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  • Why AMP, Qantas, Qube, & Transurban shares are dropping lower

    graph of paper plane trending down

    In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to continue its positive run. At the time of writing the benchmark index is up 0.3% to 5,973.6 points.

    Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

    The AMP Limited (ASX: AMP) share price is down over 2% to $1.86. The financial services company’s shares were solid performers on Tuesday after announcing the receipt of the final regulatory approval required for the sale of its life business to Resolution Life. This morning analysts at Morgan Stanley responded to the news by holding firm with their equal weight rating and $1.40 price target.

    The Qantas Airways Limited (ASX: QAN) share price has fallen 2% to $4.22. Investors may have been selling the airline operator’s shares amid concerns over another spike in coronavirus cases in Victoria. If it isn’t brought under control soon, there are worries it could delay the recovery in the domestic travel market.

    The Qube Holdings Ltd (ASX: QUB) share price is down by 2.5% to $2.84. This morning analysts at Morgans downgraded Qube’s shares to a reduce rating with a $2.45 price target. It appears to believe the company’s shares are overvalued after a strong gain over the last few months. Qube’s shares are up a massive 59% since this time in March.

    The Transurban Group (ASX: TCL) share price is down over 1% to $14.62. This decline may have been driven by a broker note out of UBS this morning. According to the note, the broker has downgraded the toll road operator’s shares to a neutral rating with a $14.85 price target. UBS made the move on valuation grounds after a strong rebound in its share price over the last couple of months.

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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 Transurban Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Why AMP, Qantas, Qube, & Transurban shares are dropping lower appeared first on Motley Fool Australia.

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  • Sonic Healthcare share price pushes higher on FY 2020 guidance update

    beat the share market

    The Sonic Healthcare Limited (ASX: SHL) share price is pushing higher on Wednesday after the release of a trading update.

    At the time of writing the healthcare company’s shares are up almost 3% to $29.76.

    What did Sonic Healthcare announce?

    After withdrawing its FY 2020 guidance in March because of the pandemic, this morning the company revealed that it is now in a position to provide guidance once again.

    Management notes that its trading results in March and April were substantially below forecast, but things have picked up since then. In May, its performance was stronger than expected and in June this positive trend has continued.

    As a result of the above, the company expects to report statutory earnings before interest, tax, depreciation, and amortisation (EBITDA) at a similar to level to what it achieved in FY 2019 (excluding the impact of the new lease accounting standard AASB 16). In FY 2019 Sonic reported statutory EBITDA of $1.075 billion.

    Sonic’s CEO, Dr Colin Goldschmidt, was pleased with the way the company performed during the crisis.

    He commented: “Sonic’s global leadership teams have responded magnificently to the Covid crisis, making use of established executive experience, trusted culture, team spirit and wide-open Sonic collaboration channels at national and international level.”

    “Our leaders have shown great flexibility and have adapted rapidly to an entirely new operating environment. Sonic continues to play a crucial frontline role in combating the pandemic, with our laboratories in Australia, the USA and Europe testing thousands of patients per day for Covid-19,” he added.

    What about FY 2021?

    Due to the uncertainty caused by the pandemic, Sonic advised that it is not in a position to provide guidance for FY 2021 at this time. Though, it does intend to provide a further update with the FY 2020 results release in August 2020.

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    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sonic Healthcare Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

    The post Sonic Healthcare share price pushes higher on FY 2020 guidance update appeared first on Motley Fool Australia.

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  • Can Novavax’s Huge Rally Continue? This 5-Star Analyst Sees ‘Only’ 25% Upside Ahead

    Can Novavax’s Huge Rally Continue? This 5-Star Analyst Sees ‘Only’ 25% Upside AheadAnyone following the market in 2020 will be aware of the massive gains made by biotechs fighting the coronavirus. For companies in search of a vaccine or treatment, valuations have soared dramatically, as investors have piled in on the hope one can bring a viable solution to market.Among those making headlines, vaccine specialist Novavax (NVAX) has earned its place as one of 2020’s star performers. Based on a 1,658% year-to-date increase, there’s no doubt regarding its success.Yet, Cantor analyst Charles Duncan argues there are more gains on the way. In fact, the 5-star analyst has just increased his price target for the vaccine player by almost 100%.In addition to reiterating an Overweight rating, the price target moves from $45 to $88. There’s upside of "only" 25%, should Duncan’s target be met over the next 12 months. (To watch Duncan’s track record, click here)Novavax is one of the companies developing an experimental COVID-19 vaccine, deeming its candidate NVX-CoV2373. However, the biotech was excluded from the list of five companies chosen to receive support as part of the Trump administration’s Operation Warp Speed program. Along with being further behind in development, a possible reason for the omission was the company’s lack of resources compared to pharma giants such as J&J, Merck and Pfizer. However, Duncan notes recent grants from the CEPI ($384 million in total) and $60 million from the DoD to fund the vaccine’s development, in addition to the sale of 4.4 million shares worth $200 million, have strengthened the balance sheet considerably as well as levelled the playing field.Furthermore, the recruitment of established biotech veterans for the roles of CMO and SVP of Corporate Affairs is another indication that Novavax can compete with more established names.Duncan said, “To us, this trilogy of events enhances our conviction in Novavax’s pipeline potential… As a result of the DoD and CEPI funding and logistical support, we believe that large-scale manufacturing capabilities are being put in place for NVXCoV2373. With assistance from these organizations, it is our belief that potential manufacturers have been identified and that, in conjunction with a tech transfer process that should not be overly complicated, the company can deliver a high quantity of vaccines.”The majority of the Street concurs. Novavax’s Strong Buy consensus rating is based on 5 Buys and 1 Hold. However, after soaring so high over the past few months, the average price target of $56 suggests possible downside of nearly 20% over the coming months. (See Novavax stock analysis on TipRanks)To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

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