Category: Stock Market

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

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX 200 shares are in the buy zone:

Appen Ltd (ASX: APX)

According to a note out of UBS, its analysts have retained their buy rating and lifted the price target on this artificial intelligence (AI) company’s shares to $41.00. The broker has been looking into the industry and believes that Appen’s second half outlook is very positive. Especially given recent hiring activity, which it feels indicates that its government business is performing well. Overall, the broker remains very positive on its growth prospects over the medium term. I agree with UBS and think Appen would be a fantastic buy and hold option.

Goodman Group (ASX: GMG)

Analysts at Morgan Stanley have retained their overweight rating and lifted the price target on this property company’s shares to $20.00. According to the note, Goodman Group delivered an FY 2020 result in line with its expectations. And while its guidance for the year ahead is a little lower than the broker is forecasting, it notes that the company has consistently outperformed its guidance for a number of years. Furthermore, with the ecommerce tailwind in its sails, Morgan Stanley expects its strong form to continue into FY 2022 as well. I think Morgan Stanley is spot on and would be a buyer of Goodman Group’s shares.

Telstra Corporation Ltd (ASX: TLS)

A note out of Goldman Sachs reveals that its analysts have retained their conviction buy rating but trimmed their price target slightly on this telco giant’s shares to $3.90. According to the note, the broker was pleased with its FY 2020 result, but notes that its guidance has caused dividend doubts. However, the broker believes Telstra could shift its dividend policy to be based on free cash flow rather than earnings. If it does this, it would be able to sustain its 16 cents per share dividend. As such, it holds firm with its forecast for no dividend cuts in FY 2021. I agree with Goldman Sachs and feel Telstra would be a good option for income investors after its pullback.

More reading

• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• How investing in ASX shares could help you grow $10,000 into $100,000
• Is the Telstra dividend in danger? This leading broker thinks it’s safe
• 3 ASX shares that could grow rapidly during the 2020s
• ASX 200 drops 0.7%, Telstra falls 7.7%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Appen Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Having successfully fended off new cases of COVID-19 for 100 days prior to this week, media reports this morning now say that 36 new cases of the virus have infiltrated New Zealand’s borders. To restrict further infections, NZ Prime Minister, Jacinda Ardern, has selectively imposed renewed short-term restrictions across the country. If case numbers continue rising, however, it is likely these restrictions will become more widespread and longer lasting. This could potentially impact the share prices of NZ-based ASX shares. So, should prospective investors be looking to buy these ASX-listed Kiwi companies if they take a dive?

2 ASX shares that could become buys

Air New Zealand Limited (ASX: AIZ)

Having reached a 52-week high of $2.94 in January of this year, the Air New Zealand share price now trades at $1.20 at the time of writing.

As one of the many businesses devastated by the pandemic, Air New Zealand reported to the market in June that it was expecting to deliver a full-year loss of $120 million for FY20. Despite this result, however, the company was optimistic in June that NZ’s scaling back of restrictions would allow it to slowly restart domestic flying operations.

This week’s news of a spike in cases will likely foil any such plans for the airline. The news was reflected by the Air New Zealand share price taking a dive on Tuesday by over 4.5%. But investors who nabbed the airline at lows of 80 cents per share in April have still done pretty well at this point, up approximately 50% at the time of writing.

Thus, if new restrictions are imposed, and Air New Zealand shares dive below the $1 mark again, could the company be too cheap to ignore?

On the one hand, the airline seems a pretty safe bet. As the national airline, if Air New Zealand did get in to any liquidity trouble, the NZ government may very well bail it out. And eventually, the company’s operations will rebound – albeit to an unknown extent.

Yet, on the flip side, three of the top brokers, Macquarie, Credit Suisse, and UBS, have all placed a ‘sell’ or ‘underperform’ rating on the airline. Some of the key risks referred to by the brokers include the high likelihood of a significant liquidity injection via debt or an imminent capital raising, the latter of which could dilute shares.

Notwithstanding this, if you’ve got the risk appetite and the shares dip below that $1 mark in the coming days, I still think Air New Zealand could be a good buy.

Skycity Entertainment Group Limited (ASX: SKC)

The Skycity share price has likewise been bludgeoned by the coronavirus pandemic, retreating from nearly $4 in January to its current price of $2.18.

The gaming and entertainment powerhouse was quick to inform the market on Wednesday about what an Alert Level 2 for the entire country and an Alert Level 3 for Auckland would mean for its business operations.

The announcement revealed that the company would be shutting its Auckland casino and entertainment facilities. The company’s Auckland hotels and other NZ casinos, however, would remain open for the time being.

It has been a wild ride for shareholders in 2020, with the Skycity share price bottoming out at $1.10 in March, which was followed by a partial recovery to its current trading levels.

Due to liquidity issues, the company also completed a $230 million equity raise, and is expected to report its full-year results for FY20 on 3 September. Only then will it be known just how large a hole the pandemic has punched in the operations of its casinos, hotels, restaurants and bars.

If the Skycity share price takes a tumble again in the coming days, I definitely think this is a company worth looking into further. With casinos in Hamilton, Auckland and tourism-rich Queenstown, as well as Australia’s Adelaide, the company has diverse market exposure and a history of paying sizeable dividends.

At the current share price, its dividend of 18 cents equates to a trailing yield of 8.3%. Whilst it may take some time to get back to these payout levels, those with a long-term investment horizon could possibly reap the benefits of another dip in the Skycity share price.

Foolish takeaway

First and foremost, let’s hope our neighbours can get the pandemic under control as soon as possible, negating the need for more stringent lockdowns. If ongoing restrictions are required, however, it will be interesting to see whether these New Zealand ASX shares experience further sell offs. Both remain watchlist shares for me at this point due to the uncertainty of the NZ situation, but a further sell-off could possibly make both companies too cheap for me to ignore.

More reading

• Coronavirus: SkyCity share price falls as NZ restrictions tighten
• Top broker warns Afterpay and these ASX stocks could disappoint on profit results

Motley Fool contributor Toby Thomas has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Sky City Entertainment Group Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 early afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing the benchmark index is up 0.5% to 6,122.3 points. 

Four shares that are climbing more than most today are below, Here’s why they are zooming higher:

The Baby Bunting Group Ltd (ASX: BBN) share price has jumped 8% to $4.06 following the release of its full year results. In FY 2020, the baby products retailer posted an 11.8% increase in total sales to $405.2 million despite the pandemic. And thanks to margin expansion, Baby Bunting delivered a 34.1% increase in pro forma net profit after tax to $19.3 million. Importantly, this was achieved without the company receiving any COVID-19 assistance from the government.

The Evolution Mining Ltd (ASX: EVN) share price is up 5% to $6.02. This appears to have been driven by a rebound in the gold price overnight. It isn’t just Evolution pushing higher today. A number of gold miners are on the rise for the same reason. This has led to the S&P/ASX All Ordinaries Gold index rising 1.5% at the time of writing.

The Mesoblast limited (ASX: MSB) share price has rocketed 38% higher to $4.66. Investors have been fighting to get hold of the biotech company’s shares after a very positive outcome from its meeting with the Oncologic Drugs Advisory Committee (ODAC) overnight. This meeting was to discuss its remestemcel-L product candidate as a treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD). While the company still needs the U.S. FDA to approve the product, the odds look to be very much in its favour now.

The Xero Limited (ASX: XRO) share price is up 3.5% to $92.50. This appears to be in response to the business and accounting software provider’s annual general meeting update on Thursday. That update revealed that Xero has added 96,000 net subscribers to its platform since the start of April. This lifted its subscribers to a total of 2.38 million at the end of the period.

More reading

• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints
• Mesoblast share price rockets 57% higher on FDA breakthrough
• Baby Bunting share price in focus after strong FY 2020 profit growth despite the pandemic
• Mesoblast share price on watch after US regulatory approval
• 5 things to watch on the ASX 200 on Friday

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 Xero. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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Our market looks like it will close the week on a strong footing. This is more than what we can say for the Telstra Corporation Ltd (ASX: TLS) share price and two other ASX stocks that got slugged with a broker downgrade.

The S&P/ASX 200 Index (Index:^AXJO) gained 0.3% in late morning trade and if it closes at this level, it would have advanced by a decent 1.7% pace for the week.

That’s not a bad effort given we are nearing the half-year point for what has been described as the worst reporting season in recent history.

Dividend disconnect

But the August cheer isn’t universally shared. Just ask shareholders in Telstra Corporation Ltd (ASX: TLS) with the stock slumping again today on a broker downgrade.

Morgans cut its rating on the stock to “hold” from “add” after Telstra posted its full year results yesterday.

The broker questions whether the stock is as dependable an income stock as investors like to believe as management’s outlook was more downbeat than expected.

Telstra’s 25% dividend cut risk

“TLS also reduced their FY23 return on capital target from 10% to now being greater than 7%,” said Morgans. “This has implications for EPS and DPS sustainability.”

That assessment will strike fear in shareholders as dividend sustainability is the key (if not only) reason to be holding the stock.

Morgans believes Telstra will need to cut its dividend by a quarter to 12 cents a share from this financial year onwards. Its price target drops to $3.21 from $3.73 a share.

Shares in our largest telco fell 1.8% to $3.06 at the time of writing and is likely to shed around 10% of its value over the week.

Good news baked in

Another stock licking its wounds this week is the Breville Group Ltd (ASX: BRG) share price. Bell Potter lowered its recommendation on the small kitchen appliance maker to “hold” from “buy” even though its results proved to be resilient to COVID-19.

Breville’s underlying earnings before interest and tax (EBIT) jumped 14.3% to $111.1 million in FY20 over last year due to strong sales in key markets. But the good news is arguably reflected in the current share price.

“We have a positive view on BRG on several fronts: growth prospects in several large markets, flexible cost structure and strong balance sheet,” said Bell Potter.

“However, given the strong share price run, and mindful of near-term uncertainties, we believe BRG is now fair-value.”

The broker’s price target on Breville is $26 a share.

Flying blind

It’s uncertainties from COVID-19 that also prompted Citigroup to downgrade its call on the Flight Centre Travel Group Ltd (ASX: FLT) share price.

The travel agent released a trading update that forecasted a pre-tax loss of $474 million to $525 million for FY20. This is significantly below Citi’s estimate of a $145 million loss.

Management tried to off-set the bad news by pointing to its strong liquidity position. Flight Centre can go for 18 months with the $800 million in its tank.

That should give plenty of time for the world to recover from the COVID-19 shutdown.

Second capital raising?

“We acknowledge the potential upside on a three-year view, albeit with very limited visibility,” said Citi.

“The risk of a second capital raising also exists within twelve months given the lack of leisure and corporate travel expected over the near term.”

The broker cut its recommendation on the stock to “hold” from “buy” with a price target of $13.50 a share.

More reading

• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints
• How investing in ASX shares could help you grow $10,000 into $100,000
• Why Flight Centre, Navigator Global, Newcrest, & Whitehaven Coal are dropping lower
• Is the Telstra dividend in danger? This leading broker thinks it’s safe
• Iluka share price on watch as half-year profit falls 17%

Motley Fool contributor Brendon Lau owns shares of Breville Group Ltd and Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 National Australia Bank Ltd. (ASX: NAB) share price was up 0.61% at the time of writing to $18.12 after the company released its quarterly report for the 3 months ended 30 June 2020.

What was in the announcement?

NAB announced unaudited statutory net profit of $1.50 billion for the June quarter.  Unaudited cash earnings were $1.55 billion with cash earnings, down 7% compared to the 3rd quarter of 2019.

The bank recorded credit impairment charges of $570 million versus impairments of $976 million in the second quarter of 2020.

NAB’s common equity tier one ratio was 11.6% at 30 June.

The bank also reported that 12.3% of the balance of all home loans outstanding were deferred in June 2020.

NAB CEO Ross McEwan commented on the result, stating:

The COVID-19 pandemic continues to challenge our customers and our bank, with varied impacts across industries and communities. The outlook remains highly uncertain, but decisive actions in April to strengthen our balance sheet allow us to support customers, while keeping our bank safe.

Our repayment deferrals are providing vital assistance to customers, in combination with significant relief from governments and regulators. Encouragingly, about 16% of home loan deferral customers contacted via our check-ins have recommenced repayments. However, many customers still face an uncertain future. Where it makes sense, we will offer them extra support to help manage through the pandemic, but providing further credit won’t always be the right thing to do.

He confirmed the bank still has a long-term view despite the current challenges, adding:

Our 3Q20 result is reflective of the current operating environment, characterised by volatile markets, subdued credit demand, low interest rates, cost pressures and deteriorating asset quality. In navigating these near-term challenges, we have not lost sight of the need to invest for NAB’s long term future.

About the NAB share price

National Australia Bank is one of Australia’s big four banks and was formed by a merger in 1982. NAB offers business banking, personal banking, online banking and private banking to its customers.

In May, NAB raised $4.25 billion from investors through an institutional placement and a retail share purchase plan. The issue price was $14.15 per share.

The NAB share price is up 37.27% since its 52 week low of $13.20, however, it is down 26.43% since the beginning of the year. The NAB share price is down 34.46% since this time last year.

More reading

• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints
• Qantas share price is facing this new challenge in FY21
• As CBA slashes its dividend, the brutal reality is bank shares have been dogs for 5 years, with more pain ahead
• Is the Bank of Queensland share price a better buy than Bendigo and Adelaide Bank?
• Flight Centre and Zip Co were among the most traded shares on the ASX last week

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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At lunch on Friday the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a high. The benchmark index is currently up 0.3% to 6,107.4 points.

Here’s what has been happening:

NAB update impresses.

The National Australia Bank Ltd (ASX: NAB) share price is pushing higher following the release of its third quarter update. The banking giant posted unaudited cash earnings of $1.55 billion, which was down 7% on the prior corresponding period. Though, cash earnings before tax and credit impairment charges was up 5%. NAB ended the period with a CET1 ratio of 11.6%.

Mesoblast rockets on FDA update.

The Mesoblast limited (ASX: MSB) share price rocketed as much as 57% higher to a new record high this morning. This follows a very positive outcome from its meeting with the Oncologic Drugs Advisory Committee (ODAC) overnight. This meeting was to discuss its remestemcel-L product candidate as a treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD). Given the positive feedback, the likelihood of the U.S. FDA approving the drug on 30 September looks strong.

Newcrest guidance disappoints.

The Newcrest Mining Limited (ASX: NCM) share price has come under pressure after a solid full year profit result was overshadowed by weak guidance for FY 2021. The gold miner is guiding to gold production of 1.95 million ounces to 2.15 million ounces, which will be down from 2.2 million in FY 2020. This guidance also remains subject to there being no COVID-19 disruptions.

Best and worst ASX 200 shares.

The best performer on the ASX 200 by some distance has been the Mesoblast share price. It is up 38% at lunch after the ODAC voted in favour of its remestemcel-L product for paediatric SR-aGvHD. The worst performer with a 3.5% decline is the Whitehaven Coal Ltd (ASX: WHC) share price. It has come under pressure amid news that a group of shareholders are trying to shut down the business.

More reading

• Why Baby Bunting, Evolution, Mesoblast, & Xero shares are zooming higher
• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• NAB share price lifts on quarterly report
• How investing in ASX shares could help you grow $10,000 into $100,000
• Why Flight Centre, Navigator Global, Newcrest, & Whitehaven Coal are dropping lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 3P Learning Ltd (ASX: 3PL) share price has this morning exploded higher after a takeover offer was released to the market. 3P Learning also released its full year results. The 3P Learning share price has smashed its 52-week high and is currently trading 22.4% higher at $1.34.

Takeover bid

This morning, it was announced that 3P Learning is set to be taken over by rival IXL Learning. IXL is a privately owned, global online learning player. Founded in 1998 and headquartered in California, it is active around the world and already has an existing presence in Australia.

Under the terms of the scheme, each 3P shareholder will receive cash consideration of $1.35 for every 3P Learning share held. The consideration values 3P Learning’s equity at approximately $189.0 million with an enterprise value (EV) of $166.7 million, implying an EV/EBITDA multiple of 11.4. The price represents a 23.3% premium to the last closing price. Furthermore the 3P Learning board is fully behind the takeover and suggests that shareholders vote in favour of the scheme.

Nevertheless, shareholders should note that the scheme is subject to certain conditions which must be satisfied before it is implemented.

How did 3P Learning perform in FY2020?

3P learning performed well in FY2020 despite the effects of the pandemic. The company managed to increase its revenue by 1% to $54.9 million despite challenging market conditions.

Revenue growth from licence sales was modest, as expected, with the Americas up 11% and Europe, the Middle East and Africa (EMEA) up 1%. Other revenue increased 12% due to an increase in copyright revenue.

Expenses were up 11% due to the increased average headcount in the Americas and increased product development to support the company’s growth agenda. As a result, NPAT was down $4.3 million to $1.6 million. Moreover, as a result of increased expenses, profit for the year was down 73.8% to $1.55 million.

In terms of the balance sheet, 3P Learning has cash of $27.1 million with no bank debt. 

FY2021 outlook

3P Learning has announced that it expects double-digit revenue and EBIDTA growth in FY21. The cost base is now set and the company is aiming to deliver revenue growth with increased operating leverage. This increased leverage is set to drive growth at high margins similar to other software-as-a-service (SaaS) businesses.

3P Learning CFO, Dimitri Aroney, was optimistic looking forward and stated:

“In FY2021 we expect the EMEA market to deliver strong revenue and EBITDA growth as a result of the deal with a National Ministry of Education in the Middle East. In the APAC market, we expect single digit revenue and EBITDA growth for the full year. In the Americas market, we expect continued market uncertainty due to funding challenges as a result of COVID-19 however there is a pipeline of enterprise opportunities with an expectation of licence revenue growth for the full year.”

More reading

• This ASX share has surged 40% in 3 weeks

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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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If you have a spare $10,000 sitting in your account, putting it to work by buying ASX shares could help you substantially increase your returns over a short amount of time.

Sure, you could leave your spare change in your savings account and accumulate a paltry 1% interest per annum. However, choosing to invest could net you a tidy amount and make life that little bit easier.

Just rewind to the start of the year. Had you chosen to invest that $10,000 in ASX shares like Afterpay Ltd (ASX: APT) or Fortescue Metals Group Limited (ASX: FMG), you’d be sitting on a profit of 151% and 68%, respectively (at the time of writing).

These are just 2 examples of ASX shares that have soared in recent memory. I think that there are a number of long-term opportunities in the S&P/ASX 200 Index (ASX: XJO) and if I had a spare $10,000 to invest, here is where I would put my money to work.

Appen Ltd (ASX: APX)

A global leader focused on providing language technology data and services, Appen has shot for the stars these past few months. The Appen share price has jumped 69% since the beginning of 2020, and if you had bought and held Appen shares 5 years ago, you would have been rewarded with gains of almost 4,500%. Buying $5,000 of Appen shares in 2015 would have netted you an astonishing $217,108.

The company has been an integral partner to the biggest tech names in the world. Without Appen, I doubt Apple and Google would have become very successful with their digital voice assistants. The artificial intelligence (AI) industry has been booming during the coronavirus pandemic with sectors such as education, manufacturing and health increasing the use of AI applications. With its addressable market forecasted to grow exponentially over the next decade, Appen is in prime position to reap the rewards.

Appen reported that with over 1 million contractors mostly working from home, it expects to meet this year’s earnings before interest, taxes, depreciation and amortisation (EBITDA) guidance of $125–$130 million. The company has advised it will release its FY20 results on 27 August. I would happily snap up Appen shares at today’s price (at time of writing) of $36.97.

Megaport Ltd (ASX: MP1)

This exciting mid-cap ASX share operates in the network-as-a-service space, providing bandwidth to allow customers to connect to cloud services and data centres, and has been gaining attention at an incredible rate. In the last 12 months, Megaport has seen its share price rise 72% and I think it won’t stop there. Demand for its services has been exceptionally strong due to its cloud offering.

Megaport’s most recently quarterly update included revenue growth of 66%, year-on-year. The company is focused on attaining profitability, and it is expected that the EBITDA break-even will be achieved by the end of FY21. Megaport does have healthy cash balance of $166.9 million to see it through any unexpected turbulence.

The company’s FY20 results will be announced on 19 August. Megaport shares are currently trading at $12.98, up 0.7% for the day. I would class Megaport as a buy at today’s price.

Pointsbet Holdings Ltd (ASX: PBH)

The Aussie wagering group has been on tear recently with a number of positive announcements, sending the Pointsbet share price up more than 33% in the last 3 months. Last week, the company advised the market that it secured a raft of multi-year partnerships with Pacers Sports & Entertainment, Kroenke Sports & Entertainment (KSE) and an agreement with Twin River Management Group.

As the sporting industry slowly starts to come back to life, these lucrative arrangements will no doubt set PointsBet on a pathway to profitability. With its FY20 results expected to be released later this month, I think that today could be a great time to pick up some shares. At the time of writing, Pointsbet shares are valued at $6.23 and I would pick up shares without hesitation.

Foolish takeaway

Regular investing in high-quality ASX shares can reap big rewards in the future. I think that all of these shares are trading at attractive prices for a long-term diversified investor. I would snap up all 3 today and hold for at least a decade.

More reading

• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints
• Iluka share price on watch as half-year profit falls 17%
• Mesoblast share price on watch after US regulatory approval
• 5 things to watch on the ASX 200 on Friday

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 recommends MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia owns shares of Appen Ltd. The Motley Fool Australia has recommended MEGAPORT FPO and Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end the week on a positive note. At the time of writing the benchmark index is up 0.3% to 6,105.1 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are dropping lower:

The Flight Centre Travel Group Ltd (ASX: FLT) share price is down 1.5% to $12.10. This appears to have been driven by a broker note out of Citi this morning. According to the note, the broker has downgraded the travel company’s shares to a neutral rating with a $13.50 price target. This follows its update on Thursday which revealed expectations for a major loss in FY 2020.

The Navigator Global Investments Ltd (ASX: NGI) share price has crashed almost 10% lower to $1.74. This appears to be down to profit taking after some strong gains following the release of its FY 2020 full year results earlier this week. One broker that sees this share price weakness as a buying opportunity is Macquarie. This morning it put an outperform rating and $2.23 price target on the investment company’s shares.

The Newcrest Mining Limited (ASX: NCM) share price is down almost 1% to $34.23. Investors have been selling the gold miner’s shares after its guidance for FY 2021 underwhelmed and offset a rise in the gold price overnight. Newcrest expects another decline in production this year. This follows a 13% decline in production in FY 2020.

The Whitehaven Coal Ltd (ASX: WHC) share price has fallen 3.5% to $1.32. This follows news that a group of shareholders are trying to shut down the business. A group of shareholders, led by activist shareholder Market Forces, will propose shutting down the business and returning capital to investors at the miner’s next annual general meeting.

More reading

• Brokers just downgraded the Telstra share price and these other ASX 200 stocks
• ASX 200 up 0.3%: NAB Q3 update, Mesoblast rockets, Newcrest guidance disappoints
• Newcrest Mining share price lower after FY 2020 result
• 5 things to watch on the ASX 200 on Friday
• Here’s why the Navigator Global share price surged 39% today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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 Mesoblast limited (ASX: MSB) share price has been the best performer on the S&P/ASX 200 Index (ASX: XJO) on Friday.

In morning trade the biotechnology company’s shares rocketed as much as 57% higher to a record high of $5.30.

Why is the Mesoblast share price rocketing higher?

Investors have been fighting to get hold of the company’s shares after a very successful outcome from its meeting with the Oncologic Drugs Advisory Committee (ODAC) overnight.

That meeting was to discuss its remestemcel-L (RYONCIL) product candidate as a treatment for paediatric steroid-resistance acute graft versus host disease (paediatric SR-aGvHD).

The ODAC is an independent panel of experts that evaluates efficacy and safety of data and makes appropriate recommendations to the United States Food and Drug Administration (FDA).

What happened at the meeting?

This morning the company revealed that the ODAC voted overwhelmingly in favour that the available data supports the efficacy of remestemcel-L in paediatric patients with SR-aGvHD.

Mesoblast’s Chief Medical Officer, Dr Fred Grossman, commented: “Steroid-refractory acute graft versus host disease is an area of extreme need, especially in vulnerable children under 12 years old where there is no approved therapy.”

 “We are very encouraged by today’s outcome and are committed to working closely with the FDA as they complete their review of our submission regarding approval of RYONCIL for this life-threatening complication of an allogeneic bone marrow transplant.”

What now?

While the FDA will seriously consider the recommendation of the panel, the final decision regarding the approval of the product is made solely by the regulator. This means the recommendations by the panel are non-binding.

The RYONCIL product has been accepted for Priority Review by the FDA, with an action date of 30 September 2020. If approved, Mesoblast plans to launch RYONCIL in the United States in 2020.

Paediatric transplant physician Dr Joanne Kurtzberg appears hopeful this will go to plan. She sees a major need for a treatment for this condition.

Dr Kurtzberg commented: “This devastating condition has an extremely poor prognosis and there are no FDA-approved options for children under the age of 12. The clinical studies I have directed have demonstrated the potential for this treatment to fill a significant unmet medical need.”

More reading

• Mesoblast share price on watch after US regulatory approval
• 5 things to watch on the ASX 200 on Friday
• Broker reveals its expectations for the Mesoblast FDA meeting
• Down 37% in 2 days! Is the Mesoblast share price a buy?
• Why Mesoblast, Northern Star, SEEK, & WiseTech Global shares are sinking lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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