Category: Stock Market

The JB Hi-Fi Limited (ASX: JBH) share price has been suffering in recent weeks, just like most of the rest of the S&P/ASX 200 Index (ASX: XJO).

In just one month, JB Hi-Fi shares have fallen almost 20%. That means the JB Hi-Fi market capitalisation has lost an entire fifth of its value – the entire business is now valued at $4.3 billion according to the ASX.

What happens next?

I wish I knew. It would make investing a lot easier! Sadly, my time machine isn’t working yet.

There has been a lot of volatility. With the ongoing strength of inflation, there could be more volatility to come.

But, specifically on the JB Hi-Fi share price, market sentiment has declined. Is this lower price an opportunity? Let’s look at what some of the leading brokers are thinking.

Ratings on the JB Hi-Fi share price

Macquarie recently downgraded its rating on the business to underperform from outperform, citing the negative outlook regarding the consumer because of the high level of inflation and rising interest rates, as well as a redirection of household spending to other categories. Macquarie’s price target is $40.90.

The broker points out that a lot of households bought new gadgets and appliances over the last two years, so the shorter-term spending on those categories is likely to be lower. While Macquarie thinks JB Hi-Fi is a great ASX retail share, it believes the economic conditions will be challenging.

Citi is more optimistic about things for the JB Hi-Fi share price, with a price target of $53. However, the current rating is neutral. But that does imply a possible rise of more than 30%. While acknowledging the worsening economic conditions, the broker thinks things still look reasonable for the retail sector.

Another broker, UBS, is also neutral on the business. It noted the latest trading update, showing growth for the business.

Latest trading update

The company announced last month the performance for the three months to 31 March 2022.

For that quarter, JB Hi-Fi Australia sales went up 11.9% year on year, JB Hi-Fi New Zealand sales were up 4.8% year on year and The Good Guys sales went up 5.5% year on year.

JB Hi-Fi share price valuation

Macquarie thinks that JB Hi-Fi shares are valued at under 10 times FY22’s estimated earnings and 11 times FY23’s estimated earnings.

Citi has estimates for a bigger profit by the ASX retail share. This broker’s projections put the JB Hi-Fi share price at 9 times FY22’s estimated earnings and 10 times FY23’s estimated earnings.

The post The JB Hi-Fi share price has tumbled 19% in a month. What’s next? appeared first on The Motley Fool Australia.

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More reading

• 2 ASX companies busted for sneaky facial recognition on customers
• Why are these ASX 200 retail shares lagging the market today?
• ASX retail shares tumble following RBA rate rise
• Why experts rate the JB Hi-Fi share price a buy right now
• Why are ASX 200 retail shares climbing on Friday?

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Macquarie Group 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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It was yet another day to forget for the Novonix Ltd (ASX: NVX) share price on Wednesday.

The battery technology company’s shares were the worst performers on the ASX 200 index with a 14% decline to $2.47.

This means the Novonix share price is now down 76% in 2022.

What’s going on with the Novonix share price?

The most recent weakness in the Novonix share price appears to have been driven by news that a major shareholder has been selling down its stake.

According to a change of interests of substantial shareholder notice, St Baker Energy has offloaded 7.6 million shares.

St Baker Energy, which was founded by Trevor St Baker, sold these shares on 10 June via an off-market transfer for a total of just over $24 million. This equates to an average of $2.90 per share.

Despite this sale, the investment company still retains a sizeable 11.7% stake in Novonix.

Why was it selling?

No explanation was given in respect to why St Baker Energy sold the shares. However, given that Trevor St Baker retired from the Novonix Board last month to devote more time to the establishment of a second St Baker Energy Innovation Fund, it’s possible that he was raising funds for this new venture.

Nevertheless, the selling appears to have spooked investors and put further pressure on the Novonix share price at a difficult time for higher risk assets.

The post The Novonix share price is the worst of the ASX 200 losers today. What’s going on? appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Novonix share price tumbles 10% amid Tuesday’s carnage
• Can the Novonix share price hit the comeback trail in June?
• Novonix share price slips to 10-month low amid Thursday’s sell-off
• Novonix share price dips ahead of US investor conference presentation

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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Like many ASX shares of late, the Telstra Corporation Ltd (ASX: TLS) share price has been through the washer. Telstra shares closed today’s session at $3.83, up a pleasing 2.13% for the day. But over the past five trading days, Telstra has been as high as $3.90 a share and as low as $3.67.

Despite this volatility, the Telstra share price is actually flat if we just take the bookend prices of this period.

But perhaps investors should have taken advantage of this volatility. That’s certainly what some ASX brokers are implying at the moment.

Brokers name Telstra shares as a buy, despite recent volatility

One is Morgans. As my Fool colleague James covered this week, Morgans is currently bullish on Telstra shares. This ASX broker recently rated Telstra as an “add”, replete with a 12-month share price target of $4.56.

With Telstra’s T25 cost-cutting program now underway, Morgans is pleased with the company’s progress in this area. The broker is also predicting that the telco will be able to keep its annual 16 cents per share dividend flowing across FY2022 and into FY2023, further boosting returns.

For argument’s sake, let’s assume Morgans is accurate with its share price prediction (by no means guaranteed). That means this week’s volatility has presented a compelling buying opportunity.

At the current Telstra share price of $3.83, investors will enjoy an upside of 19% over the next 12 months if Telstra does indeed rise to $4.56 a share. But if an investor who took advantage of the recent volatility and bought in at $3.67 a share, the potential upside would stretch to more than 24%.

Morgans’ fellow broker Ord Minnet is even more bullish on Telstra. As my Fool colleague Tristan also covered recently, Ord Minnet has a buy rating on Telstra, complete with a price target of $4.85. If that played out, investors would be looking at an upside of 26.6% on current prices. That extends to 32% for our hypothetical ‘buy-the dip‘ buyer this week.

So despite the recent share price volatility, that’s what two of the ASX’s top brokers are anticipating for the Telstra share price going forward. But only time will tell if these brokers are proven right.

At the current Telstra share price, this ASX 200 telco has a market capitalisation of $44.3 billion, with a dividend yield of 4.17%.

The post Despite recent volatility, brokers are predicting big things for the Telstra share price. Here’s why appeared first on The Motley Fool Australia.

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More reading

• Falling ASX share prices = bigger dividend yields. Here’s what you need to know
• Why are ASX 200 bank shares having another day to forget?
• Here are the 3 most traded ASX 200 shares on Wednesday
• 3 ASX 200 shares stretching higher on Wednesday
• Investing should be boring: fundie

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation 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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By now, chances are you’ve heard that the S&P/ASX 200 Index (ASX: XJO) has had a rough couple of days. The ASX 200 has lost more than 1% on Wednesday, putting its five-day losses at a painful 6.8% or so. Not many investors enjoy a red market like the one we’ve seen this week. But it does carry a fairly significant silver lining: higher dividend yields.

Every ASX dividend share has a dividend yield. This is the number (expressed as a percentage) that is usually quoted when one enquires about a company’s dividend. For example, on current pricing, Commonwealth Bank of Australia (ASX: CBA) shares have a dividend yield of 4.15%.

But this metric is not a static one. It uses two different numbers to get there. The first is the dividends per share that a company pays out. In CBA’s case, this ASX bank has paid out $3.75 in dividends per share over the past 12 months.

But the second is the company’s share price itself. By dividing $90.46 (CBA’s current share price at the time of writing) by $3.75, we get to a dividend yield of 4.15%. That means that if CBA pays out the same dividend over the next 12 months as the previous, an investor putting $100 into CBA shares right now can expect a dividend return of $4.15, or 4.15% of that $100.

Why do lower share prices bring higher dividend yields?

So getting a dividend from an ASX share is influenced by these two factors. Thus, if a company’s share price falls, but its dividends remain consistent, the dividend yield that investors can expect from buying additional shares rises.

As a case in point, CBA shares have fallen from $102.40 last Wednesday to the $90.45 we see right now. This means that if an investor bought CBA last week, their shares would have offered a yield of 3.66%. Today, those same shares offer a yield of 4.15%.

If CBA maintains or raises its dividend next year, an investor who bought in at $90.46 can expect a higher dividend yield (and income) than the investor who bought at $102.40.

So falling share prices aren’t always bad for long-term investors. Sure, it’s never fun watching the value of your shares drop in value. But it also shows that these occasions can be a potent buying opportunity for the brave of heart.

The post Falling ASX share prices = bigger dividend yields. Here’s what you need to know appeared first on The Motley Fool Australia.

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More reading

• Why are ASX 200 bank shares having another day to forget?
• Here are the 3 most traded ASX 200 shares on Wednesday
• 3 ASX 200 shares stretching higher on Wednesday
• Investing should be boring: fundie
• Will the share market recover in 2022?

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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Many of Australia’s top brokers have been busy adjusting their financial models again, leading to the release of a large number of broker notes this week.

Three ASX shares brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

According to a note out of Credit Suisse, its analysts have retained their outperform rating and $30.80 price target on this banking giant’s shares. Credit Suisse continues to rate ANZ as its preferred pick among the big four banks. This is due to its preference for banks with exposure to business banking, which it expects to fare better in the current environment. The ANZ share price is trading at $21.58 on Wednesday.

Lynas Rare Earths Ltd (ASX: LYC)

A note out of Macquarie reveals that its analysts have retained their outperform rating and $12.80 price target on this rare earths producer’s shares. This follows news that the company has been awarded a US$120 million contract from the US government to build a heavy rare earths facility. Macquarie was pleased with the news and expects it to lead to the commencement of production in FY 2025. This is a year earlier than previously anticipated. The Lynas share price is fetching $8.88 today.

Xero Limited (ASX: XRO)

Analysts at Ord Minnett have retained their buy rating and $97.00 price target on this cloud accounting platform provider’s shares. Ord Minnett notes that Xero has announced that it is increasing subscription prices in the ANZ and UK markets. Its analysts expect this to boost the company’s average revenue per user metric. The Xero share price is trading at $77.58 this afternoon.

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

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More reading

• Why are ASX 200 bank shares having another day to forget?
• 3 ASX 200 shares stretching higher on Wednesday
• Down 45% in 2022, is the Xero share price in the buy zone?
• Why Computershare, Lithium Plus, Lynas, and ResApp shares are pushing higher
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink

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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In case you were wondering, the Crown Resorts Ltd (ASX: CWN) share price is exchanging hands for the last time on the ASX today.

At the time of writing, the casino operator’s shares are up 0.23% to $13.08.

Why is Crown shares ceasing to exist from tomorrow?

The Crown share price will be suspended from close of trading today following the company’s latest update on its takeover.

In its statement, Crown advised that the Federal Court of Australia made orders approving the proposed $8.89 billion acquisition.

By way of a scheme of arrangement, Blackstone entity, SS Silver II Pty Ltd will become the new Crown owners after being green-lit.

Based in the United States, Blackstone is the world’s largest investment firm with approximately $915 billion in assets under management.

Crown is expected to lodge an office copy of the court orders with the Australian Securities and Investments Commission (ASIC) today. This means that the scheme will become legally effective.

While the company’s shares will be suspended, its subordinated notes under the code “CWNHB” will continue to be traded.

Blackstone will pay out $13.10 in cash per share to Crown shareholders which they will receive on 24 June.

Crown share price summary

A disastrous 2020/21 for Crown led its shares to record heavy falls over the past couple of years.

An AUSTRAC investigation along with issues regarding renewal of its gambling licence in Victoria plagued Crown shares.

However, its shares picked up steam in 2022 on the back of the proposed takeover offer.

Year-to-date, Crown shares are up almost 10%

On valuation grounds, Crown presides a market capitalisation of about $8.84 billion, with a tad over 677 million shares outstanding.

The post Guess which ASX 200 share is trading for the last time today? appeared first on The Motley Fool Australia.

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• 3 ASX 200 shares that avoided today’s sell-off
• 3 ASX 200 shares rocking new 52-week highs on Thursday
• Why Boss Energy, Crown, Magellan, and Shaver Shop shares are rising
• ASX 200 midday update: Magellan rebounds, Crown’s takeover boost
• Why is the Crown share price beating the ASX 200 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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REA Group Limited (ASX: REA) is having a tough time in the market in 2022. The REA share price is down 6.18% at the time of writing and has fallen below the $100 mark for the first time since the COVID-19 crash in February 2020. Year to date, REA shares are down 42%.

The question is, why?

Let’s look at the headwinds for the real estate classifieds giant that could be affecting its share price.

The ASX tech share sell-off

REA is an ASX tech share and the second-largest constituent in the S&P/ASX All Technology Index (ASX: XTX) by market capitalisation. And we all know what has happened to tech shares in 2022.

The tech sell-off in 2022 is the first headwind for the REA share price. The All Tech index is down 39.6% year to date. Ouch! But consider what this means, given REA is down by almost the same amount.

You know the saying, ‘Don’t throw the baby out with the bathwater’? Well, that’s what some ASX investors may be doing with REA.

Tech shares are getting hammered and REA appears to be going down with its sector compatriots.

Tech shares are out of favour right now because of economic conditions. Many ASX tech companies are young and not yet profitable. Many also have large debts required to fund their growth. So, rising inflation and interest rates aren’t good for them.

But REA isn’t a young company. It’s certainly both an ASX tech share and a growth share, but it’s also an established and profitable business. In its Q3 update for FY22 released last month, REA reported 27% year-on-year (YoY) growth in earnings before interest, tax, depreciation and amortisation (EBITDA) to $523 million for the first nine months of FY22.

Missing the mark as house prices decline

That third-quarter report is actually the second headwind, though. The results missed some analysts’ estimates and the REA share price lost 8% in value on the day they were released.

The third headwind is cooling conditions in Australia’s two biggest property markets, Sydney and Melbourne. Any negative news about property prices tends to put ASX investors off REA.

If we look at recent historical price movements, there’s a clear correlation between the REA share price and Australian property prices.

For example, the REA share price began rising in 2019 at the same time as the property market began its recovery from the 2017/2018 downturn.

The company’s shares also skyrocketed during the pandemic to an all-time high of $180.67 in November 2021 — just as CoreLogic was reporting the fastest annual growth in national home values since 1989.

In the three months to May 31, the median house price has fallen 1.3% in both Sydney and Melbourne, according to the latest CoreLogic data.

Is this a buying opportunity?

REA is a market darling stock that has delivered incredible share price gains over the long term.

Over 10 years, the REA share price has ascended 645%. Let’s compare that performance to a couple of other darlings.

Macquarie Group Ltd (ASX: MQG) shares have grown by 940% over the same time frame. CSL Limited (ASX: CSL) shares are up 672%, Rio Tinto Limited (ASX: RIO) shares are up 106%, and Commonwealth Bank of Australia (ASX: CBA) shares are up 80%.

So, it’s certainly fair to say REA has one of the most outstanding histories for share price growth among the ASX 200 blue chips.

A few brokers see the current weakness in the REA share price as an opportunity to buy the dip.

What the experts think of the REA share price

REA recently released an investor presentation outlining its evolution from a residential listing portal to a property, financial services, and data business.

Morgans liked what it heard and retained its add rating on REA shares with a slightly reduced price target of $144.

Goldman Sachs is more bullish. It has a buy rating on REA and a $167 price target on the shares.

The broker likes that REA management “remains confident it can achieve double digit revenue/EBITDA growth through the cycle with positive jaws”.

Furthermore, Goldman said:

Overall, we believe these commitments illustrate the pricing power of REA, pipeline of value-add products, and its ability to offset any potential macro weakness, and now forecast FY22-24E Sales growth of 10% despite challenging volume listings.

A recent Market Matters report also suggested REA could be worth buying.

As we reported, the Market Matters team said: “[Tax loss-selling] can often send already depressed stocks down into oversold/deep value areas, which can be attractive for the well-informed investor. The key is determining the difference between value and a company simply in trouble.”

Market Matters said REA was among three examples of “quality” ASX shares that might be in this boat.

The report said REA is an “almost monopolistic-style business” with “useful pricing power”.

Market Matters said REA would be “compelling” when its share price fell below $100 — which it has today.

The post Why has the REA share price crashed by 40% in 2022? appeared first on The Motley Fool Australia.

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More reading

• 2 blue chip ASX 200 shares that Goldman Sachs rates as buys
• 3 ASX shares to pounce on after tax-loss selling: report
• Here’s why I think these ASX tech shares are buys in June
• Here are 2 ASX 50 shares analysts rate as buys
• Can the REA share price turn over a new leaf in 2022?

Motley Fool contributor Bronwyn Allen has positions in CSL Ltd., Commonwealth Bank of Australia, Macquarie Group Limited, and REA Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. and Goldman Sachs. The Motley Fool Australia has recommended Macquarie Group Limited and REA Group 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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Santos Ltd (ASX: STO) shares haven’t been immune to the past week’s selling action.

But despite dropping 8% over the past five days, the S&P/ASX 200 Index (ASX: XJO) energy company remains up 22% year-to-date.

At the current price of $8.03 per share, Santos has a market cap of $27.1 billion.

But according to analysts at Morgans, those numbers are likely to head higher over the next 12 months.

Diversified earnings base to drive outperformance

Santos shares make it on the top 12 ASX 200 shares that Morgans believes “offer the highest risk-adjusted returns over a 12-month timeframe supported by a higher-than-average level of confidence”.

With its focus on oil and gas production and exploration, Santos also lists among the broker’s most preferred sector exposures over the coming year.

Andrew Tang, equity strategy analyst at Morgans, explained why Santos shares made the top 12 list on Livewire.

According to Tang:

We expect the resilience of Santos’ growth profile and diversified earnings base see it best placed to outperform against a backdrop of a broader sector recovery. While pre-FEED, we see Dorado as likely to provide attractive growth for Santos, while its recent acquisition increasing its stake in Darwin LNG has increased our confidence in Barossa’s development.

One area Tang recommends keeping a close eye on is its operations in Papua New Guinea.

“PNG growth meanwhile remains a riskier proposition, with the government adamant it will keep a larger share of economic rents while operator Exxon has significantly deferred growth plans across its global portfolio,” he said.

How have Santos shares performed longer term?

Santos shares have not only outperformed year-to-date, but they’ve also smashed the benchmark returns over the past five years, gaining 164%. By comparison, the ASX 200 is up 15% over that same period.

At current prices, Santos shares pay a 2.3% trailing dividend yield, 70% franked.

The post ‘Resilient growth profile’: Why this broker is tipping Santos shares to outperform appeared first on The Motley Fool Australia.

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• This fund manager is optimistic on these 2 leading ASX 200 energy shares
• 5 things to watch on the ASX 200 on Wednesday
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• ASX 200 energy shares are up 40% so far this year. Can they run further?
• Why did the Santos share price smash a 2-year high on Thursday?

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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record another sizeable decline. At the time of writing, the benchmark index is down 1.3% to 6,597.3 points.

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

Block Inc (ASX: SQ2)

The Block share price is down 6% to $87.29. This follows another poor night for this payments company’s NYSE listed shares on Tuesday. However, Block isn’t the only tech share falling today. With heavy declines being recorded across the sector, the S&P ASX All Technology index is down 3% at the time of writing.

Nanosonics Ltd (ASX: NAN)

The Nanosonics share price is down 3% to $2.99. This appears to have been driven by broad market weakness and a broker note out of Morgans. In respect to the latter, this morning Morgans retained its add rating but slashed its price target on the infection prevention company’s shares by 10% to $4.86. The broker has downgraded its earnings forecasts to reflect higher costs and softer growth.

St Barbara Ltd (ASX: SBM)

The St Barbara share price is down 3% to $1.10. Investors have been selling St Barbara and other gold miners after a pullback in the gold price overnight. This has led to the S&P/ASX All Ordinaries Gold index tumbling 1.4% this afternoon.

Woodside Energy Group Ltd (ASX: WDS)

The Woodside share price is down 3% to $32.03. The catalyst for this was weakness in energy prices overnight. This has put pressure on energy producers like Woodside on Wednesday. So much so, the S&P/ASX 200 Energy index is down 2.5% at the time of writing.

The post Why Block, Nanosonics, St Barbara, and Woodside shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Why is the Block share price tumbling another 5%
• This fund manager is optimistic on these 2 leading ASX 200 energy shares
• ASX 200 midday update: ResMed’s US$1bn acquisition, tech shares continue to sink
• Can the St Barbara share price recover its losses in 2022?
• Why BHP, Block, Harvey Norman, and PointsBet shares are sinking

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 Block, Inc. and Nanosonics Limited. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nanosonics 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 S&P/ASX 200 Health Care Index (ASX: XHJ) is in the red today, but this one ASX share is bucking the trend.

The ResApp Health Ltd (ASX: RAP) share price is currently at 17 cents, a 3.03% gain. It comes despite the ASX 200 healthcare index being down 2.11% so far today.

ResApp’s share price is trading at its highest level since 26 June 2020.

Let’s take a look at why ReApp Health is having such a good day.

Why is this ASX share rising?

ResApp shares are climbing a further 3% today after rocketing a massive 50% yesterday.

ResApp is a digital health company that works on smart phone apps to diagnose and manage respiratory disease.

Investors appear to be continuing to snap up Resapp shares today after pharmaceutical giant Pfizer improved its takeover offer for the company.

ResApp had entered a trading halt on 31 May pending the announcement and emerged from the freeze yesterday.

Pfizer has agreed to boost its offer from 11.5 cents per share to 14.6 cents per share or 20.7 cents per share.

ResApp originally announced it had entered an agreement with Pfizer in April. The two companies also entered a research and development licence agreement to work together on COVID-19 products.

ResApp’s CEO and managing director Tony Keating said the revised offer provides an “attractive premium” to the ResApp share price. He added:

We believe that it represents significant value for all shareholders and the ResApp Board strongly recommends shareholders vote in favour of the transaction in the absence of a superior proposal.

The final offer will depend on the results of a clinical validation study on Resapp’s COVID-19 cough detection tool.

The results of this study are expected to be announced on or near 20 June.

Share price snapshot

The ResApp shares price has soared by nearly 55% in the past 12 months while it is up 162% year to date.

In contrast, the S&P/ASX 200 Health Care Index has slipped nearly 15% in the past year and also year to date.

ResApp has a market capitalisation of around $146 million.

The post This ASX share is defying the odds to crack new 52-week highs appeared first on The Motley Fool Australia.

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More reading

• Why Computershare, Lithium Plus, Lynas, and ResApp shares are pushing higher
• Here’s why the ResApp share price is rocketing 50% today
• Why Australian Clinical Labs, Lake Resources, PolyNovo, and ResApp are rising
• ResApp share price halted ahead of Pfizer takeover update

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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