The S&P/ASX 200 Index (ASX: XJO) had a strong start to the week but faded as it went on. This led to the benchmark index falling by 2.8 points over the five days to finish the week at 7,060.7 points.
A number of shares on the index acted as major drags on proceedings during the week. Here’s why these were the worst performers on the ASX 200:
Challenger Ltd (ASX: CGF)
The Challenger share price was the worst performer on the ASX 200 last week with a disappointing decline of 23.8%. Investors were selling the annuities company’s shares following the release of a disappointing third quarter update. Although Challenger recorded solid growth in its assets under management, its margins have been impacted by a sharp decline in credit spreads over the year. This means it only expects to hit the low end of its guidance range. And while the company intends to lift prices significantly to combat this, there are concerns that this will weigh on sales.
Kogan.com Ltd (ASX: KGN)
The Kogan share price wasn’t far behind with a sizeable 19.7% decline over the five days. The catalyst for this was the release of the ecommerce company’s third quarter update. Although Kogan reported a 47% increase in gross sales and a 54% jump in gross profit, its operating earnings actually declined by 24%. This was predominantly due to the core Kogan business, which reported a 42% decline in adjusted operating earnings due to a significant increase in operating costs.
Pilbara Minerals Ltd (ASX: PLS)
The Pilbara Minerals share price was out of form and sank 11.9% last week. Investors were selling the lithium producer’s shares following the release of its third quarter update and a broker note out of Citi. According to the note, the broker has downgraded its shares to a sell rating with a $1.10 price target. Citi made the move largely on valuation grounds following a strong gain over the last couple of months. In addition to this, it notes that the company fell short of shipment expectations during the March quarter and its costs were higher than expected.
Whitehaven Coal Ltd (ASX: WHC)
The Whitehaven Coal share price was a poor performer and dropped 11.4% during the period. Last week analysts at Morgans gave their opinion on the coal miner. Although they have retained their add rating, they cut their price target by 8% to $2.05. The broker was disappointed with production issues at its Narrabi operation.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger Limited and Kogan.com 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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