Author: openjargon

Telstra Group Ltd (ASX: TLS) shares haven’t exactly shot the lights out so far in 2024.

To say the least.

Last Wednesday, 22 May, shares in the S&P/ASX 200 Index (ASX: XJO) telco closed at $3.42 apiece. That marked a three-year closing low for Telstra shares.

The stock came under renewed selling pressure after management announced their intentions to axe as many as 2,800 employees in a cost-cutting initiative.

And, in a move that’s divided analyst expectations, Telstra said it would no longer increase its monthly mobile charges in line with inflation.

After recouping some losses over the following trading days, today Australia’s biggest telco is again under pressure. Shares are down 1.4% at $3.46 apiece at the time of writing.

For some context, the ASX 200 is also down 1.3% at this same time following the ABS’s hotter-than-anticipated April inflation print released this morning.

But with Telstra shares now down more than 20% in 12 months, the ASX 200 telco could be in for a sizeable rebound. And that comes with partial thanks to rival Optus.

Did Optus just boost the outlook for Telstra shares?

Yesterday, Optus announced that it would increase the price of some of its monthly mobile plans by 5% to 6%, outpacing inflation.

Management pointed to higher operating costs for the price rise, which will see the cost of Optus’ least expensive mobile plan rise from $49 per month to $52 per month. Customers will also receive a higher data allowance from the service.

The last time Telstra shares enjoyed a revenue boost from higher monthly mobile fees was in July. With the ASX 200 telco having axed its CPI-linked price hikes, UBS now expects Telstra will next increase prices in 2025.

And the company now has greater flexibility to amend prices as it sees fit.

Commenting on the Singtel owned Optus price increases yesterday, UBS analyst Lucy Huang said (quoted by The Australian), “We view today’s price hikes by Optus positively, as mobile rationality continues across the industry.”

Huang added:

We note Singtel management last Friday had announced ambitions to improve return on invested capital at Optus which are currently below 2%, and we see mobile pricing as one of the key drivers.

As for Telstra shares, UBS believes the company will also boost prices to help lift returns.

“We note both key competitors have now put through above CPI price increases. Vodafone up 9% back in late March, and now Optus up 5% to 6%,” Huang said.

And that could prove beneficial not just for the share price but also for Telstra’s 2025 dividend outlook.

According to Huan:

We remain watchful on Telstra’s next price change, with our base case assuming 3% postpaid average revenue per user growth in FY 2025, driving growth in the dividend from 18 cents in FY 2024 to 19 cents in FY 2025.

UBS has a buy rating on Telstra shares with a $4.40 price target.

That represents a potential upside of more than 27% from current levels.

The post How UBS expects Telstra shares to gain 27% and deliver dividend growth appeared first on The Motley Fool Australia.

More reading

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• Buy these ASX shares and get 5% and 6.5% dividend yields
• 3 top ASX 300 dividend shares to buy now for $3,000 a month in passive income
• Here’s the new Telstra dividend forecast through to 2026

Motley Fool contributor Bernd Struben 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 positions in and has recommended Telstra Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Many of Australia’s top brokers have been busy adjusting their financial models and recommendations again. This has led to the release of a number of broker notes this week.

Three ASX shares that brokers have named as buys this week are listed below. Here’s why their analysts are feeling bullish on them right now:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of Macquarie, its analysts have retained their outperform rating and $50.50 price target on this gaming technology company’s shares. The broker highlights that Aristocrat is looking into the potential sale of its Plarium and Big Fish digital gaming businesses. Macquarie believes this would be a smart move and could command a sale price of up to US$1.18 billion based on peer valuations and the popularity of its RAID: Shadow Legends game. Macquarie sees the potential sale as a positive and expects it to support a re-rating of its shares. Particularly given that it will allow management to focus more on its core business and growing social casino and real money gaming businesses. The Aristocrat Leisure share price is trading at $43.45 this afternoon.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

A note out of Citi reveals that its analysts have upgraded this pizza chain operator’s shares to a buy rating with a $44.50 price target. The broker has become more positive on the struggling company after it laid out its plans to address its underperformance in the European market. Citi notes that the company’s excessive discounting has cheapened the brand and Domino’s failed to localise its offer. However, it thinks that Domino’s agreement to allow third-party delivery via aggregator services should lead to higher volumes. It also sees potential for the brand to outperform across a European summer that includes Euro 2024 and the Paris Olympics. The Domino’s share price is fetching $36.56 on Wednesday.

Pro Medicus Limited (ASX: PME)

Analysts at Goldman Sachs have reiterated their buy rating on this health imaging technology company’s shares with an improved price target of $136.00. Goldman highlights that Pro Medicus has won five new contracts with a minimum value of $45 million. It notes that this brings the company’s minimum total contract value (TCV) for new sales this financial year to $245 million. Goldman believes this supports its view that the company’s Visage 7 software is an industry leading solution and that Pro Medicus is the incumbent technology leader in radiology and well-placed to take market share. The Pro Medicus share price is trading at $115.28 today.

The post Top brokers name 3 ASX shares to buy today 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 positions in Domino’s Pizza Enterprises and Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises, Goldman Sachs Group, Macquarie Group, and Pro Medicus. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Domino’s Pizza Enterprises and Pro Medicus. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is under significant pressure following a hotter than expected inflation reading. At the time of writing, the benchmark index is down 1.35% to 7,662.6 points.

Four ASX shares that are not letting that hold them back today are listed below. Here’s why they are rising:

Alligator Energy Ltd (ASX: AGE)

The Alligator Energy share price is up 6% to 6.25 cents. This follows the release of an update on the uranium developer’s Samphire Uranium Project in South Australia. According to release, the 2024 Blackbush resource extension and broader exploration drilling programs have recommenced at the Samphire Uranium Project. Alligator Energy’s CEO, Greg Hall, commented: “Alligator is planning near-continuous Blackbush deposit resource extension drilling through this year, with a target to increase the resource and hence the potential annual production rate in a future feasibility study. […] Drilling and logging results will feed into a further update to the Blackbush resource estimate at year end.”

Data#3 Ltd (ASX: DTL)

The Data#3 share price is up almost 4% to $7.71. Investors have been buying this leading Australian information technology services and solutions provider’s shares thanks to a bullish broker note out of Morgan Stanley this morning. According to the note, in response to significant pullback from recent highs, the broker has upgraded Data#3’s shares to an overweight rating with an $8.40 price target. The broker believes that its valuation looks more attractive following recent weakness. Particularly given the resilience of its end users.

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)

The Fisher & Paykel Healthcare share price is up 4% to $26.53. This has been driven by the release of the medical device company’s FY 2024 results this morning. Fisher & Paykel Healthcare reported revenue of NZ$1.74 billion for the 12 months ended 31 March 2024. This represents a 10% increase over the previous financial year. Looking ahead, in FY 2025 management is guiding to revenue of between NZ$1.9 billion and NZ$2 billion, with a net profit after tax in the range of NZ$310 million and NZ$360 million.

IPD Group Ltd (ASX: IPG)

The IPD Group share price is up over 4% to $4.56. This follows the release of a guidance update from the electrical infrastructure products distributor this morning. IPD revealed that it expects to report EBITDA of $39 million to $39.5 million in FY 2024. This is up 41% to 42.5% from $27.7 million in FY 2023.

The post Why Alligator Energy, Data#3, Fisher & Paykel, and IPD shares are storming higher appeared first on The Motley Fool Australia.

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• Up 20% in 2024, why this ASX 200 healthcare stock just hit a new 52-week high
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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 positions in and has recommended Ipd Group. The Motley Fool Australia has positions in and has recommended Ipd Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Looking for an overlooked S&P/ASX 200 Index (ASX: XJO) AI share to capture the mammoth growth potential on offer from the fast-developing technology?

You’re not alone!

While not an ASX share, no company better demonstrates the potential returns on offer from the rapid rise and largely untapped opportunities presented by artificial intelligence than Nvidia Corporation (NASDAQ: NVDA).

With global companies lining up for the United States-based generative AI stock’s chips, the Nvidia share price is up 184% in 12 months. That’s seen Nvidia’s market cap reach US$2.8 trillion (AU$4.2 trillion) — more than Australia’s annual GDP!

With that growth in mind, we turn to an ASX 200 AI share that could reap major benefits from the global rollout of artificial intelligence.

Namely, Life360 Inc (ASX: 360).

An unexpected ASX 200 AI share

Like Nvidia, Life360 is also based out of the US.

The ASX 200 AI share develops software predominantly used for location sharing. The company’s smartphone app is favoured by families looking to track their children’s locations or to help keep elderly people and folks with special needs safe.

And like Nvidia, the Life360 share price has been on fire of late, up 124% over 12 months. That gives the company a current market cap of $3.1 billion, with some significant growth potential still ahead.

A new Morgan Stanley report, spearheaded by equity analyst James Bales, names Life360 as one of several ASX 200 shares that could catch sustained tailwinds from the AI revolution.

According to the report (courtesy of The Australian Financial Review):

We see the most scope for meaningful upside surprise in the industries with lower expectations where innovation, data advantages and labour automation can provide earnings upside not yet envisioned by consensus…

Demand drivers behind the AI theme are robust, setting the stage for a multiyear structural growth cycle.

Morgan Stanley is bullish on Life360 in part due to all of the data it collects from its users. Data that AI-enabled systems could monetise down the road.

According to Morgan Stanley:

We see Life360 as having access to huge volumes of user data, from personal details to daily habits, driving patterns and behaviours. Life360 understands who you are with, and where your belongings are and how you spend time on the weekend.

Longer-term, we see significant potential in terms of both monetisation and user experience of consumers being served compelling offers.

The ASX 200 AI share really began to lift off on 1 March this year after reporting its full 2023 calendar year results.

Though still operating at a net loss of US$28 million, losses were trimmed back from the more than US$91 million reported in 2022. That was driven by a 33% year-on-year revenue boost to US$305 million.

The post ‘Significant potential’: One unexpected ASX 200 AI share to buy now appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben 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 Life360 and Nvidia. The Motley Fool Australia has recommended Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The S&P/ASX 200 Index (ASX: XJO) is having a very tough session on Wednesday. In response to the release of a hotter than expected inflation reading, the benchmark index is down 1.35% to 7,661.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Cettire Ltd (ASX: CTT)

The Cettire share price is down 5% to $2.31. Short sellers have been targeting this online luxury products retailer amid concerns over the authenticity of products on its website. However, Cettire has refuted these allegations and stated: “Since commercial launch in 2017, Cettire has handled more than 2 million individual orders. There is not a single confirmed case of a non-genuine item being sold on Cettire’s platform.”

Neuren Pharmaceuticals Ltd (ASX: NEU)

The Neuren Pharmaceuticals share price is down 10% to $20.73. This may have been driven by profit taking from some investors after a very strong gain. For example, prior to today’s decline, the pharmaceutical company’s shares were up 20% since the start of the month. Investors have been buying Neuren’s shares following the release of top-line results from its phase 2 clinical trial of NNZ-2591 in children with Pitt Hopkins syndrome (PTHS). That study delivered a “statistically significant improvement” across all four efficacy measures.

Peter Warren Automotive Holdings Ltd (ASX: PWR)

The Peter Warren Automotive Holdings share price is down a further 3.5% to $1.80. Investors have been selling the automotive retailer’s shares this week after it released disappointing earnings guidance. Peter Warren advised that while revenue has continued to grow, it now expects its underlying profit before tax for FY 2024 to be in the range of $52 million to $57 million. Management notes that this is lower than market expectations and has been driven by a significant increase in vehicle supply, which has led to greater competition between dealerships and lower gross profit margins on new vehicles. In response, Citi downgraded its shares to a sell rating with a reduced price target of $1.70.

Qantas Airways Limited (ASX: QAN)

The Qantas share price is down 3% to $5.88. This may have been driven by concerns that higher than expected inflation will either lead to further rate increases or interest rates staying higher for longer. Both could have meaningful implications for consumer spending on travel. According to the Australian Bureau of Statistics, the headline CPI indicator rose 3.6% in the 12 months to April. This was notably higher than the market was expecting.

The post Why Cettire, Neuren, Peter Warren, and Qantas shares are falling today 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Cettire. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Cleo Diagnostics Ltd (ASX: COV) shares are catching the eye of investors on Wednesday.

The Australian share market may be a sea of red following a hotter than expected inflation reading, but that has not stopped this ASX micro-cap stock from rocketing.

At the time of writing, the ovarian cancer diagnostics company’s shares are up an impressive 50% to 25.5 cents.

Why is this ASX micro-cap stock rocketing?

Investors have been fighting to get hold of Cleo Diagnostics’ shares today after it announced the publication of a milestone article on its blood test for the accurate and early detection of ovarian cancer.

According to the release, the article was published in peer reviewed medical journal, Cancers.

The benchmarking study compared the ASX micro-cap stock’s ovarian cancer blood test against the current standard clinical workflows that use CA125 and ultrasound to predict malignancy.

The great news for the company was that outcomes of the study clearly demonstrate that its ovarian cancer blood test is far superior to all routine clinical tools used by doctors to predict the diagnosis of an adnexal mass prior to surgery.

Importantly, Cleo Diagnostics’ test correctly detected 90% of early-stage cancers compared to only 50% using current standard of care workflows of CA125 and ultrasound.

Management believes that this clinical evidence supports its commercial pathway. It notes that it is now focusing on a number of initiatives in parallel that will deliver appropriate routes to adoption of its tests following regulatory approval and market launch.

If everything goes to plan, this ovarian cancer blood test could be a real cash cow for the ASX micro-cap stock. It highlights that despite its poor performance, CA125 is exclusively recommended in medical guidelines, and represents a $1 billion+ market with an estimated compound annual growth rate of ~4%.

Commenting on the study, Cleo Diagnostics Chief Executive, Richard Allman, said:

Our peer-reviewed publication strategy is delivering gold-standard clinical evidence which is vitally important as we begin to engage with potential early adopters of our technology. Having demonstrated now that the CLEO ovarian cancer blood test is far superior to CA125 and ultrasound in our initial pre-surgical triage market, we open up new dialogue with physicians to consider the potential material benefits that CLEO brings for their patients. More broadly, these encouraging results on early-stage cancer detection provide impetus for us to progress the development of CLEO’s screening test for ovarian cancer.

The post ASX micro-cap stock rockets 50% on ovarian cancer blood test news appeared first on The Motley Fool Australia.

More reading

• Why Cettire, Neuren, Peter Warren, and Qantas shares are falling today
• Up 20% in 2024, why this ASX 200 healthcare stock just hit a new 52-week high
• Record highs! Is it too late to buy the Nasdaq 100 (NDQ) ETF on the ASX?
• Why did the ASX 200 just plunge on the latest Aussie inflation print?
• Why the CBA share price is predicted to ‘fall substantially’: broker

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 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.

It’s been a horrid day for the S&P/ASX 200 Index (ASX: XJO) and most ASX shares so far this Wednesday. At the time of writing, the ASX 200 has shed a hefty 1.25%, pulling it back under 7,700 points. But let’s talk about one ASX 200 healthcare stock that is defying the markets today to decisively push higher.

That ASX 200 healthcare stock is none other than Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH). Fisher & Paykel shares closed at $25.45 each yesterday evening. But this morning, those same shares opened at $26.55 and are currently sitting at $26.58, up a rosy 4.44% for the day thus far.

It was even better for Fisher & Paykel earlier this morning too. Just before midday, this ASX 200 healthcare stock hit a new 52-week high of $27.50 a share.

Today’s gains (and new 52-week high) are just the latest push higher from Fisher & Paykel though. At current pricing, this healthcare stock is now up a happy 20.5% over 2024 to date, as well as up 16.7% over the past 12 months.

So what on earth is behind this run, and new 52-week high, for Fisher & Paykel Healthcare today?

Why has this ASX 200 healthcare stock just hit a new 52-week high?

Well, the latter first. Today’s fresh 52-week high appears to be a direct result of the earnings report that Fisher & Paykel posted this morning before market open.

This report revealed that Fisher & Paykel enjoyed revenues of NZ$1.74 billion over the full year ending 31 March 2024, a 10% rise over the previous financial year.

That helped the ASX 200 healthcare stock deliver an underlying net profit after tax (NPAT) of NZ$264.4 million, up 6% over last year. This rise was assisted by a boost in Fisher & Paykel’s gross margins, which rose 2.16% up to 61.1%.

These results allowed Fisher & Paykel to reveal a 10 July dividend worth 23.5 cents per share. This brings the ASX 200 healthcare stock’s full-year dividend to 41.5 cents per share, a 2% rise over FY2023.

Here’s some of what Fisher & Paykel CEO Lewis Gradon had to say about these results:

After several years of changing demand patterns, we are pleased to have returned to a trajectory of growth. All the right foundations are in place for future success – we have an impressive portfolio of products, strong relationships with our customers and the right infrastructure to meet our future needs…

With a fifty-year track record, we are building on strong foundations. Looking ahead, we are
determined to keep bringing to market new solutions that deliver better outcomes for patients and
sustainable, profitable growth for our shareholders.

Fisher & Paykel also discussed the company’s guidance for the 2025 financial year. The healthcare company expects to bring in between NZ$1.9 billion and NZ$2 billion in revenues, with a net profit after tax in the range of NZ$310 million and NZ$360 million.

So Fisher & Paykel’s strong 2024 runup is continuing today in light of these results. But investors have been bidding up this ASX 200 healthcare stock for a while now. The company took off after a guidance update for today’s results back in March.

As we covered at the time, this guidance told investors to expect revenues for the 12 months to 31 March of approximately NZ$1.7 billion, and a net profit after tax of between NZ$250 million and NZ$260 million. So Fisher & Paykel has obviously delivered on this guidance today.

It’s clear investors are appreciating these numbers, judging from the reaction of the Fisher & Paykel stock price. Let’s see if today’s new 52-week high is the last one for this ASX 200 healthcare stock in 2024.

The post Up 20% in 2024, why this ASX 200 healthcare stock just hit a new 52-week high appeared first on The Motley Fool Australia.

More reading

• Why Cettire, Neuren, Peter Warren, and Qantas shares are falling today
• ASX micro-cap stock rockets 50% on ovarian cancer blood test news
• Record highs! Is it too late to buy the Nasdaq 100 (NDQ) ETF on the ASX?
• Why did the ASX 200 just plunge on the latest Aussie inflation print?
• Why the CBA share price is predicted to ‘fall substantially’: broker

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.