Tag: Stock pick

Qantas Airways Ltd (ASX: QAN) shares got hammered in March.

Shares in the S&P/ASX 200 Index (ASX: XJO) airline stock closed out February trading for $9.95. When the opening bell sounded on 31 March, shares were swapping hands for $8.37 apiece.

This saw Qantas shares down 15.9% over the month just past, or more than twice as much as the 7.8% loss posted by the ASX 200 over this same period.

Though it’s worth noting that Qantas traded ex-dividend on 10 March. Investors who owned the stock at market close on 9 March can expect to receive the 100% franked 19.8 cent per share dividend on 15 April.

If we add that dividend payment back in, then the ASX 200 airline stock sank a modestly less 13.9% in March.

Here’s what’s been pressuring the flying kangaroo.

What sent Qantas shares into a tailspin?

Turning directly to the elephant in the room, the biggest tailwind pressuring Qantas shares last month was the outbreak of the Iran war at the end of February.

That’s causing two separate difficulties for the airline.

First, the Middle East conflict could disrupt international travel destinations and see travellers delay their business or holiday flights.

Second, the conflict in the oil-rich Middle East and the closure of the vital Strait of Hormuz shipping route sent the oil price rocketing in March.

Here’s what I mean.

On 27 February, Brent crude oil was trading for US$72.50 per barrel. By 31 March, a barrel of Brent crude oil was trading for US$107.50, up more than 48% over the month.

And any sustained major increase in the oil price could have a material impact on Qantas shares.

Indeed, on 26 February, Qantas forecast fuel costs for H2 FY 2026 would be around $2.5 billion, inclusive of hedging and carbon costs.

But with the Iran war sending global oil prices surging, Macquarie Group Ltd (ASX: MQG) analyst Ian Myles said Qantas’ overall costs could increase by $250 million over two to three months.

And the ASX 200 airline’s former chief economist, Tony Webber, said that if the Middle East conflict dragged on, it could see Qantas earnings fall by more than 50%.

According to Webber, a prolonged war could see some major changes in the company’s flight operations. He noted:

They will cut capacity most on longer sectors where fuel costs are a higher percentage of total costs and where reducing capacity provides the strongest fare response, usually routes with more business and fewer leisure travellers.

Following the March carnage, Qantas shares are now down 4.3% since this time last year, not including dividends.

The post Why Qantas shares nosedived 16% in March appeared first on The Motley Fool Australia.

More reading

• Why I’d buy these 3 ASX income shares this week
• I think smart investors should buy these ASX 200 blue-chip shares with $10,000
• Qantas shares extend losses as fuel costs reshape operations
• Why Qantas shares could be flying into turbulence
• Qantas stock is down 17.7% in a month. Time to buy?

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 positions in and has recommended Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Late last month, amid all of the chaos of the Iran war, something extraordinary happened on the ASX. More specifically, with Telstra Group Ltd (ASX: TLS) stock.

On 24 March, shares of this ASX 200 telco hit a new 52-week high. Not only was it a new 52-week high, but the highest Telstra stock has traded at in many years. Yep, last Tuesday saw Telstra shares top $5.37 each. We haven’t seen that kind of pricing on this telco since at least early 2017. That means Telstra was at a nine-year high a week ago.

Today, Telstra stock has cooled off a little, but is still at $5.32 at the time of writing. That puts the company at an impressive year-to-date gain of 9.45% for 2026, and up 24.8% over the past 12 months.

Telstra is a strong and mature ASX 200 blue-chip stock. But gains of this magnitude prompt us to wonder whether the telco is still a good deal at $5.37 a share. Or indeed, at today’s $5.32.

So let’s talk about that.

Is Telstra stock a buy at $5.37?

That’s a tough question for investors to consider. Telstra, as we’ve already established, is a high-quality company that dominates its sector and shows characteristics of possessing a wide economic moat.

It is also growing at a slow-but-steady pace. The company’s most recent earnings, released in February, showed Telstra growing its reported earnings per share (EPS) by 11% to 9.9 cents, as well as its underlying net profits after tax by 10% to $1.2 billion.

Investors have to consider whether Telstra’s future growth trajectory is enough to justify its current share price, though. At today’s price, Telstra stock trades at a price-to-earnings (P/E) ratio of 26.6.

That’s not ridiculous, but it’s arguably not cheap either. For comparison, that’s about the same earnings multiple that Google-owner Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) is currently at.

But what about Telstra stock’s dividends? After all, many investors just buy this telco for its famously large and dependable income cheques.

Well, Telstra’s galloping share price over recent months has indeed come with the unfortunate consequence of reducing Telstra’s dividend yield. Investors were perhaps used to a yield well over 4% until Telstra went on this stock price surge. Today, the company is trading with a yield of about 3.8%.

That’s certainly not as attractive as it once was. Particularly so if we consider that one can obtain a safer 5% yield with a cash investment like a term deposit these days.

Brokers still call buy

Saying that, some ASX brokers still think Telstra is a buy today. Last week, my Fool colleague covered the outperform rating that Macquarie’s brokers gave Telstra shares. Macquarie thinks the recently announced price increases on Telstra’s mobile offerings bode well for the company’s future and dividends. The broker has set a 12-month stock price target of $5.64 per share for Telstra.

Let’s see if Macquarie is on the money there.

The post Is Telstra stock a buy at $5.37 a share? appeared first on The Motley Fool Australia.

More reading

• 3 must-own ASX dividend shares which belong in every portfolio
• 5 reasons why I’d buy Telstra shares for passive income
• Telstra just hit a 10-year high. Has this ASX income giant still got more to give?
• How to build a defensive ASX share portfolio in 2026
• 3 blue-chip ASX dividend shares to buy and hold

Motley Fool contributor Sebastian Bowen has positions in Alphabet. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet and Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group and Telstra Group. The Motley Fool Australia has recommended Alphabet. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Shares of Acrow Ltd (ASX: ACF) are staging a strong turnaround on Wednesday afternoon after the company released a market update.

Earlier in the day, the stock had been trading in the red, down 0.60% to 82.5 cents.

But sentiment shifted quickly after the release, sending the shares 6.63% higher to 88.5 cents.

The sudden reversal suggests investors saw enough in the update to feel more confident about the company’s growth over the next year.

Here’s what appears to be driving the move.

Momentum builds after a strong March

According to today’s announcement, Acrow secured $14.3 million in new hire contracts during March, making it the strongest month in the company’s history.

That pushed its hire revenue pipeline to a record $256 million, up 34% on the prior comparable period.

Management said conditions have improved across Australia. Queensland has been a standout, with March revenue reaching its highest level in more than 12 months.

That strength has given the board confidence to reaffirm its FY26 guidance and provide initial FY27 guidance.

The company continues to expect FY26 revenue of $315 million to $325 million, with EBITDA of $80 million to $84 million.

Looking ahead, Acrow expects FY27 revenue between $335 million and $350 million, and EBITDA in the range of $88 million to $98 million.

Using the midpoint, that implies roughly 7% revenue growth and 13% EBITDA growth year over year.

Management commentary

Chief Executive Officer Steven Boland said the company’s multi-year diversification strategy is helping build a more resilient earnings base.

Boland said Acrow had spent the past three years broadening its revenue streams to better handle ups and downs in the broader construction industry.

He noted that the strategy has positioned the company to take advantage of the next uplift in the construction cycle, particularly across civil infrastructure markets in Queensland.

Those comments are likely to have supported today’s move higher, with investors focusing on both current trading momentum and clearer growth prospects into FY27.

Foolish Takeaway

Today’s gain came after investors received a clearer growth outlook for both FY26 and FY27.

After trading lower earlier in the afternoon, the stock reversed course as the company pointed to record contract momentum and a stronger forward pipeline.

With early FY27 guidance now in place, the focus shifts to whether Acrow can keep turning infrastructure demand into higher revenue and profits.

That could leave the stock better placed if infrastructure demand continues to improve across key East Coast markets.

The post From red to green: Why this under-the-radar ASX stock is ripping higher this afternoon appeared first on The Motley Fool Australia.

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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 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.

The S&P/ASX 200 Index (ASX: XJO) plunged 7.8% in March, but that didn’t stop the DroneShield Ltd (ASX: DRO) share price from posting another month of solid gains.

Shares in the ASX 200 drone defence company closed out February trading for $3.62. When the closing bell sounded on 31 March, shares were changing hands for $3.81 apiece.

This put the DroneShield share price up 5.3% over the month just past.

Here’s what’s been piquing investor interest.

DroneShield share price soars higher amid global conflicts

On the macro level, daily news feeds detailing the Iran conflict and the growing prevalence of drone warfare were hard to escape in March, and likely helped boost the DroneShield share price.

Russia’s war in Ukraine is also seeing ongoing heavy drone use, while various nations around the world have been moving to protect their critical infrastructure from hostile drone attacks.

The ASX 200 defence stock also reported on a number of promising developments over the month.

On 11 March, DroneShield reported that it had commenced manufacturing its counter-drone products in the European Union in collaboration with an unnamed EU partner.

Pointing to the ReArm Europe Plan/Readiness 2030 initiative, the company noted:

Under a new collaboration with an experienced and established manufacturer, production of European-made counter-UAS systems is now underway, with delivery scheduled for mid-2026…

As part of this collaboration, DroneShield has established and will continue to grow a primarily EU-based supply chain, making this the company’s only production line currently outside of Australia.

DroneShield CEO Oleg Vornik said, “The ReArm Europe Plan / Readiness 2030 initiative has highlighted the importance of localised, scalable production, and this new production line positions us to meet that demand.”

The DroneShield share price closed up 1.5% on the day.

Building on its growing EU footprint, on 30 March the company announced that it had opened a new headquarters in Amsterdam.

Commenting on its new head office in the Dutch capital city, the company said:

It further builds on DroneShield’s newly established European manufacturing footprint to advance sovereign counter-UAS capability, which marks a major expansion of the company’s European industrial footprint and manufacturing capacity.

In calendar year 2025, the European market accounted for 45% of the company’s total revenue.

And the turbulent global outlook for 2026 could help the DroneShield share price continue to outperform.

According to the ASX defence stock:

As of February 2026, DroneShield has a regional pipeline valued at $1.2 billion. Geopolitical pressures, such as the Iranian conflict, ongoing war in Ukraine and repeated Russian drone incursions, continue to drive demand for deployed counter-UAS solutions across Europe and the Middle East.

The post How the DroneShield share price smashed the benchmark in March 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 positions in and has recommended DroneShield and is short shares of DroneShield. 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.

West African Resources Ltd (ASX: WAF) this week announced record gold production guidance for this year and, looking further out, said it expects to average more than half a million ounces of gold production per year for the next decade.

It was a positive announcement, though it led the team at Macquarie to slightly lower its price target for the company.

They are still bullish on the stock, however, and think investors can make serious gains over the next 12 months.

We’ll get to the details of their share price target shortly.

Firstly, what did West African Resources announce?

Strong production profile

The company said its ore reserves had increased to seven million ounces of gold, which would underpin 5.3 million ounces of gold production from 2026 to 2035.

West African Executive Chair Richard Hyde said there could be further upside:

WAF’s updated 10-year production outlook forecasts the production of 5.3 million ounces of gold over the next decade, with production peaking in 2030 at 596,000 ounces. Our unhedged Mineral Resources now stand at 13.6 million ounces of gold, while Ore Reserves total 7.0 million ounces. We see potential to improve annual production further through our ongoing drilling programs where we plan to drill more than 100,000m annually targeting extensions at M5 South underground, beneath M5 North open-pit and Toega underground. Our 2026 10-year production plan highlights WAF’s strong and sustainable long-term future.

The company said its Sanbrado and Kiaka projects, along with surrounding exploration licenses, had “strong potential” for new discoveries and extensions of existing resources.

The company added:

Current efforts are focused on near mine exploration to maximise value from our operating assets, where mineralisation remains open at depth. West African plans to further expand its owner operated drilling fleet in 2026 with the purchase of two additional surface diamond rigs to accelerate resource and reserve growth.

Shares looking cheap

The analyst team at Macquarie ran the ruler over this week’s announcement and said that the production forecast was in line with consensus estimates.

However, they said that the higher overall production over the next 10 years was offset by higher expected costs across the operations.

They said the company had also hinted at paying a dividend, so they had factored a 10-cent per share dividend into their calculations on the company’s shares.

Macquarie has a 12-month price target of $4.50 on West African shares, which they reduced by 10 cents from $4.60, compared with the current share price of $3.37.

That would be a return of 33.5% if achieved.

The post After new production guidance, how high could this ASX gold stock go? appeared first on The Motley Fool Australia.

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• Why Challenger, Magellan, Northern Star, and West African Resources shares are storming higher
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Motley Fool contributor Cameron England 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 Macquarie Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is building on yesterday’s gain and moving higher again on Wednesday.

At the time of writing, the benchmark index is up 1.64% to 8,624 points, adding to Tuesday’s 0.25% rise and putting it at its highest level in about two weeks.

The move extends the rebound from last week’s 10-month low after a difficult March for our Aussie share market.

Gains are broad across the ASX, with 146 stocks rising against 49 falling, showing solid buying support across the top 200 names.

Here’s what is driving the rebound.

Relief from offshore markets keeps momentum alive

The main reason for today’s gains is another strong lead from Wall Street and growing optimism that tensions in the Middle East may ease.

Local shares are moving higher after US markets rallied overnight on hopes Washington could wind back its involvement in Iran within weeks.

Wall Street had a strong overnight session, with the S&P 500 Index (SP: .INX) rising 2.9%, the Dow Jones Industrial Average Index (DJX: .DJI) gaining 2.5%, and the Nasdaq climbing 3.8%.

The bigger flow-through now is oil prices and what that means for inflation expectations.

Any sign of easing tensions may limit further energy price rises, a major reason the ASX 200 remained under pressure through March.

Miners and big banks are doing the heavy lifting

Much of today’s move is coming from the ASX’s biggest index names.

Among the top miners, BHP Group Ltd (ASX: BHP) is up 4.49%, Rio Tinto Ltd (ASX: RIO) has climbed 4.25%, and Fortescue Ltd (ASX: FMG) is up 3.15%.

The banks are also adding support, with Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), and National Australia Bank Ltd (ASX: NAB) all trading in positive territory.

With miners and banks both higher, the index is getting strong support from its largest sectors.

This combination is helping keep the benchmark near session highs heading into afternoon trade.

Foolish Takeaway

Today’s move suggests confidence is returning to the ASX after a difficult March, but it may still be an attractive time for long-term investors to start picking up quality shares at lower prices.

Many leading ASX names remain well below where they were trading before last month’s sell-off, which could leave value on offer if conditions continue to improve.

At the same time, it still makes sense to keep some cash on the sidelines in case global tensions flare up again and drag the market lower.

That way, investors can take advantage of current weakness while still leaving room to buy more if another downturn creates even better opportunities.

The post ASX 200 charges higher again as relief rally gathers pace appeared first on The Motley Fool Australia.

More reading

• These were the worst-performing ASX 200 shares in March
• How to invest during an ASX share bear market when you’re worried about prices falling more
• These were the best-performing ASX 200 shares in March
• 5 things to watch on the ASX 200 on Wednesday
• Paladin Energy shares: Judicial review challenges EIS approval

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 BHP Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Lindian Resources Ltd (ASX: LIN) shares are on the slide on Wednesday.

At the time of writing, the ASX rare earths share is down 13% to 77.2 cents.

Why is this ASX rare earths share falling today?

The rare earths developer’s shares are under pressure today following the announcement of a large capital raising.

According to the release, Lindian has received firm commitments to raise approximately $100 million via a single tranche placement to institutional investors and strategic critical minerals funds.

The funds are being raised at 75 cents per new share, which represents a 15.25% discount to its last close price.

In total, approximately 133.3 million new shares will be issued as part of the placement.

What will the funds be used for?

The ASX rare earths share revealed that the capital raising is designed to accelerate development of its flagship Kangankunde rare earths project in Malawi.

Specifically, proceeds will be used to fund Stage 1 development through to first production and cash flow, as well as support Stage 2 expansion activities and the integration of the SARECO MREC downstream processing facility.

Importantly, the company notes that this funding provides a pathway to bring both the mine and processing facility into operation without the need for project debt.

Management believes this will reduce execution risk and allow the company to maintain a clean balance sheet as it transitions toward production.

Lindian is targeting first production from Stage 1 and the SARECO facility by the fourth quarter of 2026.

Beyond this, the company is advancing studies for a potential Stage 2 expansion, which could significantly increase production capacity over time.

Commenting on the news, Lindian Resources’ executive chair, Robert Martin, said:

We are very pleased with the strong level of institutional support received for this Placement, including significant participation from high quality existing and new investors, reflecting Lindian’s growing global profile and the strategic importance of Kangankunde as one of the next rare earths producers to supply emerging global supply chains.

Importantly, Stage 1 at Kangankunde and our SARECO MREC facility are both fully funded without the need for any debt drawdowns to reach first cash flows allowing us to be in production at both operations debt free and with a clean balance sheet. This capital also allows Lindian to accelerate Stage 2, bring forward key development activities and materially reduce execution risk, while advancing our downstream strategy through the SARECO MREC facility, which provides a clear and capital-efficient pathway to capture additional value beyond Rare Earths Monazite Concentrate production.

The post Why is this ASX rare earths share sinking 13% today? 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.

Australians think they need $800,000 in superannuation for a comfortable retirement, new research from iSelect shows, while the median amount they have saved is well short of this, at $180,000.

Many not sure what’s needed

The life insurance comparison provider surveyed more than 3,000 people across Australia, the US, and Canada about their retirement savings aspirations and found that 41% of Australians surveyed reported not knowing how much money they would need to retire.

The next highest band, at 25%, believed they needed between $500,000 and $1 million to retire, while 9% thought they needed $1 million to $2.5 million.

The median amount came out at $800,000, while the median amount currently held in superannuation came out at $180,000.

Perhaps worryingly, 37% of people reported not knowing how much superannuation they had put aside.

ISelect said further:

22% of Australians said they have up to $100,000 saved for their retirement, and 24% reported to have between $100,000 and $500,000 saved. 4% of savvy savers in Australia reported having more than $1,000,000 already saved in their retirement fund.  

iSelect pointed out that the Association of Superannuation Funds of Australia says that singles retiring at age 67 would need $630,000 and couples would need $730,000 to achieve a comfortable retirement.

A large 73% of those surveyed by iSelect said that cost of living increases will either severely or moderately impact their retirement plans, while only 7% said it would have no effect.

Aiming for 65

In terms of the age of retirement, iSelect said:

According to our study, Aussies plan to retire at an average age of 65.2 years, despite the Australian state pension being available from age 67. Out of the respondents who aren’t retired, 30% said they plan to retire between 40 and 60 years of age. This is followed by 27% who aim to retire between 61 and 65 years, with the majority (31%) of Aussies planning to retire between the ages of 66 and 70 years. Remarkably, 12% of respondents anticipated they would retire between 71 and 100.

iSelect said men appeared to have a better handle on their retirement savings than women, although 32 % still said they didn’t know how much superannuation they would need compared with 51% of women.

When it came to their actual retirement savings, men reported savings of $230,000, whereas women’s median savings were considerably lower at $100,000. The Super Members Council recently reported that women are being hit hardest by unpaid super, costing the typical working woman more than AU$26,000 in savings by retirement. Our findings have reported an even bigger difference.

iSelect said that approaching retirement, adults aged 55-64 report needing $750,000 and have saved $400,000, while those aged 65-74 expect to need $700,000 and have just $250,000 saved.

The post How much superannuation do Aussies think they need to retire, and how much do they actually have? appeared first on The Motley Fool Australia.

More reading

• These were the worst-performing ASX 200 shares in March
• How to invest during an ASX share bear market when you’re worried about prices falling more
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• Paladin Energy shares: Judicial review challenges EIS approval

Motley Fool contributor Cameron England 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.

The S&P/ASX 200 Index (ASX: XJO) is back on form and charging higher on Wednesday. In afternoon trade, the benchmark index is up 1.75% to 8,630.6 points.

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

Dateline Resources Ltd (ASX: DTR)

The Dateline Resources share price is down almost 4% to 43.75 cents. This morning, this gold developer completed a $50 million placement to leading institutional investors. These funds were raised at a discount of 40 cents per new share. Dateline’s managing director, Stephen Baghdadi, commented: “This raise drew strong support from high-quality institutional investors, a clear endorsement of what Colosseum represents. We’re not standing still. Enabling works are already underway and we’re pushing ahead on multiple fronts to make sure the project is ready to move into production quickly when the time comes.”

Karoon Energy Ltd (ASX: KAR)

The Karoon Energy share price is down 3% to $2.00. This is despite there being no news out of the energy producer. However, given there is optimism that the Middle East conflict could soon come to an end, it is possible that investors are expecting oil and gas prices to retreat in the near term.

Lindian Resources Ltd (ASX: LIN)

The Lindian Resources share price is down 13% to 77.2 cents. This has also been driven by a capital raising today. The rare earths developer revealed that it has received firm commitments to raise approximately $100 million via a single tranche placement to institutional investors and strategic critical minerals funds. These funds are being raised at a 15.25% discount of 75 cents per new share. Lindian Resources’ executive chair, Robert Martin, commented: “We are very pleased with the strong level of institutional support received for this Placement, including significant participation from high quality existing and new investors, reflecting Lindian’s growing global profile and the strategic importance of Kangankunde as one of the next rare earths producers to supply emerging global supply chains.”

PEXA Group Ltd (ASX: PXA)

The PEXA share price is down almost 17% to $12.68. This morning, the team at UBS downgraded the property settlement company’s shares to a neutral rating (from buy) and cut its price target to $15.70 (from $17.50). The broker made the move on the belief that risks are skewed to the downside at present.

The post Why Dateline, Karoon Energy, Lindian, and PEXA shares are falling today appeared first on The Motley Fool Australia.

More reading

• How ASX 200 energy shares like Santos, Beach and Woodside surged in March’s sinking market
• This ASX mining stock just banked $50 million. So why are its shares falling?
• 4 ASX 200 energy shares rated buys
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• Here are the top 10 ASX 200 shares 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 PEXA Group. The Motley Fool Australia has positions in and has recommended PEXA Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Rio Tinto Ltd (ASX: RIO) shares are jumping higher again today. At the time of writing, the shares are up 4.7% to $168.92 a piece.

Today’s uptick means the shares are now up 14.4% year to date and 44.3% over the past year.

It hasn’t been smooth sailing for the ASX miner, though. 

The share price spiked at an all-time high of $169.74 in mid-February. 

But then war in the Middle East broke out later in the month, sending shockwaves across markets and reigniting inflation and interest rate concerns. 

It caused Rio Tinto’s share price to crash nearly 15% in the first three weeks of March as investors sold up their ASX shares over fears of commodity price weakness and operational disruptions.

If I bought $7,500 worth of Rio Tinto shares 10 days ago, what are they worth now?

After a sharp investor sell-off, investors have started buying back in and causing a rebound in the share price.

Since reaching a 10-week low of $144.1 per share on the 23rd of March, Rio Tinto shares have surged 16.8% higher to the trading price at the time of writing.

The turnaround means that $7,500 invested in Rio Tinto shares in the dip 10 days ago is already worth $8,760.

Meanwhile, investors who bought $7,500 of shares 12 months ago would be jumping for joy. Today, that investment would be worth $10,822.50.

Why have Rio Tinto shares rebounded?

There hasn’t been any price-sensitive news out of the miner recently to explain the share price recovery. 

But the S&P/ASX 200 Materials Index (ASX: XMJ) fought back last week, posting a 4.6% gain. It seems like investors are taking advantage of the sell-off and are buying in the dip in the hope that Iran and the US will come to an agreement, which will end the war.

The long-term outlook for mining shares is incredibly positive, with some stating that Australia is in the early stages of a new mining boom. This boom is expected to be driven mostly by a transition to green energy, which could support a huge long-term demand for metals. 

At the same time, Western countries want to become more self-sufficient in key resources, manufacturing, and energy supply.

Can we expect more upside ahead?

Analysts are mostly positive about the outlook for Rio Tinto shares over the next 12 months. 

TradingView data shows that seven out of 15 analysts have a buy or strong buy rating on the miner’s shares. Another seven have a hold rating, and 1 a sell rating.

Analysts expect a maximum target price of $190.42, which implies a potential 13% upside at the time of writing. 

The post $7,500 invested in Rio Tinto shares 10 days ago is now worth… appeared first on The Motley Fool Australia.

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Motley Fool contributor Samantha Menzies 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.