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The Lynas Rare Earths Ltd (ASX: LYC) share price is in the green despite the company revealing a significant fall in its quarterly sales revenue.

Right now, shares in the S&P/ASX 200 Index (ASX: XJO) rare earths producer are trading 2.14% higher at $6.67.

Lynas share price lifts on quarterly report

Here are the key takeaways from Lynas’ report on the three months ended 31 March:

• Sales revenue came in at $237.1 million – up 9% quarter-on-quarter (QoQ) but down 28% year-on-year (YoY)
• Sales receipts came to $229.2 million – a 36% improvement QoQ but a 12% slump YoY
• Average selling price dropped to $48.3 a kilogram – down 25% on the prior comparable period
• Total rare earth oxide production slumped to 4,349 tonnes – down 2% QoQ and 12% YoY
• Neodymium and praseodymium (NdPr) production jumped to a record 1,725 tonnes – a 14% QoQ improvement and a 2% jump on the prior comparable period
• The company closed the period with $1.1 billion of cash and short-term deposits

The company noted demand for its NdPr production from customers outside of China remained strong last quarter.

Update on the company’s Malaysia licence blow

Lynas also provided more detail on the impacts of Malaysia’s Atomic Energy Licensing Board’s move to ban the company from importing and processing lanthanide concentrate. The ban is set to come into effect in July.

It would force the company to shut down its Malaysian cracking and leaching plant and transition to using mixed rare earth carbonate produced at its Kalgoorlie Rare Earths Processing Facility as feedstock for downstream processing.

Thus, if the cracking and leaching plant is shut, the company’s entire Malaysian facility will follow suit until new feedstock can be received. That’s likely to be in August.

However, due to the unpredictable nature of the Kalgoorlie facility’s ramp-up, the Malaysian facility’s restart is unpredictable and would be followed by a period of reduced production.

Lynas’ appeals against the Atomic Energy Licensing Board’s decision are due to be heard next week.

What’s next?

Looking forward, Lynas highlighted a current oversupply of rare earths products was impacting the materials’ value. The oversupply was driven by a 19% increase in production quotas in China for the first half of 2022.

It says future price trends will depend on China’s economic recovery and anticipation of Chinese production quotas for the second half of this year.

Finally, the company is targeting feed-on at its Kalgoorlie facility in the current quarter. The final phase of the project’s major construction has now kicked off.

Lynas share price snapshot

This year has been a rough one for the Lynas share price.

The stock has tumbled 13% since the start of 2023. It’s also 30% lower than it was this time last year.

Comparatively, the ASX 200 has gained 6% year to date and fallen 3% over the last 12 months.

The post Lynas share price gains despite quarterly revenue taking a 28% dive appeared first on The Motley Fool Australia.

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More reading

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• Which stocks does Warren Buffett own (and what can ASX 200 investors learn from this)?
• Here are the top 10 ASX 200 shares today
• Are Star Casino shares finally cheap enough to buy?
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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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The Tesla Inc (NASDAQ: TSLA) share price took a beating during trade last night as investors responded to the company’s first-quarter results.

Amid a barrage of price cuts throughout the quarter, concerns had been mounting about how it would affect the electric vehicle (EV) makers’ results. As some had expected, it came at the cost of profit margins.

Still, it seems many were blindsided by the extent of the impact, with shares being sold down overnight.

By the end of the session, the Tesla share price had descended 9.75% to US$162.99 apiece. Whereas, the Nasdaq Composite finished 0.8% weaker than its previous close.

How low is Elon willing to go?

Before we dive into understanding why exactly the company’s shares were sold off heavily, here are important figures from the company’s quarterly report:

• Total revenue up 24% year-on-year to US$23.33 billion
• GAAP gross margin down 977 basis points to 19.3%
• Operating margin down 779 basis points to 11.4%
• Earnings per share (GAAP basis) down 23% to 73 US cents per share
• Cash equivalents at the end of the quarter up 24% to US$22.40 billion

Notably, total revenue and earnings per share were only slightly below analysts’ estimates heading into earnings. Yet, despite coming within sneezing distance of what was expected, the Tesla share price was ravaged by selling.

The stark reaction could have more to do with comments from Tesla’s CEO, Elon Musk, on the earnings call. During the call, Musk leaned into the option of further price cuts in order to fuel higher volumes, stating:

We’re making a car that if autonomy pans out, and we think it will, where that asset will actually be worth a hell of a lot more in the future than it is now … It is technically possible to sell it at zero profit, but still have the net present value of future cash flows associated with that asset [be] very significant.

Given past promises of autonomy, these remarks may have inflamed concerns that Tesla could bet its current-day margins on a wishful future.

Not all negative on the Tesla share price

Renowned Tesla bull, ARK Invest, has updated its long-term price target on Tesla shares following the latest results. Much like Musk, the investment team is hinging a bountiful future on autonomy — attributing 58% of its 2027 Tesla valuation to the robotaxi business.

According to the report, ARK Invest envisages the Tesla share price reaching US$2,000 by 2027 under its base case. Meanwhile, the analysts assigned a US$2,500 and a US$1,400 price target to its bull and bear case respectively.

ARK Invest bought over $41 million of $TSLA stock today. pic.twitter.com/4thYGlEfuE

— Sawyer Merritt (@SawyerMerritt) April 21, 2023

https://platform.twitter.com/widgets.js

The revised estimate pushes the base price target back one year than previously forecast by the team. However, that didn’t stop ARK Invest from adding to its Tesla holdings last night, buying an additional $41 million worth of Tesla shares during the sell-off, as shown above.

Despite last night’s collapse, the Tesla share price is still up 50.8% since the beginning of the year.

The post Why did the Tesla share price tumble by nearly 10% last night? appeared first on The Motley Fool Australia.

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More reading

• Why have investors fallen out of love with Lynas shares?
• Is it time to sell my Lynas shares after crashing 30% in a year
• 50% fall: Are ASX 200 lithium shares a bargain buy right now?
• Here’s why the Novonix share price crashed 19% in March

Motley Fool contributor Mitchell Lawler has positions in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Tesla. 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 Woodside Energy Group Ltd (ASX: WDS) share price is down 1.4% in morning trade.

The S&P/ASX 200 Index (ASX: XJO) oil and gas stock is facing headwinds on Friday from a drop in crude oil prices. Both Brent crude and WTI declined by more than 2% overnight on global recession fears.

ASX 200 investors will also be mulling over Woodside’s first quarter results for the three months ending 31 March (Q1 2023).

Here are the highlights.

Woodside share price dips alongside production

• Quarterly production of 46.8 million barrels of oil equivalent (MMboe), up 122% year on year, down 9% from Q4 2022
• Sales volume of 50.4 MMboe, up 112% from Q1 2022, down 4% from Q4 2022
• Revenue of $4.33 billion, up 81% year on year, down 16% from Q4 2022
• Portfolio average realised price of $85 per barrel of oil equivalent

What else happened during the quarter?

Woodside noted that the 9% quarter-on-quarter decline in production stemmed from a planned turnaround and maintenance activities.

On the gas front, the ASX 200 energy stock achieved LNG reliability of 99.9% at Pluto LNG and 98.3% at its North West Shelf Project. It sold 32% of the produced LNG at prices linked to gas hub indices.

As for major projects with a potential impact on the Woodside share price, the company reported that its Scarborough and Pluto Train 2 projects in Western Australia are 30% complete. Manufacturing of the export trunkline is 86% complete, with the first concrete poured for Pluto Train 2.

The drilling program for the Sangomar field in Senegal continued over the three months. Ten of 23 wells are now complete. Sangomar contains both oil and gas and is located approximately 100 kilometres south of Dakar.

What did management say?

Commenting on the results that have yet to lift the Woodside share price today, CEO Meg O’Neill said:

Our operations teams continued to achieve strong outcomes. Production was 122% higher than the corresponding quarter last year, demonstrating the significant value generated by the merger with BHP’s petroleum business…

We are making good progress on all major growth projects in Australia and globally…

Mad Dog Phase 2 in the US Gulf of Mexico achieved a significant milestone with first production in April 2023. Mad Dog is one of several low cost producing assets for Woodside in the region with significant expansion potential and in close proximity to infrastructure and attractive markets.

What’s next?

Looking at what might impact the Woodside share price in the months ahead, the company noted that despite a slip in production from the prior quarter, full-year production guidance remained unchanged.

With drilling progressing at Sangomar, the ASX 200 energy stock is targeting first oil from the project later in 2023.

In the new energy business, Woodside is continuing to progress activities and approvals for its H2OK project, located in the US state of Oklahoma. The company aims to achieve final investment decision (FID) readiness for the liquid hydrogen production facility this year.

Woodside’s half-year report 2023 will be released on 22 August.

Woodside share price snapshot

As you can see on the chart below, despite today’s dip, the Woodside share price remains up a slender 1% over the past 12 months.

The post The Woodside share price is sliding today. Here’s why appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Could the Woodside share price face ‘long-term harm’ from this government tax plan?
• 5 things to watch on the ASX 200 on Wednesday
• Why Ramelius, Sayona Mining, St Barbara, and Woodside shares are dropping today
• Macquarie says changes to this tax could be a red flag for Woodside shares

Motley Fool contributor Bernd Struben 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 Whitehaven Coal Ltd (ASX: WHC) share price is in the green this morning on the release of the coal miner’s quarterly production report.

The S&P/ASX 200 Index (ASX: XJO) stock is up 0.72% at $7.02 in early trade on Friday.

Whitehaven share price rises as production falls 12%

Here are the key takeaways from the coal miner’s production over the three months ended 31 March:

• Run-of-mine (ROM) production fell 12% quarter-on-quarter to 4.3 million tonnes
• Average coal price fell to $400 a tonne – down 24% quarter-on-quarter but up 27% year-on-year
• Sales of produced coal slumped to 3.4 million tonnes ­– down 2% quarter-on-quarter and 5% year-on-year
• Generated $1.2 billion of cash from operations
• Ended the period with a $2.7 billion net cash position

What else happened last quarter?

Whitehaven Coal’s lower quarterly production reflects a drop in its Narrabri operation’s performance following a ripper December quarter. ROM production at the operation slumped 39% quarter-on-quarter while saleable coal production dropped 43%.

Simultaneously, production at its Maules Creek mine lifted just 9% despite wet weather and flooding taking a major toll last quarter, while lower yields saw its saleable coal production flat at 1.7 million tonnes.

The company also continued its on-market share buyback – spending $100 million on the capital returning activity.

What did management say?

Whitehaven CEO and managing director Paul Flynn commented on the release driving the company’s share price today, saying:

A mild northern hemisphere winter meant that customers’ inventory levels remained high in the March quarter, demand was softer and thermal coal prices moderated.

Despite this, underlying demand remains strong …

We are well placed to maintain a strong balance sheet through the cycle while continuing to return capital to shareholders through our share buy-back program. So far this financial year we have returned $1.3 billion of capital through dividends and buybacks.

What’s next?

Looking forward, Whitehaven expects thermal coal prices to be supported through the remainder of 2023. Meanwhile, the metallurgical coal price is expected to stay above historical levels, but remain volatile due to economic pressures.

The company downgraded its full-year guidance earlier this month. It now forecasts its managed coal sales to come in between 15.3 million tonnes and 16 million tonnes, its equity coal sales to be between 12.3 million tonnes and 12.9 million tonnes, and its unit cost of coal to be $100 a tonne to $107 a tonne.

Whitehaven also began supplying coal to NSW power stations at a capped price of $125 a tonne this month. The volumes provided will be disclosed in its next quarter report.

Finally, the commencement of early mining at its Vickery coal deposit has been approved with construction to kick off in June.

Whitehaven Coal share price snapshot

The Whitehaven share price has had a disappointing start to 2023.

The stock has tumbled 21% since the start of the year. Though, it’s still 45% higher than it was this time last year.

Comparatively, the ASX 200 has gained 6% year to date and has fallen 3% over the last 12 months.

The post Whitehaven share price lifts as production tumbles 12% appeared first on The Motley Fool Australia.

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More reading

• How to mine $100 a month in passive income from 2 ASX 200 coal stocks
• Capital deities and destroyers: The best and worst at putting money to work among ASX 200 shares
• Broker names 2 high yield ASX dividend shares to buy
• Here are the top 10 ASX 200 shares today
• Leading brokers name 3 ASX shares to buy 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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Are you looking for some ASX shares to add to your retirement portfolio?

Well, two ASX shares that tick these boxes are listed below. Here’s why analysts rate them as buys:

Charter Hall Long WALE REIT (ASX: CLW)

The Charter Hall Long Wale REIT could be an ASX share to consider for a retirement portfolio.

That’s because the company has a strong portfolio of assets in resilient property sectors, including industrial & logistics, convenience and long leased retail, long leased hardware, social infrastructure and office.

It also has ultra long weighted average lease expiries (hence the name) and sky-high occupancy rates of 11.8 years and 99.9%, respectively.

Citi is a fan of the company and has a buy rating and $5.00 price target on its shares.

As for dividends, the broker expects dividends per share of 28 cents in FY 2023 and 29 cents in FY 2024. Based on the current Charter Hall Long Wale REIT unit price of $4.31, this will mean yields of 6.5% and 6.7%, respectively.

Woolworths Limited (ASX: WOW)

Woolworths could be another ASX share to consider for a retirement portfolio. It is of course the retail giant behind the eponymous supermarket chain and other brands such as Countdown and Big W.

Given its blue chip status and incredible defensive qualities, as we saw clearly during the pandemic, it could be a safe option in the current environment. Especially considering the company is benefitting from food inflation.

Goldman Sachs is bullish on the company and believes it is well-placed for growth in the coming years thanks to its strong market position and digital and omni-channel advantage. It expects the latter to drive further market share and margin gains.

Goldman currently has a conviction buy rating and $41.00 price target on the company’s shares. As for dividends, its analysts are forecasting fully franked dividend yields of approximately 2.7% and 3%, respectively, over the next two years.

The post Buy Woolworths and this ASX share for your retirement portfolio: experts appeared first on The Motley Fool Australia.

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More reading

• Want passive income? Forget term deposits and buy these high yield ASX dividend shares: brokers
• Are these ASX All Ords shares ready to buy at fundamentally fire sale prices?
• My $10-a-day approach to building a second income with ASX shares
• Need passive income? Turn $5,000 into $25 every month with these ASX shares
• The boosted Woolworths dividend is hitting bank accounts today. Here’s what you need to know

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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AGL Energy Ltd (ASX: AGL) has been paying dividends to investors for many years, but the amount has fluctuated over time.

The energy producer’s share price has fallen 60% in the last five years and is currently trading at $8.54.

Let’s take a look at how much I would need to invest in AGL to achieve $150 in monthly income.

How many AGL shares would deliver $150 a month in dividends

Starting at the beginning, a monthly income of $150 would provide you with an annual income of $1,800.

AGL paid an interim dividend of 8 cents per share in March this year. This follows the company paying a final dividend of 10 cents per share in the second half of last year.

This means AGL has paid 18 cents per share in total dividends in the past 52 weeks.

That means, to have received a total of $1800 a year, or $150 a month, you would need to have owned exactly 10,000 AGL shares.

At the latest AGL share price of $8.54, this would set you back $85,400 in total.

AGL reported a 55% fall in underlying net profit after tax (NPAT) in 1H23 to $87 million. EBITDA declined 16% on 1H22 to $604 million.

However, AGL management is expecting earnings to improve in the second half and into FY24.

Commenting on this future outlook in the company’s half-year results presentation in February, CEO Damien Nicks said:

We expect to have higher earnings in the second half of FY23, in line with guidance, and continued positive momentum into FY24. 

AGL share price snapshot

AGL shares have fallen 1.27% in the last year. However, in the past month, AGL shares have risen 20%.

AGL has a market cap of about $5.7 billion based on the latest share price.

The post Here’s how much I would need to invest in AGL shares to achieve $150 in monthly income appeared first on The Motley Fool Australia.

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More reading

• 3 things that could tank the AGL share price
• Bought $3,000 of AGL shares 5 years ago? Guess how much passive income you’ve earned since
• Here are the top 10 ASX 200 shares today
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• ‘Risks, returns, and decarbonisation’: AGL shares scrubbed from $68b superfund’s climate watchlist

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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The Macquarie Group Ltd (ASX: MQG) share price has been a strong performer over the last five years, posting three times the gains of the broader S&P/ASX 200 Index (ASX: XJO).

Indeed, an $8,000 investment into the banking giant in April 2018 likely would have seen one walk away with 75 shares, having paid $105.52 apiece.

Today, that holding would be worth $13,622.25. The Macquarie share price last traded at $181.63 – 72% higher than it was five years ago.

For comparison, the ASX 200 has risen 24% in that time.

But what happens when we also factor Macquarie’s dividends into its returns? Keep reading to find out.

All dividends paid to those holding Macquarie shares since 2018

Here are all the dividends the banking giant has provided since April 2018:

Macquarie dividends’ pay date	Type	Dividend amount
December 2022	Interim	$3
July 2022	Final	$3.50
December 2021	Interim	$2.72
July 2021	Final	$3.35
December 2020	Interim	$1.35
July 2020	Final	$1.80
December 2019	Interim	$2.50
July 2019	Final	$3.60
December 2018	Interim	$2.15
July 2018	Final	$3.20
Total:		$27.17

As readers can see, each Macquarie share has yielded $27.17 of dividends since April 2018 That means our figurative parcel has likely provided $2,037.75 of passive income over its life.

Add that to its share price gains, and our total return on investment (ROI) becomes an impressive 98%.

And that’s before considering the potential compounding one might have realised if they reinvested their dividends, perhaps making the most of the company’s dividend reinvestment plan (DRP).

Not to mention, all of Macquarie’s offerings over that time have been partially franked. That means some investors might have reaped further rewards come tax time.

Right now, Macquarie shares are trading with a 3.58% dividend yield.   

The post Sunk $8,000 into Macquarie shares 5 years ago? Here’s how much dividend income you’ve received appeared first on The Motley Fool Australia.

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More reading

• Banking and mining: Analysts say these ASX 200 dividend shares are buys
• 5 reasons Macquarie shares could be a great investment today
• ‘Buying opportunity’: 2 ASX 200 shares to grab before they rocket
• Best ASX dividend share to buy now: Rio Tinto vs. Macquarie Group
• Buy these ASX dividend shares now: analysts

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 positions in and has recommended Macquarie 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 300 Index (ASX: XKO) share Rural Funds Group (ASX: RFF) has suffered a fall of close to 40% since its peak during COVID-19.

I was recently contacted and asked why I am positive about the farmland real estate investment trust (REIT) despite the falling share price.

There are a number of reasons why I’m just as positive, if not more positive, at this lower level.

It’s understandable why the market has punished the share price considering the higher interest rate. In theory, asset values such as farms do fall with higher interest rates.

How much could farm values fall? It’s hard to say. But, the higher interest rate situation does put pressure on Rural Funds’ finance costs, which can typically be the single biggest expense for a business like a REIT.

But, here are some reasons why I’m still very positive on the ASX 300 share.

Distribution income yield

While the Rural Funds share price has been falling, the passive income yield that it offers has been increasing.

Rural Funds has been growing its distribution by at least 4% each year since it listed and I think the business will be able to keep growing the distribution in future years because of a few reasons I’ll outline below.

But, the current total payout of 12.2 cents per unit for FY23 represents a total yield of 6.25%.

Assuming the business grows the distribution by another 4% in FY24, it would be a distribution yield of 6.5%. I think that’s a very attractive yield for a relatively defensive asset class of farmland.

Debt hedging

Rural Funds has entered into an increased level of interest rate hedges which will hopefully shield it from a lot of the higher interest rate costs.

In its FY23 half-year result, it said that it had entered into $175 million of additional hedges since 1 July 2022. Hedging will increase from $190 million in FY23 to $402 million in FY24. Its term debt drawn at 31 December 2022 was $504.4 million, so a large proportion of the debt is hedged.

The $402.2 million that is hedged for FY24 is at a weighted average hedge rate of 3.27%, so the interest rate increases may not impact the finance costs significantly.

Rental income continues to grow

In the HY23 result, Rural Funds pointed out that its property revenue grew by 7% primarily due to increased rent, rent on capital expenditure and new leases.

Almost half of its revenue is linked to CPI inflation, so the higher inflation is pushing this portion of the rent higher at a strong rate. This can offset some of the impacts of the higher interest rates, and help support the farm values.

Another third of the revenue has a fixed increase each year, which also boosts the ASX 300 share’s revenue.

Rural Funds has a weighted average lease expiry (WALE) of 12.3 years, so there’s a lot of rental revenue locked in for the coming years.

The tenants are large operators, so I think they’re as safe as they could be for Rural Funds.

Farm values could hold up

As any property investor might agree, we can only truly know what a property’s value is when it goes up for sale.

In the FY23 half-year result, Rural Funds said that its adjusted net asset value (NAV) increased by 3% to $2.78 which it put down to revaluations. Don’t forget, water entitlements make up close to a fifth of total adjusted assets, which can behave differently to farm values.

I believe the fall in the Rural Funds share price has more than made up for the potential fall of asset prices.

A few months ago, the ASX 300 share released its latest newsletter which outlined why there has been a positive correlation between inflation, commodity prices and farmland values since 1900, suggesting that farmland values can keep rising over time.

Productivity improvements

The business is expecting to benefit in future years from its development pipeline, which can boost rental returns and isn’t currently being reflected in the annual rental profits.

First, there is a 3,000 hectare macadamia development, which is forecast to be completed by FY25. Second, there is the development of an additional 2,000 hectares, which is forecast to commence in FY25 – Rural Funds will look for a tenant, or tenants, closer to the development commencement.

Third, there are 475 hectares of mature orchards going through improvements before seeking a long-term tenant.

Finally, productivity improvements are occurring on five cattle and cropping properties before seeking a tenant.

I think each of these will help boost the capital value and rental potential of Rural Funds.

Foolish takeaway

I’m still optimistic about the ASX 300 share, particularly at this lower level. I’m not expecting it to get back to a $3 share price any time soon, but it could get a boost when interest rates start dropping back towards 3%.

The post 5 reasons I’m still positive about this ASX 300 share despite the 40% drop appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Rural Funds Group. 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 Rural Funds 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 Allkem Ltd (ASX: AKE) share price had a day to forget on Thursday.

The lithium miner’s shares tumbled over 5% to end the day at $11.64.

This means the Allkem share price is now more than 20% over the last six months.

Why did the Allkem share price tumble?

Investors were hitting the sell button on Thursday after the miner released its third-quarter update.

Although the company delivered production that was largely in line with expectations, its commentary on pricing appears to have spooked the market.

For example, analysts at Morgans highlight that management is guiding to a sharp drop in lithium prices during the fourth quarter of FY 2023. They said:

AKE delivered 3Q production largely as expected but weakness in Chinese spot markets is affecting the short term outlook. Guidance for 4Q carbonate prices ($42k/t) was reduced 21% compared to 3Q and spodumene ($5k/t) was reduced 12%.

Should you buy the dip?

Interestingly, despite the recent weakness in lithium prices, they are still trading well beyond what Morgans is expecting for the long-term. In light of this, it continues to see significant value in the Allkem share price at current levels.

In fact, the broker has suggested that its shares could be worth almost double what they are now if spot prices were to remain at these levels over the long term. It explained:

Spot prices in China are significantly lower than Asia although there are some quality differences between the benchmarks. It’s unlikely that all of the Chinese production would be qualified for use by Asian battery manufacturers but there is clearly pressure on prices until the Chinese market tightens. Contract prices will likely continue to follow spot prices lower.

Despite this, our LT price assumptions are still well below current spot prices. Our nominal LT carbonate price of ~$20k/t is significantly below Chinese spot prices (~$25k/t) and our LT spodumene price of $2.5k/t is half of the current spot price. If we were to substitute for spot prices in our valuation, it would be over $22ps.

However, the broker doesn’t believe prices will stay this high forever, unfortunately. So, it currently has a more modest (but enticing) add rating and $14.70 price target on Allkem shares.

Based on where they are currently trading, this implies potential upside of 26% for investors over the next 12 months.

Incidentally, it is a similar story over at Bell Potter and Goldman Sachs. Both brokers have responded by retaining their buy ratings with price targets of $19.89 and $12.90, respectively.

All in all, brokers appears to believe buying the dip could be worth considering.

The post Should lithium investors buy the dip in the Allkem share price? appeared first on The Motley Fool Australia.

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More reading

• Why 29Metals, Allkem, Alliance, and Rio Tinto shares are falling today
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• 5 things to watch on the ASX 200 on Thursday
• Why did Pilbara Minerals shares charge higher today?
• Here’s the latest forecast for ASX 200 lithium stocks from UBS

Motley Fool contributor James Mickleboro has positions in Allkem. 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 200 gold stock Evolution Mining Ltd (ASX: EVN) has been charging ahead in the last six months.

The company’s share price has soared 89% from $1.85 at market close on 20 October to $3.49 at market close on 20 April. For perspective, the S&P/ASX 200 Materials Index (ASX: XMJ) has risen 20% in the same time.

Let’s take a look at what is going on with the Evolution Mining share price.

Has the gold price helped?

Evolution Mining is a gold explorer with mines in New South Wales, Western Australia Queensland and Canada.

ASX 200 gold stocks Newcrest Mining Ltd (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) have also risen in the last six months.

Northern Star shares have soared 72.5% since market close on 20 October, while Newcrest Mining shares have surged 73%.

Amid wider market turmoil, the gold price has also had a stellar run in the past six months.

The spot gold price has risen 23% from US$1636.8 an ounce on 20 October to US$2,009 an ounce at the time of writing, according to CNBC.

Copper has also jumped nearly 24% in the same time frame, trading economics data shows.

This lift in the gold price could be giving ASX 200 mining shares including Evolution a boost.

Evolution achieved a 3% lift in the average achieved gold price from US$2,551 an ounce to US$2,639 an ounce in the third quarter of FY23. The company sold 165,758 ounces of gold, up 2.4% on the previous quarter.

The company’s realised copper price rose 15%, however, copper sales fell 30.9% during the quarter.

In other news, Evolution on Thursday reported drilling continues to extend mineralisation at the company’s Ernest Henry project in Queensland. The results are expected to “drive further growth” of the mineral resource at the project.

Mining activities at the Ernest Henry operation resumed in April following weather impact during the March quarter.

Commenting on these results, Evolution CEO Lawrie Conway said:

We continue to see encouraging drill results from the exploration drill program at Ernest Henry, highlighting the exciting potential for growth at this world class operation.

On 12 January, Evolution advised it had satisfied an earn-in milestone to earn a 75% interest in the Cue Project joint venture with Musgrave Minerals Ltd (ASX: MGV).

Evolution Mining share price snapshot

The Evolution Mining share price has slid 23% in the last year.

This ASX 200 gold share has a market capitalisation of about $6.4 billion based on the current share price.

The post How has ASX 200 gold share Evolution Mining managed to surge 89% in 6 months? appeared first on The Motley Fool Australia.

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• 11 ASX shares to buy with 4 on-trend qualities right now
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• ASX 200 gold shares are booming in 2023 with more gains forecast: fund manager

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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