Category: Stock Market

If you’re looking for an easy way to invest in international shares for diversification, then exchange traded funds (ETFs) could be just what you need.

But which ETFs should you look at? Here are two popular ETFs that have generated strong returns for investors:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. As its name implies, it gives investors exposure to a number of the biggest and brightest tech shares in the Asia market. Among the fund’s holdings you will find the likes of Samsung, Alibaba, JD.com, Meituan Dianping, Tencent, Baidu, and Pinduoduo.

In respect to the latter, Pinduoduo is an e-commerce platform that offers a wide range of products from daily groceries to home appliances. Its platform connects distributors with consumers directly through an interactive shopping experience, allowing shoppers to team up to buy items at lower prices. At the end of September, it was serving 731 million active buyers.

Another company you’ll be owning a slice of is Meituan Dianping. Its apps connect consumers with local businesses for food deliveries (think UberEats), hotel bookings, and movie tickets, among many other services. During the second quarter of FY 2020, the company was making 24.5 million food deliveries per day. Meituan had 476.5 million users at the end of September.

Over the last 12 months, the BetaShares Asia Technology Tigers ETF generated a return of 68% for investors.

BetaShares NASDAQ 100 ETF (ASX: NDQ)

Another ETF to look at is the BetaShares NASDAQ 100 ETF. This ETF aims to track the performance of the famous NASDAQ 100.

This index comprises 100 of the largest non-financial companies listed on Wall Street’s famous exchange. This means you’ll be buying a slice of tech shares such as Amazon, Apple, Microsoft, Netflix, and Google parent, Alphabet, as well as non-tech companies including Gilead Sciences, Lululemon, Moderna, and Starbucks.

As with the Asia Technology Tigers ETF, its units have provided investors with strong returns over the last 12 months. Since this time last year, the BetaShares NASDAQ 100 ETF is up 23.5%.

More reading

• 3 explosive ASX growth shares that could be strong buys
• Got cash to invest? Here are 3 ASX shares to buy
• 2 tech ETFs delivering rapid growth
• Here’s a fantastic ETF that ASX investors need to know about
• Afterpay and BrainChip were some of the most traded ASX shares last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BETANASDAQ ETF UNITS and BetaShares Asia Technology Tigers ETF. 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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With earnings season on the horizon, I have been looking at what is expected from some of Australia’s most popular companies.

On this occasion, I’m going to take a look at conglomerate Wesfarmers Ltd (ASX: WES).

What is expected from Wesfarmers in the first half of FY 2021?

According to a note out of Goldman Sachs, it is expecting a strong half year result from Wesfarmers next month.

Goldman is forecasting underlying revenue of $17,616.2 million for the six months ended 31 December. This is up 15.5% on the prior corresponding period. It is also 2.6% higher than the consensus estimate of $17,171 million.

This is expected to be driven by growth across almost the entirety of the business. Though, the biggest driver will be the key Bunnings business, which Goldman is expecting to deliver a 22.3% increase in revenue to $8,899.4 million.

This is expected to be supported by an 8.4% jump in Department Stores revenue to $5,406.7 million and a 25.6% increase in Officeworks revenue to $1,546.1 million.

And thanks to margin expansion of 120 basis points, offset slightly by a lower property earnings contribution, Goldman estimates that the company will report a 12.5% increase in earnings before interest and tax (EBIT) to $1,831.8 million.

Finally, underlying net profit after tax is forecast to grow 12.7% to $1,269.8 million, allowing the Wesfarmers board to declare an interim dividend of 84.1 cents per share. This will be up 12.2% on last year’s interim dividend.

Though, it is worth noting that in respect to its dividend, Goldman does see upside risk. It commented: “However, we note that there is risk to the upside through a special dividend given the strong balance sheet position and the guidance for c. 85% of payout ratio (which we forecast on a full year basis).”

Is the Wesfarmers share price in the buy zone?

At present, Goldman feels Wesfarmers’ shares are fully valued and has reaffirmed its neutral rating and lifted its price target to $48.30.

This compares to the latest Wesfarmers share price of $55.27.

More reading

• Wesfarmers (ASX:WES) share price climbs to new record high
• These blue chip ASX shares just hit multi-year highs
• Why ASX travel shares like Webjet (ASX:WEB) fell lower on Monday
• 3 top ASX blue chip shares to buy
• ASX 200 Weekly Wrap: Change in America spurs ASX 200 higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Wesfarmers 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 Sezzle Inc (ASX: SZL) share price is trading lower on Friday following the release of its fourth quarter update.

In afternoon trade, the buy now pay later provider’s shares are down 2% to $8.12.

How did Sezzle perform in the fourth quarter?

For the three months ended 31 December, Sezzle reported a 205.4% increase in underlying merchant sales (UMS) to US$320.8 million ($419.8 million). This was also a 40.6% quarter on quarter increase.

This meant that at the end of the period, Sezzle’s annualised run rate UMS reached US$1.36 billion.

According to the release, this strong growth was driven by an increase in active customers, merchants, and repeat usage.

In respect to customer numbers, Sezzle’s customers broke through the 2 million mark for the first time and stood at 2.2 million at the end of the period. This was up 143.9% over the 12 months.

As for merchant numbers, they increased 166.6% to 26,690. Management notes that its move up the merchant enterprise spectrum toward large enterprise is gaining traction. In addition to GameStop, Sezzle is now available at a number of mid-size merchants such as UNTUCKit, Thursday Boots, Galls, Guidefitter, and Pure Hockey.

And finally, repeat usage improved for the 24th consecutive month. Active Consumer repeat usage grew to 89.8% and supported lower loss rates.

At the end of the period, the company had total cash on hand of US$89.1 million, consisting of US$84.3 million of cash and cash equivalents and US$4.8 million of restricted cash.

Sezzle’s Executive Chairman and CEO, Charlie Youakim, was pleased with the quarter and particularly the company’s performance in December.

He commented: “We are very excited about our momentum as December’s UMS outpaced November’s for the first time in the Company’s history. Further, each month throughout 4Q20 represented new records for UMS, Active Consumers, Active Merchants, and Repeat Usage.”

“Our efforts toward large enterprise merchants is paying dividends, as evidenced by our recent addition of GameStop and a number of mid-sized merchants such as UNTUCKit, Thursday Boots, Galls, Guidefitter, and Pure Hockey,” he concluded.

More reading

• What’s in store for the ASX tech sector in 2021?
• ASX 200 rises 0.4%
• Could this be why Afterpay (ASX:APT) and other BNPL shares are soaring today?
• Why Afterpay, Australian Ethical, Pro Medicus, & Sezzle shares are charging higher
• 2 small cap ASX shares to buy that are growing quickly

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Sezzle Inc. The Motley Fool Australia has recommended Sezzle Inc. 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 Wisr Ltd (ASX: WZR) share price is climbing today as the company announced a positive quarterly report for the period ending 31 December 2020. Shares in the neo lender are currently trading 2.7% higher at a price of 19 cents.

Wisr is a small cap Australian fintech company that operates in the marketplace lending industry. The company’s app aims to help people pay down debt and enables users to compare credit scores. It also has recently launched a vehicle lending product. 

Why the Wisr share price is flying higher

In today’s release, the company advised its Wisr Warehouse funding model continued to drive growth for the company. As such, Wisr saw strong 43% growth on last quarter as revenue increased to $5.9 million. This means that revenue is now up an impressive 350% since this time last year.

New loan originations also grew, up 35% on the previous quarter at a record of $83.3 million. Total loan originations now stand at $390.5 million.

Wisr remains strongly funded with $29 million in cash and liquid loan assets.

Management comments

Wisr CEO Anthony Nantes welcomed the results, saying:

With all the foundations now firmly in place, our very strong exit run rate and continued improvements in all key metrics has us well placed to deliver a highly profitable business as we scale towards our medium-term target of a $1B loan book.

Wisr continues to attract Australia’s most creditworthy customers with our purpose-led business model, headlined by rates lower than a big bank, with no monthly or early repayment fees and the only app in Australia to help customers pay their loan down faster.

About the Wisr share price

The Wisr share price has underperformed the market in recent times, dropping 22% in the last six months. In comparison, the All Ordinaries Index (ASX: XAO) has more than 14% over the same period.

More reading

• The Next Science (ASX:NXS) share price is up 8% today. Here’s why
• Here’s why the Volpara (ASX:VHT) share price is edging higher
• Why the 4DMedical (ASX:4DS) share price is soaring higher
• Here’s why the Coventry Group (ASX:CYG) share price is soaring 9% today
• Here’s why the Rhythm (ASX:RHY) share price hit an all-time high today

Motley Fool contributor Daniel Ewing 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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Worley Ltd (ASX: WOR) shares are climbing higher today following the announcement of two contract awards for the company. During the opening minutes of trade, the Worley share price catapulted to an intraday high of $11.90. However, some quick profit taking has led Worley shares to retreat back to $11.77 at the time of writing, up 3.79%.

For this month alone, the global engineering company has won a total of five lucrative deals within the energy, chemicals and resources sectors.

Extended strategic partnership

The Worley share price is on the move today after the company released two positive updates to the market.

The first of these announcements related to a signed strategic partnership between Worley and Avantium Renewable Polymers. Under the agreement, Worley will assist in the development of a renewable plastic feedstock plant located in Delfzijl, the Netherlands. This follows the company’s completed work conducted over the last two years in the concept development phase and front-end engineering design of the facility.

The first-of-its-kind renewable plastic feedstock plant will produce plant-based furandicarboxylic acid (FDCA). This is a key component in making chemicals and plastics such as polyethylene furanoate (PEF). The latter is used for a variety of applications that include safe and recyclable packaging for food, drinks, shampoo, window cleaner, and even tennis balls.

Worley stated that it will be issued Avantium shares in return for a 10 million euro equity investment. This will allow both parties to share the risk associated with the engineering, procurement and construction phase of the facility.

The project will be implemented by Worley’s team in the Netherlands and Belgium.

Worley CEO Mr Chris Ashton welcomed the extended collaboration, saying:

We are excited to have entered into a strategic partnership with Avantium which is a leader in advancing the circular economy. This award reflects our strategic pivot to sustainability and delivering a more sustainable world. We look forward to growing our relationship with Avantium and transforming the global use of plastics.

Offshore oil contact award

In the second release driving the Worley share price higher today, the company revealed it won a contract from CNOOC Petroleum Europe Limited. The 2-year deal will see Worley provide engineering, procurement and construction services to three platforms within the North Sea. They include the Buzzard, Golden Eagle, and Scott offshore oil platforms.

The contract, which includes feasibility to the commissioning, will be undertaken by Worley’s United Kingdom office in Aberdeen. Additionally, the company’s global integrated delivery team will provide support where needed.

Mr Ashton, touched on the partnership, adding:

We are pleased that CNOOC Europe has selected Worley to continue supporting its North Sea assets. With our strategic focus on sustainability and delivering a more sustainable world, we’re delighted this work includes evaluation of alternative energy sources, building further on Worley’s relationship with CNOOC and our off-shore capabilities in the North Sea.

Worley share price performance

The Worley share price has accelerated since its multi-year low of $4.63 reached in March last year. Since then, Worley shares have jumped by more than 150%, reflecting positive investor sentiment.

Based on the current Worley share price, the company commands a market capitalisation of roughly $6 billion.

More reading

• Worley (ASX:WOR) share price dips despite new deals
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021
• Worley (ASX:WOR) share price dips lower despite positive news
• Why the Worley (ASX:WOR) share price is edging higher
• ASX 200 drops 1.1%

Motley Fool contributor Aaron Teboneras 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 PointsBet Holdings Ltd (ASX: PBH) share price has been a positive performer on Friday.

In morning trade the sports betting company’s shares jumped as much as 6.5% to $16.49.

The PointsBet share price has since dropped back a touch and is now up 2% to $15.81.

Why is the PointsBet share price jumping higher?

Investors have been buying PointsBet shares on Friday following the release of a quarterly update which revealed further strong growth across major metrics.

For the three months ending 31 December, PointsBet recorded turnover of $1,198.2 million. This was up a massive 303% on the prior corresponding period.

Strong turnover growth was achieved across both its Australian and US operations. Australian turnover increased 193.9% to $543.3 million and US turnover jumped 482.4% to $654.9 million. This was driven partly by a 106.6% increase in active clients to 211,100. This comprises 143,000 in Australia and 68,100 in the US.

Also growing strongly was the company’s gross win, which increased 189.2% to $83.4 million. This growth was driven entirely by its Australian operations, with its US business actually going backwards despite its huge turnover growth.

Australian gross win was up 264.4% to $75.5 million, whereas US gross win fell 2.6% to $7.9 million. This means these businesses were operating with vastly different gross win margins of 13.9% and 1.2%, respectively.

Pleasingly, there has been a huge improvement so far in the third quarter. Between 1 January and 24 January, the US business enjoyed a gross win margin of 15% and the Australian business’ gross win margin came in at 12.1%.

Finally, PointsBet’s net win for the second quarter was $44.6 million, up 148.1% from the same period last year. And thanks to the aforementioned improvement in its gross win margins in the third quarter, the company’s net win was $22.9 million between 1 January and 24 January. This means it has achieved half of its second quarter net win in just three and a half weeks.

Balance sheet

At the end of the period, the company’s corporate cash balance stood at $359.1 million with no borrowings.

PointsBet does, however, have a commitment to invest US$393 million into marketing over a five-year period to support its partnership with NBCUniversal.

More reading

• ASX 200 rises 0.4%
• Why the PointsBet (ASX:PBH) share price jumped to a record high today
• Why these ASX shares just stormed to 52-week highs or better
• Why Megaport, Netwealth, PointsBet, & Zip shares are racing higher
• Here’s why the PointsBet (ASX:PBH) share price will be on watch today

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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 Centuria Industrial REIT (ASX: CIP) share price is up 2.65% at $3.10 in midday trading, outpacing the 0.5% gain posted by the broader S&P/ASX 200 Index (ASX: XJO).

Today’s share price gains follow Centuria’s announcement of 2 new logistics acquisitions.

Centuria Industrial REIT is a real estate investment trust and Australia’s largest domestic pure play industrial REIT.

What assets has Centuria acquired?

Centuria reported today that it has acquired 2 modern industrial facilities in Derrimut, Victoria. At a price tag of $37.25 million, they deliver an average initial yield of 5.1%.

Together, the 2 assets have an area of 31,466sqm, increasing the REIT’s portfolio weighting to Victoria to 38% (previously 37%).

The assets have a 4.6-year weighted average lease expiry (WALE) and are fully occupied by Volkswagen Group and Tasman Logistics.

Centuria notes that Derrimut offers excellent connectivity to key transport routes, such as the Western Freeway and the Western Ring Road. The facilities are just 20km from Melbourne’s CBD.

Centuria will fund the acquisitions using existing debt facilities.

Commenting on the news, CIP fund manager Jesse Curtis said:

The two Derrimut acquisitions were off-market opportunities that expand the trust’s critical mass, now totalling five stabilised assets, within this well-established industrial market. The properties are underpinned by strong tenant covenants with well-known national and international customers contributing to CIP’s reliable income streams.

Both assets provide low site cover within an in-demand precinct providing the opportunity to deploy our active management approach to build on CIP’s already high quality portfolio. As Australia’s largest ASX listed pure-play industrial fund, these acquisitions continue to demonstrate CIP’s ability to identify relative value for high quality industrial assets in a highly competitive environment.

Centuria Industrial REIT will report its first half of the 2021 financial year results on 2 February.

More on Centuria share price and company snapshot

Centuria’s portfolio of industrial assets are located across Australia’s major cities. The REIT has a market cap of $1.7 billion. It pays an annual dividend yield of 5.9%.

The Centuria share price is up 0.3% in 2021. Shares have yet to fully recover from the 39% loss suffered during the wider COVID-19 led market rout last February and March. Over the past full year, shares are down 14%.

More reading

• Starpharma (ASX:SPL) share price dips on quarterly update
• GameStop (NYSE:GME) stock insanity: Here are 4 things you need to know
• The latest ASX stocks to be hit by broker downgrades
• I own these 3 potential short-squeeze stocks. Here’s what I’m doing
• Why Bubs, Kogan, Lake Resources, & Western Areas shares are sinking lower

Motley Fool contributor Bernd Struben 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 Starpharma Holdings Limited (ASX: SPL) share price has dipped slightly today after the company released its quarterly cashflow and activities report for the quarter ended 31 December 2020.

Starpharma is a global biopharmaceutical company that develops pharmaceutical and medical products based on proprietary polymers called dendrimers. Dendrimers are man-made nanoscale compounds that can be used both to enhance existing health products and as entirely new products. 

The company is presently developing Viraleze, an antiviral nasal spray for COVID-19 that is complementary to vaccines and other preventative measures.

Here are some highlights from the company’s quarterly update.

Starpharma developments during the December quarter

As Starpharma prepares for the pre-launch activities surrounding its new Viraleze product, initial batches are being manufactured to support a European launch.

The report advises that the company is also reaching out to pharmacy chains, B2B customers and online platforms in anticipation of the new product offer.

During the quarter, Starpharma also commenced a human study for Viraleze that is currently taking place in Perth, Western Australia. The results of this study are not necessary to achieve EU product registration. The study is expected to conclude in the first quarter of this year.

Starpharma continues to progress clinical trials for its DEP docetaxel and DEP cabazitaxel products. These treatments are being tested to shrink tumours in patients with pancreatic, oesophageal and gastric cancer.

The company also advised that encouraging trial work moved forward over the three-month timeframe for its DEP irinotecan product, which treats tumour types including breast, colorectal, ovarian, pancreatic, lung and oesophageal cancer. 

Financial highlights

Starpharma’s closing cash balance as at 31 December 2020 was $70.3 million. This included $47.0 million in net proceeds following the equity placement and share purchase that took place during the period.

Net operating cash outflows were $7oo,000 for the quarter. The company notes these outflows are predominately related to the Viraleze launch and the DEP product clinical programs. 

Starpharma share price snapshot

The Starpharma share price has currently slid down 0.33% today and is trading at $1.50. Starpharma shares are up 28% on this time last year, and the company has a current market capitalisation of $611 million. 

More reading

• Leading broker names the ASX healthcare shares to buy in 2021
• Are these 4 ASX medical shares set for a healthy 2021?

Gretchen Kennedy has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma 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 world of investing has been lit in conflagration over the last few days by a previously little-known company called GameStop Corp (NYSE: GME). If you want to know why, just look at a 6-month chart of the GameStop stock price.

Six months ago, GameStop stock was worth around US$4.

A month ago, it was a US$19 stock.

Last Friday, GameStop shares were trading at a healthy US$42.50.

And last night, GameStop stock hit an all-time high of US$483 a share. That’s a return of more than 1,000% in just a week, almost 2,400% in a month, and… wait for it… 11,800% over six months.

So now you know.

According to reporting in the Australian Financial Review (AFR) today, here are four things you need to know about what has happened with this company.

1. GameStop rally was sparked by a short squeeze

A short squeeze occurs when short sellers have to close their short positions because of a rising share price. Normally, this all happens at once in a chain reaction and leads to a massive imbalance between buyers and sellers. And when an imbalance like that occurs, it can result in a rapid and enormous share price surge. We saw similar events occur with Tesla Inc (NASDAQ: TSLA) stock last year. But what’s happened with GameStop is a record-breaking one for the books.

2. ‘Amateur’ investors caused this one

This move is being put at the feet of the new generation of investors known as ‘Robinhood traders’, named after the popular United States free brokering service Robinhood. The growing clout of these traders, who are famously driven by a ravenous desire for quick, ‘casino-like’ wins over a long-term investing mindset, is proving to be a force to behold. This type of buying and selling often involves the trading of options, rather than shares themselves. Options can be used as a high-risk, high-reward bet on the potential movements of a share price.

3. Collective action proves powerful for GameStop

As we previously flagged, this wasn’t a move orchestrated on Wall Street. GameStop was targeted by a group of ‘Robinhood traders’ from the Reddit group WallStreetBets. These investors have figured out that if they move as a group, they have the power to manipulate the price of a company. GameStop was targeted because these investors noticed that a large number of this company’s shares were held in short positions.

Someone surmised (accurately as it turns out) that if there was enough buying pressure, it would cause a short-squeeze. And that’s exactly what happened. Then, add an army of other traders trying to jump on the bandwagon, and you can start to see how this incredible share price surge unfolded.

4. When does this end?

Like all ‘bubble’ events in history, this one is set to reward a few lucky investors handsomely at the expense of the many. The AFR report notes that Robinhood and other traders have now placed trading restrictions on GameStop and other stocks that have been targeted in a similar manner. The report also posits that these actions hurt the entire share market by introducing massive pricing distortions that affect the broad flow of capital.

GameStop stock closed at US$193.60 this morning (our time), already down ~60% from the highs we saw earlier in the trading day. But then again, it was up another 61% to US$312 in after-hours trading. Who knows when the madness will end!

More reading

• The Reddit-GameStop-Robinhood saga is heating up
• 53% share price jump lands GME Resources (ASX: GME) in trading halt
• What Is a Gamma Squeeze?
• Short squeezes: Everything you need to know about the recent investing movement
• GameStop trading ought to be halted for 30 days, one regulator says

Sebastian Bowen owns shares of Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. 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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Our market is rebounding today but not all ASX stocks are joining the party as some got slugged by a broker downgrade.

The S&P/ASX 200 Index (Index:^AXJO) jumped 0.7% in late morning trade with most sectors trading higher.

There are exceptions though with leading brokers cutting their recommendations on three ASX stocks today.

Metal fatigue bending SGM share price

One that’s left out in the cold is the Sims Ltd (ASX: SGM) share price. Shares in the scrap metal trader fell 1.4% to $12.53 at the time of writing.

The weakness in the SGM share price coincided with a downgrade by Goldman Sachs, which lowered its recommendation to “sell” from “neutral”.

The broker believes that recent supply constrains that drove a surge in steel spreads have peaked, and that prices are poised to turn lower.

ASX steel shares downgraded by broker

“In recent weeks we have seen some improvement in supply, and a broad based retreat in both steel pricing, input commodities and spreads,” said Goldman.

“We expect that as CY21 progresses, market dynamics and pricing (and spreads) will normalise back to prior trading bands.”   

The broker warns that the earnings before interest, tax, depreciation and amortisation (EBITDA) multiples for the sector will compress by around 15%.

As an aside, Goldman also downgraded its rating on BlueScope Steel Limited (ASX: BSL) share price to “neutral” from “buy” at the same time, but that was just before BlueScope issued a profit upgrade.

Goldman’s 12-month price target on the SGM share price is $11.38 a share.

Valuation concerns triggers downgrade

Another stock that’s lost favour with investors is the Orocobre Limited (ASX: ORE) share price. The lithium miner slumped 5.7% to $5.42 as more than one broker downgraded their rating on the ORE share price after it posted its quarterly update.

The issue isn’t so much its latest quarterly production report but its valuation. If anything, the production figures were the third-highest on record, aided by record brine concentration 8000-9000ppm, according to Credit Suisse.

But the broker thinks the recent share price rally is overdone and changed its recommendation to “underweight” from “neutral” with a 12-month price target of $5 a share.

Citigroup is another that downgraded the ORE share price. It cut its rating to “neutral” from “buy”. This was despite the fact that ORE’s quarterly figures came in ahead of the broker’s expectations.

But Citi also thinks the stock has run up too quickly. It’s price target on ORE is $6.75 a share.

QAN share price running low on fuel

Taking about reaching full valuation, the Qantas Airways Limited (ASX: QAN) may also struggle to ascend further.

Macquarie Group Ltd (ASX: MQG) lowered its recommendation on the Flying Kangaroo to “neutral” from “outperform”.

Unpredictable and sudden border closures due to COVID-19 is impacting on Qantas’ earnings recovery flight path.

The stock’s recent rally also means it’s only trading at a modest 10% discount to its long-run trading multiples, added the broker.

Macquarie’s 12-month price target on the QAN share price is $5.05 a share.

More reading

• ASX 200 up 0.6%: ResMed Q2 update, Kogan sinks, NAB acquires 86 400
• Why the Novonix (ASX:NVX) share price is down 10% today
• The BlueScope (ASX:BSL) share price surges on a profit upgrade today
• Here’s why the Origin Energy (ASX:ORG) share price is climbing today
• 5 things to watch on the ASX 200 on Friday

Motley Fool contributor Brendon Lau owns shares of BlueScope Steel Limited and Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group 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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