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The Woolworths Group Ltd (ASX: WOW) share price is a popular choice for many ASX 200 investors. Woolworths shares are stalwarts of the ASX 200 after all.

This company is a blue-chip supermarket operator that has been listed on the ASX for decades, with a business that most Australians would be very familiar with. Woolworths shares also pay passive income in the form of fully-franked dividends.

But just because a company is healthily profitable, pays dividends and has a mature, built-out business model doesn’t mean it is automatically a good investment.

The Woolworths share price meanwhile has had a very productive year in 2023 so far. The supermarket giant’s shares have risen by an impressive 8.32% year to date as it stands today. The company is also up an even better 11.5% or so over the past three months:

But that doesn’t necessarily mean that Woolworths shares are a buy today.

So, let’s check out what a broker is saying about Woolworths shares right now.

ASX broker rates Woolworths shares as a buy

Goldman Sachs is an ASX broker who currently has a very favourable outlook on the Woolworths share price. As we looked at earlier this week, Goldman currently rates Woolies as a buy.

But not only that, the broker has Woolworths shares on its high conviction list, with a 21-month share price target of $41.20. If realised, that would represent a share price upside of almost 15% from the $35.86 the shares are asking today (at the time of writing).

Here’s what Goldman had to say about its position:

We are Buy rated (on Conviction List) on the stock as we believe the business has one of the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as pass through any cost inflation to protect its margins, beyond market expectations.

The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

But not only does Goldman think Woolies shares have plenty of capital growth in store for investors, but it is also pencilling in rising passive income from the shares in the form of dividends.

The broker reckons Woolies will pay out a fully franked $1.02 in dividends per share in FY2023, rising to $1.13 per share in FY2024.

So there are both capital gains, and dividend income walking Woolworths shareholders’ way if Goldman is on the money.

But as always, we’ll have to wait and see what the next 12 months and beyond hold in store for this company

At the current Woolworths share price, this ASX 200 blue-chip share has a market capitalisation of $43.44 billion, with a dividend yield of 2.57%.

The post Buy Woolworths shares today for 15% upside plus passive income: Goldman appeared first on The Motley Fool Australia.

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More reading

• These ASX 200 shares are buys: experts
• With interest rates heading higher again, the risk is to the downside for these popular blue chip ASX shares
• Buy these growing ASX dividend shares for passive income: Goldman
• Analysts name 2 strong ASX 200 shares for a retirement portfolio
• Goldman reveals the ASX shares that could surprise to the upside (and downside) this reporting season

Motley Fool contributor Sebastian Bowen 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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We’ve been in the thick of the February earnings season this week, and two All Ordinaries Index (ASX: XAO) shares are already gearing up to pass their ex-dividend dates.

Indeed, anyone who isn’t already invested in the stocks will miss out on their upcoming dividends next week.

So, which ASX All Ords shares might passive income-focused investors want to check out sooner rather than later? Let’s take a look.

2 ASX All Ords shares trading ex-dividend next week

The first of the All Ords shares to pass its ex-dividend date will be computer products distributor Dicker Data Ltd (ASX: DDR).

The company will trade ex-dividend on Monday. Of course, it’s likely the Dicker Data share price will fall in line with the value of its dividend that day, as it will no longer be received by those buying the stock.

The All Ords share tumbled 10.6% when it released its full-year earnings earlier this week.

It posted $3.1 billion of revenue – a 25% year-on-year increase and a $73.4 million profit – marking a 0.3% slump.

The company’s final dividend was also 83% lower than last fiscal year’s, coming in at 2.5 cents per share.

However, its total financial year 2022 dividends came in just 0.5 cents lower year-on-year at 41.5 cents per share.

Fortunately, fellow ASX All Ords share Suncorp Group Ltd (ASX: SUN) will provide a notably higher dividend next month.

Suncorp dropped its half-year earnings on Wednesday, declaring a 33 cent per share interim dividend – marking a 43.5% year-on-year improvement.

The financials giant also boasted a $560 million profit for the period – a 44.3% jump.

Perhaps unsurprisingly, then, the All Ords share gained 4.6% on the back of the earnings update.

But those interested in getting a hold of the stock and its upcoming dividend better do so quickly. Suncorp will pass its ex-dividend date on Tuesday.

That means investors who aren’t on board come Monday will miss out on the offering.

The post These 2 ASX All Ords shares will trade ex-dividend next week appeared first on The Motley Fool Australia.

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More reading

• Dicker Data share price tumbles to multi-year low. Is it too cheap to miss?
• Macquarie has these ASX 200 dividend shares in its income portfolio
• Why AGL, Dicker Data, Megaport, and Suncorp shares are dropping
• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX 200 shares today

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

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The S&P/ASX 200 Index (ASX: XJO) is trading down 0.7% to 7,438 points at the time of writing.

ASX 200 shares are experiencing a resurgence in 2023, with the index up 7.2% in the year to date.

Meantime, Australian home values are falling at their fastest and steepest rate ever, amid the most aggressive interest rate hiking cycle on record.

So, are we going to have an Aussie house price crash, and will it take the ASX 200 with it?

What’s happening with Aussie house prices?

In short, nothing good right now. At least, not for the 66% of us who own our own homes, either with a loan (35%) or outright (31%), according to 2021 census figures from the Australian Bureau of Statistics.

We’re seeing the steepest and fastest fall in national home values on record, according to independent property research house, CoreLogic.

That record was set last month when the CoreLogic daily home value index (HVI) showed a decline of 8.4% between the market peak on 7 May 2022 and 7 January this year — and it’s still falling.

To clarify, CoreLogic measures ‘home values’ by combining all types of properties together.

Not coincidentally, May was when the Reserve Bank (RBA) began raising interest rates for the first time since 2010. It has never raised rates this much in as short a time period ever.

A fall in national home values this large and this fast hasn’t been seen in more than 40 years.

When looking back over market cycles since 1982, the previous peak-to-trough record was an 8.38% drop in national housing values over 20 months between October 2017 and June 2019.

The current 8.4% dip has occurred over just nine months.

Is the Australian housing market going to crash?

According to the Australian Financial Review (AFR), RBA modelling suggests the peak-to-trough fall could be 20%. In another AFR article, a survey of 31 economists found a median forecast fall of 15%.

According to news.com.au today, Jarden investment bank has downgraded its forecast for house prices following last week’s hawkish commentary from the RBA.

After previously tipping a peak-to-trough fall of 15% to 20%, Jarden analysts now expect 20% to 25%.

All these forecasts represent significant declines but not a crash. So, let’s move on from that scenario.

But the odds are home values will continue to fall, so will ASX 200 shares go with them?

How will falling home values impact ASX 200 shares?

The likeliest scenario is that falling home values will impact some individual ASX 200 shares, not the whole market itself.

Remember, the share market is forward-looking and nimble. It responds quickly to economic factors like rising interest rates. Conversely, the property market is slow-moving, and there’s a lag effect with rates.

If we look at the last few property downturns, we see that both home values and ASX 200 values sometimes fell simultaneously but not because of each other. They fell because of a common negative in the broader economy.

As we said earlier, home values have fallen by 8.4% between 7 May 2022 and 7 January 2023. During that same time period, the ASX 200 fell by 1.3%. The cause of both markets’ falls? A common economic negative — rising interest rates (and rising inflation had a big impact on the ASX 200 as well).

During the now second-worst property market downturn between October 2017 and June 2019, home values fell 8.38%. Meanwhile, the ASX 200 went up by about 12.5%. That property downturn was caused by lending restrictions on residential loans, so the ASX 200 was unaffected.

In the property market downturn of 2008 to 2009, home values peak-to-trough fell by 7.4%. Over those two years, ASX 200 shares went down by 25%. The culprit? Once again, a common economic negative — the global financial crisis.

Right now, we’re seeing new confidence in the share market even though the RBA has signalled clearly that there will be more rate rises to come. But probably not too many more, given the RBA reckons inflation has peaked.

So, the share market is looking beyond that already. There’s sun on the horizon. Meantime, home values are still sliding and will likely go further, so things still look gloomy there.

Which ASX 200 shares will be affected by falling home values?

Economically, the biggest impact of falling house prices is the ‘wealth effect’. People feel wealthier when home values are rising, and they’re more inclined to spend money in the economy. When they’re falling, people feel poorer — especially those who bought recently — and they’re less inclined to spend.

Plus, rising interest rates and inflation means the cost of living is going up as well. In such times, people tighten their belts, and ASX 200 consumer discretionary shares are among the first to feel the effect.

When rates are rising, fewer homes are sold as opportunistic sellers leave the market. Fewer home sales can impact several sectors of the economy, so some ASX 200 shares are likely to feel it more so than others.

Think building companies like Johns Lyng Group Ltd (ASX: JLG), whose share price is down 31% over the past 12 months. And building materials suppliers like James Hardie Industries plc (ASX: JHX), down 37%.

Then there are furniture retailers like Harvey Norman Holdings Limited (ASX: HVN), whose shares are down 19%, and appliances company Breville Group Ltd (ASX: BRG), down 26%. Shares in plumbing and bathroom fixtures company Reece Ltd (ASX: REH) have also fallen 18% over the past 12 months.

The post Could an Aussie house price crash destroy the ASX 200 in 2023? appeared first on The Motley Fool Australia.

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More reading

• The CBA share price is trading near all-time highs. Should you cash in?
• Guess which ASX 200 healthcare share is surging 5% on a new US patent?
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Bronwyn Allen has positions in Harvey Norman and James Hardie Industries Plc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Harvey Norman and Johns Lyng Group. The Motley Fool Australia has positions in and has recommended Harvey Norman. The Motley Fool Australia has recommended Johns Lyng 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 News Corp (ASX: NWS) share price is down 5.9% in afternoon trade to $28.31 per share.

S&P/ASX 200 Index (ASX: XJO) investors are hitting the sell button following the release of the diversified media conglomerate’s quarterly results for the three months ending 31 December.

Here are the highlights.

News Corp share price slides as income tumbles

• Revenue of $2.52 billion, down 7% from $2.72 billion in the prior corresponding period (pcp). Quarterly revenue was negatively impacted by foreign currency fluctuations
• Net income of $94 million, down 64% from $262 million in the pcp
• Total segment earnings before interest, taxes, depreciation and amortisation (EBITDA) of $409 million, down from $586 million
• Earnings per share (EPS) of 12 cents, down from 40 cents in pcp
• The board declared an unfranked dividend of 10 cents per share, up from 9.4 cents per share in the pcp

What else happened during the quarter?

The News Corp share price could be gaining some support from a steeper fall after the company reported revenues from its professional information business increased 45% in its Dow Jones segment. The company attributed the increase to its acquisitions of OPIS and CMA alongside strength in its Risk & Compliance products.

While broadcast revenues continued to decline, News Corp reported this was offset by higher streaming revenues from Foxtel’s Kayo and BINGE in its Subscription Video Services segment.

In an effort to cut costs, News Corp also announced its intention to slash its workforce by 5%, or some 1,250 positions, in the 2023 calendar year.

What did management say?

Commenting on the results sending the News Corp share price lower today, CEO Robert Thomson pointed to the “progress made in certain” of the company’s business segments.

Thomson added:

Obviously, a surge in interest rates and acute inflation had a tangible impact on all of our businesses. But we believe these challenges are more ephemeral than eternal…

In terms of portfolio optimization, as publicly reported, we have been actively engaged in discussions with CoStar Group about a potential sale of Move. Any transaction would be designed to create shareholder value and strengthen Realtor.com’s competitive position.

News Corp share price snapshot

As you can see in the chart below, with today’s intraday slide factored in News Corp shares are down 14% over the past 12 months.

The past half year has seen a better performance from the company, with shares up 8% in six months.

The post News Corp share price down 6% amid sliding earnings and planned job cuts appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• ‘Incredibly cheap’: 2 ‘strong’ ASX shares expert would pounce on right now
• Here are the top 10 ASX 200 shares today

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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Finishing the week in style, the JB Hi-Fi Limited (ASX: JBH) share price is strutting higher today ahead of its earnings announcement on Monday.

Shares in the consumer electronics retailer are ticking 0.53% upwards to $46.81 as we head toward mid-afternoon. Meanwhile, the S&P/ASX 200 Index (ASX: XJO) is trending 0.7% lower, weighed down by tech and utilities.

It’s the last day for investors to take a stake in JB Hi-Fi before the release of its FY23 first-half results next week. That might explain the above-average volume traded today. More than 490,000 shares have been exchanged since the opening bell.

What could we see on Monday?

The reality is JB Hi-Fi shareholders already have a fairly good idea of what they’ll see on Monday. Most of the guesswork has been removed after the company posted preliminary unaudited figures roughly three weeks ago.

As a quick recap, the Aussie and New Zealand retailer defied the odds and achieved record sales and earnings in the first half.

Revenue was ratcheted up 8.6% year-on-year to $5,278.5 million, and net profit after tax (NPAT) increased 14.6% to $329.9 million. These numbers can change during auditing. Though, usually, the figures aren’t altered meaningfully.

What will be important — which was not included in the preliminary results — is guidance around the forward outlook. Undoubtedly, this will be a key driver for which direction the JB Hi-Fi share price goes.

Between the last update and now, the conversation has changed around how far the Reserve Bank of Australia will go with interest rate rises. This could be problematic for the retailer, as it could mean a harder hit to consumer spending and the economy at large.

The Australian bond market is now pricing in a peak cash rate of around 4%. Previously, the peak was expected to be closer to 3.7%. At present, the Australian cash rate sits at 3.35% following the 0.25% hike on Tuesday.

How have JB Hi-Fi shares responded in the past?

Which way the JB Hi-Fi share price goes on Monday will likely depend on how rosy the full-year guidance is from management. A particular focus will be on whether wage inflation could hurt earnings, or if rising rates are beginning to discourage spending.

While it holds little to no bearing on how the shares will respond on Monday, it can be interesting to review past share price reactions to earnings. The table below shows the JB Hi-Fi share price change amid its results.

Date	Results	Share price reaction
22 August 2022	FY22 Full Year	-1.15%
14 February 2022	FY22 Half Year	5.42%
16 August 2021	FY21 Full Year	2.50%
15 February 2021	FY21 Half Year	3.05%
17 August 2020	FY20 Full Year	4.80%
10 February 2020	FY20 Half Year	11.50%

Shares have moved to the downside on one occasion over the last three years.

The post Earnings inbound: How could JB Hi-Fi shares respond on Monday? appeared first on The Motley Fool Australia.

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More reading

• I’m listening to Warren Buffett and buying ASX shares at deep discounts
• With interest rates heading higher again, the risk is to the downside for these popular blue chip ASX shares
• The ASX 200 is still full of cheap shares despite this year’s surge and I’m ready to buy more
• Morgans names 8 ASX retail shares to buy
• 3 things Scott Phillips is most excited about investing in 2023

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Jb Hi-Fi. 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a disappointing note. At the time of writing, the benchmark index is down 0.7% to 7,436.9 points.

Four ASX shares that aren’t letting that stop them from climbing today are listed below. Here’s why they are pushing higher:

Appen Ltd (ASX: APX)

The Appen share price is up 12% to $3.31. Investors have been buying this artificial intelligence data services company’s shares despite there being no news out of the company. However, investors appear to be betting that significant investment in artificial intelligence from tech giants in response to the emergence of ChatGPT could underpin increased demand for Appen’s services.

Endeavour Group Ltd (ASX: EDV)

The Endeavour share price is up 2% to $6.79. This may have been driven by a broker note out of UBS. Its analysts have taken their sell rating off the drinks company’s shares and upgraded them to a neutral rating with a $6.75 price target. UBS believes regulatory risks are now adequately priced in.

Imugene Limited (ASX: IMU)

The Imugene share price is up 11% to 15 cents. This follows news that the biotech company has been granted a patent in the United States. The patent relates to the company’s B-cell activating immunotherapy PD1-Vaxx. It is currently in development for the treatment non-small cell lung cancer.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is up 2% to $14.41. A broker note out of Morgan Stanley appears to have given this wine giant’s shares a boost. Its analysts highlight China’s reopening and the easing of trade tensions as potential positives for Treasury Wine. In respect to the latter, Chinese officials have suggested that they could revisit at tariffs imposed on Australian wines.

The post Why Appen, Endeavour, Imugene, and Treasury Wine shares are pushing higher appeared first on The Motley Fool Australia.

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More reading

• Treasury Wine share price climbs on China tariff hopes
• Guess which ASX 200 healthcare share is surging 5% on a new US patent?
• Appen share price soars again, up 29% since Monday
• Here are the top 10 ASX 200 shares today
• Beaten-up ASX 300 tech share Appen is booming 10% today

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 Appen. 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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2023 has so far been a good year for the Wesfarmers Ltd (ASX: WES) share price, and it could soon get better if one broker is to be believed.

Morgans is notably hopeful for the company behind iconic retailers like Kmart, Bunnings, Target, and Officeworks, as well as lesser-known businesses including WesCEF and lithium resource Mt Holland.

It’s tipping the stock to grow, and its also hopeful of the company’s dividends.

Right now, the Wesfarmers share price is $49.29. That’s 8.4% higher than it was at the start of 2023.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has risen 7.1% so far this year.

So, what might drive the stock even higher in the future? Let’s take a look.

Could the Wesfarmers share price surpass $55 in 2023?

The ball might be in Wesfarmers’ court in 2023, according to Morgans.

The broker tips the economic environment to soften this year. Meanwhile, many experts are forecasting recessions to hit some of the globe’s largest economies as higher interest rates, employed in a bid to tame inflation, take their toll.

Fortunately, Kmart could be “well-placed to benefit” from such a shift, Morgans says, courtesy of my Fool colleague James. It notes the average price of an item at the department store chain is around $6 to $7.

Wesfarmers managing director and CEO Rob Scott also expressed that the company could be poised to benefit from an economic slowdown at its October annual general meeting, saying:

While there are some risks on the horizon – including elevated inflation, rising interest rates and geopolitical tensions, I continue to believe that Wesfarmers is well positioned for this environment and has the capacity to effectively manage a range of economic scenarios.

Our balance sheet is strong. We have a diverse portfolio of high quality, cash-generative businesses, and new opportunities for value creation.

Morgans tips the Wesfarmers share price to reach $55.60 – a potential 12.75% upside. Meanwhile, the company could work to grow the passive income it offers investors.

The broker forecasts Wesfarmers to pay $1.82 per share in dividends this financial year and $1.89 per share next financial year.

That’s up from $1.80 per share last financial year and could see Wesfarmers boasting a 3.8% dividend yield by financial year 2024, considering its current share price.

Though, not all experts are so positive. Goldman Sachs rates the stock as a sell, slapping it with a $42.20 price target – a potential 14% downside.

The post Do Wesfarmers shares really offer 13% upside AND passive income? appeared first on The Motley Fool Australia.

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More reading

• The top ASX 200 share on my watch list right now
• Analysts say these growing ASX 200 dividend shares are top buys for income investors
• 2 ASX stocks I’ll be buying hand over fist in 2023
• Why right now is a once-in-a-decade opportunity to make passive income from ASX shares
• Wesfarmers share price drops on Catch news

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 positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Wesfarmers. 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 Brainchip Holdings Ltd (ASX: BRN) share price is having a difficult start to the year.

Earlier today, the semiconductor company’s shares dropped almost 2% to 61 cents.

When the Brainchip share price hit that level, it meant it was down 19% since the start of the year and a massive 63% over the last 12 months. The latter can be seen on the chart below.

Why are investors selling down the Brainchip share price?

Investors have been selling down the company’s shares over the last 12 months due to its abject financial performance.

Despite hyping up its technology, market opportunity, and sales activity and engagement, the company is still generating less revenue than some cafes.

That wouldn’t be too bad if the company had a $50 million to $100 million market capitalisation, but that is not the case.

Brainchip had a market capitalisation approaching $3 billion 12 months ago. And while that has now dropped down to approximately $1.1 billion, it is still a crazy valuation for a loss-making tech stock with a tiny team that is trying to compete with absolute behemoths that spend billions of dollars on research and development each year.

But that’s what happens when a meme stock has a good story and a strong social media following.

Short sellers appear to have caught onto this and have been increasing their positions in the company in recent months.

Clearly, they believe the Brainchip share price can fall materially from current levels. And as we have seen plenty of times in the past, it is never wise to bet against short sellers.

The post Why has the BrainChip share price crashed 19% in 2023? appeared first on The Motley Fool Australia.

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

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The Treasury Wine Estates Ltd (ASX: TWE) share price is up 1.77% to $14.40 amid news that China may shift its position on tariffs for Australian wine imports.

According to reporting in The Australian, a Chinese ministry official has indicated they may be willing to move on the tariffs.

Is China about to lift its wine tariffs?

At a briefing in China, the commerce spokeswoman Shu Jueting was asked a question about Australian wine tariffs.

She reportedly said: “China is willing to communicate on some technical issues in bilateral trade which are of concern to both sides.”

China imposed tariffs of up to 212% on Australian wine imports in 2020. This occurred as relations soured with the Australian Government.

ASX wine shares were hit hard because the tariffs effectively rendered one of our biggest export markets redundant.

Government data shows the Chinese market was worth $1.1 billion at its peak in 2019-20. It represented 37% of Australia’s total wine exports at the time.

Today, Austrade says 60% of Australian wine is exported and we are the world’s fifth largest wine exporter.

We have more than 6,000 grape growers and 2,000 wineries. About 1,000 producers export their wine to more than 100 international locations.  

How the tariffs killed the Treasury Wine share price

The Chinese market was crucial to Treasury Wine prior to the tariffs being imposed in November 2020.

The Treasury Wine share price crashed to $7.87 per share on 5 November after news of the tariffs broke. Just three months earlier, it had been trading 26% higher.

More than two years down the road, Treasury Wine has found other markets for its Australian products. If China were to reopen as an export destination, it would give Treasury Wine an enormous ‘new’ market.

The Treasury Wine share price hit a 52-week high of $14.84 on 1 February. This was driven by hopes Australia and China may rekindle their trade relationship.

At a GSFM briefing on 24 January, Tribeca portfolio manager Jun Bei Liu said even just a reduction in tariffs would create “an earnings upgrade of between 15% to 20% for [Treasury Wine]”.

She said the Treasury Wine share price (trading at a high of $14.44 that day) “hasn’t really reflected that yet”.

The post Treasury Wine share price climbs on China tariff hopes appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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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Pilbara Minerals Ltd (ASX: PLS) shares are bucking the wider selling action on the S&P/ASX 200 Index (ASX: XJO) today.

The ASX lithium stock is currently trading for $4.83 per share, up 1% during Friday’s lunch hour.

That’s today’s price action.

Now, if you own Pilbara Minerals shares, or plan to, here’s why the miner will likely be doing business with core Chinese customers for many years.

What’s happening with China?

China leads the world in EV production.

In 2022, EV sales in the middle kingdom averaged more than 500,000 per month, totalling 6.9 million units over the full year. A figure that’s not expected to slow down anytime soon.

That’s important for lithium, and by extension, Pilbara Minerals shares, as roughly 75% of the world’s lithium consumption goes into rechargeable batteries.

Now lithium has been labelled a critical mineral by Australia and its allies. Which has seen Western nations work to source supply chains outside of China.

But, according to Pilbara Minerals CEO Dale Henderson, China is set to be a major buyer of the miner’s lithium – sold in the form of spodumene concentrate – for a long time.

“I think they will be a key customer for Pilbara for a long time yet just because of the structural landscape that has evolved,” Henderson said (quoted by The Australian Financial Review).

Henderson noted that Great Wall Motor Company and Ganfeng are the biggest buyers of Pilbara Minerals’ Western Australian lithium exports.

“The lithium-ion industry is essentially completely domiciled in China, bar some emerging shoots elsewhere,” he said. “So we have had to make the choice to work with China and our customers have been fantastic partners in the main.”

Henderson added that the Chinese lengthy experience with lithium-ion battery production gives the country a competitive edge.

“China is really good in this space, they have honed their skills, they have done it for a long time, they will be really competitive for a long time,” he said.

How have Pilbara Mineral shares been tracking?

As you can see in the chart below, Pilbara Minerals shares have shot out of the blocks in 2023, up 29%. Investors who bought shares six months ago will be sitting on gains of 62%.

The post Own Pilbara Minerals shares? Here’s why China is set to remain a ‘key customer’ 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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