Category: Stock Market

The Downer EDI Limited (ASX: DOW) share price is falling after the integrated services company reported its FY22 full-year earnings. 

The Downer share price closed yesterday at $5.61. Downer shares opened at $5.25 this morning, down 6.4% on yesterday’s close and are currently sitting at $5.20, a 7.31% decline.

Downer provides integrated services to customers in Australia and New Zealand to design, build, and maintain infrastructure, facilities, and other assets.

Let’s examine the company’s results.

Downer share price in the red as profit falls

• Underlying net profit after tax and amortisation (NPATA) of $225.3 million, down 13.7% on the prior corresponding period (pcp)
• Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) of $399.2 million, down 14.6% pcp
• Profit from ordinary activities after tax of $151.6 million, down 16.5% pcp
• Total group revenue of $12 billion, down 2% pcp
• Underlying cash conversion of 88.9%
• Final dividend of 12 cents per share (unfranked) payable on 28 September
• The dividend reinvestment plan (DRP) remains suspended (since 2014)

What else happened in FY22?

Downer completed the divestment of its non-core businesses in mining and hospitality in FY22. This means the company can now focus solely on its core urban services business comprising transport, utilities, and facilities.

In its statement, Downer said “demand remained strong” in this segment and revenue constituted $11.5 billion of the company’s total group revenue of $12 billion in FY22.

It noted that revenue in the core urban services business segment increased by 10.8% on the pcp.

A highlight for Downer in FY22 was the announcement of a $200 million contract win on 8 October.

ASX investors pushed the Downer share price to a 52-week high of $6.87 on the day.

What did management say?

Downer said its operations were negatively impacted by COVID-19 and severe wet weather in FY22.

Downer CEO Grant Fenn said the company’s performance demonstrated “resilience”:

Despite the challenging conditions, particularly relating to COVID-19 and severe wet weather, our
Urban Services businesses have continued to deliver solid earnings and strong cash conversion.

Completing the divestment of the non-core businesses is a major milestone for Downer, enabling the
delivery of a transformed business and a strong balance sheet.

Gearing has reduced to 17.7% and Net Debt to EBITDA of 1.6x remains well below our 2-2.5x target with available liquidity of $1.9 billion.

What’s next?

Fenn said Downer had a strong end to FY22 with a number of contract wins providing “solid
momentum into FY23″.

Fenn said:

We have announced material contract wins across each of our Transport, Utilities and Facilities
segments in Q4. We are winning work in our key markets, our brand and relationships are very strong, and we are seeing a growing pipeline of work ahead of us.

Demand for decarbonisation solutions across the Group’s customer base has accelerated dramatically
in the past 12 months, which will create a strong pipeline of work. Our customers know they need to start acting on their decarbonisation targets and that it will require enormous effort.

Downer’s suite of technical skills means we are in a prime position to grow our business in what will be a significant economy-wide transformation journey to net zero.

For FY23, Downer expects 10% to 20% underlying NPATA growth. This assumes no material disruptions caused by COVID-19, poor weather, or labour shortages.

Downer share price snapshot

The Downer share price is down 13.9% in the year to date.

This compares to a dip of 6.3% for the benchmark S&P/ASX 200 Index (ASX: XJO).

The post Downer share price drops on 17% profit slide appeared first on The Motley Fool Australia.

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More reading

• Redbubble share price tumbles 40% as profit turns to loss
• What’s creating tailwinds for the Qantas share price today?
• Why is the Liontown share price limping lower on Wednesday?
• Can BHP shares keep cashing in on coal?
• Why is the Core Lithium share price careering 5% lower today?

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 Redbubble Ltd (ASX: RBL) share price is plummeting today after the company announced a severe FY22 loss in its latest annual report.

Shares in the artists’ e-commerce marketplace are currently trading for 90 cents apiece, a drop of 39.8% at the time of writing. They closed yesterday’s session at $1.495 each.

Let’s go over the key metrics of the report.

What did Redbubble report?

• Gross transaction value down 10% year on year (YoY) to $629.6 million
• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) down 121.25% YoY to an $11.2 million loss
• Gross profit down 18% YoY to $183.1 million
• Operating cash flow down 95% YoY to a $52.3 million loss

The company cited numerous headwinds contributing to its earnings and revenue reductions. They included disruption from COVID-19, volatility from supply chain disruptions, inflationary pressures, and the war in Ukraine.

Despite the financial pain, Redbubble stated it now has 809,000 monetised artists on its platform, the largest number ever.

However, the number of selling artists was offset by a 7% reduction in the number of active members on the platform, which shrank to 14.4 million.

What else happened in FY22?

The company noted that $55 million worth of mask sales boosted its FY21 revenue. In FY22, mask sales accounted for just $10 million.

Redbubble said 68% of its marketplace revenue was recurring from existing artists. Furthermore, 46% of revenue came from users making repeat purchases, up from 42% in FY21.

Organic sales, or sales generated in the absence of paid ads, were said to account for 60% of the company’s revenue.

A new pet category was also launched on the website in June.

What did management say?

Redbubble CEO Michael J. Ilczynski gave the following comments on the company’s performance.

Actions taken by Redbubble during FY22 remain focussed on continued investment in our technology platforms, experiences for artists and their customers, and more recently our brand. This reflects our disciplined approach to investing to drive sustainable growth for the medium and long term. Overall, the Group’s outcomes demonstrate continued resilience across all three sides of the marketplaces, and importantly, financial performance and operating momentum improved in Q4FY22.

What’s next?

The company said it expects revenue growth in FY23, supported by a 6% increase in the average price of products on the platform.

Redbubble also intends to significantly slash its employee growth, down to 4% this financial year from 30% in FY22.

An investment in the company’s brand will also run to a total of $8 million to $12 million.

Over the medium term, Redbubble intends to grow its gross transaction value to more than $1.5 billion, with the majority coming from marketplace revenue at $1.25 billion.

Redbubble share price snapshot

The Redbubble share price is down 70% over the last 12 months and 72% year to date.

That’s signifantly below the performance of the S&P/ASX 200 Index (ASX: XJO), which has dropped 5.4% in a year and 4.5% in 2022 so far.

Redbubble’s market capitalisation currently stands at around $251 million.

The post Redbubble share price tumbles 40% as profit turns to loss appeared first on The Motley Fool Australia.

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More reading

• Why is the CBA share price sliding today?
• Magellan share price in freefall despite 44% rise in profits
• Super Retail Group share price jumps 8% on soft FY22 results
• Why these 2 ASX shares rocketed 40% last month
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Matthew Farley 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 Qantas Airways Limited (ASX: QAN) share price is currently up by 0.63%. It’s outperforming the S&P/ASX 200 Index (ASX: XJO), which is currently down by around 0.07%.

Reporting season is in full swing right now. Qantas is expecting to report its full year result on 25 August 2022, which is when investors will get an insight into the ASX airline share’s performance in FY22 and Qantas could also provide guidance for FY23.

Some ASX travel shares have already reported, including Corporate Travel Management Ltd (ASX: CTD) which outlined a recovery of demand in its FY22 result.

Qantas has recently said it’s seeing strong travel demand across all categories, helping net debt improve to around $4 billion by the end of FY22. It’s expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of between $450 million to $550 million for the second half of FY22.

What’s going on with the Qantas share price?

One of the main things to keep in mind with airlines is that one of the key variable expenses, fuel, can have a significant impact on profitability and demand in the shorter term.

If the oil price goes higher, airlines need to decide how much to increase ticket prices by and what that might do to demand. If they don’t pass on the higher fuel cost, the profit would be impacted. There’s more to Qantas’ profit generation than just oil prices, but it can have an important influence.

Overnight, as noted by CommSec, the oil price fell by around 3% as it continues to decline from the previous highs seen after the Russian invasion of Ukraine when energy markets were disrupted.

New flight training centre

Qantas did make an announcement to the media today, though it’s not necessarily important to the Qantas share price.

The airline announced it will train pilots at a new, purpose-built centre in Sydney for its current and future fleet, including the aircraft that will operate non-stop flights from the east coast of Australia to London and New York.

It’s a new multi-million-dollar facility for St Peters near Sydney Airport. It will provide training for up to 4,500 new and current Qantas and Jetstar pilots and cabin crew each year from early 2024.

This centre will have up to eight full motion flight simulators, including for the Airbus A350 and A320 family of aircraft that were recently ordered.

It will have fixed flight training devices, emergency procedures equipment with aircraft cabin mock-up, and classroom and training facilities. Qantas said that senior Qantas and Jetstar training captains will train pilots from the two airlines while global training provider CAE will maintain the simulators and manage the day-to-day operations of the centre.

The Qantas CEO Alan Joyce said:

Qantas has trained its pilots and crew in Sydney for more than half a century and we look forward to bringing this critical function back to New South Wales with this custom-built facility.

Sydney will be the launch city for our non-stop flights to London and New York, and will now be the home of pilot training for the A350s, which will operate these flights from 2025.

As our international network recovers from the impact of COVID and we grow our fleet, this new training centre will give us the simulator capacity to train our new and current pilots.

Having flight training centres in all three eastern states, where the majority of our crew reside, will provide significant cost savings and efficiencies by training them at their home base.

Qantas share price snapshot

The Qantas share price has risen by 9% over the last month.

The post What’s creating tailwinds for the Qantas share price today? appeared first on The Motley Fool Australia.

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More reading

• What’s lifting the Qantas share price on Monday?
• Qantas share price unimpressed despite $15m solution to ‘well-publicised challenges’
• Why did the Qantas share price fly higher today?
• Why is the Qantas share price beating the ASX 200 today?
• ‘Downside is less severe’: Why some brokers are still bullish on the Qantas share price

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 recommended Corporate Travel Management Limited. 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 Liontown Resources Limited (ASX: LTR) share price is sliding lower today despite the company’s silence.

The S&P/ASX 200 Index (ASX: XJO) lithium share is down 2% right now, trading at $1.705.

For context, the index is currently up 0.04% while the S&P/ASX 200 Materials Index (ASX: XMJ) has slipped 0.06%.

So, what might be going wrong for the Liontown share price today? Let’s take a look.

What’s going on with the Liontown share price?

The Liontown share price is tumbling on Wednesday alongside those of its ASX 200 lithium peers.

Indeed, the ASX 200 materials sector is being weighed down by stock in Lake Resources N.L. (ASX: LKE) and Core Lithium Ltd (ASX: CXO). They’ve fallen 4.5% and 3.7% right now, making them the two worst performing ASX 200 materials shares.

The Liontown share price is the sector’s fifth worst performer while those of Allkem Ltd (ASX: AKE) and Pilbara Minerals Ltd (ASX: PLS) are also struggling.

It marks the second consecutive day in which Liontown is trading in the red and leaves the stock roughly flat with where it was this time last week.

Such recent performance seemingly marks an end to its meteoric rise. The lithium share is currently trading 95% higher than its lowest point of 2022 so far – 87.5 cents – reached in late June.

Interestingly, it’s been nearly three weeks since the market heard price-sensitive news from the company.

It dropped its latest quarterly report on 28 July, detailing what the company’s CEO and managing director Tony Ottaviano dubbed “a significant period of positive activity and progress”. That saw the Liontown share price lift 6%.

Though, investors who jumped on board with the company at the start of the year haven’t quite broken even.

The stock is still trading 2.5% lower than it was at the beginning of 2022. Though, it’s gained 82% since this time last year.

The post Why is the Liontown share price limping lower on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Why is the Liontown share price leaping 5% on Monday?
• Why has the Liontown share price roared 30% higher in a week?
• Here are 2 ASX lithium stocks analysts rate as buys
• Here are the top 10 ASX 200 shares today

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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BHP Group Ltd (ASX: BHP) shares have been on most investors’ radars this week. That’s as the S&P/ASX 200 Index (ASX: XJO) mining giant reported its full FY22 results yesterday.

And those results were impressive.

The highlights included a record dividend payout. It also included a 16% increase in underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) from continuing operations. EBITDA reached US$40.63 billion in FY22, also a record high.

BHP shares closed up 4.3% yesterday.

What you may not know about BHP shares and coal

While BHP shares are generally connected with iron ore, and to a lesser extent copper and nickel, some 23% of the miner’s FY22 EBITDA came from coal.

The big year-on-year leap in its coal earnings was driven by soaring prices for the other black gold, amid a broader global energy crisis spurred by Russia’s invasion of Ukraine.

In the financial year just past, BHP shares did take a step away from coal. The miner completed the sales of its interests in the BMC and Cerrejón energy coal assets. However, BHP opted to retain and operate its New South Wales Energy Coal business until mine closure in 2030.

And the company doesn’t appear to have any intention of exiting the coal business, stating:

Long term, we believe that higher quality metallurgical coals will still be used in blast furnace steel making for decades based on our bottom-up analysis of likely regional steel decarbonisation pathways.

However, BHP has moved its coal project plans in Queensland to the back burner.

Queensland moves the mining royalty goal posts

In June the Queensland Government surprised miners by tying the royalties it receives from them to the rising price of coal. By some estimates, this could see the miners paying as much as three times the prior tax levels.

This has seen BHP hit the pause button on its Blackwater South coal mine project, which has a 90-year mine life.

Commenting on the decision to reporters (courtesy of the Australian Financial Review), BHP CEO Mike Henry said:

There’s been a significant increase in the sovereign risk associated with Queensland. Which has caused us to say, ‘Well, we really can’t deploy further capital into that business for the time being’.

Henry added that the regulatory processes BHP has engaged in with the Queensland Government for approval of the coal mine simply offered the miner that option, not the obligation to invest:

It gives you the option to make a decision to invest. Since then, we’ve had changes to the Queensland royalty regime that were quite sudden and didn’t involve any engagement with industry. We’ll go back and reassess what the plans for the business are going forward.

How have BHP shares been tracking?

BHP shares have come off their April highs amid lower iron ore prices. Year to date the BHP share price is down 4%, compared to a 2022 loss of 6% posted by the ASX 200.

The post Can BHP shares keep cashing in on coal? appeared first on The Motley Fool Australia.

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More reading

• An ASX 200 market darling in the past, but don’t expect fireworks from the CSL share price going forward
• Brokers say BHP and this ASX 200 share are buys
• Here are the top 10 ASX 200 shares today
• Why has the Panoramic Resources share price surged 40% in a month?
• Why BHP, Life360, Tassal, and Temple & Webster shares are charging higher

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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It’s been a bouncy but overall negative day so far this Wednesday for ASX shares. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is sitting at around 7,110 points, up an anaemic 0.05% so far. But it’s looking a lot worse for the Core Lithium Ltd (ASX: CXO) share price today.

Core Lithium shares have had a clanger so far in today’s session. This ASX 200 lithium stock has copped a 4.7% drop at the time of writing to $1.42 a share after closing at $1.49 yesterday and opening at $1.47 this morning.

Soon after market open, Core Lithium fell all the way down to $1.36 a share, which was a drop of almost 8% at the time.

So what’s going on here?

Why has the Core Lithium share price cratered today?

Well, there’s nothing out of the company itself this Wednesday that explains this rather sizeable drop. The last major piece of news out of the company was the exploration update Core Lithium released on Monday.

This prompted enormous investor excitement at the time, with the Core Lithium share price rising more than 10%.

But Core Lithium shares have been on a tear for far longer than that. Over the past month, this ASX lithium stock has gained an impressive 50%. Year to date, Core Lithium shares are up a whopping 126% or so.

So perhaps the weakness we are seeing today is an acknowledgement that this extraordinary share price run had to end at some point. Notably, we are seeing weakness across most of the ASX lithium share space today.

Pilbara Minerals Ltd (ASX: PLS) and Liontown Resources Limited (ASX: LTR) are also both down today, although not by as much as Core Lithium shares.

At the current Core Lithium share price, this ASX 200 lithium stock has a market capitalisation of $2.46 billion.

The post Why is the Core Lithium share price careering 5% lower 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 Tuesday
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• 3 ASX 200 shares having a super start to the week
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• Why BlueScope, Carsales, Core Lithium, and Nearmap shares are racing higher

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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The Santos Ltd (ASX: STO) share price is currently in the red by more than 2% even though the oil and gas ASX share just announced its FY22 half-year report that included huge returns.

It revealed a record result and much larger shareholder returns in the form of a dividend and share buyback.

On top of that, it also announced a final investment decision on Pikka.

HY22 result

It said that underlying profit grew by 300% to US$1.27 billion, statutory net profit jumped 230% to $1.17 billion and free cash flow went up 199% to $1.71 billion.

Santos benefited from the “significantly higher” oil and LNG prices, due to stronger global energy demand as well as a higher interest in PNG LNG after the merger with Oil Search.

It grew the interim dividend by 38% to US 7.6 cents. It also increased its previously-announced on-market share buyback from US$250 million to US$350 million. Profit and shareholder returns can have a big impact on the Santos share price.

Santos also revealed it’s in advanced discussions with a shortlist of parties for the sale of a 5% interest in the PNG LNG project. Expected proceeds are in-line with the market consensus valuation, according to management. Santos said it intends to retain a 37.5% interest in PNG LNG.

Pikka final investment decision

As operator of the Pikka phase one oil project located on the north slope of Alaska, Santos announced that the project will proceed.

The expected production is 80,000 barrels per day, with first oil anticipated in 2026. The 2P reserves are 397 million barrels gross pre-royalties. Santos’ share of capital expenditure is US$1.3 billion.

Santos is expecting an internal rate of rate (IRR) of 19% at a long-term oil price of US$60.

The ASX share is committed to the project being net-zero, in terms of scope 1 and scope 2. It has entered into memorandums of understanding with Alaska Native Corporations to deliver carbon offset projects.

Santos said this project would add further diversification to its portfolio and reduce geographic concentration risk.

Santos share price snapshot

Since the beginning of 2022, Santos shares have risen by 6%. It is down 20% since 8 June 2022.

The post Santos share price slips despite record profit and dividend boost appeared first on The Motley Fool Australia.

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More reading

• Santos share price on watch after 300% first half profit growth
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• What’s impacting the Santos share price today?
• Is the Santos share price a buy following the energy giant’s latest acquisition?

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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1) The CSL Limited (ASX: CSL) share price fell around 4% in Wednesday trade to $285. This comes after the popular biotech reported a 6% fall in FY22 net profit on revenue growth of just 3%.

For a company trading on a trailing price-to-earnings (P/E) ratio of around 40 times, the growth is underwhelming, to say the least. 

Admittedly, the past year has not been an easy one, with CSL Chief Executive Paul Perreault saying…

“CSL has delivered a good result at the top end of our guidance, demonstrating our resilient performance against the ongoing challenges presented by the global COVID pandemic.”

CSL is anticipating a return to growth in FY23, forecasting an uplift in profits of around 8%. 

Once the darling of the ASX, the CSL share price first hit these levels coming up to three years ago now, lagging the returns of the ASX 200.

Given its competitive advantage, CSL might be seen as a safe investment, but trading on 40 times earnings, going forward it’s unlikely to deliver anything like the bumper returns from years gone by.

2) With the ASX 200 up around 10% from its June lows, it feels like the easy “rebound” gains have already been made.

Results season has largely been “as expected” for many of the large-cap stocks that have so far reported. 

Resource and commodity companies: booming profits and dividends in FY22, but expecting lower commodity prices and higher costs in FY23. BHP Limited (ASX: BHP) has been the standout, with the BHP share price now trading on a fully franked dividend yield of around 11%. Just don’t bank on that same yield going forward. 

Tech stocks: still posting losses, but with a keen eye on breakeven. Many share prices have made a partial recovery, albeit from falls of up to 80% or more, as tax loss selling hit them for six. 

Reporting today, SaaS stock Whisper (ASX: WSP) said it’s “on track for positive EBITDA in FY23 as it reported an FY22 EBITDA loss of $10.6 million. The Whispir share price is up 67% from its June lows, but down 75% from its July 2020 highs. I own the stock, for my sins.

Bank stocks: a decent FY22, but a more challenging FY23. After holding up reasonably well during the “inflation correction”, the CBA share price now looks downright expensive, and only trades on a fully franked dividend yield of 3.9%.  

3) So, where to from here?

I’m pinning my short-term hopes on a few ASX microcap stocks I own, many of which have (sadly, for me) not participated in the stock market recovery of the past two months.

One is MSL Solutions (ASX: MSL), a leading SaaS technology provider to the sports, leisure, and hospitality sectors. Its share price is showing signs of life on Wednesday — up 10% on modest volume — but is still trading lower than when it updated the market on May 31 with a strong forecast for FY22.

MSL Solutions reports tomorrow. It has forecast revenue growth of around 30% and trades on a forecast EBITDA multiple of around 12 times. MSL shares are not exactly cheap, but with a decent level of predictable revenue, I think the company should be able to keep growing nicely into the future.

The post An ASX 200 market darling in the past, but don’t expect fireworks from the CSL share price going forward appeared first on The Motley Fool Australia.

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More reading

• CSL share price drops despite expectations of growth in FY23
• CSL share price on watch following FY22 results
• Brokers say BHP and this ASX 200 share are buys
• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Bruce Jackson has positions in MSL Solutions Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. 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 Wesfarmers Ltd (ASX: WES) share price is outperforming the market despite the company’s silence. The retailer has been joined in the green by many of its S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) peers.

Indeed, consumer discretionary is up 1.37% at the time of writing. And the Wesfarmers share price is its fifth best performer, having gained 2.15% to trade at $48.93.

At the same time, the S&P/ASX 200 Index (ASX: XJO) is slipping 0.2%.

So, what might be driving the stock and its peers higher on Wednesday? Let’s take a look.

What’s boosting the Wesfarmers share price today?

The Wesfarmers share price is on the up-and-up today. Its gain follows a strong session for retailers on Wall Street. Many were buoyed by earnings from consumer discretionary giants.

The Walmart Inc (NYSE: WMT) share price lifted 5.1% overnight on the back of the retail monolith’s quarterly earnings. The company posted US$152.9 billion of revenue – an 8.4% increase on that of the prior corresponding period (pcp) – while its operating income fell 6.8% to US$6.9 billion.

Fellow retailer Home Depot Inc (NYSE: HD) also posted quarterly results, boasting US$43.8 billion of sales, a 6.5% lift on those of the pcp, and US$5.2 billion of net earnings – an 11.5% improvement. The stock gained 4% on the back of the release.

Other New York-listed retailers such as Target Corporation (NYSE: TGT) and Best Buy Co Inc (NYSE: BBY) also saw their shares rise 4.5% and 4.4%, respectively.

Meanwhile, a continuing short squeeze saw the Bed Bath & Beyond (NASDAQ: BBBY) share price surge 29%, as The Motley Fool reports.

Such international action has seemingly moved the ASX 200 on Wednesday. Consumer discretionary is leading the way today, coming in as the market’s top performing sector.

Outperforming the Wesfarmers share price on the index are those of Super Retail Group Ltd (ASX: SUL) – which reported today, City Chic Collective Ltd (ASX: CCX), Bapcor Ltd (ASX: BAP) – another company that dropped earnings today – and Premier Investments Limited (ASX: PMV). They’ve gained 8%, 3.8%, 2.8%, and 2.3% respectively.

The post Why is the Wesfarmers share price smashing the ASX 200 today? appeared first on The Motley Fool Australia.

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More reading

• Did you know you’re investing in lithium when you buy Wesfarmers shares?
• Do any ASX lithium shares pay dividends?
• ASX 200 better buy: Wesfarmers or Woolworths?
• 2 excellent ASX dividend shares experts rate as buys
• What’s impacting ASX 200 retail shares today?

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 positions in and has recommended Super Retail Group Limited, Target, and Walmart Inc. The Motley Fool Australia has positions in and has recommended Super Retail Group Limited and Wesfarmers Limited. The Motley Fool Australia has recommended Bapcor and Premier Investments Limited. 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 Aussie share market is relatively flat today after Wall Street recorded a mixed bag overnight.

In midday trade, the S&P/ASX 200 Index (ASX: XJO) is shedding 0.11% to 7,097.8 points.

Also heading south is the Commonwealth Bank of Australia (ASX: CBA) share price.

At the time of writing, the banking giant’s shares are down 1.51% to $99.93 apiece.

CBA shares trade ex-dividend

Following the release of the bank’s full-year results earlier this month, investors are eyeing CBA shares as they go ex-dividend today.

This means if you purchased the company’s shares yesterday or before and still own them, you will be eligible for the latest dividend.

Traditionally, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors try to make a quick profit after securing the dividend.

For those eligible for CBA’s final dividend, shareholders will receive a payment of $2.10 per share on 29 September.

This brings the full-year dividend to $3.85 per share, reflecting an increase of 10% compared to the prior corresponding period.

The dividend is also fully franked.

Under the company’s capital management framework, the dividend payout ratio was 68% of the bank’s cash earnings.

CBA advised it will continue to target a full-year payout ratio of 70-80% of cash NPAT and an interim payout ratio of approximately 70% of cash NPAT.

Are CBA shares still a buy?

Following the bank’s financial scorecard for the full year, analysts at Morgan Stanley weighed in on CBA shares.

According to ANZ Share Investing, the broker raised its 12-month price target by 1.2% to $83.00. Based on the current CBA share price, this implies a downside of 17%.

Similarly, Goldman Sachs cut its rating by 4.4% to $86.86 apiece.

It appears both brokers are in agreeance with what they believe CBA shares should be worth in the current climate.

CBA share price snapshot

Since the beginning of 2022, the CBA share price has travelled in circles to post a small loss of 1%.

In comparison, the benchmark ASX 200 index is down almost 5% over the same time frame.

CBA has a price-to-earnings (P/E) ratio of 18.52 and commands a market capitalisation of roughly $170 billion.

The post Why is the CBA share price sliding today? appeared first on The Motley Fool Australia.

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More reading

• Magellan share price in freefall despite 44% rise in profits
• Super Retail Group share price jumps 8% on soft FY22 results
• Why these 2 ASX shares rocketed 40% last month
• 5 things to watch on the ASX 200 on Wednesday
• ‘Green premium’: What could it mean for the Vulcan Energy share price?

Motley Fool contributor Aaron Teboneras 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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