S&P/ASX 200 Index (ASX: XJO) shares are down 1.5% on news that the US and Iran launched new attacks on each other this week.
Today, analysts at Trading Economics said the US hit an empty oil tanker bound for Iran on Tuesday, and Iran launched attacks on US naval bases in Bahrain and Kuwait, as well as commercial vessels.
The strikes have cast new doubt over the likelihood of a peace deal any time soon to end the conflict and reopen the Strait of Hormuz.
ASX investors are also still digesting yesterday's news that Australian gross domestic product (GDP) rose by an anaemic 0.3% in the March quarter.
Over the 12 months to 31 March, GDP rose 2.5% in seasonally adjusted terms, according to the Bureau of Statistics.
Additionally, the Fair Work Commission ordered a 4.75% lift to award wages, surprising many businesses with the above-inflation bump.
Inflation is currently running at 4.2% in annual terms.
However, CBA economists pointed out that minimum wage workers represent only 10% of all wage earners in Australia.
So, while the pay bump will raise labour costs for some companies, CBA does not expect that it will add upward pressure to inflation.
Meanwhile, brokers continue to review their ratings on ASX shares.
Here are some updates.
Image source: Getty Images
Tabcorp Holdings Ltd (ASX: TAH)
The Tabcorp share price is 79 cents, down 1.3% today and down 33% over the past month alone.
Morgans upgraded this ASX 200 consumer discretionary share to a buy rating on valuation grounds this week.
The broker said:
Following the announcement of AUSTRAC's investigation this month, the TAH share price has fallen approximately 37%.
While we expect the investigation to remain an overhang for the foreseeable future, at these levels the stock appears materially undervalued.
Current trading conditions remain supportive in our view and position the company well for a strong upcoming result, despite inherent uncertainty surrounding the scope of the investigation and the quantum of potential penalties.
While we are cautious about speculating on the ultimate outcome, we believe the approximately $960m erosion in market value is overly pessimistic and reflects the most bearish of scenarios.
We upgrade TAH from Accumulate to Buy given what we view as a near-term share price overreaction, and an underlying business that looks on track to outperform in the near term.
Morgans has a 12-month share price target of $1.07 on Tabcorp stock. This implies a potential 35% upside from here.
BHP Group Ltd (ASX: BHP)
The BHP Group share price is $62.51, down a chunky 3.7% today, and up 40% over six months.
Germany's DZ Bank AG upgraded the ASX 200 mining share to a hold rating this week.
DZ Bank has a price target of $65 on BHP shares.
This suggests that only 4% upside is left for the next 12 months.
4DMedical Ltd (ASX: 4DX)
The 4D Medical share price is $3.91, up 3% today, and down 14% in the calendar year to date.
The big picture is more impressive: this ASX healthcare share has ripped 1,158% over 12 months.
On Wednesday, 4DMedical announced a US$2 million program to fast-track entry into the acute pulmonary embolism (PE) market.
The program is called CLEAR – contrast-free lung evaluation for acute risk in pulmonary embolism.
4DMedical said PE would grow the addressable market for its CT:VQ product in the US to US$3 billion.
The company said PE accounts for about 600,000 to 650,000 diagnosed clinical episodes in the US per year.
Yesterday, Ord Minnett reiterated its sell rating and $3 target on 4DMedical shares.
This suggests the broker anticipates a near 25% share price fall over the coming year.
