Tag: Motley Fool

If you’re looking for income, then National Australia Bank Ltd (ASX: NAB) shares could be worth considering.

That’s the view of analysts at Citi, who have recently upgraded the banking giant’s shares.

NAB shares upgraded

According to the note, the broker has upgraded NAB’s shares to a buy rating with a $32.75 price target.

Based on the latest NAB share price of $29.36, this implies potential upside of 11.5% for investors over the next 12 months.

The broker is also expecting NAB’s shares to provide investors with generous yields in the near term. It is forecasting a $1.50 per share dividend in FY 2022 and then a $1.85 per share dividend in FY 2023.

This equates to fully franked yields of 5.1% and 6.3%, respectively, over the next two years.

Why is the broker positive?

Last month Citi gave NAB’s third quarter update a reasonably lukewarm response. It said:

Pre-provision profit of ~$2.5bn was in-line with Citi, but ~5% below Consensus driven by weaker than expected revenue growth of just ~3%. In the quarter, Markets & Treasury income unexpectedly fell, while NIMs ex M&T were only ‘up slightly’ (consensus +4bpts). Underlying expense growth was better than expected at just ~1%. CET 1 of 11.6% was a strong result, but benefited from undisclosed deductions movements. Looking to 4Q, the impact of recent RBA cash rate rises will deliver a very different set of results. We expect consensus 2H22 pre-provision estimates to remain intact with some possible refinement of BDDs.

Since then, though, the NAB share price has pulled back and the outlook for the banks has improved even more so.

In respect to the latter, Citi believes that NAB and the other big four banks are well-placed to profit thanks to their significant excess liquidity as rates rise. In fact, the broker has upgraded sector earnings estimates by 2% in FY 2023 and 4% in FY 2024 to reflect this.

All in all, this could make NAB shares one to consider if you don’t already have meaningful banking sector exposure.

The post Are NAB shares a buy for income investors right now? appeared first on The Motley Fool Australia.

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More reading

• Analysts say these high yield ASX dividend shares are buys
• NAB shares: Buy, hold, or fold?
• Here’s why I decided to buy each of the big 4 ASX 200 bank shares
• NAB shares: Boring or beautiful?
• Looking to buy CBA shares? Here’s how the bank’s balance sheet stacks up

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 Wesfarmers Ltd (ASX: WES) share price is having a terrible day, down 4% in afternoon trading to $43.33.

There’s been no market-sensitive news issued by the diversified conglomerate today.

However, according to an article in the Australian Financial Review (AFR), Wesfarmers has been busy with a bunch of changes to the businesses in its new health segment following the purchase of Australian Pharmaceutical Industries (API).

Wesfarmers bought API in a takeover deal finalised in March. The acquisition brought retail chains including Priceline Pharmacy, Pharmacist Advice, and Clear Skincare into the Wesfarmers portfolio.

Best known for owning Bunnings, Kmart, and Officeworks, the purchase represents Wesfarmers’ first foray into the healthcare, beauty, and wellness space.

What will API do to the Wesfarmers share price?

Emily Amos is managing director of Wesfarmers’ health segment. She was appointed in April shortly after the takeover was concluded.

Amos has done an interview with AFR outlining some of her first priorities.

According to the article, one of them is leveraging API’s loyalty program to boost sales. It’s the fourth largest of its kind in terms of market penetration in Australia.

Called Sister Club, the loyalty program has 7.5 million members. Amos wants to use it to increase sales, expand product ranges, and improve marketing.

She also wants to expand the network of Clear Skincare clinics, which offers anti-ageing, acne and laser treatments. There are currently 96 clinics across Australia and New Zealand. Amos wants to add 30 more.

Amos told AFR: “It’s a good margin business, so it’s really about operational execution and discipline.”

The former API wholesale drug business recorded $3 billion in sales in fiscal year 2021 but with low margins.

Amos reckons she can improve things by making the distribution centre in Sydney’s Marsden Park more efficient. She sees automation as the way to go and expects gains from the second half of this year, according to the article.

Bringing a new business into the fold involves many costs but also many potential rewards.

In Wesfarmers’ FY22 full-year results, the health division recorded $1,240 million in revenue. But this trickled down to a $25 million loss in earnings before tax (EBT).

Of course, this is only over the three months that Wesfarmers owned its new health assets.

The picture changes if you take out $36 billion in acquisition-related and one-off expenses. In that scenario, earnings for the three-month period were $11 million.

Over this three-month timeframe, the Wesfarmers share price went down by 15%.

The post Own Wesfarmers shares? Here’s where the health business is heading appeared first on The Motley Fool Australia.

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More reading

• Down 23% in 2022, are ASX investors throwing Wesfarmers shares out with the bathwater?
• 2 excellent ASX dividend shares experts rate as buys
• Wesfarmers shares: Buy, hold, or fold?
• Wesfarmers share price drops 4%: Time to buy?
• Why this top broker is tipping 15% upside for the Wesfarmers share price

Motley Fool contributor Bronwyn Allen has positions in Wesfarmers Limited. 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 Wesfarmers Limited. 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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By now, most investors would be aware of the awful end to the trading week that ASX 200 shares are suffering through this Friday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) has plunged by a depressing 2.3% to back down around 6,550 points.

These falls have predictably bought some new share price lows to the ASX today. So let’s take a look at three ASX 200 shares that have just unlocked some new low points for their share prices.

3 ASX 200 shares hitting new lows today

Sonic Healthcare Limited (ASX: SHL)

Sonic is our first ASX 200 share worth a look at today. This ASX 200 healthcare share has taken a beating today. At present, Sonic shares are down a nasty 2.4% this session to $29.60 each. But earlier today, Sonic sank as low as $29.43. That’s a new 52-week low for the company.

It’s also the lowest Sonic shares have been since the dark days of the 2020 COVID crash. Sonic healthcare shares are now down 35.85% year to date.

Lottery Corporation Ltd (ASX: TLC)

Lottery Corp shares have only been on the ASX 200 in their own right for a few months. The company was spun out of Tabcorp Holdings Limited (ASX: TAH) back in May. But it’s been a baptism by fire for this gaming share. Since its ASX debut, Lottery Corp shares have fallen by close to 11%.

Today, the company has taken a depressing 3.8% hit, which puts it down to the present price of $4.18. This morning saw the company descend to just $4.11 per share, which is Lottery Corp’s new 52-week low.

TPG Telecom Ltd (ASX: TPG)

Our final ASX 200 share to check out today is telecom company TPG. TPG shares are down 2.31% so far this Friday, putting the telco at $4.86 a share. That’s just a whisker off of the low of $4.85 that TPG saw this morning. That’s also the new 52-week low for the company.

It’s been a brutal month or so for TPG, which has seen its share price decline by more than 27% since 17 August. The company is now down by 17.7% year to date in 2022 thus far.

The post These ASX 200 giants are unlocking new lows on Friday appeared first on The Motley Fool Australia.

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More reading

• Here’s how ASX telco shares are faring following Optus hack
• These ASX 200 dividend shares just paid out. Here’s how much
• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• These are the top ASX 100 buy ideas from Macquarie
• 3 blue-chip ASX 200 shares touting the highest dividend yield in September

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 recommended Sonic Healthcare Limited and TPG Telecom Limited. 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 a number of growth shares being sold off recently as interest rates rise, now could be a good time to look at which ones you want to buy when the market settles down.

Two that analysts at Morgans rate as buys are listed below. Here’s what the broker is saying about them:

Aristocrat Leisure Limited (ASX: ALL)

Morgans is a big fan of this gaming technology company. It highlights that the company has been growing strongly in recent years and expects this trend to continue. Particularly given how it continues to win market share across all product segments. So, with Aristocrat’s shares down materially since this time last year, its analysts see this as a buying opportunity for investors. It commented:

The underperformance [of its shares] means, however, that ALL’s 1-year forward P/E has derated to less than 20x from a high of 30x last September. With $3.3bn of currently available liquidity, ALL has significant funding capacity for growth, even after the buyback. It has a stated ambition to build a meaningful presence in the rapidly growing online real money gaming segment, which we believe may be achieved both through organic investment and inorganic acquisitions.

Morgans has an add rating and $43.00 price target on the company’s shares.

Jumbo Interactive Ltd (ASX: JIN)

Another ASX growth share to consider is lottery ticket seller Jumbo. Morgans likes the company due to its belief that lottery ticket sales are somewhat recession proof. In addition, the broker also sees growth opportunities overseas. It said:

We believe JIN offers excellent strategic growth opportunities, both in Australia and overseas, supported by a steadily expanding domestic market for digital lottery retailing. The business is cash generative and has a low requirement for ongoing capex. Lottery sales are resilient to economic cyclicality. They do not represent a large proportion of the personal budgets, hovering around 0.5% of household discretionary income in Australia. Although near-term sales are affected by the frequency of large jackpots, over time growth is steady.

Morgans has an add rating and $17.50 price target on its shares.

The post 2 ASX growth shares that Morgans rates as buys appeared first on The Motley Fool Australia.

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More reading

• Here are 3 top ASX growth shares that analysts rate as buys
• ‘Bullish sign’: Expert names 2 rising ASX shares to buy right now
• Aristocrat share price defies the selloff thanks to bullish brokers
• 5 things to watch on the ASX 200 on Friday
• Are these ASX growth shares buys after the market selloff?

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 Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited. 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 Evolution Mining Ltd (ASX: EVN) share price hasn’t been immune to today’s sharp sell-off on the S&P/ASX 200 Index (ASX: XJO). But the gold miner is certainly holding up better than the benchmark.

In afternoon trade the Evolution Mining share price is down 1%. Meanwhile, the ASX 200 has tumbled more than twice that much, down 2.2%.

But it’s not just Evolution Mining shares that are outperforming.

At the time of writing the Northern Star Resources Ltd (ASX: NST) share price has slipped 1.2% while shares in Newcrest Mining Ltd (ASX: NCM) are down 0.86%.

All up the S&P/ASX All Ordinaries Gold Index (ASX: XGD) is down 1% today, half the damage suffered by the ASX 200.

With the United States Fed having just bumped interest rates in the world’s largest economy by another 0.75% and gold trading near two-year lows, what’s supporting the Evolution Mining share price?

Safe haven status in play

Gold is classically viewed as a safe-haven asset, alongside the US dollar and government bonds.

Yet, despite rising geopolitical tensions around China and Taiwan, alongside Russia’s invasion of Ukraine, bullion has fallen from multi-year highs of US$2,051 per ounce on 8 March to US$1,671 today.

Much of that pressure has come from fast rising interest rates. Not just from the US Fed, but from central banks across the world, including the RBA.

That’s pushed down bullion prices, and pressured the Evolution Mining share price, on several fronts. Mainly, gold doesn’t pay any interest. And as rates go up, so too does the allure of alternate haven assets like the US dollar and government bonds.

But an interesting thing happened in the wake of Wednesday’s rate hike by the Fed. While gold dipped initially, bullion is currently just $2 per ounce below where it was before the rate announcement.

Commenting on the outlook for gold, and by extension the share prices of gold stocks like Evolution Mining, Ed Moya, senior market analyst at Oanda said (quoted by Bloomberg):

Gold is clearly going to become a safe haven as the global outlook deteriorates and as Wall Street grows confident that we are nearing the peak with Treasury yields … [with] massive support at the $1,660 level. And if it can stabilise above there, prices could eventually make a move back above the $1,700 level.

Indeed, with Russian president Vladimir Putin announcing the mobilisation of 300,000 reserve troops, and possibly more, tailwinds from gold’s haven status may trump the headwinds from rising interest rates.

Evolution Mining share price snapshot

Though it’s outperformed the benchmark today, the Evolution Mining share price has been hammered in 2022, down 51%. That compares to a 12% year-to-date loss posted by the ASX 200 and a 31% loss on the ASX gold index.

The post How the Evolution Mining share price is dodging the worst of today’s sell off appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Why did ASX 200 gold shares have such a rough day?
• 5 things to watch on the ASX 200 on Thursday
• Evolution Mining share price craters in brutal market sell-off

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

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The Commonwealth Bank of Australia (ASX: CBA) share price is being hit the hardest out of its peers today.

The banking giant’s shares are receding 1.85% to $93.68 amid the S&P/ASX 200 Index (ASX: XJO) diving 2.14% today.

When looking at the other major banks, CBA shares aren’t faring quite well.

The National Australia Bank Ltd (ASX: NAB) share price is dropping 1.68%, while Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) are sinking 1.5% and 1.23%, respectively.

How is the CBA share price valued?

A catalyst for the CBA share price performing worse than its peers today could be the premium level its currently trading at.

Currently, CBA has a price-to-earnings (P/E) ratio of 17.83 which is higher than its peers. This means investors are paying $17.83 for every $1 of earnings the company makes.

In comparison, NAB has a P/E ratio of 15.11, Westpac is on 15.97, and ANZ with 10.62.

The long-term trend for the P/E ratio of the Australian market is around 15, although it has moved around a bit since COVID-19.

Measuring P/E ratios against other companies in the sector tells an investor how expensive the stock is trading at.

This is calculated by dividing the current share price by the earnings the company made over the last 12 months.

What do the brokers think?

The team at Macquarie raised their 12-month price target for the bank’s shares by 12% to $90.50 apiece. It appears that the broker believes that CBA is fully valued at the moment, with investors agreeing alike given the current share price.

On the other hand, analysts at Morgan Stanley had a slightly more bearish take, raising its rating by 0.6% to $83.50.

Based on the bank’s share price, this implies a downside of roughly 12% from where it trades today.

CBA share price summary

Adding to the already tough month it has been, the CBA share price is down 7% over the last 12 months.

When looking at year-to-date, its shares are also down 7%.

CBA commands a market capitalisation of about $162.22 billion, making it the second largest company on the ASX.

The post Why is the CBA share price falling the hardest of the big four today? appeared first on The Motley Fool Australia.

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More reading

• What’s with the CBA share price on Wednesday?
• Here’s why I decided to buy each of the big 4 ASX 200 bank shares
• Looking to buy CBA shares? Here’s how the bank’s balance sheet stacks up
• Which ASX 200 bank share will win the great tech battle?
• CBA share price edges higher amid acquisition rumours

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. 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 CSL Limited (ASX: CSL) share price is ending the week in the red.

At the time of writing, the biotherapeutics giant’s shares are down almost 2% to $276.30.

This means the CSL share price is now down approximately 14% from its 52-week high.

Is the CSL share price weakness a buying opportunity?

According to a note out of Citi, its analysts believe the company’s shares are trading at a very attractive level.

The note reveals that Citi has retained its buy rating and lofty $340.00 price target on its shares.

Based on the current CSL share price, this implies potential upside of 23% for investors over the next 12 months.

The broker is also expecting a dividend yield of approximately 1.5% in FY 2023, lifting the total potential return closer to 25%.

What did the broker say?

Citi notes that the United States District Court has overturned a decision to ban Mexicans from crossing the border to donate plasma.

Citi sees this as a positive for the company and expects it to be modestly supportive of plasma collections due to CSL operating 13 centres close to the border. It commented:

Reversal of ban on plasma donations by Mexican nationals: a tailwind for US plasma collection CSL announced that the United States District Court has issued a preliminary injunction preventing the United States Customs and Border Protection (CBP) from continuing to enforce its ban on plasma donations by Mexican nationals.

The ban was in place since June 2021. This is a positive for the industry which has just recently seen plasma collections reach pre-pandemic levels. For CSL the impact will positive, but relatively small: CSL has ~13 centres near the border, or ~4% of its US total of 312. CSL is hosting its AGM on 12 Oct and its CSL Vifor Investor Day on 17 Oct where we expect it to provide revised guidance including Vifor. We rate CSL Buy, $340 TP.

The post CSL share price tipped to rise 23% by Citi appeared first on The Motley Fool Australia.

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More reading

• Brokers name 3 ASX shares to buy today
• Top brokers name 3 ASX shares to buy today
• Could the CSL share price be set for a boost before the year’s end?
• Looking to buy ASX shares? Expert reveals ‘one metric to assess the quality of a business’
• The CSL share price has been struggling of late. Is this because it’s fully valued?

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 CSL Ltd. 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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With the push towards electrification of vehicles, the price of lithium in its raw and refined forms has shot to record highs

With lithium carbonate now resting at an all-time high of A$106,626 per tonne, there’s been a flurry of investor activity on ASX-listed shares producing the battery metal.

The Global X Battery Tech & Lithium ETF (ASX: ACDC) has gained nearly 2% in the past month of trade and has lifted 16% off its low point on 7 July.

Driving the upside in recent times has been government stimulus in China that has spurred growth in electric vehicle demand, whilst the U.S.’s ‘inflation reduction act’ offers tax breaks for individuals considering purchasing an electric vehicle.

These two recent factors in combination with the soaring aggregate demand for lithium-ion batteries and electric vehicles has created a buoyant market for both lithium and the companies mining or producing the metal.

What ASX lithium shares have been in favour?

Whilst there’s been some triple-digit gains in the small and micro-cap end of the market in 2022, here I’ll concentrate on the larger capitalised lithium stocks.

And there’s been some stellar performances on the chart this year from this particular cohort.

Two standouts have been the Core Lithium Ltd (ASX: CXO) share price and the Pilbara Minerals Ltd (ASX: PLS) share price, up 131% and 52% in 2022 respectively.

Both shares have seen their 4-week average trading volume lift to 15.3 million and 6.3 million shares respectively – well above previous averages.

Meanwhile, there are plenty more ASX lithium shares catching a strong bid lately.

Names such as Sayona Mining Ltd (ASX: SYA) have soared from the June bounce in equities and recently shot back towards 52-week highs, before turning sharply back to the downside.

Similar patterns have been observed with The Lake Resources N.L. (ASX: LKE) share price, itself having a difficult time in 2022 after whipsawing between $2.45 and 62.5 cents per share.

It now trades well off its previous highs and is down almost 13% for the past month of trade.

The same can’t be said for the Allkem Ltd (ASX: AKE) share price, however. It has continued on a one-way journey up north and thrust past 52-week highs of $15.96 on 20 September.

It has since levelled off and trades 5% down on the day, despite no market-sensitive news.

These 5 names form a core basket of ASX lithium players that sit at the large end of town. However, the entire spectrum of lithium shares has benefitted from the market activity this year.

It remains to be seen where the market will head next. Forecasts at both ends of the analyst matrix are estimating a sustained increase all the way down to a plummet in the lithium price.

Time will tell, but that’s something to think about.

The post Here’s which ASX lithium shares investors have been loading up on this month appeared first on The Motley Fool Australia.

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More reading

• Why has the Lake Resources share price been so volatile lately?
• Why is the Sayona Mining share price in the doldrums this week?
• Which ASX lithium shares are performing best in 2022?
• Is it too late to invest in ASX lithium shares? Apparently not…
• These 8 companies joined the ASX 200 on Monday. Here’s how they’re performing

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

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The Whitehaven Coal Ltd (ASX: WHC) share price is on the rise again today, but could there be challenges ahead?

Whitehaven Coal shares are leaping nearly 2% today and are currently trading at $9.13. For perspective, the S&P/ASX 200 Energy Index (ASX: XEJ) is down a painful 3.26% today.

So what looming development could impact Whitehaven coal shares?

Could New South Wales implement a coal tax?

Whitehaven shares have exploded 250% since the start of the year. Whitehaven reported a $2 billion net profit after tax (NPAT) in FY22.

However, TAMIM Asset Management Australian equities head Ron Shamgar has warned of the prospect coal producers could face a new tax next year, potentially impacting Whitehaven and New Hope Corporation Limited (ASX: NHC). In a tweet, Shamgar said:

One risk to keep in mind in the coal trade and $WHC and $NHC is that it’s certain the NSW government will impose an additional tax on coal producers next year, but unlike Qld gov, they will do it in consultation with the industry. That’s my prediction.

Queensland has a three-tier coal royalty tax system that has been in place since 1 July 2022. When coal prices hit $175 to $225 per tonne, 20% tax is charged. This rises to 30% when the coal price lifts to $225 to $300, and 40% when the average coal price per tonne is more than $300.

Australian Institute economist Rod Campbell is calling on the NSW Government to follow this path and implement a higher tax burden on the coal industry. In quotes cited by The Guardian, he said:

This is absolute textbook economics on what you should be taxing.

You should be taxing the things you want less of – fossil fuel production – and you should tax higher when profits are over and above a normal return to capital.

NSW currently charges a coal royalty of between 6.2% and 8.2%, depending on the method of mining.

Whitehaven operates four coal mines in the Gunnedah Basin of NSW. The company is also developing the Winchester South coal project in Queensland.

Whitehaven Coal share price snapshot

Whitehaven coal shares have soared 194% in the past year, while they have risen 21% in the past month

For perspective, the ASX 200 energy index has grown 28.6% in the past year.

Whitehaven has a market capitalisation of around $8.7 billion based on the current share price.

The post Whitehaven Coal shares are on fire, but could there be a looming risk? appeared first on The Motley Fool Australia.

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More reading

• Why Apollo Tourism, OZ Minerals, SSR Mining, and Whitehaven Coal shares are rising
• Is the party just getting started for ASX 200 coal shares?
• Here are the top 10 ASX 200 shares today
• Why is the Whitehaven share price soaring another 5% on Wednesday?
• Why is the Whitehaven Coal share price having such a top run on Tuesday?

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

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The Woodside Energy Group Ltd (ASX: WDS) share price is in the red on Friday, down 3.27% to $31.38.

The whole market is down today, with the benchmark S&P/ASX 200 Index (ASX: XJO) dipping 2.26%.

Earlier today, Woodside announced it was the first Australasian company to sign the Aiming for Zero Methane Emissions Initiative.

This means the energy producer is committed to “striving to reach near-zero methane emissions from its operated assets by 2030″.

What does methane do to our climate?

In its non-market statement today, Woodside said methane was the second-worst greenhouse gas contributing to climate change after carbon dioxide.

Woodside cited a 2021 International Energy Agency paper that said methane had caused about 30% of the rise in global temperature.

The Aiming for Zero initiative is led by the Oil and Gas Climate Initiative (OGCI), which in turn is led by a bunch of CEOs who are trying to accelerate the industry’s response to climate change.

The OGCI aims to reduce the average methane intensity of oil and gas operations. It wants to drive it down from 0.3% in 2017 to well below 0.2% by 2025.

Other big global companies that have signed the initiative include BP, Chevron, ExxonMobil, and Shell.

Does this make Woodside shares cleaner?

Woodside is already compliant with the initiative’s demands. Its 2021 methane emissions were less than 0.1% of production by volume. So, signing into the initiative doesn’t appear to make Woodside shares a cleaner investment.

Woodside CEO Meg O’Neill said:

Woodside’s historic focus on managing methane emissions means that we are already at less than 0.1% of our production by volume — well below the OGCI’s 2025 methane intensity target …

Minimising methane emissions has historically been a priority for Woodside. For example, frontline engineering, operations and maintenance staff are empowered to understand and act on methane emissions to support a sustainable ‘find and fix’ philosophy that can be implemented by site personnel.

OGCI executive committee chair Bjørn Otto Sverdrup said:

We hope other producers, from Australasia and beyond, will join Woodside in recognising that eliminating methane emissions from the oil and gas industry represents one of the best short-term ways to address climate change.

Signatories of the initiative pledge to report annually on their methane emissions. They also commit to using “all reasonable means to avoid methane venting and flaring, and to repair detected leaks”.

What Woodside is doing on climate change

Woodside has committed to reducing its net equity Scope 1 and 2 greenhouse gas emissions by 15% by 2025. Its goal for 2030 takes it further — to 30%.

In its half-year report, Woodside said it has a “strategy to thrive through the energy transition as a low-cost, lower-carbon energy provider”.

As we reported recently, Woodside aims to invest $5 billion in new energy products and lower-carbon services by 2030.

Among its projects is a proposed liquid hydrogen project in the United States. There’s also a proposed “world-scale liquid hydrogen and ammonia production facility” in Perth.

The post Could this nation-first action make an investment in Woodside shares cleaner? appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• Could international demand keep boosting Woodside shares for the next 20 years?
• 5 things to watch on the ASX 200 on Wednesday
• Have ASX 200 energy buyers missed the boat on Woodside shares?
• 5 ASX energy shares powering portfolios with the highest dividend yields

Motley Fool contributor Bronwyn Allen has positions in Woodside Petroleum Ltd. 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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