Day: November 7, 2021

Why did UBS just downgrade the Domain (ASX:DHG) share price to neutral?

online real estate shares

Shares in real estate media giant Domain Holdings Australia Ltd (ASX: DHG) are sliding deep into the red today, and are currently trading 5.86% lower at $5.62.

Domain shares are on the down despite there being no market-sensitive information out of its corner for a while now.

Although, when zooming out and scoping out a wider time frame, the Domain share price has climbed over 23% in the last 3 months.

Analysts at investment bank UBS aren’t so rosy on the company’s outlook, which it feels may bode in poorly for Domain’s share price.

Read on to find out what the broker has to say on its outlook for Domain investors.

What’s up with Domain shares lately?

Domain shares have been gaining serious field position ever since the release of its FY21 results back in August.

There the company recognised a 21% gain in EBITDA to $102 million which carried through to a 66% jump in net profit to $38 million.

From there the Domain share price rallied to a high of $5.78 in late September, after some market turbulence, as well as after it announced the acquisition of Insight Data Solutions.

Aside from this, investors appear to be piling into ASX real estate shares this past month, with the S&P/ASX 200 Real Estate index (XRE) climbing 7.3% off its low in mid-October.

These strengths are shared with growth in the broad Australian property sector. For instance, new home sales in Australia have increased by 12% per month on average since April this year.

Some experts even think a corresponding boost in home building will flow through to the second half of 2022. This could bode in well for Domain’s share price, as more properties will be available for listing on its websites.

However, not all those covering the real estate marketing and media company are as positive on the outlook for investors into the near future.

Why did UBS downgrade the Domain share price?

Analysts at UBS don’t appear to have as an encouraging outlook on the housing market in Australia, amid uncertainties from the impact of COVID-19 lockdowns in Melbourne and Sydney.

The broker reckons it is difficult to accurately forecast the impact of these lockdowns on real estate listing volumes in Australia.

Moreover, UBS finds it equally as challenging to gauge the market’s reaction to government policy in rolling back the restrictions, further clouding its forward estimates.

In fact, the broker reckons that real estate listing volumes won’t return to pre-pandemic levels until FY23 for Domain.

However, it does acknowledge that this could all change if planned reforms to stamp duty turn out to be a positive catalyst for the sector.

For reference, the proposed changes would see the tax of stamp duty replaced with a property tax based on unimproved land value (ULV).

Even though the broker remains cautious by replacing its buy rating with a neutral recommendation on Domain’s shares, it has still upgraded its price target by 1.8% to $5.80.

Domain share price snapshot

The Domain share price has spent the entire year to date in the green, having climbed 25% in that time.

This extends its gain over the last 12 months to 28.5%, a step ahead of the S&P/ASX 200 index (ASX: XJO)’s return of around 20% in that time.

The post Why did UBS just downgrade the Domain (ASX:DHG) share price to neutral? appeared first on The Motley Fool Australia.

Should you invest $1,000 in Domain Holdings Australia right now?

Before you consider Domain Holdings Australia, 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 Domain Holdings Australia 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

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The author Zach Bristow has no positions 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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AMP (ASX:AMP) share price climbs despite ratings downgrade

a man in a business suit hangs on with his bare hands as he nears the top of a rocky mountain with little footholds and mist swirling around the mountain top.

The AMP Ltd (ASX: AMP) share price is on the rise during Monday afternoon. This comes despite the financial services company receiving a ratings downgrade from a bond credit rating agency.

At the time of writing, AMP shares are fetching for $1.195 apiece, up 1.27%. That’s a sharp contrast from when they were trading for as little as 88 cents in late September.

Moody’s lowers AMP rating

The AMP share price is showing little despair on the negative update that came in late Friday night.

In a statement to the ASX, AMP advised it received notice that Moody’s lowered its ratings on its group entities.

As such, AMP Group Holdings and AMP Group Finance Services were graded from Baa2 to Baa3. The rating assigned to AMP Bank by Moody’s remained unchanged at Baa2.

Bond rating agencies are firms that evaluate the creditworthiness of both the debt securities and the issuing company. These agencies provide ratings, commentary, and research on businesses. The ratings are then used by investment professionals to determine the likelihood of the debt being repaid.

Bond ratings range from an investment grade of ‘AAA’ meaning a very strong capacity to meet financial commitments and minimal credit risk. The speculative grade of ‘C’ or ‘D’ indicates likely payment default on financial commitments and bankruptcy.

It’s worth noting that this is in the mid-range of the bond credit ratings, representing “adequate capacity to meet financial commitments, moderate credit risk”.

The outlook was changed based on AMP having a smaller capital and earnings base after the private capital markets demerger. This is expected to follow through sometime in the first half of FY22.

All credit ratings assigned to AMP by other ratings agencies such as Standard & Poor’s were not altered.

About the AMP share price

Founded in 1849, AMP provides superannuation and investment products, financial advice, and banking products including home loans and savings accounts.

Headquartered in Sydney, the company operates in both Australia and New Zealand.

Over the last 12 months, AMP shares have fallen almost 30% and are down 23.5% year-to-date. The company’s share price has lost about 80% of its wealth from early 2018, reflecting negative investor sentiment.

Based on today’s price, AMP presides a market capitalisation of roughly $3.9 billion, with approximately 3.27 billion shares on issue.

The post AMP (ASX:AMP) share price climbs despite ratings downgrade appeared first on The Motley Fool Australia.

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

Before you consider AMP, 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 AMP 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

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 Bruce Jackson.

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Here are the 3 most heavily traded ASX 200 shares on Monday

three men stand on a winner's podium with medals around their necks with their hands raised in triumph.

The S&P/ASX 200 Index (ASX: XJO) is kicking off the week’s trading on the wrong foot this Monday. At the time of writing, the ASX 200 is down by 0.22% at 7,440 points. But rather than dwelling on that miserly figure, let’s instead check out the ASX 200 shares that are currently topping the ASX trading volume charts, according to investing.com.

3 most active ASX 200 shares by volume this Monday

Incitec Pivot Ltd (ASX: IPL)

Fertiliser and explosives manufacturer Incitec Pivot is our first ASX 200 share to check out today. Incitec has seen a hefty 8.69 million of its shares bought and sold so far this Monday. This might be related to the ASX announcement the company put out early this morning.

Incitec told investors that it would be closing manufacturing at its Gibson Island fertiliser plant by the end of next year due to rising gas prices. The Incitec share price is currently down by 1.27% at $3.11 a share. The combination of these factors is probably why we are seeing some elevated trading volume here.

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara is next up today. So far this Monday, Pilbara has seen a sizeable 10.25 million of its shares changing owners. With not much in the way of news or announcements out of Pilbara today, this is probably a consequence of the nasty 3.18% drop to $2.285 Pilbara shares have suffered so far today. It’s this steep fall in value that has likely prompted this surge in trading volume for Pilbara.

Sydney Airport (AS:X SYD)

And last but certainly not least today, we have the ASX 200 infrastructure stalwart Sydney Airport. A whopping 48.46 million SYD shares have swapped hands so far this Monday. Of course, it’s not too hard to see why this is occurring.

This morning, Sydney Airport announced that it has accepted a bid to acquire the $22.86 billion company for a price of $8.75 a share and will recommend shareholders vote in the affirmative in the absence of any superior offers. Sydney Airport shares are currently up 2.86% at $8.46 each so far today.

The post Here are the 3 most heavily traded ASX 200 shares on Monday appeared first on The Motley Fool Australia.

Should you invest $1,000 in Sydney Airport right now?

Before you consider Sydney Airport, 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 Sydney Airport 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

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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Why is the QBE (ASX:QBE) share price outperforming IAG lately?

A little girl holds a colourful umbrella under a chalk rainbow drawn on the ground.

The QBE Insurance Group Ltd (ASX: QBE) share price has performed relatively well over the last 6 months.

However, the insurance company’s competitor, Insurance Australia Group Ltd (ASX: IAG), hasn’t been so lucky.

The QBE share price is currently $11.98, 12% higher than it was 6 months ago. In the same timeframe, the value of IAG’s stock has slid 7% to $4.71.

Additionally, over the last 30 days, the IAG share price has dropped 9% while QBE’s has recorded a 2% dip.

So, what’s caused the QBE share price to outperform IAG’s? Let’s take a look.

Federal Court findings

One event that has recently affected both QBE and IAG was a court case brought about by policyholders. The case was the second of a business interruption test case against numerous insurance providers.

The last 6 months have seen the second test case finalised. This time, the Federal Court ruled in favour of the insurance companies in 8 of 9 matters.

It was brought by business owners seeking legal action against insurance companies that didn’t cover pandemic-related business interruptions.

What else has driven the QBE share price lately?

The other major news to drive the QBE share price in the last 6 months was the company’s half-year results, released in August.

Within them, QBE reported its return to profitability. In fact, it boasted an underwritten result of US$642 million for the 6 months ended 30 June – up from a US$189 million loss.

After such a strong result, the company boosted its dividend from 4 cents to 11 cents.

The QBE share price gained 8.1% on the back of its results.

IAG’s struggles

While IAG also reported increased profits in August from its financial year 2021 results, the company’s stock tumbled.

The IAG share price fell 2.6% on the day it released its FY2021 earnings.

IAG’s stock was also hit hard in October when the Australian Securities and Investments Commission (ASIC) announced it was taking IAG’s subsidiary to Federal Court for failing to fully apply some customers’ loyalty and ‘no claim’ discounts.

Finally, the company lowered its financial year 2022 guidance last week after storms caused damage across much of Australia in October.

Thus, IAG’s share price has performed far worse than its ASX peer over the last 6 months.

The post Why is the QBE (ASX:QBE) share price outperforming IAG lately? appeared first on The Motley Fool Australia.

Should you invest $1,000 in QBE Insurance right now?

Before you consider QBE Insurance, 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 QBE Insurance 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

Motley Fool contributor Brooke Cooper 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 owns shares of and has recommended Insurance Australia Group 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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