The All Ordinaries Index (ASX: XAO) may be sinking today but that hasn’t stopped a couple of ASX healthcare shares from racing higher.

Here’s why these two All Ords shares are smashing the index on Thursday:

Immutep Ltd (ASX: IMM)

The Immutep share price is up 5% to 31 cents. This morning the biotechnology company announced that a late-breaking abstract relating to its phase II TACTI-002 trial has been accepted for an oral presentation at the Society for Immunotherapy of Cancer (SITC) Annual Meeting 2022 this month.

The release notes that the presentation will include new clinical data for eftilagimod alpha (efti), its first-in-class soluble LAG-3 protein, in combination with pembrolizumab in 1st line non-small cell lung cancer (NSCLC) patients.

Last month, fast track designation was granted by the US FDA for efti in combination with pembrolizumab in 1st line NSCLC. This offers the potential for expedited development and review.

Rhythm Biosciences Ltd (ASX: RHY)

The Rhythm Biosciences share price is up almost 9% to $1.24. Investors have been buying this cancer diagnostics technology company following the release of an announcement relating to its ColoSTAT product.

According to the release, the company has continued the expansion of its international regulatory footprint after successfully registering ColoSTAT with the New Zealand national database of Medical Devices. This allows the lifesaving colorectal cancer detection technology to be marketed and sold in the country.

Rhythm’s CEO and managing director, Glenn Gilbert, commented:

Bowel cancer is the second highest cause of cancer death in New Zealand and a growing issue with 1 in 10 now diagnosed under the age of 50. ColoSTAT is a simple blood test which has the potential to make a material impact on health outcomes through mass screening for higher participation to achieve early diagnosis. We look forward to working with the Ministry of Health’s National Screening Unit to enhance New Zealand’s National Bowel Screening Programme.

The post 2 ASX healthcare shares smashing the All Ords today appeared first on The Motley Fool Australia.

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More reading

• 2 US stocks Wall Street thinks could deliver 50% or more upside
• How did the Sayona Mining share price perform in October?
• Is Bendigo Bank the best bet for dividends out of all the ASX 200 bank shares?
• How are ASX 200 tech shares faring after the overnight NASDAQ plunge?
• Why is the Domino’s share price down 13% in two days?

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

While market sell-offs can be brutal, they also open up opportunities to purchase some stocks that were previously trading near uninvestable levels. According to Wall Street analysts, two companies that have come down to that point are Cloudflare (NYSE: NET) and Datadog (NASDAQ: DDOG).

On average, analysts see 57% upside for Cloudflare and 56% for Datadog. That’s quite a turnaround in one year, but is it realistic? 

The businesses

First, it’s helpful to understand what these two do. Both are rapidly growing tech companies whose valuations reached unsustainable levels in 2021, contributing to their significant decline. To be clear, the businesses are both performing admirably; it was the exuberance of 2021 that caused their terrible stock performance.

Cloudflare’s product allows its clients to host websites on its servers, eliminating the need to purchase expensive networking equipment that can quickly become obsolete. Cloudflare’s 275-plus data centers in cities worldwide also place the information closer to website users, making the website load incredibly fast. With more than 151,000 paying customers, Cloudflare has a large base of customers that are expanding their use quarterly.

As businesses deploy more cloud solutions, it’s becoming harder for IT teams to monitor how all their software solutions function. Datadog’s platform solves this issue through its cloud monitoring service, allowing users to see how data flows function and to solve problems quickly when they arise. Datadog’s product is more niche than Cloudflare’s, but it still has about 21,200 paying customers. 

Although many businesses are tightening their budgets to prepare for an economic downturn, both companies posted solid revenue growth in the second quarter:

Company	YOY Revenue Growth
Cloudflare	54%
Datadog	74%

Data source: Cloudflare and Datadog. YOY: year-over-year.

These aren’t small revenue streams, either; Cloudflare’s and Datadog’s second-quarter sales were $235 million and $406 million, respectively.

However, no matter how fast a business grows, there is always a reasonable price to pay for it. From a price-to-sales (P/S) standpoint, both companies were too expensive last year.

Data source: YCharts.

Even now, many would contend that 20 times sales is also too expensive. But the bigger picture for these companies is their prospects and growth, making the valuation more palatable.

The road ahead is bright

Both Cloudflare and Datadog operate in massive markets. Datadog believes its market could be $53 billion by 2025, and Cloudflare sees its total addressable market at $135 billion by 2024. While it’s impossible for one company to capture an entire market completely, these two have a long way to go before they saturate their market opportunity.

And both companies are teetering on the brink of profitability. In the second quarter, Datadog had a mere $3.1 million in operating losses, and Cloudflare is projecting an operating profit for its full-year 2022. Unlike some tech companies that are laying off part of their workforce even to get remotely close to breaking even, these two are on the brink.

These two factors are significant reasons both stocks still command a premium price. Wall Street also expects these stocks to maintain their valuation; analysts forecast Cloudflare and Datadog to grow their revenues by 36% and 38%, respectively, in 2023. And there is likely further upside beyond that point.

I think both stocks are strong buys because of their massive opportunities, but investors must be committed to holding the stocks for at least three to five years. This will allow investors to wait out market downturns like the one we are in right now. For Datadog and Cloudflare, the best days are still ahead, and investors should take positions accordingly. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post 2 US stocks Wall Street thinks could deliver 50% or more upside appeared first on The Motley Fool Australia.

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More reading

• 2 ASX healthcare shares smashing the All Ords today
• How did the Sayona Mining share price perform in October?
• Is Bendigo Bank the best bet for dividends out of all the ASX 200 bank shares?
• How are ASX 200 tech shares faring after the overnight NASDAQ plunge?
• Why is the Domino’s share price down 13% in two days?

Keithen Drury has positions in Cloudflare, Inc. and Datadog. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Cloudflare, Inc. and Datadog. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Sayona Mining Ltd (ASX: SYA) share price had its highs and lows in October, but overall finished flat.

Sayona shares closed at 23.5 cents on 30 September. At market close on 31 October, Sayona shares were fetching this exact same price. For perspective, the S&P/ASX 200 (ASX: XJO) lifted 6% in the same timeframe.

Let’s take a look at what impacted the Sayona share price in October.

Up and down

The Sayona Mining share price was up and down like a yo-yo in October.

Sayona shares soared 13% on 4 October on the back of positive lithium news. Sayona launched a pre-feasibility study for lithium carbonate production at its North American Lithium (NAL) operation in Quebec. Piedmont Lithium Inc (ASX: PLL) has a 25% stake in this project, with Sayona holding the other 75%.

Commenting on the news, managing director Brett Lynch said:

We look forward to examining the results of the PFS, as we work towards becoming a leading integrated producer and the largest in North America, amid accelerating demand from the battery and electric vehicle sector.

The Sayona Mining share price descended 15% between market close on 4 and 20 October.

On 5 October, Sayona Mining shares fell nearly 7.69% despite a seemingly positive update from the company. Sayona Quebec CEO Guy Laliberté described the agreement as “another important step” on the road to restarting operations at the mine.

Sayona launched a pre-feasibility study for the Moblan Lithium Project in northern Quebec, Canada. However, as my Foolish colleague James noted, profit taking and industry weakness at the time may have impacted the company’s share price.

What else?

In further news, on 18 October, Sayona advised a CA$43 million Quebec rail contract had been signed to transport lithium from the North American Lithium operation to port.

Sayona shares rocketed 18% higher between market close on 20 October and 25 October before pulling back nearly 8% up to the 31 of October.

In news on 27 October, Sayona Mining advised the NAL project is “picking up speed” with 96% of procurement and permitting complete. The project is on track to restart in quarter one of 2023.

On the final day of October, Sayona released a quarterly activities and cash flow report. Sayona has cash at hand of about $159.234 million.

Sayona’s annual general meeting will be held on 16 November.

Share price snapshot

The Sayona Mining share price has lifted 40% in the past year, while it has soared 73% year to date.

For perspective, the ASX 200 has shed more than 7% in the past year.

Sayona has a market capitalisation of about $1.8 billion based on the current share price.

The post How did the Sayona Mining share price perform in October? appeared first on The Motley Fool Australia.

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More reading

• Could this news be helping the Sayona share price light up today?
• If ASX lithium shares are soaring, why is the ACDC ETF down 9% in 2022?
• Why Champion Iron, Lynas, Newcrest, and Sayona shares are storming higher
• Sayona Mining share price higher on lithium project update
• Here are the 3 most heavily traded ASX 200 shares on Wednesday

Motley Fool contributor Monica O’Shea 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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S&P/ASX 200 Index (ASX: XJO) bank shares have a reputation for paying high levels of income to shareholders. But, could Bendigo and Adelaide Bank Ltd (ASX: BEN) shares be the best source of dividends from the sector?

For context, Bendigo Bank is a pretty big business. It has a market capitalisation of $5.2 billion according to the ASX. However, it’s a fraction of the size of major banks of Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

But, $1,000 invested in any of these businesses is still $1,000. It doesn’t necessarily matter what size the ASX 200 bank share is.

Is Bendigo Bank the best choice for dividends?

I’m going to use the estimates for the dividend on CommSec for FY23.

Bendigo Bank is expected to pay a grossed-up dividend yield of 8.5% in the current financial year, based on an expected payout of 54 cents per share.

CBA could pay a grossed-up dividend yield of 5.8% if it pays an annual dividend of $4.25 per share.

NAB is projected to pay a grossed-up dividend yield of 7.4%, based on a potential payout of $1.67 per share.

Westpac may pay a grossed-up dividend yield of 8.25% if it pays $1.39 per share in FY23.

ANZ is projected to pay a grossed-up dividend yield of 8.6% based on a potential annual dividend payment of $1.54 in FY23.

The final bank I’ll put in the mix is Bank of Queensland Limited (ASX: BOQ). According to Commsec, BOQ could end up paying a grossed-up dividend yield of 10.5% in FY23.

As we can see, Bendigo Bank’s expected yield is right up there with the big ASX 200 bank shares. In yield terms, it seems to rank evenly with the highest-yielding major bank.

However, BOQ seems to take the prize in terms of the potential dividend size in FY23.

Direction of the dividend

Bendigo Bank is expected to grow its dividend to 56 cents per share in FY24, which represents an attractive trajectory.

However, BOQ is expected to pay a similar-sized dividend in FY24, which would mean no growth.

Even so, the FY24 yield would be 10.4% from BOQ and 8.8% from Bendigo Bank.

Time will tell what the growth of the dividend is after FY24.

But, I can understand why investors may prefer one of the big ASX 200 bank shares for dividends because they may be viewed as more stable due to their size and ‘too big to fail’.

Foolish takeaway

I think that Bendigo Bank can be a good source of dividends in the coming years. But, it may not be the bank that delivers the most dividend income, or the most growth. However, I do think it can do quite well in the shorter term in this rising interest rate environment.

The post Is Bendigo Bank the best bet for dividends out of all the ASX 200 bank shares? appeared first on The Motley Fool Australia.

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More reading

• Coles shares underperformed the market last month. What’s next?
• ASX 200 dives on hawkish Federal Reserve interest rate policies
• 3 ‘bullish’ ASX shares to buy as FOMO grips the market: expert
• The Westpac share price soared 17% in October, what’s next?
• 5 things to watch on the ASX 200 on Thursday

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 Bendigo and Adelaide Bank Limited. The Motley Fool Australia has recommended Westpac Banking Corporation. 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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S&P/ASX 200 Index (ASX: XJO) tech shares are deep into the red during the lunch hour on Thursday.

At the time of writing, the ASX 200 itself is down 2%. The S&P/ASX All Technology Index (ASX: XTX) – which contains some smaller tech shares outside of the ASX 200 – is down 1.7%.

This comes after the US Federal Reserve lifted rates for a fourth consecutive session yesterday. The 0.75% interest rate increase brings the US target rate into the 3.75% to 4% range.

While that increase had been widely priced in by the markets, the hawkish post-announcement press address by Fed chair Jerome Powell was unexpected. And it was clearly unwelcomed by tech investors, with the Nasdaq Composite (NASDAQ: .IXIC) closing down 3.4%.

So, how are the big-name ASX 200 tech shares holding up?

How are ASX 200 tech shares faring after the Fed’s rate hike?

ASX 200 tech shares took Tuesday’s rate hike from the RBA in their stride. But they’re all losing ground in the face of some further likely rises from the Fed, the world’s most watched central bank.

In early afternoon trade, buy now, pay later (BNPL) stock Block Inc (ASX: SQ2), which acquired Afterpay in January, is down 6.5%.

Meanwhile, WiseTech Global Ltd (ASX: WTC), a provider of cloud-based software solutions for the logistics sector, has seen its share price slip by 1.1%.

Accounting software provider Xero Limited (ASX: XRO) is under pressure too, with shares down 2.3%.

And rounding off our list of big-name ASX 200 tech shares, administration services company Link Administration Holdings Ltd (ASX: LNK) is down 1.7%.

What did Powell say to spook investors?

The big sell-off in US tech stocks, and the pressure on ASX 200 tech shares today, really came post the Fed’s rate hike announcement.

That’s when Powell addressed a media conference, stressing that the Fed was not done with hiking rates yet and that inflation remained stubbornly high.

“We think we have a ways to go before we get to that level of interest rates that we think is sufficiently restrictive,” Powell told the conference.

The Fed chair added that the rate hikes had yet to have any material impact on taming inflation.

“The level of rates that we estimated in September, the incoming data suggests that’s actually going to be higher. There is no sense that inflation is coming down. We’re exactly where we were a year ago,” he said.

Companies priced with future earnings in mind are particularly vulnerable to rising rates. That’s because as the present cost of holding money goes up, the current value of those future revenue streams goes down.

The reverse will also hold true.

When interest rates finally top out, and eventually begin to head lower, well-placed ASX 200 tech shares should be some of the biggest beneficiaries.

The post How are ASX 200 tech shares faring after the overnight NASDAQ plunge? appeared first on The Motley Fool Australia.

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More reading

• Why did the Block share price just tumble 7%?
• Why is the Zip share price up 5% on Tuesday?
• Top ASX shares to buy in November 2022
• Here are the 10 most shorted ASX shares
• Why are ASX 200 tech shares getting bashed around today?

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 positions in and has recommended Block, Inc., Link Administration Holdings Ltd, WiseTech Global, and Xero. The Motley Fool Australia has positions in and has recommended Block, Inc., WiseTech Global, and Xero. 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 has been another disappointing day for the Domino’s Pizza Enterprises Ltd (ASX: DMP) share price on Thursday.

In early afternoon trade, the pizza chain operator’s shares are down 9% to $54.70.

This means the Domino’s share price is now down 13% over the last two trading sessions.

Why is the Domino’s share price crashing?

The Domino’s share price has been sold off this week after the company released a disappointing trading update at its annual general meeting.

That update revealed that the company’s sales are down 1.8% year to date. This is being driven by inflationary pressures, high energy prices, and foreign exchange headwinds.

Domino’s CEO and managing director, Don Meij, commented:

We understand inflation, particularly high energy prices in Europe, are making customers consider every purchase – our answer to this is delivering a high-quality product at an affordable price.

Unfortunately, Domino’s earnings are also being impacted by inflationary pressures and this is expected to remain the case for a little while longer. The company advised that it “anticipates inflationary headwinds to continue into the 2023 calendar year; primarily raw ingredients, energy prices in Europe, and labour costs in some markets.”

As a result, the company’s earnings are expected to “be materially lower” in the first half of FY 2023.

For the full year, management expects a year over year decline including foreign exchange headwinds and “to deliver NPAT growth in FY23” on a constant currency basis.

Broker reaction

This update hasn’t gone down too well with brokers, which explains the weakness in the Domino’s shares price today.

According to a note out of Citi, its analysts have downgraded Domino’s shares to a neutral rating and cut their price target on them by over 20% to $66.60.

Elsewhere, Goldman Sachs has retained its neutral rating but cut its price target to $60.00. Goldman commented:

DMP reported FY23 first 17 weeks trading update with sales largely in-line with expectations though company guided for 1H23 earnings to be materially lower than pcp. Additionally, FY23 NPAT excluding ~A$7mn FX headwinds is expected to be above FY22 A$165mn but will be below if including FX impact. This is below Factset Consensus FY23 NPAT forecast of A$179mn and GS forecasts of FY23 A$170mn.

The post Why is the Domino’s share price down 13% in two days? appeared first on The Motley Fool Australia.

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More reading

• ‘Close to bottom’: Expert names 3 bargain ASX shares to buy right now
• 5 things to watch on the ASX 200 on Thursday
• Domino’s share price sinks 5% on AGM update
• 5 things to watch on the ASX 200 on Wednesday
• These were the best-performing ASX 200 shares in October

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 Dominos Pizza Enterprises 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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It’s been a ripper year for many of the market’s favourite ASX coal shares – and one still looks to be trading at an attractive price, according to one expert.

Stanmore Resources Ltd (ASX: SMR) is an Aussie coal producer with assets in the Bowen and Surat Basins, where it mines metallurgical, known as coking, coal. It recently acquired all interest in what was BHP Mitsui Coal (BMC).

The Stanmore share price has rocketed around 200% since the start of 2022 amid soaring coal prices. It’s trading at $2.90 at the time of writing – more than 30% higher than it was this time last month.

Its year-to-date gains are on par with similar surges in S&P/ASX 200 Index (ASX: XJO) coal favourites Whitehaven Coal Ltd (ASX: WHC) and New Hope Corporation Limited. They’ve gained 245% and 148% respectively in 2022.

Glenmore Asset Management founder Robert Gregory previously posted a huge win, with a few notable coal shares helping the fund return more than 50%.

Now, the expert is bullish on the future of the smaller ASX coal miner, writing, via Livewire, that he believes it’s set to outperform over coming years.

Could this coal share outperform its ASX 200 peers?

There are many reasons behind Gregory’s bullishness on shares in ASX coal miner Stanmore.

The most obvious is its established, producing, and low-cost mines. The expert notes that its low-cost base better positions the company to push through falling coal prices.

On top of that, he notes coking coal prices are lower than their thermal cousins right now. Thus, they might face less volatility in the future. Though, commodity prices are notoriously hard to predict.

The federal government recently tipped thermal coal to average US$333 a tonne in 2022, falling to US$125 a tonne in 2024. Meanwhile, coking coal is expected to fall from around US$400 a tonne this year to US$220 tonne in 2024.

Of course, current high commodity prices mean Stanmore and other ASX coal producers are experiencing huge cash flows right now. Indeed, the company’s operating cash flow surpassed US$560 million in the first half.

As a result, Gregory tips its balance sheet to improve, driving it to a net cash position next year.

Speaking of, the expert flagged the ASX coal share’s valuation as another positive, writing:

At a stock price of $2.90, [Stanmore] trades on low EV/EBITDA multiples of 2.0-2.5 times in [calendar year 2022-2023], which seems too cheap given the quality of its asset base.

Stanmore isn’t the only ASX coal share market experts are tipping will rise.

Experts are divided about the future of the Whitehaven share price, however many are hopeful it could post notable gains. Meanwhile, others believe Yancoal Australia Ltd (ASX: YAL) shares are a value coal buy.

The post Up 30% in a month, the ASX coal share that still ‘seems too cheap’: expert appeared first on The Motley Fool Australia.

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More reading

• 5 ASX shares that have crushed the market this year
• Why Allkem, Karoon Energy, Stanmore Resources, and Whitehaven Coal are charging higher

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

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It’s proving a tough day so far for ASX iron ore shares. This comes after a broker offered a bearish view on the iron ore price.

The S&P/ASX 200 Materials Index (ASX: XMJ) is currently the worst-performing sector index on Thursday, with a 3.04% loss.

Some of the largest ASX iron ore producers are also having a rough start to the day. Here’s how they’re holding up:

• Fortescue Metals Group Limited (ASX: FMG) down 3.37%
• BHP Group Ltd (ASX: BHP) down 2.91%
• Rio Tinto Limited (ASX: RIO) down 2.54%

Looking at the bigger picture, the S&P/ASX 200 Index (ASX: XJO) is struggling today and is currently descending 2.04%.

Liberum gives a bearish outlook for iron ore

Liberum Capital gave a bleak short-term outlook for the iron ore price in a note published by The Australian Financial Review this morning.

The broker’s bearish position on iron ore was influenced by what’s been happening recently in Chinese markets. This could be bad news for ASX iron ore producers as China is collectively their largest export destination.

China’s steel-intensive property sector was stated to be “subdued”, and the steel industry could be heading into a weak trading period.

Other factors included reduced ore-buying rates and destocking by steel companies in China, as well as an increase in maintenance programs by local businesses. These factors come amid the margins for companies in the steel industry collapsing.

One reason to be bullish

However, amid the bad news, Liberum notes that while steel production and demand are weak in China right now, the industry typically reports a significant increase in activity after the winter season. This is expected to happen in the first quarter of 2023.

Liberum concluded by giving its analysis of the current iron ore price in China.

Flagship signal, 62 per cent Fe fine, North China (31-Oct; physical), is now $US82/t, -31 per cent YTD; half of Apr-22’s peak; spot is now 9 per cent below our 4Q22 & 2023 average forecast of $US90/t; 26 per cent above our long-term nominal price of $US65/t cfr North China.

The post What’s the forecast for the iron ore price right now? appeared first on The Motley Fool Australia.

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Motley Fool contributor Matthew Farley 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Big technology companies, such as Meta Platforms and Microsoft, are having a horrid time on the stock market this earnings season thanks to the macroeconomic slowdown, but Apple (NASDAQ: AAPL) dodged a bullet and avoided a big sell-off when on Oct. 27 it released its fiscal 2022 fourth-quarter results (for the three months ended Sept. 24).

The technology giant’s revenue and earnings beat Wall Street’s estimates despite what Apple’s CFO termed  “a challenging and volatile macroeconomic backdrop.” The company’s revenue was up 8% year over year to $90.1 billion, while adjusted earnings increased 4% to $1.29 per share. Analysts would have settled for $1.27 per share in earnings on $88.7 billion in revenue, but the healthy demand for iPhones, MacBooks, and wearable devices, along with the growth in Apple’s services business, helped it post stronger results.

The iPhone moved the needle in a big way for Apple last quarter, and the device is the biggest reason why this tech giant looks worth buying at a time when other big names have fallen by the wayside. Let’s see why.

Apple thrives on strong iPhone sales

The iPhone was the driving force behind Apple’s growth last quarter. The device produced 47% of the company’s revenue and recorded nearly 10% year-over-year growth in revenue to $42.6 billion. That’s impressive, considering that the broader smartphone market declined yet again last quarter.

According to Strategy Analytics, global smartphone shipments were down 9% year over year in the third quarter to 297 million units. Apple, however, bucked the trend and sold 49 million iPhones during the quarter, an increase of 6% over the prior-year period. The company’s share of the global smartphone market increased to 16.3% as a result.

It is worth noting that Apple’s sales increased at a time when its key competitors saw their shipments decline. Samsung‘s shipments were down 7% year over year. Chinese smartphone OEMs (original equipment manufacturers) such as Xiaomi, Oppo, and Vivo saw their shipments drop 8%, 20.1%, and 20.5%, respectively.

More importantly, Apple enjoyed healthy pricing power last quarter despite inflation and concerns about a potential recession next year. Dividing Apple’s total iPhone revenue in fiscal Q4 by Strategy Analytics’ shipment estimate points toward an average selling price (ASP) of nearly $879. That’s more than double the overall smartphone market’s estimated ASP of $413 for 2022, according to IDC.  

Apple’s solid pricing power isn’t surprising. The ASP of 5G smartphones in 2022 is expected to land at $616, so customers are spending more on phones supporting the latest wireless standard. What’s more, shipments of 5G smartphones could jump nearly 24% over 2021 to 688 million units and account for 54% of overall shipments, which tells us why Apple is enjoying a mix of healthy pricing and volumes.

The 5G market can supercharge Apple’s long-term growth

Apple was the leading 5G smartphone OEM last year with a 31% market share. A similar share in 2022 means that Apple could end up shipping just over 213 million smartphones, based on this year’s estimated 5G smartphone shipment forecast of 688 million. As Apple is expected to build 220 million iPhones this year, it could hit that mark as it has a comprehensive 5G smartphone lineup, including the entry-level iPhone SE.

Additionally, customers are willing to pay a premium for Apple’s 5G devices, as the company’s iPhone ASP indicates. What’s more, the stronger demand for Apple’s more expensive Pro models is another indication of the company’s pricing power at a time when inflation is pulling the overall market down. As such, it won’t be surprising to see Apple sustain its dominant position in 5G smartphones.

The good part is that the 5G smartphone market still has a lot of room for growth. IDC estimates that 79% of the smartphones sold in 2026 will support 5G. Based on IDC’s forecast of 1.46 billion overall smartphone sales in 2026, annual 5G smartphone shipments could hit 1.15 billion units after four years. If Apple continues to control 30% of the 5G smartphone space in 2026 — which it could in light of customers’ preference for its devices even in the face of macroeconomic headwinds — its annual iPhone shipments could reach 350 million units.

Multiplying that by an estimated ASP of $850 (assuming Apple needs to lower prices to keep the competition at bay), its annual iPhone revenue could approach $300 billion. That would be a big increase over Apple’s iPhone revenue of $205 billion in fiscal 2022, indicating that the company’s biggest source of revenue is set to get bigger in the long run.

With Apple trading at 25 times trailing earnings and 6 times sales right now, buying the stock looks like a good idea as these multiples suggest a discount to last year’s earnings multiple of 31 and sales multiple of 8. The robust demand for the company’s iPhones and its foray into emerging areas such as headsets and even self-driving cars could make Apple a top tech stock in the long run, which is why investors may want to capitalize on its 12% decline in 2022.   

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Is Apple stock a buy now? appeared first on The Motley Fool Australia.

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Harsh Chauhan has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Apple, Meta Platforms, Inc., and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Apple and Meta Platforms, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.   

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Woolworths Group Ltd (ASX: WOW) share price is having a difficult session.

In morning trade, the retail giant’s shares are down 4% to $31.81.

Why is the Woolworths share price sinking today?

Investors have been hitting the sell button this morning for a couple of reasons.

One is the broad market selloff after the US Federal Reserve delivered a 0.75% interest rate hike and warned of more pain to come.

The other reason for the weakness in the Woolworths share price today is the release of the company’s first quarter sales update, which has fallen short of expectations.

How did Woolworths perform in the first quarter?

For the quarter ended 2 October, Woolworths delivered a 1.8% increase in group sales to $16,363 million.

This was driven by better than expected performances from its Big W and Australian B2B businesses, which offset softer performances from the Australian Food and New Zealand food businesses.

The key Australian Food business reported a 0.5% decline in sales to $12,204 million, which equates to a 1.1% comparable store sales decline. This was due largely to its online channel, which reported a meaningful pullback in sales after benefiting from lockdowns a year earlier

It also means that Woolworths is underperforming Coles Group Ltd (ASX: COL). Late last month, its rival reported a 2.1% increase in comparable store sales for the same period.

Broker reaction

Analysts at Goldman Sachs highlight that while the overall sales result was in line with its estimates, its Australian and New Zealand Food businesses disappointed. The broker commented:

Group sales of A$16.4B came in largely in line with expectations though the AU and NZ Foods businesses were slightly weaker, offset by slightly stronger AU B2B and Big W.

Sales of A$12.2B and growth of -0.5% was a continuation of the trends for first 8 weeks in FY23. 1Q23 comp sales of -1.1% is below peer COL of +2.1% and is largely driven by a decline in comp item growth of -8.6%, offset by inflation of +7.3% (COL +7.1%). This decline in item growth is primarily coming from a reversal of e-Commerce, which fell 10.8% YoY and saw sales penetration reduce from 11.4% 1Q22 to 10.2% in 1Q23 (GSe: 10.3%).

Goldman also revealed what it will be looking out for in the second quarter of FY 2022. It said:

We look for further clarity on the October exit rate for the Australian and NZ food businesses and look to understand whether positive mix will return as personalised offers begin to take effect. As Covid effected comps roll off we look for details on second quarter sales volume, mix and pricing as well as the strategy heading into Christmas with details on how consumers shift to value will be approached. Additionally, we look forward to more colour on the strategies to address the slowdown in New Zealand.

The post Why is the Woolworths share price sinking 4% today? appeared first on The Motley Fool Australia.

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