Category: Stock Market

The Woodside Energy Group Ltd (ASX: WDS) share price dipped in late afternoon trading to close 3.01% lower at $30.24.

This is the lowest price that the oil and gas giant has traded at since mid-December.

The move appears to have been triggered by an announcement released 23 minutes before the market close detailing some major financial news.

Let’s look into the details.

Woodside share price dips on US$1.5 billion impairment

Woodside released its Reserves Statement and financial updates revealing an approximate collective US$1.5 billion (A$2.31 billion) impairment.

The company said its 2023 full-year financial statements were expected to recognise non-cash post-tax asset impairments of approximately US$1.5 billion.

This includes approximately $1.2 billion for the Shenzi Joint Venture.

Woodside said it was primarily related to goodwill and a portion of the purchase price assigned to Shenzi on completion of the merger with the petroleum division of BHP Group Ltd (ASX: BHP).

The Shenzi JV is located in the Shenzi conventional oil and gas field, approximately 195km off the coast of Louisiana in the Green Canyon protraction area of the Gulf of Mexico.

In a statement, Woodside said:

The goodwill and purchase price allocation resulted from application of acquisition accounting principles and reflect both higher hydrocarbon prices and Woodside’s share price at the merger completion date.

Goodwill is not amortised and, once impaired, is not subject to a future impairment reversal. For reference, Shenzi represented approximately 5% of 2023 production and approximately 2% of 2023 year-end proved plus probable reserves.

As part of the total US$1.5 billion impairment, the 2023 full-year statements will also recognise a non-cash post-tax impairment of approximately $300 million for the Wheatstone Project in Western Australia.

Woodside says this is mainly related to short-term pricing.

The company will exclude the impairment when it calculates the final dividend, as per previous practice.

Oil and gas reserves update

Woodside also announced that it added 266 MMboe of ‘proved’ oil and gas reserves in 2023, replacing 132% of production.

With ‘probable’ reserves added, the total goes up to 318 MMboe, replacing 158% of production.

Woodside said its proved reserves’ life is 12.2 years based on 2023 production levels. This puts it in the top benchmark quartile of global peers.

Woodside CEO Meg O’Neill said this reserves update reflected Woodside’s larger portfolio following the BHP merger.

O’Neill said:

Woodside has delivered strong operational performance over the past 12 months. We achieved record production in 2023, while progressing a world-class funnel of development opportunities, which have us well positioned for growth and returns.

Our success in integrating the strategic merger with BHP Petroleum, combined with our ability to advance major projects and improve performance has delivered a high-quality resource base that enjoys top quartile reserves life.

Woodside share price snapshot

The Woodside share price is down 13.6% over the past 12 months.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 2.6% over the same period.

The post Woodside share price dips to two-month low upon late news announcement appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• 5 things to watch on the ASX 200 on Thursday
• How are Woodside shares avoiding the market selloff today?
• 5 things to watch on the ASX 200 on Wednesday
• How another acquisition could boost Woodside shares following the collapse of the Santos deal

Motley Fool contributor Bronwyn Allen has positions in BHP Group and Woodside Energy Group. 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 post Here are the top 10 ASX 200 shares today appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• What can Wesfarmers’ results tell us about the future of ASX lithium shares?
• How have Sayona Mining shares risen 25% in just 2 days?
• 2 ASX 200 real estate shares leaping higher on earnings news
• Why Altium, Goodman, Magellan, and Wesfarmers shares are storming higher today

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Goodman Group, Life360, Wesfarmers, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Wesfarmers, WiseTech Global, and Xero. The Motley Fool Australia has recommended Goodman Group. 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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National Australia Bank Ltd (ASX: NAB) shares will be in focus next week.

That’s because the big four bank is scheduled to release its first quarter update before the market open on 21 February.

Ahead of the release, let’s take a look to see what the market is expecting from NAB.

NAB first quarter preview

With NAB shares trading within a whisker of a 52-week high, you might think that expectations are high going into this update.

Though, that’s not necessarily the case.

As a reminder, a year ago, NAB released its quarterly update and revealed cash earnings of $2.15 billion.

The market isn’t expecting a result anywhere near that level next week.

For example, according to a note out of Citi, its analysts are expecting NAB to report cash earnings of $1.8 billion for the three months. This represents a year on year decline of approximately 16%.

In addition, it worth noting that Citi’s estimate is actually 4% ahead of the consensus estimate for cash earnings of $1.73 billion.

Citi is expecting the bank to outperform expectations thanks largely to lower than expected bad and doubtful debts. Its analysts believe the market is being too negative on its credit quality assumptions.

The broker also believes that NAB’s net interest margin will be stronger than expected and that its CET1 ratio will only ease to 11.9% from 12.2% at the end of June.

Interestingly, despite the above, the broker has reiterated its sell rating and $25.75 price target on the bank’s shares. This implies almost 22% downside for NAB shares over the next 12 months.

The post Own NAB shares? Here’s how much profit to expect in Q1 appeared first on The Motley Fool Australia.

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More reading

• Which ASX 200 large-cap shares offer the best dividend yields in 2024?
• Big news: 15 ASX 200 shares smashing 52-week highs this Tuesday
• Transform $50 into monthly income: The best ASX dividend stocks under $50
• 3 top ASX bank shares hit 52-week highs today: Is there still value to be found?
• What is the outlook for NAB shares under new CEO Irvine?

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 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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a 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:

AMP Ltd (ASX: AMP)

According to a note out of Citi, its analysts have upgraded this financial services company’s shares to a buy rating with an improved price target of $1.25. This follows the release of the company’s FY 2023 results. The broker highlights that the company is making strides with its cost reductions and expects this to boost its earnings in the near term. The AMP share price is trading at $1.12.

Computershare Ltd (ASX: CPU)

Another note out of Citi reveals that its analysts have retained their buy rating on this administration services company’s shares with an improved price target of $30.00. The broker was pleased with Computershare’s performance in the first half, noting that its earnings before interest and tax coming in a touch ahead of expectations. It remains upbeat on its earnings growth prospects over the medium term. The Computershare share price is fetching $25.99 today.

CSL Ltd (ASX: CSL)

Analysts at Morgans have retained their add rating on this biotechnology giant’s shares with a trimmed price target of $315.40. This follows the release of a solid half-year result which saw earnings come in ahead of consensus expectations. Morgans was pleased with the result and particularly the performance of the key CSL Behring business. And while it has trimmed its valuation to reflect the disappointing CSL112 trial failure, it still sees plenty of value on offer here. The CSL share price is trading at $283.25 on Thursday.

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

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More reading

• Here are the top 10 ASX 200 shares today
• Why AMP, Core Lithium, Downer EDI, and IDP Education shares are racing higher
• Looking for passive income? This ASX All Ords stock just boosted its dividend by 33%!
• AMP share price rockets 10% amid 2023 earnings boost
• 5 things to watch on the ASX 200 on Wednesday

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL. The Motley Fool Australia has recommended CSL. 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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With interest rates as high as they are and the best savings accounts delivering 5.75% returns, ASX dividends are on investors’ minds this year.

The ASX 200 bank shares and mining shares are well-known for delivering some of the highest dividend yields in the market year after year.

But if you do some digging, you’ll find other great dividend payers in other market sectors.

Typically, the companies that will pay you the best dividend yields are the ASX 200 large-cap shares.

With a minimum market capitalisation of $10 billion, these are the biggest companies on the market. Most of them have been operating for decades, bringing in sustainably strong earnings every year.

Let’s look at which ASX 200 large-cap shares are trading on the highest trailing dividend yields today.

Woodside is the best ASX dividend payer

The best payers of the ASX 200 large-cap shares today, based on trailing dividend yields, are:

ASX 200 LARGE-CAP SHARE	ASX DIVIDEND YIELD	PAID PER SHARE
Woodside Energy Group Ltd (ASX: WDS)	11.1%	$3.40
Pilbara Minerals Ltd (ASX: PLS)	7.14%	25 cents
APA Group (ASX: APA)	6.86%	55.5 cents
Fortescue Metals Group Ltd (ASX: FMG)	6.27%	$1.75
ANZ Group Holdings Ltd (ASX: ANZ)	6.21%	$1.75
Westpac Banking Corp (ASX: WBC)	5.82%	$1.42
BHP Group Ltd (ASX: BHP)	5.81%	$2.61
National Australia Bank Ltd (ASX: NAB)	5.08%	$1.67
Santos Ltd (ASX: STO)	4.88%	35.76 cents
Transurban Group (ASX: TCL)	4.77%	61.5 cents
Telstra Group Ltd (ASX: TLS)	4.36%	17 cents
South32 Ltd (ASX: S32)	4.15%	12.31 cents

A word of warning on trailing dividend yields

If you’re using this data to research ASX dividend shares, just remember that trailing dividend yields represent last year’s earnings as a percentage of today’s share price.

Next year’s earnings may be much lower (or higher).

This is particularly the case with mining stocks, oil shares and any other stock associated with commodities.

These companies negotiate the sale prices for their products based in large part on the going global market commodity price at the time.

Commodity prices are entirely out of these companies’ hands. When they’re high, mining and oil shares are likely to earn more and pay higher dividends. When they’re low, the reverse happens.

Conversely, large non-commodity companies producing the same services or products year after year may have limited room for growth, and hence they may deliver very stable earnings and dividends.

Here are some examples showing why you need to bear all this in mind when researching dividend yields on ASX stocks.

ASX dividend case studies

Woodside shares

ASX oil & gas giant Woodside is shown here as the top payer because its trailing dividend amount (i.e, the annual dividend amount paid in 2023) was $3.40 per share.

The Woodside share price is currently $30.64, so we get a trailing dividend yield of 11.1%.

But global oil and gas commodity prices have been fluctuating pretty wildly, and the consensus forecast among analysts on CommSec is that Woodside will pay nowhere near as much in dividends this year.

The analysts are currently forecasting a 2024 annual dividend of $1.62, which would equate to a 5.28% yield. That’s more than a 50% reduction in yield compared to 2023.

Pilbara Minerals shares

The 2024 dividend forecast is far worse for this ASX lithium share, following an 80% plunge in the lithium price in 2023.

The company has already flagged that it is unlikely to pay any dividend at all for 1H FY24.

Let’s compare these two commodity-related stocks to one of the Big Four banks.

ANZ stocks

Our biggest payer among financial stocks listed above, based on trailing dividend yields, is ANZ shares.

In 2023, ANZ paid $1.75 per share in dividends. The consensus forecast on CommSec is for ANZ shares to pay $1.62 per share in 2024, the same in 2025, and $1.625 in 2026.

The dividend is pretty stable because ANZ is a big, mature business delivering reliable annual earnings.

On top of that, the ANZ share price doesn’t move much over time (except during major bull runs and market crashes when all stock prices move significantly), so dividend yields stay pretty even.

The 20-year chart of ANZ shares and dividends below shows this.

Why choose ASX shares over simple savings?

Five of our top 12 ASX dividend stocks listed above will pay less than the best interest rate on savings accounts today, which is 5.75%, according to RateCity.

So, why would you buy ASX shares instead of investing cash in a simple risk-free savings account?

There are two key reasons:

1. ASX shares offer the possibility of capital growth as well as yield. Savings only pay a yield.
2. Dividends paid by many ASX 200 large-cap shares carry franking credits, which reduce an investor’s tax liability. There are no tax breaks on interest earnings.

We recently published a team post, Top ASX shares to buy in 2024 instead of investing in a term deposit.

The post Which ASX 200 large-cap shares offer the best dividend yields in 2024? appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the Telstra dividend
• Why BHP, IDP Education, Pro Medicus, and Whitehaven Coal shares are dropping
• South32 share price lifts off as ASX 200 miner greenlights US$2.2 billion project
• Telstra shares tumble on half-year disappointment
• BHP shares fall on multi-billion profit hit from nickel and Samarco

Motley Fool contributor Bronwyn Allen has positions in Anz Group, BHP Group, South32, Westpac Banking Corporation, and Woodside Energy Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Transurban Group. The Motley Fool Australia has positions in and has recommended Apa Group and Telstra Group. 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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Miners are mothballing projects left, right, and centre. An oversupply of commodities common in batteries, namely electric vehicles (EVs), has left mining monsters stumbling. Arguably, none more afflicted than ASX lithium shares.

One begins to wonder whether the good times for the industry are 10 miles back in a ditch. On the other hand, could the supply and demand dynamics be nearing a favourable shift? It’s impossible to know for sure.

However, Wesfarmers Ltd (ASX: WES) CEO Rob Scott has shed some light on the path for the critical electrifying material today.

‘Nothing has really changed’

Australia’s retailing powerhouse, Wesfarmers, unwrapped its first-half figures for the market to admire this morning — and admire it has. Shares in the Bunnings, Kmart, and Officeworks owner are up 5% to $61.84 per share in afternoon trading.

While known for its gargantuan presence in retail, Wesfarmers also operates a chemicals business under the WesCEF banner. Under this umbrella lies Wesfarmers’ 50% stake in Covalent Lithium, which is in a joint venture for the Mt Holland project in Western Australia.

Details on lithium in the presentation were limited. The Mt Holland concentrator is expected to produce its first spodumene concentrate sometime between now and the end of June. From there, the company already has offtake arrangements in place with ‘tier-one auto and battery customers’.

But that doesn’t give us much insight into the lithium sector as a whole. Fortunately, Rob Scott shared more details with the media published in The Australian Financial Review. Providing commentary on the downtrodden lithium market, Scott professed:

Notwithstanding the volatility we’ve seen in recent months, nothing has really changed as far as we’re concerned.

Expanding upon this, the Wesfarmers’ CEO articulated:

What often happens is that, given the strong demand that we are seeing in lithium, there could well be shortages of supply in the years ahead.

#Lithium carbonate production insights from China in Jan/Feb 2024.

February production is expected to fall to 32kt from 42kt in January. representing a month-on-month (MoM) decline of 23%.

This is due to CNY holidays and “a subsequent period of concentrated maintenance,… pic.twitter.com/xza0eE73jB

— ᴀᴍᴀʟ ɪʟʟᴇꜱɪɴɢʜᴇ (@mineralsmindset) February 13, 2024

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Data from Macquarie points to lithium inventory in China experiencing its first decline last month since October 2023. Conversely, cathode and electrolyte demand is said to have jumped 7%. These two factors worked in tandem to reduce the estimated lithium surplus.

Costs are key for ASX lithium shares

If there is a takeaway for the lithium sector from Wesfarmers today, it’s arguably all about costs.

In recent months, Aussie lithium companies have decided to reduce or suspend production as costs rise above revenue. One such example is Core Lithium Ltd (ASX: CXO), which saw its share price gutted to the tune of 21% after announcing a curbing of production.

The difficult decision highlights the advantage of low-cost miners in this environment, as explained by Scott, stating:

We feel that the dynamics are still very strong for our project and indeed for many who produce by having low-cost structures, reliable production, and hopefully by getting our hydroxide plant working, that will provide another opportunity to capture additional margin and upside within the lithium value chain.

Lithium carbonate prices have tracked sideways since December, holding around CNY$97,500 per tonne.

The post What can Wesfarmers’ results tell us about the future of ASX lithium shares? appeared first on The Motley Fool Australia.

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More reading

• Why Altium, Goodman, Magellan, and Wesfarmers shares are storming higher today
• Wesfarmers share price pops 5% to new high after dividend hike
• Wesfarmers share price on watch amid stellar first-half Kmart growth
• Beginners: Here are 2 ASX dividend stocks to get your portfolio started!
• Are Wesfarmers shares a good long-term buy?

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 positions in and has recommended Wesfarmers. The Motley Fool Australia has positions in and has recommended Wesfarmers. 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) has had two highly volatile trading days. Yesterday saw the ASX 200 shed a depressing 0.74%. But today thus far, the ASX 200 has piled back on with a rise of 0.73% at the time of writing. But let’s talk about the Sayona Mining Ltd (ASX: SYA) share price.

If you think the ASX 200 has been volatile, wait until you see what the Sayona share price has been up to. This ASX 200 lithium stock has gained an extraordinary 25% over just the past two trading days. Yep, Tuesday saw Sayona shares close at just 4 cents each.

But by market close yesterday, those same shares were up to 4.5 cents apiece. Today, the gains have just kept on coming, with Sayona adding an additional 13.3% to 5.1 cents.

So what on earth is going on with this embattled lithium stock this week?

How has the Sayona share price managed a 27% rise in two days?

Well, unfortunately, it’s a bit of a mystery. Sayona’s stunning share price rises have come out of the blue, for want of a better phrase.

We did get an ASX announcement from the company this morning. But that just announced that Lucas Dow has been appointed to Sayona’s board as an independent non-executive director. Hardly the sort of stuff that sees a company add a third to its valuation over two trading days.

Before this announcement, Sayona’s last ASX release was the 31 January quarterly cash flow report, which had a negative impact on the company’s shares at the time.

However, it’s not just Sayona that has vaulted dramatically higher in value this week. Core Lithium Ltd (ASX: CXO) shares have bounced by more than 11% since Tuesday’s trading. Saying that, other lithium stocks like Pilbara Minerals Ltd (ASX: PLS) and Arcadium Lithium plc (ASX: LTM) have gone backwards.

In Sayona and Core Lithium’s case, we could be seeing a bit of a short squeeze going on. As my Fool colleague James reported on Monday, both Core and Sayona remain on the list of the ASX’s most short-sold shares.

Perhaps yesterday’s rally has triggered a round of short sellers closing their positions, which in turn would have forced up both companies’ share prices even further, and spurred more short sellers to close.

Whatever the reason, it’s certainly been a good two days to own Sayona Mining shares.

Even with these gains though, the Sayona share price still remains down by more than 77% over the past 12 months.

The post How have Sayona Mining shares risen 25% in just 2 days? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• Why Block, Resolute Mining, Sayona Mining, and Syrah shares are sinking today
• Sayona Mining share price crashes 12% as weak lithium prices start to bite

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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Telstra Group Ltd (ASX: TLS) shares are a popular option for income investors.

Particularly in recent times after the telco giant’s earnings and dividend returned to growth.

The good news for shareholders is that this positive trend has continued on Thursday, with the company releasing its half-year results and delivering further growth.

What’s the latest Telstra dividend?

In case you missed it, this morning Telstra reported a 1.2% increase in total income to $11,700 million and a 3.1% lift in underlying EBITDA to $4,001 million.

This was driven largely by its mobile business, which offset weakness across mobile hardware, Fixed C&SB, Fixed Enterprise, and Fixed Active Wholesale.

While this result was a touch short of expectations, it didn’t stop the Telstra board from increasing its dividend for the first half of FY 2024.

The company increased its fully franked interim dividend by 5.9% to 9 cents per share. Management notes that this is consistent with its capital management framework to maximise the fully franked dividend and seek to grow it over time.

When is pay day?

If you want to receive the next Telstra dividend, you will need to own the company’s shares before they trade ex-dividend on 28 February.

If you’re not on its share register before the market open on that day, you won’t be entitled to receive this payout when it is distributed to shareholders.

Speaking of which, Telstra is scheduled to pay the 9 cents per share fully franked interim dividend on 28 March.

Based on its current share price, this single dividend equates to an attractive 2.3% dividend yield.

And if it were to repeat this dividend in August with its full year results, you will be looking at a 12-month yield of 4.6%.

The post Everything you need to know about the Telstra dividend appeared first on The Motley Fool Australia.

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More reading

• Telstra shares tumble on half-year disappointment
• Telstra share price on watch amid earnings miss and guidance revision
• 5 things to watch on the ASX 200 on Thursday
• How does investing in a term deposit compare with buying ASX shares?
• Forget Westpac and buy these top ASX dividend stocks

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 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.

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ASX 200 tech stock Data#3 Limited (ASX: DTL) is floundering on Thursday, down 10.79% to $8.73.

The drop follows the release of the business technology solutions company’s 1H FY24 report.

It was only two days ago that the ASX 200 tech stock reached a new record high share price of $10.01.

Today, it is the biggest faller of the ASX 200.

Let’s take a look at the report.

ASX 200 tech stock tumbles on Thursday

Here are the highlights for the six months ended 31 December 2023:

• Gross sales up 13.4% to $1.3 billion
• Statutory revenue up 11.1% to $450.1 million
• Net profit before tax up 25.3% to $30.8 million
• Net profit after tax (NPAT) up 25.5% to $21.4 million
• Basic earnings per share (EPS) up 25.5% to 13.85 cents per share
• Interim dividend up 26% to 12.6 cents per share, fully franked, and payable 28 March

What did Data#3 management say?

CEO Laurence Baynham said:

The record result reflects good contributions across most of our business units and regions, with company Gross Sales growth over double industry growth rates.

Our Services and Software Solutions businesses performed ahead of expectations, with 67% of Gross Sales now recurring.

Although our Infrastructure Solutions business was up on the prior period, it was impacted by customers previously ordering in advance of requirements, in response to pandemic related supply chain issues.

This slowed down ordering and decision making in the current period. Improved supply chain conditions reduced our stock levels, and our diligent management of working capital enabled us to benefit from increased interest income of $6.5 million.

What’s next for Data#3?

Baynham said the company expected digital transformation and artificial intelligence to play a key role in Australia’s economic future.

The company did not offer full-year FY24 guidance but said its goal was to deliver sustainable earnings growth.

Baynham will retire from his role after 30 years with the company on 1 March. He is undertaking a four-month transition process to ensure a smooth handing over of the reins to new CEO Brad Colledge.

ASX 200 tech stock price snapshot

The #Data3 share price is up 17.7% over the past 12 months.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 3.4% over the same period.

The post ASX 200 tech stock down 11% despite record half-year profit appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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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Lovisa Holdings Ltd (ASX: LOV) shares will have a moment in the spotlight when the company reports its FY24 half-year result. I’m going to look at what the company might report.

It’s scheduled to release its results on 22 February 2024.

It has already been a promising reporting season with some retailers like Nick Scali Limited (ASX: NCK) and Temple & Webster Group Ltd (ASX: TPW) beating expectations.

Store growth and recent trading

Lovisa has an increasingly global presence, as it’s expanding into new markets regularly. Performance won’t necessarily be consistent across the board – for example, the Australian and UK stores may have performed differently.

Lovisa recently revealed that it was going to enter imminently into mainland China and Vietnam, so we might hear about its early performance in those two regions.

The latest we heard about the overall trading performance was announced on 22 November 2023 – it said global comparable store sales for the first 20 weeks of FY24 were down 6.2% year to date, but total sales were up 17% thanks to ongoing store network growth. It said at the time it had opened 35 net new stores for FY24 to date. It had 836 stores across 40 markets – that was 160 more stores and 14 additional markets more than 12 months prior.

What could Lovisa report?

Broker UBS recently decided to reduce its rating on Lovisa shares to neutral, following recent data suggesting slowing store growth compared to the first half and second half of FY23. It’s seeing a slowing pace within key shopping centres, which was a major source of growth in FY23. The slowing net new store growth “removes a key revenue driver”.

UBS warned that a slowdown of like-for-like (comparable) sales increases the risk of markdowns and operating de-leverage risk, especially as labour and rental costs are forecast to rise.  

While UBS doesn’t think FY23 revenue growth can be continued in FY24, UBS is forecasting double-digit revenue growth until FY32. The broker also doesn’t think the earnings before interest and tax (EBIT) margin can increase in FY24, but it does expect growth in FY25.

Looking at the full 2024 financial year estimates – a retailer’s annual performance isn’t just based on one half – UBS thinks Lovisa can grow earnings per share (EPS) by just over 10% to 71 cents and grow revenue by 18.5%. The annual dividend per share is projected by UBS to increase by 4.3% to 69 cents.

Lovisa share price snapshot

Using that earnings estimate, Lovisa shares are valued at 36x FY24’s estimated earnings. Since the end of November 2023, the Lovisa share price has climbed around 33%.

The post Own Lovisa shares? Here’s the results preview you need to see appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Lovisa and Temple & Webster Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Lovisa and Temple & Webster Group. The Motley Fool Australia has recommended Lovisa, Nick Scali, and Temple & Webster Group. 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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