ASX lithium stocks just put in a great month.

Looking at some of the top lithium shares, here are how the share prices have moved since the opening bell on 12 July (as of yesterday’s closing price), using the All Ordinaries Index (ASX: XAO) as our benchmark.

• All Ordinaries up 7.9%
• Core Lithium Ltd (ASX: CXO) shares up 76.2%
• Allkem Ltd (ASX: AKE) shares up 30.8%
• Lake Resources NL (ASX: LKE) share price up 161.5%

See what we mean.

And these are all multibillion-dollar companies, mind you.

ASX lithium stocks have been soaring again, following a brief retrace from May into mid-June, as investors mull over the supply and demand dynamics for the lightweight, highly conductive metal.

Demand for lithium is booming alongside rocketing growth in electric vehicle (EV) production. Lithium is a critical element in both EV and grid storage batteries.

With demand outstripping supply over the past year, lithium prices have rocketed more than 400% over 12 months, providing some gale-force tailwinds for ASX lithium stocks.

Clearly, the lithium price has a material impact on the share prices of the miners that produce it.

The question facing ASX investors now is, how are the supply and demand dynamics shaping up for the coming years?

Will there be a glut in lithium supply?

For some insight into that question, we turn to the analysts at S&P Global Market Intelligence.

In 2022, S&P Global forecasts that demand for lithium will continue to outpace supply growth, a scenario that should continue to support ASX lithium stocks.

“The magnitude of the deficit depends on producers’ ability to execute projects, according to their existing plans,” the analysts said.

“Lithium raw material supply is likely to improve especially from the September quarter onward, when the bulk of this year’s new additions is scheduled to reach the market.”

Looking further ahead, S&P Global forecasts:

The visible lithium supply pipeline could be sufficient to meet demand in 2023. The lithium market is likely to return to a deficit from 2024, which is forecast to deepen over 2024-26, as demand growth once again outpaces that of supply.

ASX lithium stocks eyeing new Chinese record

June saw a record number of EVs sold in China — a record ASX lithium stockholders may wish to note.

The world’s second-biggest economy and most populous nation recorded 571,000 EV sales in June, according to the China Passenger Car Association (CPCA). That’s a massive 141% increase from the number sold in June 2021.

As for the full year, the CPCA expects to see total Chinese EV sales increase 84% in 2022, reaching 5.5 million vehicles.

While China is a major lithium producer, Australia leads the globe, producing almost half the world’s total output in 2020.

With EV sales going hyperbolic in China, ASX lithium stocks could enjoy some sustained demand growth.

The post New records and looming deficits. Why ASX lithium stocks are in the spotlight appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why Block, Lake, Mirvac, and QBE shares are racing higher
• Why is the Core Lithium share price rocketing 5% today?
• Why is the Lake Resources share price up so much more than other ASX lithium shares 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 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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Suncorp Group Ltd (ASX: SUN) shareholders might be wondering why the share price has fallen 2.07% to $11.35 today.

The insurance giant released its FY2022 scorecard on Monday, reporting a mixed performance across its key financial metrics.

In turn, the board elected to significantly reduce its upcoming final dividend by 65% as a result of the challenging year.

Let’s take a look below at why Suncorp shares are falling during mid-morning trade.

Shareholders set eyes on the Suncorp dividend

The Suncorp share price is in reverse following the company’s shares trading ex-dividend today.

The ex-dividend date is particularly important as it determines which shareholders will receive the company’s latest dividend.

If you held Suncorp shares at yesterday’s market close, you will be eligible for the final dividend.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

When can shareholders expect to be paid?

For those eligible for Suncorp’s final dividend, shareholders will receive a payment of 17 cents per share on 21 September.

The dividend is fully franked which means investors will receive tax credits to put to their next tax bill.

Management noted that the full-year dividend payout of 75% of cash earnings is towards the top of the target payout ratio range of 60% to 80%.

You can also elect for the dividend reinvestment plan (DRP) which will add a portion of shares to your portfolio instead. This will be based on a 10-day volume-weighted average price (VWAP) from 18 August to 31 August.

There is no DRP discount and the last election date to opt in is on 16 August.

Suncorp share price summary

For 2022, Suncorp shares have gained around 2% despite being heavily impacted by inflationary movements and market volatility.

The S&P/ASX 200 Financials (ASX: XFJ) sector has treaded the other way, down 2% over the same timeframe.

Based on today’s price, Suncorp commands a market capitalisation of approximately $14.46 billion and has a trailing dividend yield of 5.67%.

The post Why is the Suncorp share price slipping today? appeared first on The Motley Fool Australia.

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More reading

• Why Alliance, Aurizon, MVP, and Suncorp shares are dropping today
• Suncorp share price slides following softer-than-expected FY2022 results
• Suncorp share price on watch after FY22 profit falls 34%
• 5 things to watch on the ASX 200 on Monday
• Why has the Suncorp share price gone backwards since the ANZ takeover news?

Motley Fool contributor Aaron Teboneras 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 it’s a relatively quiet day for the Nasdaq Composite (NASDAQINDEX: ^IXIC) itself today, there’s a lot of volatility within its component stocks. As of 1:23 p.m. ET on Aug. 11, the stock index is up a modest 0.25%. That’s good enough to keep it up more than 20% from the recent lows in June, continuing its recent bull run. 

Shares of battery maker Enovix (NASDAQ: ENVX) are up 32%, and shares of both 23andMe (NASDAQ: ME) and Trupanion (NASDAQ: TRUP) are up around 7%. On the downside, shares of smart-speaker maker Sonos (NASDAQ: SONO) and card issuing and payment processing company Marqeta (NASDAQ: MQ) are both down around 25% at this writing. 

Battery start-up Enovix sells some batteries; market approves

Since its founding, Enovix has been almost entirely focused on research and development. But in 2021, it made a commitment to begin the transition from developing a product to making it — and selling it — by the second quarter of 2022. Well, it met that goal in the quarter, shipping battery cells to 10 original equipment manufacturers (OEMs), which will use the cells in their products, and generating a modest amount of revenue from those cells. Needless to say, investors were incredibly pleased by this, as it positions the company to begin generating cash flows and delivering on its potential. 

Investors should remain somewhat cautious, however. It’s still very early in its transition to commercial sales, and the majority of cells it’s shipping at this stage are likely to be used by OEMS for testing, not with finished products. To be clear, this is still a big step forward, but Enovix’s products still have to meet OEMs’ standards, and it must compete in a big, but highly competitive, market. 

23andMe, Trupanion represent general bullishness driving stocks higher

Genetics research company 23andMe and pet insurer Trupanion are both up strongly today, but not on any very recent news. 23andMe’s shares have been climbing for most of the past week, up almost 30% since the day before it reported second-quarter results, while shares of Trupanion are up 13% since its Aug. 3 earnings release. Neither company has any particularly material news out there today. However, if there is one common thread both companies share, it’s short interest, or how much of its stock float is sold short: 7% of 23andMe’s shares are sold short, while 15% of Trupanion’s are shorted. It’s possible the recent gains for both is short-sellers reducing their positions. 

That’s great for a short-term move higher, but both companies have a lot to prove about their ability to grow and generate positive cash flows to generate long-term wealth to shareholders. 

Leadership changes rocking the boat for Sonos and Marqeta

While investors seem more optimistic in the three prior stocks, Sonos and Marqeta left shareholders uneasy — nay, downright worried — this week. Sonos reported a 2% revenue decline, weakening margins, and a net loss after being profitable in last year’s second quarter. Adding to that uncertainty, CEO Patrick Spence told investors that CFO Brittany Bagley was leaving the company to “pursue another professional opportunity,” while the company’s Chief Legal Officer was stepping in as interim CFO. 

Marqeta investors were even more shocked by big leadership changes. Company founder Jason Gardner announced that he was stepping down as CEO once a replacement is named. At the same time, COO Vidya Peters is also leaving, with its chief product officer taking over on an interim basis. Gardner did say that when he vacates the CEO chair, he would remain in a leadership role as executive chairman. 

Needless to say, these both demonstrate that investors are looking for certainty in the ongoing environment, and weak results combined with management changes — especially when there’s not a replacement already named — is enough to send investors heading for the exits. 

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

The post Despite some big losers, these growth stocks are keeping the Nasdaq bull market going appeared first on The Motley Fool Australia.

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• Avita share price dives 16% on net loss
• Up 52% since June, can the Pilbara Minerals share price extend gains?
• Why Ethereum, Bitcoin, and Dogecoin jumped this morning
• ‘Our future is looking bright’: Baby Bunting share price slips despite earnings milestone
• Can the iron ore price regain its March highs in 2022?

Jason Hall has positions in 23andMe Holding Co. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and recommends Sonos Inc and Trupanion. 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 AVITA Medical Inc (ASX: AVH) share price is falling on the back of the company’s financial results.

The medical technology company’s share price is currently $1.895, a 16.5% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 0.6% today.

Let’s take a look at what Avita reported to the market today.

Avita reports a higher net loss

Avita reported both quarterly and half-year results for the 2022 calendar year.

In the first six months of 2022, Avita reported:

• Net loss jumped by 47% to $15.7 million, compared to $10.7 million loss in prior corresponding period (pcp)
• Gross profit margin increased by 2% to 80% compared to pcp
• Adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss jumped 46% to $11.1 million on pcp
• Commercial revenue excluding Biomedical Advance Research Development Authority (BARDA) revenue jumped 39% to $4.4 million
• Total revenue including BARDA revenue of $15.9 million, down from $19.1 million in pcp

Second-quarter results included:

• Net loss up 33% to $6.3 million
• Adjusted EBITDA loss leapt 51% to $4.7 million
• Gross profit margin jumped by 3% to 83% on pcp
• Commercial revenue excluding BARDA revenue leapt 23% to $8.2 million
• Total revenue including BARDA revenue of $8.3 million, down from $10.3 million on pcp

What else did the company report?

Operating expenses surged 12% on the pcp to $29.9 million in the first six months of the year. This was largely due to greater compensation costs and professional fees.

Lower clinical trial expenses partly offset these higher costs. Research and development costs were also lower compared to the pcp.

Avita highlighted the commercial revenue growth was due to more customers and order sizes increasing.

Avita has $91.1 million of cash, cash equivalents and marketable securities available as of 30 June and no debt.

The company is providing a calendar year 2022 revenue guidance of $30 million, excluding BARDA revenues. BARDA revenues are expected to be $0.3 million in 2022 compared to $7.9 million in 2021.

What did management say?

Commenting on the results, chief executive officer Dr Mike Perry said:

Our commercial team continued to drive further RECELL utilisation and penetration within burn centres, and our clinical team advanced our soft tissue reconstruction and vitiligo trial.

We look forward to topline data from our vitiligo clinical trial in the second half of this year.

Topline results from pivotal trial

Avita also reported topline results from a trial looking into the company’s RECELL system to heal soft tissue reconstruction with reduced donor skin.

The results showed “statistically superior donor sparing” and “comparable healing rates” in the treatment of soft tissue injuries.

Further commenting on the trial, Dr Perry said:

The RECELL system has been used to effectively treat serious burn injuries and we anticipate that the RECELL system will be well-positioned to treat patients with soft-tissue injuries, pending FDA review and approval.

Avita share price snapshot

The Avita share price has dived 45% in the year to date. However, it has gained 14% in the past month.

For perspective, the benchmark ASX 200 index has lost more than 5% in the year to date but climbed nearly 7% in a month.

The post Avita share price dives 16% on net loss appeared first on The Motley Fool Australia.

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• Why is the Avita Medical share price tracking 20% higher today?

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 Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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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The Pilbara Minerals Ltd (ASX: PLS) share price has gained 52% since bouncing from lows of $2.05 on 23 June.

Shares in Pilbara Minerals now rest at $3.11 apiece, the same price as at Thursday’s close, after the ASX lithium miner posted another 4% gain in yesterday’s session.

Returns for the past 12 months are seen on the chart below.

Can the Pilbara share price continue the upside?

Pilbara’s exposure to lithium has helped its share price stretch up over the past two months. The battery metal still commands a premium, trading at A$99,471/Tonne at the time of writing.

It’s held this price range for the past two months as well, while many other commodity baskets have pared gains.

According to a Trading Economics report:

Lithium carbonate prices in China rose slightly to [A$99,471/Tonne] in the end of July, remaining near the record-high of [A$104,377/Tonne] from March and 430% higher year-on-year amid high demand and tight supply.

The gradual recovery from inactivity in Shanghai prompted a 129% annual and 63% monthly surge in new energy vehicles sales during June.

With an uptick in demand for both electric mobility and the raw material itself since June, it’s no wonder Pilbara Minerals has caught a bid lately.

The question is if it can extend these gains, however.

Brokers are positioned to say it can. According to Refinitiv Eikon data, seven out of eight analysts covering the share rate it as a buy.

Credit Suisse recently downgraded its rating to hold – the only broker to do so from this list, on a $2.40 price target.

The consensus price target from this list is $3.18 per share, suggesting a considerable amount of upside should the list be correct.

In the past 12 months, the Pilbara share price has lifted 30%.

The post Up 52% since June, can the Pilbara Minerals share price extend gains? appeared first on The Motley Fool Australia.

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More reading

• Why is the Lake Resources share price up so much more than other ASX lithium shares today?
• The Pilbara Minerals share price has powered 28% higher in a month. What’s been happening?
• Could this development further energise ASX lithium shares in FY23?
• Here are the 3 most heavily traded ASX 200 shares on Monday
• Top brokers name 3 ASX shares to buy next week

Motley Fool contributor Zach Bristow 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.

What happened 

Crypto values jumped early on Thursday as Ethereum (CRYPTO: ETH) moved a few steps closer to “The Merge.” This is generally seen as a bullish move for crypto use cases because Ethereum has the largest base of developers and many tokens are on the Ethereum blockchain.

The value of Ethereum was up as much as 7.9% in the last 24 hours as of 1 p.m. ET. Bitcoin (CRYPTO: BTC) had jumped 6.2%, and Dogecoin (CRYPTO: DOGE) was up 8.2% at its peak. 

So what 

At 1:45 a.m. UTC (9:45 p.m. ET on Wednesday), the Goerli testnet moved from proof-of-work to proof-of-stake, the last test before the main blockchain will make such a move. Goerli is an active test blockchain where developers can see if new systems work as planned before moving to the main blockchain. Ethereum has gone through a number of tests ahead of the transition to proof-of-stake operations to find potential bugs and this is the last one expected before the final merge. 

The official merge has been scheduled for mid-September and this is intended to improve the blockchain in a number of ways. Validation of blocks, or transactions, will be done through staking rather than energy-intensive computations. This will lower the energy consumption of Ethereum by over 99%. It will not, notably, make transactions less costly. 

The Merge is the first in a series of planned upgrades that could allow Ethereum to complete 100,000 transactions per second. These upgrades could take a long time, but co-founder Vitalik Buterin has laid out the development plans already. 

Now what 

Today’s move is really nothing more than speculation that “The Merge” will lead to increased activity on Ethereum and in the crypto ecosystem more broadly. But this may not have a fundamental impact on the blockchain at all. 

High costs and slow speeds are still a headwind for Ethereum and the biggest reason costs have come down recently is the fact that there’s less activity on the blockchain. The Merge won’t change that underlying fact. 

I would like to see greater activity before being too bullish on Ethereum. The blockchain has been losing market share to smaller, faster blockchains and I think that’s a bigger threat than most investors realize. And if future upgrades take years like The Merge did it may leave Ethereum behind the curve. 

Crypto has also been rising along with equity markets over the last few weeks. Investors have been in a “risk-on” trade mindset, buying riskier assets in search of returns. That’s helped crypto, but doesn’t change the underlying investment thesis at all. The crypto winter is still here and if blockchain activity doesn’t pick up I am afraid this bounce won’t last. 

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

The post Why Ethereum, Bitcoin, and Dogecoin jumped this morning appeared first on The Motley Fool Australia.

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• Why Bitcoin, Ethereum, and Dogecoin are shooting higher today

Travis Hoium has positions in Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia owns and has recommended Bitcoin and Ethereum. 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 Baby Bunting Group Ltd (ASX: BBN) share price is in the red on Friday after the company released its earnings for financial year 2022.

After opening at $4.87, 0.2% higher than its previous close, the nursery retailer’s stock has slipped to trade at $4.695. That represents a 3.4% fall.

Baby Bunting share price falls as sales surpass $500m

Here are the highlights of the company’s full-year earnings:

• Sales reached $507.3 million – 8.3% higher than that of the prior corresponding period (pcp)
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 16.1% to $50.5 million
• Statutory net profit after tax of $19.5 million – a 14.6% increase
• Online sales represented 22.2% of all sales, coming in at $112.7 million
• Final dividend of 15.6 cents per share – a 10.6% increase on that of the pcp

Baby Bunting surpassed a major milestone in financial year 2022, boasting more than half a billion dollars of total sales for the period.

Its comparable store sales also grew, increasing 5% over the last 12 months and 25.2% over the last two years. Sales of its private label and exclusive products also increased to represent 45.3% of all sales.

Meanwhile, its core Australian business (excluding New Zealand start-up costs) brought in $31.1 million of pro forma after-tax profits – a 20% improvement.

What else happened in FY22?

The last financial year was a relatively quiet one for the baby-focused retailer.

The Baby Bunting share price slumped 3% when the company released its half-year results in February.

It also worked to enter the New Zealand market, opening its first store across the ditch today. Its establishment in the nation brought $1.5 million in one-off costs.

It also transitioned its digital technology to a headless architecture, switching over the Australian website in January, and launched its loyalty program ‘Baby Bunting Family’ across all channels in February. The company noted that 81% of sales are transacted by a loyalty member.

What did management say?

Baby Bunting CEO and managing director Matt Spencer commented on the company’s earnings, saying:

Baby Bunting has had a very successful year. Our total sales exceeded half a billion dollars for the first time. We continued to grow our market share at the same time as we delivered very strong gross profit growth.

Our future is looking bright.

We have started the new financial year in good shape. We are the clear leader in our category.

What’s next?

The company’s immediate future does, indeed, appear busy. Though, it hasn’t provided any earnings guidance, blaming economic uncertainty, inflation, and other global challenges.

It’s working to expand its market to a $3.5 billion market, targeting that beyond birth-to-three-years-old in certain categories and growing online.

It’s also looking to grow its Australian network by six stores in financial year 2023 and open another store in New Zealand in the second half.

Work has also begun on a Baby Bunting marketplace ­– expected to launch in the second half.

Finally, Baby Bunting provided a trading update for the period from 1 July to 10 August.

Its comparable store sales rose 15.3% in that time compared to the pcp. That’s expected to moderate as the company cycles periods impacted by lockdowns. Meanwhile, its total sales increased by 19.3%.

Baby Bunting share price snapshot

The Baby Bunting share price has underperformed the broader market so far in 2022. Though, it’s doing well compared to its sector.

The stock has fallen 15% year to date. Meanwhile, the All Ordinaries Index (ASX: XAO) has dumped 8%.

But, while the company isn’t included on the S&P/ASX 200 Index (ASX: XJO), it’s worth noting the S&P/ASX 200 Consumer Discretionary Index (ASX: XDJ) has fallen 19% since the start of 2022.

The post ‘Our future is looking bright’: Baby Bunting share price slips despite earnings milestone 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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Baby Bunting. 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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Global commodity markets continue to gyrate as several sectors look to have consolidated 2022’s gains.

Iron ore, the key ingredient in steelmaking, looked to have staged a small recovery after prices bounced from USD$101/T on 20 July to USD$119/T by 1 August.

They have since reversed course down to USD$111/T, and the question is whether the commodity can return to its March highs.

Can it get there?

There’s mixed opinion on the potential for iron ore’s recovery.

The medium-term outlook for steel demand is shrouded by several potential headwinds, particularly with respect to Chinese demand for the product.

“Steel mills have restarted some of their idled blast furnaces in recent days, encouraged by improved margins and a pickup in demand from the construction sector,” Reuters reported yesterday.

Analysts at Trading Economics weren’t as optimistic, however.

“Weak global demand will help turn the iron ore market to a significant surplus over the second half of 2022, which, in turn, poses a significant downside risk for prices,” they said.

Meanwhile, analysts at Morgan Stanley see “little reason to be bullish on iron ore” for the remainder of FY22.

The broker says a price recovery is contingent on demand for steel out of China, itself just recovering from widespread COVID-19 lockdowns.

As a result, it says there are as yet “no signs of a meaningful recovery” for iron ore.

The downside has been seen in the basket of iron ore-producing stocks this year, despite huge rallies in other markets.

Major iron ore players Fortescue Metals Group Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO) have had a difficult time on the chart this year to date, down 4.5% and 5%, respectively.

The post Can the iron ore price regain its March highs in 2022? appeared first on The Motley Fool Australia.

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• Why AMP, OFX, Rio Tinto, and Telstra shares are dropping
• Still down in 2022, is the Fortescue share price now on the road to recovery?
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• Why is the Rio Tinto share price sinking today?
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Motley Fool contributor Zach Bristow 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 AMP Ltd (ASX: AMP) share price has been gradually rising over the past couple of months.

Since hitting a low of 95 cents on 1 July, shares in the financial services company are now 22% higher.

At Thursday’s market close, AMP shares were trading for $1.155 apiece, a 0.86% fall on the day.

Let’s take a look at what one broker recently said about the company.

AMP falling behind the pack?

While the AMP share price has been treading upwards, the team at Morgan Stanley believes the company is lagging behind its peers.

According to equity analyst Andrei Stadnik at Morgan Stanley, AMP Bank needs to re-invest in technology to stay competitive in the market.

Stadnik even went as far as to say that AMP is “sub-scale against even the regional banks”.

Recent sales figures indicate the company is becoming more efficient with its operations following a string of asset sales. This includes offloading its funds management arm earlier this year to Digital Bridge for up to $699 million.

However, this could play against AMP as it takes away the “best growth opportunity” it had beforehand.

In 2021, the global asset management market was valued at $250.12 billion. This is projected to increase four-fold to $1,113.53 billion by 2028, representing a compound annual growth rate (CAGR) of 23.78% from 2022 to 2028.

While Stadnik noted that the new AMP has a robust financial model, it isn’t the largest anymore and has a long road ahead to stabilise its books.

Morgan Stanley has an equal-weight rating on AMP shares with a target price of $1.10 apiece. Based on where it last traded as of yesterday, this implies a downside of around 5%.

It also stated that AMP is not cheap compared to the broader financial market, even when factoring in capital returns.

AMP announced a $1.1 billion capital return to shareholders on Thursday in its first-half result. This will consist of a $350 million share buyback program commencing immediately. The remaining $750 million will be returned in the following 2023 financial year through a mix of a special dividend or another share buyback.

However, given that asset sales reduce future earnings and AMP has returned capital to shareholders, the broker wasn’t more positive about the company.

About the AMP share price

Founded in 1849, AMP provides superannuation and investment products, financial advice, and banking products, including home loans and savings accounts.

Headquartered in Sydney, the company operates in both Australia and New Zealand.

Year-to-date, AMP’s stock has gained 14%. It is up by a similar amount over the past month, and has also gained 3.6% over the past year.

AMP presides a market capitalisation of roughly $3.81 billion with approximately 3.27 billion shares on issue.

The post Looking to buy AMP shares? Read this first appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares on Thursday
• Why AMP, OFX, Rio Tinto, and Telstra shares are dropping
• AMP share price slides as $1.1b pledged to investors
• AMP share price in focus amid falling profits and $1.1b capital return
• Are AMP shareholders heading for a $1 billion pay day?

Motley Fool contributor Aaron Teboneras 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 Insurance Australia Group Ltd (ASX: IAG) share price is one to watch today after the company reported its FY22 results this morning.

The insurer reported a net profit after tax (NPAT) of $347 million during this period, an improvement from the loss of $427 million it recorded in FY21.

The IAG share price is up 0.43% so far this week. Yesterday shares closed at $4.61 each.

What did IAG report?

Among the highlights of the IAG report were:

• Gross written premiums up 5.7% from FY21, to $13.31 billion
• Net insurance profit down 41.8% from FY21, to $586 million
• Cash earnings down 71.5% from FY21, to $213 million
• Underlying insurance margin down 10bps, to 14.6%

IAG reported growth in its top line with gross written premiums, but its net insurance profit contracted 48.8%.

Gross written premium (GWP) growth was buoyed by an increase in the company’s business performance despite facing headwinds in the form of challenging investment markets and natural perils claims.

What else happened in FY22?

Diluted earnings per share (EPS) is up 13.33 cents. In FY21 it was a negative 17.82 cents.

IAG reported that COVID-19 had a material impact on the company’s performance in 1H22, reducing its gross written premiums and increasing insurance profits. In 2H22, no material impact was recorded.

A loss of $105 million was also reported for investment income on shareholders’ funds. The primary cause was due to increased rates and negative credit spreads for its fixed income portfolio, which caused a $68 million loss.

What did management say?

IAG managing director and chief executive officer Nick Hawkins said:

Our FY22 financial results reflect the quality of our underlying business as we build a stronger and more resilient IAG.

We had strong GWP growth, and the performance of our business was steady despite the challenging external environment. We are on track to deliver against our strategic priorities.

What’s next?

Gross written premiums were given a “mid-to-high single-digit growth”. The company expects growth in volume and customer numbers.

The insurance margin is tracked to be between 14% to 16%. This is supported by IAG’s business performance and higher yields on investments.

IAG is also looking to achieve a higher return on equity (ROE) of 12% to 13% over the medium term. A growing customer base of one million to 9.5 million in FY26 will support this, along with an insurance profit of $250 million by FY24.

IAG share price snapshot

The IAG share price is down 15.4% over the last 12 months.

Shares in the company are not beating the broader market, with the S&P/ASX 200 Index (ASX: XJO) down 6.82% over the same period.

IAG has a market capitalisation of $11.36 billion.

The post IAG share price on watch as company reports $347 million in earnings appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Friday
• IAG share price seesaws amid class action news
• Looking for value: The ASX shares this fundie is holding amid rising inflation
• Is the IAG share price a buy following the insurer’s latest update?
• Here are the top 10 ASX 200 shares today

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 positions in and has recommended Insurance Australia Group 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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