Ingenia Communities Group (ASX: INA) is the worst-performing ASX 200 share on the market today.

Ingenia shares opened at $3.72, down 19.5%, and quickly descended to an intraday low of $3.61. This represented a 21.85% drop. The stock has since recovered to $3.98, down 13.85% for the day.

This follows the release of the retirement and holiday communities developer’s half-year FY23 results.

While the company reported a 24% increase in earnings before interest and taxes (EBIT), it downgraded its full-year EBIT growth guidance significantly from 30% to between 0% and 10%.

ASX 200 share in trading halt before results release

The ASX property share went into a trading halt at the company’s request before the market open yesterday. That froze the ASX 200 share at Friday’s closing price of $4.62.

Ingenia asked for the trading halt “in order to review recently updated home settlement forecasts and confirm its impact on earnings guidance, previously provided to the market”.

The shares recommenced trading and crashed shortly after the results were released at 11.30am today.

Meantime, S&P/ASX 200 (ASX: XJO) shares are down a collective 0.2% as the market close nears.

What did the company report?

In its statement, the company said it had “growth levers in place” but production and settlement delays would impact its FY23 result, resulting in the downgrade to guidance.

Here are the highlights for the six months ending 31 December 2022:

• Revenue of $173.6 million, up 32% on the prior corresponding period (pcp) of 1H FY22
• EBIT of $42 million, up 24% pcp
• Underlying earnings per share (EPS) of 8.5 cents, up 5% pcp
• Statutory profit of $33.7 million, down 16% pcp
• 5.2 cents per share distribution (unfranked) to be paid on 23 March

What did management say?

Ingenia CEO, Simon Owen said continuing construction delays and the falling residential market were key challenges for 2H FY23.

Owen commented on the results and outlook, saying:

During the first half, revenue and EBIT increases on the prior year were delivered as we benefitted from
an expanded asset base as well as growth in rents across the residential portfolios and strong performance from the holidays business.

We commenced our asset recycling program as we focussed on improving portfolio quality and internally funding growth.

However, extended construction timeframes and the subsequent impact on home settlements moderated first half earnings.

What’s next for this ASX 200 share?

Owen said Ingenia’s residential communities and holidays businesses “are performing well and
experiencing ongoing demand”.

However, short-term challenges like ongoing labour shortages and construction delays, as well as rising inflation and interest rates, would lead to longer lead times with settlements.

Owen pointed to recent data showing days on market in regional areas had increased significantly from last year.

He said:

Whilst we are taking a prudent approach given the uncertainty, as we move into FY24, greater project
diversity and progress on our new projects will contribute to increased settlement volumes as we scale the development business.

Ingenia share price snapshot

The ASX 200 share is down 11.4% in the year to date and down 28.2% over the past 12 months.

Ingenia is underperforming its peers, with the S&P/ASX 200 A-REIT Index (ASX: XPJ) up 6.7% in the year to date and down 13% over the past 12 months.

This compares to a 6.5% year-to-date bump in the ASX 200 and a 1.4% rise over the past year.

The post Guess which ASX 200 share just crashed 22% on its results announcement appeared first on The Motley Fool Australia.

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More reading

• Why A2 Milk, Altium, Cogstate, and Ingenia shares are sinking today

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX dividend stocks are a wonderful way to make passive income in Australia.

Not only do some ASX shares pay wonderful dividends (or distributions), but Australian companies also have the added bonus of franking credits, which are refundable tax credits.

In other words, for high-income earners, the franking credits will reduce the tax burden of receiving the dividends. For lower-income earners, some (or all) of the franking credits may be refunded when the tax return is completed.

But, I wouldn’t suggest investing in an asset or an ASX share just because of the possible income. The risk of a fall in the share price means we should try to identify good investments that are at good prices.

In my opinion, the below three names tick the necessary boxes.

Brickworks Limited (ASX: BKW)

Brickworks is the leading brickmaker in Australia. It also offers other products including roofing (through Bristle Roofing) which makes it fairly diversified.

The ASX dividend stock is also increasing its exposure to the northern hemisphere. It has been growing its brick market share in North America after making some acquisitions there. Plus, the business will soon be supplying millions of bricks to the UK after recently signing an agreement with a distributor.

Brickworks also owns two other major assets that are funding its dividend and delivering growth.

Firstly, Brickworks owns a large chunk of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares. Soul Pattinson itself has grown its dividend to shareholders every year for the last two decades.

Brickworks also has a 50% stake in a growing industrial property trust. That trust is building huge, modern warehouses on land that Brickworks no longer needs. This is enabling the generation of property development profits and unlocks a growing stream of rental income.

Brickworks hasn’t cut its dividend for over four decades and currently has a trailing grossed-up dividend yield of 3.7%.

Adairs Ltd (ASX: ADH)

The Adairs share price has been one of the most-hit ASX dividend stocks during this period of volatility and uncertainty surrounding the economy as interest rates soar.

It’s quite possible that the company’s earnings will have a bumpy ride over the next year or so. The company sells furniture and homewares through three different brands – Adairs, Focus on Furniture and Mocka.

Adairs just reported its FY23 first half, which showed that earnings per share (EPS) was up 22% to 12.7 cents per share. The company also said that it was focusing on debt reduction – net debt fell by $12.2 million from June 2022 to $81 million at December 2022.

Despite that, Adairs decided to pay a dividend per share of 8 cents per share. If it were to pay an annual dividend per share of 16 cents for FY23, that would equate to a grossed-up dividend yield of 9.5%.

I think that retail conditions will improve in 2024, which could be helpful for both investor sentiment and hopefully earnings.

Rural Funds Group (ASX: RFF)

Rural Funds is a real estate investment trust (REIT) that owns farmland across Australia. That includes cattle, almonds, vineyards, macadamias, sugar and cotton.

The ASX dividend stock has a goal of increasing its distribution to investors by 4% each year. The Rural Funds share price is close to its 52-week low, so I think this is a very good time to consider investing.

While the cost of debt has increased, the REIT’s rental income which is linked to CPI inflation is also getting a boost.

I think that this is a good time to invest while the distribution yield is elevated. A total distribution of 12.2 cents per unit could be paid in FY23, which would equate to a distribution yield of 5.2%.

For me, farmland seems like a good long-term investment that doesn’t deteriorate in the same way that an office building or shopping centre does.

The post ASX investors: 3 of the best Aussie dividend stocks to buy this year appeared first on The Motley Fool Australia.

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More reading

• Boost your passive income with these ASX shares: analysts
• Top ASX small-cap shares to buy in 2023
• How a stock market crash could turbocharge my ASX share portfolio
• Adairs share price falls amid strong first half growth but guidance downgrade
• Why term deposits can’t compete with these 5 ASX dividend machines

Motley Fool contributor Tristan Harrison has positions in Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs, Brickworks, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Adairs, Brickworks, Rural Funds Group, and Washington H. Soul Pattinson and Company Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Woodside Energy Group Ltd (ASX: WDS) shares will be on watch next week.

That’s because on 27 February, the energy giant is scheduled to release its full-year results.

Ahead of the release, let’s take a look at what the market is expecting from the company.

What is the market expecting from Woodside’s results?

According to a note out of Morgans, its analysts are expecting Woodside to deliver very strong revenue and earnings growth in FY 2022. This is due to a combination of strong oil prices and the BHP Group Ltd (ASX: BHP) petroleum demerger.

The latter saw Woodside take control of these assets in the middle of last year, creating “a global independent energy company.”

As for oil prices, Morgans estimates that Woodside commanded an average brent oil price of US$101.11 a barrel during the 12 months. This is up from US$71.73 a barrel the previous year.

Revenue and earnings to double

The broker is forecasting revenue of US$16,973 million from Woodside in FY 2022, which represents a 139% increase year over year.

It will be a similar story for Woodside’s earnings according to the broker. It is forecasting EBITDAX of US$11,227 million and underlying EBITDA of US$10,990 million for the year. This will be up 142% and 154%, respectively.

And on the very bottom line, a net profit after tax of US$5,192 million is forecast. This will be up 210% from US$1,674 million a year earlier.

The good news for shareholders is that this earnings growth is expected to lead to a big dividend boost in FY 2022. Morgans is forecasting Woodside to pay a full-year dividend of 201.6 US cents per share (A$2.93). This will be up from 135 US cents per share in FY 2021.

Based on where Woodside shares are currently trading, this equates to a very generous 8.5% dividend yield.

The post Own Woodside shares? Here’s what the market is expecting from its full-year results appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• How I’d generate a $20,000 second income from Woodside shares
• 5 things to watch on the ASX 200 on Wednesday
• Woodside share price turns red following production update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has come under pressure on Wednesday. In afternoon trade, the benchmark index is down 0.2% to 7,336.2 points.

Four ASX shares that aren’t letting that hold them back today are listed below. Here’s why they are charging higher:

Hub24 Ltd (ASX: HUB)

The Hub24 share price is up almost 11% to $29.87. Investors have been buying this investment platform provider’s shares following the release of its half-year results. For the six months ended 31 December, Hub24 reported an 87% increase in net profit after tax to $26.6 million.

Johns Lyng Group Ltd (ASX: JLG)

The Johns Lyng share price is up over 15% to $6.47. This morning, the integrated building services company released its half-year results and reported a 63% increase in first-half EBITDA. This strong half has led to the company upgrading its revenue and EBITDA forecasts for the full year.

Judo Capital Holdings Ltd (ASX: JDO)

The Judo Capital share price is up 5% to $1.52. This has been driven by the business lending company’s half year results, which revealed a 322% increase in pre-tax profits to $53.2 million. This was underpinned by a 23% increase in gross loans and advances and a 72 basis points increase in its underlying net interest margin to 3.56%.

Magnis Energy Technologies Ltd (ASX: MNS)

The Magnis share price has jumped 8% to 43.7 cents. This morning, this lithium-ion battery technology and materials company revealed that it has entered into a binding offtake agreement with electric vehicle giant Tesla for the supply of anode active materials (AAM) from February 2025. Tesla will purchase a minimum 17,500 tonnes per annum (tpa) with the option to buy up to 35,000 tpa for a minimum three-year term at a fixed price.

The post Why Hub24, Johns Lyng, Judo Capital, and Magnis shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX 200 share is surging 16% following a revenue upgrade
• 2 ASX 300 shares making big gains on results announcements
• Hub24 share price up 9% on record half-year results and turbocharged dividend
• Magnis share price rockets 23% on Tesla deal
• Why is ASX lithium share Magnis in a trading halt?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Hub24, Johns Lyng Group, and Judo Capital. The Motley Fool Australia has positions in and has recommended Hub24. The Motley Fool Australia has recommended Johns Lyng Group. 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 Fortescue Metals Group Limited (ASX: FMG) share price hit a new 52-week high of $23.33 in early afternoon trading.

There is no price-sensitive news out of Fortescue today, however, it’s likely that Goldman Sachs’ prediction of a 20% bump to the iron ore price is playing a role in the ASX mining giant’s leap.

In addition, S&P/ASX 200 Materials (ASX: XMJ) is the best performer among the 11 market sectors today, up 0.6% compared to the benchmark S&P/ASX 200 Index (ASX: XJO) which is down 0.25%.

On top of all that, Fortescue shares might be looking more attractive than BHP Group Ltd (ASX: BHP) shares after the Big Australian released its 1H FY23 results, revealing a consensus earnings miss of 7.5%.

Not only that, but BHP also cut its dividend by 40%, which has likely disappointed income investors.

Fellow ASX mining share Mineral Resources Ltd (ASX: MIN) is also up today by 3.9% to $85.04.

The Rio Tinto Limited (ASX: RIO) share price is also in the green, up 1.1% to $126.50.

BHP shares are down 0.75% to $48.10 apiece.

Goldman Sachs tips iron ore price rise to US$150 per tonne

As my Foolish colleague Tristan reported this morning, Goldman has a three-month iron ore price target of US$150 per tonne and a six-month target of US$135 per tonne.

That means the iron ore price could rise by almost 20% over the next three months.

The iron ore price increased overnight by 0.39% to US$127.50 per tonne, according to Trading Economics.

It’s down 2.67% year-over-year, and well off its all-time high of more than US$210 per tonne reached in June 2021. (No wonder the mining companies are paying reduced dividends in FY23 compared to FY22.)

Goldman says the iron ore price could rise because of an impending supply/demand imbalance.

This would be due to a seasonal boost in Chinese steel production during March and April and a “near-term” supply squeeze at the same time.

Changes in the iron ore price have a very direct effect on the Fortescue share price because the company is a pure play among the ASX iron ore shares.

Case in point: Both the iron ore price and the Fortescue share price have risen 3.66% over the past month.

The Fortescue share price is currently $23.26, up 2.97% at the time of writing.

The post Why has the Fortescue share price hit a new 52-week high today? appeared first on The Motley Fool Australia.

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More reading

• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Passive income watch: 3 ASX 200 shares that slashed their dividends this week
• Should I buy Fortescue shares following the ASX 200 miner’s latest results?
• Here’s what you need to know about the latest Fortescue dividend
• Fortescue share price sinks amid 13% dividend cut

Motley Fool contributor Bronwyn Allen has positions in BHP Group and Fortescue Metals Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Core Lithium Ltd (ASX: CXO) share price is charging higher today, up 5.11% in afternoon trading to 97 cents per share.

This comes after shares in the S&P/ASX 200 Index (ASX: XJO) lithium stock dropped 4.2% yesterday, closing at 92 cents per share.

So, what’s driving the rebound?

What are ASX 200 investors considering?

It’s not just the Core Lithium share price that’s widely outperforming the 0.3% loss posted by the ASX 200 so far today.

In fact, all of the ASX 200 lithium shares are well into the green.

Here’s how they’re tracking at the time of writing:

• Allkem Ltd (ASX: AKE) shares are up 2.26%
• Pilbara Minerals Ltd (ASX: PLS) shares are up 4.64%
• IGO Ltd (ASX: IGO) shares are up 2.59%
• Mineral Resources Ltd (ASX: MIN) shares are up 4.16%

With no price-sensitive news out today, the Core Lithium share price looks to be benefiting from a broader investor rethink about the outlook for lithium prices.

The battery-critical metal hit all-time highs in November but has fallen some 30% since then amid speculations of supply and demand imbalances.

Several prominent analysts, including those at Goldman Sachs, have been forecasting a looming supply and demand imbalance in 2023, which would drive the lithium price even lower. This has seen some investors lighten their holdings of ASX lithium stocks.

However, the quarterly results released last week by US lithium giant Albemarle Corporation (NYSE: ALB) suggest demand for lithium may prove more resilient than these bearish forecasts suggest. And that could usher in more tailwinds for the Core Lithium share price in the months ahead.

Albemarle posted a whopping 444% increase in its adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), which came in at US$1.2 billion.

Net sales of US$2.6 billion were up 193%, buoyed by a 410% increase in lithium net sales of US$2.1 billion. Albemarle reported it received 328% higher pricing net of FX for lithium during the quarter, partly driven by increased market pricing.

For its full-year 2023 guidance, the company expects net sales to increase between 55% to 75% “primarily driven by market demand and continued favourable pricing for lithium”.

Albemarle also has a bullish outlook for EV production in China, the world’s top EV manufacturer. It expects China to produce approximately 2.5 million more EVs in 2023 than the nation did in 2022.

The company noted, “Chinese EV sales typically rebound following subsidy reductions and COVID lockdowns.”

With some 75% of the world’s consumption of lithium currently going into rechargeable batteries, that equates to some healthy demand growth. And it could indicate some more big days ahead for the Core Lithium share price.

Core Lithium share price snapshot

With today’s intraday gains factored in, the Core Lithium share price is up 22% over the past 12 months.

The post Why is the Core Lithium share price rebounding 5% on Tuesday? appeared first on The Motley Fool Australia.

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More reading

• At under 30 cents each, are these ASX lithium stocks cheap?
• Goldman tips 20% surge in iron ore price. Should I buy ASX 200 mining shares?
• Should I dig in and buy Pilbara Minerals shares before the ASX 200 lithium miner reports on Thursday?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• 2 excellent ASX 200 mining shares to buy now: experts

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There’s quite a bit of variety when it comes to the pricing of ASX lithium stocks.

There’s market-leader Pilbara Minerals Ltd (ASX: PLS), which is currently asking $4.40 a share at the time of writing:

Then there are other lithium leaders like Liontown Resources Ltd (ASX: LTR). Liontown has a lower share price than Pilbara but is still well over $1 each – $1.36 a share at the present time.

Or Core Lithium Ltd (ASX: CXO). Core Lithium is asking just under $1 a share at present, but has been as high as $1.88 in the past 12 months.

But others have far lower share prices. Take popular lithium stock Sayona Mining Ltd (ASX: SYA). Right now, Sayona is going for 22 cents a share.

Fellow lithium company Anson Resources Ltd (ASX: ASN) is trading at 19 cents per share.

And you can pick up a single share of Latin Resources Ltd (ASX: LRS) for just 13 cents.

So these last three shares are the cheap ones, right? The shares you might choose if you want the maximum upside?

Well, no.

It’s a common misconception on the share market that a lower share price equates to a ‘cheaper’ price. Sure, you can buy more shares if a share price is lower. But that’s it.

A share price is a function of two things – a company’s market capitalisation, and how many shares it has on issue. The price of those shares is entirely determined by the company’s market cap. So when you see shares moving up and down in price, what you are really seeing is a company’s market capitalisation changing.

Low-price ASX lithium stocks aren’t cheap

Let’s say a company has one million shares on issue.

If the market wants to value that company at $1 million, it will give each of its shares a share price of $1. If the company does well over time, and the market decides it is now worth $2 million, then the shares will rise to $2 each.

But then say that same company decides to issue more shares, enough to double its share count. Now there are two million shares on issue. But if the market still thinks the company should be worth $1 million, then each share will be priced at 50 cents.    

So just because Latin Resources shares are 13 cents each, doesn’t mean that it is cheaper than another ASX lithium stock like Pilbara Minerals at $4.40. It just means that Pilbara has a greater market capitalisation, with proportionally fewer shares, than Latin Resources.

If the market decides to double the value of either Latin or Piblara, investors will enjoy exactly the same monetary gain.

Just because an ASX lithium stock’s share price is numerically lower doesn’t mean it has more potential to rise over time. The only thing that matters at the end of the day is how profitable a company is, and how much value the share market places on those profits.

The post At under 30 cents each, are these ASX lithium stocks cheap? appeared first on The Motley Fool Australia.

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More reading

• Should I dig in and buy Pilbara Minerals shares before the ASX 200 lithium miner reports on Thursday?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Why A2 Milk, BlueScope, NIB, and Pilbara Minerals shares are dropping today
• Why is the Core Lithium share price being trashed on Monday?
• Here are the 10 most shorted ASX shares this week

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has dropped into the red on Tuesday. In afternoon trade, the benchmark index is down 0.25% to 7,333.1 points.

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

A2 Milk Company Ltd (ASX: A2M)

The A2 Milk share price is down a further 5% to $6.14. This morning, the team at Credit Suisse responded to this infant formula company’s half-year results by downgrading its shares to an underperform rating with a $5.10 price target. Its analysts have concerns that overall infant formula demand could fall materially in China in 2023.

Altium Limited (ASX: ALU)

The Altium share price is down 6% to $37.60. This follows the release of the electronic design software company’s half-year results after the market close on Monday. Although Altium’s earnings came in ahead of expectations, investors appear to be focusing more on its revenue, which was softer than consensus estimates.

CogState Limited (ASX: CGS)

The Cogstate share price was down 14% to $1.63 before being hurried into a trading halt. Management advised that the trading halt has been requested so the digital brain health assessments company can respond to a price query request from the ASX. Its shares are now down almost 30% in a week without any news.

Ingenia Communities Group (ASX: INA)

The Ingenia share price is down 13% to $4.03. This morning, this retirement and holiday communities developer released its half-year results and reported a 24% increase in earnings before interest and tax (EBIT) to $42 million. However, it expects a tough second half and has downgraded its EBIT growth guidance to between flat and 10%. This compares to its previous guidance of 30% growth.

The post Why A2 Milk, Altium, Cogstate, and Ingenia shares are sinking today appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium and Cogstate. The Motley Fool Australia has positions in and has recommended Cogstate. The Motley Fool Australia has recommended A2 Milk. 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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Tuesday has proven to be another big earnings season day, with plenty of S&P/ASX 200 Index (ASX: XJO) shares posting results. Sadly, however, not all have been met with enthusiasm.

Two ASX 200 consumer stocks are among those trading in the red today. Let’s take a closer look at the releases that have the market bidding them lower.

Right now, the ASX 200 is down 0.3% at 7,329.8 points.

2 ASX 200 consumer shares struggling after posting earnings

The Costa Group Holdings Ltd (ASX: CGC) share price is suffering on the back of the company’s full-year earnings, released this morning. Right now, the stock is down 2.04%, trading at $2.645.

It comes after the ASX 200 fresh produce company posted around $1.36 billion of revenue for 2022 – an 11.2% year-on-year improvement. However, its statutory net profit after tax (NPAT) slumped 10% to $47 million.

Last year saw the grower hit by severe weather events and inflation. Fortunately, both appear to be moderating in 2023.

Though, interim CEO Harry Debney expressed frustration over export market access, particularly to China and Japan.

Costa Group declared a 5 cents per share, 40% franked, final dividend – flat with that of the prior year.

Shares in ASX 200 vehicle accessories manufacturer ARB Corporation Limited (ASX: ARB) are also in the red on the release of the company’s first-half earnings, falling 1.28% to swap hands for $31.315 apiece.

It posted a 31.2% tumble in NPAT – coming in at $47.4 million. At the same time, its sales revenue fell 5.1% to $340.9 million. It declared a 32 cents per share fully franked interim dividend ­– down 17.9% on last year’s.

ARB posted lower sales last half amid challenges in fitting resource constraints and vehicle availability, lower export sales, the restructure of a major United States customer, and the timing of original equipment manufacturers (OEM) contracts.

Looking forward, it expects higher new vehicle sales, strong customer orders, and better recruitment opportunities to boost its aftermarket category. Meanwhile, OEM sales are tipped to be flat this financial year before growing again next financial year.

It also notes new and innovative products have been slated for release in 2023.

The post 2 ASX 200 consumer shares tumbling lower on earnings updates appeared first on The Motley Fool Australia.

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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 positions in and has recommended ARB Corporation. The Motley Fool Australia has recommended ARB Corporation and Costa Group. 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 A2 Milk Company Ltd (ASX: A2M) share price has continued its slide on Tuesday.

In afternoon trade, the infant formula company’s shares are down 3.5% to $6.26.

This means that A2 Milk’s shares are now down 12% over the last two trading days.

Why is the A2 Milk share price being sold off?

Investors have been hitting the sell button this week in response to the company’s half-year results release.

In case you missed it, for the six months ended 31 December, A2 Milk reported an 18.6% increase in revenue to NZ$783.3 million and a 22.1% jump in net profit after tax to NZ$68.5 million. The latter was comfortably ahead of the consensus estimate of NZ$60.6 million.

So why the selling? This appears to have been driven by commentary around the China market and its margins in the ANZ segment.

Morgans has been looking at the result and has given its verdict. It commented:

While management believes that A2M is very well positioned over the medium term, it was quite cautious on the China IF industry for 2023. It said A2M is moving into an increasingly challenging period, with headwinds including the rolling impact of five consecutive years of a decline in the birth rate and the market wide transition of CL [Chinese label] IF product to the new GB standard.

We remain concerned that the transition to the new GB standard may cause disruption to sales/pricing and create inventory risks (write-downs) between the timing of new and old product (consumers perceive the stock as not being fresh). Given this uncertainty, A2M’s share price may be more volatile over this period.

And while Morgans believes that A2 Milk can achieve its FY 2026 sales targets, it has doubts over its ability to deliver on its margin goals. The broker adds:

A2M remains on track to achieve its ambition to grow sales to US$2bn by FY26. Management said that CL is tracking ahead of its target while EL, other nutritionals and emerging markets are a work in progress. Given EL (higher margin vs CL) is lagging and the business requires further investment, achieving an EBITDA margin of low-to-mid 20s now looks a stretch. A margin in the high teens now looks more achievable in this timeframe.

Morgans has retained its hold rating with a slightly improved price target of $6.45.

The post Is the A2 Milk share price good value after its post-results selloff? appeared first on The Motley Fool Australia.

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More reading

• Why A2 Milk, BlueScope, NIB, and Pilbara Minerals shares are dropping today
• Why is the A2 Milk share price sinking 9% today?
• A2 Milk share price on watch amid double-digit sales and profit growth
• 5 things to watch on the ASX 200 on Monday
• Here are the top 10 ASX 200 shares today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended A2 Milk. 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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