Category: Stock Market

At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is pushing higher again. The benchmark index is currently up 0.7% to 7,305.4 points.

Here’s what’s happening on the ASX 200 on Friday:

EML Payments shares sink

The EML Payments Ltd (ASX: EML) share price is crashing lower today after releasing an update on regulatory action by the Central Bank of Ireland (CBI). According to the release, the CBI is planning to take action against its PFS Card Services (Ireland) business. Management has warned that the potential directions “could materially impact the European operations of the Prepaid Financial Services (PFS) business.”

Mining shares lift ASX 200

One area of the market helping to drive the ASX 200 index higher today is the mining sector. The likes of BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) shares are pushing higher today following a decent night for base metals. Copper, nickel, and aluminium prices all pushed higher amid global economic growth optimism.

ANZ BNPL offering

The Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price is struggling today amid broad weakness in the banking sector. Not even news that the bank is planning to offer a buy now pay later solution with its credit cards has been able to support its shares. Once launched in 2022, the new Visa Instalments feature will provide ANZ credit card customers with an option at the checkout or online to make purchases through interest free instalments across a wide range of terms.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Chalice Mining Ltd (ASX: CHN) share price with a 5% gain. This is despite there being no news out of the gold explorer. The worst performer has been the EML Payments share price with a 14% decline following the update on its Ireland business.

The post ASX 200 (ASX:XJO) midday update: EML crashes, mining shares rise appeared first on The Motley Fool Australia.

More reading

• EML (ASX:EML) share price plunges 13% following regulatory update
• How did ASX fintech shares perform in the FY22 first quarter?
• BHP (ASX: BHP) share price gains amid CEO’s ‘strong growth outlook for China’
• ANZ (ASX:ANZ) share price flat despite BNPL plans
• What happened on the US stock market last night?

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. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Sezzle Inc (ASX: SZL) share price has taken off over the past 2 days after the United States cult retailer Target Corporation (NYSE: TGT) launched the buy now, pay later (BNPL) service.

Those shopping with the retail giant ahead of the holiday season will now be able to pay for their purchases in instalments through Sezzle or Affirm, which is owned by Affirm Holdings Inc (NASDAQ: AFRM).

The Sezzle share price stormed 12.6% higher yesterday and is continuing to gain today.

At the time of writing, the Sezzle share price is $5.85, which is 3.54% higher than its previous close.

That means the BNPL provider’s stock is now trading for 18.66% more than it was at Wednesday’s close.

Let’s take a closer look at the news that’s got the market excited about Sezzle this week.

Sezzle share price soars on Target launch

The Sezzle share price is rocketing higher this week after Target announced it has launched the BNPL provider in-store and online.

Target shoppers can now split their payments into 4 instalments using Sezzle’s platform.

They can also split large purchases into monthly instalments using Affirm.

Sezzle announced the partnership in June after the companies signed a 3-year agreement.

Under the agreement, Sezzle can be used by customers shopping on Target.com and the Target app. Target shoppers can also use Sezzle on orders that use the retailer’s same-day fulfillment services.

Additionally, those shopping in-store can access Sezzle’s BNPL service by paying with Apple Pay, which is owned by Apple Inc (NASDAQ: AAPL), or Google Pay which is owned by Alphabet Inc (NASDAQ: GOOGL).

Target’s president of financial and retail services, Gemma Kubat, commented on the news that’s been driving the Sezzle share price over the past 2 days, saying:

We know our guests want easy and affordable payment options that work within their family’s budget.

Through our partnerships with Affirm and Sezzle, Target is investing in new financial tools that make our shopping experiences more flexible and personalised to guests’ needs, right in time for the holiday season.

The post The Sezzle (ASX:SZL) share price has leapt 19% in 2 days. Here’s why appeared first on The Motley Fool Australia.

More reading

• How did ASX fintech shares perform in the FY22 first quarter?
• Which ASX 300 shares are the biggest winners and losers on Thursday?
• Why Collins Foods, Pilbara Minerals, Sezzle, & Super Retail are pushing higher
• Why the Sezzle (ASX:SZL) share price is storming 9% higher on Thursday
• ASX 200 tech shares set to slide as Nasdaq plunges 2%

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Affirm Holdings, Inc., Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The EML Payments Ltd (ASX: EML) share price is nosediving during early morning trade on Friday. This comes after the payments company provided a regulatory update relating to the Central Bank of Ireland (CBI).

At the time of writing, the EML share price is down a sizeable 12.97% to $3.22. Today’s fall means shareholders have lost more than 20% in a month.

What happened?

As pointed out last night by my colleague Tristan, EML Payments advised its Irish-based subsidiary, PFS Card Services (PCSIL), had received further correspondence from CBI.

As such, regulatory concerns were raised about PCSIL’s directions in respect to its remediation plan and material growth. EML Payments noted this could impact its European operations of PSCIL’s business from a material standpoint.

While CBI acknowledged the remediation program and governance improvements, the proposed material growth policy is higher than expected.

Consequently, CBI proposed certain limits be applied to programs. But if implemented, this may potentially have a negative impact on the PCSIL business. This appears to have had a detrimental effect on the EML share price today.

Subject to endorsement by the PCSIL board, EML Payments will submit its plan next week. This involves a significant and detailed analysis of limits applied across almost 27,000 programs. In addition, some of these programs could be recalibrated to different limits within.

PCSIL’s submission outlining potential directions is due to the CBI by 28 October.

EML Payments noted while its remediation plan remains on track, this does not affect its operations in other parts of the world. This includes its business in Australia, North American, and other subsidiaries listed in the United Kingdom, Ireland, and France.

About the EML share price

Over the course of the last 12 months, the EML share price accelerated to an all-time high in April before freefalling. As a result, its shares crashed below $2.80 and have since moved sideways, down by more than 20% year-to-date.

Based on valuation grounds, EML Payments has a market capitalisation of roughly $1.24 billion, with 373 million shares on issue.

The post EML (ASX:EML) share price plunges 13% following regulatory update appeared first on The Motley Fool Australia.

More reading

• How did ASX fintech shares perform in the FY22 first quarter?
• 5 things to watch on the ASX 200 on Friday
• EML Payments (ASX:EML) share price on watch with CBI update
• ASX 200 tech shares set to slide as Nasdaq plunges 2%
• How has the EML (ASX:EML) share price been performing compared to Tyro?

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. owns shares of and has recommended EML Payments. The Motley Fool Australia owns shares of and has recommended EML Payments. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX 200 darling Afterpay Ltd (ASX: APT) has had quite the year in 2021 so far, capped off of course by the company’s pending acquisition by the US payments giant, Square Inc (NYSE: SQ).

Afterpay and Square announced this blockbuster marriage, which will be the largest acquisition in Australia’s corporate history, back in early August. So, examining Afterpay’s share price performance over the first quarter of FY2022 (1 July – 30 September) might be especially illuminating.

Let’s dig in.

How did the Afterpay share price perform over the FY22 first quarter?

Afterpay shares started the 2022 financial year on 1 July at a share price of $118.17. On 30 September, the buy now, pay later (BNPL) giant ended the quarter at a share price of $121.32. That puts its raw gains for the quarter at 2.67%.

Afterpay doesn’t pay a dividend, so that’s the absolute return shareholders are left with.

Here’s something else to consider, though. Square and Afterpay announced their merger plans on the morning of Monday 2 August. Up until that point, Afterpay had lost a stunning 18.2% since the start of the quarter, closing on Friday 30 July at a price of $96.66.

The deal Square put forward to acquire Afterpay values the Afterpay share price at 0.375 of one Square share. That’s because Square’s offer was all-scrip, putting up 0.375 Square shares for every Afterpay share held.

That intrinsically ties the Afterpay share price to the Square share price. As it stands today, Square last traded at a price of US$249.43. That works out to be $340.94 in Aussie dollars at the current exchange rate.

That places Square’s offer at a value of $127.85 for every Afterpay share as of today.

Looking at Afterpay’s share price history, the Square acquisition offer is probably largely to thank for Afterpay’s positive first quarter.

At the time of writing, the Afterpay share price is $123.43, up 2.32% so far on Friday.

Afterpay has a market capitalisation of $34.93 billion.

The post Here’s what happened to the Afterpay (ASX:APT) share price in the FY22 first quarter appeared first on The Motley Fool Australia.

More reading

• How did ASX fintech shares perform in the FY22 first quarter?
• Here’s why ASX 200 tech shares are surging today
• Why Afterpay, Austal, Baby Bunting, & Nick Scali shares are storming higher
• Why the Afterpay Ltd (ASX:APT) share price is bouncing back on Wednesday
• ASX 200 (ASX:XJO) midday update: A2 Milk class action, tech shares rebound

Motley Fool contributor Sebastian Bowen owns shares of Square. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Square. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Energy Resources of Australia Limited (ASX: ERA) share price is selling off on Friday, down 4.05% to 35.5 cents.

The company is currently undergoing a rehabilitation program for the area surrounding its uranium Ranger Mine in the Northern Territory.

What’s driving the Energy Resources share price?

This morning, Energy Resources announced that the Ranger rehabilitation project will overrun both initial cost and schedule forecasts.

According to the release, the full extent of the overrun is not yet known and the company will update the market in due course.

Production at the Ranger Mine ceased in early 2021 after 40 years of operation.

The company will undergo an extensive cleanup of the area with activities such as managing contaminated materials and reinstating the affected landform.

The company estimates that over 18 gigalitres of process water need to be treated over the next five years and 90 million tonnes of material will need to be moved to create the final landform.

According to Energy Resources’ June half-year results, the rehabilitation project is a strategic priority to demonstrate the company’s commitment to “long-term sustainable operations in the region, create a sustainable, positive legacy and underpin potential future growth opportunities.”

The completion of the rehabilitation project was initially projected by January 2026.

Energy Resources held total cash resources of $725 million at 30 June 2021, comprised of $191 million in cash at bank and $534 million held by the Commonwealth Government as part of its Ranger Rehabilitation Trust Fund.

What’s next for Energy Resources?

Energy Resource’s near-term focus will be on completing its rehabilitation project.

During this time, the company said that it will attempt to maximise cash flow generation from its remaining inventories of drummed uranium oxide. As well as progress inorganic growth options for evaluation.

The Energy Resources share price is up 9.4% year-to-date.

The post Here’s why the Energy Resources (ASX:ERA) share price is falling on Friday appeared first on The Motley Fool Australia.

More reading

• Why ASX uranium shares are diving double-digits on Monday
• This week’s top ASX share versus top altcoin winner revealed
• Is there a uranium ETF listed on the ASX?
• Why are ASX uranium shares in focus today?
• Why Energy Resources of Australia, Incitec Pivot, Sydney Airport, & Talga are rising

Motley Fool contributor Kerry Sun 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 Bruce Jackson.

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The Imdex Limited (ASX: IMD) share price has started the day off in the green and is climbing 2% higher at $2.68.

Imdex shares have rallied 13% this past week, and another 13% this month as well.

That’s well ahead of the S&P/ASX 200 index (ASX: XJO) which has posted a loss of 3% in that time.

Why is the Imdex share price gaining ground lately?

Imdex shares had been trading sideways since the company released its FY21 earnings report.

At that time, the provider of technology and equipment to the mining industry’s share price popped 11% on the day, but returns had been fairly uninteresting from that point.

That is however until we finished the walk through September, where investors began to show love for Imdex in the markets again.

Despite no price-sensitive news, bullish investors began driving the price action from $2.32 to $2.45 per share in the first week of October.

Then, yesterday, the company announced some positive updates from its annual general meeting (AGM), noting it had made a positive start to FY22.

It stated that Q1 FY22 revenue was already up 41% from the same time last year, and 13% higher than the previous quarter.

This is the highest Q1 top-line earnings result the company has achieved since 2018 by at least $18 million, per the AGM presentation.

Can Imdex keep up the momentum? One leading broker seems to think so. Let’s take a look at what investment firm Jeffries is saying about the Imdex share price.

Can Imdex keep growing its earnings?

Jeffries certainly believes it can, especially given the company’s record quarterly revenue result. The broker has updated its modelling and raised its earnings outlook for Imdex from the company’s updates.

As such, it reiterated its buy recommendation on Imdex shares, which implies analysts see further growth potential as a possibility.

The broker feels there are upcoming catalysts investors might want to consider as well too, as “the pace of recovery continues to surprise to the upside”, referring to broad ASX earnings growth and the recovery of the real economy.

With this in mind, it “expect(s) the next catalyst to be earnings and the inherent operating leverage that would drive further upgrades”, which it says could be bolstered by product development after the pandemic.

With FY22 revenue coming in so strong this early in the year, the broker lifted its FY22-24 estimates on Imdex’s EBITDA by 13-15% and its net profit after tax (NPAT) forecasts by 18-20%.

As The Motley Fool reported in August, some fund managers are seeing this upside in Imdex shares too, with Fairmont Equities managing director providing an optimistic look on the company’s shares in a note to clients.

Imdex share price snapshot

The Imdex share price has climbed 55% this year to date and has posted a return of 98% in the last 12 months.

These outsized gains have outpaced the broad index’s 12 month return of around 25%.

The post What this broker is saying about the Imdex (ASX:IMD) share price appeared first on The Motley Fool Australia.

More reading

• The Imdex (ASX:IMD) share price leaps 7% following AGM

The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Imdex Limited. 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 Bruce Jackson.

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The Woolworths Group Ltd (ASX: WOW) share price is gaining this morning after the company settled a class-action lawsuit brought about by its employees.

A class action against Woolworths was filed to the Federal Court of Australia in 2019 after the supermarket found it had underpaid around 5,700 employees.

Today, the retail giant announced it has provisionally settled the class action. The company has also agreed to pay a $2,500 ex-gratia payment plus superannuation to around 20,000 current and former employees.

At the time of writing, the Woolworths share price is $39.86, 0.4% higher than its previous close.

That’s roughly in line with the broader market’s movements. Right now, the S&P/ASX 200 Index (ASX: XJO) and the All Ordinaries Index (ASX: XAO) have gained 0.16% and 0.21% respectively.

Let’s take a closer look at today’s non-price-sensitive news from Woolworths.

A quick refresher

Woolworths has been battling against the now-settled class action for nearly 2 years. In October 2019 a review found Woolworths had underpaid some of its salaried employees.

Around a month later, employees filed a class action lawsuit against the company to the Federal Court of Australia.

Woolworths has since repaid what was owed to affected employees, including interest and superannuation. The remediation payments have pulled around $370 million from Woolworths’ coffers so far.

However, the company believes the underpayments began in 2010. That’s beyond the time period the supermarket keeps records of rosters. Therefore, it’s unclear as to whether employees were underpaid between 2010 and 2013.

Today’s news

The Woolworths share price is up amid news the company has settled a class-action lawsuit brought against it.

Additionally, Woolworths has agreed to provide around $50 million worth of ex-gratia payments to previously underpaid employees.

Unfortunately for Woolworths, it no longer has records of employee rosters from between 2010 and 2013. That means the company can’t verify if employees were indeed underpaid during that time.

However, the underpayments likely stem from the 2010 implementation of the modern General Retail Industry Award.

As a result, the company will provide every employee who was potentially affected by the underpayments from 2010 until 2013 with a $2,500 payment, plus superannuation.

Woolworths’ CEO Brad Banducci commented on the news released today:

We said at the outset that we would extend our review beyond our legal obligations and look back to 2010. With detailed analysis challenging in the earlier years, we felt an equal and broad-based payment to all potentially impacted team members was a fair and equitable way to approach remediation for this period.

Woolworths share price snapshot

Today’s gains for the Woolworths share price have added to its already strong performance.

The company’s share price has gained 17% since the start of 2021. It is also 24% higher than it was this time last year.

The post Woolworths (ASX:WOW) share price gains amid class action settlement appeared first on The Motley Fool Australia.

More reading

• The final Woolworths (ASX:WOW) dividend will be paid today. Here’s what you need to know
• 5 things to watch on the ASX 200 on Friday
• 3 ASX shares protected from rising inflation and interest rates
• 5 defensive ASX shares to guide you through the market correction
• What happened for the Woolworths (ASX:WOW) share price in the FY22 first quarter?

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 Bruce Jackson.

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The Webjet Limited (ASX: WEB) share price could be one to watch for the rest of this year. Could the ASX travel share rise to $7 by the end of 2021?

One broker has a positive price target for the company.

UBS rates Webjet as a buy

Webjet is rated as a buy by the broker UBS, with a price target of $6.85. That suggests the broker believes Webjet shares can rise by not far off 10%. However, a price target is for a period of 12 months, not just for the next quarter. It may take a bit longer than December 2021 to get to $7.

Increasing vaccine coverage is helping increase UBS’ belief in the company’s prospects. It noted that the ASX travel share was doing well when there weren’t so many COVID restrictions. Once borders open again, the broker is positive on Webjet’s future, with a lot of expected demand waiting to be unleashed.

What has the ASX travel share said?

Webjet said in an update the WebBeds business was profitable in July and August and is well on track to be profitable in September. It has seen “strong demand” as travel restrictions ease in North America and Europe, suggesting “significant upside” as more international markets reopen.

The company’s online travel agency business was profitable for the period from April to July, though the lockdowns in Australia and New Zealand impacted that. Online Republic was also profitable in April and May, but was also impacted by the lockdowns. Management said the company is confident that both businesses will return to profitability as soon as the Australian and New Zealand markets reopen.

The Webjet share price could be in focus when borders do open.

Management also said:

We see a world of opportunity for Webjet. All our businesses have significant potential to grow market share by expanding into new market segments and benefiting from consumers shifting to buy travel online. Transformation initiatives are underway and we are on track to reducing costs by at least 20% once the company gets back to scale. As a result, as conditions normalise, we believe our Webjet businesses will have higher market share, lower costs and greater profitability.

While the exact timing is uncertain as our growth opportunities are driven by the opening of borders, we know demand for travel will return and we are absolutely ready to capture it.

What is the UBS valuation on the Webjet share price?

The broker thinks that Webjet is going to get back to making profit in FY23.

Based on the UBS earnings estimate for the 2023 financial year, Webjet shares are valued at 20x FY23’s projected profit.

UBS has also pencilled in that Webjet could pay a dividend in FY23. How much? Not a big one, the estimate is 12.7 cents per share. Excluding franking credits, that translates to a dividend yield of 2%.

The post Can the Webjet share price fly to $7 by the end of 2021? appeared first on The Motley Fool Australia.

More reading

• It hasn’t been a great week so far for the Webjet (ASX:WEB) share price
• These are the 10 most shorted ASX shares
• Why ASX 200 travel shares are having a bumper day
• Up 5%, the Webjet (ASX:WEB) share price is back to March 2020 levels. Here’s why
• Here’s why the Webjet (ASX:WEB) share price gained 29% last quarter

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 owns shares of and has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The NIB Holdings Limited (ASX: NHF) share price is in the green this morning.

The private health insurer has revealed it will pay employees $1,200 annually plus a one-off $300 to work from home.

According to NIB chief people officer Martin Adlington, the payments will compensate staff for “renting” their homes for work.

“While nobody celebrates the misery and disruption caused by COVID-19, it has presented a unique opportunity to us to re-think old work practices and design principles and ultimately redefine work at NIB,” Adlington said.

“We moved quickly to transition our people to remote working at the start of the pandemic, but since then we’ve spent months planning and consulting with our people to better understand how they like to work and how we can best support them.”

The private health insurer is encouraging employees to telecommute for a minimum of 4 days each week, and only come into the office for meetings and social events.

The NIB share price is up 0.14% to $7.03 in early trading on Friday and up 16.39% year to date.

Paying staff to telecommute attracts superior talent

Many employers have already adopted working from home as a permanent post-pandemic practice, which saves them office maintenance costs. 

But this is understood to be the first time an Australian company has redirected some of those savings to staff, who bear the expenses of conducting business at home.

The scheme, called Life at NIB, came about after 79% of the insurer’s 1,200-strong workforce indicated they did their best work from home.

“Our $1,200 annual allowance will help cover some of the costs of working in a remote environment while new employees will also receive a one-off reimbursement of $300 to help them set up their workstation at home, in addition to the tech kit we supply them,” Adlington said.

“Each employee can come to an agreement with their leader on what works best for them in terms of hours and location.”

Adlington added that the flexible working policy has already helped NIB attract new talent.

“Our teams are starting to be made up of a mix of people from all different locations which is great for encouraging diversity of thought.”

OHS at home

NIB is also putting in programs to assist employees’ mental and physical health while working from home.

“In the past 12 months, we’ve learnt that just having mental health resources available is not enough and creating proactive internal marketing campaigns that leverage a range of communications channels and formats, has the most impact,” Adlington said. 

“It’s why we’ve focused on delivering experiences that foster connections and camaraderie across NIB like physical challenges, panel discussions and buddy programs.”

Establishing a “safe space” for staff to start conversations is a vital part of the telecommute policy, too.

“We are very conscious of employees continuing to experience those informal workplace connections with their colleagues and we’re constantly looking for new ways to support this, particularly during lockdown.”

NIB share price snapshot

The NIB share price has gained 62.65% over the past 12 months. This far outpaces the S&P/ASX 200 index (ASX: XJO), which is up 19.25%.

The post ASX 200 company pays staff $1,500 to work from home appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• NIB (ASX:NHF) share price struggles despite big profits in FY21
• Why the NIB (ASX:NHF) share price is heading south today
• Why this analyst is bullish on the NIB (ASX:NHF) share price
• 2 small-cap ASX shares with an edge over rivals

Motley Fool contributor Tony Yoo 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 NIB Holdings Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Kogan.com Ltd (ASX: KGN) share price is heading in the right direction again on Friday morning.

At the time of writing, the ecommerce company’s shares are up over 1% to $9.87.

However, despite this morning’s gain, the Kogan share price is still down over 6% since the end of last week.

This may be due to concerns over the impact that proposed strikes by transport operators could have on online shopping during the peak Christmas season.

Is the Kogan share price good value?

One leading broker that appears to see a lot of value in the Kogan share price is Credit Suisse.

According to a recent note, the broker currently has an outperform rating and $14.06 price target on the company’s shares.

Based on the latest Kogan share price, this implies potential upside of 42% over the next 12 months.

What did the broker say?

Credit Suisse acknowledges that it remains unclear how quickly the company can reduce its cost base to normal levels after a disastrous FY 2021.

Due to the company’s excess inventory, Kogan reported a significant increase in storage costs. It also led to Kogan spending more on sales and marketing to help shift it. This weighed heavily on its margins and limited its full year profit to just $3.5 million from gross sales of almost $1.2 billion. This was down 86.8% year on year.

Nevertheless, Credit Suisse feels investors should look beyond the short term and focus more on its long term growth potential. This is being underpinned by Kogan’s strong market position, the shift to online shopping, and its growing private label business.

Overall, based on this, the broker feels the Kogan share price is trading at an attractive level for investors and it retains its outperform rating.

The post Top broker tips Kogan (ASX:KGN) share price to rise 42% 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. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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