Insights

Could the Aurizon (ASX:AZJ) share price hit $3.70 by Christmas?

Is it time to buy Aurizon shares?
The post Could the Aurizon (ASX:AZJ) share price hit $3.70 by Christmas? appeared first on The Motley Fool Australia. –

The Aurizon Holdings Ltd (ASX: AZJ) share price has been out of form in 2021.

Since the start of the year, the rail freight operator’s shares have fallen 11%.

Can the Aurizon share price bounce back and hit $3.70 by Christmas?

One leading broker that sees scope for the Aurizon share price to be trading in or around the $3.70 level by Christmas is Morgans.

This morning the broker retained its add rating but cut its price target on the company’s shares to $3.73. This price target cut was in response to management reducing its dividend payout ratio to ~70% to support credit metrics for the next couple of years.

Based on the current Aurizon share price of $3.46, this implies potential upside of almost 8% for its shares.

In addition, the broker is now forecasting a 20 cents per share dividend in FY 2022. If we add this into the equation, the total potential return increases to ~14%.

What did the broker say?

Last month the broker upgraded its recommendation on the Aurizon share price to an add rating on valuation and yield grounds. It feels this should be enough to offset ESG sustainability concerns for value investors.

It commented: “Following recent share price weakness, we upgrade to ADD. We would expect AZJ’s cash yield and cheap trading multiples to attract value investors tolerant of AZJ’s ESG and sustainability concerns.”

The broker also likes the company due to its defensive qualities.

Its analysts explained: “AZJ’s revenue protections and the essential and long-dated nature of its assets make its earnings less correlated with the business cycle, providing a defensive element to a portfolio. Also, its strong cashflows and debt capacity give it flexibility to pursue growth investment and/or undertake capital management initiatives.”

The post Could the Aurizon (ASX:AZJ) share price hit $3.70 by Christmas? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Aurizon right now?

Before you consider Aurizon, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Aurizon wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

These 3 ASX 200 shares are topping the volume charts this Tuesday

These 3 ASX 200 shares are topping the volume charts this Monday

These 3 ASX 200 shares are topping the volume charts this Friday

Why Aurizon, De Grey Mining, Lynas, and Yancoal shares are falling

ASX 200 (ASX:XJO) midday update: BHP and Rio Tinto fall, Qantas 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 recommended Aurizon Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!