The Global Lithium Resources Ltd (ASX: GL1) share price is on a tear today, up 7.4% in morning trade.

Shares in the ASX lithium explorer are shunning the wider market sell-off today following positive assay results.

Let’s look at the highlights.

What results did Global Lithium report?

The Global Lithium share price is surging after the company reported it has received the highest-grade lithium assays to date at its 100%-owned Marble Bar Lithium Project, located in Western Australia.

The results from recent drilling campaigns at the project included:

• 3 metres at 2.5% Li2O and 32 parts per million Ta2O5 from 67 metres, including 1m @ 4.1% Li2O
• 4m @ 1.55% Li2O and 69ppm Ta2O5 from 37m
• 4m @ 2.18% Li2O and 33ppm Ta2O5 from 13m

Additionally, the explorer said the potential for lithium was demonstrated in the east of the project where several drill holes intercepted wide zones of lithium mineralisation.

Global Lithium head of geology Stuart Peterson commented on the results:

Our Q4 2021/Q1 2022 exploration drilling program continues to build momentum at the MBLP, with lithium intercepts continuing along the 6-kilometre strike of the mineralisation already identified within the project area.

These results continue to highlight the prospectivity of the area, particularly towards the southern and eastern areas of GL1’s tenement package. The successful program vindicates the targeting effort by the Global Lithium and CSA Global teams and provides a strong platform for future growth from the ongoing exploration.

Further, the company said that both existing and recently identified lithium targets have yet to be tested. These will remain the focus of its drilling campaign, which kicked off in February, for the remainder of the year.

“The lithium market remains very strong and we expect this momentum to continue throughout 2022 and beyond,” Peterson added.

Global Lithium share price snapshot

The Global Lithium share price has gained an eye-popping 678% over the past 12 months. For perspective, the All Ordinaries Index (ASX: XAO) is up 4% over the past full year.

The post Here’s why the Global Lithium share price is soaring 7% today appeared first on The Motley Fool Australia.

More reading

• ASX lithium shares set to deliver next positive surprise to investors

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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Are you looking for some dividend options for your portfolio? If you are, check out the two ASX shares listed below.

Here’s what analysts are saying about these ASX dividend shares:

HomeCo Daily Needs REIT (ASX: HDN)

The first ASX dividend share that could be a buy is the HomeCo Daily Needs REIT.

It is a property company focused on neighbourhood retail, large format retail, and health and services assets.

The team at Goldman Sachs is very positive on the company and sees it as well-placed to benefit from consumer trends.

The broker commented: “We believe HDN is undervalued at its current valuation given its diversified tenant base, and see it as well positioned to benefit from the shift to omni channel retailing, with additional external growth opportunities to drive earnings growth over the medium-term.”

Goldman has a buy rating and $1.70 price target on its shares. It is also forecasting dividends per share of 8 cents in FY 2022 and 9 cents in FY 2023. Based on the current HomeCo Daily Needs share price of $1.43, this will mean dividend yields of 5.6% and 6.3%, respectively.

Transurban Group (ASX: TCL)

Another ASX dividend share that has been tipped as a buy is Transurban.

It is one of world’s leading toll road operators with a portfolio of key roads in Australia and North America.

Analysts at Morgans believe it could be a good option for investors. Particularly given the positive outlook for dividend increases in the coming years thanks to favourable trends and the normalisation of trading conditions post-COVID. Morgans has an add rating and $14.42 price target.

It said: “We view TCL as a high quality pure-play toll road infrastructure portfolio benefitting from employment and population growth, urbanisation, and the value of time, with particular exposure to the east coast capital cities in Australia.”

As for dividends, the broker is forecasting dividends per share of 37 cents in FY 2022 and then 60 cents in FY 2023. Based on the current Transurban share price of $14.34, this implies yields of 2.6% and 4.2%, respectively.

The post 2 ASX dividend shares analysts have named as buys for income investors appeared first on The Motley Fool Australia.

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• Transurban shares are one of only a handful of ASX 200 stocks gaining today. What’s happening?
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The Coronado Global Resources Inc (ASX: CRN) share price has been an outstanding ASX performer in 2022 so far. Coronado shares are currently up 0.22% so far today, putting this coal miner at a price of $2.315 share. It pushes Coronado shares up an eye-watering 78% or so in 2022 thus far. Not a bad return for four months.

Coronado’s stellar share price performance over the year to date has resulted in the company’s market capitalisation swelling to almost $3.9 billion. However, Coronado still isn’t part of the ASX’s flagship index, the S&P/ASX 200 Index (ASX: XJO).

The ASX 200 is designed to reflect the 200 or so largest shares by market cap on the Australian share market. Coronado’s market cap is far larger than many of the ASX 200’s smaller components. But the company still hasn’t made the cut.

However, if reporting in The Australian this week is to be believed, that could be about to change. According to the report, broker Wilsons is tipping five new entrants to the ASX 200 when the index is due for its quarterly rebalance next month.

Coronado share price set for an ASX 200 promotion

And Coronado is one. Since AMP Ltd (ASX: AMP) is no longer considering spinning off its Collimate assets, Wilsons reckons Coronado is the most likely beneficiary. Here’s some of what Wilsons had to say on the matter:

Coronado is the least liquid of the probable entrants, which should be price-supportive for Coronado on the day of the rebalance… Its chances of inclusion improved upon AMP’s announcement, which will likely drive short-term trading support in the coming days.

In addition to Coronado, Wilsons is predicting that Core Lithium Ltd (ASX: CXO), Johns Lyng Group Ltd (ASX: JLG), Brainchip Holdings Ltd (ASX: BRN), and Coronado’s fellow coal share New Cope Corporation Limited (ASX: NHC) are likely candidates for ASX 200 inclusion.

These shares are likely to take the place of companies like Codan Limited (ASX: CDA), Polynovo Ltd (ASX: PNV), Appen Ltd (ASX: APX), and Platinum Asset Management Ltd (ASX: PTM). These are the unlucky shares that Wilsons has identified as the most likely to get kicked out of the index next month.

We’ll find out what the ‘new ASX 200’ looks like next month on 3 June. So it will be interesting to see if Coronado makes the cut, as this ASX broker is predicting.

The post Up 80% in 2022, are Coronado shares heading for the ASX 200? appeared first on The Motley Fool Australia.

More reading

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• Why did the Wesfarmers share price lag the ASX 200 in April?
• Why did the Bank of Queensland share price tank 7% in April?
• These were the best performing ASX 200 shares in April
• Direct indexing: What is this latest investing fad?

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 positions in and has recommended Appen Ltd and POLYNOVO FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Core Lithium Ltd (ASX: CXO) share price is sliding this morning despite the company announcing a positive update.

At the time of writing, the lithium producer’s shares are swapping hands at $1.33, down 5%.

It’s possible the dip may be part of a broader fall across the All Ordinaries Index (ASX: XAO), which is trading 1.6% lower at 7,601 points at the time of writing. This follows a disappointing finish on Wall Street on Friday, with all major indices deep in the red.

Let’s take a closer look at what Core Lithium released to the ASX.

Core Lithium progresses on Finniss Lithium Project

In today’s release, Core Lithium announced a crushing services contract with CSI Mining Services (CSI) for the Finniss Lithium Project.

Based in Western Australia, CSI is a wholly-owned subsidiary of mining services giant Mineral Resources Ltd (ASX: MIN).

Core Lithium said the process would involve feeding the stockpiled run of mine ore into the CSI crusher circuit. The crushed ore would then be “stockpiled before being processed by the dense media separation plant to make spodumene concentrate for export”.

While crusher civil works are nearing completion, the company expects plant and equipment to be mobilised to the site next month.

Core Lithium is building Australia’s most advanced lithium project, with the first production of lithium concentrate scheduled in Q4 2022.

Once online, the Finniss Lithium Project will be the first Australian lithium-producing mine outside Western Australia.

Core Lithium managing director Stephen Biggins commented:

The award of the crushing contract is another significant step in the development of the Finniss Lithium Project. Core staff have done a great job getting the site ready for CSI to start work next month.

Regardless of the positive news, the Core Lithium share price has come under selling pressure today.

About the Core Lithium share price

In the past year, Core Lithium has surged close to 400% and is up around 130% year to date.

The company’s share price reached an all-time high of $1.675 earlier this month before taking a breather.

Based on valuation grounds, Core Lithium has a market capitalisation of roughly $2.33 million.

The post Core Lithium share price slips despite positive news appeared first on The Motley Fool Australia.

More reading

• Core Lithium share price charges higher amid quarterly update
• Why is it such a mixed day of trade for ASX lithium stocks?
• The Core Lithium share price is sinking 6% today. Why?
• What are the 10 biggest ASX shares in the lithium space
• Here are the top 10 ASX shares today

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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At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) has followed Wall Street’s lead and sunk deep into the red. The benchmark index is currently down 1.65% to 7,312.9 points.

Here’s what is happening on the ASX 200 today:

NAB’s AUSTRAC update

The National Australia Bank Ltd (ASX: NAB) share price is trading lower today after the banking giant released an update on its dealings with AUSTRAC. According to the release, the bank has entered into an Enforceable Undertaking with the government financial intelligence agency following an enforcement investigation in relation to NAB’s compliance with Australia’s anti-money laundering and counter-terrorism financing laws.

AGL downgrades earnings guidance

The AGL Energy Limited (ASX: AGL) share price has come under pressure today after the energy company downgraded its earnings guidance. Due to the previously reported generator fault at Unit 2 of the Loy Yang A Power Station in Victoria in April, AGL now expects its underlying EBITDA to be between $1,230 million and $1,300 million. This is down from its previous guidance range of between $1,275 million and $1,400 million.

Qantas trading update

The Qantas Airways Ltd (ASX: QAN) share price is defying the market selloff and is taking off on Monday. Investors have been buying the airline operator’s shares after a trading update revealed that domestic travel numbers are rebounding faster than expected. This is expected to underpin second half underlying EBITDA of $450–$550 million, which is a big improvement on its first half EBITDA loss of $245 million.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Monday has been the Qantas share price with a 2.5% gain. Going the other way, the worst performer has been the Pro Medicus Limited (ASX: PME) share price with an 8% decline. This follows a selloff in the tech sector, which is hitting high PE stocks particularly hard.

The post ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off appeared first on The Motley Fool Australia.

More reading

• Why did the Wesfarmers share price lag the ASX 200 in April?
• Qantas share price lifts off on projected return to profitability
• Why did the Bank of Queensland share price tank 7% in April?
• These were the best performing ASX 200 shares in April
• NAB share price drops amid AUSTRAC update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pro Medicus Ltd. The Motley Fool Australia has positions in and has recommended Pro Medicus Ltd. 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 Wesfarmers Ltd (ASX: WES) share price underperformed the S&P/ASX 200 Index (ASX: XJO) in April 2022.

From the closing bell on 31 March to the end of April, the Wesfarmers share price fell 1.98%. That compares to the ASX 200, which fell 0.86%. This isn’t much of an underperformance, but it’s still more than double the loss of the ASX 200.

What happened during April?

Wesfarmers didn’t announce any market-sensitive news during the month.

However, on the last day of March 2022, the ASX 200 share did announce the completion of the Australian Pharmaceutical Industries acquisition. Wesfarmers paid $1.50 per share to API shareholders. It said that the initial capital was $1.025 billion, with $774 million being paid to API shareholders plus the estimated funding requirement for API’s net debt and the working capital balance.

Wesfarmers says that API will be the foundation business of a new health division. It’s going to develop capabilities and invest in the growing health, wellbeing and beauty sector. Management see opportunities to strengthen the competitive position of API and its partners, by expanding product ranges, improving supply chain capabilities, and improving the online experience for customers.

What could happen next for the Wesfarmers share price?

There has been a lot of talk about inflation and rising interest rates this year.

In terms of managing inflation, Wesfarmers said that it “continues to actively manage increasing inflationary pressure and will leverage its scale to mitigate the impact of rising costs. The group’s retail businesses will increase their focus on price leadership and are well positioned to continue to provide customers with great value on everyday products as rising cost-of-living pressures impact household budgets.”

Time will tell what this means for the Wesfarmers retail profit margin and how much extra product volume it sells.

COVID-19 continues to have an impact. The company said it is incurring additional costs and experiencing “stock availability impacts” as a result of ongoing global supply chain disruptions, elevated team member “absenteeism”, and delays with third-party logistics providers.

Supply chain disruptions, higher transport costs and constraints in domestic labour markets are expected to continue in the second half.

Retail trading conditions were “subdued” in January, which Wesfarmers put down to rising cases of Omicron, impacting both customer traffic and labour availability. However, it said that trading momentum was improving in February 2022.

What next for the Wesfarmers share price?

One recent rating comes from Citi, with a price target of $50. That implies the Wesfarmers share price will barely move over the next year.

Citi thinks that Wesfarmers could be a beneficiary of government stimulus to help the population.

The broker is neutral on the business. According to Citi’s estimates, the Wesfarmers share price is valued at 24x FY22’s estimated earnings and 22x FY23’s estimated earnings.

Citi thinks Wesfarmers will pay a grossed-up dividend yield of 5.4% in FY22 and 5.8% in FY23.

The post Why did the Wesfarmers share price lag the ASX 200 in April? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB’s AUSTRAC update, AGL downgrades guidance, Qantas takes off
• Why did the Bank of Queensland share price tank 7% in April?
• These were the best performing ASX 200 shares in April
• Direct indexing: What is this latest investing fad?
• 5 things to watch on the ASX 200 on Monday

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 Wesfarmers 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 Qantas Airways Ltd (ASX: QAN) share price is bucking the wider market selloff today, flying 2.5% higher at the time of writing.

This comes after the airline released several key updates to the market this morning. Those include a projected return to profitability next financial year alongside plans to fly the world’s longest direct flights commencing in 2025.

Here’s what you need to know.

Qantas share price lifts on record-breaking flight plans

If you’ve ever flown to New York or London, you’ll be well aware of the extra hours it takes to get there due to refuelling stops.

Today, the Qantas share price looks to be getting a boost following the announcement of major domestic and international fleet decisions.

On the domestic front, Qantas ‘Project Winton’ will see the airline work on renewing its fleet of narrow body jets as it progressively retires its Boeing 737s and 717s. The company reported it has firm orders for 20 Airbus A321XLRs and 20 A220-300s. It expects the first aircraft to be delivered in the latter months of 2023.

On the international front, with what could save international travellers many hours of stopover delays, the airline reported that its Project Sunrise had been given the green light by its board. This will see Qantas buy 12 new Airbus A350s to fly direct routes from Australia to international destinations, including London and New York.

The flights are expected to commence out of Sydney in 2025. These will be the longest direct flights offered by any airline in the world.

The Qantas share price could also be getting a lift from ESG focused investors, with the report that the new aircraft and engines will reduce emissions by 15% or more.

Commenting on Project Sunrise, Qantas CEO Alan Joyce said:

Throughout our history, the aircraft we’ve flown have defined the era we’re in. The 707 introduced the jet age, the 747 democratised travel and the A380 brought a completely new level of comfort.

The A350 and Project Sunrise will make any city just one flight away from Australia. It’s the last frontier and the final fix for the tyranny of distance. As you’d expect, the cabin is being specially designed for maximum comfort in all classes for long-haul flying.

The company said it will fund the new planes within its debt range and through earnings “while still leaving room for shareholder returns”.

“The Board’s decision to approve what is the largest aircraft order in Australian aviation is a clear vote of confidence in the future of the Qantas Group,” Joyce added.

What other updates were reported?

Qantas also released its third-quarter (Q3) trading update this morning.

ASX investors could be bidding up the Qantas share price after it revealed that domestic travel numbers were rebounding faster than expected. Domestic numbers are now back at levels not seen since before the onset of COVID-19 saw state borders slam shut.

Both leisure and business travel demand was said to be rebounding strongly.

While demand for international travel was also reported to be robust, pandemic restrictions in some international markets continued to throw up headwinds here in the shorter term.

Financially, the airline’s net debt levels were down to $4.5 billion as at 30 April, similar to pre-COVID debt figures.

Looking ahead to the second half of 2022 (2H FY22), underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) are forecast to come in at $450 million to $550 million. Underlying EBITDA in the first half came in at a loss of $245 million.

Qantas said it is on track to return to profitability in the 2023 financial year. It expects capital expenditure for FY23 to come in at $2.3 billion to $2.4 billion, in line with its previous forecasts.

“After a few false starts, we’re finally seeing a sustained recovery in travel demand,” Joyce said. “People have confidence in domestic borders now that we’ve shifted to living with COVID and that’s bringing us back towards pre-pandemic levels of flying.”

Qantas share price snapshot

The Qantas share price has gained 16% so far in 2022, well outpacing the year-to-date loss of around 2% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Qantas share price lifts off on projected return to profitability appeared first on The Motley Fool Australia.

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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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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains to be the most shorted ASX share despite its short interest easing to 17%. The Flight Centre share price is up 23% in 2022 but short sellers don’t appear to believe these gains will last.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 13.2%. This betting technology company’s shares are trading within a whisker of a 52-week low amid concerns over its valuation and cash burn.
• Nanosonics Ltd (ASX: NAN) has short interest of 11.9%, which is down slightly week on week. Short sellers have been going after this medical device company since it announced a major change to its sales model in the United States.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise again to 10%. Valuation concerns and an inconsistent performance appear to be weighing on this medical device company’s shares.
• Webjet Limited (ASX: WEB) has short interest of 9.7%, which is down week on week. Short sellers may believe the market is too bullish on the travel market recovery.
• Kogan.com Ltd (ASX: KGN) has seen its short interest climb again to 9.6%. Short sellers will have been celebrating last week after another disappointing update sent this ecommerce company’s shares crashing to a multi-year low.
• Zip Co Ltd (ASX: Z1P) has seen its short interest fall to 8.9%. This buy now pay later provider’s shares also dropped to a multi-year low last week, much to the delight of short sellers.
• EML Payments Ltd (ASX: EML) has seen its short interest ease to 8.7%. This payments company’s shares crashed lower last week after it downgraded its profit guidance following a tough third quarter.
• AMA Group Ltd (ASX: AMA) has 8.7% of its shares held short, which is up slightly week on week. This crash repair company disappointed the market earlier this year with a half year loss of $46.3 million.
• Mesoblast limited (ASX: MSB) has seen its short interest edge higher to 8%. Short sellers have been targeting this biotech amid disappointing trial results and significant cash burn.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Travel’s back! 3 ASX shares this expert loves right now
• These were the worst performing ASX 200 shares last week
• Why Kogan, Reliance, ResMed, and Sandfire shares are dropping
• Why is the Flight Centre share price trouncing ahead of the ASX 200 today?
• Why is the Webjet share price flying higher on Friday?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group Ltd, EML Payments, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended EML Payments, Kogan.com ltd, and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet Ltd. 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 rallied more than 21% last month as investors upped expectations that the company has finally turned a corner.

The embattled wealth manager is selling assets to shore up its balance sheet and to streamline its business.

There is also optimism that the reinvented AMP will benefit from a reported severe shortage of financial advisors.

AMP shares trading outlook improving

According to media and industry reports, there is an advisor exodus due to higher regulatory requirements that some believe are too strict. The lack of advisors has sent the cost of financial advice sharply higher.

Meanwhile, the demand for expert advice is strong, given volatile markets and imminent possible interest rate hikes. If AMP can capitalise on the growing market opportunity, its trading outlook won’t look as dire as it did in January this year. That is when the AMP share price slumped to an all-time low of $0.87.

AMP share price boosted by capital return hopes

While any transformation takes time and money, at least AMP won’t have to worry too much about the latter.

The agreements it announced in the last few months could see its coffers swell by up to $2 billion.

AMP entered into a sale agreement of its Collimate Capital’s international infrastructure equity business to DigitalBridge Investment Holdco on 28 April. AMP will be paid an upfront amount of $462 million and a total value of up to $699 million.

Up to $2 billion cash splash

This is on top of the $430 million sale of Collimate’s domestic infrastructure equity and real estate business announced the day before.

Throw in the $578 million it will get from the sale of the infrastructure debt platform completed in February 2022, and the total AMP will receive surges to around $1.5 billion. AMP stands to reap up to circa $2 billion in cash if earnouts are included.

AMP estimates that it will cost around $20 million post tax to separate the assets from the main group for the sale.

How AMP shareholders might be rewarded

There is another reason why the AMP share price is responding positively to the divestments. Management will use part of the proceeds to repay debt and return most of the cash to shareholders.

AMP is likely to undertake an on-market share buy-back, which will support the AMP share price. It will also look at a capital return program. This could take the form of a special dividend, like it did in September 2020, or an off-market share buyback.

The post The AMP share price soared 21% in April. Here’s why appeared first on The Motley Fool Australia.

More reading

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• These were the best performing ASX 200 shares last week
• 3 ASX All Ordinaries shares that soared more than 9% today
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Brendon Lau has positions in AMP Limited. 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 Bank of Queensland Limited (ASX: BOQ) share price dropped in April 2022, materially underperforming the S&P/ASX 200 Index (ASX: XJO) which only fell by 1% last month.

Last month, the bank announced its FY22 first half result for the six months to February 2022. Let’s have a look at some of the numbers that BOQ reported to investors:

Half-year earnings recap

A lot of investors like to pay close attention to the results that businesses report every six months. It can give an indication of profitability as well as the outlook.

BOQ reported that it generated $212 million of statutory net profit after tax (NPAT). This was an increase of 38%. Cash earnings after tax rose by 14% to $268 million. Profitability can have an influence on companies’ share prices.

Meantime, the bank’s operating expenses declined by 3% to $461 million.

However, the net interest margin (NIM) declined 12 basis points to 1.74% in the second half of FY21. The bank said the majority (seven basis points) of the decline was due to “industry dynamics including ongoing competition, higher fixed rate lending volumes and volatile swap rates, and a further five basis points relating to increased liquidity during the period”.

BOQ managed to grow its housing loans by $2.6 billion and business loans by $0.6 billion.

The bank’s common equity tier 1 (CET1) ratio declined by 12 basis points from the second half of FY21 to 9.68%.

BOQ said that the result demonstrated the “disciplined execution of the ME integration and digital transformation program” and represented the fifth consecutive half of improved underlying performance.

It said that key integration milestones for ME Bank have been delivered on the accelerated timeline and within the committed expense profile, with $33 million of run-rate synergies delivered during the half. Synergy benefits have been increased from a range of $70 million to $80 million to the new goal of $95 million in FY24 and beyond.

Management noted that its asset quality remains “sound” with “prudent” collective provision levels.

The challenger bank’s board decided to pay an interim dividend of 22 cents per share, representing a dividend payout ratio of 53% for the first half of FY22.

BOQ outlook

Investors may take the outlook into consideration when it comes to the BOQ share price.

It said that Australia is well placed for a continued economic recovery though there is uncertainty with elevated inflation, rising interest rates, and other disruptions.

BOQ is focused on delivering 2% positive ‘jaws’ in FY22. It also noted that momentum continues to build, with BOQ and Virgin Money Australia gaining market share.

It’s expecting the NIM headwinds to ease while the continued benefits of its integration and productivity programs should reduce costs by at least 1%.

What do brokers think of the BOQ share price?

Citi thinks that BOQ is a buy, with a price target of $10.25 but noted it may have been revenue growth that disappointed the market.

Morgans is more optimistic, with a price target of $11 – that implies a potential rise of more than 30%. This broker’s numbers put the BOQ share price at nine times FY23’s estimated earnings with a potential grossed-up dividend yield of 9.5% in the 2023 financial year.

The post Why did the Bank of Queensland share price tank 7% in April? 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 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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