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It has been a tumultuous month for the Santos Ltd (ASX: STO) share price. During this timeframe, shares in the oil and gas company have fallen approximately 10%. That might not sound like much to some investors, but in the context of Santos being a $13.3 billion company, it is certainly not a meagre slump.

This brings us to the question, could now be the time to consider making space for Santos in the portfolio? As late and great investor Christopher Browne said, “Buy stocks as you would groceries: when they are on sale,” although is Santos really on sale?

Let’s review the company’s latest activities and broker insights.  

What’s going on over at Santos?

Firstly, we’ll address the elephant in the room. The most notable event happening with Santos is its efforts to merge with Oil Search Ltd (ASX: OSH). Originally Santos submitted a non-binding indicative all-scrip merger proposal to the Oil Search board in late June.

Initially, the proposal offered Oil Search shareholders 0.589 Santos shares – allowing Santos to hold 63% of the merged company. However, this proposal was then revised in early August to 0.6275 Santos shares, thereby reducing Santos’ potential stake to 61.5%.

Dampening the excitement of the merger, Papua New Guinea’s Prime Minister James Marape recently signalled the merged entity would need to be in the best interest of PNG and its people. The news pushed the Santos share price down 1.2% on the day.

When it rains, it pours… as further revelations arose earlier this week. This time it involved Oil Search and its management. Reportedly, complaints regarding the company’s ex-CEO are now in the spotlight as the whistleblower who made them is concerned about a fair inquiry due to the closeness between those involved.

What do experts think of the Santos share price?

In the early stages of the merger announcement, most experts were reasonably bullish on the potential for the creation of an oil and gas giant.

Analysts at UBS said, “We are supportive of the strategic rationale to merge and believe the proposed merger would be both value and FCF accretive.”

Although, my colleague Zach Bristow reported on the risks to Santos perceived by the credit rating agencies Standard & Poors (S&P) and Fitch. Both agencies highlighted concerns around the geopolitical risk posed by carrying out business in PNG.

At the time of writing, the Santos share price is down 0.08% to $6.38. It appears investors are more prone to selling while Santos dances with its merger intentions.

The post Could it be time to consider buying Santos (ASX:STO) shares? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Santos (ASX:STO) share price lifts despite ratings concerns
• 5 things to watch on the ASX 200 on Wednesday
• What could the latest climate report mean for ASX 200 shares?
• Santos (ASX:STO) share price slides as UN calls “death knell” on fossil fuels

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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Today is Endeavour Group Ltd‘s (ASX: EDV) twelfth Friday on the ASX, and it’s become apparent that on every Friday except one, its share price has increased.

There’s no clear cause of this phenomenon.

Perhaps, drinks bought at Endeavor-owned outlets spark ASX-related conversations between friends. Or maybe, as investors run to buy their weekend necessities at Dan Murphy’s or BWS, or grab a beer at their local Endeavour-owned hotel, the idea of getting on board with the beverage retailer crosses their mind.

Possible resulting boosts of market activity could, thus, inspire the Endeavour share price to gain.

This Friday, the Endeavour share price has gained 0.72%. Shares in the ASX newbie are trading for $7.03 apiece.

Let’s take a look at some theories as to why Endeavour shares gain on Fridays.

TGIF for the Endeavour share price

One theory as to why Endeavour tends to gain on Fridays is that its business is assumed to pick up over the weekend.

Using Google’s ‘popular times’ feature as a source, most Dan Murphy’s stores in the cities of Melbourne, Sydney, and Brisbane seem to be at their busiest between Friday afternoon and Saturday evening.

The same data on BWS outlets was much less consistent. Though most BWS stores in Australia’s 3 largest cities experienced an uptick in popularity on Friday nights and Saturdays.

Endeavour also owns 332 hotels, 1,775 licenced venues, more than 12,000 poker machines, and 290 TABs and KENO outlets. Some may assume these would be at their busiest over the weekend. However, Endeavour hasn’t stated that’s the case.

Although, if this theory was true, Endeavour shares would assumably be traded more on a Friday. But, while some Fridays see more activity than other days of a given week, it’s not consistent enough to call a pattern.

Another theory market watchers might come to regarding the Endeavour share price’s fabulous Fridays, is that most of the company’s news comes out on a Friday. Though, that’s not the case.

Aside from the Friday before last, when Endeavour announced a new non-executive director, it has never released big news on a Friday.

In fact, aside from that one announcement, Endeavour has only released common paperwork to the ASX on Fridays.

And yet, the Endeavour share price follows a pattern of being in the green on Fridays.

Foolish takeaway

It’s tempting to draw comparisons between a weekly occurrence and a share price lifting.

However, Endeavour has traded on the ASX for 37 sessions now. Of those sessions, the Endeavour share price has only ended 10 in the red and traded flat for 3.

Therefore, the case of the Endeavour share price’s mysterious Fridays is likely just a coincidence.

The post Friday drinks: Why does the Endeavour (ASX:EDV) share price lift on Fridays? appeared first on The Motley Fool Australia.

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• These 10 ASX 200 shares hit new 52-week highs this Monday
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• Here’s why the Endeavour (ASX:EDV) share price is up 10% in a month
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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While the Qantas Airways Limited (ASX: QAN) share price is down 7.64% this year, the Alliance Aviation Services Ltd (ASX: AQZ) share price is in the green.

The company has been having an off couple of days, down over 5% yesterday and a further 0.36% – resulting from the release of its FY21 full-year results. Alliance, unlike Qantas, made a profit this year, and a rising one at that. For the year it made $51 million, which is up 25.3% on the prior corresponding period (pcp).

Let’s take a closer look.

Alliance is overperforming the Qantas share price

For FY21, Alliance had the following results:

• Revenue up 3% on the pcp to $308 million.
• Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $90.5 million – up 15% on the pcp
• Operating underlying cashflow of $75.9 million, which is 73% higher on the pcp.
• Underlying earnings per share (EPS) 22.6 cents a share but no dividend paid for the year.

Alliance is a Queensland-based airliner that specialises in charter flights and group travel. While first established to meet the needs of fly-in, fly-out (FIFO) mine workers, it has since expanded into government, tourism, and corporate travel. The Australian reports that Alliance’s service has even been sought by the NRL and the Australian Open in their attempts to keep their competitions running during the COVID pandemic.

The company has a fleet of 4 aircraft, which have been in high demand during the pandemic as people struggled and/or avoided commercial flights. This has seen the Alliance share price rise to record highs, which is the converse of the Qantas share price experience during this global viral outbreak.

What did Alliance management say about the results?

Alliance Managing Director, Scott McMillan, said

Alliance has produced a record result at a time when we are investing heavily in supporting the growth of the business. The underlying business, utilising the Fokker fleet, continues to reap the benefits of past planning and investment and is the financial and operational foundation on which the E190 expansion has been built. This expansion program will provide the Company with an increase in annualised flight hours of up to 3 times by the end of FY2022.

Alliance and Qantas share price snapshot

Over the past 12 months, the Alliance share price is 18.5% higher while the Qantas share price is 26% greater. The contrast between the 52-week figures and the year-to-date figures are stark and show how quickly things can change.

At the same time, the S&P/ASX 200 Index (ASX: XJO) is 14.1% higher year-to-date and up 25.2% over the year.

Alliance Aviation has a market capitalisation of $666 million and Qantas has one of $8.5 billion.

The post Move over Qantas (ASX:QAN). This ASX airline share is profiting during COVID appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous 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 Global Lithium Resources Ltd (ASX: GL1) share price is charging higher again on Friday.

Earlier today, the lithium explorer’s shares were up as much as 12.5% to a record high of 45 cents.

When the Global Lithium Resources share price hit that level, it was up 52% since the end of last week.

Why is the Global Lithium Resources share price rocketing higher?

Investors have been bidding the Global Lithium Resources share price higher this week despite there being no news out of the company.

However, Global Lithium Resources isn’t the only lithium-focused company rising this week.

The likes of Galaxy Resources Limited (ASX: GXY), Orocobre Limited (ASX: ORE), Piedmont Lithium Inc (ASX: PLL), Pilbara Minerals Ltd (ASX: PLS), and Vulcan Energy Resources Ltd (ASX: VUL) shares are all up strongly this week as well.

This has been driven by a very bullish broker note out of JP Morgan which reveals that the investment bank is becoming very positive on lithium. So much so, it has increased its price forecasts materially to reflect this.

Lithium price upgrades

JP Morgan’s analysts have raised their long term-lithium spodumene price forecast by 31% to $850 a tonne and their long-term lithium hydroxide price forecast by 12% to US$14,000 a tonne.

The investment bank is bullish due to its belief that there isn’t enough lithium to meet demand for the foreseeable future. This strong demand is being driven by the electrification revolution, with households turning to electric vehicles (EV) and battery power storage.

It commented: “We have rebuilt our model which is still based off JPM’s global equity team assumptions for auto sales, EV roll out, and battery capacity. The team expects total EV penetration of 45% in 2030, with battery electric vehicles (BEVs) at 21%. BEVs account for the vast majority of lithium demand due to greater battery size when compared to plug in hybrid & hybrid vehicles.”

How does this benefit Global Lithium Resources?

This could be good news for the Global Lithium Resources share price.

The company owns the Marble Bar Lithium Project in the Pilbara region of Western Australia.

It has defined a maiden Inferred Mineral Resource of 10.5Mt @ 1.0% Li20 at its Archer deposit, which confirms the project as a significant new greenfield lithium discovery.

If prices rise in line with JP Morgan’s forecasts, this project has the potential to be generating strong free cash flows in a few years. But time will tell if that is the case.

The post The Global Lithium Resources (ASX:GL1) share price is up 52% in a week appeared first on The Motley Fool Australia.

More reading

• The Afterpay (ASX:APT) share price history: The major highlights (and low points)
• Why the Charger Metals (ASX: CHR) share price is up 80% this week
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• Why CBA (ASX:CBA) is backing the RBA in push for payment reforms
• Galan Lithium (ASX:GLN) share price tumbles 6% after $50 million placement

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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 Afterpay Ltd (ASX: APT) share is one that has certainly commanded a lot of attention over the past few years. Afterpay shares are famously (perhaps infamous) for their volatility. After all, this was an ASX 200 share which fell almost 70% over just one month at the onset of the coronavirus pandemic last year, only to add more than 1,100% over the subsequent 11 months.

Afterpay is of course back at the front of the ASX 200 news feed recently, thanks to the blockbuster announcement last week that the US payments giant Square Inc (NYSE: SQ) is attempting to acquire Afterpay in full.

Since investors received Square’s offer to swallow Afterpay for an all-scrip price of 0.375 shares of Square for every share of Afterpay held, the Afterpay share price has been slowly edging higher. Today, it’s currently going for $132.40 a share, up 0.66% for the day.

So now that the Afterpay share price looks as though it might have found a Square groove, let’s take a look back at this company’s major highlights (and lowlights) over the past few years.

Afterpay share price bared

Here’s the Afterpay share price over the past 5 years:

As you can see, it’s been one heck of a ride. So as we discussed earlier, Afterpay had a nasty crash last year with the emergence of the COVID-19 pandemic. On February 21, 2020, Afterpay was riding high at what was then a record high of around $38-39 a share. But by March 23, Afterpay had fallen below $9, wiping more than 70% from the market capitalisation of the company in just a month.

Before this dramatic crash, Afterpay could seemingly do no wrong. Afterpay shares more than doubled across 2019, rising from around $12 at the start of the year, but finishing it at more than $30 a share. Before that, we saw similar growth in 2017 and 2018 as well.

A 2020 to remember… thanks to Tencent

But this company really stepped on the gas over the period following the COVID crash last year. Perhaps the most dramatic day in Afterpay’s then-history came in late April 2020. That was when investors found out that the Chinese e-commerce giant Tencent Holdings Ltd had acquired a 5% stake in the BNPL company.

At the time, Afterpay was still in recovery mode from the COVID crash, with investors still nervous that a recession-induced wave of defaults may have been coming the company’s way. But this vote of confidence from Tencent seemed to dispel these doubts and really lit a rocket under the Afterpay share price. Over the next month, investors would send Afterpay shares from around $30 to over $50. That’s a rough 70% jump.

The company hasn’t looked back since. The Afterpay share price continued to climb, topping out at a record $160.05 a share by February 2021.

Since February, Afterpay shares had slowly started to sink back towards $100 a share, and even sank below $90 at one point back in May. However, the Square deals emergence has once again resulted in a re-rating of Afterpay’s value.

And that brings us to today.

So what lies in store for the Afterpay share price going forward?

Well, as long as this deal is in play, Afterpay’s share price looks set to be tied to that of Square. But that won’t mean that Afterpay won’t still be one of the most watched ASX 200 shares until the day its stock leaves the ASX boards. If or when that does happen, ASX investors will still be able to indirectly buy Afterpay through Square’s proposed ASX listing.

The Afterpay share price has gripped and excited ASX investors for years now. If Afterpay’s independence finally comes to an end, it will be the end of an ASX era.

The post The Afterpay (ASX:APT) share price history: The major highlights (and low points) appeared first on The Motley Fool Australia.

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Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T 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 Charger Metals NL (ASX: CHR) share price is gaining again today, despite no news having been released by the company.

Right now, shares in Charger are 9.72% higher than their previous close, bringing its share price to 79 cents.

Today’s gains included, the Charger share price has gained a massive 80% over the course of this week. It is also 252% higher than it was when it completed its initial public offering (IPO) on the ASX on 9 July.

Let’s take a look at what’s been driving shares in the lithium and critical metals-focused minerals company higher.

Why is Charger’s stock gaining?

The Charger Metals share price has been performing exceptionally well since it released news of its 70% owned Bynoe Lithium Project on Wednesday.

The company announced it has begun fieldwork at the Northern Territory project, which it says is prospective for spodumene.

The Bynoe Lithium Project is also partly owned by Lithium Australia NL (ASX: LIT) and is surrounded by Core Lithium Ltd’s (ASX: CXO) Finnis Lithium Project.

The fieldwork that is now underway will include mapping, geochemistry, and aero-magnetics.

Charger says the project houses 14 identified pegmatite anomalies along a 5-kilometre-long zone.

Additionally, the project’s pegmatites have previously produced cassiterite. They are also prospective for tantalite.

After the fieldwork is finished, the Charger share price might be boosted by more news of the project. The company expects the fieldwork’s findings to refine the project’s lithium targets so Charger can begin a drilling campaign.

Charger Metals’ exploration portfolio also partly owns projects prospective for copper, nickel, platinum group elements, and gold.

Charger Metals share price snapshot

It goes without saying that Charger Metals’ first few weeks on the ASX have been outstanding.

The company’s prospectus had its shares going for 20 cents apiece — they’re now trading for nearly 300% more.

The company has a market capitalisation of around $36 million, with approximately 50 million shares outstanding.

The post Why the Charger Metals (ASX: CHR) share price is up 80% this week appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. The benchmark index is currently up 0.5% to 7,627.7 points.

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

Telstra share price hits 52-week high

The Telstra Corporation Ltd (ASX: TLS) share price has climbed to a new 52-week high on Friday. This follows a positive reaction to its full year results release from brokers. Among the most positive were analysts at Credit Suisse, Goldman Sachs, and Morgans. They have all retained the equivalent of buy ratings and lifted their price targets. Credit Suisse has retained its outperform rating and increased its price target to $4.25. Whereas Goldman has a buy rating and new $4.30 price target and Morgans has an add rating and new price target of $4.34.

PointsBet shares higher on

The PointsBet Holdings Ltd (ASX: PBH) share price is pushing higher today. This morning it revealed that it has received regulatory approval from the West Virginia Lottery Commission and has now launched online sports betting operations in the state. West Virginia marks the seventh operational US state for PointsBet’s premium sports betting product. Management believes West Virginia represents another tremendous opportunity.

Lithium miners sink

A number of lithium miners such as Orocobre Limited (ASX: ORE) and Pilbara Minerals Ltd (ASX: PLS) are under pressure on Friday. This appears to have been driven by profit taking after some sensational recent gains. For example, the Orocobre share price is still up 32% in the space of a month despite tumbling 5% today.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Premier Investments Limited (ASX: PMV) share price with a 5% gain. This morning UBS resumed coverage on the retailer with a buy rating and $30.00 price target. The worst performer on the ASX 200 has been the Orocobre share price with a 5% decline. This appears to have been driven by profit taking in the lithium sector.

The post ASX 200 midday update: Telstra 52-week high, PointsBet rises on US update appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday
• ASX 200 edges higher, Telstra climbs, NAB up

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 owns shares of and has recommended Telstra Corporation Limited. 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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The Commonwealth Bank of Australia (ASX: CBA) has thrown its formidable weight behind the Reserve Bank of Australia’s (RBA) governor, Phil Lowe.

CBA’s CEO Matt Comyn said he agreed with Lowe that payment laws that apply to traditional banks should also apply to the big-name technology companies moving into the payments space.

Why are tech company payments regulations different?

The different regulatory playing fields for traditional banks like CBA and companies like Afterpay Ltd (ASX: APT), which Square Inc (NYSE: SQ) proposes to acquire for $39 billion, largely comes down to 2 words: system and services.

As the Australian Financial Review reports, Australian courts “have restricted the definition of payments ‘system’”. For that reason, the RBA wants to extend its mandate from “oversight of the payments ‘system’ to payments ‘services’”.

That would ensure that companies like Afterpay, as well as tech giants like Google (Alphabet Inc Class A (NASDAQ: GOOGL)) and Apple Inc (NASDAQ: AAPL) which are also moving into the payments space, will have to play by the same rules as CBA and the other big banks.

“I agree with the Governor’s comments in that the definition of payments is very narrow at the moment,” Comyn said.

He added (quoted in the AFR):

I do believe some competition issues could look to be addressed. I am sure policy makers will start at the principle [of what is in the best interest of country and customers] and it could lead to some quite significant reshaping of the laws, that currently aren’t applied to a number of providers.

Comyn pointed out that this wasn’t just an issue Down Under. “These exact discussions and debates, and some early legislation, are already occurring in other markets around the world,” he said.

How has CBA been performing?

The CBA share price is up 44% over the past 12 months, well outpacing the 25% gains posted by the S&P/ASX 200 Index (ASX: XJO).

Year to date, the CBA share price continues to outperform, up 25% in 2021.

The post Why CBA (ASX:CBA) is backing the RBA in push for payment reforms appeared first on The Motley Fool Australia.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Alphabet (A shares), Alphabet (C shares), Apple, and Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. 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 Galan Lithium Ltd (ASX: GLN) share price opened lower on Friday after the company successfully completed a $50 million institutional placement. The lithium explorer plans to use the funds raised to accelerate the development of its lithium projects.

At the time of writing, the Galan share price is down 5.86% trading at $1.21.

Galan Lithium share price lower following capital raising

Galan advised that it has received firm commitments to raise $50 million through a two-tranche institutional placement at $1.15 per share or a 10.2% discount to its last closing price of $1.28 on 11 August.

Tranche one will raise a total of $29.8 million, with new shares to be issued on Friday, 20 August.

Tranche two will seek to raise a further $20.2 million, subject to Galan shareholder approval, sought at the company’s extraordinary general meeting in late September.

Galan notes that tranche two was subscribed by two institutional investors with a track record of successful investments in the natural resources sector.

What are the funds for?

Galan’s June quarter results highlighted near term plans to convert lithium resources to reserves as well as the commencement of drilling programs.

According to today’s announcement, the proceeds from the placement will be used to accelerate drilling activities to convert existing resources to reserves, fund ongoing exploration activities and the completion of feasibility studies.

What did management say?

Galan managing director Juan Pablo Vargas de la Vega said:

We are delighted to announce the completion of the placement which has enabled us to introduce a number of high quality institutions to Galan’s register.

This represents a significant milestone in the history of the company and the recognition from these leading investors provides significant external validation for Galan’s extensive portfolio of strategic lithium projects.

Galan Lithium share price snapshot

Despite today’s pullback, the Galan Lithium share price is up 229% year-to-date and has surged 713% in the last 12 months.

The lithium explorer has a market capitalisation of just $313 million.

The post Galan Lithium (ASX:GLN) share price tumbles 6% after $50 million placement appeared first on The Motley Fool Australia.

More reading

• Why is the Galan Lithium (ASX:GLN) share price frozen?

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 National Australia Bank Ltd (ASX: NAB) share price is pushing higher again on Friday.

In morning trade, the banking giant’s shares are up over 1% to $27.62.

This latest gain means the NAB share price is now up 21% since the start of the year.

Can the NAB share price keep climbing?

The good news for investors is that Goldman Sachs is tipping the NAB share price to continue its rise.

According to a note, the broker has retained its conviction buy rating and lifted its price target to $30.62.

Based on the latest NAB share price, this implies potential upside of almost 11% over the next 12 months excluding dividends. Including dividends, this potential return stretches to over 15.5%.

What did the broker say?

Goldman Sachs was pleased with NAB’s performance in the third quarter. It notes that the bank is tracking ahead of its second half expectations.

It said: “NAB reported unaudited cash earnings from continuing operations of A$1.70 bn, up 1% on the previous period average, run-rating 11% ahead of what was implied by our previous 2H21E forecasts (lower BDDs). PPOP trends were softer on account of weak Markets and Treasury revenues and 3Q21 CET1 ratio of 12.6% was running ahead of our forecasts.”

This stronger than expected performance led to Goldman Sachs upgrading its earnings estimates for FY 2021 and FY 2022. This underpinned the increase in its NAB share price target.

Why is Goldman bullish?

NAB is the broker’s preferred sector exposure due to four key reasons. These are its cost management initiatives, its position as the largest business bank, its management of volumes and margins, and its potential return.

In respect to its cost management, Goldman said: “NAB’s cost management initiatives, which seem further progressed relative to most of its peers, should drive productivity benefits sooner and free up investment spend to be directed more towards customer experience, as opposed to infrastructure (3Q21 update shows NAB is tracking well against this).”

And Goldman feels that NAB’s position as the largest business bank and its investment in its mortgage capability means it is “strongly positioned to benefit from the current recovery in both housing and commercial volumes.”

All in all, the NAB share price may be smashing the market this year, but this leading broker doesn’t believe the run is over.

The post Why the NAB (ASX:NAB) share price can keep rising 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. 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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