The News Corp (ASX: NWS) share price is having a moment in the sun today. This follows the media giant’s announcement of its first-quarter results for FY22.

At the time of writing, shares in the company are gliding 8.9% above their previous close at $34.52. With today’s strong price appreciation, News Corp shares are now only 2% away from setting a new 52-week high.

What’s moving the News Corp share price today?

Investors are sending the News Corp share price skywards to finish the week. Given the company released its first-quarter results prior to the market opening today, it is likely that the market is fixated on details within this announcement.

As we covered earlier, the large media outlet handed down a solid quarter performance. Not only did revenue grow by 18% year on year to $2.5 billion, but earnings also increased by more than a factor of five.

The uptick in operations wasn’t reduced to only one segment either. All five News Corp’s business segments reported revenue growth. Most noticeably, digital real estate services posted a massive 47% leap in revenue compared to the prior year.

However, the biggest contributor in terms of growth to the company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) was the subscription video services segment. According to the release, EBITDA for this segment increased 46% to $114 million.

The subscription video services part of News Corp incorporates streaming services such as Foxtel, Kayo, and BINGE. At the end of the quarter, Foxtel subscribers had reached 3.9 million, increasing 17% year on year. The improved earnings margin was the product of lower sports programming rights and production costs.

Making sense of the valuation

After the improvement in News Corp quarterly numbers, analysts are likely running the numbers again to check against their price targets.

If we summarise the net income of Q2, Q3, and Q4 of FY21 with our latest Q1 FY22 results, we can get an indication of the company’s trailing 12-month earnings. With some quick back-of-the-napkin math, this works out to be ~$427 million.

Based on the current News Corp share price and our calculated 12-month trailing earnings, News Corp is currently trading on an approximate price-to-earnings (P/E) ratio of 44 times.

The post News Corp (ASX:NWS) share price rallies 8% on market-moving quarterly appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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Shares in Domino’s Pizza Enterprises Ltd (ASX: DMP) took a beating yesterday and closed the session 18% lower at $116.20.

That’s a $26 per share loss for the pizza giant in a single day, as investors responded to its annual general meeting (AGM) update.

Today, the Domino’s share price has lost a little more ground and is down 0.37% to $115.69 in afternoon trading.

The team at investment bank Goldman Sachs retains its buy rating on Domino’s shares. However, fellow brokers aren’t so rosy on the outlook for Domino’s. So, they’ve trimmed their price targets in response to the announcement.

Here are the details.

What led us to this point?

Before we analyse what the experts are saying, let’s review what led to the Domino’s share price taking such a hit.

Investors appear to be spooked by the company’s performance in Japan, which was surprisingly weak for the period.

Domino’s has an aggressive ‘rapid store rollout’ strategy in the region. It has grown its store base to 742 restaurants in 2020 from just 200 a decade ago.

Even though the Japanese government has rolled back COVID-19 restrictions, Domino’s recognised negative growth in FY21.

As a result, Domino’s management was unable to give guidance for FY22 at the AGM. Not even to confirm or deny whether earnings would come in behind or in front of FY21.

This bodes poorly for the Domino’s share price. As pointed out by investing hall-of-famers Warren Buffet and Peter Lynch in their writings, the market prices shares based on past earnings and future earnings expectations.

The absence of a robust outlook in Japan appears to have disappointed investors. It has left many of their questions on expectations unanswered, and this is reflected in yesterday’s share price losses.

What are brokers saying in response?

Leading brokers Citi, Morgans, Jarden, and Bell Potter have slashed their price targets for the Domino’s share price.

Citi lowered its price target by almost $4 per share to $144.25. It also trimmed its forecast for earnings per share (EPS) by 8% and Japan store sales by 1%.

The weak performance surprised the Citi team. It said it is “flagging risk to FY22 sales given the current negative momentum comes ahead of the material Christmas trading period”.

Analysts at Bell Potter also gave their price target a buzz-cut, wiping 16% off their valuation to $130 per share.

Jarden Securities also reduced its price target by 6% to $113, implying 2.3% downside potential on today’s share price.

Fellow broker Morgans doesn’t interpret the Japan slowdown as a signal that Domino’s is failing there. The broker notes: ” … nor does it suggest the strategy of rapid store roll out and ‘fortressing’ has lost any of its validity”.

Morgans hasn’t budged on its ‘hold’ recommendation but has slashed its Domino’s share price target by 7.5% to $135.

Goldman Sachs retained its ‘buy’ rating but also trimmed its Domino’s share price target by more than 5% to $147.

Domino’s share price snapshot

Over the past year, the Domino’s share price has risen by 37% compared to the S&P/ASX200 index gain of 21.5%.

The post Targets slashed: Why these top brokers aren’t so rosy on the Domino’s (ASX:DMP) share price appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Dominos Pizza Enterprises Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) is well on the way to ending the week on a strong note. The ASX 200 is presently up a healthy 0.54% to 7,467 points. But one ASX 200 share isn’t joining the party this Friday. That would be the Virgin Money UK (ASX: VUK) share price.

Virgin Money UK shares are, at the time of writing, down a nasty 11.27% to $3.15 a share. That puts this quasi-ASX bank at an 8-month share price low, seeing as the company was last at these levels way back in February.

So what’s gone so wrong for Virgin Money today?

Virgin Money UK share price slumps on FY21 update

Well, this steep share price drop seems to be the result of a trading update the bank released yesterday evening after the market closed.

This update provided some guidance on what Virgin Money expects the company to deliver for its FY21 earnings results.

Virgin Money told investors that its statutory profit before tax is expected to be 417 million British pounds. Underlying profits before tax are expected to grow to 801 million pounds, up 546% from the 124 million pounds of the previous period. the company says this improvement is due to “strong financial momentum and improved macro outlook”.

Meanwhile, the bank’s income grew by 2% to 1.57 billion pounds, mainly helped by higher net interest income.

Virgin Money UK also announced a 1 pence per share dividend (final amount to be determined for the ASX shares) for investors, subject to the finalisation of FY21’s results, as well as shareholder approval.

Here’s some of what management had to say of these numbers:

Our strategy has continued to deliver improved financial momentum throughout the year, with support from an improved economic backdrop. Underlying profit is expected to be stronger at [801 million pounds, against 2020’s 124 million pounds] and the Group expects to return to statutory profit in FY21, delivering [417 million pounds] of PBT [profits before tax].

So why are Virgin Money UK shares falling so much today? Perhaps the most likely explanation is that investors were expecting more. Especially seeing that the United Kingdom relaxed most of their COVID-related restrictions back in June.

At the current Virgin Money UK share price, this bank has a market capitalisation of $5.11 billion.

The post Why is the Virgin Money UK (ASX:VUK) share price down 11% today? appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with a solid gain. At the time of writing, the benchmark index is up 0.6% to 7,471.6 points.

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

Afterpay Ltd (ASX: APT)

The Afterpay share price is down 4.5% to $118.71. Investors have been selling this payments company’s shares following a pullback in the Square share price overnight. The US payments giant’s shares were sold off after its third quarter result fell short of expectations. As Square is acquiring Afterpay in an all-scrip deal, the value of the takeover rises and falls with its share price.

Clinuvel Pharmaceuticals Limited (ASX: CUV)

The Clinuvel share price is tumbling 10.5% to $36.36. This decline appears to have been driven by the release of a broker note out of Jefferies this morning. According to the note, following some strong gains in recent months, the broker has downgraded this biopharmaceutical company’s shares to a hold rating from buy. The Clinuvel share price is still up over 50% in 2021.

Inghams Group Ltd (ASX: ING)

The Inghams share price is down a further 3.5% to $3.47. Investors have been selling this poultry producer’s shares since the release of its annual general meeting update on Thursday. That update revealed that Inghams’ performance is being impacted by sustained input cost pressures. In response, this morning Macquarie retained its neutral rating but cut its price target down to $3.70.

Virgin Money UK (ASX: VUK)

The Virgin Money share price has sunk 11.5% to $3.14. This UK based bank’s shares are being sold off today following the release of its full year update. Virgin Money advised that it expects to record an underlying profit before tax of 801 million pounds. This will be up 546% from the 124 million pounds recorded a year earlier. However, taking the shine off this was management revealing that it will incur 275 million pounds in restructuring costs over the next three years. This was approximately double what the market was expecting.

The post Why Afterpay, Clinuvel, Inghams, and Virgin Money UK shares are tumbling appeared first on The Motley Fool Australia.

More reading

• Why is the Virgin Money UK (ASX:VUK) share price down 11% today?
• Which tech shares are dragging down the ASX 200 on Friday?
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Link receives takeover offer
• Expert highlights big threat to the Zip (ASX:Z1P) share price
• Own ASX BNPL shares? These were the best performers during October

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. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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