Day: 24 January 2022

Key Points

• Thorn Group shares are trading ex-dividend
• The proceeds of asset sales will be distributed to shareholders
• A special dividend of 7 cents is to be paid on 9 February

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The Thorn Group Ltd (ASX: TGA) share price is one of the worst performers on the All Ordinaries (ASX: XAO) so far today.

At the time of writing, the diversified financial services company’s shares are down a sizeable 21.74% to 27 cents apiece.

Why is the Thorn Group share price falling today? 

Investors are selling off Thorn Group shares after securing a special dividend today.

Last week, management announced that it completed the sale of the Radio Rentals consumer finance business to Credit Corp Group Ltd (ASX: CCP).

Thorn received a cash consideration of around $44 million, with an additional $2.3 million on a deferred basis.

As such, the board decided to return the surplus funds to shareholders, totalling $23.792 million. Each eligible investor will collect a fully-franked special dividend of 7 cents per share.

In addition, the directors decided to temporarily suspend the dividend reinvestment plan (DRP) for the special dividend.

What does this mean for Thorn Group shareholders?

Typically, one business day before the record date, the ex-dividend date, is when investors must have purchased shares. If the investor does not buy before this date, the dividend will go to the seller.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

For those eligible for Thorn Group’s special dividend, shareholders will receive payment on 9 February.

It’s worth noting that because the dividend is fully-franked, this means investors can expect to receive tax credits from this.

Thorn Group share price snapshot

In the past 12 months, the Thorn Group share price has gained around 53% despite today’s significant drop. The S&P/ASX 200 Consumer Discretionary (ASX: XDJ) index is up around 7% over the same timeframe.

Thorn Group shares reached an all-time high of 36 cents last week as investors moved in to secure the special dividend.

Based on today’s price, Thorn Group commands a market capitalisation of roughly $93.47 million, with around 340 million shares outstanding.

The post Why the Thorn Group (ASX:TGA) share price is plummeting 22% today appeared first on The Motley Fool Australia.

More reading

• Why is the Telix Pharmaceuticals (ASX:TLX) share price plummeting 13% today?
• Why are these beaten-up small cap ASX tech shares seeing 52-week lows today?
• The Nasdaq is in correction territory. Is the ASX 200 next?
• The Lynas (ASX:LYC) share price is tumbling 5% today. What’s going on?
• Why is the Uniti (ASX:UWL) share price up 10% on Monday?

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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Key points

• The Telix Pharmaceuticals share price is down 13% on Monday
• The company’s December quarterly report revealed a 51% fall in cash reserves
• It is also conducting a $175 million capital raise

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The Telix Pharmaceuticals (ASX: TLX) share price is tumbling today amid the release of the company’s December quarter results and a capital raise update.

The biotechnology company’s shares are currently trading at $7.05, plunging 12.86% from the open.

Let’s take a look at what might be weighing on investors minds today.

Why is the company’s share price falling?

Telix provided results for its December quarter. The highlights include:

• Cash reserves of $22.04 million, down 51.93% from $45.85 million in the previous quarter
• Net operating outflows of $20.97 million with total operating outflows of $21.96 million, as forecasted
• The company invested $6.96 million in research and clinical development
• Cash inflows of $0.99 million

The company highlighted it had received regulatory approval from the US FDA for its lead prostate cancer imaging product Illuccix. This product also has regulatory approval in Australia. Telix is also working on distribution agreements in Europe.

Telix’s capital raise announcement

Investors may also be reacting to the company’s capital raise announcement.

Telix has successfully completed a $175 million institutional placement at $7.70 per new share. The company will also conduct a share purchase plan to raise a further $25 million.

The funds are being raised to help the company advance its products towards commercialisation. This includes its prostate cancer therapy clinical program and Targeted Alpha Therapy. The company is also launching its first commercial product Illuccix following US Food and Drug Agency approval.

Speaking on the announcement, CEO Dr Christian Behrenbruch said:

We are delighted with the level of support for the placement from new and existing investors.

Funds raised under the placement and SPP will provide the company with the financial resources to execute on the next phase of Telix’s growth strategy.

We are particularly pleased to attract high quality, specialist investors to the register and would
like to welcome our new investors and thank our existing shareholders for their outstanding
support.

Telix cofounders Behrenbruch and Dr Andreas Kluge will also sell 2 million shares to coincide with the placement. This represents 8.1% of their total shares in the company. Both have pledged to the board they will not sell any further shares in the next 12 months.

Share price recap

The Telix Pharmaceuticals share price has rocketed 55.9% in the past year. However, it has slipped 11% in the past month, down more than 18% in the past week alone.

Meanwhile, the broader S&P/ASX 200 Index (ASX: XJO) has returned roughly 5% over the past 12 months.

The company has a market capitalisation of around $2 billion based on its current share price.

The post Why is the Telix Pharmaceuticals (ASX:TLX) share price plummeting 13% today? appeared first on The Motley Fool Australia.

More reading

• Why Adairs, Bigtincan, Regis Resources, and Telix shares are sinking
• Here are the top 10 ASX shares today
• Here are the 5 best performing ASX biotech shares of 2021
• 3 ASX biotech shares rated as buys in 2022

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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Key points

• Small cap ASX tech shares are having a rough day. The last few weeks have been difficult for many technology names
• Investors are expecting that the US Federal Reserve is going to start increasing interest rates in March
• Businesses like Redbubble and ELMO are down 7% and 9% today, respectively

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There are plenty of small cap ASX tech shares being beaten-up today and hitting 52-week lows. What’s happening?

It has been a rough start to the year for the ASX.

The S&P/ASX 200 Index (ASX: XJO) has dropped 6% since the start of the year.

But there are multiple technology businesses that are having a really difficult time now when it comes to their share prices.

Why are small cap ASX tech shares suffering?

Each individual business has its own operations, growth plans and management. However, the share prices of all businesses can move down in unison when there is negative news that could affect the valuation of nearly all companies.

Analysts, fund managers and market commentators are keeping a close eye on interest rates, particularly the US Federal Reserve interest rate because of how much influence that has on asset prices.

Legendary investor Warren Buffett once said:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

According to reporting by Bloomberg, the US Federal Reserve is expected to suggest that March could be the time when interest rates start rising and the balance sheet starts reducing later in the year. Why? To fight inflation which remains persistently high.

These are some of the companies that are hurting today:

ELMO Software Ltd (ASX: ELO)

Today, the ELMO Software share price is down 8.75%. The small cap ASX tech share has fallen 14% in 2022 and has declined 44% over the past year.

Investors will soon get an update in the February reporting season about how growth at the HR software business is going. But, in the first quarter of FY22 it saw revenue growth of 52% to $20.7 million and annualised recurring revenue (ARR) growth of 61% to $88.5 million. It also released two new modules: ‘Experiences’ and ‘COVIDsecure’.

Redbubble Ltd (ASX: RBL)

The Redbubble share price is currently down 7% today and 43% in the past month.

This e-commerce business is currently finding it difficult to beat the strong marketplace revenue it saw in FY21. A recent trading update from the small cap ASX tech share showed that FY22 first half marketplace revenue was down 18% to $288 million.

It’s now expecting FY22 marketplace revenue to be slightly below FY21 underlying marketplace revenue (which excludes FY21 mask sales). A negative earnings before interest, tax, depreciation and amortisation (EBITDA) margin in the single digits is now expected in FY22.

Sezzle Inc (ASX: SZL)

The buy now, pay now US business has been suffering along with the rest of the BNPL sector. The Sezzle share price has declined 7% today and it’s down 72% over the past six months.

However, the month of November 2021 saw underlying merchant sales (UMS) rise 83% year on year.

Nearmap Ltd (ASX: NEA)

Aerial imaging business Nearmap has seen its share price fall almost 3% today, at the time of writing. In just the last three months, the Nearmap share price has fallen 40%.

Last month the small cap ASX tech share said that the North American annualised contract value (ACV) had surpassed US$50 million and the overall ACV portfolio had increased to more than US$100 million.

The post Why are these beaten-up small cap ASX tech shares seeing 52-week lows today? appeared first on The Motley Fool Australia.

More reading

• The Nasdaq is in correction territory. Is the ASX 200 next?
• Top fund manager says don’t buy the share market dip
• 5 things to watch on the ASX 200 on Monday
• Is the prospect of rising interest rates battering ASX shares?
• These were the best performing ASX 200 shares last week

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Elmo Software and Nearmap Ltd. The Motley Fool Australia owns and has recommended Elmo Software and Nearmap Ltd. 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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Key points

• The Lynas share price has fallen 4.55% today to trade at $9.85
• Today’s drop brings its losses for the last 5 session to 11%
• That makes the rare earths producer’s stock the worst performing ASX 200 resource share of the last week

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It’s a mad Monday for the Lynas Rare Earths Ltd (ASX: LYC) share price despite the company’s silence.

In fact, the rare earths producer’s stock has tumbled 11% since the market last heard news from the company.

At the time of writing, the Lynas Rare Earths share price is $9.85, 4.55% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently down 0.31% while the All Ordinaries Index (ASX: XAO) has slumped 0.44%.

Let’s take a look at what the company has been up to lately.

Lynas Rare Earths share price suffers on Monday

The Lynas Rare Earths share price is continuing its multi-day plunge on Monday.

The fall comes despite no news having been announced by the company since Wednesday last week. Then, Lynas released its report for the 3 months ended 31 December.

Over the period, the company saw a record $202.7 million of sales revenue. Additionally, the price of the company’s product – neodymium and praseodymium (NdPr) – hit a 10-year high of US$100 per kilogram.

However, Lynas noted its supply chain had been restricted over the quarter, causing the time it takes to ship its products from Fremantle to Kuantan to more than double.

The Lynas share price slipped 1% on the day its quarterly update was released, before gaining 1.4% on Thursday.

However, it plunged 7.6% on Friday and is seemingly continuing that tumble today.

That’s a similar performance to that of the S&P/ASX 200 Resources Index (ASX: XJR), albeit more dramatic, as can be seen in the chart below, which is tracking the pair’s performance since Wednesday.

The sector plunged 3% on Friday and it’s back in the red today, having fallen 1.59% at the time of writing.

The Lynas Rare Earths share price is the sector’s biggest weight of the last week.

Though, that of BlueScope Steel Limited (ASX: BSL) is only just outperforming it, having fallen 10% over the last 5 sessions.

The post The Lynas (ASX:LYC) share price is tumbling 5% today. What’s going on? appeared first on The Motley Fool Australia.

More reading

• The Lynas (ASX:LYC) share price is slipping today despite record sales results
• Why is the Lynas Rare Earths (ASX:LYC) share price up 20% in a month?
• Here’s why leading brokers name the Lynas (ASX:LYC) share price as a buy
• These were the best performing ASX 200 shares last week
• Here are the 5 best performing ASX 200 mining and resource shares of 2021

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 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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Key points

• The ASX 200 has had a rough month or so
• But the US Nasdaq Index has fared even worse, falling by 14.25% from its most recent high
• A ‘correction’ is normally defined as a 10% fall from the last high
• So is the ASX 200 next up for a correction?

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As most of us would be painfully aware of right now, the past few months have not been kind to ASX shares. The S&P/ASX 200 Index (ASX: XJO) has not done much to dispel those concerns so far today. Starting the week off on exactly the wrong foot, the ASX 200 has given up another 0.51% so far today, and is currently sitting at 7,139 points at the time of writing.

That means the ASX 200 is now down around 6.5% from its last all-time high of 7,632.8 points that we saw way back in August last year.

Now that might sound rather depressing for most ASX investors. But consider this. Over in the United States, the tech-heavy Nasdaq Composite Index last closed at 13,768.9 points. That’s a painful 14.25% below its last all-time high of 16,212.2 points that we saw only back on 19 November. By conventional investing wisdom, a fall of 10% or more from the most recent high is technically a correction. So as such, the Nasdaq Index is now firmly in correction territory. This is also the nastiest pullback for the Nasdaq since the infamous initial COVID crash of 2020.

So the Nasdaq is in correction. Is the ASX 200 next?

What does the Nasdaq correction bode for the ASX 200?

Well, it’s not that simple. The Nasdaq is just one of the US’s major sharemarkets, and in itself is not representational of the entire US market. The Nasdaq is home to mainly tech companies, with none of the ‘older-style’ blue-chips of the New York Stock Exchange present. Its largest share are exclusively the US tech giants: Apple Inc (NASDAQ: AAPL), Microsoft Corporation (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Amazon.com Inc (NASDAQ: AMZN), Meta Platforms Inc (NASDAQ: FB) and Tesla Inc (NASDAQ: TSLA). Other significant holdings include Adobe Inc (NASDAQ: ADBE), Netflix Inc (NASDAQ: NFLX) and PayPal Holdings Inc (NASDAQ: PYPL).

Perhaps a more representative index for the US markets would be the S&P 500 Index (INDEXSP: .INX). This index holds 500 of the US’s largest companies drawn from both the Nasdaq and the NYSE. So in addition to the names listed above, you’ll also find NYSE-listed companies like Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B), JPMorgan Chase & Co (NYSE: JPM) and Johnson & Johnson (NYSE: JNJ) amongst its top holdings.

So just to be clear, the S&P 500 hasn’t had a great time of it recently either. But since its last peak in early January, the S&P 500 is down by around 8.3% on the latest pricing. That’s not nearly as bad as the Nasdaq’s 14.25%, and doesn’t yet qualify for that scary ‘correction’ label.

But as they say, where the US markets go, the world follows. So if the US markets continue to downtrend, it’s well possible that the ASX 200 will follow suit. No doubt there are more than a few investors out there with fingers crossed that we’ll see a bottom soon. But only time will tell.

The post The Nasdaq is in correction territory. Is the ASX 200 next? appeared first on The Motley Fool Australia.

More reading

• Top fund manager says don’t buy the share market dip
• 5 things to watch on the ASX 200 on Monday
• Is the prospect of rising interest rates battering ASX shares?
• These were the best performing ASX 200 shares last week
• These were the worst performing ASX 200 shares last week

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Alphabet (A shares), JPMorgan Chase, Johnson & Johnson, Meta Platforms, Inc., and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Meta Platforms, Inc., and Microsoft. The Motley Fool Australia has recommended Adobe Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., Netflix, and PayPal Holdings. 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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Key points

• The Uniti share price is trading 10% higher today following its latest update
• Multiple approaches have been made towards Uniti, suggesting an interest in acquiring the company
• While there are no official offers, investors are bidding up the company’s shares today

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The Uniti Group Ltd (ASX: UWL) share price is gaining today as investors rally around the company’s receipt of multiple acquisition approaches.

Market participants have responded with exceptional ferocity on Monday, with more than 7.4 million shares having been exchanged since the opening bell.

At the time of writing, the Uniti share price is $4.135, up 9.68% from its previous closing price. However, the telecommunications company reached an intraday high of $4.26. For context, the S&P/ASX 200 Index (ASX: XJO) is trading 0.55% lower.

Let’s check what the driving force behind the Uniti share price movement could be on Monday.

Belle of the ball

In a short, almost inconspicuous, share buyback update on Monday, Uniti shared some new information with the market. It appears the contents of this update have captured the imagination of investors, as the Uniti share price pushes higher.

Firstly, the share buyback was revealed on 27 October 2021. At that time, the company announced it planned to buy back up to 10% of shares on issue. This was reinforced further with a release in November detailing strong recent financial performance.

Today, Uniti told shareholders that it has received multiple approaches from more than one party. Furthermore, the company noted this indicated a potential interest in the acquisition of the telecom player.

However, at this point, the interest has not been accompanied by any specific details around timing, price, or conditions. As such, Uniti Group cannot guarantee that any approach will result in an official proposal.

The announcement follows a year of uncharacteristically high merger and acquisition activity on the ASX.

What has the Uniti share price been up to?

The Uniti Group share price has been hot real estate over the last 12 months. Riding a wave of renewed optimism towards the telecommunications sector, Uniti is now up 123% in the past year.

Notably, the inflated share price has also driven the company’s price-to-earnings (P/E) ratio higher. Around June of 2021 Uniti was valued at ~49 times earnings. In contrast, the company is now trading at ~90 times earnings.

The post Why is the Uniti (ASX:UWL) share price up 10% on Monday? appeared first on The Motley Fool Australia.

More reading

• Netflix stock crashes 22%: Is it a good value stock?
• Rio Tinto (ASX:RIO) share price edges lower amid Serbian licence decision
• Leading brokers name 3 ASX shares to buy today
• Why UBS says the Woodside (ASX:WPL) share price is a buy
• Why is the Altium Limited (ASX:ALU) share price sinking 16% this year?

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 recommended Uniti 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In the early months of the COVID-19 pandemic, Netflix (NASDAQ: NFLX) benefited from a huge wave of new subscriber signups, as people looked for things to do at home during lockdowns. However, subscriber growth has been slowing ever since that initial surge cooled off in the spring of 2020.

Last week, investors finally lost their patience. Weaker-than-expected fourth-quarter subscriber growth and a fairly dismal forecast for the first quarter caused Netflix stock to plunge 22% on Friday. Yet this pullback could make Netflix an attractive value stock in 2022.

Management finally admits that growth is slowing

Netflix’s subscriber growth moderated significantly in 2021. The company grew its paid streaming membership base by 18.2 million users last year. For comparison, Netflix reported a record 36.6 million paid net additions in 2020, and it averaged just over 28 million paid net additions over the previous two years.

In short, Netflix expanded at a much slower pace in 2021 than it did before the pandemic. Its growth slowdown looks even more dramatic in percentage terms. In 2021, Netflix grew its paid streaming subscriber base just 9%, compared with a 26% increase in 2018.

Despite clear signs that growth was slowing, Netflix executives spent most of last year arguing that the deceleration in subscriber growth was temporary.

Management finally acknowledged the obvious in conjunction with the company’s Q4 earnings release. Netflix reported 8.3 million paid net subscriber additions for the fourth quarter — slightly below its Q4 2020 performance and its forecast — and it expects to add just 2.5 million subscribers in the first quarter (down from 4 million a year ago). CFO Spence Neumann said that subscriber retention has been healthy but the pace of new member acquisitions hasn’t recovered to pre-pandemic levels.

Netflix stock plummets

Investors punished Netflix stock viciously for the subscriber miss. Barely more than two months ago, the shares hit an all-time high of $700.99. The stock had already retreated to just above $500 before Netflix’s earnings report, largely because of a broader sell-off in high-flying tech stocks. Netflix stock dropped another 22% after the earnings report, pushing the shares below $400 for the first time in almost two years.

Netflix stock performance, data by YCharts.

The abrupt pullback is hardly surprising in light of Netflix’s recent results and forecast. For many years, Netflix has been valued as a growth stock. Now, investors have to reckon with the fact that Netflix may be close to saturating many of its markets. If the company’s Q1 guidance is any indication, subscriber growth could moderate again to roughly 6%-8% this year.

To be fair, price increases should keep Netflix’s revenue growing at a double-digit rate in 2022. (Netflix is raising the prices of most plans by 10% to 11% in the U.S. and Canada this quarter.) But that was a small consolation to investors, as Netflix risks further handicapping its subscriber growth if it raises prices too much.

Could Netflix be a good value stock?

While Netflix is falling out of favor with growth-focused investors, it is starting to gain merit as a value stock. Despite its somewhat disappointing subscriber gain, Netflix posted earnings per share (EPS) of $1.33 last quarter, easily beating its guidance and the analyst consensus of $0.82. This brought its full-year EPS to $11.24.

Netflix expects its operating margin to retreat somewhat in 2022 — largely due to exchange rate pressures — following several years of extremely strong margin expansion. Still, margin expansion will likely resume in 2023. Even with slower subscriber growth, the operating leverage inherent in Netflix’s business model should enable the company to grow revenue faster than expenses for the foreseeable future.

Netflix stock’s recent plunge has left it trading for just 35 times the company’s 2021 earnings. While that still represents a premium to the market, it’s a far cry from a year ago, when the stock traded for over 80 times earnings.

Netflix P/E ratio, data by YCharts.

Moreover, analysts on average expect Netflix’s EPS to reach roughly $15 in 2023 and $19 by 2024. Netflix shares now trade for just 21 times the 2024 analyst consensus.

Looking ahead, earnings growth and free cash flow may become more important drivers of Netflix stock than subscriber gains. If the company can keep its costs under control, the stock could perform well for a new crop of value investors even if subscriber growth never reaccelerates. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Netflix stock crashes 22%: Is it a good value stock? appeared first on The Motley Fool Australia.

More reading

• FAANG Stocks: 2022 Winners and Losers
• Will Netflix earnings sink the stock market Friday?
• Here’s what you need to know before Netflix’s Q4 earnings
• Netflix earnings preview: The most important metric to watch
• 835 reasons to invest in Netflix stock right now

Adam Levine-Weinberg has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Key Points

• Rio Tinto shares are sliding following Serbian government’s verdict on lithium exploration licences
• The Serbian Prime Minister sides with environmentalists
• Rio Tinto is now looking at a range of legal avenues

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The Rio Tinto Ltd (ASX: RIO) share price is hovering in negative territory today following a broader market selloff.

At the time of writing, the mining giant’s shares are swapping hands for $107.58, down 1.05%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is down 0.56% to 7,135.5 points. This means that the benchmark index has fallen almost 4% since this time last week.

Serbian government revokes lithium exploration licences

Relations between Australia and Serbia have gotten frostier following the prolonged Novak Djokovic visa saga earlier this month.

According to several media outlets, the Balkan nation of Serbia has decided to revoke Rio Tinto’s lithium exploration licences.

The announcement comes as the Serbian government sides with protestors who have raised concerns about the environmental impact of Rio Tinto’s proposed lithium mine. It’s claimed the development of the project will pollute land and water affecting valuable farmland.

Previously, the Serbian prime minister advised she would make a decision in April’s general election as to whether Rio Tinto could proceed. However, it’s speculated the treatment and deportation of Djokovic, a Serbian national hero, angered the European nation.

The Serbian government’s verdict may also be used to boost popular support in the lead-up to the election after protesters strongly voiced their opposition to the lithium project.

For several weekends, thousands of demonstrators in the capital Belgrade and other towns blocked main roads and bridges in protest.

During a televised address to the nation, Serbian Prime Minister Ana Brnabic said:

We have fulfilled all the requests of the environmental protests and put an end to Rio Tinto in the Republic of Serbia.

Everything is finished. It’s over.

In response, Rio Tinto noted that it was extremely concerned by the Serbian prime minister’s statement and is reviewing its legal options.

The project, if approved, would have become the largest lithium mine in Europe and one of the biggest in the world.

Experts estimated the mine to have a 40-year life, producing 2.3 million tonnes of lithium carbonate per year.

Rio Tinto had planned to invest up to $2.4 billion in the construction and development of the lithium mine.

Rio Tinto share price summary

Despite travelling higher in 2022, it has been a disappointing 12 months for Rio Tinto shareholders. The Rio Tino share price has lost around 9.3% in value since this time last year.

Based on today’s price, Rio Tinto has a market capitalisation of $40 billion with approximately 371 million shares outstanding.

The post Rio Tinto (ASX:RIO) share price edges lower amid Serbian licence decision appeared first on The Motley Fool Australia.

More reading

• Here’s why the Pilbara (ASX:PLS) share price is on watch
• Can lithium charge the Rio Tinto (ASX:RIO) share price higher?
• Why were Rio Tinto (ASX:RIO) and BHP (ASX:BHP) shares in the green today?
• Top brokers name 3 ASX shares to sell today
• What are brokers saying about the Rio Tinto (ASX:RIO) 2022 production update?

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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Corporate Travel Management Ltd (ASX: CTD)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and lifted their price target on this corporate travel specialist’s shares to $28.00. The broker has named Corporate Travel Management as a top pick for investors looking for reopening investments. It believes the company’s decision to deploy capital at the bottom of the cycle will reap rewards in the future. The Corporate Travel Management share price is trading at $20.57 on Monday.

Lendlease Group (ASX: LLC)

A note out of Macquarie reveals that its analysts have upgraded this property company’s shares to an outperform rating and lifted their price target to $12.64. While the broker acknowledges that there is a risk that it has moved too soon with its recommendation, it believes Lendlease’s FY 2024 targets are achievable. In light of this, it suspects that the market will start to rerate its shares to higher multiples once it becomes apparent that the company is delivering on its targets. The Lendlease share price is fetching $10.42 this afternoon.

Pro Medicus Limited (ASX: PME)

Analysts at Morgans have upgraded this health imaging technology company’s shares to an add rating with a $54.49 price target. The broker notes that Pro Medicus’ shares have fallen heavily since it first downgraded its shares to a reduce rating earlier this month. It feels this has created a buying opportunity for investors with a long term and patient view. Though, it has warned that market sentiment is weak and its shares could yet be dragged lower in the near term. The Pro Medicus share price is trading at $45.44 on Monday afternoon.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Why this broker upgraded the embattled Pro Medicus (ASX:PME) share price to “buy”
• Are these 2 beaten-up quality ASX shares now buys?
• These were the worst performing ASX 200 shares last week
• 2 beaten-up ASX shares tipped to rebound in 2022
• Why Accent, Careteq, Pro Medicus, and Xero shares are dropping

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 Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended Corporate Travel Management 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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Key points

• Woodside is off to a flying start in 2022 backed by strengths in underlying commodities markets
• UBS raised its EPS targets on the petroleum giant by 31% for FY21
• Broker concurrently reduced its dividend forecasts, feeling Woodside could preserve capital
• UBS rates Woodside as a buy on a $28.80 price target.

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Shares in Woodside Petroleum Limited (ASX: WPL) are rangebound today and are now trading less than 1% in the red at $24.99.

With oil and gas markets rallying to new single-year highs again, Woodside shares have climbed 14% into the green already this year to date. Brent Crude has also climbed just over 13% since January 1 as well, alongside gasoline futures, falling just shy of 3-month highs at US$2.40/gallon.

Now the team at UBS have become more constructive on the petroleum giant, hammering down its buy call in a recent note to clients. Let’s take a look.

Why’s UBS bullish on the Woodside share price?

The Swiss investment bank raised its earnings forecasts for Woodside’s FY21 results due to its improved revenue outlook.

UBS increased its earnings per share (EPS) targets for the company by 31% in FY21, subsequently raising its EPS estimates by 12% and 4% in FY22 and FY23 respectively.

This is a reflection of Woodside’s increased domestic gas sales and heightened production at its Pluto LNG asset, as well as of the buoyant underlying markets.

However, in spite of the bullish earnings projections, the broker also reckons Woodside might refocus its capital allocation away from its dividend programme.

The broker says it expects Woodside to “preserve capital to support its growth projects and energy transition spend (US$5 billion by 2030)”.

As such, it reduced its implied payout ratio assumptions down from 80% to 65%, curtailing its dividend per share forecasts by 9–15% in doing so.

Nevertheless, UBS rates Woodside as a buy right now and values the company at $28.80 per share.

Morgans, Barrenjoey Capital Markets and Credit Suisse also rate Woodside a buy right now, valuing the company at $31, $33 and $28.32 respectively.

More on the Woodside share price

In the last 12 months, the Woodside share price has remained in the red and has lost 6% in that time.

Things are different in 2022 however, with shares performing well after rallying 14% in the past month.

As such, the Woodside share price is outpacing the benchmark S&P/ASX 200 Index (ASX: XJO) so far this year to date.

The post Why UBS says the Woodside (ASX:WPL) share price is a buy appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• ASX 200 (ASX:XJO) midday update: Zip’s Q2 update, Santos and Woodside deliver record revenue
• Record quarterly sales can’t stop the Woodside (ASX:WPL) share price falling today
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Zach Bristow 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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