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The IGO Ltd (ASX: IGO) share price has been a positive performer over the last 12 months.

As you can see on the chart below, during this time, the ASX 200 lithium share has risen almost 11%.

This compares very favourably to the performance of the S&P/ASX 200 Index (ASX: XJO), which is down 0.5% over the same period.

Has this ASX 200 lithium share peaked?

The good news for investors is that the team at Goldman Sachs believes this ASX lithium share can still rise a bit further from here.

According to a note, the broker has responded to IGO’s quarterly update by retaining its buy rating with an improved price target of $14.30.

As with most mining updates during the last quarter, its analysts were not blown away with the company’s performance. They commented:

3Q23 spodumene production softened in line with GSe to 356kt down 6% QoQ driven by lower throughput attributed to a reduction in CGP1 and CGP2 run time during the quarter and mined grade fell slightly 2.59%, though remains above long run grade expectations of ~2% at Greenbushes. Sales revenue of A$2.8bn was up 23% QoQ representing higher spodumene contracted prices and favorable sales mix with high grade spodumene product. IGO expects higher spodumene sales volumes in the June quarter, following the 13% fall in shipments in the March quarter, where spodumene sales were 336kt for 3Q, 9% below GSe.

Despite this, the broker remains a fan of this ASX 200 lithium share and continues to recommend it as a buy. This is due to its attractive valuation compared to peers, its strong free cash flow generation, and the low costs of its key Greenbushes operation. It explains:

We rate IGO a Buy on: 1) Valuation: trading on ~1.0x NAV and pricing ~US$1,050/t spodumene (peer average ~1.3x NAV and ~US$1,300/t), and near-term FCF yields of c. 15-20% in FY23/24E and c. 10% in FY25/26E remain attractive vs. peers, 2) Greenbushes the lowest cost lithium asset in our coverage, 3) TLEA dividends de-risk nickel spend; Ni volumes declining, but study outcomes due this year.

The post Buy this ASX 200 lithium share in May: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• ASX lithium shares: Short-term pain for long-term gain?
• IGO share price lifts on news of record quarterly profit
• 11 ASX shares to buy with 4 on-trend qualities right now
• Here are the top 10 ASX 200 shares today
• Here’s the latest forecast for ASX 200 lithium stocks from UBS

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

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The BHP Group Ltd (ASX: BHP) share price sank 6% in April, marking a difficult month for the ASX mining share. It performed worse than the S&P/ASX 200 Index (ASX: XJO) which went up 1.8%.

Considering what a sizeable influence BHP has on the ASX 200’s overall return, it’s quite interesting there was such a divergence in performance between BHP shares and the ASX 200.

Still, it was a decent month for a number of the other large ASX blue-chip shares such as Westpac Banking Corp (ASX: WBC), CSL Limited (ASX: CSL), Telstra Group Ltd (ASX: TLS), and National Australia Bank Ltd (ASX: NAB).

So what went wrong?

Iron ore price sinks

The iron ore price had been trading at around US$120 per tonne in the first half of the month and had reached above US$130 per tonne in March.

But, towards the end of the month, the price sank and that seemingly caused the BHP share price decline. At the time of writing, the price of iron ore is sitting at around US$105 per tonne so, overall, there was a rapid US$15 per tonne drop.

The price of the commodity can play a big part in how much profit BHP can make. Mining 10 million tonnes of iron typically comes with the same costs month to month, so any extra revenue for that production is largely extra profit, aside from paying more to the government.

But it’s the opposite when the iron ore price goes down – a reduction of revenue almost entirely hurts profit. That’s essentially what’s happening now.

Iron has been BHP’s biggest profit generator by some margin in recent years. But the business is on the way to acquiring OZ Minerals Limited (ASX: OZL), which would hopefully grow its copper earnings and diversify it away from iron ore.

What happens next for the BHP share price?

Things may be very unpredictable for BHP from here. It’s difficult at the best of times to know what the iron ore price is going to do in the short term.

The Australian Financial Review recently reported on a Citi note that suggested that the iron ore price could keep dropping to US$100 and then US$90 per tonne where it sees “meaningful cost support”.

This probably won’t be good news for the BHP share price.

As reported by Reuters last week, the Chinese economy has not yet returned to strong economic growth after its COVID lockdowns. So, it may take stronger demand from the Asian powerhouse to lift BHP and investor sentiment.

BHP share price snapshot

Since the start of the year, BHP shares are down by around 2%.

The post Why did the BHP share price dive 6% in April? appeared first on The Motley Fool Australia.

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More reading

• Why did the NAB share price smash the ASX 200 in April?
• 5 things to watch on the ASX 200 on Monday
• Want $300 in monthly passive income? Buy 24,300 shares of this ASX 200 stock
• Bull and bear factors impacting BHP shares
• These were the best-performing ASX 200 shares in April

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 positions in and has recommended CSL. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ANZ Group Holdings Ltd (ASX: ANZ) shares will be on watch this week.

That’s because the banking giant is scheduled to release its eagerly anticipated half-year results on Friday 5 May.

Ahead of the result, let’s take a look to see what the market is expecting from the bank.

What to expect from ANZ’s half-year results

According to a note out of Goldman Sachs, its analysts expect ANZ to report cash earnings (before one-offs) of $3,978 million. This represents an impressive 27.8% increase over the prior corresponding period.

However, the market consensus is for slightly softer growth and cash earnings of $3,769 million for the six months.

As for dividends, Goldman is expecting this profit growth to underpin an 11.1% increase in ANZ’s interim dividend to 80 cents per share.

What else should you look out for?

There will be a lot of focus on margins during this banking earnings season. So, it certainly is worthwhile understanding what the market is expecting from ANZ’s net interest margin (NIM). After all, anything softer than expected (or better) could have a big impact on the performance of ANZ’s shares.

Goldman Sachs revealed that it is expecting the bank to report a NIM of 1.82%. It also believes that this will be the peak during the current cycle. It explained:

The key feature of ANZ’s FY22 result was its NIM outlook, in which it noted that i) its Sep-22 exit NIM was 1.80%, well ahead of the 2H22 NIM of 1.68% and ii) the environment will continue to be supportive for margins in 1H23. However, management also noted that only recently have rates become attractive enough for customers to start switching from at-call transaction accounts to term deposits (TDs).

In our recent analysis (here) we highlighted that current term deposit betas have averaged c. 0.75 this cycle, versus the 1.0 (currently assumed in our forecasts) seen in previous rate cycles. We will therefore be keen to get an update on how flows into TDs have tracked since then and commentary on where ANZ believes deposit mix could settle. We currently forecast the 1H23E NIM to increase by 13 bp hoh to 1.82%, and peak this half.

Are ANZ shares good value?

Goldman Sachs currently has a neutral rating and $26.48 price target on ANZ shares. This implies potential upside of 8.75% from current levels.

Analysts at Citi are more positive. They recently named ANZ as their top pick with a buy rating and $27.25 price target.

The post Looking to buy ANZ shares? Here’s what to watch in this week’s results appeared first on The Motley Fool Australia.

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More reading

• Another ASX company to disappear
• No savings at 30? I’d invest $3 a day in ASX shares to target a second income of $10,824 a year
• Which is the best ASX 200 bank share to buy right now?
• First Republic Bank shares just crashed 50%. Here’s how ASX 200 bank stocks are responding
• Analysts say income investors should buy ANZ and these ASX dividend shares

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

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The S&P/ASX 200 Index (ASX: XJO) finished the month in the green, but National Australia Bank Ltd (ASX: NAB) outperformed the index.

NAB shares have climbed more than 4.04% since market close on 31 March, closing on the last trading day in April at $28.84 apiece. For perspective, the S&P/ASX 200 (ASX: XJO) gained 1.83% over the same time frame.

So why did the NAB share price return more to investors than the ASX 200 in April?

What happened?

Looking at NAB’s performance against the other big four banks, it’s outperformed some but not all of them.

ANZ Group Holdings Ltd (ASX: ANZ) shares have risen more than 6% since 31 March while the Westpac Banking Corporation (ASX: WBC) share price gained nearly 4%. However, Commonwealth Bank of Australia (ASX: CBA) shares have only climbed 1%.

Big four bank NAB has not released any price-sensitive news to the market in the last month.

As well, ASX 200 bank shares appeared to have been resilient amid bank turmoil in the United States and Europe.

In April, Morgan Stanley analysts revealed Australian banks have “plenty of capital” amid global banking jitters.

Head of research at Morgan Stanley Richard Wiles said:

The major Australian banks learned the lessons of the 2008 global financial crisis and have significantly strengthened their liquidity, funding and capital.

Federal treasurer Jim Charmers also gave Australia’s banks a plug during April, saying, “Australian banks are well-capitalised, well-regulated and well-placed to deal with this new source of volatility in the global economy.”

National Australia Bank is set to deliver its half-year financial results to the market on Thursday this week.

Looking ahead, Goldman Sachs analysts are optimistic NAB can keep going higher. The broker has a “buy” rating on the company’s shares with a $35.42 price target.

This implies an upside of nearly 23% based on NAB’s last closing price of $28.84.

On the flip side, however, Morgans analysts have recently slashed the price target on NAB to $28.78. This is 0.2% lower than NAB’s latest closing price.

Commenting on NAB, the team at Morgans said:

Recent slowing of loan growth. Leading SME [small to medium enterprise] relationship banking franchise. Increased simplification and improving digitisation in personal banking.

Meaningful improvement in ROE that is in excess of cost of equity. Attractive yield and buyback. Cautious re step-up in costs and weaker valuation support.

On another note, the Reserve Bank of Australia is due to meet tomorrow to deliver its verdict on the official cash interest rate.

ASX 200 banks tend to raise their rates in response to any official rate hike from the central bank. However, City Index senior market analyst Matt Simpson believes the RBA is on track to keep the official cash rate on hold. 

Simpson said, “I suspect the RBA will be content in keeping rates on hold”, especially as “inflation expectations remain well anchored”. He added:

However, that is not to say the RBA have reached their terminal rate in the cycle, as disinflation needs to keep up the pact to justify a pause in the coming months.

Share price snapshot

The NAB share price has shed 11.6% over the last 12 months.

The bank has a market capitalisation of about $90.52 billion based on the last closing price.

The post Why did the NAB share price smash the ASX 200 in April? appeared first on The Motley Fool Australia.

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More reading

• Analysts say these ASX 200 dividend stocks are top buys
• 5 things to watch on the ASX 200 on Monday
• Want $300 in monthly passive income? Buy 24,300 shares of this ASX 200 stock
• These were the best-performing ASX 200 shares in April
• Looking to buy ASX 200 iron ore shares? Here are 5 reasons not to

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

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Megaport Ltd (ASX: MP1) shares had a stunning session on Friday.

The release of a surprisingly strong third-quarter update sent short sellers scrambling to the exits and the network services company’s shares hurtling 41% higher to $5.63.

Can Megaport shares keep climbing?

The good news for readers is that Megaport shares could have plenty of room to climb higher from current levels despite Friday’s heroics.

According to a note out of Goldman Sachs, its analysts have responded to the update by reiterating their buy rating with a slightly trimmed price target of $8.10.

This price target suggests that Megaport’s shares could rise by a further 44% over the next 12 months. Not bad considering the gains it made last week!

Why is Goldman bullish?

The note reveals that Goldman was impressed with Megaport’s performance during the quarter. Particularly given its poor performance in the second quarter and the sudden departures of its CEO and CFO. The broker believes this bodes well for the future and suspects that the company will have sufficient capital to reach its free cash flow goals. It commented:

Following significant share price weakness around 2Q23 earnings and CEO/CFO departures, the positive 3Q23 result (financial + operating metrics) and introduction of stronger than expected FY23/24 EBITDA guidance improves our confidence in the outlook both in the short term (pricing impact & cost out execution) and medium term (MVE/MCR returning to strong growth), while reinforcing our view that MP1 will not need to raise capital to reach a sustainable FCF position.

Looking ahead, Goldman is looking for the company to build on this performance in the coming quarters. If it does, it expects it to help improve investor confidence. It adds:

Looking forward, MP1 now needs to deliver a number of consistent quarters of improved momentum, and show that its direct sales investment can accelerate growth from 2Q24 to continue rebuilding investor confidence. We remain positive that this can occur, given we believe in the structural growth drivers underpinning in MP1’s growth outlook (cloud/multi-cloud/NaaS adoption) so retain our Buy rating, while raising FY24/25 EBITDA +7% to +4% given marginally lower revenues, offset by the greater cost out targets. Our 12m TP declines -1% to A$8.10, implying +44% upside.

The post Megaport shares can rise another 40%: Goldman Sachs appeared first on The Motley Fool Australia.

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More reading

• These were the best-performing ASX 200 shares in April
• Here are the top 10 ASX 200 shares today
• Why Appen, Megaport, Mirvac, and Pilbara Minerals shares are pushing higher today
• Megaport share price launches 40% higher amid rosy guidance
• These are the 10 most shorted ASX shares this 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 positions in and has recommended Megaport. The Motley Fool Australia has recommended Megaport. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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I’m about to tell you about some excellent All Ordinaries (ASX: XAO), or All Ords, ASX shares that I think are very cheap.

Certainly, there’s been plenty of volatility in recent times, but this gives us an opportunity to buy shares at a (hopefully temporarily) cheaper price.

Lots of investors, analysts, and fund managers follow the largest businesses on the ASX. But I think it’s more likely to find an opportunity at the relatively unknown end of the market that could be priced at a better level.

With that in mind, these are two ASX All Ords shares that look particularly good to me.

Aeris Resources Ltd (ASX: AIS)

This is a very promising copper miner, in my opinion. The business is already producing copper and has more projects on the way. These could unlock a lot of extra earnings and cash flow in the future.

It has a market capitalisation of around $360 million, according to the ASX. At the end of the third quarter of FY23, it had $56 million of cash and receivables, around $25 million of stockpiled ore, and no debt. The balance sheet is in good shape.

In FY23, the ASX All Ords share is expecting to generate between $50 million to $70 million of earnings before interest, tax, depreciation and amortisation (EBITDA).

Aside from my belief that the copper price can improve over the long term because of higher demand due to decarbonisation, it’s the low valuation that makes me believe this is extremely cheap.

Commsec numbers suggest that the business could generate 17 cents of earnings per share (EPS) in FY25, which would put it at less than three times FY25’s estimated earnings. Even if it only generated 12 cents of EPS in FY25, that would put the price/earnings (p/e) ratio at less than four.

Volpara Health Technologies Ltd (ASX: VHT)

Volpara says that it makes software to help save families from cancer. The company’s software helps healthcare providers better understand a patient’s cancer risk and empowers patients in personal care decisions. It also guides recommendations about additional imaging, genetic testing, and other interventions.

Its software is used in more than 2,000 facilities, by more than 5,000 technologists, helping conduct more than three million cancer risk assessments each year.

The All Ords ASX share is delivering a lot of impressive numbers. In its fourth quarter of FY23, which it just announced, it achieved record cash receipts from customers of more than NZ$10 million. This was up 19% in constant foreign exchange rate terms year over year. Certainly, that growth rate is enabling the business to compound at a good rate.

Its quarterly update also showed the second straight positive net operating cash flow quarter. It’s not making a lot of cash flow yet, but being cash flow positive for a fast-growing business is a handy step.

If Volpara can sell more of its software to existing clients, win over new clients, and keep growing its scale, I think its gross margin profit of over 90% will enable the business to become very profitable in the future.

The post Why I think these ASX All Ords shares are extremely cheap right now appeared first on The Motley Fool Australia.

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More reading

• Why Aeris, Brainchip, Pointsbet, and Syrah shares are falling today
• Why I think it’s a great time to start buying ASX growth shares
• Brokers say these small cap ASX shares are buys with huge upside potential
• Why Aeris Resources, Evolution, Li-S Energy, and Race Oncology shares are charging higher
• 4 ASX All Ords shares smashing the market on big news

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 positions in and has recommended Volpara Health Technologies. The Motley Fool Australia has positions in and has recommended Volpara Health Technologies. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you hold shares in an ASX lithium producer (or many), you might have had a glance behind-the-scenes at your company last week.

Many of the market’s favourite battery-material producers dropped quarterly reports in recent sessions, and there appears to be a common theme among many – lower lithium prices.

That’s likely not news to readers. Lithium prices have been falling for a while now – since late last year in fact.

Interestingly, many ASX lithium companies reporting last week were adamant the value of the battery-making material will recover lost ground, and then some.

So, could the sector face short-term pain and long-term gains? Let’s take a look.

What’s been weighing on lithium prices?

Simple supply and demand has been dragging lithium prices lower in recent months.

China has seen demand for electric vehicles (EV) slump amid the removal of subsidies, while Chinese car dealerships have been cutting prices of traditional cars ahead of the introduction of emissions standards. Meanwhile, previous inventory stocking means some would-be buyers probably aren’t topping up their lithium stocks.

It’s an observation noted by both Liontown Resources Ltd (ASX: LTR) and Pilbara Minerals Ltd (ASX: PLS) last week.

Liontown told investors Chinese spot prices for lithium hydroxide fell by more than 30% over the three months to March. International spot markets, on the other hand, dropped around 25%.

Pilbara Minerals saw its realised spodumene concentrate sales price fall 15% last quarter to around US$4,840 a tonne. Mineral Resources Ltd (ASX: MIN) also saw its average realised lithium battery chemicals revenue dump 14% to US$56,996 a tonne, exclusive of China VAT.

But not all ASX lithium shares have been so impacted, as evidenced by IGO Ltd (ASX: IGO). It said in its quarterly release:

The lithium market is currently experiencing a high level of volatility, which has resulted in the emergence of a price disparity between lithium product streams.

Are ASX lithium shares playing a long-term pricing game?

Well, yes and no. Pilbara Minerals, for one, expects lithium prices to continue softening this quarter. Though, CEO and managing director Dale Henderson said a potential resurgence is still on the cards for the second half of 2023, continuing:

We remain very positive on the structural deficit for lithium.

He believes recent investments by global giants in the lithium and battery space, as well as the long-term trend of EV adoption, are evidence of such a deficit.

Meanwhile, Liontown commented in last week’s update:

The medium to long term outlook remains very attractive with structural supply deficits and ongoing robust demand for electric vehicles and battery storage devices.

But not all are so bullish. Barrenjoey head of mining research Glyn Lawcock said potential prices could “moderate at the top end of the cost curve in 2023 and 2024” amid a supply glut, the Australian Financial Review reported last month

The broker is said to have slashed its 2023 spodumene price forecast to US$3,966 a tonne – a 43% cut. Meanwhile, its 2024 forecast was dropped 50% to US$2,500 a tonne.

Looking forward, however, it expects the market to be back in deficit from 2027.

The post ASX lithium shares: Short-term pain for long-term gain? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• Here’s what brokers are saying about Pilbara Minerals shares
• Top brokers name 3 ASX shares to buy next week
• 2 ASX lithium shares this US institutional investor is buying up big (and one it’s selling)
• Here are the top 10 ASX 200 shares today

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 Scott Phillips.

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ASX dividend shares might be all the rage, but just buying stocks for high yields is a recipe for trouble.

That’s because a point-in-time yield percentage reveals nothing about the future prospects of the business.

It’s no use harvesting a 15% dividend if the share price halves!

That’s why professional investors always emphasise the importance of achieving a harmonious balance of dividend yield and capital growth potential.

Here are two such examples from the S&P/ASX 200 Index (ASX: XJO):

‘An attractive valuation’ with 5 major tailwinds

According to the team at Auscap Asset Management, NIB Holdings Limited (ASX: NHF) currently has “an attractive valuation”.

“We believe that NIB is a high-quality defensive business led by a highly capable management team with exposure to multiple attractive end markets,” it stated in a memo to clients.

“Trading on a reasonable valuation, with good forecast earnings per share growth over the coming years, we are enthusiastic about the future prospects for the company.”

The way Auscap analysts see it, the private health insurer has exposure to five rising themes.

“There are parts of the economy which should grow even faster than average, including healthcare expenditure, immigration, international student demand, inbound tourism, and services related to the National Disability Insurance Scheme (NDIS).”

Companies that are riding on these trends “often trade on very high valuations”. 

But not NIB.

“NIB is trading on a 17.5x forward price-to-earnings ratio, towards the bottom end of its historical range since the 2014 Medibank Private Ltd (ASX: MPL) IPO.”

The NIB share price has risen 10.5% over the past 12 months, leaving it with a dividend yield of 3.1%.

‘A sensible approach to growth and risk’

For Airlie senior investment analyst Joe Wright, general insurer QBE Insurance Group Ltd (ASX: QBE) is in a sweet spot of its business cycle.

“Several years of above-trend catastrophe events (CATs), as well as COVID-related business interruption claims and the return of broad-based inflation, has seen the commercial insurance market tighten considerably,” Wright said on the Airlie blog.

“The net [effect] has been a prolonged period of premium rate growth not seen since the early 2000s.”

Insurance is the rare industry that’s whistling all the way to the bank at the moment. 

Ten consecutive months of interest rate rises is providing excellent returns on its investments, and inflation is merely giving it an excuse to exercise its pricing power.

“We continue to believe QBE is underearning as margins for both the North American business unit, and more recently the Lloyd’s syndicates, have dragged on group performance,” said Wright.

“To date, [chief executive] Andrew Horton has demonstrated a sensible approach to growth and risk management, and for all of these reasons, QBE still looks attractive to us at ~9.5x P/E.”

QBE shares have rocketed 24.3% over the past 12 months while providing a dividend yield of 2.54%.

The post Perfect balance: 2 ASX 200 shares set to surge while paying dividends appeared first on The Motley Fool Australia.

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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 recommended NIB Holdings. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Telstra Group Ltd (ASX: TLS) share price was on form in April.

Not only did it record a decent 3.6% gain for the month, which doubled the market return, the telco giant’s shares cracked a number of new multi-year highs in the process.

This means that the Telstra share price is now up almost 11% year to date, much to the delight of its shareholders.

Why did the Telstra share price scale new heights last month?

There were a few factors giving the Telstra share price a lift last month.

One was increased volatility and concerns over a global recession, which fuelled demand for defensive shares. Given how telecommunication shares are seen as some of the more defensive options out there, nervous investors were quick to snap up Telstra’s shares.

In addition, news that Telstra had increased its mobile prices also went down well with investors and brokers.

In respect to the latter, last month Macquarie retained its outperform rating on the telco giant’s shares with an improved price target of $4.68.

It was pleased with the mobile price increases and sees this industry rationality as a big positive for Telstra. So much so, it suspects that the company could be on course to deliver stronger than expected earnings in the coming years.

Over at Goldman Sachs, its analysts were equally positive. They responded to the increases by reiterating their buy rating with an improved price target of $4.70.

The broker also doesn’t expect the increases to stop there. It added:

Following recent (and significant) mobile prices changes from Telstra (Prepaid, JB-HiFi), we now believe they are more likely to fully utilize CPI (GSe +7% in Mar-23) at the upcoming postpaid mobile price review – raising plan pricing by c.$4-6/m. This is ahead of our prior forecast for a c.$2-3/m, so drives our FY24-25E EBITDA +1.6%/+1.1% and EPS +4%/+2% (higher pricing, partly offset by lower postpaid sub growth).

Like Macquarie, Goldman believes the market is underestimating Telstra’s earnings growth. It said:

Ultimately, we continue to believe consensus mobile forecasts look conservative, and now sit +3% ahead of FY24 postpaid ARPUs. We expect updated mobile pricing expected to be announced in coming weeks (to give sufficient notice to the Jul-23 introduction), which should be positively received.

Based on the above, it wouldn’t be overly surprising to see the Telstra share price building on April’s heroics and hitting new multi-year highs this month.

The post Why did the Telstra share price crack new multi-year highs in April? appeared first on The Motley Fool Australia.

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More reading

• Top ASX shares to buy in May 2023
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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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is, for better or for worse, dominated by the big banks and giant mining companies.

In fact, according to the creator of the ASX 200, the finance (27.1%) and materials (25.6%) sectors combined take up the majority index weight.

This means that the Australian market is skewed towards dividend stocks.

The trouble with ASX dividend shares is that, generally, they don’t have as much potential for capital growth as other equities.

The logic is that, if the business was expanding at a rapid rate, management would not be giving excess cash back to investors. The company would, instead, put the money back into the business to fuel growth.

Following in the footsteps of giants

Betashares manager Libby Hopper recently said that, while they may not attract as much attention as the banks and miners, there are actually plenty of ASX 200 growth shares to choose from.

They come from varied fields, such as healthcare, retail and technology.

“Australia boasts a number of under the radar success[es]… including Pro Medicus Limited (ASX: PME), Lovisa Holdings Ltd (ASX: LOV) and Altium Limited (ASX: ALU),” Hopper said on the Betashares blog.

She reckons Pro Medicus is following in the footsteps of CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH) as “an Australian healthcare success story”.

“In its 2022 annual report, Pro Medicus’ after tax profits and revenue jumped more than 44% and 37% respectively compared to the previous period,” said Hopper.

“Looking ahead, the company expects adoption of its technologies to increase – particularly as the use of artificial intelligence in the industry accelerates.”

International expansion and technology themes

The Lovisa share price has more than doubled since June last year, which is incredible enough, but even more so considering the market has remained depressed in that time.

It seems like another lifetime ago when the jewellery retailer was forced to shut stores due to the COVID-19 pandemic.

“Since then the business has seen year on year revenue growth – increasing almost 60% in 2022 to more than $458 million,” said Hopper.

“Lovisa’s success to date has left it with a healthy balance sheet which it is using to continue its international expansion and better its digital platforms.”

Altium, as a maker of software for designing printed circuit boards, cashes in on from multiple global themes in technology.

“Altium stands to benefit from increased advancements in and adoption of key technologies such as robotics, artificial intelligence as well as electric and autonomous vehicles,” said Hopper.

“Altium has subsequently reaffirmed its guidance for the 2023 financial year, with total revenue anticipated to rise between 15% to 20% to approximately US$255 to 265 million.”

The post ‘Under the radar success’: 3 quality ASX 200 growth shares to buy right now appeared first on The Motley Fool Australia.

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More reading

• Top ASX shares to buy in May 2023
• This is how you can generate passive income in May with ASX shares
• Nasdaq rebound! Brokers say these ASX 200 tech shares are buys
• Why did the CSL share price smash the ASX 200 in April?
• Don’t get duped: Why cheap ASX shares can still rip you off

Motley Fool contributor Tony Yoo has positions in CSL and Cochlear. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, CSL, Cochlear, Lovisa, and Pro Medicus. The Motley Fool Australia has positions in and has recommended Pro Medicus. The Motley Fool Australia has recommended Cochlear and Lovisa. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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