Next month the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price will be in focus when it releases its first quarter update.

To get readers ready for the release, I’ve looked to see what a leading broker is expecting from the bank’s update.

What Is expected from ANZ during the first quarter?

According to a note out of Bell Potter, its analysts are expecting a first quarter cash profit of $1.59 billion. This will be down 12.2% from $1.81 billion in the prior corresponding period.

The broker commented: “We look at numbers on a continuing basis again following the renewed impact of COVID19 on community health and the economy. In terms of 1Q22, we estimate cash profit of around $1.59bn and cash EPS of around 56¢.”

“We were hoping for a quick end to support packages this time around but this was not to be given onset of the Omicron and other variants (and bearing in mind that support for home and business loans is still in excess of 90%). Nevertheless, we still expect the bank to revert back to credit impairment expenses in 1Q22 but not as much as before,” it added.

What else should you look out for?

Bell Potter expects ANZ to report a net interest margin (NIM) of 1.62% for the quarter, down from 1.64% in FY 2021. This reflects lower volumes in both Australia Retail and Commercial and Institutional.

Another metric investors might want to look out for is the bank’s costs. Largely due to one-offs in the fourth quarter, Bell Potter expects a decent reduction in the bank’s expenses. It explained: “We have opted for operating expenses of around $2.00bn in 1Q22, a fair drop from $2.28bn in 4Q21 of around 12% but mainly due to the removal of large/notable items.”

Finally, the broker is forecasting a CET1 ratio of 11.8%, which is notably higher than APRA’s unquestionably strong benchmark of 10.5%.

Is the ANZ share price in the buy zone?

The broker sees a lot of value in the ANZ share price at the current level and has retained its buy rating and lifted its price target to $31.00.

Based on the current ANZ share price of $26.62, this implies potential upside of 16% over the next 12 months.

And with Bell Potter forecasting a $1.44 per share fully franked dividend in FY 2022, the total return stretches to over 21%.

The post What to expect from the ANZ (ASX:ANZ) Q1 update next month appeared first on The Motley Fool Australia.

More reading

• The ANZ (ASX:ANZ) share price is outperforming its big bank peers in 2022. Here’s why
• What’s happening to ASX bank shares today?
• Brokers name 3 ASX shares to buy today
• ANZ (ASX:ANZ) share price raised to ‘buy’ at Morgan Stanley
• Will ASX big four bank ANZ (ASX:ANZ) raise its dividend in 2022?

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.

from The Motley Fool Australia https://ift.tt/3g2nUsc

Is it possible that the Reserve Bank of Australia (RBA) could increase interest rates in 2022? What would this mean for the ASX share market?

US interest rates headed higher

Central banks are now capturing a lot of investor attention and headlines.

After much speculation about when interest rates were going to increase in the United States, the Federal Reserve has officially indicated that rates are going to rise in March 2022. That’s just two months away.

The American central bank noted that indicators of economic activity and employment have continued to strengthen, with the sectors most adversely affected by the pandemic have improved in recent months.

Supply and demand imbalances related to the pandemic and the reopening of the economy have continued to contribute to elevated levels of inflation. Explaining the decision to plan for growing interest rates, the Federal Reserve said:

With inflation well above 2% and a strong labor market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate.

It has also been reducing the pace of its monthly asset purchases. In a separate statement, the Federal Open Market Committee said that it expects to significantly reduce the size of its balance sheet over time.

The global share market, including the ASX share market, has been more volatile with interest rate rises now firmly factoring into investors’ thoughts.

Is the RBA going to increase interest rates this year?

For a long time, RBA boss Dr Lowe had indicated that 2024 was going to be the year that Australian interest rates would rise.

However, as noted by the Australian Financial Review, there are three things that the RBA is focused on.

The most important factor is the RBA’s goals of ‘full employment’ and that inflation is “sustainably” being within its target band of 2% to 3%. Two other factors include the functioning of Australia’s bond market and the actions of other central banks.

Australia’s unemployment rate has recovered quickly. In the latest monthly update for December 2021, the Australian Bureau of Statistics (ABS) reported that the unemployment rate improved from 4.6% to 4.2% and the underemployment rate improved from 7.5% to 6.6%.

Meanwhile, the latest quarterly consumer price inflation showed a 3.5% increase year on year, with a quarterly change of 1.3%.

The ABC reported that ABS head of price statistics Michelle Marquardt, said: “Shortages of building supplies and labour, combined with continued strong demand for new dwellings, contributed to price increases for newly built houses, townhouses and apartments”

Economists are now thinking that the RBA could raise rates later this year. The Commonwealth Bank of Australia (ASX: CBA) chief economist Gareth Aird has noted that internal CBA data for the three months to December 2021 showed that wage growth was increasing. Mr Aird said:

Our expectation for the labour market to continue to tighten, for wages growth to accelerate and for underlying inflation to push towards the top of the RBA’s target band from here means the risk lies with an earlier hike than August 2022.

What would higher interest rates mean for the ASX share market?

No-one can say what share prices are going to do day to day, or even year to year.

Already in 2022, some ASX shares have seen some sizeable declines. For example, in this year to date, the CSL Limited (ASX: CSL) share price has fallen 16%, the Aristocrat Leisure Limited (ASX: ALL) share price has dropped 15%, the Xero Limited (ASX: XRO) share price has fallen 28% and the Zip Co Ltd (ASX: Z1P) share price has dropped 31%.

Investment outfit Magellan Financial Group Ltd (ASX: MFG) has this quote from Warren Buffett on its website about interest rates:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature… its intrinsic valuation is 100% sensitive to interest rates.

The post ASX share market on watch: Is the RBA going to increase interest rates in 2022? appeared first on The Motley Fool Australia.

More reading

• What is the CBA (ASX:CBA) dividend payout ratio sitting at?
• CBA reveals the Australian economy’s leading state amid COVID surge
• What’s happening to ASX bank shares today?
• Own CBA (ASX: CBA) shares? Here’s what’s happening with the big bank this week
• What to expect from the CBA (ASX:CBA) half year result next month

Motley Fool contributor Tristan Harrison owns Magellan Financial Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd., Xero, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3o2JHnY

Key points

• The crypto world is now A$1.76 trillion lighter following a rough run for the alternative asset class
• Another crypto winter could be ahead with one expert predicting Bitcoin below A$10,000
• ARK Invest is still optimistic on Bitcoin, suggesting more upside from here

---

It is beginning to feel uncomfortably cold in the cryptocurrency markets lately. In the space of two and a half months, approximately A$1.76 trillion of market capitalisation has been wiped from the global crypto market.

Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) have been leading these losses in dollar terms. In the last week alone, the top two cryptocurrencies have fallen 14.5% and 22.7% respectively.

After experiencing such a tremendous pullback in prices, some spectators are calling this the beginning of the next crypto winter. For the uninitiated, this is an extended period of time where the alternative asset class underperforms.

The last ‘crypto winter’ occurred after enthusiasm died off in early 2018. During this near three-year timeframe, Bitcoin traded below its previous high of ~A$25,700 set in 2017. Investors had to patiently wait until December 2020 to reclaim this milestone.

But what stance do experts currently hold on the future of Bitcoin?

Is it about to get colder for crypto?

For crypto investors, the short-term headwind resides in the monetary policy instated by the Federal Reserve. While the loose money printing of the past acted as a catalyst for the price of Bitcoin, the Fed’s signalling for tighter policy in the near term is having the opposite effect.

The likelihood of an increase to interest rates by the Federal Reserve was only further bolstered by the chair’s comments overnight. Jerome Powell suggested a rate rise in March was a strong possibility, especially following the surprising rebound in the jobs market.

For this reason, CEO and founder of Bull and Bear Profits, Jon Wolfenbarger is expecting further pain to come for crypto markets and the price of Bitcoin. The analyst is forecasting an 80% fall from the recent Bitcoin high, placing the cryptocurrency under A$10,000.

What about the bull case for Bitcoin?

While the sentiment is frosty for crypto at present, the team at ARK Invest remains bullish. In their Big Ideas Summit 2022, the innovation-focused fund manager assigned Bitcoin with a market cap projection for 2030.

According to the presentation, ARK analysts believe Bitcoin’s market cap could reach US$28.5 trillion by 2030. This would represent a more than 25-fold increase in the cryptocurrency’s current valuation.

The price of a single bitcoin could exceed $1 million by 2030.

We are still early. pic.twitter.com/rvja2h2vi5

— Yassine Elmandjra (@yassineARK) January 25, 2022

https://platform.twitter.com/widgets.js

To get to this estimate, the dominant cryptocurrency was allotted value based on eight different use cases. These various use cases are as follows:

• Remittance network
• Emerging market currency
• Economic settlement network
• Nation-state treasury
• Seizure-resistant asset
• Institutional investment
• Corporate treasury
• Digital gold

When combined, the total value per Bitcoin by 2030 — as ARK Invest sees it — could be US$1.36 million. This would make the crypto three times larger in value than the entirety of the gold market at present.

The post Is winter coming for the crypto world? A bull and bear case appeared first on The Motley Fool Australia.

More reading

• What? 2 days of gains for Bitcoin, Ethereum, and Dogecoin?
• Bitcoin and Ethereum are at 6-month lows. Is now the time to pounce?
• Could this Achilles’ heel bring Bitcoin tumbling down?
• This crypto will be the Ethereum of 2022
• Bitcoin in the crosshairs. What Russia’s proposed ban could mean: expert

Motley Fool contributor Mitchell Lawler owns Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3AAwGHb

Key points

• Jumbo shares on the move following UK-based acquisition of StarVale
• Initial consideration of $32.1 million funded by Jumbo’s new debt facility
• Low to mid single-digit EPS accretion in the first 12 months post-completion

---

The Jumbo Interactive Ltd (ASX: JIN) share price soared by 6% in early trading today after the company revealed an acquisition to expand its presence in the United Kingdom (UK).

At the time of writing, the lottery ticket seller’s shares are $17.27, up 2.55%. Earlier today, Jumbo Interactive shares reached a price of $17.90, up 6%. They have since been caught up in this afternoon’s broader market sell-off, with the S&P/ASX 200 Index (ASX: XJO) down 2.64% to 6,778 points.

Jumbo bolsters United Kingdom portfolio

In a statement to the ASX, Jumbo Interactive advised it has entered into an agreement to acquire 100% of StarVale Group.

Based in the UK, StarVale is a leading External Lottery Manager (ELM) and a digital payments company. The group provides a full range of Society Lottery services (weekly lottery and raffle) and prize draw services.

StarVale services over 850,000 active players across more than 45 charity and not-for-profit clients around the country.

In total, 9.5 million direct debit transactions are processed, reflecting roughly £54 million (A$102.44 million) in transaction value.

Under the deal, Jumbo Interactive will conditionally acquire StarVale for an initial amount of $32.1 million.

In addition, between $7.5 million to $8.5 million of deferred consideration will be payable on 30 June 2023 upon achieving certain earnings hurdles.

The acquisition will be funded by Jumbo Interactive’s new $50 million senior debt facility.

Post-completion, StarVale is expected to deliver low to mid single-digit earnings per share (EPS) accretion within the first 12 months.

The acquisition remains subject to approval by the UK Gambling Commission. This is expected by the end of FY22.

Jumbo Interactive noted that this latest purchase provides a unique opportunity to significantly broaden its footprint across the UK.

This follows the acquisition of UK-based Gatherwell in November 2019 and the conditional acquisition of Canada-based Stride in August 2021.

Jumbo Interactive CEO and Founder, Mike Veverka commented:

We identified StarVale as one of our top acquisition opportunities in the UK given their scale and leadership position in the charity lottery market, strong brands, cultural alignment with Jumbo, and their talented leadership team.

The acquisition helps accelerate our strategy to grow internationally and adds significantly more scale to our Managed Services business in the UK.

Jumbo Interactive share price summary

Over the past 12 months, the Jumbo Interactive share price has posted a gain of almost 22%.

The company’s shares reached a 52-week high of $19.57 just before the turn of the calendar year. Since then, weak investor sentiment in the market has dragged Jumbo shares down.

Based on today’s price, Jumbo commands a market capitalisation of roughly $1.08 billion, with approximately 62.4 million shares on issue.

The post Jumbo Interactive (ASX:JIN) share price leaps 6% on acquisition announcement appeared first on The Motley Fool Australia.

More reading

• Brokers name 2 ASX dividend shares to buy 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. owns and has recommended Jumbo Interactive Limited. The Motley Fool Australia has recommended Jumbo Interactive Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3Ayvx2W

Key points

• Cochlear is one of the worst performing ASX 200 healthcare stocks on Thursday
• Right now, its share price is 5.2% lower, trading at $181.54
• No news to explain the slump but some brokers are bearish on revenue growth

---

The Cochlear Limited (ASX: COH) share price is in the red today. In fact, its slump places it as one of the worst-performing healthcare stocks on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

At the time of writing, the Cochlear share price is $181.54, 5.2% lower than its previous close.

For context, the ASX 200 is also in the red right now, having dipped 2.3% by lunchtime.

Let’s take a look at what’s happening with the hearing device manufacturer and distributor.

What’s dragging the Cochlear share price lower today?

Cochlear’s shares are weighing on the S&P/ASX 200 Health Care Index (ASX: XHJ) on Thursday.

Right now, healthcare is one of the ASX 200’s worst-performing sectors, having slumped 3.8%.

Though, the title has evaded it due to the S&P/ASX 200 Information Technology Index‘s (ASX: XIJ) 4.86% tumble.

Amongst the ASX healthcare stocks, the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price is down 5%. The Resmed CDI (ASX: RMD) and CSL Limited (ASX: CSL) share prices are both down by about 3.7%.

To make Cochlear’s tumble more baffling, there’s been no price-sensitive news from the company since August. Then, it released its results for the financial year 2021, inspiring the market to bid the Cochlear share price 7.4% lower.

The company isn’t expected to release its results for the first half of the financial year 2022 until around 22 February.

However, The Motley Fool Australia has recently reported on multiple broker updates regarding the Cochlear share price.

For instance, Macquarie recently dropped its price target for Cochlear shares to $222.50, representing a 22% upside on its current level. Credit Suisse is bullish on the future of Cochlear, slapping a $235 price target on its shares.

Though, my Foolish colleague Tony recently reported that some experts are concerned about the company’s revenue growth amid the ongoing COVID-19 pandemic.

The post Why is the Cochlear (ASX:COH) share price tumbling 5% on Thursday? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• Here are the latest broker updates from Macquarie. It’s not all pretty for ASX shares.
• Leading brokers name 3 ASX shares to sell today
• Cochlear (ASX:COH) share price higher on FDA approval
• Hear this: Why the Cochlear (ASX:COH) share price had such a difficult time in 2021

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. owns and has recommended CSL Ltd. and Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/34e0IV1

The S&P/ASX 200 Index (ASX: XJO) has unfortunately slipped into negative territory so far this Thursday, after an initially strong market open. The ASX 200 is currently down by 1.53% and is sitting at 6,855 points at the time of writing. That performance is getting shown up by the BHP Group Ltd (ASX: BHP) share price in a big way.

Comprehensively defying the broader market, BHP shares are currently up a healthy 1.78% at $45.83 apiece after rising as high as $46.48 earlier in the trading day.

So how is BHP managing such a robust performance this Thursday?

Well, it’s not entirely clear. But it could have something to do with the ASX notice the company put out this morning before market open.

BHP shares up as unification now a virtual certainty

This notice confirmed that BHP shareholders have voted in favour of the company’s proposed ‘unification’ program on 20 January. This will result in BHP withdrawing its BHP Group plc (LON: BHP) dual-listing on the London Stock Exchange (LSE).

That will leave its ASX listing as its primary global share market presence, as well as adding an extra few hundred billion or so to its ASX market capitalisation.

But the ASX release also revealed the UK Court has just issued a court order that sanctions the unification process. This effectively removes the last barrier to unification. The company now expects the process to be finalised at 9pm Greenwich Mean Time (GMT) on 28 January (8am on January 29 AEDT). That’s when “the UK Court Order is expected to be delivered to the UK Registrar of Companies”, according to BHP.

After that, BHP is expecting unification to be wholly wrapped up on 31 January. This is when holders of the BHP plc LSE-listed shares and BHP plc American Depository Receipts (ADRs) will have their shares and ADRs swapped for ASX-listed shares and ADRs at a one-for-one basis.

It’s very possible this news could be behind the strong BHP share price performance thus far today. This has been a long and complicated process for the company to go through. So no doubt many investors would be pleased it has gone off without a hitch.

In other news, my Fool colleague Tony recently interviewed a top ASX fund manager that named BHP shares as one of the investments to look at in the current investing environment.

At the current BHP share price, this ASX 200 mining giant has a trailing dividend yield of 8.8%.

The post Why is the BHP (ASX:BHP) share price leaping ahead today? appeared first on The Motley Fool Australia.

More reading

• 2 ASX shares to guide you out of this bloodbath: expert
• 2 ASX dividend shares with fully franked 7% yields
• Two top ASX 200 mining shares to watch in 2022: Saxo Markets
• These are the 10 most shorted ASX shares
• ASX 200 (ASX:XJO) midday update: Whitehaven sinks, BHP to unify

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

from The Motley Fool Australia https://ift.tt/3AHPzrR

Key points

• FY 22 guidance maintained
• Gold production slipped
• Cash in bank up

---

The Evolution Mining Ltd (ASX: EVN) share price is taking a tumble today, down 10.13% to $3.51 per share.

Below we take a look at the ASX gold miner’s quarterly activity report for the period ending 31 December, which appears to be driving today’s losses.

What did Evolution report?

• Gold production of 148,084 ounces, down from 170,681 ounces the prior quarter
• Improved All-in Sustaining Cost (AISC) of $1,347 per ounce
• Evolution maintained guidance for FY22 of 670,000–725,000 ounces with a forecast AISC of $1,135–1,195 per ounce.
• Cash in bank of $1.150 billion as at 31 December, up from $422 million the previous quarter

What else happened in the quarter?

The Evolution share price is under pressure today, despite the gold miner reporting year-to-date production of 318,766 ounces at an AISC of $1,381 per ounce and maintaining its guidance for the 2022 financial year.

Investors may be selling Evolution shares on the 13% quarter-on-quarter reduction in gold production.

The average gold price the company received increased from $2,364 per ounce in the September quarter to $2,378 in the December quarter. But the amount of gold sold dropped from 163,046 ounces in the prior quarter to 155,287 ounces in the quarter just past.

One of the factors hampering gold production during the quarter was heavy rains at Evolution’s Cowal and Mt Rawdon projects, which impacted access to the pits during the quarter.

Evolution also said labour shortages are creating challenges at its Mungari mine in Western Australia.

As for the pandemic, the company reported that, “COVID-19 continues to be proactively managed with limited impact on operational performance in the December quarter. However, positive cases and isolation of close contacts has resulted in periods where up to 15% of the workforce has been unavailable at Red Lake and Cowal.”

Mine operating cash flow increased 5% quarter-on-quarter to $203 million.

Evolution had a net debt position (excluding pre-paid loan fees) of $449 million as at 31 December.

What’s next?

Looking ahead, Evolution said it’s continuing to upgrade the quality of its asset portfolio.

Among those, it pointed to its “transformational acquisition of Ernest Henry”, which was completed on 6 January.

According to the company, “An immediate increase in copper production will reduce Group All-in Sustaining Costs and positions Evolution as one of the lowest cost gold producers in the world.”

Evolution’s current guidance and outlook “include the benefit of this acquisition”.

Evolution share price snapshot

The Evolution share price has struggled over the past 12 months, down 25%. That compares to a gain of 1% posted by the S&P/ASX 200 Index (ASX: XJO) over that same time.

So far in 2022, Evolution shares have slipped 14%.

The post Why is the Evolution (ASX:EVN) share price sinking 10% today? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Premier impresses but Kogan disappoints again
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Tuesday
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares this Thursday

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.

from The Motley Fool Australia https://ift.tt/3fZymR5

Key points

• The Qantas share price leapt 3.2% in early trading today before falling back
• The company is fronting a Fair Work Commission hearing regarding cabin crew pay today
• CEO Alan Joyce says the WA border closure is creating angst for the company

The Qantas Airways Limited (ASX: QAN) share price has fallen into the red after starting the day well with a 3.2% gain in early morning trade. The shares are currently swapping hands for $4.63, down 0.64% on yesterday’s closing price.

ASX travel shares are enduring a rollercoaster ride today, with other travel companies following the same pattern.

The Flight Centre Travel Group Ltd (ASX: FLT) share price is currently down 0.06% to $15.91, having also leapt in early trading by as much as 4% before falling back.

The Webjet Limited (ASX: WEB) share price is currently $4.78, up 0.53%. However, earlier this morning it was up by 4.4% and hit an intraday high of $4.97.

Let’s take a look at the latest news from Qantas.

What’s happening with Qantas?

The Qantas share price has been on a downward trend in January, falling by 10% year to date.

On Australia Day, lobby group Australian Tourism urged the Federal Government to reopen our international border immediately.

As reported in The Financial Review, Australian Chamber-Tourism chief executive John Hart said:

As a matter of priority, the federal government must expedite the reopening of our international borders to all fully vaccinated travellers, a move that will provide the tourism industry with confidence to resume their operation.

Qantas is dealing with a Fair Work Commission hearing today regarding cabin crew pay. The Australian reported that the commission will hear the company’s application to put flight attendants on a new work agreement. The new agreement includes a 2-year pay freeze and more flexible rostering.

Yesterday, my Foolish colleague Tony reported that Ord Minnett senior investment advisor Anthony Paterno is optimistic about Qantas.

Paterno said: “We remain positive about a domestic leisure-led recovery, a prevailing rational domestic market, and strong loyalty earnings.”

What does the Qantas CEO have to say?

WA Premier Mark McGowan recently announced he would be holding off on a planned reopening of the state’s border on 5 February.

On Tuesday, Qantas CEO Alan Joyce appeared on 6PR radio in Perth saying the WA state border closure is creating angst for the company.

Joyce said:

We are faced with not knowing when the borders will open up again. So what do we do and how do we plan for that?

This uncertainty is creating for us a lot of angst about what do we plan going forward without having a certain date. Even if we get that commitment, could something change again?

Among the flight routes facing uncertainty is a Perth to London service earmarked to commence in April. A Perth to Rome flight is also due to commence in June.

Joyce continued:

I think every business has to plan a back up when you don’t have the certainty of a date. Probably in the next days, or in the next week or so, we will have to make a call on the Perth to London (flight route) for April.

As my Foolish colleague Aaron reported recently, Qantas has reviewed its capacity settings in response to the border opening delay. Capacity will be cut by 10% from 5 February to 31 March.

Share price snapshot

The Qantas share price is flat over the past 12 months. Over the past 5 days of trading, it has shed 8.6%.

For perspective, the S&P/ASX 200 Index (ASX: XJO) is down 6.5% over the past week.

Qantas has a market capitalisation of about $8.8 billion based on its current share price.

The post Qantas (ASX:QAN) share price falls amid rollercoaster day for ASX travel shares appeared first on The Motley Fool Australia.

More reading

• 3 ASX shares to buy right now that are famous Aussie brands
• Why the Qantas (ASX:QAN) share price will be on watch today
• Top brokers name 3 ASX shares to buy next week
• Can the Qantas (ASX:QAN) share price fly higher in 2022?
• ASX travel shares are nosediving today amid border opening delays

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.

from The Motley Fool Australia https://ift.tt/3o0MfCU

Key Points

• Atomo shares accelerate on back of New Zealand approval for its antigen test
• Businesses and pharmacies allowed to supply COVID kit for sale
• Atomo has secured up to 20 million units for Australia and New Zealand

---

The Atomo Diagnostics Ltd (ASX: AT1) share price is racing higher during Thursday trade. This comes after the company announced it has received approval to expand its product into another key geographical market.

At the time of writing, the medical device company’s shares are up 17.5% to 23.5 cents apiece. However, in early trade they were up 25% at 25 cents before partially retreating.

Atomo expands geographical presence

Investors are driving up the Atomo share price after digesting the company’s latest positive news.

In a statement to the ASX, Atomo advised its COVID-19 antigen test has been approved for use in New Zealand.

The green light was given by the New Zealand Ministry of Health under the New Zealand COVID-19 public health response.

The country is currently on ‘red alert’ status after the Omicron variant continued to accelerate across key cities.

This follows one of the most significant turning points of New Zealand’s pandemic, with the government accepting the virus. The suppression strategy is a major psychological shift from the previous pathway of aiming to achieve COVID zero.

The COVID-19 antigen test can be used by professionals such as healthcare workers and government agencies or for self-test use.

New Zealand-based businesses and pharmacies are all permitted to supply, distribute, and sell the Atomo COVID-19 antigen test.

To support demand, Atomo secured up to 20 million COVID-19 rapid antigen tests for Australia and New Zealand in 2022.

The company revealed it renegotiated its supply agreement with United States manufacturer, Access Bio, last August.

Commenting on the news driving the Atomo share price higher, managing director John Kelly said:

We are excited the Atomo antigen test has received approval for use in New Zealand and we have now commenced commercial discussions related to supply of the product to the New Zealand market.

Atomo share price summary

Over the past 12 months, the Atomo share price has moved on a rollercoaster ride to post a loss of almost 20%.

It’s worth noting that despite today’s strong gains, the company’s shares are down by more than 21% in 2022.

Based on today’s price, Atomo has a market capitalisation of roughly $100.13 million, with approximately 408.69 million shares on issue.

The post Here’s why the Atomo (ASX:AT1) share price is rocketing 17% today appeared first on The Motley Fool Australia.

More reading

• Why has the Atomo Diagnostics (ASX: AT1) share price surged 50% since Christmas?

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.

from The Motley Fool Australia https://ift.tt/3ACmhuw

The Fortescue Metals Group Limited (ASX: FMG) share price is pushing higher today after a rise in the iron ore price offset a few bearish broker notes.

At the time of writing, the iron ore giant’s shares are up 0.5% to $19.60.

What are brokers saying about the Fortescue share price?

In response to the company’s second quarter update earlier this week, Citi, Credit Suisse and Goldman Sachs have released bearish notes.

For example, this morning Citi retained its sell rating and $17.00 price target. It feels the market is getting too optimistic with the Fortescue Future Industries business.

Over at Credit Suisse, its analysts downgraded Fortescue’s shares to an underperform rating with a $14.00 price target. It believes its valuation is stretched, noting that its shares trade on much higher multiples than its peers.

Finally, Goldman Sachs has retained its sell rating and lowly $13.50 price target. Based on the current Fortescue share price, this implies potential downside of over 30%.

Why is Goldman bearish?

Goldman Sachs echoed Credit Suisse’s concerns about the Fortescue share price in comparison to peers BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO).

It commented: “The stock is trading at c. 1.65x NAV vs. RIO at c. 0.9x NAV. FMG is pricing in c. US$80/t (real) long run iron ore vs. our US$67/t (real 2022 $) estimate, and trading at a significant premium to BHP & RIO, which we think is unwarranted considering the lack of diversification.”

In addition to this, like Citi, the broker has concerns over its Fortescue Future Industries business. It feels that dividends will be impacted by its aim to decarbonise the Pilbara.

Goldman said: “We think decarbonising the Pilbara could cost FMG over US$7bn and requires +US$50/t carbon or a green premia to be NPV positive. FMG has outlined that the Pilbara decarbonisation project/assets would logically sit within FFI (although ultimately under a Power Purchasing Agreement (PPA) which would still be reflected on FMG’s balance sheet). In order to fund FFI projects, we think FMG will need to reduce their dividend payout ratio from 80% to 50% from 2022 onwards.”

All in all, these brokers appear to believe the next 12 months could be tough for the Fortescue share price.

The post Broker tips Fortescue (ASX:FMG) share price to sink 30% and warns of dividend cuts appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Why Accent, BrainChip, Fortescue, and Novonix shares are sinking
• ASX 200 (ASX:XJO) midday update: Zip confirms Sezzle talks, Fortescue’s Q2 update
• Fortescue (ASX:FMG) share price lower following Q2 update
• 5 things to watch on the ASX 200 on Tuesday

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.

from The Motley Fool Australia https://ift.tt/3rXbKpQ