

A second small cap to look at is Bigtincan. It is a growing provider of enterprise mobility software to sales and service organisations. The company notes that its mobile, AI-powered sales enablement automation platform features the industry’s premier user experience that empowers sales representatives to more effectively engage with customers. Bigtincan’s recurring revenues have been growing strongly in recent years but are still only scratching at the surface of a huge global market opportunity.

Morgan Stanley is positive on the company. It currently has an overweight rating and $2.10 price target on its shares.

Booktopia Group Ltd (ASX: BKG)

A final small cap ASX share to watch is Booktopia. It is an online book retailer which really caught the eye in FY 2021. For the 12 months ended 30 June, the company reported a 35% increase in revenue to $223.9 million and a 125% jump in EBITDA to $13.6 million. This was driven by record shipments of 8.2 million units, which was underpinned by its new distribution centre and strong demand. Pleasingly, it has started FY 2022 in a positive fashion. Management advised that sales in July and August were higher than the prior corresponding period.

This went down well with Morgans. In response, the broker retained its add rating and lifted its price target to $3.72.

The post 3 small cap ASX shares analysts rate highly appeared first on The Motley Fool Australia.

More reading

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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 AUDINATEGL FPO and BIGTINCAN FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group Limited. The Motley Fool Australia owns shares of and has recommended AUDINATEGL FPO and BIGTINCAN 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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It can be difficult to find options for income in this era of record-low interest rates. ASX dividend shares could be a good way to generate that required cashflow.

Businesses have the ability to pay some of the profit they make each year to investors.

However, just because a business pays a dividend or distribution, doesn’t automatically make it a buy for income.

But these two ASX dividend shares could be good to think about:

Adairs Ltd (ASX: ADH)

In FY22, Commsec estimates suggest that Adairs has a forward grossed-up dividend yield of 8%. That’s based on an annual dividend per share of around $0.22.

Adairs is a leading retailer on homewares and furnishings. It has a large store network across Australia and New Zealand, as well as a large online presence. The company made 37.4% of its total sales online. The company saw total sales increase by 28.5% to $500 million.

The company experienced a strong increase of profitability during FY21 with the group underlying earnings before interest and tax (EBIT) rising by 98.2% to $96.7 million. Some of this growth was driven by a 520 basis point increase of the underlying gross profit margin to 66.7%.

But it’s looking to continue to grow profit. The supply chain is a key focus, with a new DHL-operated national distribution centre operational this month (September 2021). This should lead to annualised cost savings of around $3.5 million per annum.

Store floor space growth could be another area of growth. The ASX dividend share says that store sales are highly correlated to store floor space with each additional square metre adding around $4,000 in store sales. It expects to grow its gross lettable area (GLA) by 8% (or more) in FY22 and by 5% (or more) for the following five years through new and upsized stores.

The Adairs share price is valued at 11x FY22’s estimated earnings.

Inghams Group Ltd (ASX: ING)

Inghams is one of Australia’s largest poultry businesses. It provides chicken, turkey and plant-based protein products. The poultry business has a number of customers including major retailers, quick service (fast food) restaurants, food service distributors and wholesalers.

The ASX dividend share’s vertically integrated operating model enables the business to create value and realise efficiencies across a complex and large scale supply chain, according to management.

Inghams saw FY21 statutory earnings before interest, tax, depreciation and amortisation (EBITDA) growth of 14.5% to $443.9 million. Meanwhile, statutory net profit rose by 107.7% to $83.3 million. This enabled the business to grow its total dividend by 17.9% to 16.5 cents per share.

In FY22, Commsec estimates suggest that Inghams is going to pay a grossed-up dividend yield of 6.4%.

Inghams says it’s looking to pay reliable dividends to shareholders, with a dividend payout ratio of 60% to 80% of underlying net profit after tax. It’s focusing on revenue growth and “continuous improvement benefits”.

It’s expecting to growth volume with new business across various channels. It’s looking to secure growth opportunities with existing customers and product innovation.

Inghams is investing across its network to improve and grow its operations, including the WA hatchery as well as a systems modernisation project.

Citi currently rates Inghams as a buy with a price target of $4.55. Using the broker’s forecast, Inghams is valued at 16x FY22’s estimated earnings.

The post 2 top ASX dividend shares to think about appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• 2 ASX dividend shares with big yields
• Why Adairs, Beach, Catapult, & Myer shares are charging higher
• 5 things to watch on the ASX 200 on Tuesday
• These are the 10 most shorted ASX shares

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. 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 PointsBet Holdings Ltd (ASX: PBH) share price was back on form again on Friday.

The sports betting company’s shares rose a sizeable 6% to end the week at $9.75.

However, despite this strong gain, PointsBet’s shares are still down a disappointing 15% year to date.

Is the PointsBet share price good value?

One leading broker that sees a lot of value in the PointsBet share price right now is Goldman Sachs.

According to a recent note, the broker has put a buy rating and $14.75 price target on the company’s shares.

Based on the current PointsBet share price, this implies potential upside of 51% over the next 12 months.

What did the broker say?

Goldman was pleased with the company’s performance in FY 2021 and remains confident on the future. Particularly given its huge opportunity in the United States market and its strong position within it following its deal with NBCUniversal.

The broker estimates the US market will be worth US$37 billion per annum by FY 2033.

Goldman explained: “We reiterate our Buy rating on PBH, with our thesis underpinned by i) PBH’s leverage to the burgeoning US Sports Betting and iGaming market, ii) our view that PBH is well-placed to achieve 10% share in states it operates in, iii) upside risk to LR sustainable margins in Aus and the US, iv) Scalability benefits ahead noting positive impacts from the NBCUniversal deal to come and iGaming synergies, and v) strong management team and execution track record. Stay Buy with our view that current share price levels do not reflect much upside from potential license wins in states such as NY.”

All in all, the broker believes this makes the PointsBet share price great value at the current level.

The post Leading broker says the PointsBet (ASX:PBH) share price has 51% upside appeared first on The Motley Fool Australia.

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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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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