Category: Stock Market

Fans of ASX coal shares might have woken up optimistic today. But any hopes of Thursday gains have since turned sour.

The market’s leading coal producers are each trading deep in the red right now despite a deluge of outwardly impressive earnings. Here’s how they’re trading:

• Shares in Whitehaven Coal Ltd (ASX: WHC) are currently down 2.9% at $7.95
• Those in New Hope Corporation Limited (ASX: NHC) have dumped 4% to trade at $5.50
• Stock in Yancoal Australia Ltd (ASX: YAL) has fallen 2.6% to reach $5.62

And the NSW Government is likely behind at least some of their downturns.

Let’s take a closer look at what seems to be going wrong for ASX coal shares on Thursday.

Right now, the S&P/ASX 200 Index (ASX: XJO) is up 0.8% while the All Ordinaries Index (ASX: XAO) has gained 0.83%.

ASX 200 energy giants post earnings

Let’s start at the beginning.

Whitehaven kicked off the coal-related news today, posting its earnings for the first half of financial year 2023. The company posted $3.8 billion of revenue for the period and quadrupled its interim dividend to 32 cents per share.

That was followed by New Hope’s quarterly activities report, released shortly after the market opened. It revealed it expects to deliver $1 billion of earnings before interest, tax, depreciation, and amortisation (EBITDA) for the first half but noted a slump in both coal production and sales.

ASX coal shares fall as companies respond to NSW policy

Come midday, however, other news was catching the market’s attention.

The Yancoal share price tumbled after it warned investors to “exercise caution in dealing in [its] shares” after it received advice on the NSW Government’s intended price cap and coal reservation policy.

The policy will be in effect from 1 April 2023 until 30 June 2024 and will see producers forced to put aside a portion of production to sell to domestic power generators. In Yancoal’s case, that portion would be up to 395,000 tonnes of coal each quarter.

The coal put aside would then be subject to a price cap of $125 a tonne for 5,500 kilocalorie coal, energy adjusted. For comparison, Whitehaven achieved an average coal price of $553 a tonne last half.

Treasurer and Minister for Energy Matt Kean commented on the change, also announced by the government today, saying:

Where possible, coal mines will be required to provide power stations with the amount of coal they have supplied in the past, and export-focused mines will be required to provide additional coal needed to meet any difference.

Yancoal said the government confirmed producers won’t be compensated for the difference between market rates and the capped price.

Though, it noted compensation may be available under some circumstances, such as if costs exceeded the capped price. The government says producers can apply for a higher price cap if the proposed cap doesn’t cover costs.

Whitehaven also updated the market on the changes, saying it would be compelled to put the lower of 200,000 tonnes or 5% of each of its mines’ expected saleable thermal coal production towards the scheme, unless volumes were under contract prior to 19 January.

New Hope also addressed the changes in its quarterly report, saying its 80% owned Bengalla operation won’t be impacted by the price cap until the first quarter of 2024 due to existing contracts.

The post What’s going so wrong for ASX coal shares today? appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Thursday
• New Hope share price tumbles 6% despite surge in earnings
• Why AMP, Evolution, Perenti, and Whitehaven Coal shares are dropping
• Everything you need to know about the monster Whitehaven dividend
• Whitehaven Coal share price sinks despite 423% profit jump

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 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 love is back on for the S&P/ASX 200 Index (ASX: XJO) this Thursday! After experiencing some post-Valentine’s Day blues yesterday, the ASX 200 is back in the green so far this session.

At the time of writing, the Index has recorded a healthy gain of 0.82%, which has dragged the ASX 200 back up to over 7,410 points once more.

So time now to dig a little deeper into these share price rises by taking stock of the ASX 200 shares that are topping the share market’s trading volume charts right now, according to investing.com.

The 3 most traded ASX 200 shares by volume this Thursday

Sayona Mining Ltd (ASX: SYA)

Our first share worth a look at this Thursday is the ASX 200 lithium stock Syaona mining. So far today, a notable 25.47 million Sayona shares have changed brokerage accounts. We haven’t seen any fresh news out of Sayona itself this session.

So this volume looks like a consequence of the eye-catching rises we have seen in the Sayona share price. At present, Sayona has gained a pleasing 3.3% to 22.2 cents a share, but rose as high as 23 cents earlier this morning (up more than 5.5%).

With gains like these, no wonder so many shares have been flying around.

Whitehaven Coal Ltd (ASX: WHC)

Next up we have the ASX 200 coal miner Whitehaven. Today’s trading session has seen a hefty 27.32 million Whitehaven shares change hands as it currently stands. Whitehaven is seeing a bit of a different situation to Sayona today.

The ASX 200 energy giant has lost a nasty 3% over today’s trading to the current price of $7.94 a share. It fell as low as $7.17 today, a drop of 12.5%. This comes after the company posted its latest half-year results this morning. Investors don’t seem impressed, despite the company posting a whopping 423% rise in after-tax profits.

AMP Ltd (ASX: AMP)

Finally this Thursday, let’s take a squiz at ASX 200 financial services stalwart AMP. AMP has had a sizeable 36.9 million of its shares bought and sold on the markets thus far. And it looks like another share price casualty after earnings that is to blame here.

The AMP share price has cratered today. The company is currently down a horrendous 14.35% at $1.12 a share, which is almost certainly why AMP is topping our most-traded share list today. 

Again, it seems investors did not appreciate AMP’s earnings report this morning. The company announced that its underlying after-tax profits had fallen by 34% to $184 million. In a spot of good news though, the company has returned to paying dividends to shareholders.

The post Here are the 3 most heavily traded ASX 200 shares on Thursday appeared first on The Motley Fool Australia.

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More reading

• The AMP dividend is back! Here’s what you need to know
• Why AMP, Evolution, Perenti, and Whitehaven Coal shares are dropping
• 2 ASX 200 shares soaring over 9% on strong results
• AMP share price dives 12% on earnings miss
• Everything you need to know about the monster Whitehaven dividend

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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If you’re looking for some exposure to the mining sector for your portfolio, then one ASX 200 mining share to buy could be Chalice Mining Ltd (ASX: CHN).

That’s the view of analysts at Bell Potter, which are very bullish on the mineral exploration company.

Why is this an ASX 200 mining share to buy?

Bell Potter is very positive on Chalice Mining due to its Julimar project in Western Australia and the globally significant PGE-NiCu deposit found within. This gives the miner exposure to highly sought critical minerals in one of the world’s top mining jurisdictions. The broker commented:

CHN’s 100%-owned Julimar project is a globally significant PGE-NiCu deposit. Located 70km north of Perth in WA, it represents a unique opportunity to establish new strategic PGE and base metals supply in a top mining jurisdiction.

Bell Potter also highlights that Chalice Mining’s minerals feature on the United States’ critical minerals lists. It added:

This is reinforced by the inclusion of PGE’s nickel and cobalt on Australia’s and the USA’s critical minerals lists, due to their role in the lithium-ion battery and hydrogen fuel cell production value chain and Russia’s market dominance. Exploration and project development updates in 2022 have reinforced the upside at the Gonneville deposit, and the Julimar project.

Major upside potential

According to the note, the broker has a speculative buy rating and $11.73 price target on the ASX 200 mining company’s shares.

Based on the current Chalice Mining share price of $6.19, this implies potential upside of almost 90% for investors over the next 12 months.

However, with a speculative rating in the mining sector, this is likely to be an investment option that is only suitable for investors with a high tolerance for risk.

The post This ASX 200 mining share has 90% upside: broker appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Here are the top 10 ASX 200 shares today
• These are the best ASX mining shares to buy in 2023: experts

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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It’s been a fantastic day for the S&P/ASX 200 Index (ASX: XJO) so far this Thursday. At present, the ASX 200 has shrugged off yesterday’s gloom and has rallied by 0.79% to back over 7,400 points. But ASX 200 tech stocks like Xero Limited (ASX: XRO) are having an even wilder party.

ASX 200 tech shares are on fire today, making the broader market’s gains look insignificant. Just take leading ASX 200 tech share Xero. The Xero share price has jumped by 3.5% so far today to $81.94 a share.

It’s not just Xero though. Most ASX 200 tech shares are on fire today. Block Inc (ASX: SQ2) is torching it up. Block shares have risen by a whopping 9.36% at the time of writing to $122.22 each, while Megaport Ltd (ASX: MP1) shares have risen by close to 8% at $6.39 each.

So what’s going on with ASX 200 tech shares this Thursday that have resulted in such stellar gains?

Why are ASX 200 tech shares like Xero on fire today?

Well, it could be a combination of factors. Firstly, US tech shares have been on a bit of a run lately. The tech-heavy NASDAQ-100 Index (NASDAQ: NDX) has now gained more than 3% over the week so far. And some US tech giants like Tesla Inc are up even more than that.

US tech stocks often seem to set the mood for our own ASX 200 tech shares, so this is probably feeding into the positive sentiment we are seeing.

The other thing that could be playing a role in these gains is today’s Australian unemployment figures.

This morning, the Australian Bureau of Statistics (ABS) released its latest labour market data. This showed the unemployment rate in the Australian economy rose from 3.5% in December to 3.7% in January.

The markets have responded well to this news, with the ASX 200 recording its highest intra-day levels after the report was publically released.

Rising unemployment could be showing that the Reserve Bank of Australia’s (RBA) rapid interest rate hikes are starting to have some effect on the economy. Why is this good news for shares?

Well, a slowing economy could mean that the RBA might be about to stop hiking rates. And lower interest rates are good news for shares. Especially tech shares, which often rely on valuations based on future, not present, profitability.

So it’s probably a combination of these factors that are helping the ASX 200 tech stocks like Xero to perform so strongly today.

The post Why are ASX 200 tech stocks like Xero having such a cracking run today? appeared first on The Motley Fool Australia.

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More reading

• Buy these 2 struggling ASX 200 shares now while they’re cheap: fund
• Here are the top 10 ASX 200 shares today
• Goldman Sachs says these excellent ASX tech shares are buys
• Here are the 10 most shorted ASX shares
• Brokers name 3 ASX shares to buy now

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 positions in and has recommended Block, Megaport, and Xero. The Motley Fool Australia has positions in and has recommended Block and Xero. The Motley Fool Australia has recommended Megaport. 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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Qantas Airways Limited (ASX: QAN) shares are lifting off again on Thursday. In afternoon trade, the airline operator’s shares are up 2% to $6.60.

This means the Qantas share price is now up 23% over the last 12 months, as you can see below.

It appears that investors are betting on a strong half year update from the Flying Kangaroo on 23 February.

Ahead of the release, let’s take a look at what the market is expecting from Qantas.

What is the market expecting from Qantas’ half year results?

According to a note out of Goldman Sachs, its analysts have named Qantas as a positive surprise candidate during earnings season.

This is because of a string of updates from international peers since we’ve last heard from Qantas that appear supportive of a strong finish to the half. Goldman commented:

US airlines’ 4Q results also reflected strength in pricing in the current environment, with American Airlines, Delta Airlines and United Airlines unit revenue averaging +19% vs. pre-covid level in the quarter.

Qantas has guided to underlying profit before tax of $1.35 billion to $1.45 billion for the half and Goldman appears to see this as being comfortably achieved.

Will there be a share buyback?

In light of this and its strong balance sheet, the broker sees scope for further capital management.

It expects a $400 million share buyback to be undertaken during the second half of FY 2023. This could be announced with its half year results.

Incidentally, the team at Morgans agrees with this view. It recently commented:

QAN’s balance sheet strength positions it extremely well for its upcoming EBIT-accretive fleet reinvestment and further capital management initiatives (forecasting a A$400m on-market share buyback to be announced at 1H23 result).

Finally, while Morgans isn’t expecting a dividend in FY 2023, Goldman is forecasting a 10 cents per share dividend. This could mean a 5 cents per share interim dividend is declared this month if Goldman is on the money with its forecast.

The post Own Qantas shares? Here’s what the market is expecting from its half year results appeared first on The Motley Fool Australia.

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More reading

• Buy Qantas shares today for 30% upside: Morgans
• These are the best ASX 200 travel shares to buy right now: broker
• 4 top ASX 200 shares to pounce on for reporting season: Wilsons
• Why Morgans just added these ASX 200 shares to its best ideas list
• What’s going on with the Qantas share price today?

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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The AMP Limited (ASX: AMP) share price is down 13%, with the market not impressed by the FY22 result despite the ASX financial share announcing that it was going to pay a dividend.

It has been a painful few years for shareholders, with AMP profits sinking following the Royal Commission into financial advice.

AMP has finally announced a dividend for investors. Yet, a return to making a statutory net profit after tax (NPAT) in the FY22 report was not enough to impress the market.

What was in the AMP result?

AMP revealed that it made a statutory NPAT of $387 million, a turnaround from the $252 million loss in FY21.

However, the underlying NPAT dropped from $280 million to $184 million. The company said this was a result of assets under management (AUM) suffering due to volatile investment markets, repricing in its wealth management businesses, and a weaker net interest margin (NIM) for AMP Bank.

AMP dividend

AMP hadn’t paid a dividend to shareholders for a few years, but the ASX financial share declared a final dividend for the 2022 financial year of 2.5 cents per share, with franking of 20%.

At the current AMP share price, that represents a partially franked dividend yield of 2.2%.

This is part of the company’s $1.1 billion plan to return capital to shareholders. In FY22, it delivered $267 million of a targeted $350 million share buyback.

This dividend amounts to around $75 million.

Will there be future AMP dividends?

AMP didn’t give much guidance about dividends in FY23.

It said that returning capital to shareholders remains one of its “key strategic priorities for 2023″.

But, the company did say that it continues to maintain a conservative approach to capital management to support the transformation of the business and maintain balance sheet strength.

It intends to return the $1.1 billion as a result of previously announced business sales.

While AMP is unlocking value for shareholders by divesting parts of the business, I think it’s likely that (some of) the cash could be sent shareholders’ way through a combination of dividends and share buybacks.

But, in terms of paying dividends from AMP’s ongoing operations, I think the focus will be on AMP ensuring that it can create a sustainable future and retaining profit for re-investment.

Before today’s result, estimates on Commsec suggested that AMP might pay an annual dividend per share of 4 cents in FY23 and 5.2 cents in FY24.

At the current AMP share price, excluding the impact of possible franking credits, that could be a dividend yield of 3.5% in FY23 and 4.6% in FY24.

The post The AMP dividend is back! Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• Why AMP, Evolution, Perenti, and Whitehaven Coal shares are dropping
• AMP share price dives 12% on earnings miss
• Here are the top 10 ASX 200 shares today
• Why is the AMP share price smashing the ASX 200 on Tuesday?
• Why ASX shares will flog global stocks the next few years: economist

Motley Fool contributor Tristan Harrison 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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S&P/ASX 200 Index (ASX: XJO) lithium shares have garnered plenty of investor attention due to their outsized returns. 

Even after smashing the benchmark returns in 2022, all but one of the blue-chip lithium companies is outpacing the ASX 200 again this year.

Since the opening bell on 3 January, the ASX 200 is up 6.6%.

Here’s how the ASX 200 lithium shares have performed over that same period:

• Core Lithium Ltd (ASX: CXO) shares are down 1.0%
• Allkem Ltd (ASX: AKE) shares are up 12.4%
• Pilbara Minerals Ltd (ASX: PLS) shares are up 30.0%
• IGO Ltd (ASX: IGO) shares are up 7.9%
• Mineral Resources Ltd (ASX: MIN) shares are up 16.3%

The strong performance has been driven by soaring demand for – and the soaring price of – lithium, a critical element in most EV and home storage batteries.

While the lithium price has fallen from its 2022 record highs, the price remains elevated by historic standards. And all signs point to growing demand in the years ahead.

Which brings us to the US$1 trillion (AU$1.45 trillion) milestone.

Global spending on EVs is surging

According to a new report, published by Bloomberg, global spending on passenger EVs leapt 53% in 2022 year on year.

All told, consumers around the world splashed out US$388 billion on new passenger EVs last year.

That’s good news for ASX 200 lithium shares, as approximately 75% of the world’s consumption of lithium goes into rechargeable batteries.

2022’s figures have now seen the total value of passenger EVs sold over the past 10 years (when EVs first began to make real inroads) hit US$1 trillion.

Granted, that’s only around 4% of the total value of all passenger vehicles sold over the last decade (some US$25 trillion).

But when seeking out long-term investments, it can pay to look for these kinds of mega-growth trends with a lengthy horizon ahead of them.

Indeed, according to Bloomberg’s analysis, passenger EV sales are likely to surpass US$500 billion in 2023. That represents a 29% annual growth rate.

That will see lithium demand continue to ramp up and should offer some ongoing tailwinds for ASX 200 lithium shares.

The best-performing ASX 200 lithium share over 12 months

Up top we looked at how the big lithium miners have performed so far in 2023.

But which one is leading the pack over the past 12 months?

With a nod to the runner-up, Pilbara with a 52% share price gain over 12 months, the best-performing ASX 200 lithium share for the full year is Mineral Resources.

As you can see in the chart below, the Mineral Resources share price is up a whopping 77% since this time last year.

Boom!

The post Why this US$1 trillion milestone matters for ASX 200 lithium shares appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 lithium shares being targeted by short sellers
• Pilbara Minerals shares: Future dividend darling?
• Could this new advancement reignite ASX 200 lithium stocks?
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why is short interest in Core Lithium shares growing?

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 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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ASX tech share Revasum Inc (ASX: RVS) is soaring with its share price up 39.39% despite no news from the company today.

Revasum is an ASX nano-cap share with a market capitalisation of just $17.5 million.

The company designs, manufactures, and markets semiconductor processing equipment used in the creation of wafers, which are inserted into microchips, sensors, LEDs, mobile phones, and cars.

So, why is this ASX tech share shooting the lights out today?

Great day for ASX tech shares

Revasum may be riding a broader momentum wave for ASX tech shares today, although that doesn’t explain the scale of its share price increase.

The S&P/ASX 200 Information Technology Index (ASX: XIJ) is the second-best performer of the 11 market sectors today.

It’s up 2.44% at the time of writing, with many ASX tech shares enjoying surges today.

Revasum is the top-performing ASX tech share, followed by fellow nano cap Digitalx Ltd (ASX: DCC) shares, up by 20%.

Some other big ASX tech share movers today include Brainchip Holdings Ltd (ASX: BRN) shares, up 11.5%, and Sezzle Inc (ASX: SZL) shares, up 9%.

What’s the latest news from Revasum?

The last time we heard price-sensitive news from Revasum was last Wednesday when the company announced a financing facility deal.

Revesum told the market it has entered into a non-binding term sheet with SQN Venture Partners LLC and Firsthand Capital Management.

Firsthand has backed the company since its incorporation. It will invest up to an additional US$2 million to help Revesum cure a recent default in its financing agreement with SQN.

Revesum has a growth capital facility with SQN. On 2 September, the company announced it had defaulted by failing to meet certain covenants, such as a requirement to maintain at least six months of liquidity.

The money invested by Firsthand will help cure the breach, with discussions ongoing to finalise the terms. The parties have not yet decided whether the $2 million will be taken as debt, equity, or a mix of both.

Revesum share price snapshot

This ASX tech share is down 73% over the past 12 months.

But it’s enjoying a better time in 2023, up 77% in the year to date.

Revesum has only been trading on the ASX for four years. It began trading in December 2018 at $2 per share with a market capitalisation of $153 million.

The post Guess which ASX tech share just rocketed 40% appeared first on The Motley Fool Australia.

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More reading

• New Hope share price tumbles 6% despite surge in earnings
• Down 38% since mid-November, is it time to bag some Liontown shares?
• Why Bapcor, Magellan, Sonic Healthcare, and Telstra shares are charging higher
• Why is the Zip share price rocketing 7% today?
• 2 ASX 200 stocks on the move following earnings updates

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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The New Hope Corporation Limited (ASX: NHC) share price is tumbling despite the company revealing an 89% jump in earnings.

Stock in the S&P/ASX 200 Index (ASX: XJO) coal producer is down 4% right now, trading at $5.50.

New Hope share price plummets despite $1b of earnings

Here are the key takeaways from New Hope’s January quarterly report:

• $1 billion of unaudited underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) ­– an 89% jump on those of the prior comparable period (pcp)
• $983 million of cash generated from operating activities in the first half
• Thermal coal prices closed at US$357.80 for the quarter – a 59% increase on the pcp
• So far, the company has completed $31 million of its on-market buy-back
• Ended the period with $1.1 billion of cash and equivalents

The company’s run of mine coal production came in at around 2.1 million tonnes last quarter – a 7.2% quarter-on-quarter drop. That left its year-to-date production down 24.7% on the pcp.

Meanwhile, coal sales slumped 22.3% quarter-on-quarter to close to 1.5 billion tonnes – leaving its year-to-date production 27.7% lower.

Finally, oil production for the quarter came in at 71,652 barrels while sales volumes slipped 7% due to a build-up of crude stock.

What else happened last quarter?

New Hope notes demand for coal weakened last quarter as Europe and Asia saw more mild temperatures and a drop in industrial activity.

Meanwhile, a price cap on coal was introduced by the New South Wales Government, limiting the black rock’s value to $125 a tonne.

New Hope’s 80% owned Bengalla was directed to reserve the lower of 280,000 tonnes or 15% of production for domestic consumption until June 2024.

However, due to existing supply contracts, the operation won’t be impacted until early next year.

Finally, New Hope paused its on-market buy-back in December, turning its attention to buying back its 2.75% senior convertible notes with a face value of $200 million.

What’s next?

The company expects demand to rebound in the coming months as COVID-19 lockdown measures ease in China, and Japan continues lessening its use of Russian coal.

New Hope share price snapshot

After roaring higher in 2022, the New Hope share price has started this year out on the wrong foot.

The stock is currently 6% lower than it was at the start of 2023. Though, it’s still 119% higher than it was this time last year.

For comparison, the ASX 200 gained nearly 7% year to date and around 2% over the last 12 months.

The post New Hope share price tumbles 6% despite surge in earnings appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Why AGL, New Hope, News Corp, and REA shares are dropping today
• New Hope share price dives 9% as ASX 200 coal stocks get hit hard
• 2 ‘high quality’ ASX 200 shares to navigate a turbulent 2023: expert

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 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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Liontown Resources Ltd (ASX: LTR) shares are heading in the right direction at last on Thursday.

In afternoon trade, the lithium developer’s shares are up almost 2% to $1.37.

However, this gain cannot hide the fact that Liontown shares are down 38% from its mid-November peak of $2.22.

Why have Liontown shares been smashed?

There have been a number of catalysts for the sudden pullback by Liontown’s shares over the last three months.

The first is concerns over the outlook for lithium prices. With some analysts suggesting that the price of the battery making ingredient could fall materially in the next 18 months, investors appear worried that lithium miners may not deliver earnings as strong as hoped. This has obvious consequences for valuations in the industry.

Also weighing on Liontown’s shares has been short sellers loading up on its shares, as well as a number of other lithium developers. They may believe that lithium prices are indeed heading lower and have been shorting their shares.

Finally, a cost blowout at the Kathleen Valley lithium project has shaken confidence. The cost of the project continues to rise and there are fears that Liontown will need to raise funds in the near future given its cash shortfall.

Is this a buying opportunity?

Not everyone is bearish on Liontown shares. The team at Bell Potter remains positive and recently retained its speculative buy rating with a $2.81 price target. This suggests that its shares could double in value over the next 12 months.

Bell Potter acknowledges that project costs are rising but is overlooking this due to an increase in its production capacity. It commented:

LTR has announced that the Kathleen Valley capital cost is now expected to be $895m (June 2022 estimate of $545m), a 20% increase in initial plant capacity to 3.0Mtpa (from 2.5Mtpa) and the potential for early revenues from sales of Direct Shipping Ore (DSO). The capital cost increase is due to industry cost inflation, the increased plant capacity and prioritising schedule to maintain first concentrate production from mid2024. Around $75m has been spent on the project to date, implying $820m remaining. LTR has cash reserves of $385m, undrawn debt of $300m and is progressing a range of further funding options which it does not expect will be required until late 2023.

The post Down 38% since mid-November, is it time to bag some Liontown shares? appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 lithium shares being targeted by short sellers
• 2 ASX lithium shares to pounce on before they explode: experts
• Here are the 10 most shorted ASX shares
• Top brokers name 3 ASX shares to buy next week
• Buy Liontown shares today for 70% upside: Macquarie

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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