Ths S&P/ASX 200 Index (ASX: XJO)’s recent run of good form looks like it is set to continue this week. So far this Monday, the ASX 200 has gained another 0.86%, putting it within reach of 7,400 points. But the BHP Group Ltd (ASX: BHP) share price had an even better morning.

The use of the past tense is deliberate. BHP shares soared upon market open this morning, climbing to the psychologically significant $50 mark for the first time in the miner’s very long history:

It seems investors want to take this new high slowly though, with BHP only just touching the $50.00 mark, which is now the company’s rather neat new all-time record high.

But the good times didn’t end up rolling for long. At present, BHP shares have retreated from those highs and have slipped into red territory, with the miner now well under $50 at $49.54 a share.

So why did investors push BHP shares to a new record high today?

Why did the BHP share price hit a $50 new record high?

Well, it’s probably due to a couple of factors. The first is the reopening of China. The Chinese Communist Party has spent the past few months pulling off a stunning about-face on its previous and strict ‘zero-COVID’ policies.

The country now seems to be embracing a new ‘living with COVID’ policy of opening up after years of strict lockdowns and shutdowns designed to stop the spread of COVID infections.

Investors are betting that a reopened China will see the country’s economy boom. BHP is a major exporter to China. As such, this is probably partly behind the renewed optimism we have seen with BHP shares of late.

Secondly, the iron ore price itself has been on a tear lately. The base metal is currently comfortably back over US$120 a tonne after dipping as low as US$80 last year. Iron ore is BHP’s largest source of revenue, so higher prices are obviously good news for the miner.

So it’s likely that the new highs we have seen for the BHP share price today can be put down to a combination of these factors. No doubt BHP’s investors will be delighted with what the ASX brought them today.

The post BHP share price hits milestone $50 mark on Monday appeared first on The Motley Fool Australia.

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• Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings
• Attention income investors! These 7 ASX 200 dividend shares are projecting yields of 7%+ in FY24
• Broker forecasts CBA share price to slide 15%
• Bought $1,000 of IAG shares 10 years ago? Here’s how much dividend income you’ve pocketed
• Are ASX 200 retail shares on sale in 2023?

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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ASX 200 lithium shares are having a tough run on the market today.

Lithium shares in the red today include:

• Core Lithium Ltd (ASX: CXO), plunging 5%
• Sayona Mining Limited (ASX: SYA), sliding 1.3%
• Liontown Resources Ltd (ASX: LTR), down 4%
• Allkem Ltd (ASX: AKE), falling 0.2%

However, the Pilbara Minerals Ltd (ASX: PLS) share price is bucking the trend today, up 1.25% after falling 1% into the red in earlier trade. For perspective, the S&P/ASX 200 (ASX: XJO) is climbing 0.76% today.

What’s going on?

Lithium demand sentiment could be weighing on ASX 200 lithium shares. Lithium is an essential component of Electric vehicle (EV) batteries.

The lithium hydroxide price has fallen 0.73% to US$81,300 on the London Metal Exchange. Meanwhile, lithium carbonate has slid 0.44% to CNY 447,500.

Meanwhile, news emerged on Friday that Tesla Inc (NASDAQ: TSLA) had cut the prices on the majority of its electric cars. As my Foolish colleague Mitch reported, the major price changes could signal EV demand may be less than previously forecast.

However, this move will mean more of Tesla’s vehicles will be eligible for a US federal tax credit, The New York Times reported. Tesla also slashed EV prices by up to 13% in China last week, the Verge reported.

Lithium giant Sociedad Quimica y Minera de Chile (NYSE: SQM) fell 1.58% on the New York Stock Exchange on Friday, while Albermarle Corporation (NYSE: ALB) shares slid 0.4%. Meanwhile, a recent broker downgrade could be continuing to weigh on Core Lithium shares today. Goldman Sachs placed a “sell” rating on the Core Lithium share price with a 95 cent price target. Analysts are concerned Core Lithium “looks relatively expensive” versus peers and raised concerns about the company’s Finniss project. Goldman said:

We see production risk as the Finniss project moves through ramp up on project complexity (moving between different open pits and underground configurations), and the required exploration/resource upside to support capacity expansion/life extension currently priced into the stock looks significant.

Share price snapshot

The Core Lithium share price climbed 19% in the last year.

The Allkem share price has risen nearly 9% in the past 52 weeks.

Liontown Resources shares have slid 13% in the past year.

Pilbara Minerals shares have jumped 8% in the last year.

Sayona Mining shares have soared 50% in the last year.

The post Why are ASX 200 lithium shares struggling on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why is the Core Lithium share price tumbling 6% on Monday?
• Here are the 10 most shorted ASX shares
• Which ASX lithium shares are forecasting to pay dividends in 2023?
• 2 ASX 200 mining shares to buy as China reopens: analysts
• Own ASX lithium shares? Here’s the latest lithium price forecast

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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Just days after the Fortescue Metals Group Limited (ASX: FMG) share price cracked a new 52-week high, the stock is plummeting to come in as one of the S&P/ASX 200 Index (ASX: XJO)’s worst performers.

The Fortescue share price is down 2.68% at the time of writing, trading at $22.19 – 4% lower than the 12-month high it reached in Friday’s session.

For comparison, the ASX 200 is enjoying a day in the green. It’s up 0.77% right now while the S&P/ASX 200 Materials Index (ASX: XMJ) is nearly flat, rising 0.06%.

So, what’s going so wrong for the iron ore giant on Monday? Let’s take a look.

Fortescue share price tumbles on Monday

The Fortescue share price is tumbling into the week amid news China has vowed to crack down on illegal activity capable of driving up iron ore prices, the Sydney Morning Herald reports.

Such activities include “fabricating and disseminating information on price increases, hoarding and price gouging”, the nation’s National Development and Reform Commission said, via the publication.

It comes as the price of the steel-making ingredient hit a seven-month high of more than US$122 a tonne on Friday – a 4.9% week-on-week increase.

The material’s rising value was likely partially driven by China’s reopening and moves to bolster the nation’s real estate sector.

The Fortescue share price is far from alone in the red on Monday. Here’s how some of the market’s other iron ore favourites are performing:

• The BHP Group Ltd (ASX: BHP) share price is down 0.18% right now, trading at $49.55
• The Rio Tinto Limited (ASX: RIO) share price is also down 0.44% at $121.75

Shareholders reportedly concerned about Fortescue governance

Meanwhile, Fortescue founder and executive chair Dr Andrew Forrest is back in the headlines this week, with the Australian Financial Review reporting some of the company’s major shareholders are concerned about its governance amid an exodus trend among its executives.

Chief financial officer Ian Wells was the latest leader to announce his departure from the company, resigning last week.

Its rotating door of leaders has reportedly left shareholders uneasy about Forrest’s control over the company. As well as serving as executive chair, the billionaire has a 30% stake in the ASX 200 iron ore giant.

The publication also alleges that non-executive director and former Olympian Lord Sebastian Coe, who indirectly bought $98,621 worth of the company’s stock last month, did so amid pressure from investors. Shareholders were quoted as pushing Forrest to ensure Coe had “skin in the game”.

The post Why is the Fortescue share price being hammered on Monday? appeared first on The Motley Fool Australia.

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More reading

• Why did Fortescue shares just crack a new, 52-week high?
• Goldman tips Fortescue share price to crash 42%
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX 200 shares today
• Fortescue’s Twiggy Forrest is in the wars this week. Here’s why

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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As an ASX 200 blue chip, many ASX dividend investors own Wesfarmers Ltd (ASX: WES) shares for income. Over the past few years, this would have proven rather successful.  

After a big hit to its shareholder payouts in 2020 (thanks to the pandemic), Wesfarmers has been steadily bringing back its dividends since. In 2021, the company doled out payments worth $1.78 per share, up from $1.70 in 2020. And last year, the company upped them to $1.80 per share.

But is Wesfarmers really a safe ASX share to buy for income?

What makes an ASX 200 share ‘safe’?

Well, let’s clear this up right away. No ASX share is truly ‘safe’ from an income perspective. Regardless of its history, no company is under any sort of obligation to pay out dividends. And if a company doesn’t have enough cash to comfortably afford a dividend, paying out one could even inflict long-term damage.

Saying that, we usually find that top-quality companies can consistently afford to pay out rising dividends to investors over time. So is Wesfarmers one of those gems?

Well, it certainly has been. Wesfarmers has paid out fairly consistent dividends for decades. Despite the ravages of the pandemic, the company still forked out a decent, if trimmed dividend in 2020.

Wesfarmers is a company with fingers in many pies. It owns the dominant retailers Kmart, OfficeWorks and Bunnings, as well as dozens of other businesses outside the retail sector. These include mines, clothing, chemicals and fertilisers, amongst others.

However, Bunnings is still Wesfarmers’ primary breadwinner, contributing more than 60% of the company’s total earnings before tax in FY2022.   

Although its many businesses give the company a somewhat diversified earnings base from which to draw dividends, the lion’s share still comes from Bunnings alone. If Bunnings’ profits hit the skids, it’s likely that Wesfarmers’ dividends would too.

Are Wesfarmers’ dividends maxed out?

Additionally, Wesfarmers’ finances are starting to look a little stretched by its current dividend policy. The company reported a total of $2.08 in earnings per share (EPS) over FY2022. Of that $2.08, the company paid out $1.80 in dividends per share, which is a payout ratio of 86.54%.

That doesn’t leave a lot of wiggle room to keep its dividends at the current levels if the company does experience a future drop in earnings.

So all in all, Wesfarmers can be described as a solid dividend payer on the ASX 200 today. However, I would not describe it as safe, or even approaching safe. If we see a recession this year, there’s a real chance Wesfarmers could be forced to trim its dividends.

But that doesn’t mean Wesfarmers is a bad investment. Many companies cut back on dividends when their profits go through a downturn, which is arguably the prudent thing to do. And Wesfarmers has delivered some pretty impressive returns over its long history as an ASX share:

If you want truly safe income, a savings account or term deposit is the right place to look, not the share market.

At the current Wesfarmers share price, this ASX 200 blue chip has a trailing dividend yield of 3.69%.

The post Is Wesfarmers a ‘safe’ ASX 200 share to buy for dividends? appeared first on The Motley Fool Australia.

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More reading

• Experts say these top ASX dividend shares are buys right now
• Are ASX 200 retail shares on sale in 2023?
• How I’d invest my very first $500 in ASX shares in 2023
• Dividend stocks: Why I’m buying now for supercharged and long-lasting passive income
• Why have ASX investors been buying Wesfarmers shares to hold?

Motley Fool contributor Sebastian Bowen has positions in Wesfarmers. 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 Wesfarmers. 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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I think there are a number of All Ordinaries (ASX: XAO), or All Ords, shares that have fallen heavily over the past year that now seem very interesting.

In my opinion, there are some names that could see a good turnaround this year after a tough time in 2022.

When something drops, it only needs to recover some of its lost ground to make a big return. For example, if something drops 50% from $100 to $50. Just rising to $75 would be a capital growth of 50%.

With the growth outlook for the below three ASX All Ords shares looking promising, I’m watching these three closely.

Adore Beauty Group Ltd (ASX: ABY)

Adore Beauty is a leading online retailer of beauty products. The business saw a big bump in demand during the COVID-19 period. But, I think there is a longer-term trend of shopping going digital, with younger generations more confident about e-commerce.

Over the past year, the Adore Beauty share price has fallen more than 70% as the company has found it difficult to outperform its recent success. However, I believe that the ASX All Ords share may have been oversold considering its long-term growth outlook.

I like some of the things I’m seeing from the business – growth of returning customers, slow-but-steady gross profit margin improvement, and the launch of owned brands.

The first month of Viviology, Adore Beauty’s first skincare brand, saw sales “well exceed” internal expectations.

Over the next 12 months and five years, I think the Adore Beauty share price can outperform the market, particularly if the annual revenue per active customer keeps rising and profit margins improve thanks to scale benefits.

Australian Ethical Investment Ltd (ASX: AEF)

Australian Ethical is a growing fund manager that focuses on providing investment options – both managed funds and superannuation – for investors seeking much more focus on the ethics and sustainability of the businesses being invested in on their behalf.

This is proving to be popular because the company is seeing healthy inflows every quarter. In the two months to November 2022, the company saw $120 million of net inflows.

The All Ords ASX share also recently saw Christian Super funds join Australian Ethical, which added another $1.93 billion and 28,000 members to the business. Australian Ethical has reduced its fees so that new and existing members benefit from increased competitiveness of its super options.

The net inflows and Christian Super addition combined saw the company’s funds under management (FUM) rise 39% from 30 September 2022. But, the Australian Ethical share price is down almost 60% over the past year.

I think a rebound of the share market could be very useful for the company’s FUM and profitability.

Healthia Ltd (ASX: HLA)

Healthia is described as an integrated allied healthcare organisation that includes networks of optometry, podiatry, and physiotherapy clinics.

The Healthia share price has fallen around 40% over the past year.

It’s working on a number of goals. The company has been making acquisitions to grow its scale. It currently has a market share of around 3%, but it wants to be able to easily reach 50% of Australian and New Zealanders.

Research and development, and improving quality, are two other areas of focus. For example, it wants to co-locate complementary allied health services inside its existing footprint, as well as offering new services in existing clinics, such as retinal scanners in its optical stores.

The ASX All Ords share is expecting same clinic revenue growth of between 3% to 6% year over year. I think this will be a good tailwind for earnings, combined with increasing scale.

According to Commsec, it’s valued at just 11 times FY23’s estimated earnings.

The post 3 ASX All Ords shares I’m watching like a hawk in January appeared first on The Motley Fool Australia.

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More reading

• Waiting for ASX shares to bottom? Why you could miss out on a stock market rally

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 Australian Ethical Investment and Healthia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Adore Beauty Group. The Motley Fool Australia has recommended Adore Beauty Group, Australian Ethical Investment, and Healthia. 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 a woeful start to the week for Aussie lithium shares, and the Core Lithium Ltd (ASX: CXO) share price is no exception.

At the time of writing, shares in the Finniss Lithium project developer are skating 56.9% lower to $1.07. Whereas the S&P/ASX 200 Index (ASX: XJO) is powering 0.79% higher in an attempt to secure its fourth consecutive positive performance.

The sole sector currently holding the benchmark back today is materials. Some of the thorny culprits are lithium heavyweights such as Allkem Ltd (ASX: AKE), Mineral Resources Ltd (ASX: MIN), and IGO Ltd (ASX: IGO).

What’s rocking the Core Lithium share price today?

All commodities are driven in either direction by the supply and demand dynamics. When the outlook is rosy for the lithium price (supply low, demand high), it would be assumed the Core Lithium share price would rally.

However, that also means when it’s the opposite (supply high, demand low), shares in Core Lithium — and other ASX lithium shares — could come under pressure. Given there is no news out from the company directly, it’s fair to assume today’s move is probably tied to broader lithium matters.

On Friday, word travelled through the grapevine that the world’s leading electric vehicle (EV) manufacturer, Tesla Inc (NASDAQ: TSLA), was taking a knife to its prices in the United States and Europe.

Prominent Tesla investor and commentator Sawyer Merritt shared a summary on Twitter of the price changes for Tesla’s various models in the US (see below). The most drastic price cut inflicted was a 23% decrease on the Model Y — Tesla’s SUV offering.

BREAKING: @Tesla has reduced their car prices MASSIVELY in the US. Changes:

• Model 3 RWD: $43,990 (from $46,990, a 6.4% drop)
• Model 3 P: $53,990 ($62,990, 14.2% drop)
• Model Y Long Range: $52,990 (from $65,990, a 20% drop)
• Model Y P: $56,990 (from $69,990, a 23% drop) pic.twitter.com/Wifwf2ViOD

— Sawyer Merritt (@SawyerMerritt) January 13, 2023

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The significant price adjustments suggest that EV demand might be less than previously anticipated. Whether it is a byproduct of high-interest rates, a looming recession, or simply an aversion toward EV adoption, all that matters for lithium producers is that less lithium might be needed than first thought — at least in the short term…

What else?

It is a battle between short-sellers and investors when it comes to the Core Lithium share price today.

According to the latest short data, Core Lithium was the sixth most-shorted ASX share as of last week, with an 8.8% short interest. Today, that short pressure is being felt all the more in light of a potentially weaker outlook for lithium demand.

Goldman Sachs currently has a 95 cents per share price target on Core Lithium. Even after factoring in today’s selloff, Goldman’s target would suggest a further 11% downside from here.

The post Why is the Core Lithium share price tumbling 6% on Monday? appeared first on The Motley Fool Australia.

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More reading

• Here are the 10 most shorted ASX shares
• 3 ASX lithium shares forecasting maiden production in 2023
• Why Brainchip, Core Lithium, Deterra Royalties, and Mesoblast shares are falling
• Here’s what Goldman Sachs is saying about the Core Lithium share price now
• Here are the 3 most heavily traded ASX 200 shares on Thursday

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

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The S&P/ASX 200 Materials index (ASX: XMJ) is climbing 0.09% today, but three ASX mining shares are soaring far higher.

The Ioneer Ltd (ASX: INR), Victory Metals Ltd (ASX: VTM) and Black Cat Syndicate Ltd (ASX: BC8) share prices are all charging higher today.

So why are these three ASX mining shares all lifting today?

Black Cat Syndicate

Shares in Black Cat Syndicate shares are up 13%, trading at 43 cents apiece at the time of writing after the company provided a mineral resource update to the market.

Black Cat today advised the underground resource at Coyote Central in Western Australia had lifted to 356 koz at 14.6 grams per tonne of gold (51% indicated).

Describing Coyote Central as “one of the highest-grade deposits in Australia”, the company will continue exploration drilling and test work at the project.

Commenting on the news, managing director Gareth Solly said:

It is exciting to have already demonstrated the grade and scale potential of Coyote within such a short period of time.

Despite today’s major gains, Black Cat shares have slid 32% in the last 12 months.

Ioneer

Ioneer is developing the Rhyolite Ridge lithium and boron project in Nevada, USA. The company’s shares are rocketing 19.2% at the time of writing.

In news released today, Ioneer has received a conditional commitment from the US Department of Energy for a $700 million loan to develop the Rhyolite Ridge project. A significant equity contribution from Sibanye Stillwater Ltd (NYSE: SBSW) to secure a 50% interest in the project will also help fund capital expenditure at the project.

Managing director Bernard Rowe welcomed the news, saying:

The conditional commitment is the culmination of 23 months of discussions with and due diligence by the Loan Programs Office and it represents a significant milestone for Rhyolite Ridge.

We look forward to working with the DOE and Sibanye-Stillwater to complete the remaining milestones to start construction of Rhyolite Ridge.

The Ioneer share price has slid 33.4% in the last year. However, it has gained 28% in the last week.

Victory Metals

Victory Metals shares are soaring 11.9% today. The company advised the market of a “high-grade rare earth extension” at the company’s North Stanmore project in Western Australia.

Assay results showed a significant total rare earth oxide (TREO) grade of 1001 parts per million (ppm) from 1m samples and up to 5239 ppm with a cut-off of 500 ppm.

Commenting on the news, executive director Brendan Clark said:

What an extraordinary moment for Victory with confirmation of a significant rare earth element mineralisation extension at our North Stanmore REE discovery

Victory Metals shares have climbed 9.3% in the past 52 weeks.

The post 3 ASX mining shares going gangbusters on Monday appeared first on The Motley Fool Australia.

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More reading

• Guess which ASX lithium share just rocketed 27% on a $1 billion US Government loan
• These were the worst-performing ASX lithium shares of 2022

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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Woolworths Group Ltd (ASX: WOW) shares are known for paying dividends to shareholders. But, is the dividend income good enough to invest in the leading supermarket business?

Firstly, I think it’s worth noting that we shouldn’t invest in a business just because of the income. I think the share price needs to make sense as well at a good price.

The Woolworths share price has seen plenty of volatility over the last year, as we can see on the chart below.

The great thing about dividends is that they can be much more consistent than the share price. While the board gets to decide on what level of dividend to play, it is still dependent on profit generation for sustainable payments.

Woolworths dividend projections

Using the estimates on Commsec, Woolworths is projected to pay an annual dividend per share of around $1.01 in FY23. If it does pay that, then it will translate into a grossed-up dividend yield of 4.25%.

But, we should look at more than just what’s going to happen this year. In 2024, Woolworths is projected to pay an annual dividend per share of $1.12. This could translate into a grossed-up dividend yield of 4.7%.

Recent trading

The latest investors have heard is the sales update for the first quarter of FY23. Group sales increased by 1.8% to $13.36 billion.

But, there was a mix of performance. Australian supermarket sales fell 0.5% despite 7.3% inflation. Australian business to business (B2B) sales were up 26% to $1.2 billion. New Zealand supermarket sales fell 8.1% in Australian dollar terms to $1.8 billion, and 2.5% in New Zealand dollar terms to $2 billion. Big W sales jumped by 30.1% to $1.2 billion.

With that period being compared to a locked down time last year, it was hard for the supermarkets to surpass that performance, whereas a return to normal life seems to have helped the B2B and Big W retail sales.

However, Woolworths did say that in October, the first month of the second quarter, year over year sales growth in Australian supermarkets had improved as it cycled out of the NSW and Victorian lockdowns last year.

Is it time to buy Woolworths shares for dividend income?

A 4% dividend yield isn’t bad, but I don’t think it’s enough to get excited about. If Woolworths is going to be a good investment from here, I think it will be capital growth that makes up the majority of the return.

Woolworths shares are currently valued at 25 times FY23’s estimated earnings. I like the move by the business to buy a majority stake of PETstock’s owner. This could help the company diversify and grow its earnings.

However, in the sector, I think I would rather look at Coles Group Ltd (ASX: COL). Using Commsec, estimates, it’s valued at 21 times FY23’s estimated earnings with a potential grossed-up dividend yield of 5.5%. Coles shares look both cheaper and could pay a bigger dividend.

The post Are Woolworths shares worth buying for dividend income or not? 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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles 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 share price of S&P/ASX 200 Index (ASX: XJO) retail giant Super Retail Group Ltd (ASX: SUL) is soaring after the company provided a glimpse into its record first half.

Right now, the Super Retail share price is 9.51% higher at $12.55.

Super Retail share price soars on record first-half sales

Here are the key expectations the company has for its first half earnings, to be released next month:

• $1.96 billion of revenue
• Between $212 million and $218 million of normalised profit before tax
• Sales to increase 11% year on year on a like-for-like basis – inking a first-half record
• Supercheap Auto leading the way, expected to bring in $728 million in revenue

Super Retail ended the period with no drawn bank debt and a positive cash position.

What else happened in the first half?

The ASX 200 retailer delivered record first-half sales in financial year 2023 (FY23).

Though it notes, unlike FY22, Boxing Day fell in the first half of FY23. As such, it adjusted its sales to reflect like-for-like growth.

Over the six months ended 31 December, Supercheap Auto’s sales grew 15% year on year, while those of Rebel lifted 11%. Meanwhile, BCF’s sales fell 2% and Macpac’s rose a whopping 54%.

Its inventory is also being well managed, the company reports. Its inventory balance ended the half around $30 million lower than it did the prior comparable period.

What did management say?

Super Retail managing director and CEO Anthony Heraghty commented on the announcement driving the ASX 200 share higher today, saying:

I am pleased to report that the group has delivered an outstanding first half result.

All four core brands traded strongly over the peak cyber sales and Christmas holiday trading period as customers embraced the festive season, contributing to a record first half sales performance.

Effective and targeted promotions and a disciplined approach to cost management has ensured that this top-line growth has translated into strong first half earnings.

What’s next?

The coming month with likely have fans of the company on their toes as they wait for its audited first-half earnings, to be released on 16 February.

It also noted its inventory balance is expected to continue to normalise going forward as purchase orders are adjusted to reflect current stock levels.

Super Retail share price outperforms the ASX 200

The Super Retail share price has outperformed the market over the last 12 months despite the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) falling.

The ASX 200 has fallen around 0.3% since this time last year while the consumer discretionary sector has slumped 13.5%.

Simultaneously, the Super Retail share price has gained 1.6%.

The post This ASX 200 retail share is booming 10% on an ‘outstanding first-half result’ 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 Super Retail Group. The Motley Fool Australia has positions in and has recommended Super Retail 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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This ASX All Ords tech share in the buy now, pay later (BNPL) sector is soaring today on the back of its preliminary half-year results.

The Tyro Payments Ltd (ASX: TYR) share price is lifting 7.66% today and is currently fetching $1.475. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.92% at the time of writing.

Let’s take a look at what this ASX All Ords tech share is reporting to the market today.

Tyro profit lifts 40%

Highlights of the unaudited first-half results for FY23 include:

• Earnings before interest, taxes, depreciation, and amortisation (EBITDA) exploded 601% to $19.5 million
• Statutory gross profit soared 45% on the prior corresponding period (pcp) to $102.8 million
• Revenue lifted 45% to $216.6 million

What else happened?

Underpinning this result was a 37% lift in transaction volume on the previous corresponding period to $21.7 billion.

Growth in the company’s banking business, its cost reduction program, and merchant base growth were also positives for the company.

Banking gross profit soared 73%, with loan originations rising 101% to $72.7 million.

The company’s cost reduction program is on target to deliver an $11 million reduction in its annualised cost base.

Tyro achieved an operating leverage of 80% for the half, down from 96% in the prior corresponding period.

Commenting on the result, Tyro CEO Jon Davey said:

The 37% increase in our transaction value has been driven by a 9% increase in our merchant base, growth in customer applications, and loan originations. External factors such as the absence of COVID lockdowns and inflation have also positively impacted Tyro’s transaction values, particularly in our hospitality and retail verticals.

What’s ahead?

Tyro has updated its FY23 earnings guidance on the back of these financial results. The company is now predicting a transaction value between $42.5 and $43.5 billion. This is higher than the previous guidance of between $40 billion and $42 billion.

As a result of this increased earnings guidance, Tyro is now forecasting a gross profit of between $187 million to $191 million with a targeted operating leverage of 79%.

Commenting on this improved guidance, Davey added:

The first half of FY23 has been exceptionally strong, however in forecasting the second half of FY23, we are taking a cautious approach and have allowed for some softening of consumer trading conditions due to rising interest rates and other macro-economic factors.

We are also focusing on a more disciplined approach to managing the profitability of our merchant portfolio. Based on our forecast for the remainder of FY23, we will be targeting a full year operating leverage of 79% or better.

Share price snapshot

Tyro shares have fallen 42% in the last year.

Tyro has a market capitalisation of about $763 million based on the current share price.

The post Guess which ASX All Ords tech share is soaring 8% on boosted forecast earnings appeared first on The Motley Fool Australia.

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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 positions in and has recommended Tyro Payments. The Motley Fool Australia has recommended Tyro Payments. 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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