Month: May 2022

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.

When Netflix (NASDAQ: NFLX) reported 2022 first-quarter financial results on April 19, what captured the market’s attention was a loss of 200,000 subscribers during the period. Making matters worse was management’s expectation of losing another 2 million customers in the current quarter. Unsurprisingly, the stock immediately crashed 35% following the announcement. 

For a business that was growing rapidly over the past decade, adding tens of millions of new members every year and increasing revenue at a brisk rate, the dramatic slowdown is raising questions about the streaming company‘s prospects. And investors have a lot to think about. 

Arguably, topping the list of what shareholders should start to question is Netflix’s pricing power. Let’s take a closer look. 

Netflix’s weakening moat 

Netflix has historically been able to raise prices in the U.S. with seemingly no impact on its customer growth. It hiked prices in April 2014 (the first of six price hikes), and since then, the membership count has increased from 48 million to 221.6 million today. But it’s starting to look like the party could be over. 

Management blamed elevated churn as the reason for the first-quarter subscriber miss and weak second-quarter forecast. Furthermore, it specifically said that the most recent U.S. price increase in January was not the reason for higher churn. Instead, the leadership team called out the war in Ukraine, macro issues in Latin America, seasonality, and heightened competition for the attrition. 

However, some could be sceptical of this argument. The U.S. and Canada region (UCAN) lost 640,000 members last quarter, the biggest decline in at least the past decade. And this was during the three-month period that Netflix raised prices in the U.S. and in a period when Bridgerton 2, its most popular English-language TV show, was released. Top-notch content wasn’t enough for consumers to want to pay more, a key part of the company’s strategy that has worked so well in the past. 

It’s only going to get harder to bring these fallen-off customers back onto the platform. Including accounts that share passwords, Netflix estimates that there are 105 million households in the UCAN region that watch Netflix. Market saturation is real. Additionally, there are an unlimited number of entertainment options today. Is Netflix still superior enough to rival services to warrant its premium pricing? I’m not so sure. 

Excluding the impact of Russia, Netflix would’ve added 500,000 customers in the first quarter. That still would’ve substantially missed management’s previous guidance of 2.5 million adds. So there were an unexpected 2 million accounts that chose to cancel their subscriptions. Losing members is problematic because it not only affects sales in the current quarter, but in future periods as well. 

The leadership team’s long-term pricing strategy, however, hasn’t changed. The objective is still to continue finding ways to add greater entertainment value, while asking its customers to pay more over time. But the company’s latest struggles call into question a key part of Netflix’s thesis: its pricing power. 

Warren Buffett once said that pricing power is the most important determinant of a company’s quality. Is Netflix now a worse business than it was before? 

What now? 

With the stock down 68% since the start of the year, Netflix’s current price-to-earnings (P/E) ratio of 17 makes shares appear cheap right now. It’s still the top streaming service by number of subscribers, and this scale is a huge advantage when it comes to producing content. But the U.S. market is starting to look saturated. At the same time, competition for consumers’ attention has never been higher. 

Regardless of the seemingly attractive stock price, whether this is a temporary blip on the company’s radar or not remains to be seen.  

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

The post Should investors start to question Netflix’s pricing power? appeared first on The Motley Fool Australia.

More reading

• Have ASX tech shares finally reached the bottom?
• Why Netflix stock was falling again today
• 3 reasons to buy Netflix, and 1 reason to sell
• Better buy: Netflix vs. Twitter
• Netflix looks to 100 million existing viewers to boost revenue

Neil Patel has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended 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 Scott Phillips.

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

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The Bapcor Ltd (ASX: BAP) share price is tumbling lower amid confirmation of the company’s guidance for financial year 2022.

The company restated its outlook in its latest Macquarie Group Ltd (ASX: MQG) Investor Conference presentation, published in a non-price sensitive update this morning.

At the time of writing, the Bapcor share price is $6.43, 4.46% lower than its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) is also in the red today, having slumped 0.1%.

Let’s take a closer look at the vehicle parts, accessories, and services provider’s performance for the financial year so far.

Bapcor reports increased revenue for FY22 so far

The Bapcor share price is sliding amid the company’s latest trading and guidance update.

Bapcor has told the Macquarie Investor Conference its performance for financial year 2022 so far has been “strong” given the challenges it faced in the first half. It continued:

[The] fundamental drivers of the automotive aftermarket remain strong and are expected to continue to do so.

The company’s revenue for the first three quarters of financial year 2022 is 3% higher than it was at the same point of financial year 2021.

The boost has been driven by the company’s specialist wholesale segment. Its revenue has increased 8% this financial year. Meanwhile, Bapcor’s trade segment has seen its revenue rise 4% and its New Zealand segment’s revenue has grown 1%.

Those increases have counteracted a 4% revenue slip from Bapcor’s retail segment.

The company also provided a window into its performance for the quarter ended 31 March.

Over that period, Bapcor’s retail/online division outperformed, with its revenue increasing 39.7% compared to that of the third quarter of financial year 2021. Additionally, its trade/Burson segment and its specialist wholesale division’s revenue increased by 5.2% and 10.1% respectively.

Finally, Bapcor reiterated its previously given financial year 2022 guidance. It’s still aiming for its pro forma earnings to be at least in line with those of financial year 2021.

The company has stuck with that guidance since it released its most recent full year results in August.

Last financial year saw the company reporting pro forma earnings before interest, tax, depreciation, and amortisation (EBITDA) of $279.5 million and pro forma net profit after tax (NPAT) of $130.1 million.

Bapcor share price snapshot

This year so far has been tough on the Bapcor share price.

Today’s fall included, the company’s stock has slumped 9% year to date. It is also 15% lower than it was this time last year.

The post Why is the Bapcor share price sinking on Tuesday? appeared first on The Motley Fool Australia.

More reading

• 3 reasons the Bapcor share price could be an ASX 200 winner
• Brokers: 2 ASX dividend shares expected to pay juicy yields

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 recommended Bapcor and Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX: NST) share price is on a bit of a rollercoaster today.

Down 2% in the early minutes of trade to $9.33 per share, the Northern Star share price rebounded to trade almost even before sliding again at the time of writing to be down 0.7%.

For some context, the S&P/ASX 200 Index (ASX: XJO) is down 0.1% at this same time. And the S&P/ASX All Ordinaries Gold Index (ASX: XGD) has slipped 1.7% amid another retrace in gold prices, now down 6% over the past 2 weeks.

What else is impacting the Northern Star share price?

The Northern Star share price could also be experiencing some additional volatility after the ASX 200 gold miner released its annual Mineral Resource and Ore Reserve update.

Despite mining depletion and the reduction of 2.4 million ounces after divesting its Kundana assets, the company’s mineral resource remained stable at 56.4 million ounces. It credited the stability to successful exploration activities over the year, which added 4.3 million ounces to its mineral resource.

Northern Star’s Ore Reserve also remained stable at 20.7 million ounces. It said that exceptional growth and higher-grade gold levels at several of its project underpin the potential for mine life extensions alongside additional organic growth.

Commenting on the update, Northern Star managing director Stuart Tonkin said:

Our substantial Mineral Resource base in world-class jurisdictions is what enables Northern Star to stand out in the marketplace. We will continue to explore aggressively and effectively to unlock the enormous potential within, around and below our existing operations. This further supports the replacement of Ore Reserves in coming years.

Our conservative gold price assumptions combined with our underground mining portfolio provide optionality in a supportive gold price environment to optimise cash flow and shareholder returns as well as ensure downside protection.

How has the ASX 200 gold miner been performing?

The Northern Star share price has seen its fair share of ups and downs this year. With today’s intraday moves factored in, shares in the ASX 200 gold miner are up 1.2% in 2022. That compares to a year to date loss of 3.2% posted by the ASX 200.

Northern Star pays a 2% trailing dividend yield, fully franked.

The post What’s happening with the Northern Star share price on Tuesday? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• Can the gold price surge above US$2,000 again this year?
• Why Appen, Block, Life360, and Northern Star shares are dropping
• Why aren’t ASX gold shares performing better in these uncertain times?
• ASX 200 midday update: Coronado has record quarter, Life360 and Northern Star sink

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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) can’t seem to decide what it wants to do so far today. At the time of writing, the ASX 200 is down by 0.14%. That comes after a big drop after open was partly mitigated by a mid-morning rally. But one company that seems to have a better idea of what it wants to do today is the Magellan Financial Group Ltd (ASX: MFG) share price.

Magellan shares are well in the green today. The company has risen by an impressive 7.43% at the time of writing to $17.50. That’s looking a lot better than the $16.29 the fund manager closed at yesterday.

So what’s behind Magellan’s stellar outperformance today? Well, it’s not entirely clear. There hasn’t been any official news out from the company itself. However, there have been some media reports out today that might have something to do with this decisive move upwards.

According to reporting in the Australian Financial Review (AFR), Magellan has decided to move on from the era of its co-founder and long-term chief investment officer (CIO) Hamish Douglass. Mr Douglass helmed Magellan for over a decade as CIO. He was also the public face of the company. However, a series of unfortunate events over the past 12 months culminated in Mr Douglass taking a leave of absence from his duties at Magellan. These included what turned into a chronic period of underperformance for Magellan’s investment funds. As well as the abrupt resignation of Magellan’s CEO Brett Cairns. There was also the revelation of Mr Douglass’ divorce.

Douglass was replaced as CIO by another Magellan co-founder Chris Mackay earlier this year.

Magellan shares rise amid reports company is moving on from Douglass

The AFR reports that, after several months of absence, “it’s understood the remainder of Magellan’s directors has come to accept that Douglass will not rejoin the board nor return as the fund manager’s chief investment officer”.

Mr Douglass reportedly won’t be leaving the company though. Instead, “the board is now working with Douglass to create for him a new role providing macroeconomic and geopolitical counsel to the investment team and directly to key Magellan clients”. However, the report is firm that “he [Douglass] would no longer pick stocks or face the market” under the arrangement.

Nikki Thomas is reportedly set to replace Douglass as permanent CIO, taking back over from Mackay. Thomas was a former fund manager at Magellan who was brought back into the fold when Douglass stepped back.

So it’s perhaps this certainty about Magellan’s future that is helping to lift the company’s shares today. After all, markets hate uncertainty. And, if this report is to be believed, Magellan is about to remove several ‘uncertainties’ about who is running the show.

But one thing is for sure. If investors want a Magellan back to its glory days, there is still a long way to go.

At the current Magellan share price, this ASX 200 fund manager has a market capitalisation of $3.25 billion, with a trailing dividend yield of 12.81%.

The post Why is the Magellan share price soaring 7% today? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Woolworths’ Q3 update, AGL falls on Cannon-Brookes raid
• These were the worst performing ASX 200 shares in April
• If you’d bought $10,000 of Bendigo Bank shares 10 years ago, guess how much you’d have now
• 5 things to watch on the ASX 200 on Tuesday
• The CBA share price was the worst performer of the ASX 200 big banks in April. What happened?

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 Scott Phillips.

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The Corporate Travel Management Ltd (ASX: CTD) share price is in the red today despite the company providing an update on its post-COVID recovery.

This ASX travel share is currently trading at $25.15, a 2.52% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is sliding by just 0.05% today.

Let’s take a look at what Corporate Travel reported.

Corporate Travel predicts revenue will improve

Corporate Travel predicted monthly revenue could top calendar year 19 (CY19) levels by the fourth quarter of this year. The company is aiming for an EBITDA of $265 million when the travel industry fully recovers from COVID-19.

In a presentation to the Macquarie conference in Sydney, the company noted it has made “transformational acquisitions” during COVID-19 and has zero debt.

Corporate Travel said the third quarter had a slow start due to the COVID-19 Omicron variant, however March revenue has been a record. Since March 2021, the company has recorded underlying EBITDA profits.

Corporate Travel said the Australian and New Zealand business has experienced a slow international recovery amid supply constraints. This is despite high demand for travel. State Government accounts are less than average due to people working from home. However, a return to work is underway.

Meanwhile, in North America, the top 25 accounts are trading below average but recovering in April. In the European region, a return to work is underway but UK BAU Government accounts are less than 50% recovered.

One expert has recently predicted that corporate travel could grow its earnings post-COVID. As my Foolish colleague Tony reported, Sage Capital portfolio manager Kelli Meagher said that the company raised money to make “some pretty clever acquisitions”, setting them up for post-COVID growth.

We like Corporate Travel over the longer term just because it is now in a much stronger position to gain market share.

We don’t even have to see a full rebound of corporate travel back to [pre-COVID] levels… for Corporate Travel to grow its earnings, because it’s a market share and margin game.

In early April, Corporate Travel completed the acquisition of Helloworld Travel Ltd (ASX: HLO)’s corporate and entertainment travel business.

Corporate Travel share price summary

The Corporate Travel share price has ascended nearly 40% in the past year and more than 14% year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 4% over the past year.

Corporate Travel has a market capitalisation of roughly $3.7 billion based on today’s share price.

The post Why is the Corporate Travel share price lagging the ASX 200 today? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Woolworths’ Q3 update, AGL falls on Cannon-Brookes raid
• Travel’s back! 3 ASX shares this expert loves right now
• Why are ASX 200 travel shares having a first-class end to the week?
• Here are the 5 best performing ASX travel shares of 2022 so far
• What went so wrong for ASX travel shares today?

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 Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) has fought back from early weakness to be trading broadly flat at 7,346.1 points.

Here’s what is happening on the ASX 200 today:

Woolworths sales update

The Woolworths Group Ltd (ASX: WOW) share price is pushing higher after investors responded positively to the retail giant’s sales update. For the 12 weeks ended 3 April, Woolworths reported sales growth of 9.7% over the prior corresponding period to $15,123 million. This compares favourably to Goldman Sachs’ estimate for total sales growth of 6.4% to $14.7 billion.

AGL shares lower

The AGL Energy Limited (ASX: AGL) share price is falling on Tuesday. This follows news that Mike Cannon-Brookes has snapped up an 11.28% stake in the energy company. Mr Cannon-Brookes made the move in an attempt to block AGL’s demerger. However, management remains committed to progressing the proposed demerger and believes it is in the best interests of AGL shareholders.

Corporate Travel Management update

The Corporate Travel Management Ltd (ASX: CTD) share price is under pressure today following the release of an update out of the corporate travel specialist. That update revealed that the Omicron variant impacted its recovery during the third quarter. Nevertheless, management expects a big fourth quarter and for momentum to carry over into FY 2023.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Tuesday has been the Magellan Financial Group Ltd (ASX: MFG) share price with a 7.5% gain on no news. Going the other way, the Cleanaway Waste Management Ltd (ASX: CWY) share price is the worst performer with a 4.5% decline. This morning the waste management company revealed that its EBITDA would be $15 million to $20 million lower than expected in FY 2022 due to higher fuel and labour costs and one-off operational disruptions.

The post ASX 200 midday update: Woolworths’ Q3 update, AGL falls on Cannon-Brookes raid appeared first on The Motley Fool Australia.

More reading

• Own AGL shares? Here’s why the company’s demerger could be dead in the water
• The ASX 200 shares that fund managers are buying and dumping
• These were the worst performing ASX 200 shares in April
• AGL share price in focus amid Cannon-Brookes raid
• Woolworths share price on watch amid strong Q3 sales growth

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 Corporate Travel Management Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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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.

What happened

Shares of Shiba Inu (CRYPTO: SHIB) continued to trend lower today as one report showed that trading activity in the meme coin had hit a 12-month low, a sign that the meme-fueled boom that sent the cryptocurrency skyrocketing last year was fading. At the same time, the fallout from Robinhood’s (NASDAQ: HOOD) layoff announcement last week also seemed to weigh on Shiba Inu as Robinhood had just started allowing users to trade SHIB, and many see the trading platform as synonymous with meme investing.

As of 5:31 p.m. ET, the cryptocurrency was down 3.2% over the last 24 hours.

So what

Shiba Inu joined Robinhood in April, but even that was only enough to generate a short-lived pop in its price and trading activity. Recorded transactions in the crypto fell 70% in the first quarter from the previous quarter, and in April 2022, SHIB transactions fell to 216,260 from 329,893 in March, according to Finbold.

That tracks with a broader decline in the value of SHIB, which is down more than 75% from its peak last October, as well as fading interest in cryptocurrency more generally.

Robinhood’s first-quarter report, which came out last Thursday, also underscored that trading activity among the millennials that helped drive the crypto boom is drying up as the company’s overall revenue fell 43% to $299 million, and crypto revenue declined 39% to $54 million.

Now what

There was some good news out for Shiba Inu as well, as 22 billion SHIB tokens were burned over the last week. With 549 trillion coins in circulation, trillions of them will need to be burned for the asset to have a chance at getting to $1, as bulls hope it will.

For now, though, headwinds seem to be mounting against SHIB, with both Robinhood and SHIB trading activity declining. The coin’s days as a meme star could be over.

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

The post Why Shiba Inu was falling today appeared first on The Motley Fool Australia.

More reading

• Why Shiba Inu, Ethereum, and Dogecoin are sinking today
• Why Bitcoin, Ethereum, Dogecoin, and Shiba Inu dropped today
• 3 reasons Robinhood’s addition of Shiba Inu doesn’t matter
• Why Solana is rising today
• Why Shiba Inu is soaring today

Jeremy Bowman 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 Scott Phillips.

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

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Mike Cannon-Brookes has upped his holding in AGL Energy Limited (ASX: AGL)’s shares to 11.28% and plans to put that muscle to work in blocking the company’s planned demerger.

AGL’s newly minted largest shareholder announced his position last night, saying the “flawed demerger … makes no sense, or cents”.

The S&P/ASX 200 Index (ASX: XJO) energy producer and retailer’s board has hit back, responding to Cannon-Brookes’ stance this morning. It said it’s still confident the demerger is in the best interest of shareholders.

At the time of writing, the AGL share price is $8.34, 3.31% lower than its previous close.

Let’s take a look at what all this could mean for the 185-year-old company’s future.

AGL share price slips as Cannon-Brookes ups the ante

The AGL share price is in the red on Tuesday. Its slide comes as the company responds to Cannon-Brookes’ latest attempt to block its planned demerger.

According to Cannon-Brookes, his private investment vehicle, Grok Ventures is now AGL’s largest shareholder.

And the venture has not only committed to voting the stake against AGL’s demerger. It’s also working to convince other shareholders to vote ‘no’ at AGL’s upcoming scheme meeting.

Grok Ventures operates the Keep it together Australia campaign, which argues against the split.

The demerger would see AGL Energy split into energy generating business, Accel Energy, and energy retailer, AGL Australia.

A media release, published by Keep it together Australia, notes:

Grok firmly believes the demerger will create two weaker, interdependent companies with significant operating risk and dis-synergies.

Grok suggests Accel Energy will not be able to fund its transition or meet its liabilities due to high leverage, thermal coal exposure, significant remediation costs and a reduced appetite for coal exposure from equity and debt investors.

“[AGL] has had a proud history of leaning into the future, innovation, and embracing the latest in technology,” Cannon-Brookes tweeted last night.

“However, AGL is also Australia’s single largest emitter of carbon, at over 40mt. Alone it emits more CO2 than the entire countries of Sweden, Portugal, Ireland, or New Zealand.”

Cannon-Brookes also commented on Keep it together Australia’s release, saying:

By not transitioning fast enough away from fossil fuels, the board has presided over AGL’s value plummeting to the tune of almost 70% in five years.

We intend to vote every AGL share we control at the relevant time against the demerger, and we call on fellow AGL shareholders to vote against the demerger to avoid further value destruction.

AGL board claps back

The energy producer and retailer’s board responded in an ASX release this morning.

It said the demerger could help maximise growth by providing each business its own “freedom”, with separate dividend policies, capital structures, and future values.

“AGL remains committed to progressing the proposed demerger with a view to achieving implementation by 30 June 2022 and a responsible transition of Australia’s energy system,” the board stated.

As The Motley Fool Australia’s Tristan Harrison reported earlier today, AGL’s demerger needs the support of 75% of shareholders.

Assuming Cannon-Brookes’ stake will slide into the ‘no’ box, the demerger decision lies with the voting power of 13.72% of AGL’s shares.

That’s not the only news that could be moving the AGL share price on Tuesday. The company announced a $2 billion renewable energy deal this morning.

The deal could see Accel Energy managing a 2.7 gigawatt renewable energy pipeline. It’s subject to the demerger’s completion.

The post Own AGL shares? Here’s why the company’s demerger could be dead in the water appeared first on The Motley Fool Australia.

More reading

• AGL share price in focus amid Cannon-Brookes raid
• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• AGL share price tumbles on earnings guidance downgrade
• How much is the AGL dividend payout ratio?
• Why is the AGL share price outperforming today?

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 positions in and has recommended Atlassian and Twitter. 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 Scott Phillips.

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The Strike Energy Ltd (ASX: STX) share price is surging higher, up 4.8% after earlier posting gains of more than 9%.

Here’s what’s driving investor interest in the ASX oil and gas explorer and developer.

What field test results were announced?

The Strike Energy share price is leaping higher after the company reported on promising final flow testing results at its Walyering Gas Field, located in the Perth Basin in Western Australia.

Strike Energy is the operator and owns a 55% equity interest in the gas field, while Talon Energy Ltd (ASX: TPD) holds a 45% equity interest. Talon Energy shares are up 11% at time of writing.

According to this morning’s release, after 21 days of testing, the results at its Walyering-5 well have “materially outperformed expectations.”

In fact, the Walyering comingled flow test achieved the 3rd highest flow rate in Basin history. For the technically minded, the explorer reported this came in “at a choke coefficient of 75 mmscfd on 72/64 choke with FWHP of 2,599 psi”.

Individual testing of the Walyering-5 well’s A and B Sands has now been completed.

And the Strike Energy share price could be getting a lift from the report that the gas analysed from the A and B sands was found to be high quality with negligible impurities and condensate gas ratios.

Commenting on the positive test results, Strike Energy’s CEO, Stuart Nicholls said:

The outcomes of the Walyering-5 flow test have exceeded Strike’s most bullish estimates. The strength of the reservoir pressure, high quality gas stream and adjacency of gas transmission infrastructure will all come together to create some of the lowest cost gas to be developed in Australia for many years.

Strike Energy is currently drilling the Walyering-6 well at a measured depth of 2,130 metres.

Strike Energy share price snapshot

The Strike Energy share price has been a star performer in 2022, up 56.8% since the opening bell on 4 January. By comparison, the All Ordinaries Index (ASX: XAO) has lost 3.8% year to date.

The post Here’s why the Strike Energy share price is leaping 5% today appeared first on The Motley Fool Australia.

More reading

• Why did the Strike Energy share price power higher today?

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 Scott Phillips.

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The CSL Limited (ASX: CSL) share price was a relatively positive performer in April.

During the month, the biotherapeutics giant’s shares rose a touch short of 2%.

This compares favourably to a disappointing 0.9% decline by the benchmark ASX 200 index over the same period.

Why did the CSL share price beat the market last month?

The key to the CSL share price strength last month appears to have been improving plasma collection industry data and the release of a number of positive broker notes.

In respect to the latter, analysts at Citi, Macquarie, and Morgan Stanley all reiterated the equivalent of buy ratings on the company’s shares last month with price targets meaningfully higher than current levels.

What was said?

While all three brokers spoke very positively about CSL, the most bullish broker in the group was arguably Citi with its buy rating and $335.00 price target on its shares.

Based on the current CSL share price of $275.20, this implies potential upside of 22% for investors over the next 12 months.

Citi’s analysts believe that the company’s shares could be due for a re-rating to higher multiples in the coming months. This is expected to be supported by ongoing improvements in plasma collections and the impending acquisition of Swiss biotech giant Vifor Pharma.

Citi commented: “Over the next six months, we expect the market to focus on the strong underlying plasma market demand, and the closure the Vifor deal, both of which should lead to strength in the share price. Maintain Buy. A$335 TP.”

All in all, the broker appears to believe that now could be an opportune time for investors to snap up shares in one of Australia’s highest quality companies.

The post Here’s why the CSL share price beat the market in April appeared first on The Motley Fool Australia.

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Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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