Tag: Motley Fool

The Laybuy Holdings Ltd (ASX: LBY) share price will be one to watch when trading opens up this morning. This comes after the buy now, pay later (BNPL) provider announced an update to its recent capital raising efforts.

At close of trade on Monday, Laybuy shares finished the day at 51 cents – up 0.99%. The All Ordinaries Index (ASX: XAO) closed the trading day at 7,485 points – down 1.8%.

Let’s take a closer look at what the company released in yesterday’s late market news.

What did Laybuy announce?

Laybuy shares could be on the move today following the announcement of a successfully completed share purchase plan (SPP).

In a statement to the ASX, Laybuy advised it has raised $5 million to accelerate its growth strategy in the United Kingdom.

The non-underwritten SPP received overwhelming support from eligible shareholders, totalling $14.4 million in valid applications. This almost tripled the size of the tabled offer put towards retail investors, with over 1,000 shareholders participating in the SPP.

As a result, Laybuy will scale back the applications based on the shareholding balances of applicants at the record date. All eligible applicants, however, will be allocated a minimum quantity of $1,000 in Laybuy shares. The average participation amount for each application was $14,025.

In total, almost 10 million new ordinary shares will be issued under the SPP after rounding and scale back is applied. The offer price was listed at 50 cents apiece.

The SPP shares are expected to be issued on 25 June, and be available for trading from 28 June 2021.

Laybuy’s capital raising efforts, including the $35 million two-tranche placement completed last week, provide additional firepower on its balance sheet.

The company’s managing director, Gary Rohloff, commented:

We are very pleased with the demonstration of support by our shareholders shown in this SPP. The capital raising will allow us to focus on our strategic priorities, including investment in our people, our platform and accelerated growth in the UK.

Laybuy share price summary

The Laybuy share price is down more than 75% since its 52-week high of $2.30 reached in September 2020. The company’s shares are also down more than 60% year to date.

On valuation grounds, Laybuy has a market capitalisation of around $125 million, with approximately 244 million shares outstanding.

The post Why the Laybuy (ASX:LBY) share price will be on watch today appeared first on The Motley Fool Australia.

More reading

• This BNPL just saw stronger UK growth than Afterpay (ASX:APT)

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

from The Motley Fool Australia https://ift.tt/35GLg1h

ASX tech shares could be a way for investors to get exposure to exciting businesses.

Technology companies are often the ones that are producing the quickest growth because of the nature of software which is easy to replicate for clients and customers.

Here are two ASX tech share ideas to consider:

Betashares Nasdaq 100 ETF (ASX: NDQ)

This is an exchange-traded fund (ETF) that is invested in 100 of the biggest businesses that are listed on the NASDAQ.

It’s one of the investment products on the ASX that provides the largest exposure to the FAANG shares. That stands for Facebook, Apple, Amazon, Netflix and Google (Alphabet).

These are global businesses that have huge worldwide userbases.

But there are plenty more names in the portfolio beyond just the ones I mentioned.

Other tech shares include: Microsoft, Tesla, Nvidia, PayPal, Adobe, Cisco Systems, Broadcom, Texas Instruments, Qualcomm and Intuit. Many of the holdings in this ETF are either directly or indirectly changing the way we live our lives.

The annual management fee is 0.48%.  

Past performance is not an indicator of future performance. Since inception in mid-2015, the net returns of the ETF have been 20.9% per annum.

There are some other holdings in there that aren’t technology businesses such as PepsiCo, Costco, Moderna, Mondelez and Starbucks.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is an investment business that focuses on information technology and media sectors.

The company picks businesses that are seeking growth stage investment.

There are a few different factors that Bailador looks for when it invests in something.

The ASX tech share looks for companies that have been typically running for two to six years, that are run by the founders, have a proven business model with attractive KPIs, have the ability to generate repeat revenue, generate international revenue, have a “huge” market opportunity and require capital to grasp that opportunity.

The typical investment size is between $2 million to $10 million of equity.

It currently has a portfolio of different names.

Siteminder is described as the world leader in hotel channel management and distribution solutions for online accommodation bookings.

Bailador says Instaclustr is an open source data platform for cloud-based solutions that require immense scale, providing enterprise support and managed solutions for technologies such as Apache Cassandra.

Stackla is a social marketing platform that aggregates user-generated content that curates its display and integrates at various touch points within the marketing stack.

Straker Translations provides a cloud-based ‘hybrid’ translation platform that uses a combination of both machine translation and human refinement to rapidly speed up language translation.

Other investments in the ASX tech share’s portfolio include Rezdy, Brosa and Standard Media Index.

At the end of May 2021, its pre-tax net tangible assets (NTA) per share was $1.53. That compares to the current share price of $1.37.

The post 2 exciting ASX tech shares that could be buys appeared first on The Motley Fool Australia.

More reading

• 3 ASX ETFs that could give investors easy exposure to the US markets
• 3 high quality ETFs for ASX investors
• 3 excellent ETFs for ASX investors
• Should investors be looking at tech shares right now?
• NAB and Zip were among the most traded ASX shares last week

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 BETANASDAQ ETF UNITS and Bailador Technology Investments Limited. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Bailador Technology Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3xKJyIp

If you’re looking to add some growth shares to your portfolio, then you might want to take a look at these shares listed below.

All three of these ASX growth shares have been tipped as buys recently. Here’s what you need to know about them:

Afterpay Ltd (ASX: APT)

This buy now pay later (BNPL) focused payments company could be a growth share to consider buying. It has been growing at a rapid rate in recent years thanks to the increasing popularity of BNPL with consumers and merchants, the demise of credit cards, and its global expansion. Positively, due to its international expansion, it still has a long runway for growth over the 2020s. In addition to this, it is planning to expand its offering beyond BNPL in the near future.

Morgan Stanley is a fan of the company. It currently has an overweight rating and $145.00 price target on Afterpay’s shares.

Breville Group Ltd (ASX: BRG)

Breville is one of the world’s leading appliance manufacturers. It has been growing its sales and profits at a strong rate over the last few years. This is being underpinned by its international expansion and its investment in research and development. The latter is ensuring that Breville has a strong and innovative product portfolio.

UBS is positive on its growth outlook. Its analysts currently have a buy rating and $35.70 price target on its shares.

Hipages Group Holdings Ltd (ASX: HPG)

Hipages is a leading Australian-based online platform and software as a service (SaaS) provider. The company’s platform connects tradies with residential and commercial consumers, providing job leads from homeowners and organisations looking for qualified professionals.

Analysts at Goldman Sachs are very positive on the company’s future and see a huge growth runway ahead of it. The broker has a buy rating and $3.40 price target on its shares.

The post 3 excellent ASX growth shares rated as buys appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why are blue-chip ASX 200 shares selling off today?
• Zip (ASX:Z1P) and Afterpay (ASX:APT) shares withstand market selloff
• Selling some ASX shares before tax time? Here’s what you should know
• ASX 200 Weekly Wrap: ASX makes it 5 out of 5

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Hipages Group Holdings Ltd. 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.

from The Motley Fool Australia https://ift.tt/3cY4FyK

If you’re interested in boosting your portfolio with some dividend shares, then the two listed below could be worth considering.

Here’s what you need to know about these ASX dividend shares:

BHP Group Ltd (ASX: BHP)

This mining giant could be a dividend share to consider. This is because with commodity prices improving significantly over the last 12 months, particularly the iron ore price, BHP is well-positioned to deliver an exceptionally strong result in FY 2021.

And thanks to its strong balance sheet and favourable dividend policy, this is likely to lead to bumper dividends for investors in the near term.

Macquarie certainly expects this to be the case. Yesterday the broker retained its outperform rating and lifted its price target on the company’s shares to $63.00. It also increased its dividend forecasts to ~$4.05 per share and ~$3.68 per share for FY 2021 and FY 2022, respectively.

Based on the current BHP share price of $45.61, this will mean fully franked yields of 8.9% and 8% over the next two years.

Wesfarmers Ltd (ASX: WES)

Another dividend share to look at is Wesfarmers. It is the conglomerate behind several popular retail brands such as Bunnings and Kmart, and the owner of diverse portfolio of industrial businesses. The latter includes chemicals companies and lithium miners.

Wesfarmers has been on form again this year and has been tipped to build on this next year, leading to increasing dividends for investors.

For example, analysts at Macquarie are forecasting fully franked dividends of $1.74 per share in FY 2021 and then $1.76 per share in FY 2022. Based on the latest Wesfarmers share price of $57.54, this represents attractive yields of 3% and 3.1%, respectively. Macquarie has an outperform rating and $58.12 price target on its shares.

The post 2 ASX dividend shares with attractive fully franked yields appeared first on The Motley Fool Australia.

More reading

• Why are blue-chip ASX 200 shares selling off today?
• The Aussie dollar has plummeted! Here are some ASX winners and losers
• Leading brokers name 3 ASX shares to buy today
• ASX 200 Weekly Wrap: ASX makes it 5 out of 5
• 5 things to watch on the ASX 200 on Monday

James Mickleboro does not own any shares 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.

from The Motley Fool Australia https://ift.tt/3j1HxmS

On Monday the S&P/ASX 200 Index (ASX: XJO) started the week with a day to forget. The benchmark index crashed 1.8% to 7,235.3 points.

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

ASX 200 expected to rebound

The Australian share market looks set to rebound strongly from yesterday’s sell off thanks to a very positive start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 96 points or 1.35% higher this morning. Wall Street had its best day since March, with the Dow Jones rising 1.75%, the S&P 500 jumping 1.4%, and the Nasdaq pushing 0.8% higher.

Oil prices storm higher

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices stormed higher. According to Bloomberg, the WTI crude oil price is up 2.65% to US$73.54 a barrel and the Brent crude oil price has risen 1.9% to US$74.90 a barrel. Oil prices rose amid a softening US dollar and Iranian supply uncertainty.

Tech shares on watch

Tech shares such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO) could be on the charge today. This follows a strong night of trade on the Nasdaq index. The buying drove the tech-heavy Nasdaq index 0.8% higher. This left the famous index trading within sight of its record high.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could be on the rise today after the gold price pushed higher. According to CNBC, the spot gold price is up 0.8% to US$1,783.20 an ounce. The gold price rose after the US dollar softened and traders bought the dip.

Metcash rated as a buy

The Metcash Limited (ASX: MTS) share price could be good value right now. According to analysts at Goldman Sachs, its team have retained their buy rating and $3.95 price target on the wholesale distributor’s shares ahead of its results next week. Goldman is expecting Metcash to report a 24.5% increase in EBITDA to $606.6 million.

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

More reading

• Why are blue-chip ASX 200 shares selling off today?
• ASX 200 drops, CBA sinks, Boral sells US division
• Why Seven (ASX:SVW) has slammed the Boral deal today
• Here are the 3 most active ASX 200 shares trading today
• Zip (ASX:Z1P) and Afterpay (ASX:APT) shares withstand market selloff

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3d2oOUn

Shares in Actinogen Medical Ltd (ASX: ACW) soared today after the company released news on the upcoming study of its drug designed to treat Alzheimer’s disease.

At market close, the Actinogen share price was trading at 16 cents – 19.23% higher than its previous close.

Let’s take a closer look at today’s news from the biotech company.

XanaMIA study

Today, Actinogen announced it has made deals with several companies to run the XanaMIA Part A dose-ranging study.

The dose-ranging study is the company’s first step towards testing whether XanaMIA can treat cognitive ability in volunteers and patients with mild cognitive impairment, the first clinical stage of Alzheimer’s disease.

The study will enrol 105 healthy volunteers aged 50 or older, starting next month. The volunteers will be given either 5 milligrams or 10 milligrams of XanaMIA to determine the minimum effective dose.

Actinogen also advised today that research organisation Avance Clinical will manage the XanaMIA study. Avance will charge Actinogen around $1.25 million for the service.

Additionally, Actinogen has employed Paratus Clinical to recruit the dose-ranging study’s subjects, for which Actinogen will provide a budget of around $850,000.

Paratus will also provide the 4 Australian clinical-trial sites that will house the study.

Finally, Actinogen has made an agreement with CogState Limited (ASX: CGS) to use the neuroscience technology company’s Neuropsychological Test Battery in the dose-ranging study.

CogState’s Neuropsychological Test Battery is a platform that delivers highly sensitive cognition tests.

Actinogen will pay CogState around US$300,000 for access to the platform.

Today’s news comes nearly 3 weeks after Actinogen announced the XanaMIA study received approval from the Bellberry Human Research Ethics Committee.

Following the XanaMIA Part A dose ranging study, Actinogen will begin its XanaMIA Part B study.

The Part B study will see people with early-stage Alzheimer’s disease treated with XanaMIA. It will try and find if the drug can treat mild cognitive impairment.

Actinogen share price snapshot

The Actinogen share price has performed exceptionally well on the ASX this year.

Currently, the Actinogen share price is a whopping 675% higher than it was at the start of 2021.

The company has a market capitalisation of around $215 million, with approximately 1.6 billion shares outstanding.

The post Here’s why the Actinogen Medical (ASX: ACW) share price is up 20% appeared first on The Motley Fool Australia.

More reading

• These 5 ASX shares are delivering the biggest gains in 2021
• Why is the Actinogen (ASX:ACW) share price up 414% in 3 months?
• 4 ASX shares to gain exposure to international market growth: fund manager
• Why Cogstate, Contact Energy, EML, & OM Holdings are pushing higher
• Why the Cogstate (ASX:CGS) share price is rocketing 73% higher

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.

from The Motley Fool Australia https://ift.tt/3vJwmlw

The Megaport Ltd (ASX: MP1) share price closed today at an all-time high.

Earlier in the day, Megaport shares touched a record high of $18.27 before settling to close at $18, up 2.27%.

What’s helped drive Megaport’s growth?

The company describes itself as a “global leading provider of elastic interconnection services”.

In a nutshell, Megaport allows its customers to connect their networks to other services across its platform. The company connects more than 2,100 customers in some 740 enabled data centres around the globe, with its customer base including some of the biggest players in the industry.

While many factors have helped push the Megaport share price to a new record high, the company has clearly benefitted from the rapid growth of cloud computing. That’s where your data is stored offsite in a data centre, rather than on your own facility’s servers.

Cloud computing demand has been growing steadily since the turn of the century. But the work, shop, and play from home trend spurred by COVID-19 mitigation efforts has accelerated the trend.

A recent Australian Bureau of Statistics report revealed that 55% of Australian businesses are now leveraging paid cloud computing, up from 31% in 2015–2016.

Megaport share price snapshot

Megaport shares have gained around 40% over the past 12 months, compared to a lift of 21.75% on the S&P/ASX 200 Index (ASX: XJO).

Year to date, the Megaport share price has continued to outperform, up 26.32% so far in 2021.

The post ASX tech company Megaport (ASX:MP1) share price hits all-time high appeared first on The Motley Fool Australia.

More reading

• ASX 200 sinks 1.9%: BOQ’s ME Bank acquisition approved, CBA divests insurance business
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• How Microsoft’s new Xbox could spur ASX data centre shares
• 3 exciting ASX growth shares rated as buys

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended MEGAPORT FPO. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3wLFaIL

The Charter Hall Social Infrastructure REIT (ASX: CQE) share price will be one to watch on Tuesday.

This follows the release of a very positive update after the market close on Monday.

What did it announce?

This afternoon the Charter Hall Social Infrastructure REIT announced that it has signed new ultra-long leases with its major tenant, Goodstart Early Learning.

According to the release, the two parties have agreed mutually beneficial terms including fixed annual increases for a further 48 properties.

Prior to the new leases, these properties had a weighted average lease expiry (WALE) of 5.5 years. As a result of this transaction and other portfolio activities during the second half, the company expects to end the period with a WALE of approximately 15 years.

This compares to its WALE of 14 years at the end of the first half and provides the company with great visibility on its future earnings.

Property valuations

The Charter Hall Social Infrastructure REIT also provided the market with an update on its property valuations.

During the second half, the company had 211 childcare properties, or 61% of the childcare portfolio by gross asset value, independently valued. This includes the 48 properties subject to new leases with Goodstart.

The valuations resulted in a $81 million or 12.3% uplift on the prior book values, with the passing yield on these properties firming by 56 bps to 5.7%.

In addition to this, the company revealed that its 50% interest in the Brisbane Bus Depot was independently revalued to $61.12 million. This reflects a passing yield of 4.5% and an uplift of $6.1 million or 11.1% on the prior book value.

Distributions

In light of its strong form, the company has declared a fourth quarter distribution of 4.1 cents per unit. This brings its full year distribution to 15.7 cents per unit which, based on the current Charter Hall Social Infrastructure REIT share price of $3.46, represents a 4.5% yield.

But it won’t stop there. Due to the portfolio curation activity undertaken during the year and resultant capital gains, the company has declared a special distribution of 4 cents per unit. This brings its quarterly distribution to 8.1 cents per unit and full year distribution to 19.7 cents per unit.

The post This ASX dividend share just declared a special distribution appeared first on The Motley Fool Australia.

More reading

• These ASX dividend shares have attractive yields
• 2 ASX shares tipped to pay bumper dividends in 2021
• 2 ASX dividend shares that could help you beat low interest rates
• 2 buy-rated ASX dividend shares
• 2 ASX dividend shares that analysts rate as buys

James Mickleboro does not own any shares 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.

from The Motley Fool Australia https://ift.tt/3qbS7Jq

The S&P/ASX 200 Index (ASX: XJO) has found itself in deep waters, sliding 1.81% to 7,235 by market close on Monday.

ASX 200 shares in the banking and financials sector were the main victims in today’s sharp pullback. Most notably, Commonwealth Bank of Australia (ASX: CBA) shares finished the session down 5.43%.

Smaller and regional banks including Bendigo and Adelaide Bank Ltd (ASX: BEN) and Bank of Queensland Limited (ASX: BOQ) were also major losers today, sliding 5.32% and 4.98% respectively.

Elsewhere, iron majors including BHP Group Ltd (ASX: BHP), Rio Tinto Ltd (ASX: RIO) and Fortescue Metals Group Ltd (ASX: FMG) have slipped 1.96%, 2.77% and 2.72% respectively, despite iron ore prices remaining relatively buoyant at US$214/tonne.

Other typically defensive sectors such industrials and utilities also finished in the red.

In contrast, the S&P/ASX Information Technology (INDEXASX: XIJ) managed to eke some green, up 0.18%. Afterpay Ltd (ASX: APT) shares also managed to stand tall, closing 2.46% higher to $117.21.

What’s driving these blue chip ASX 200 shares lower?

It’s likely that the ASX 200 has been influenced by the selloff across US indices on Friday night. The S&P 500 Index (INDEXSP: .INX), Dow Jones Industrial Average (INDEXDJX: .DJI) and Nasdaq Composite (INDEXNASDAQ: .IXIC) tumbled 1.31%, 1.58% and 0.92% respectively.

More specifically, financials, energy and utilities were the main laggards for the US market on Friday, falling 2.45%, 2.92% and 2.63% respectively.

This came after the US Federal Reserve took the spotlight last week when it signalled a potential rate rise by late 2023 despite previously saying there would no increases until at least 2024 in March.

The Australian Financial Review reported today that the post-Fed meeting market reaction which has seen investors reversing some cyclical bets and inflation hedges was “likely an overreaction” even though “it could continue for a while yet”.

In Australia, we have not seen an interest rate increase since late 2011. The prospect of such hikes on the horizon could dampen growth prospects and spell the end of a near-zero interest rate era.

The post Why are blue-chip ASX 200 shares selling off today? appeared first on The Motley Fool Australia.

More reading

• Rio Tinto (ASX:RIO) share price sinks on broker downgrade
• ASX 200 drops, CBA sinks, Boral sells US division
• Zip (ASX:Z1P) and Afterpay (ASX:APT) shares withstand market selloff
• The Aussie dollar has plummeted! Here are some ASX winners and losers
• Leading brokers name 3 ASX shares to buy today

Kerry Sun has no position in any of the stocks mentioned.  The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. 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.

from The Motley Fool Australia https://ift.tt/3zE7bUC

The Rio Tinto Limited (ASX: RIO) share price was out of form on Monday and tumbled lower.

The mining giant’s shares ended the day almost 3% lower at $120.05.

Nevertheless, longer term shareholders won’t be too dismayed. The Rio Tinto share price is still up over 24% since this time last year.

Why did the Rio Tinto share price tumble today?

While broad market weakness will certainly have weighed on the Rio Tinto share price, a broker note out of UBS also appears to have done so as well.

According to the note, the broker has downgraded the company’s shares from a neutral rating to a sell rating with a $104.00 price target.

Based on the current Rio Tinto share price, this implies potential downside of 13.5% over the next 12 months excluding dividends.

Why did UBS downgrade Rio Tinto?

The note reveals that UBS is expecting a sharp reduction in iron ore prices in the near future.

Its analysts believe that the steel making ingredient is approaching an inflection point due to a number of reasons. These include Chinese regulators trying to ease commodity prices, Brazilian iron ore supply increasing, and stockpiles at Chinese ports rising to above average levels.

UBS points out that Rio Tinto’s iron ore operations are the main contributor to its overall earnings. As a result, should the iron ore price fall to US$90 a tonne over the next 12 months as UBS expects, it doesn’t believe its dividends are sustainable and cuts will need to be made.

Bullish broker

Interestingly, not everyone is bearish on Rio Tinto.

This morning analysts at Macquarie retained their outperform rating and lifted their price target on its shares to $163.00. This price target implies potential upside of almost 36% over the next 12 months. Macquarie made the move after adjusting its commodity forecasts for the coming years.

Time will tell which broker made the right call.

The post Rio Tinto (ASX:RIO) share price sinks on broker downgrade appeared first on The Motley Fool Australia.

More reading

• The Aussie dollar has plummeted! Here are some ASX winners and losers
• Why Codan, CommBank, Rio Tinto, & Starpharma shares are sinking
• ASX 200 Weekly Wrap: ASX makes it 5 out of 5
• Are crashing ASX mining shares an opportunity or a disaster to run from?
• 5 things to watch on the ASX 200 on Wednesday

James Mickleboro does not own any shares 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.

from The Motley Fool Australia https://ift.tt/3gHqnbe