The Australian Clinical Labs Ltd (ASX: ACL) share price has hit a record high on Tuesday morning.

At the time of writing, the pathology services provider’s shares are up 10% to $5.47.

Why is the Australian Clinical Labs share price charging higher?

Investors have been bidding the Australian Clinical Labs share price higher this morning after it upgraded its guidance for the first half of FY 2022.

According to the release, the company expects its first half revenue to be between $497.3 million and $517.2 million. And on the bottom line, Australian Clinical Labs’ net profit after tax (NPAT) is expected to come in at between $116.3 million and $128 million.

As a comparison, the company’s previous guidance was revenue of $437.5 million to $454.9 million and NPAT of $86.3 million to $94.9 million.

At the mid-point of all ranges, this represents an upgrade of 13.7% for its revenue guidance and 35% for its NPAT guidance.

What drove the upgrade?

Management advised that the revenue guidance upgrade reflects continued strong demand for COVID-19 testing, particularly in VIC and NSW, as well as a sustained resilient performance of the non-COVID-19 business.

Whereas the profit guidance upgrade was driven by a combination of revenue growth and expanding margins from increased scale and operating leverage.

Positively, while the company has not provided guidance for the full year, management appears confident demand for testing will remain strong in the second half.

Australian Clinical Labs’ Chief Executive Officer, Melinda McGrath, commented: “We anticipate heightened volumes of COVID-19 testing to continue during the remainder of FY22 due to the impact of new variants and outbreaks, the lifting of travel restrictions and increased demand for both commercial and travel testing.”

The post Why the Australian Clinical Labs (ASX:ACL) share price is up 10% to a record high appeared first on The Motley Fool Australia.

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• Analysts are tipping huge gains for these small cap ASX shares

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 Australian Clinical Labs 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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Investing in the small side of the share market carries more risk than other areas. However, if your risk tolerance allows for it, having a bit of exposure to this side of the market could be a good thing for a balanced portfolio given the potential returns on offer.

With that in mind, here are three small cap ASX shares that analysts rate highly:

Ai-Media Technologies Ltd (ASX: AIM)

The first small cap ASX share to watch is Ai-Media Technologies. This global media access provider’s cloud-based technology platform offers live and recorded captioning, transcription, subtitles, translation and speech analytics. And these services are certainly in demand! So much so, globally, Ai-Media technology delivers 7 million minutes of live and recorded media content, and online events and web streams every month. Bell Potter is positive on the company. It currently has a buy rating and $1.50 price target Ai-Media Technologies’ shares.

Mydeal.Com Au Ltd (ASX: MYD)

Another small cap to watch is MyDeal. It is an online retail marketplace focused on home and lifestyle goods. At the end of FY 2021, MyDeal had more than 1,800 sellers on its platform with over 6 million product SKUs listed across over 2,000 categories. And with its customer numbers nearing 1 million, the company looks well-placed to benefit from the shift to online shopping over the long term. The team at Morgans is positive on the company’s outlook and has an add rating and 90 cents price target on its shares. It feels MyDeal would be a good option for investors that want exposure to a high growth ecommerce opportunity with a strong balance sheet.

SILK Laser Australia Limited (ASX: SLA)

A final small cap ASX share to watch closely is SILK Laser. It is one of Australia’s largest specialist clinic networks, offering a range of nonsurgical aesthetic products and services. SILK’s five core offerings comprise laser hair removal, cosmetic injectables, skin treatments, body contouring and skincare products. Demand has remained strong for its services during the pandemic, underpinning stellar sales and profit growth. The good news is that management still sees significant room to expand its clinic over the next decade. This gives it a long runway for growth. Wilsons is bullish on SILK and has an overweight rating and $5.25 price target.

The post 3 exciting small cap ASX shares analysts rate highly 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 recommended SILK Laser Australia 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 ASX 200 index is home to 200 of the largest listed companies on the Australian share market.

While there are a number of quality options on offer in the index, two that could be in the buy zone with material upside are listed below.

Here’s what you need to know about these ASX 200 shares:

BHP Group Ltd (ASX: BHP)

The first ASX 200 blue chip share to look at is BHP. The Big Australian’s shares have pulled back materially in recent months following a sharp decline in the iron ore price.

While the weakness in the price of the steel making ingredient is disappointing, it still notably higher than BHP’s cost of production. As a result, the company’s operations are still generating significant free cash flow. As are many of its non-iron ore operations which are benefiting from rises in other commodity prices.

Macquarie remains very positive on the company. It currently has an outperform rating and $52.00 price target on BHP’s shares.

CSL Limited (ASX: CSL)

Another ASX 200 share to look at is CSL. It is one of the world’s leading biotherapeutics companies.

CSL has been a very positive performer over the last decade. This has been driven by successful acquisitions, its high level of investment in R&D activities, its growing plasma collection network, and its leading therapies and vaccines.

In respect to the latter, CSL’s portfolio includes lucrative and life-saving products such as Privigen, Hizentra, Idelvion, and Afstyla. It will soon add leading iron deficiency, nephrology and cardio-renal therapies to these with the acquisition of Vifor Pharma for $17 billion.

But it doesn’t stop there. Thanks to its ~US$1 billion spend on R&D annually, CSL has a pipeline of lucrative products under development to drive its future growth.

Last week Citi upgraded the company’s shares to a buy rating with a $340.00 price target.

The post 2 high quality ASX 200 shares with huge upside potential 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. owns and has recommended CSL Ltd. 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 fund manager Magellan Financial Group Ltd (ASX: MFG) were rangebound today and trade more than 4% higher at $20.56.

Magellan shares have pared long-term gains and now trade deep in the red across all relevant time frames after a string of headwinds has plagued its manager performance lately.

What do the experts think? Let’s take a look at what analysts from leading investment firms are saying on the outlook for Magellan investors.

What is Morgans saying about Magellan’s outlook?

Morgans takes immediate note of UK based wealth management giant St James Place withdrawing its investment mandate from Magellan’s book, and also takes a balanced view of its outcome.

On the one hand, it notes the contagion risk for its flagship fund, however also notes that the withdrawal makes Magellan’s headline valuation look attractive.

Despite the optimism, however, Morgans remains unconfident on Magellan’s funds under management and the stability of its fees, saying that “medium term earnings risk are still present” in that regard.

Moreover, the risk of contagion or loss of another large institutional investor from St James Place’s exit is a real risk which investors must consider, Morgans says. This could impact retail outflows and force retail fee reductions, Morgans says.

In the end, the broker states that “we would avoid the stock until there is more certainty in the funds under management base and earnings outlook”.

It is neutral on the shares and values Magellan at $24.15 per share, in line with Jarden who have Magellan as a sell at $24.

Is Magellan a sell?

Meanwhile, Morgan Stanley says that Magellan’s bear case is finally playing out after St James Place’s exit, causing the broker to slash its price target by 40% to $17.50.

Morgan Stanley notes that a particular institutional client accounted for around 12% of Magellan’s annual revenues, and the broker is now worried about the lumpy revenues from other large clients.

It too recognises a threat to Magellan’s retail fees, which already sit at the highest amongst its peer group, and reckons a cut to Magellan’s 90%+ payout ratio is likely on the horizon. Morgan Stanley thinks Magellan is a sell.

UBS is also bearish, noting that St James Place’s withdrawal is a sign for broader concern. UBS notes that the institutional wealth manager accounted for 16% of Magellan’s funds under management, which could risk a follow on event.

UBS says that “with the stock down 33% on the news, investors are righty, in our view, factoring in broader contagion of institutional outflows”.

The investment bank itself forecasts $23 billion of net outflows over the next 2-3 years in its own modelling, according to the note.

UBS rates Magellan as a sell with these risks in mind on a valuation of just $17 per share.

Magellan share price summary

Magellan’s share price is down 64% in the past 12 months after falling another 63% this year to date. Over the past month is has extended losses and has plunged 43%, and has tanked more than 32% in the last week.

The post Is it a sell? Why is Morgans saying “avoid” the Magellan (ASX:MFG) share price? appeared first on The Motley Fool Australia.

More reading

• Why Australian Clinical Labs, Magellan, Sandfire, and Telix shares are rising
• ASX 200 (ASX:XJO) midday update: Magellan rebounds, Pilbara Minerals sinks
• Magellan (ASX:MFG) shares just lost $1.8b of market cap. What now?
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• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles

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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