The Telstra Group Ltd (ASX: TLS) share price hasn’t moved that much over the past year, though it is up 6%. However, I think it’s on track to deliver market-beating returns from here.

To be clear, I’m not suggesting Telstra shares are about to double over the next 12 months. But I believe the combination of dividends and capital growth can beat the S&P/ASX 200 Index (ASX: XJO) over the next two or three years.

Looking at the 20 biggest blue-chip ASX shares in terms of market capitalisation, I think Telstra is one of the first I’d want in my portfolio. In my opinion, there are a number of reasons why investors who are interested in Telstra can consider it an unmissable buy during this period of time.

Growing revenue

I think that Telstra is now in a strong position where it can increase prices for its subscribers. While increasing its subscription price in line with inflation is not exactly a huge jump, it does mean it can give itself a very useful revenue boost. In the FY23 half-year result, it grew its revenue by 6.4%.

But, the state of the telco market seems to be that there is less competition – TPG Telecom Ltd (ASX: TPG) is also increasing prices. While not ideal for customers, it is hopefully going to mean a boost for total revenue. Telstra also continues to add more mobile customers.

I think that Telstra’s revenue can grow in a number of other ways. For example, it could charge more for 5G mobile connections and it could win over households from a NBN connection to a wireless 5G connection. Telstra can also grow in the Pacific region with Digicel Pacific while other divisions such as Telstra Health could become meaningful contributors to income.

I believe that revenue growth will help drive the Telstra share price.

Improving margins

Costs are a very important part of a business. Put simply, companies can’t operate without paying the costs which help them run and grow.

However, most businesses can improve their operations and become more efficient. That doesn’t just mean cutting jobs or other things for the sake of it.

But, Telstra is looking to cut $500 million of costs out of the business by FY25 despite the impacts of inflation and investing for growth.

The business is looking to grow its underlying earnings per share (EPS) at a high-teen compound annual growth rate (CAGR) between FY21 to FY25. In the FY23 half-year result, Telstra delivered a 27.1% increase in EPS.

I think that its ongoing efforts to grow revenue and reduce costs (as a percentage of revenue) will help the company’s profit margins in the next few years. Higher profit should help grow the Telstra share price over time.

Rising dividend

The improving outlook for the EPS is helping the Telstra board boost the dividend again finally.

In the HY23 result, Telstra grew its interim dividend by 6.3% to 8.5 cents per share. I think that the Telstra board want to steadily increase the dividend to shareholders over the next few years as profit improves.

If the FY23 annual dividend is 17 cents, it would represent an increase from FY22 and it would amount to a grossed-up dividend yield of 5.75%. I think the dividend return can form a solid base for its annual returns from here, while growth of the Telstra share price would mean a pleasing total shareholder return over the next two to three years as Telstra carries out its T25 strategy.

The post Why I think the Telstra share price is now an unmissable buy appeared first on The Motley Fool Australia.

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• Brokers name 3 ASX shares to buy now
• Passive income watch: 3 ASX 200 shares that announced boosted dividends this week
• Broker gives its verdict on the Telstra share price post-results
• Why Bapcor, Magellan, Sonic Healthcare, and Telstra shares are charging higher
• Everything you need to know about the boosted Telstra dividend

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Group. The Motley Fool Australia has recommended Tpg Telecom. 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 NIB Holdings Limited (ASX: NHF) share price is plummeting as the market digests the health insurance provider’s first-half earnings.

Right now, the S&P/ASX 200 Index (ASX: XJO) stock is down 10.33%, trading at $7.12 a share.

NIB share price tumbles on first-half results

Here are the highlights of the company’s half-year report:

• $91.6 million of net profit after tax (NPAT) – up 12.8% on the prior comparable period’s (pcp)
• Underlying operating profit lifted 13.3% to $125.1 million
• $1.5 billion of revenue – a 9.3% jump
• 20 cents of earnings per share (EPS) – up 12.4%
• Claims expense came to $1.1 billion – up 4.9%
• 13 cent per share fully franked interim dividend declared – 18.2% higher than the pcp’s 11 cent offering

All of the company’s major businesses performed well last half, with strong results from the Australian Residents Health Insurance (arhi) and New Zealand businesses. NIB also saw a recovery in its International Inbound Health Insurance (iihi) business and its travel insurance leg.

Policyholder growth across arhi, iihi, and the New Zealand business saw health insurance premium revenue lift 5.8% to $1.4 billion and contributed to higher net claims expenses.

Finally, the company said its investment income improved – coming in 47% higher at $22.2 million – but markets have been “fickle”.

What else happened last half?

Effects from the pandemic lingered last half, driving arhi’s net margin down to 8.6%. Though, that’s higher than the company’s 6% to 7% target.

That led the company to post its second-lowest premium increase in 20 years – 2.72%.

It also raised $158 million to fund its entry into the National Disability Insurance Scheme (NDIS), purchased plan manager Maple Plan, and launched its Thrive NDIS business.

What did management say?

NIB CEO and managing director Mark Fitzgibbon commented on the results weighing on the insurer’s share price today, saying:

There’s a symmetry returning to the businesses and profitability, after a period of COVID-led disruption. The half-year has set us up for a good full-year result and longer-term outlook.

Market and business conditions look favourable for our strategy and we’ve definitely got an appetite to invest across the group.

Yet inflation, rising interest rates, and slowing economic growth suggest some level of caution is required. Claims are still lower than we’d expected and at some point, volumes will lift.

What’s next?

“No one is happy about the difficulties we see in the public healthcare system, but those issues will continue to render private health insurance more attractive to consumers,” Fitzgibbon continued.

Despite that positive indication, NIB hasn’t reinstated financial guidance, citing remaining COVID-19 consequences and uncertainty.

NIB share price snapshot

Today’s tumble sees the NIB share price in the year-to-date red. But looking longer-term, the stock has been outperforming.

It’s currently 8% lower than it was at the start of 2023 and 6% higher than it was this time last year.

For comparison, the ASX 200 has gained 6% year to date and 2% over the last 12 months.

The post NIB share price tumbles 10% despite higher profit and bolstered dividend appeared first on The Motley Fool Australia.

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More reading

• Why Inghams, Kelsian, Nuix, and Perenti shares are racing higher
• Why is ASX lithium share Magnis in a trading halt?
• Why is the DroneShield share price surging 10% today?
• 3 ASX shares that could create lasting generational wealth
• Guess which ASX 200 director has been buying up shares since their company reported

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small gain. At the time of writing, the benchmark index is up slightly to 7,348.6 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Inghams Group Ltd (ASX: ING)

The Inghams share price is up 9% to $2.99. This appears to have been driven by news that a couple of brokers have upgraded the poultry producer’s shares. One of those is Macquarie, which has upgraded its shares to an outperform rating with a $2.97 price target. It was pleased with Ingham’s first half results.

Kelsian Group Ltd (ASX: KLS)

The Kelsian share price is up 5% to $6.49. This morning, this travel and transport company announced that it won two new major contracts with Transport for NSW. These contracts will see Kelsian operate bus services in southwestern Sydney in the bus service areas Region 2 and Region 15 through to June 2031. The new contract secures more than $500 million in revenue over the contract term.

Nuix Ltd (ASX: NXL)

The Nuix share price is up 2% to $1.09. This morning the investigative analytics software provider released its half year results and reported a 3.4% in annualised contract value to $170.2 million and a $1.3 million net profit. This compares to a loss of $2.3 million a year earlier.

Perenti Ltd (ASX: PRN)

The Perenti share price is up 9% to $1.15. This morning, this mining services company announced that it has been awarded a new surface contract at the Northern Star Resources Ltd (ASX: NST) owned Kalgoorlie Consolidated Gold Mines Fimiston open pit gold mine in Western Australia. The new ~$160 million contract runs for 60 months.

The post Why Inghams, Kelsian, Nuix, and Perenti shares are racing higher appeared first on The Motley Fool Australia.

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• Northern Star share price falls as half-year earnings decline 12%
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• Inghams share price dives 7% on slashed dividend

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 All Ordinaries Index (ASX: XAO) is having a bit of a bouncy start to the trading week today. At the time of writing, the All Ords has spent time in both positive and negative territory this Monday but is presently down by around 0.05%. But one ASX All Ords lithium share isn’t even at the table today. 

The Magnis Energy Technologies Ltd (ASX: MNS) share price closed at 40 cents last Friday. And that’s where the company will be staying, at least for a while.

That’s because, just before market open this morning, Magnis put out an ASX notice. This told investors its shares would be placed in a trading halt, effective from today.

Here’s some of what the notice said:

The Company requests the trading halt pending an announcement to the market in relation to a material transaction, the signed agreement for which was received from the counterparty over the weekend…

The Company requests that the trading halt applied to its securities continue until the earlier of the making of an announcement in relation to the proposed material transaction and the commencement of trading on 21 February 2023.

That’s all we know for now.

ASX lithium share Magnis on ice

Magnis did give investors another update last Friday. But this was related to its Imperium3 lithium-ion battery plant in the US state of New York, in which Magnis owns a 61% interest.

This informed investors that there will be a delay in gaining United Nations certification for the safe transportation of the lithium-ion batteries manufactured at Imperium3:

In one of the last tests performed, a cell reported an irregular result which has resulted in the process starting again with a new batch of cells.

In order to compress the timeline to achieve certification, additional accredited independent certifiers have been appointed. While disappointed with the delay, Magnis is pleased that cells produced by iM3NY are continuing to be sampled by a range of existing and potentially new customers, which reinforces the Company’s view on positive market demand for these new cells.

The Magnis share price reacted poorly to this news, with the company losing a nasty 7.96% last Friday. That put the company at the 40 cent share price Magnis is frozen at today:

It appears that these two consecutive announcements are not related, but we shall have to wait and see what Magnis comes out with later this week.

The post Why is ASX lithium share Magnis in a trading halt? appeared first on The Motley Fool Australia.

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• NIB share price tumbles 10% despite higher profit and bolstered dividend
• Why Inghams, Kelsian, Nuix, and Perenti shares are racing higher
• Why is the DroneShield share price surging 10% today?
• 3 ASX shares that could create lasting generational wealth
• Guess which ASX 200 director has been buying up shares since their company reported

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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When a director of an ASX 200 share buys up stock in their own company, investors usually sit up and take notice. After all, it’s rarely a bad sign to see the managers of a company put their money where their mouth is and put extra skin in the game.

Directors are usually paid handsomely to look after a company’s fortunes. So when said directors buy up additional shares in said company, it aligns their financial fortunes more closely to those of other investors. Which said other investors usually, and understandably, appreciate. 

That’s exactly what seems to be going on with one ASX 200 share this week: Seven Group Holdings Ltd (ASX: SVW).

Seven Group is the company headed by the famous Stokes family. Not to be mistaken with the media company Seven West Media Ltd (ASX: SWM), Seven Group is a diversified ASX 200 investment company. It has interests ranging from oil and gas, equipment hire and media through its stake in Seven West.

Last week, we briefly covered Seven Group’s latest earnings report. This covered the first half of FY2023. Investors seemed very impressed with Seven’s 16% jump in revenues that were reported. Not to mention the 17% increase in net profits and an 18% jump in earnings per share (EPS). Since this report became public, Seven Group shares have risen by a healthy 3.3% or so.

But today, the Seven Group share price has had a red day. The shares have slid by 1.4% down to $24.05 a share.

But this is despite news of some insider buying going on.

ASX 200 director loads the boat on Seven shares

Last Thursday, Seven Group put out an ASX notice that confirmed a large, post-earnings director transaction.

The director in question is Rachel Argaman OAM. The ASX notice reveals that Argaman more than doubled her stake in Seven Group last Thursday, picking up 6,500 shares in an on-market trade. These shares were acquired for an average price of $24.15 each. That’s slightly below what the company is trading for today.

This indicates the transaction set Argaman back around $157,000. Until Thursday, Argaman owned 6,000 Seven shares. So she has now more than doubled her stake to 12,500 shares. The shares are held indirectly, in a family trust.

So the fact that these shares were picked up after Seven had reported its earnings and its share price had risen is arguably a strong vote of confidence in Seven Group and its future from Argaman. No doubt investors will be stoked with this news.

The Seven Group share price has had a remarkably strong start to 2023. It has recorded a year-to-date gain of 14.3% at today’s pricing. The company is also up by around 7.5% over the past 12 months, and up almost 30% over the past five years:

At the current Seven Group share price, this ASX 200 share has a market capitalisation of $8.74 billion, with a dividend yield of 1.91%.

The post Guess which ASX 200 director has been buying up shares since their company reported appeared first on The Motley Fool Australia.

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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 ASX share market regularly goes through volatility. Share prices moving up and down isn’t surprising – trades are being made by different buyers and sellers every day. But a stock market crash opens up a lot of opportunities.

When I’m about to make an investment, I want to buy shares as cheaply as possible.

People don’t just decide to sell their shares for 30% or 50% less in normal conditions. It takes something significantly worrisome to cause a share price to drop. A global financial crisis (GFC), a global pandemic, and rapidly rising interest rates have triggered share market sell-offs over the last two decades.

Investment advice about being greedy and burgers

I think that Warren Buffett is one of the best investors of all time. While the investment returns he has generated have been incredible, it’s the extremely wise pieces of advice that he has shared with the public over the decades that, to me, make him one of the most revered figures in the investing world.

The first piece of investment advice I’m going to share is one that most readers have probably already heard. It’s easy to get caught up with the booms and busts of the market cycle. But, try to keep this in mind:

Be fearful when others are greedy and greedy when others are fearful.

In other words, be careful with your money when valuations are high and frothy, and get busy buying when the share market goes through a hefty decline.

Warren Buffett also said this in 2001:

To refer to a personal taste of mine, I’m going to buy hamburgers the rest of my life. When hamburgers go down in price, we sing the ‘Hallelujah Chorus’ in the Buffett household. When hamburgers go up in price, we weep. For most people, it’s the same with everything in life they will be buying — except stocks. When stocks go down and you can get more for your money, people don’t like them anymore.

ASX share opportunities galore?

During early 2020 and through 2022, we could buy most ASX shares for much cheaper prices.

I accelerated my wealth-building significantly during 2020 and 2022 by picking my favourites at beaten-down prices.

I’ll give a couple of examples of how this can turbocharge wealth.

First, imagine company A has a share price of $100 before a market crash. It then falls 50% to $50. If I buy it at $50 and then it recovers to $75 in six months, I’ve made a 50% return even though it’s still down 25% from the starting price. But, I’d only choose a business I think has a good long-term future with growth.

I think the Adairs Ltd (ASX: ADH) share price is a great example of this in action.

Between the February 2020 peak and the March 2020 bottom, it dropped more than 70%. By July 2020, it was up 250% from that low. By April 2021, it had risen more than 600%.

Between 31 December 2021 to 17 June 2022, the Adairs share price fell around 60%. Between the June 2022 low and today, it has risen close to 40%.

While we’re not currently seeing 52-week lows for many names, I think there will be more volatility ahead, enabling us to buy at better prices.

If/when there is another major decline in the stock market later this year, I’ll be eager to snap up my favourite ASX shares at cheaper prices.

The post How a stock market crash could turbocharge my ASX share portfolio appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Adairs. The Motley Fool Australia has positions in and has recommended Adairs. 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 lithium industry is a sea of red on Monday.

A large number of ASX lithium shares are under pressure and have sink deep into the red today.

What’s going on with ASX lithium shares?

Investors have been selling down ASX lithium shares on Monday in response to heavy declines from their Wall Street-listed peers on Friday.

Lithium giants Albemarle, Livent, and SQM all fell 10% amid concerns over lithium prices.

This was driven by reports that the world’s largest battery maker, CATL, is offering discounts to some of the Chinese automakers it supplies batteries.

According to Reuters, these discounts are being offer in response to a downturn in the price of lithium and a bid to win more orders. CATL has also reportedly been negotiating with its lithium suppliers to bring prices down.

This appears to indicate that CATL, which has a 37% global share of the EV batteries market, is confident that lithium prices have peaked and are now on the way back down again.

The state of play

Most ASX lithium shares are trading sharply lower today. Among the biggest moves are the shares listed below:

• The Allkem Ltd (ASX: AKE) share price is down 5% to $11.30.
• The Core Lithium Ltd (ASX: CXO) share price is down 4% to 92 cents.
• The Lake Resources N.L. (ASX: LKE) share price is down 5% to 60.5 cents.
• The Liontown Resources Ltd (ASX: LTR) share price is down 4% to $1.29.
• The Piedmont Lithium Inc (ASX: PLL) share price is down 13% to 93.5 cents.
• The Pilbara Minerals Ltd (ASX: PLS) is down 7% to $4.10.

Time will tell what happens with prices, but it seems that many investors are not sitting around to find out. Particularly given how spot prices have now fallen 30% since their November peak.

The post Why are ASX lithium shares being hammered on Monday? appeared first on The Motley Fool Australia.

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• Why is the Pilbara Minerals share price crashing 7% today?
• Down 22% in a month, is it time to dive in and buy Lake Resources shares?
• Two ASX shares with bucketloads of growth potential: experts
• Why Baby Bunting, Integral Diagnostics, Pilbara Minerals, and Zip shares are falling
• Why A2 Milk, Piedmont Lithium, QBE, and Super Retail shares are racing higher

Motley Fool contributor James Mickleboro has positions in Allkem. 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 Bendigo and Adelaide Bank Ltd (ASX: BEN) share price has dipped into the red.

Shares in the S&P/ASX 200 Index (ASX: XJO) bank share closed on Friday trading for $9.61. Shares are currently changing hands for $9.56 apiece, down 0.5% after posting gains of more than 3% in early trade.

This comes following the release of the company’s half-year results for the six months ending 31 December (1H FY23).

Read on for the highlights.

Bendigo Bank share price volatile as profits rocket

• Statutory net profit of $249 million, up 49.3% from 1H FY22
• Cash earnings after tax of $295 million, up 22.9%
• Net interest margin (NIM) of 1.88%, up 0.19%
• Fully franked interim dividend of 29 cents per share, up 9.4% from the 26.5 cents per share paid in 1H FY22

What else happened during the half year?

Atop higher profits and dividends, the Bendigo Bank share price should be receiving some tailwinds from the company’s progress towards significant reductions in its cost-to-income ratio. That’s fallen from 59.3% in 1H FY22 to 54.6% in the half year just past.

Bendigo’s Common Equity Tier 1 (CET1) ratio increased by 0.45% year on year to 10.13%.

While the bank saw total lending decline 1.1% to $77.0 billion, total deposits increased 2.5% to $76.5 billion.

Total funding also increased to $88.9 billion up 1.5% from 1H FY22, with Bendigo reporting customer deposits represented 73.9% of its total funding during the six-month period.

For interested investors, management has announced a dividend reinvestment plan (DRP). The board noted that with APRA’s approval, it intends to “neutralise the impact of the DRP by arranging for a third party to purchase the shares on market rather than issue additional shares”.

What did management say?

Commenting on the results that look to be sending the Bendigo Bank share price on a bit of a wild ride this morning, CEO Marnie Baker said:

Bendigo and Adelaide Bank has delivered on all key metrics with cash earnings, return on equity and capital ratios all improving over the half…

Our digital bank Up has continued to drive growth with 613,000 customers and over $1.3 billion in deposits at the end of the half. Its flagship lending product Up Home was soft launched and settled $38 million in home loans.

Our digital home loan product BEN Express reached $100 million in lending during the half with continued strong levels of enquiry expected. Pleasingly, more than 80% of Up Home and BEN Express customers are new to bank.

What’s next?

Looking ahead at what could impact the Bendigo Bank share price down the road, Baker said, “Our business is well positioned to perform in this environment and we are targeting growth at or better than system whilst generating appropriate returns on equity.”

However, Baker noted that while the bank expects interest rates to peak in 2023, housing prices are likely to continue to moderate, leading to lower system credit growth.

“We are seeing a continued contest for market share play out primarily amongst the big four banks, using incentives in the form of cash back offers for housing loans,” Baker added.

Bendigo Bank share price snapshot

As you can see in the chart below, the Bendigo Bank share price is down 5% over the past 12 months. As for 2023, shares are right about where they started the year.

The post Bendigo Bank share price volatile amid 50% profit boost appeared first on The Motley Fool Australia.

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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 positions in and has recommended Bendigo And Adelaide Bank. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s going to be a busy day for earnings as a significant number of ASX shares are expected to release their financial results today.

This is a crucial time for investors to stay informed on how their companies are navigating the current environment. Reporting season gives the average shareholder a greater look into what management is doing, how the business is creating value, and where the company could be heading in the future.

To help you stay up-to-date, here’s a summary of the companies that are set to reveal their earnings today.

Get ready to absorb the latest financial updates!

ASX shares dishing out results today

Ranked in order of market capitalisation (largest to smallest)

Northern Star Resources Ltd (ASX: NST), $13.1 billion

BlueScope Steel Limited (ASX: BSL), $9.2 billion

Ampol Ltd (ASX: ALD), $7.6 billion

Charter Hall Group (ASX: CHC), $6.9 billion

Bendigo and Adelaide Bank Ltd (ASX: BEN), $5.5 billion

A2 Milk Company Ltd (ASX: A2M), $5.2 billion

Viva Energy Group Ltd (ASX: VEA), $4.7 billion

Nib Holdings Limited (ASX: NHF), $3.8 billion

Reliance Worldwide Corporation Ltd (ASX: RWC), $2.8 billion

HomeCo Daily Needs REIT (ASX: HDN), $2.7 billion

EVT Ltd (ASX: EVT), $2.3 billion

Adairs Ltd (ASX: ADH), $408.0 million

Nuix Ltd (ASX: NXL), $338.0 million

McGrath Ltd (ASX: MEA), $60.9 million

What can we expect to see?

Off the back of a record result in FY22, BlueScope will be under review by its shareholders today.

The company had expected parts of its steelmaking business to slow from the cyclical high coming into the first half. For instance, the North Star segment was anticipated to post an earnings figure that is roughly a third of the previous half.

Heading into today, Bloomberg estimates for BlueScope’s net profit after tax (NPAT) sat at $536 million.

Turning the page to a more growth-orientated ASX share. Investigative analytics software provider Nuix will also be under scrutiny amid the release of its half-year results.

Shares in the company have figuratively scaled mountains over the past six months. During this time, the Nuix share price climbed 53% as its legal predicaments passed. Though, attention will now turn toward the fundamentals.

A return to net profitability would be a major boost to shareholder confidence. In FY22, the company reported a net loss of $22.8 million.

Don’t forget to check back for our results coverage of these ASX shares and more.

The post Earnings preview: Here are the ASX shares reporting on Monday appeared first on The Motley Fool Australia.

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• Why Appen, Lendlease, Nuix, and Star shares are sinking today
• Why did the Nuix share price just crash 27%?
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• Why De Grey, Elders, Maas, and Nuix shares are charging higher today

Motley Fool contributor Mitchell Lawler 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 Adairs and Reliance Worldwide. The Motley Fool Australia has positions in and has recommended Adairs and Bendigo And Adelaide Bank. The Motley Fool Australia has recommended A2 Milk, NIB Holdings, and Reliance Worldwide. 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 Qantas Airways Limited (ASX: QAN) share price has soared around 40% in the last six months. Could the ASX airline share be the best place to put our money before the company reports this week?

Qantas shares have significantly outperformed the S&P/ASX 200 Index (ASX: XJO) in the last half-year — it’s only up by 3% in that time.

The travel business has seen a strong post-pandemic rebound in demand and profitability.

Before considering whether it’s a buy, I think it’s worthwhile thinking about what the business is actually expecting to report.

Latest from the airline

In November 2022, the airline said that in the first half of FY23, it was expecting underlying net profit after tax (NPAT) to come in between $1.35 billion to $1.45 billion.

At the time, Qantas explained that continued strength in travel demand resulted in Qantas upgrading its profit expectations. The range I mentioned above was a $150 million increase compared to the profit range given in early October 2022.

Qantas noted that consumers were continuing to put a “high priority on travel ahead of other spending categories”.

I think it’s important to recognise the market is now expecting a strong result from Qantas. If it reports an underlying profit before tax of $1.35 billion – the bottom of the range – I don’t think investors will love that.

However, fund manager Chris Stott once pointed out that businesses that upgrade their profit guidance can often upgrade a second or third time.

Remember, the Qantas share price, or any share price, is what the market currently thinks the business is worth based on the current guidance/outlook. If it turns out the ASX share is making more profit than expected, then investors will quickly re-evaluate how much the business is worth today.

Is the Qantas share price a buy?

I think Qantas will achieve the high end of its guidance, or perhaps even more.

The airline is rapidly improving its financial position after the terribly difficult COVID-19 period.

Its balance sheet is now looking much stronger. Qantas noted that its net debt is expected to fall to an estimate of between $2.3 billion to $2.5 billion by 31 December 2022. This was around $900 million better than expected in the update before that one.

Excitingly, Qantas noted that the “low levels of net debt put the board in a position to consider future shareholder returns in February 2023”. Further capital put into a share buyback should also be helpful for the Qantas share price.

With the oil price drifting lower over 2022, and international travel returning, I think the outlook in FY24 and beyond looks promising for the Qantas share price.

In my opinion, I think that the Qantas share price is a buy on a three-year view. The Qantas loyalty division continues to grow and generate earnings, while capacity is returning.

The post Are Qantas shares a buy ahead of this week’s ASX results announcement? appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 shares rerated by brokers following earnings results
• Passive income watch: 3 ASX 200 shares that announced boosted dividends this week
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Why did the ASX 200 leap higher on rising unemployment data?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has 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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