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The S&P/ASX 200 Index (ASX: XJO) has kicked off this week’s trading on a positive note.

At the time of writing, the ASX 200 has gained a reasonable 0.57% so far, which puts the index at just under 7,150 points. At this point, it has been a very happy new year for the ASX indeed, with the index’s year-to-date gains now sitting at close to 3%. 

But let’s now dig a little deeper by taking a look at the ASX 200 shares currently topping the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Monday

South32 Ltd (ASX: S32)

First up this Monday is the ASX 200 mining giant South32. A hefty 13.82 million South32 shares have changed hands during today’s session so far. There hasn’t been much out of the company itself today that might explain this volume.

But that hasn’t stopped the South32 share price from popping by a healthy 4.24% today to $4.43 a share at present. It’s this sharp rise that probably explains the volumes we are witnessing.

Pilbara Minerals Ltd (ASX: PLS)

Next up we have ASX 200 lithium producer Pilbara Minerals. This Monday has seen a sizable 17.82 million Pilbara shares bought and sold at this point. We haven’t seen any ASX announcements out of Pilbara today, or indeed in 2023 as of yet.

So this volume can probably be explained by the machinations of the Pilbara share price itself. Pilbara has had a bumpy day this Monday. The company is currently up by 0.13% to $3.96 a share. But Pilbara has shown a bit of volatility today, bouncing between $3.92 and $4.06 a share. This could be the cause of Pilbara’s presence on this list.

Core Lithium Ltd (ASX: CXO)

Finally, we have another ASX 200 lithium share in Core Lithium. A notable 18.06 million Core Lithium shares have been exchanged on the ASX thus far this Monday. We’ve also seen some significant volatility with this ASX 200 share today, with Core trading between $1.19 and $1.27 a share over the course of this session.

We did get a new announcement from the company this morning. This discussed the relocation of the company’s head office to Perth, as well as the appointment of two new executives, including chief financial officer Andrew Forman.

So perhaps it is a combination of these factors that is leading Core Lithium to top our most traded shares list today.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

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More reading

• Looking to buy South32 shares? Here are the key dates to watch in 2023
• Will 2023 bring gains for ASX 200 shares? Here’s what Citi is forecasting
• Mineral mania: 5 ASX 200 mining shares smashing new highs on Monday
• This ASX 200 coal share is up 170% in a year. But one director is still buying
• Why are ASX 200 iron ore shares jumping higher today?

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a decent gain. At the time of writing, the benchmark index is up 0.55% to 7,148.9 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

AMP Ltd (ASX: AMP)

The AMP share price is down over 4% to $1.26. Investors have been selling this financial services company’s shares after it released an update on the divestment of its Colimate Capital businesses. AMP continues to wait for approval for the transfer of its interest in China Life AMP Asset Management. There is a danger that if this drag on any longer the transaction could be reduced in value or even terminated.

Computershare Limited (ASX: CPU)

The Computershare share price is down 5.5% to $24.25. This may have been driven by optimism that interest rates won’t rise as much as fear amid signs of easing inflation in the United States. While this is good news for the share market, it is a small blow to Computershare which benefits greatly from higher interest rates.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price is down 1.5% to $4.68. This morning, this insurance giant announced its 2023 reinsurance program. IAG’s CFO Michelle McPherson said: “Global reinsurance has become more challenging over the past year due to the impact of capital markets and Australian and international natural peril events.”

Telix Pharmaceuticals Ltd (ASX: TLX)

The Telix share price is down almost 5% to $7.05. This follows the release of the radiopharmaceuticals company’s trading update this morning. Telix reported unaudited revenue of $76.8 million for the fourth quarter of 2022. While this is a 39% quarter on quarter increase, it appears to have fallen a touch short of expectations.

The post Why AMP, Computershare, IAG, and Telix shares are dropping today appeared first on The Motley Fool Australia.

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More reading

• The 3 best-performing ASX tech shares of 2022
• Here are the top 10 ASX 200 shares today
• Bell Potter names the ASX healthcare shares to buy in 2023
• The 3 best-performing ASX 200 healthcare shares of 2022 revealed
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has positions in Telix Pharmaceuticals. 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 Insurance Australia 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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2022 was a rather rough year for ASX shares and the S&P/ASX 200 Index (ASX: XJO). Over the year just passed, the ASX 200 fell by a depressing 5.5%, ensuring that any ASX exchange-traded fund (ETF) tracking the ASX 200 Index would have fallen by a similar amount

But that doesn’t mean all ASX ETFs had a rough year. So let’s check out the three best-performing ETFs from last year. Just to be clear, we’ll go off the change in unit prices alone over the year here.

The top 3 ASX ETFs of 2022 revealed

BetaShares U.S. Equities Strong Bear Fund (ASX: BBUS)

First up is this inverse ETF from BetaSahres. Inverse ETFs are designed to rise in value when the value of the index they track falls. In the Strong Bear Fund’s case, the returns are also leveraged. This means that a 1% fall in the US market will generally give this ETF a boost of between 2% and 2.75%.

The US markets had an even worse year than the ASX 200 in 2022, with the S&P 500 Index (SP: .INX) falling by more than 19%. So it’s perhaps no surprise that this ETF had a cracking year.

Strong Bear Fund units started 2022 at $8.22, but finished up at $10.82, meaning investors enjoyed a total capital gain of 31.63% for the year.

BetaShares Global Energy Companies ETF (ASX: FUEL)

Another fund from BetaShares, this one is a little different. The Global Energy Companies ETF is not an inverse or leveraged fund. It simply tracks a basket of global energy giants operating in the oil and gas industries. These include well-known names like Exxon Mobil, Shell, BP and Chevron.

2022 saw oil and gas prices skyrocket thanks to a potent mix of geopolitical and economic challenges. This resulted in a very pleasing year for these kinds of companies.

We can see this reflected in the Global Energy Companies ETF’s unit price. This ETF started last year at a price of $4.69 but finished up at $6.46. That’s a gain worth 37.74%.

Global X Ultra Short Nasdaq 100 Hedge Fund (ASX: SNAS)

Our final and best-performing ETF of 2022 is another inverse, leveraged fund. The Global X Ultra Short Nasdaq 100 Hedge Fund is designed to move in the opposite direction to the US Nasdaq 100 Index.

The Nasdaq 100 is an index that reflects 100 of the largest companies on the tech-heavy NASDAQ exchange over in the US.

The Nasdaq 100 had a horrible 2022, falling by almost 33% last year. That’s a perfect storm for a cracking year for this ETF. The Ultra Short Nasdaq Fund started 2022 off at $3.04 per unit but ended the year at $5.53. That’s a gain worth a stellar 81.9%.

The post Here are the 3 best-performing ASX ETFs of 2022 appeared first on The Motley Fool Australia.

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More reading

• Looking to buy Woodside shares? Trader says oil price has 90% upside
• Why is the Fortescue share price lagging the ASX 200 materials sector today?
• Could this put another rocket under the price of ASX 200 coal shares?
• Mineral mania: 5 ASX 200 mining shares smashing new highs on Monday
• The A2 Milk share price rocketed 20% in 2022. Is it too late to buy for 2023?

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 positions in and has recommended BP. 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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When it comes to the Woodside Energy Group Ltd (ASX: WDS) share price, oil prices tend to have a big impact on whether its rises or falls.

In light of this, before buying the energy producer’s shares in 2023, it could be worth thinking about where oil prices could be heading.

The good news for investors is that one hedge fund trader believes oil prices could be destined to climb materially in the near future.

Oil prices tipped to rise

According to Bloomberg, hedge fund trader Pierre Andurand believes that global oil demand could increase as much as 4 million barrels or 4% in 2023 if the world fully emerges from COVID restrictions.

This compares to the International Energy Agency estimate for a 1.7 million increase in demand this year.

Andurand, whose main commodities fund gained about 50% last year, believes that this could lead to oil prices climbing to “upwards of US$140 a barrel once Asia fully reopens, assuming there will be no more lockdowns.” Particularly given that jet fuel demand is still down 2.5 million barrels a day from 2019 levels because China has not reopened fully yet.

Overall, the hedge fund trader feels the market is “underestimating the scale of the demand boost” that the COVID reopening would have for oil consumption and ultimately prices.

As a comparison, the WTI crude oil price is currently fetching US$74.47 a barrel and the Brent crude oil price is trading at US$79.42 a barrel. Based on the former, this means that oil prices could rise approximately 90% in 2023.

This would undoubtedly bode well for the Woodside share price if it happened. Especially given that the company was operating with a production cost of US$7.60 per barrel during the first half.

Should you buy Woodside shares?

According to a note out of Citi, its analysts have put a buy rating and $38.50 price target on Woodside shares.

This implies potential upside of 10% for investors over the next 12 months. In addition, the broker is expecting a hefty 9.8% dividend yield in FY 2023, bringing the total potential return to almost 20%.

The post Looking to buy Woodside shares? Trader says oil price has 90% upside appeared first on The Motley Fool Australia.

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More reading

• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?
• Bought $1,000 of Woodside shares 10 years ago? Here’s how much dividend income you’ve received
• 5 things to watch on the ASX 200 on Monday
• How are ASX 200 energy shares tracking in the first week of trade?
• 3 key factors that helped propel the Woodside share price 60% higher in 2022

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 Fortescue Metals Group Limited (ASX: FMG) share price looks set to snap its three-day green streak today.

Shares in the Australian iron ore miner have rallied by 28% during the last six months. However, the company chaired by Andrew ‘Twiggy’ Forrest is losing steam on Monday despite a rather peachy performance across the materials generally.

As we head into the afternoon, the materials corner of the market is holding out as the best-performing sector. At present, the sector is 1.42% above its previous close. Meanwhile, the Fortescue share price is 0.8% underwater at $21.63.

Management maketh the company

Today’s Fortescue share price weakness could be explained by an announcement that the company made earlier today. According to the release, the company’s chief financial officer (CFO), Ian Wells, has put forward his resignation.

Wells has served as group CFO since 2018, overseeing a period of significant earnings growth and shareholder returns. Between June 2018 and now, the Fortescue share price has increased by approximately 390% and earnings have grown by seven-fold.

Commenting on the departure of Wells, Fortescue chair Andrew Forrest said:

I recall fondly back in 2010 when Ian joined our team. The finance team at the time were charged with refinancing our original project finance bonds and the successful refinancing in 2010 enabled the company to make investments to expand capacity to 155mtpa.

Since then, we have seen the company’s balance sheet and capital allocation change from debt repayment to reinvestment and delivering market-leading shareholder returns …

The respected member of the leadership team is stepping away from Fortescue to explore other opportunities. With a finish date of 31 January, the company is already underway with finding and selecting a successor to Wells.

Fortescue share price under scrutiny

Shareholders could be growing concerned about what appears to be a trend at this point. Ian Wells’ exit is yet another in a series of senior outflows — joining Linda O’Farrell, Greg Lilleyman, Don Hyma, and former CEO Elizabeth Gaines to name a few.

At this point, only two out of the 13 executive leadership members displayed in Fortescue’s 2021 annual report are still on board.

The company trades on a price-to-earnings (P/E) ratio of 7.4 based on the current Fortescue share price. For reference, this is roughly in line with peers like Rio Tinto Limited (ASX: RIO) and slightly below BHP Group Ltd‘s (ASX: BHP) 8.1 earnings multiple.

The post Why is the Fortescue share price lagging the ASX 200 materials sector today? appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 iron ore shares jumping higher today?
• Will 2023 get better for ASX 200 shares?
• Guess how much a $20k investment in these ASX 200 shares in 2013 is worth now
• Fortescue share price bulls vs bears: Which will prevail in 2023?
• My 3 top-performing ASX shares of 2022, and why I’m still buying 2 of them for 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 no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) coal shares have seen plenty of gains over the past year. But, there’s a chance that things could get even better based on news coming out of China.

As a reminder, some of the strongest performers over the past 12 months within the ASX 200 have been the share prices of New Hope Corporation Ltd (ASX: NHC) and Whitehaven Coal Ltd (ASX: WHC).

What could power ASX 200 coal shares higher?

According to reporting by Reuters, China Energy Investment Corp has placed an order to import Australian coal. China had supposedly put an unofficial ban on Australian coal imports since 2020.

China is reportedly trying to meet higher demand for power consumption after COVID-related restrictions have been eased. Coal is one of the energy sources that are in demand.

Reuters reported that Australia was China’s second-largest coal supplier before that unofficial ban, with a quarter of Australian exports going to the Asian superpower in 2019. But, there may not be an immediate shift, as power plant inventories in the country are now reportedly high. Reuters quoted a Chinese utilities official who said:

Australian thermal coal is of better quality and is expensive. Chinese utilities may hence be less keen to buy.

Will it definitely help?

No one can know for sure how impacts to the global supply, demand and trade of coal will affect things.

While the entry of Australian coal into China is expected to challenge the market share of Russia in the country, one trader that Reuters quoted suggested that it could push down on prices:

Entry of Australian coal into Chinese markets could ease coking coal prices, which are currently on the higher side.

Coal prices are currently much higher than they were a year ago. But Europe is seeing such warm temperatures that it’s currently breaking records. For example, Bilbao in Spain reached 25C just over a week ago, which was more than 10C higher than average. Does warmer weather mean less coal demand over the rest of the European winter? Time will tell.

Big dividends expected

With the profits that New Hope and Whitehaven are producing, Commsec numbers suggest they will pay their shareholders significant dividends.

New Hope could pay a grossed-up dividend yield of around 40% in FY23.

Whitehaven could pay a grossed-up dividend yield of around 16% in FY23.

However, both businesses are expected to start reducing their dividends from FY24 onwards.

The post Could this put another rocket under the price of ASX 200 coal shares? appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 coal share is up 170% in a year. But one director is still buying
• These 3 ASX 200 coal shares posted the biggest gains of 2022
• The 3 best performing ASX 200 dividend shares of 2022
• Is China about to reignite ASX 200 coal shares?
• These are the highest-yielding ASX 200 dividend shares right now

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

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The S&P/ASX 200 Index (ASX: XJO) has kicked off the trading week with a pleasing gain. At the time of writing, the ASX 200 has lifted by a healthy 0.98%, putting the index at just under 7,180 points. But let’s talk about five ASX 200 mining shares that are doing even better than that.

This Monday has been especially lucrative for a number of big ASX miners.

First up is Capricorn Metals Ltd (ASX: CMM). This ASX 200 gold miner has enjoyed a 2.17% bump so far today to $5.19.

That’s not only a new 52-week high for Capricorn but an all-time, record high. Investors have also enjoyed a pleasing 57% return from Capricorn over the past 12 months.

Another ASX 200 share worth checking out is Gold Road Resources Ltd (ASX: GOR). Gold Road shares are presently up a decent 0.65% to $1.86. But this gold miner hit a new 52-week high of $1.90 a share this morning soon after market open.

That’s just a whisker off of Gold Road’s all-time high of just over $2 a share that we saw back in mid-2020.

ASX 200 gold shares glitter

De Grey Mining Limited (ASX: DEG) is another ASX 200 gold miner that is on fire this Monday. De Grey shares have gained 1.43% so far today to $1.56 a share.

That’s bang on De Grey’s new 52-week high and is also close to the highest share price this miner has ever traded at.

Next, we have gold share Perseus Mining Limited (ASX: PRU). This company’s rise has been a little more muted, with Perseus shares up 0.86% so far to $2.35 each.

This morning, the company lifted as high as $2.38 a share, which is a new 52-week high for Perseus. Although this isn’t a record high, it is the highest share price this company has seen in a decade.

Finally, we have yet another ASX 200 gold miner in Northern Star Resources Ltd (ASX: NST). Northern Star shares have put on a pleasing 1.2% so far this Monday to $11.90 each.

This morning saw a new 52-week high of $11.99 for Northern Star as well, capping off what has been a very pleasing day of trading for ASX 200 gold shares.

So with so many gold shares hitting new highs, you might think there is an underlying factor at play here. Well, you’d be right. As my Fool colleague James covered this morning, the price of gold jumped a substantial 1.6% at the end of last week to US$1,869.70 per ounce.

Thus, we can probably thank this jump for the boom we have seen in these five ASX 200 gold shares this Monday.

The post Mineral mania: 5 ASX 200 mining shares smashing new highs on Monday appeared first on The Motley Fool Australia.

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More reading

• This ASX 200 coal share is up 170% in a year. But one director is still buying
• Why are ASX 200 iron ore shares jumping higher today?
• Why is the Core Lithium share price soaring 4% on Monday?
• Are healthy returns on the horizon for ASX 200 healthcare shares in 2023?
• 5 things to watch on the ASX 200 on Monday

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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The A2 Milk Company Ltd (ASX: A2M) share price was on form in 2022.

Thanks to a rally late in the year, as shown below, the infant formula company’s shares rose 20% over the period.

As a comparison, the S&P/ASX 200 Index (ASX: XJO) index was down 5.5% in 2022.

Why did the A2 Milk share price smash the market?

As mentioned above, the A2 Milk share price took off late in the year.

This was driven by news that the US Food & Drug Administration had granted A2 Milk approval to import, sell, and distribute infant formula products in the US market.

And while management doesn’t expect any impact in the first half of FY 2023 due to the timing of the approval, it estimates that it will ship 1 million cans of infant formula to the United States during the second half.

But it won’t stop there if demand is stronger. The company has capacity to supply upwards of 9 million cans in the future.

In addition, the commencement of the company’s NZ$150 million on-market share buyback in November was supporting the A2 Milk share price late in the year.

Is it too late to buy shares?

Unfortunately, with the A2 Milk share price currently fetching $6.89, the broker community appears to believe its shares have peaked for the time being.

The most bullish broker that I’m aware of is Bell Potter. However, although it has a buy rating on its shares, the broker’s price target of $6.80 has now been surpassed.

Elsewhere, Morgans has a hold rating and $6.35 price target, Citi has a sell rating and $4.51 price target, and Goldman Sachs has a sell rating and $5.60 price target.

They appear to believe investors would be best waiting for some weakness before picking up shares.

The post The A2 Milk share price rocketed 20% in 2022. Is it too late to buy for 2023? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX 300 shares soaring to new 52-week highs today
• Can these 2 ASX 200 shares crush the market again in 2023?
• 3 ASX shares near 52-week highs I think can climb higher
• I think these 3 ASX shares could benefit from a Chinese tourism boom
• Could A2 Milk shares pay a dividend in 2023?

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 A2 Milk. 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 VHM Limited (ASX: VHM) share price is tumbling as it floats on the Aussie bourse on Monday.

The rare earths and mineral sands developer’s goal to become a global supplier of critical minerals caught the attention of many market watchers prior to its listing.

Also likely raising eyebrows is Aussie billionaire and Mineral Resources Ltd (ASX: MIN) boss Chris Ellison’s majority holding. Ellison boasts a 9.14% stake at the time of listing.

Right now, excited investors can get their hands on VHM shares for $1.20 each. That’s 11.1% lower than the company’s initial public offering (IPO) offer price of $1.35 apiece.  

Let’s take a closer look at the newest rare earths and minerals sands stock gracing the ASX.

VHM share price rockets as it hits the ASX after IPO

Those who got in on the VHM IPO will likely be disappointed this afternoon as the company’s share price slumps 11% on its ASX float.

It raised approximately $30 million in an oversubscribed IPO, offering new shares for $1.35 apiece.

That left the company expecting a market capitalisation of $266 million at its offer price.

What does VHM do?

VHM is behind the Goschen rare earths and mineral sands project in Victoria – dubbed by chair Donald Runge a “fast-emerging tier one” asset. Runge continues, via the company’s prospectus:

As the world continues to transition to renewable and environmentally friendly products like electric vehicles, the gap between increasing demand for rare earth and mineral sands and declining supply is anticipated to widen.

VHM is seeking to capitalise on these favourable market conditions and establish itself as a world-leading producer and supplier of critical minerals.

The project has a rare earth deposit of 413,107 tonnes of total rare earth oxide and an accompanying mineral sands resource.

Its definitive feasibility study was completed in March 2022.

The $30 million raised through the company’s IPO will fund to a final investment decision for the project’s first phase. That’s expected in the second half of this year.

After that, its first production is targeted for early 2025.

VHM recently agreed to provide Chinese rare earths giant Shenghe with around 60% of the project’s nominal production rate.

It’s also working on tests for a hydrometallurgy circuit to further refine rare earths produced at the project.

The post VHM share price plummets 11% following $30m IPO appeared first on The Motley Fool Australia.

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More reading

• Mineral mania: 5 ASX 200 mining shares smashing new highs on Monday
• The A2 Milk share price rocketed 20% in 2022. Is it too late to buy for 2023?
• Why is the BHP share price having such a strong start to the week?
• 4 ASX lithium stocks moving and shaking on Monday
• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?

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 BHP Group Ltd (ASX: BHP) share price has continued its ascent on Monday.

In morning trade, the mining giant’s shares were up 2% to $48.43.

When the BHP share price reached that level, as you can see below, it had risen an impressive 28% in six months.

Why is the BHP share price pushing higher again?

Investors have been buying the Big Australian’s shares on Monday for a couple of reasons.

The first is a strong session for ASX shares following an even stronger night of trade on Wall Street on Friday. Investors were flooding back into the market after wage inflation was softer than expected. This has sparked hopes that inflation could be easing and rates won’t have to rise as much as feared.

In addition, investors have been buying ASX mining shares recently amid optimism over the reopening of China from the pandemic.

With Chinese economic growth slowing markedly, the market is betting on some major stimulus to support its recovery in 2023. This could lead to an uptick in demand for the commodities that BHP produces such as copper and iron ore, which could ultimately underpin strong commodity prices.

It is for the same reason that the Rio Tinto Ltd (ASX: RIO) share price has climbed along with BHP shares in recent months, as shown below.

Can BHP’s shares keep rising?

As things stand, most brokers appear to believe the BHP share price is trading a little beyond fair value at the current level.

For example, Morgans, Morgan Stanley, and Goldman Sachs have the equivalent of hold ratings with price targets of $44.80, $42.55, and $42.90, respectively.

However, one broker that sees scope for BHP’s shares to rise slightly from here is Macquarie. Its analysts currently have an outperform rating and $50.00 price target on them.

Based on the latest BHP share price, this implies potential upside of 3%. But if you add in the ~$2.88 per share fully franked dividend the broker is forecasting in FY 2023, the total return stretches to 9%.

Though, if commodity prices strengthen because of Chinese demand, it is possible that brokers will upgrade their earnings (and dividend) estimates and price targets accordingly. Time will tell if that is the case.

The post Why is the BHP share price having such a strong start to the week? appeared first on The Motley Fool Australia.

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More reading

• How different is the Vanguard Australian Shares Index ETF (VAS) now compared to a year ago?
• Why are ASX 200 iron ore shares jumping higher today?
• How much profit are BHP shares going to make in 2023?
• Will 2023 get better for ASX 200 shares?
• Why BHP, Core Lithium, Santos, and Winsome shares are charging higher

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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