Category: Stock Market

At lunch on Wednesday, the S&P/ASX 200 Index (ASX: XJO) is on course to record a small decline. The benchmark index is currently down 0.15% to 6,595.5 points.

Here’s what is happening on the ASX 200 today:

Energy shares tumble

The energy sector is in the red on Wednesday with Beach Energy Ltd (ASX: BPT) and Woodside Energy Group Ltd (ASX: WDS) shares posting declines after oil prices crashed overnight. According to Bloomberg, the WTI crude oil price was down 8% to US$95.64 a barrel and the Brent crude oil price sank 7.5% to US$99.10 a barrel. Demand concerns weighed heavily on oil prices.

ANZ confirms MYOB talks

The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is the worst performer among the big four on Wednesday. Investors appear to have responded negatively to confirmation that the bank is in talks to acquire accounting platform MYOB from KKR. No agreement has been reached and no details have been provided in respect to what the acquisition could cost.

Tech shares rebound

The tech sector is bouncing back after a terrible performance on Tuesday. The likes of Megaport Ltd (ASX: MP1) and Xero Limited (ASX: XRO) are recording decent gains at the time of writing. This is helping to drive the S&P ASX All Technology index 1% higher at lunch.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Wednesday has been the Megaport share price with a 6% gain. Earlier this week Goldman Sachs reiterated its buy rating with a $9.00 price target on Megaport’s shares. Going the other way, the worst performer has been the Zip Co Ltd (ASX: ZIP) share price with a 4% decline. This morning UBS retained its sell rating and 45 cents price target on the company’s shares. It believes that significant uncertainty remains despite its merger termination.

The post ASX 200 midday update: ANZ confirms MYOB talks, energy shares fall appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 energy shares underperforming today?
• ANZ share price drops amid MYOB takeover talks
• This broker sees 30% upside for the Xero share price over the next year
• Can the second half of 2022 be even better for the Woodside share price?
• How does the Woodside dividend compare to Santos over the last 5 years?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended MEGAPORT FPO, Xero, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended MEGAPORT FPO. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It’s easy to hate Netflix (NASDAQ: NFLX) these days, and the disdain is gushing on Wall Street. A pair of analysts are talking down the near-term prospects of the leading premium streaming service on Tuesday. Is this really the right time to be pessimistic instead of opportunistic?

Sure, Netflix isn’t at its best these days. The company has fallen short of its own subscriber guidance in three of the past five quarters. The stock is down 71% this year and off 75% since hitting all-time highs last November. We’ve seen layoffs, and its audience is shrinking through the first half of this year. It’s a problematic look all around and hard to get excited heading into next week’s earnings report after Netflix has served a few quarterly report duds lately. 

Bear with me. There’s still time for a Hollywood ending.

Climbing the Wall Street of worry 

Two major Netflix analysts are putting out downbeat notes on Tuesday, specifically targeting next Tuesday’s quarterly update as a potential pressure point.

Benjamin Swinburne at Morgan Stanley is slashing his price target from $300 to $220 ahead of the report. He feels that the Wall Street consensus for next week’s update — in terms of net subscriber additions and margins — isn’t factoring in the negative headwinds that are driving consumers away from spending on streaming video services. It’s a foregone conclusion that Netflix will shed a lot of subscribers in next week’s report, but Swinburne expects stubborn churn rates and the rising US dollar to hold back the former market darling’s chances to turn things around in the second half of this year. He’s sticking to his neutral equal-weight rating. 

Nat Schindler at Bank of America is even less enthusiastic. He’s sticking to his underperform rating and his $196 price target, but his latest analyst note points out that leading data doesn’t bode well for the platform’s engagement levels. He sees a soft quarter for net subscribers.

Netflix itself warned in April that it expects to post a sequential decline of 2 million streaming subscribers worldwide for the period. Like Swinburne, Schindler feels that some analyst targets are too high. He fears that guidance next week for the third quarter could call for less than 2.2 million net subscriber adds that his fellow analysts are forecasting for the third quarter. 

Sentiment has clearly soured on Netflix. The company that used to routinely offer conservative guidance has aimed too high lately. It’s no longer fashionable to bet on a stock surge the day after it posts fresh financials. The contrarian take here is that a hungry Netflix will be a better Netflix. 

Netflix isn’t at its best right now, but it’s still a kingmaker of content. How else can you explain how the latest season of Stranger Things — broken out into two parts in late May and early July — catapulted not one, but two decades-old songs to the top of the music charts? Kate Bush’s “Running Up That Hill” was a digital chart-topper last month, and earlier this month, Metallica’s “Master of Puppets” proves that folks are still leaning on their Netflix subscriptions. 

It’s also not as if Netflix is standing still. It has already gone public with plans for cheaper ad-supported tiers and enhanced gaming initiatives. We’re seeing reports of everything from theatrical distribution ahead of popular films to breaking up release schedules of popular shows to keep fans from binging and cancelling.

You can teach a new media giant some old media tricks, and there’s no platform visibly challenging Netflix’s dominance as the leader of streaming service stocks. The stock is down, and the same can be said about analyst heads as we dredge our way to next week’s report. Let’s not assume that Netflix doesn’t know what it’s doing.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Betting against Netflix now could be a big mistake appeared first on The Motley Fool Australia.

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More reading

• Should you invest in stocks right now? These 2 charts say yes
• Better bear market buy: Netflix vs Amazon
• 3 reasons Netflix should bounce back in July
• 4 potential winners from Netflix’s advertising plans
• 2 oversold stocks to buy in the Nasdaq bear market

Rick Munarriz has positions in Netflix. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netflix. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Regional Express Holdings Ltd (ASX: REX) share price isn’t going anywhere on Wednesday.

This comes after the company requested a trading halt at market open.

As such, the airline operator’s shares are frozen at $1.215.

Why are REX shares in a trading halt?

The Regional Express share price entered a trading halt this morning pending an important announcement from the company.

In a statement to the ASX, Regional Express advised it is preparing to make a material announcement.

While the company has provided no further details, speculation is rife on what the release could be.

Regional Express states its shares will remain in a trading halt until an official announcement is made or trade commences on Friday 15 July.

Just yesterday, Regional Express responded to recent news articles regarding its interest in acquiring Cobham Aviation’s fly-in-fly-out (FIFO) operations.

The news sent Regional Express shares as high as $1.25 on the day before backtracking as the broader S&P/ASX 200 Industrials Index (ASX: XNJ) fell (0.37%).

Investors appear to be bracing for the June inflation report to come out of the United States tonight. In addition, the US domestic jobs data is due to come out on Thursday. This will give a clearer picture of the health of the United States economy.

Regional Express share price summary

Since this time last year, the Regional Express share price has moved in circles.

However, in 2022, the company’s shares paint a different picture for investors, down almost 12%.

Regional Express presides a market capitalisation of $133.83 million with approximately 110 million shares on its registry.

The post Why is the Regional Express share price in a trading halt today? appeared first on The Motley Fool Australia.

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More reading

• Regional Express shares hold steady amid response to fly-in fly-out takeover speculation
• Why this smaller ASX travel share is locking horns with Qantas over regulation
• These 2 ASX travel shares are tying the knot for the next 10 years
• Why is this ASX travel share flying higher today?

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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S&P/ASX 200 Index (ASX: XJO) energy shares are well into the red in lunchtime trading.

At the time of writing, the ASX 200 has edged back from earlier losses and is just 0.09% lower.

While the S&P/ASX 200 Energy Index (ASX: XEJ) has also made up some lost ground from earlier in the morning, the energy index remains down 1.23%.

The Santos Ltd (ASX: STO) share price has fallen in line with the energy index, down 1.22%, while rival ASX 200 energy share Woodside Energy Group Ltd (ASX: WDS) is down 1.94%.

Why are ASX 200 energy shares underperforming today?

ASX 200 energy shares are under pressure today after another drop in crude oil prices.

International benchmark Brent crude dropped below US$100 per barrel for the first time since February, currently trading for US$99.06 per barrel. This time last month that same barrel was worth US$122.27.

While the forces that drove energy costs higher are still in play, counter forces have been pulling prices lower.

The biggest headwind for oil prices is the potential for a significant dip in demand.

Investors are keeping a close eye on the resurgent pandemic in China, where COVID cases are again on the rise. Should China, the world’s most populous nation and second-biggest economy, reinstate strict lockdowns in its major cities, demand for oil and related fossil fuels will decrease.

Another area of concern is the United States. Economists are concerned the world’s largest economy could be heading for a recession amid aggressive interest rate hikes to tame soaring inflation.

Yet oil prices, and ASX 200 energy shares, could be in for another leg up amid continued tight supplies.

Global energy crisis could get worse

International Energy Agency (IEA) executive director Fatih Birol said that energy demand may continue to outpace supply for some time. “We might not have seen the worst of it yet,” he said.

Among the supply issues, the US, one of the world’s top oil producers, lowered its own crude oil growth forecast through 2023, with a tight labour market and inflation impacting the sector.

While the US administration is hoping that OPEC can fill some of the void left by bans on Russian oil exports, Saudi Arabia and the United Arab Emirates are the only members said to have significant spare capacity.

Markets analyst at Hargreaves Lansdown Susannah Streeter pointed to ongoing concerns around Russia as potentially continuing to distort energy markets (quoted by Yahoo News):

Although deteriorating growth in economies would be a downwards force on the oil price, fresh attempts to limit Russia’s financial power, by imposing a price cap on its crude exports, could distort markets further adding to volatility.

Investors in ASX 200 energy shares will be watching these developments closely.

The post Why are ASX 200 energy shares underperforming today? appeared first on The Motley Fool Australia.

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More reading

• Is the Santos share price in bargain territory for FY23?
• Can the second half of 2022 be even better for the Woodside share price?
• How does the Woodside dividend compare to Santos over the last 5 years?
• 5 things to watch on the ASX 200 on Wednesday
• What’s the outlook for ASX 200 energy shares in FY23?

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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The IOUpay Ltd (ASX: IOU) share price is rocketing after the company announced multiple “important milestones” for its instalment-based consumer finance product suite’s development.

IOUpay’s MyIOU Islamic – announced last month – has had two major wins.

At the time of writing, the IOUpay share price is 8.4 cents, 16.67% higher than its previous close.

Let’s take a closer look at today’s news from the South East Asia-focused fintech company.

IOUpay share price gains on MyIOU Islamic wins

It’s turned out to be a big day for the IOUpay share price.

Its day in the sun followed an update of the company’s plan to offer BNPL products consistent with Shariah principles and the practices of Islamic finance.

The offering is expected to give the company access to new markets in Malaysia and other South East Asian nations with large Islamic populations.

Certification of Shariah Compliance

Firstly, the company has been granted certification of Shariah Compliance by independent global Shariah advisory firm, Tawafuq Consultancy.

The certification is expected to allow the product access to Islamic financing and BNPL opportunities within industry best practices for Shariah principles.

Following the win, the company is looking to offer both conventional and Islamic financing. That requires partitioning of the myIOU portfolio, separate documentation, and an Islamic bank account for all Shariah compliant transactions.

It also requires the platform to integrate with an Islamic payment gateway. Fortunately, IOUpay has also entered an agreement to do just that.

Islamic payment gateway integration

The second major update regards a merchant acquiring services agreement signed between IOUpay Asia and PayHalal.

Under the agreement, PayHalal can acquire and refer merchants that follow Shariah principles who want to offer customers BNPL options consistent with Shariah principles and the practices of Islamic finance to IOUpay Asia.

PayHalal’s payment gateway has already been integrated into the myIOU BNPL platform.

IOUpay share price snapshot

Its been a rough year for ASX BNPL shares so far, and the IOUpay share price hasn’t escaped the downturn.

The company’s stock has slipped nearly 47% since the start of 2022. It has also plunged 66% since this time last year.

The post IOUpay share price jumps 17% on ‘important milestones’ for BNPL offering appeared first on The Motley Fool Australia.

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More reading

• IOUpay shares issued a speeding ticket after rocketing 55% today. What happened?

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 Santos Ltd (ASX: STO) share price is having a poor day on Wednesday.

In morning trade, the energy producer’s shares are down 1% to $6.89.

This means the Santos share price is now down 7% since the start of the financial year.

Where next for the Santos share price in FY23?

While the Santos share price may have started the new financial year in poor form, one leading broker believes that could change.

According to a note out of Morgans, the broker has retained its add rating but trimmed its price target to $9.30.

This implies potential upside of 35% for investors over the next 12 months from current levels.

What did the broker say?

While Morgans is cautious on the near term, it believes that recent weakness has created a buying opportunity for investors.

It commented:

Our conviction level on the short-term direction of oil prices is at a 2-year low. This uncertainty is not driven by any breakdown in oil market fundamentals, but rather the risk to prices that can be delivered by faltering sentiment on demand.

This is due to concerns about global economic growth and “China’s ability to defend itself against COVID.”

While the above factors could well dent some 2H22 demand growth expectations we also see there being a reasonable probability that equity markets overreact moving ahead of any further volatility. Which could generate new buying opportunities at more attractive levels.

Where are oil prices heading?

Ultimately, whether the Santos share price rises or falls will be largely down to what happens with oil prices.

The good news is that Morgans is now forecasting higher oil prices over the coming years. It explained:

We have made a number of upgrades to our oil price forecasts. 2022 now US$102/bbl (was US$91/bbl), 2023 now US$89.5/bbl (was US$78/bbl), 2024 now US$78.5/bbl (was US$66/bbl), 2025 now US$68/bbl (was US$62/bbl), 2026 now US$65/bbl (was US$62/bbl), and a new long-term real price assumption of US$ 65/bbl (was US$62/bbl).

Overall, the future looks reasonably bright for the Santos share price based on these assumptions and its growth opportunities.

The post Is the Santos share price in bargain territory for FY23? appeared first on The Motley Fool Australia.

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More reading

• How does the Woodside dividend compare to Santos over the last 5 years?
• 5 things to watch on the ASX 200 on Wednesday
• What’s the outlook for ASX 200 energy shares in FY23?
• Worley shares dip despite deal with Santos
• 5 things to watch on the ASX 200 on Tuesday

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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ASX fintech shares may be on course for a solid FY23, according to some experts.

2022 has been a rough year for some of the biggest players in the financial technology space.

For example, since the start of the year the Netwealth Group Ltd (ASX: NWL) share price has fallen by around 33%, Hub24 Ltd (ASX: HUB) shares have dropped 22%, the EML Payments Ltd (ASX: EML) share price has fallen around 70%, and Tyro Payments Ltd (ASX: TYR) shares have plunged 77%.

Ouch.

Investors might be able to pin a lot of the decline on two factors – inflation and rising interest rates.

Inflation matters because it can increase costs for a business (such as wages, rent, and other costs). It can also reduce the ability of some customers to pay. Rising interest rates can lead to higher interest rate costs. But the biggest factor could be what it does to valuations.

Billionaire founder of Bridgewater Associates Ray Dalio once said about interest rates:

It all comes down to interest rates. As an investor, all you’re doing is putting up a lump sum payment for a future cash flow.

In theory, higher interest rates reduce today’s value of an asset. Valuations of businesses that are expected to grow a lot in the coming years are meant to be ‘discounted’ more to get to today’s value (when interest rates rise). That’s why ASX growth shares are generally getting hit harder during this sell-off.

While some ASX fintech shares have been continuing to grow their businesses, it will be interesting to see what they report for the next quarter and for FY22.

Recent example of growth

When Netwealth made an announcement regarding how interest rate changes may affect the business, it said that net inflows for April were approximately $90 million, which was “marginally below” expectations.

The company put the performance down to a combination of COVID-related absenteeism and the impacts of volatile markets and investor sentiment, relating to geopolitical events and interest rate speculation. However, it did say that it expects “seasonally strong inflows” for May and June. It changed its FY22 net inflow guidance to “exceed $13 billion for FY22”.

However, the company said that it remains “very positive” about the ongoing transition of clients and the new business pipeline which continues to be “very supportive” of funds under administration (FUA) growth in FY23.

Hub24 is a fairly similar business and it’s also seeing ongoing inflows. The company noted it had $51 billion of platform FUA and this could reach up to $92 billion over the next couple of years, according to the company. Management said that strong momentum is expected to see all earnings drivers continue to improve.

ASX fintech shares like EML, Hub24, and Netwealth can benefit from higher interest rates as they earn money on the cash that they hold on deposit for their customers.

Broker ratings

Credit Suisse rates Hub24 as a buy, with a price target of $35. That implies a rise of around 50%. It’s the pick of the sector for this broker.

The broker also rates Netwealth as a buy, with a price target of $15.70. That implies a possible rise of around 30%.

UBS rates EML as a buy, despite the upheaval and recent leadership change at the company. The broker’s price target is $2.10 – suggesting the EML share price could more than double from here.

Morgans rates Tyro as a buy, with a price target of $1.62. That also implies that the Tyro share price could more than double from here.

The post Is FY23 going to be a winning year for ASX fintech shares? appeared first on The Motley Fool Australia.

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More reading

• These were the best (and worst) performing ASX 200 sectors of FY22
• Why Costa, Domino’s, EML, and Novonix shares are dropping
• Here are the 3 most heavily traded ASX 200 shares on Monday
• ASX 200 midday update: EML crashes amid CEO exit, Costa and Domino’s sink on broker downgrades
• EML share price sinks 18% amid CEO’s unexplained departure

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 positions in and has recommended EML Payments, Hub24 Ltd, Netwealth, and Tyro Payments. The Motley Fool Australia has positions in and has recommended EML Payments, Hub24 Ltd, and Netwealth. The Motley Fool Australia has recommended Tyro Payments. 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 Galileo Mining Ltd (ASX: GAL) share price is seeking direction today.

Shares in the ASX resource explorer closed yesterday at $1.23 and are currently trading for $1.21. That puts shares down 1.6% at the time of writing after opening 2% higher.

This comes after the miner reported on a fresh round of promising drill results.

What results did Galileo announce?

The Galileo share price is dipping into the red despite a positive update. The news is regarding its second reverse circulation (RC) drill campaign at Galileo’s Callisto discovery at the Norseman project in Western Australia.

The miner has completed 11 new drill holes. It reports that all 11 holes intersected disseminated sulphide mineralisation similar to what was intersected in its first round of drilling. Assays show the sulphide layer to be associated with palladium, platinum, gold, rhodium, nickel and copper metal.

According to the release, mineralisation is open in all directions and dipping to the east further onto Galileo’s granted mine lease.

Galileo managing director Brad Underwood commented on the fresh results:

The results again confirm the consistency of the geology over the target area and all drill samples are now at the laboratory for analyses with assays expected in August.

A new Program of Works has been approved by the Department of Mines which allows us to complete wide-ranging drill programs along two kilometres of prospective strike length. Preparation for the next round of drilling will now begin and we expect to have RC drilling commencing again in late July, followed by diamond drilling in August.

With a nod to the costs involved in the ongoing exploration, Underwood adds, “Our recent well-supported capital raise means we are fully funded to undertake the significant amount of drilling required to define a discovery of this nature.”

Galileo share price snapshot

The Galileo share price has been a top performer for 2022 since lifting off in early May.

Year to date shares in the ASX resource explorer are up 432%. For context, that compares to a calendar year loss of 15% posted by the All Ordinaries Index (ASX: XAO).

The post Up 430% in 2022, Galileo share price wobbles today despite strong drill results appeared first on The Motley Fool Australia.

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More reading

• Why is the Galileo Mining share price galloping 17% higher today?
• What’s behind the frozen Galileo Mining share price today?
• Why Beach, BHP, Bubs, and Galileo Mining shares are sinking
• Here’s why the Galileo Mining share price is charging higher today

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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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is trading lower on Wednesday morning.

At the time of writing, the ANZ share price is down 1% to $22.47. This compares to modest declines by the rest of the big four banks.

Why is the ANZ share price falling?

Investors have been selling down the ANZ share price this morning after the bank finally confirmed speculation that it is interested in making a major software acquisition.

According to the release, the banking giant is currently in discussions with private equity firm Kohlberg Kravis Roberts & Co. (KKR) about a potential acquisition of MYOB.

MYOB is a leading business platform provider taking on QuickBooks and Xero Limited (ASX: XRO). It delivers end-to-end business and accounting solutions direct to businesses employing between 0 and 1000 employees, alongside a network of accountants, bookkeepers and consultants.

Based on the ANZ share price performance, it appears as though not everyone is convinced that this is the right move by the bank.

What’s the latest?

The release reveals that discussions between ANZ and KKR are ongoing and the parties have yet to reach an agreement in relation to the acquisition. In light of this, the bank has warned that there is no certainty it will proceed.

However, should the transaction proceed, it would be subject to regulatory approvals. This includes approvals from the Australian Competition and Consumer Commission (ACCC) and the New Zealand Overseas Investments Office.

ANZ advised that it will make an announcement to the market if the negotiations are successfully completed and an agreement is entered into.

How much would ANZ pay for MYOB?

No details have been provided in respect to a potential acquisition price. However, it is worth noting that KKR paid $2.4 billion to acquire MYOB in 2019. So, it certainly won’t be small acquisition.

Furthermore, Xero has a market capitalisation of $12.75 billion on revenue of ~A$1 billion during the 12 months to 31 March.

MYOB reported revenue of approximately $500 million for calendar year 2021.

The post ANZ share price drops amid MYOB takeover talks appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Xero. The Motley Fool Australia has positions in and has recommended Xero. 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 Regis Resources Limited (ASX: RRL) share price had a tough financial year. However, it is bouncing back at the start of FY23 following strong gold production results in the June quarter.

This ASX gold explorer’s shares descended from $2.39 at market open on 1 July 2021 to $1.30 at market close on 30 June 2022. This is a nearly 46% fall. In today’s trade, the Regis Resources share price is rising 0.68%.

Let’s take a look at how this ASX gold explorer performed during the year.

Share price falls

The Regis Resources share price fell in FY22, but it was not alone among ASX gold explorers. The Evolution Mining Ltd (ASX: EVN) share price dropped nearly 48% between market open on 1 July 2021 and 30 June 2022.

Regis explores gold in the north eastern goldfields in Western Australia and the central western area of New South Wales.

In January, the Regis share price suffered amid a negative note out of Goldman Sachs. The broker retained a sell rating and cut the price target on the company’s shares to $1.90.

The company’s share price also fell following an update on its FY22 guidance. Production guidance was cut to between 420,000 to 475,000 ounces of gold, down from 460,000 to 515,000 ounces.

In early April however, Regis shares benefited from a positive broker note released by Credit Suisse. Analysts maintained an outperform rating and lifted the price target on the company’s shares.

In May, Regis shares were among the top most shorted stocks on the ASX. As my Foolish colleague Zach reported, this short interest may have been related to cost pressures and labour shortages. The gold price also fell 2% during the month. However, multiple analysts still kept a buy rating on the stock.

Bouncing back

Regis reported record gold production in the June quarter of 123,901 ounces.

For FY22 overall, the company reported record gold production of 437,300 ounces. The company also reported that its cash and bullion jumped to $227 million at 30 June 2022 from $167 million at the end of March.

Managing director Jim Beyer said:

We are very pleased to deliver a record quarter of gold production for the June 2022 quarter. We have seen reliable delivery on our improvement plans that were developed and implemented to address the operational challenges we experienced in the first half of the year.

This has seen the company deliver an improved performance despite the challenging external conditions

On the back of this update, the company’s share price appears to be bouncing back. Regis shares have jumped more than 13% since market close on 30 June.

This ASX gold explorer has a market capitalisation of about $1.1 billion based on its current share price.

The post Down 46% in FY22, could this ASX gold explorer’s shares be bouncing back? appeared first on The Motley Fool Australia.

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• ASX 200 midday update: BHP and Fortescue sink, EML and ZIP jump
• Why Regis Resources, Sayona, Woodside, and Xero shares are pushing higher

Motley Fool contributor Monica O’Shea 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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