The Vanguard MSCI Index International Shares ETF (ASX: VGS) has been riding the wave of volatility in 2022, just like most other investments. But how has the VGS exchange-traded fund (ETF) performed?

Since the start of this year, there has been investor concern about the Russian invasion of Ukraine, worries about inflation, and what this might mean for interest rates.

Some ASX shares have fallen heavily in the first two and a half months of 2022. For example, the Xero Limited (ASX: XRO) share price has sunk 30%, the Zip Co Ltd (ASX: Z1P) share price has dropped 63%, and the Pointsbet Holdings Ltd (ASX: PBH) share price has fallen 45%.

Vanguard International Shares ETF performance in 2022

At the time of writing, the VGS ETF has fallen by 10.11% since the start of the calendar year.

This is a bigger fall than the S&P/ASX 200 Index (ASX: XJO), which has only dropped by around 2%.

But, there are other large ETFs on the ASX that have fallen more than the VGS ETF.

The Betashares Nasdaq 100 ETF (ASX: NDQ) has fallen more than 16% since the start of the year.

Meanwhile, Vanguard US Total Market Shares Index ETF (ASX: VTS) has dropped by 10.2% in 2022 so far.

What’s influencing the VGS ETF performance?

There have been declines in several sectors in 2022, particularly technology. Plenty of global ETFs on the ASX provide exposure to the big tech names.

The biggest positions in the NDQ ETF, VTS ETF and VGS ETF portfolios are the big US tech names like Microsoft (NASDAQ: MSFT), Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN). An ETF’s overall return simply tracks the combined return of the underlying positions. As the biggest holdings in some ETFs, the giant US tech stocks have the biggest influence on the returns of those ETFs.

The US share market has a heavy tech focus, so the ETFs that are more weighted to the names like Tesla (NASDAQ: TSLA) – down over 24% this year to date – have seen a more significant decline. The NASDAQ has high exposure to tech names.

However, the Vanguard MSCI Index International Shares ETF also offers broad diversification to other sectors.

Diversification

The VGS ETF is invested in around 1,500 businesses from around the world. Many countries are represented in the holdings, including the United States, Japan, the United Kingdom, Canada, France, Switzerland, Germany, the Netherlands, Sweden, and so on.

It also offers exposure to some businesses in sectors like financials and energy that have seen a rise in the share price in 2022.

The HSBC (LSE: HSBA) share price is up more than 5% since the start of the year, while the Wells Fargo (NYSE: WFC) share price is up over 1%.

In energy, the Shell (LSE: SHEL) share price has gone up 14.5%, while the ConocoPhillips (NYSE: COP) share price has jumped 35% in 2022. The oil price has risen amid the war in Ukraine.

Vanguard MSCI Index International Shares ETF management fee

Vanguard is proud of its ability to offer investors investment products with very low management fees.

The VGS ETF has an annual management fee of just 0.18%.

The post How is the Vanguard International Shares ETF (ASX:VGS) performing in the 2022 volatility? 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. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Amazon, Apple, BETANASDAQ ETF UNITS, Microsoft, Tesla, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended HSBC Holdings and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS. The Motley Fool Australia has recommended Amazon, Apple, and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX dividend shares have the ability to boost the amount of investment income that an investor receives.

There are some companies which have boards that want to pay a fairly high level of profit out to shareholders each year.

These are two of those dividend payers, which brokers like:

Metcash Limited (ASX: MTS)

Metcash has three different divisions.

It supplies food to independent supermarkets, such as IGA.

Metcash supplies a wide array of independent liquor, including Cellarbrations, The Bottle-O, IGA Liquor, Duncans, Thirsty Camel, Big Bargain and Porters.

The ASX dividend share also has a hardware division which includes Mitre 10, Home Timber & Hardware and Total Tools.

Metcash has committed to paying out a certain level of profit. Its target dividend payout ratio is around 70% of underlying net profit after tax (NPAT).

The result for the six months to October 2021 saw Metcash achieve revenue growth of 1.3% to $7.2 billion. Group underlying earnings before interest and tax (EBIT) grew by 13.9% to $231.2 million. But within the total, food EBIT fell 7.6% to $95.2 million, liquor EBIT rose 10.5% to $44.3 million and hardware EBIT surged 53.3% to $98.9 million. Hardware is now the biggest profit generator for the business.

It’s currently rated as a buy by Credit Suisse. Based on the dividend estimate for FY22, the projected grossed-up dividend yield is 6.9%.

Bank of Queensland Limited (ASX: BOQ)

BOQ is one of the challenger banks on the ASX. It operates three different brands – BOQ, ME Bank and Virgin Money Australia.

The ASX dividend share is currently working through extracting synergies from the ME Bank acquisition which will increase the profitability of the business. BOQ is now more geographically diverse with the inclusion of ME Bank.

In December, the company reconfirmed its FY22 guidance of at least 2% ‘positive jaws’. It said that growth momentum has continued through the first quarter of FY22, with “strong” application volumes across both housing and business lending portfolios.

However, the bank noted that the industry had experienced net interest margin (NIM) headwinds in the first quarter due to tougher trading conditions, including yield curve volatility, intense price competition, fixed-rate lending and higher liquid asset balances. The ASX dividend share said this will result in a slightly lower FY22 NIM than previously guided.

It’s currently rated as a buy by the broker Morgans, with a price target of $11. Based on the broker’s dividend projection for FY23, BOQ has an estimated forward grossed-up dividend yield of 9.3%.

The post Brokers: Buy these 2 underrated ASX dividend shares 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 Bruce Jackson.

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The Magellan Financial Group Ltd (ASX: MFG) share price is edging higher today.

At the time of writing, the struggling fund manager’s shares are up 1.5% to $15.99.

This means the Magellan share price has narrowed its year to date decline to 64%.

What’s going on with Magellan share price?

Investors have been bidding the Magellan share price higher today despite the release of an update on its Founder and ex-Chairman, Hamish Douglass.

In case you weren’t aware, Mr Douglass has been on indefinite leave from the role of Chairman since early in February. This followed a period of intense pressure and focus on both his professional and personal life.

At the time, the Magellan Board advised that they were supportive of Douglass taking the time that he requires to focus on his health and were looking forward to welcoming him back.

However, today’s bombshell announcement reveals that Hamish Douglass will not be returning as a Magellan director. The release advises that with effect from 19 March 2022, Douglass has resigned from the Magellan Board.

And given how the Chairman role and the board generally go hand in hand, this could be a sign that he will not be returning as Chairman in the future. Though, that has not been confirmed.

Magellan advised that Mr Douglass said his resignation as a director of the Magellan Board is due solely to his medical leave of absence. The Board is continuing its search process to appoint an additional independent director.

Why are its shares rising on the news?

Judging by the Magellan share price performance today, it appears as though the market was already anticipating this and had priced it in.

Though, it is also worth noting that Magellan has just launched a major on-market share buyback. This offers some downside protection, with the brokers entrusted to buy shares, Barrenjoey and Ord Minnett, able to take advantage of any selling on the news today.

The post Magellan (ASX:MFG) share price higher despite Hamish Douglass resignation news appeared first on The Motley Fool Australia.

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

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There are a handful of high-yielding ASX dividend shares that brokers love right now.

It’s one thing for a single analyst to like a business. But it’s something else when many analysts all like a company at the same time. It may suggest there is an opportunity there. Or it’s possible that all of those brokers may be wrong with their ‘buy’ ratings.

Whilst interest rates are predicted to go higher, the actual interest rate is still very low which may make high-yield stocks more attractive.

Here are two high-yield ASX dividend shares that are well-liked by brokers:

Whitehaven Coal Ltd (ASX: WHC)

Whitehaven is one of the biggest coal miners in Australia. It currently operates four mines in the Gunnedah Basin of NSW. Four of its mines are: the Maules Creek Mine, the Narrabri Mine, the Tarrawonga Mine, and the Werris Creek Mine.

It’s currently rated as a buy by at least six brokers.

The Whitehaven share price has risen by 45% since the start of 2022. This is on the back of coal prices rising in recent times amid the Russian invasion of Ukraine.

As a resource business, the higher the coal price, the more revenue and profit Whitehaven can generate. That higher profit can then fund higher dividend payments.

Credit Suisse is one of the brokers that rates Whitehaven as a buy, with a price target of $4.70. That suggests a possible upside of close to 20%.

The broker is expecting a much bigger dividend in FY23 from the high-yield ASX dividend share. Credit Suisse is currently expecting a 11.5% yield in FY23.

Telstra Corporation Ltd (ASX: TLS)

Telstra has been one of the largest dividend payers on the ASX over the last 20 years.

The Telstra board has committed to try to pay a dividend of 16 cents per share until it can start growing the dividend.

The company has been working on reducing its cost base, monetising its assets, and growing customer satisfaction under its T22 strategy.

Telstra is now looking towards its T25 strategy. This includes further cost cuts, expansion of 5G coverage, and an aim to grow profit margins.

It has also been making acquisitions to expand and diversify its earnings, such as through its MedicalDirector and Digicel Pacific businesses.

At least four brokers, including Morgan Stanley, are rating Telstra as a buy. The price target on Telstra is $4.60, that’s around 16% higher than where it is now.

Morgan Stanley likes the recent regional mobile network agreement that Telstra signed with TPG Telecom Ltd (ASX: TPG), which adds to Telstra’s earnings and allows Telstra to get access to TPG’s regional spectrum.

The broker is expecting Telstra to pay a grossed-up dividend yield of 5.8% in FY22 and FY23.

The post 2 high-yield ASX dividend shares that brokers love 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 owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Many high-quality ASX shares have been beaten up in 2022. Are they now opportunities?

Investors have a lot to contend with right now. There’s a war going on in Ukraine. Inflation is high. Interest rates are expected to go higher.

Share prices change all the time. Sometimes valuations can change significantly in a short amount of time. But is it now time to jump on these stocks?

REA Group Limited (ASX: REA)

The REA Group share price has fallen almost 20% in 2022.

REA Group is recovering from the impacts of COVID-19 when property volumes were down. In the first half of FY22, it saw core revenue rise by 37% to $590 million, with core net profit after tax (NPAT) jumping 31% to $226 million. These numbers were achieved despite the lockdowns in Melbourne and Sydney in the first quarter.

The CEO said that the removal of COVID restrictions saw a wave of new listings on realestate.com.au, with sellers making up for the time lost in lockdown and taking advantage of the significant buyer demand. There was also record take-up of its premium listing products in its residential and commercial divisions.

REA Group’s international divisions also performed. REA India saw revenue growth of 125% to $24 million.

In terms of the outlook, the ASX share said that residential property market conditions remain positive. January 2022 national residential new listings were up 14% year on year, with Sydney listings up 19%.

However, the year-on-year growth rate is expected to slow in the second half as the market cycles through very strong listing volumes in the prior period.

Morgan Stanley rates the business as a buy, with a price target of $178. That’s almost 30% higher. It thinks the outlook is still positive for the business.

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price has fallen 27% since the start of the year.

Pro Medicus has one of the highest earnings before interest and tax (EBIT) margins on the ASX, with a margin of 65% in the first half of FY22. The medical imaging tech company recently reported a high level of growth as well, with HY22 profit after tax up 52.7% to $20.7 million and the dividend up 42.9%.

The company continues to see larger healthcare groups choose its Visage software to replace legacy picture archiving and communication systems (PACS). One of the more recent wins was with Novant Health, which signed a $40 million, 7-year contract.

The ASX share boasts of its highly scalable offering with a “contained cost base”. The margin continues to grow as its global footprint increases.

It’s looking to extend to new geographical markets and develop the next generation of products.

The company says that its contract pipeline remains healthy across many different market opportunities.

Morgans currently rates the healthcare business as a buy, with a price target of $56.20. That implies a possible upside of more than 20% over the next year. It thinks the market volatility provides investors a good price to invest in Pro Medicus.

The post Experts say it’s time to buy these beaten-up, quality ASX shares 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. owns and has recommended Pro Medicus Ltd. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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During all of this ASX share market volatility, investors may be looking for some S&P/ASX 200 Index (ASX: XJO) blue-chip shares that may be better value or could provide some stability.

Experts are always on the lookout for opportunities. Some ASX 200 blue-chip shares have plenty of buy ratings at the moment, including these two:

Goodman Group (ASX: GMG)

Goodman is one of the ASX’s biggest property businesses. It owns, develops, and manages a large global industrial real estate portfolio.

It’s currently rated as a buy by at least four brokers, including Morgan Stanley which has a price target of $27.88 on the business. That implies a potential upside of more than 20% for Goodman.

The Goodman share price has fallen 16% year to date.

But the ASX 200 blue-chip share continues to grow at a double-digit pace.

In Goodman’s FY22 half-year result, it upgraded its full year operating earnings per security (EPS) growth forecast to 20% with a “strong performance from all business segments”. The HY22 result showed operating EPS growth of 27% year on year.

At 31 December 2021, Goodman’s total assets under management (AUM) reached $68.2 billion. It had a portfolio occupancy of 98.4% with like for like net property income growth of 3.4%. Its development work in progress (WIP) was up 51% to $12.7 billion across 81 projects, with a forecast yield on cost of 6.7%.

Management said that it is benefiting from the strength of demand for essential infrastructure for the digital economy.

Bapcor Ltd (ASX: BAP)

Bapcor is a leading auto parts business in Australia and New Zealand. It operates lots of different brands for different parts of the vehicle market.

Some of its brands include: Burson Auto Parts, Precision Automotive Equipment, BNT (NZ), Truckline, WANO, Autobarn, Autopro, Midas, ABS, Shock Shop and Battery Town.

This ASX 200 blue-chip share is rated as a buy by UBS with a price target of $8.10. That implies a possible upside of around 30%.

The broker is expecting a recovery for the business in the second half of FY22, after the first half had plenty of disruptions from lockdowns.

UBS is expecting FY23 net profit after tax (NPAT) to grow, with the Bapcor share price valued at 15x FY23’s estimated earnings.

The company has a plan to grow the business in many ways, including expanding its store network, realising operational efficiencies, expanding its own brand product range, and growing in Asia.

The post 2 ASX 200 blue-chip shares to buy this month: experts 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 recommended Bapcor. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Due to increasing demand for lithium for electric vehicle batteries and renewable energy, the white metal has increased in value materially over the last 12 months.

This led to strong gains being recorded by a large number of lithium stocks in 2021. And while some of the bigger players, such as Pilbara Mineral Ltd (ASX: PLS), have struggled to build on this in 2022, that hasn’t stopped some emerging players from rocketing higher.

Listed below are three of the best performing lithium stocks on the All Ordinaries index in 2022:

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price has rocketed 80% since the start of the year. There have been a couple of key catalysts for this impressive gain. The main one was the announcement of a binding agreement with auto giant Tesla. The two parties have signed an agreement for the supply of 110,000 tonnes of lithium spodumene concentrate across a four-year period from its Finniss Lithium Project near Darwin. Also getting investors excited were some drilling results from the Carlton deposit of the project. Management advised that eight of the nine holes intersected spodumene bearing pegmatite mineralisation. It expects this to underpin an upgrade to the mineral resource of the project.

Piedmont Lithium Inc (ASX: PLL)

The Piedmont Lithium share price has been a strong performer in 2022 with a 41% gain. This was driven largely by the release of its 2022 lithium development plans. Piedmont revealed that it expects to double its US lithium hydroxide production to 60,000 tonnes per year. All in all, the company ultimately plans to produce or have offtake rights to an estimated 500,000 tonnes per year of SC6 production. This leaves the US-based lithium miner well-placed to meet demand for the metal in North America.

AVZ Minerals Ltd (ASX: AVZ)

The AVZ Minerals share price has started 2022 strongly and is up 18.1% since the turn of the year. Investors reacted positively to news that the lithium explorer has committed to invest $25 million to advance the drilling program at the Manono Lithium and Tin Project in the Democratic Republic of the Congo. This program is being supported by a recent $75 million capital raising.

The post These are the top performing ASX lithium stocks so far in 2022 appeared first on The Motley Fool Australia.

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

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The Myer Holdings Ltd (ASX: MYR) share price rocketed following the release of its half year results on 10 March.

While the company reported strong growth, investors appeared excited about the reinstated dividend. This is the first dividend that has been declared since the final FY17 dividend.

As such, Myer shares surged 24.39% on the day, touching a 3-month high of 53 cents. However, since then, the company’s shares have slightly retraced to close at 51 cents on Friday.

Below we take a look at the company’s financial performance and its interim dividend for investors.

Myer restarts dividend after robust H1 FY22 performance

In the half year report for the 2022 financial year, Myer recorded increases across key metrics.

In summary, sales increased by 8.5% to $1,517.4 million over the previous corresponding period. This was predominately underpinned by a combination of its online platform and store network despite COVID-19 disruptions.

Following the above result, underlying net profit after tax (NPAT) lifted by 55.2% to $32.3 million.

The group advised that momentum is being built as it moves into the second half of FY22.

In the first five weeks, Myer department store sales are up 15.2%, with stores up 9.3%, and online up 48.6%.

Based on Myer’s performance, the board declared a fully franked interim dividend of 1.5 cents per share. This represents a dividend yield of 3.7% based on the closing share price on 9 March (before the results).

When can Myer shareholders expect payment?

Myer will pay the interim dividend to eligible shareholders on 12 May.

While this is some time away, to be eligible you’ll need to own Myer shares before Wednesday 23 March. This is when its shares will trade ex-dividend, meaning anyone who purchases on this date or after, won’t be eligible.

It is worth noting that on the ex-dividend day, the share price traditionally falls in proportion to the dividend amount.

The post Hoping to bag the first Myer (ASX:MYR) dividend in 4 years? Here’s what you need to know appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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ASX growth shares have seen plenty of volatility over the last three months.

The Russian invasion of Ukraine has led to big oil price swings. Rapid inflation is adding more uncertainty for interest rates.

But after all of this volatility, are these two ASX growth shares now an opportunity?

VanEck Morningstar Wide Moat ETF (ASX: MOAT)

This is an exchange-traded fund (ETF) that looks to invest in some of the leading US businesses with strong economic moats.

An economic moat refers to the competitive advantages that a business has. Moats can come in many different forms, such as brand power, intellectual property, cost advantages, and so on.

The investment analysts at Morningstar give the businesses that they cover a ‘moat’ rating. It’s only the businesses that the analysts think will almost certainly continue making excess profits for at least a decade (and, probably, for two decades or more) that get counted as having a wide moat.

From that list of businesses with long-term competitive advantages, the analysts only choose stocks for the portfolio that are at good value compared to the estimate of fair value.

The MOAT ETF provides disclosure about its biggest positions. On 17 March 2022, the positions with a weighting of at least 2.75% of the portfolio were: Cheniere Energy, Lockheed Martin, Corteva, Berkshire Hathaway, Bristol Myers Squibb, Altria, Dominion Energy, Wells Fargo, and Merck & Co.

As VanEck says, performance is not a guarantee of future results. Over the past five years, it has produced net returns of an average of 17.1% per annum.

Cettire Ltd (ASX: CTT)

Cettire is a leading luxury retailer that sells many thousands of products from hundreds of brands. The Cettire share price has dropped 56% since the start of 2022.

The ASX growth share’s core business is growing quickly, even as markets reopen from COVID-19 lockdowns. In January 2022, the company achieved gross revenue growth of 242%.

Cettire said with its FY22 half-year result that it has started to unlock the growth opportunity in multiple high-value luxury goods markets. The company’s management is running the business to maximise revenue through investing in marketing and winning customers to drive long-term shareholder value.

The company recently announced that it was entering the Chinese online luxury market, as well as a partnership with China’s largest online retail platform JD.com. Cettire says this is a $150 billion potential market opportunity.

The JD.com partnership will help Cettire drive traffic, brand awareness, and accelerate growth. JD.com has more than 500 million active customers.

The ASX growth share said it has been developing a local talent pool in mainland China focusing on world-class engineering talent.

The post Are these 2 top ASX growth shares buys right now? 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. owns and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire Limited and VanEck Vectors Morningstar Wide Moat ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Qantas Airways Limited (ASX: QAN) share price could be about to soar higher, according to one investment expert.

Morgan Stanley thinks that the Qantas share price is undervalued. The broker has a price target close to 40% higher than where it is now.

What has happened to the Qantas share price in 2022?

Qantas shares have continued to behave with a lot of volatility. The COVID-19 impacts are lessening, but now the airline has to contend with much higher oil prices amid the Russian invasion of Ukraine.

As a transportation company, fuel is one of the most significant costs for the business.

How much will this affect demand for flights? Only time will tell. Qantas will also have to decide how much of the price increases to pass onto passengers.

Qantas shareholders continue to wait for the company to stop making losses. The last report included a painful loss.

FY22 half-year earnings wrap

Last month, Qantas reported another result of losses.

In the six months to 31 December 2021, Qantas reported that it made an underlying earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $245 million. The underlying loss before tax was $1.28 billion, while the statutory loss before tax was $622 million.

Qantas blamed the Omicron variant of COVID-19 for the unfavourable impact in its results to the tune of approximately $650 million. The Qantas share price has been volatile since the onset of COVID-19.

However, the airline company has been working hard on reducing costs. Qantas says the recovery program was on track to deliver more than $900 million of annualised cost benefits by the end of FY22. This is ahead of schedule.

While COVID-19 has hurt flying, Qantas has seen a record performance by its freight division. This has offset some of the cash losses. There has been a lack of cargo capacity on passenger aircraft. But, management says there has been a permanent shift in e-commerce patterns. It expects freight operations to remain higher than pre-COVID levels.

According to the airline, the Qantas loyalty division performed strongly, with a “strong” cash contribution and underlying earnings before interest and tax (EBIT) of $127 million.

Outlook

The Qantas share price can be influenced by commentary about its outlook.

In terms of a recovery from COVID-19, the business says while travel demand is strengthening and there have been positive developments on international borders, Omicron was likely to negatively impact group EBIT by an estimated $650 million in the second half of FY22.

The group domestic capacity is expected to be 68% of pre-COVID levels in the third quarter of FY22, increasing to between 90% to 100% in the fourth quarter.

The group international capacity is expected to be 22% of pre-COVID levels in the third quarter, increasing to 44% in the fourth quarter.

Qantas share price target

The airline is rated as a buy by the broker Morgan Stanley, with a price target of $7. It’s expecting a return to profit in FY23 as demand returns to flying.

The post Is the Qantas (ASX:QAN) share price about to soar 40% higher? 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 Bruce Jackson.

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