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The Coles Group Ltd (ASX: COL) share price could be in for a big day after the supermarket operator posted its earnings for the first half of financial year 2023 and announced its new CEO.

Shares in the S&P/ASX 200 Index (ASX: XJO) consumer staples giant last traded at $18.30.

Coles share price in focus on higher profits and dividend

• $643 million net profit after tax (NPAT) – a 17.1% jump on that of the prior comparable period (pcp)
• $20.8 billion of sales revenue from continuing operations – a 3.9% improvement
• $1 billion of earnings before interest and tax (EBIT) from continuing operations – a 9.9% jump
• Basic earnings per share (EPS) from continuing operations lifted 17.2% to 48.3 cents
• Declared a 36 cent per share interim dividend – a 9.1% improvement

Coles supermarkets brought the company $18.9 billion of revenue last half – a 4.6% year-on-year improvement, while its EBIT reached $991 million – a 10.6% jump.

The segment saw 7.7% price inflation last quarter and 7.1% inflation in the first quarter.

Coles’ liquor segment’s revenue, meanwhile, came in 2.4% lower at $2 billion and its EBIT fell 19.2% to $80 million.

Of course, the big news from the ASX 200 supermarket operator last half was of the planned sale of Coles Express. The fuel and convenience business is expected to be acquired by Viva Energy Group Ltd (ASX: VEA) for $300 million.

Coles announces new CEO

The Coles share price might also be driven by news of a leadership change today.

The company announced current CEO and managing director Steven Cain will be stepping down in May, with Leah Weckert to take on the top job.

Weckert has been with the company since 2011, holding positions including chief financial officer and chief executive of commercial and express.

What did management say?

Cain commented on the supermarket operator’s first half results, saying:

The good news is that supplier cost inflation is starting to ease in the third quarter, particularly in produce.

Many of our suppliers are however still facing increasing cost pressures and shortages of pallets, raw materials, and labour. This has been coupled with increased severe flooding impacting our road and rail networks, particularly for Western Australia and Far North Queensland. We are working together with our suppliers, and both State and Federal governments, to improve food supply chain resilience for all Australians.

What’s next?

Coles tips inflation to begin easing this year but expects Australians will tighten their belts amid higher interest rates and cost of living pressures.

Though, the company notes it’s well-positioned for such changes. It believes improving availability, population growth, and a decrease in out-of-home dining will have a positive impact.

Coles expects its capital expenditure to come in at between $1.2 billion and $1.4 billion in financial year 2023.

Coles share price snapshot

The Coles share price has been outperforming lately.

The stock has gained 11% since the start of 2023. It’s also trading 9% higher than it was this time last year.

For comparison, the ASX 200 has gained 6% year to date and 2% over the last 12 months.

The post Coles share price in focus as dividend lifted and new CEO announced appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Tuesday
• Own Coles shares? Here’s what the market is expecting from its half year results
• These are the growing ASX dividend shares to buy now: analysts
• Can Coles shares deliver 8% upside AND tasty dividends in 2023?
• Get an income boost with these ASX dividend shares: broker

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 Coles 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 BHP Group Ltd (ASX: BHP) share price will be on watch on Tuesday.

This follows the release of the mining giant’s half-year results this morning.

BHP share price on watch amid earnings miss

• Revenue down 16% to US$25,713 million
• Underlying EBITDA down 28% to US$13,230 million
• Profit after tax down 32% to US$6,457 million
• Interim dividend down 40% to 90 US cents

What happened during the first half?

For the six months ended 31 December, BHP reported a 16% decline in revenue to US$25,713 million. This reflects lower average realised prices for iron ore, copper, and hard coking coal, partially offset by higher prices for weak coking coal, thermal coal, and nickel.

In respect to earnings, BHP posted a 28% decline in underlying EBITDA to US$13,230 million. The main drag on the miner’s earnings was the aforementioned copper and iron ore price weakness.

This led to the company’s iron ore underlying EBITDA falling 31.4% to US$7,641 million. It was a similar story for BHP’s next largest segment, copper, which posted a 34.1% decline in underlying EBITDA to US$2,814 million.

In light of its softer earnings, the BHP board determined to pay an interim dividend of 90 US cents per share. This equates to a total return of US$4.6 billion and is the equivalent to a 69% payout ratio.

How does this compare to expectations?

According to a note out of Goldman Sachs, its analysts were expecting “underlying EBITDA US$13.7bn vs. cons US$14.3bn.”

So with the Big Australian reporting an underlying EBITDA of US$13,230 million, it has missed on both estimates.

And while BHP has beaten Goldman’s dividend estimate of 88 US cents per share, it has fallen short of the consensus estimate of 98 US cents per share.

This could be bad news for the BHP share price this morning.

Management commentary

BHP’s CEO, Mike Henry, was pleased with the half. He commented:

BHP has today announced a strong first half dividend of 90 US cents per share, on the back of solid operating performance. During the half, we delivered well on the production front, with Western Australia Iron Ore posting another record half. BHP remains the lowest cost major iron ore producer globally. We continued to make strong progress on executing our strategy, including the development of growth options.

Significant wet weather in our coal assets impacted production and unit costs, as did challenges in securing sufficient labour. Inventory movements during the half contributed to costs, including the planned draw-down at Olympic Dam after inventory built up during the smelter refurbishment last year. We expect these factors to abate in the second half and for unit costs to fall, in line with revised guidance.

Outlook

The good news is that BHP’s production guidance remains unchanged for the full year.

In addition, Henry is feeling positive about BHP’s prospects in the second half thanks largely to the reopening of China. He adds:

We are positive about the demand outlook in the second half of FY23 and into FY24, with strengthening activity in China on the back of recent policy decisions the major driver. We expect domestic demand in China and India to provide stabilising counterweights to the ongoing slowdown in global trade and in the economies of the US, Japan and Europe. The long-term outlook for our commodities remains strong given population growth, rising living standards and the metals intensity of the energy transition, including for steel making raw materials.

The post BHP share price on watch after first-half earnings miss appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Tuesday
• 5 things to watch on the ASX 200 on Tuesday
• Should you dig into BHP shares before the ASX 200 miner reports next week?
• Will ASX 200 shares crash in 2023?
• What are experts saying about the BHP share price?

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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Plenty of action is in store for us on Tuesday as a number of popular ASX shares hand down their latest results.

It should be an insightful day for investors thanks to the breadth of companies set to report. The agenda includes companies spanning mining, retailing, tech, real estate, and more — providing a solid cross-section of Australian corporations.

Before your day begins, here is a quick summary to get you up to speed.

These ASX shares are pulling back the curtain today

Ranked in order of market capitalisation (largest to smallest)

BHP Group Ltd (ASX: BHP), $245.5 billion

Coles Group Ltd (ASX: COL), $24.5 billion

Stockland Corporation Ltd (ASX: SGP), $9.3 billion

Seek Ltd (ASX: SEK), $8.6 billion

Alumina Limited (ASX: AWC), $4.4 billion

ARB Corporation Limited (ASX: ARB), $2.6 billion

Tabcorp Holdings Limited (ASX: TAH), $2.3 billion

Hub24 Ltd (ASX: HUB), $2.2 billion

Ingenia Communities Group (ASX: INA), $1.9 billion

Monadelphous Group Ltd (ASX: MND), $1.3 billion

Macquarie Telecom Group Ltd (ASX: MAQ), $1.2 billion

G8 Education Ltd (ASX: GEM), $1.1 billion

Monash IVF Group Ltd (ASX: MVF), $418.9 million

HT&E Ltd (ASX: HT1), $379.0 million

AMA Group Ltd (ASX: AMA), $230.9 million

See our complete calendar of the ASX reporting season here.

What can we expect to see?

One household name that investors will be paying some attention to today is supermarket operator Coles Group.

A month ago, news hit the headlines of inflation adding some sting to the prices of food and groceries. Analysts from UBS noted that Woolworths Group Ltd (ASX: WOW) had produced larger price increases than its major competitor.

Furthermore, UBS suggested the lower increases from Coles were a strategic move to take more market share. Today, shareholders will be wanting to see whether the strategy paid off and what it meant for margins.

Heading into today, the consensus estimate for Coles’ net profit after tax (NPAT) was $582 million. This would represent a year-on-year increase of 6% if achieved.

An even larger ASX share is set to report its half-year results on Tuesday. Australia’s BHP Group could report net profits of US$8.7 billion today. While the number might sound impressive, it would actually represent an 8% decline from the prior corresponding period.

Unfortunately, both iron ore and copper prices were significantly lower during the second half of 2022. The extent to which this impacted BHP’s revenue and profits will be squarely in focus today.

According to Bloomberg, the Aussie miner could announce a dividend of 90 cents per share.

Don’t forget to check back in throughout the day for our earnings coverage.

The post Earnings preview: Here are the ASX shares reporting on Tuesday appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Tuesday
• Own Coles shares? Here’s what the market is expecting from its half year results
• Should you dig into BHP shares before the ASX 200 miner reports next week?
• Will ASX 200 shares crash in 2023?
• What are experts saying about the BHP share price?

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ARB Corporation and Hub24. The Motley Fool Australia has positions in and has recommended Coles Group and Hub24. The Motley Fool Australia has recommended ARB Corporation and Seek. 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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With much uncertainty about interest rates, the economy, and geopolitics still weighing on investors, it makes sense to focus on reliable and stable ASX shares.

Smaller and more speculative stocks can flop very quickly on further bad news, which is known as high-beta among the professionals.

So for a true long-term investor, sound businesses with undeniable growth drivers could be the go for the coming period.

Baker Young managed portfolio analyst Toby Grimm this week named two S&P/ASX 200 Index (ASX: XJO) shares that have seen vastly different fortunes over the past year.

But he recommended buying both, as they have irresistible tailwinds in the long run:

That’s enough punishment

Over the past 12 months, James Hardie Industries plc (ASX: JHX) has, despite backing from many fund managers, seen its share price plummet almost 30%.

“This building products company recently announced a second full year 2023 profit downgrade to between US$600 million and US$620 million,” Grimm told The Bull.

“It was 8.1% below market consensus.”

The stock has struggled from both the perception and reality that steeply rising interest rates are killing the US housing market.

But Grimm is convinced the slaughter is now done and that James Hardie shares can only move up from here.

“With US interest rates likely to peak during the first half of calendar year 2023, we see potential for a share price recovery later this year,” he said.

“In our view, the shares offer long-term value at current levels.”

Grimm’s peers generally agree with him. 

According to CMC Markets, 11 out of 16 analysts currently recommend James Hardie as a buy. Ten of those professionals say it is a strong buy.

‘Confidence in improving profitability’

After going sideways for much of the COVID-19 pandemic, the last year has been more fruitful for CSL Limited (ASX: CSL) shareholders.

The share price has gained a tidy 13.6%.

And its trading conditions are only improving as we speak.

“Plasma collection levels and revenues across all divisions were ahead of expectations in the first half of fiscal year 2023.”

The recovery in this business is already delivering real results for investors.

“Although operating costs remain elevated, this blood products group still delivered a better than anticipated interim dividend of US$1.07 a share,” said Grimm.

“In our view, this signals confidence in improving profitability moving forward.”

CSL is a darling among professional investors at the moment. An incredible 16 out of 19 analysts currently surveyed on CMC Markets would buy.

The post ‘Long-term value’: Expert names 2 ASX 200 shares to buy for years to come appeared first on The Motley Fool Australia.

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More reading

• Top brokers name 3 ASX shares to buy next week
• Brokers name 3 ASX shares to buy now
• Top broker says CSL shares will hit $350, buy now
• Top brokers name 3 ASX shares to buy today
• Are CSL shares a buy following the ASX 200 giant’s latest results?

Motley Fool contributor Tony Yoo has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. 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 small-cap shares may not be household names. They might not get the same media attention as the big S&P/ASX 200 Index (ASX: XJO) banks and miners.

However, some pint-sized ASX companies could turn out to be the big-cap stocks of the future. And wouldn’t it be great to invest in a few during the relatively early stages of their growth stories?

But with so many tiny ASX fish in the sea, how can investors sort the future big catches from the minnows destined to forever remain small fry?

For their thoughts, we decided to open a can of worms and ask our Foolish writers which ASX small-cap shares they reckon are worth reeling in right now. Here is what they said:

6 best ASX small-cap shares for 2023 (smallest to largest)

City Chic Collective Ltd (ASX: CCX), $127.56 million

Healthia Ltd (ASX: HLA), $191.79 million

Adairs Ltd (ASX: ADH), $414.87 million

Arafura Rare Earths Ltd (ASX: ARU), $1.28 billion

Platinum Asset Management Ltd (ASX: PTM), $1.35 billion

GUD Holdings Limited (ASX: GUD), $1.40 billion

(Market capitalisations as at market close on 20 February 2023)

Why our Foolish writers love these ASX small-cap stocks

City Chic Collective Ltd

What it does: City Chic is an Australian-born, plus-sized fashion retailer. It boasts 200 locations around the globe as well as multiple online channels.

By Brooke Cooper: The last 12 months have been rough on the City Chic share price. It’s dumped almost 90% since this time last year amid inventory concerns and balance sheet pressure.

But I believe most of the bad news could now be behind the company. City Chic recently revealed its inventory levels are expected to come in below guidance for the first half, while its recently-amended debt facility should support the company’s financial position.

Goldman Sachs is neutral on the stock due to concerns around continuously-compressed margins and a promotion-focused customer base.

However, I’m not averse to risk so think the current City Chic share price could represent a buying opportunity right now.

Motley Fool contributor Brooke Cooper does not own shares in City Chic Collective Ltd.

Healthia Ltd

What it does: With over 300 clinics across Australia and New Zealand, Healthia describes itself as a leading, diversified allied healthcare provider.

The company operates networks of optometry, podiatry, and physiotherapy clinics and also owns iOrthotics, a leading manufacturer of custom-made and 3D-printed foot orthotic devices for podiatrists.

By Tristan Harrison: The Healthia share price has fallen by around 40% since the start of 2022, making it great value, in my opinion.

I think the business is exposed to a number of helpful tailwinds, including an ageing population and a growing potential market (helped by the resumption of immigration).

This small-cap ASX share is also relying on an acquisition strategy to boost its scale. It’s also working on improving the performance and efficiency of its existing clinic network. Healthia is planning to spend at least $20 million on acquisitions in FY23.

FY23 half-year revenue is expected to grow by between 31.7% to 37.1%, with like-for-like revenue growth of 5.4%. January 2023 showed “positive momentum” as well.

Motley Fool contributor Tristan Harrison does not own shares in Healthia Ltd.

Adairs Ltd

What it does: Adairs is an ASX retailer that sells homewares like linens, furniture, and decor items. It operates 170 stores across Australia and New Zealand as well as a growing online channel.

By Sebastian Bowen: This is one ASX small-cap share I think could have a big future.

The Adairs share price has had a bit of a rough trot over the past year or two, having fallen by around 50% from its pandemic highs. But this could well present a buying opportunity.

The company is still growing healthily, posting record revenues for the first half of FY2023, which were up 34.1% over 1H22’s numbers. Its online channels have also been booming, with roughly 26.5% of all sales over the half done over the internet.

Perhaps best of all, Adairs currently has a fully-franked trailing dividend yield of around 7.5% on the table today.

Considering all of this, Adairs could well be a small-cap ASX retailer to consider right now.

Motley Fool contributor Sebastian Bowen owns shares in Adairs Ltd.

Arafura Rare Earths Ltd

What it does: Arafura Rare Earths is the rare earths developer behind the globally significant Nolans Project in the Northern Territory.

By James Mickleboro: I think Arafura Rare Earths could be an ASX small-cap share to buy right now. This is because of the potential for the Nolans Project to supply a significant proportion of the world’s neodymium and praseodymium (NdPr) demand in the future.

These are critical minerals in the production of high-performance neodymium magnets, which are used in everything from mobile phones and electric vehicles to wind turbines and military weapons.

And with the company expecting demand to more than double from 2020 to 2030, and supply to remain constrained, I believe Arafura looks well-positioned to benefit from strong prices once it commences production.

Motley Fool contributor James Mickleboro does not own shares in Arafura Rare Earths Ltd.

Platinum Asset Management Ltd

What it does: Platinum Asset Management is an Australian-based niche investment manager focused on international shares.

By Bernd Struben: After a tough 18-month stretch, the Platinum Asset Management share price has seen a big turnaround in 2023, up by almost 30% year to date. I like buying into strength and believe the company can deliver more gains in the year ahead.

Adam Lund, head of trading at Spheria Asset Management, recently tipped Platinum to outperform. He told Motley Fool, “When you buy Platinum shares, you are investing in a very experienced investment team that manages $18 billion across strategies that have outperformed their direct competitors over most periods.”

Atop potential share price gains, Platinum pays a 7.8% trailing dividend yield, fully franked.

Motley Fool contributor Bernd Struben does not own shares in Platinum Asset Management Ltd.

GUD Holdings Limited

What it does: GUD Holdings is an Australian-based company that manufactures and distributes a diverse range of products in the automotive aftermarket and water industries. With a history spanning 65 years, GUD has raised a slate of trusted brands including Ryco Filters, DBA brakes, CSM, Cruisemaster, and Davey.

By Mitchell Lawler: GUD Holdings is not a flashy company touting futuristic software. However, it does meet a valuable need by providing a host of aftermarket car parts.

A growing berth of brands continues to fortify GUD’s pricing power, reputability, and top-line growth. In the company’s latest half-year results, revenue increased a significant 56% to $517 million.

What I find particularly attractive about this company is its exposure to non-discretionary spending. Around 80% of GUD’s automotive revenue is derived from wear-and-tear/replacement parts. I believe this bodes well for the company, in conjunction with a large number of registered cars in Australia and the rising average vehicle age.

I personally think GUD’s assets and growth potential are currently undervalued. At present, the company trades at around 11 times estimated FY2025 earnings.

Motley Fool contributor Mitchell Lawler does not own shares in GUD Holdings Limited.

The post Top ASX small-cap shares to buy in 2023 appeared first on The Motley Fool Australia.

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More reading

• 2 exciting ASX shares that are on course for ‘robust growth’: expert
• How a stock market crash could turbocharge my ASX share portfolio
• Adairs share price falls amid strong first half growth but guidance downgrade
• 8 ASX 200 shares trading ex-dividend this week
• Here are the top 10 ASX 200 shares today

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs and Healthia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has positions in and has recommended Adairs. The Motley Fool Australia has recommended Adore Beauty Group and Healthia. 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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On Monday, the S&P/ASX 200 Index (ASX: XJO) started the week with a very small gain. The benchmark index rose 4.7 points to 7,351.5 points.

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

ASX 200 expected to fall

The Australian share market looks set to give back yesterday’s gains and more on Tuesday following a poor start to the week on Wall Street. According to the latest SPI futures, the ASX 200 is poised to open the day 28 points or 0.35% lower. In late trade in the United States, the Dow Jones is up 0.4%, but the S&P 500 is down 0.3% and the NASDAQ is down 0.6%.

Oil prices rise

Energy shares Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could have a decent day after oil prices stormed higher overnight. According to Bloomberg, the WTI crude oil price is up 1.15% to US$77.22 a barrel and the Brent crude oil price is up 1.2% to US$83.99 a barrel. Traders appear to believe oil prices were oversold after another heavy decline last week.

Altium half-year result

The Altium Limited (ASX: ALU) share price will be one to watch on Tuesday. This follows the release of the electronic design software company’s half year results after the market close on Monday. Altium reported a 17% increase in revenue to US$119.5 million and a 30% jump in net profit after tax to US$29.6 million. Goldman Sachs commented: “In-line result drives minor changes; pricing and Octopart yield offset weaker than expected volumes.”

Gold price edges higher

It could be a subdued day for gold miners Evolution Mining Ltd (ASX: EVN) and Regis Resources Limited (ASX: RRL) after the gold price edged ever so slightly higher overnight. According to CNBC, the spot gold price is up a fraction to US$1,850.3 an ounce. Traders appear unsure where gold is heading next given the outlook for interest rates.

Seek results

The Seek Ltd (ASX: SEK) share price will be in focus today when the job listings giant releases its half year results. According to CommSec, the market is expecting the company to report a net profit after tax of $159.7 million and declare an interim dividend of 34 cents per share.

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

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More reading

• Altium share price on watch following strong first half growth
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Hoping to pocket the next CBA dividend? Here’s what you need to do
• Are Qantas shares a buy ahead of this week’s ASX results announcement?

Motley Fool contributor James Mickleboro has positions in Altium and Seek. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. The Motley Fool Australia has recommended Seek. 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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Investors in ASX shares are skittish right now.

Nucleus Wealth chief investment officer Damien Klassen described it as the market “oscillating between fear and elation”.

“Any investment is an exercise in probabilities. As part of the process, it is prudent to look at the various outcomes and consider the likelihood of different scenarios occurring.”

As such, he laid out four possible paths that interest rates could head in 2023 — and what each would mean for ASX shares:

Scenario 1: central banks cave quickly

If central banks like the Reserve Bank of Australia and the US Federal Reserve get frightened by how much their economies are tanking, they could cut rates rapidly.

According to Klassen, this is the scenario “most positive for equities”.

“It is the least likely in my view, but we have seen it play before,” Klassen said on the Nucleus blog.

“When Powell first became the US central bank chairperson he explained that he wasn’t there to backstop equity markets. A plunge in equity markets culminated on Christmas and Powell essentially reversed that position.”

At the first hint of a rate cut, bond yields would tumble and share markets would “go into a wild ‘risk-on’ rally”.

“Growth and cyclical stocks in particular would pace the market,” said Klassen.

“The US dollar would be hit hard, emerging markets and commodities would fly as global growth picks up. The party would be in full swing.”

Scenario 2: interest rates pause soon, cut in second half of 2023

This option is the one that stock markets have currently priced in, according to Klassen.

“A looming recession, albeit mild, weak economic growth and falling corporate earnings lead central banks into starting to reverse interest rates.”

Again, bond yields would fall but the flight to shares would be more orderly than the first scenario.

“Within stocks, quality stocks will perform better,” said Klassen.

“You want stocks that can maintain their margins, as earnings will be under pressure. At the same time, markets will be rewarding earnings growth with multiple expansion.”

Klassen reckons this situation or the next one seems “the most likely” to happen.

Scenario 3: interest rates pause middle of year, cut late in 2023

According to Klassen, this situation is halfway between what share markets have priced in and what central banks are stating they would do.

“It would eventuate if inflation is stickier than expected, or if central banks are more resistant to market pressure than they have been in the past,” he said.

“Either way, corporate earnings will be hit harder under this scenario.”

Shares will fall as multiple expansion is delayed.

“Corporate profits are down moderately on a big margin squeeze,” said Klassen.

“Commodities fall. Quality stocks and defensive stocks give the best returns within equities.”

Scenario 4: interest rates rise first half of 2023, then pause for second half 

Klassen considers this situation possible but “not probable”, even though it’s the path that the central banks are predicting they’ll take.

For this scenario to take place, inflation would have to remain stubbornly high, more supply chain disruptions occur for some reason, or central banks ignore market pressure.

This situation would be disastrous for stocks.

“Corporate profits are down significantly on both falling sales and falling margins. Significant bankruptcies emerge. Valuation multiples fall,” said Klassen.

“The US dollar is strong. Emerging market stocks tumble, along with commodities. Defensive stocks give the best returns within equities.”

The post 4 ways interest rates could go and what they mean for ASX shares: expert 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 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 to add some growth shares to your portfolio?

If you are, listed below are two ASX 200 growth shares that analysts are tipping as buys. Here’s what you need to know about them:

Aristocrat Leisure Limited (ASX: ALL)

The first ASX 200 growth share that has been tipped as a buy is Aristocrat Leisure. It is one of the world’s leading gaming technology companies.

It owns a portfolio of world class poker machines and a growing digital business. The former continues to win market share thanks to their popularity with casinos and players. Combined with the strong recurring revenues being generated by digital/mobile games such as Raid and its recent expansion into the real money gaming market, Aristocrat has been tipped to continue its solid earnings growth over the coming years.

Citi is positive on the company and notes that “digital industry bookings have flattened out while Aristocrat continues to outperform.”

As a result, it recently reaffirmed its buy rating and $41.20 price target on its shares.

Treasury Wine Estates Ltd (ASX: TWE)

Another ASX 200 growth share that could be a top option for investors right now is Treasury Wine.

It is one of the world’s leading wine companies with a high quality portfolio of wine brands including Penfolds, 19 Crimes, and Wolf Blass.

After going through a difficult period due to being effectively kicked out of China, Treasury Wine has bounced back strongly. The good news is that analysts at Morgans believe the company’s growth is only just starting. In fact, its analysts are expecting “TWE to deliver double digit earnings growth over 2H23/FY24/FY25.”

The broker has an add rating and $15.05 price target on its shares.

The post 2 stellar ASX 200 growth shares to buy now: analysts appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates. 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’re looking for ASX 200 shares to add to your portfolio, then you may want to look at the two named below that have been tipped as buys by analysts at Morgans following the release of their results.

Here’s why the broker is very positive on these shares:

Cochlear Limited (ASX: COH)

The first ASX 200 share that Morgans is bullish on is Cochlear.

It is a manufacturer and distributor of cochlear implantable devices for the hearing impaired across over 30 countries. It offers three main products: Cochlear implants, Baha bone conduction implants, and Cochlear Wireless Accessories.

Morgans was pleased with Cochlear’s recent half year update. It commented:

Cochlear’s 1H results were better than expected, underpinned by strong sales growth in both developed and emerging markets, but OPM declined on growth initiatives. […] We see continued momentum, with FY23 guidance reaffirmed, implying a strong 2H (+25% at the mid-point), underpinned by strong fundamentals and progressively improving trading conditions.

The broker has an add rating and $250.60 price target on its shares.

Corporate Travel Management Ltd (ASX: CTD)

Another ASX 200 share that Morgans is bullish on right now is corporate travel specialist Corporate Travel Management. It believes it is well-placed for growth over the medium term. This is thanks to acquisitions, its lower cost base, and technology development.

In response to its half year results, Morgans commented:

CTD’s 1H23 result was a slight miss compared to implied guidance and our forecast. However, the result included additional costs so that CTD can take advantage of the expected strong recovery in the 2H23 and FY24. The midpoint of FY23 EBITDA guidance was slightly better than consensus however higher D&A and tax results in NPATA downgrades. CTD is confident of achieving a full recovery in FY24 based on significant new clients wins.

Morgans currently has an add rating and $21.90 price target on the company’s shares.

The post 2 ASX 200 shares to buy post-results: Morgans appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cochlear. The Motley Fool Australia has recommended Cochlear and Corporate Travel Management. 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 mining share Okapi Resources Ltd (ASX: OKR) set the bar high on Monday.

Shares in the tiny ASX mining stock were up more than 41% in early trading today before some profit taking took place, giving back a lot of those gains.

At market close, the Okapi Resources share price closed up 5.88%, trading for 18 cents per share.

What’s piquing investor interest in the ASX mining share?

The Okapi Resources share price entered a trading halt on Thursday pending the release of a capital raising announcement.

The ASX mining share released that capital raise announcement before market open this morning. And investors appeared enthusiastic with the outcome.

Okapi said it has received binding commitments to raise $5.1 million (before costs) through a placement of approximately 34.2 million shares at an issue price of 15 cents per share. That’s 25% below the current share price, mind you.

Okapi will use the funds to complete its investment in uranium enrichment technology company, Ubaryon Pty Ltd. The miner also plans to advance its Tallahassee, Maybell and Athabasca uranium projects.

The $5.1 million placement will take place in two tranches.

The directors’ participation of $129,000 worth of shares in tranche two of the placement is subject to shareholder approval. That approval will be sought at a general meeting in early April.

Commenting on the capital raise that sent the ASX mining share soaring today, Okapi’s managing director Andrew Ferrier said:

We are delighted to have new institutional and sophisticated investors participating in this placement… We are also very pleased to see the strong support from existing shareholders.

Most importantly, this raising provides Okapi sufficient funding to complete the Ubaryon investment. We are very excited to acquire an interest in Ubaryon’s Enrichment Technology, and it has the potential to add significant value to Okapi and its shareholders.

Okapi share price snapshot

The ASX mining share slid lower during the second half of 2022.

However, as you can see in the chart below, the Okapi share price is up 20% so far in 2023.

The post Why did this ASX mining share rocket 40% on open today? appeared first on The Motley Fool Australia.

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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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