“Meaningful and sustainable change has been made to the way the bank operates” according to National Australia Bank Ltd. (ASX: NAB) chair Phillip Chronican in his address to shareholders today.

This comes as the result of a series of structural reforms made in consequence to the bank’s internal review into governance, accountability and culture in 2018, and following the Financial Services Royal Commission, Chronican says.

The address also confirmed the bank is changing the way it pays its “colleagues”, shifting 12,000 bankers onto “100% fixed pay”, whilst holding senior leaders accountable by keeping a sum of their pay at risk.

In a lengthy dialogue, NAB’s chair and CEO, Ross McEwan, gave an extensive overview of the bank’s cultural and structural shifts that are ongoing, and what to expect for the future. Here are some of the key takeouts.

Scaling up, sustainably?

NAB’s acquisition of ‘neobank’ 86 400, and the proposed acquisition of Citigroup’s Australian consumer business will enable it to quickly build scale up its digital and consumer offerings, the bank says.

Not only that, but NAB’s Strategic Net Promoter Score increased four points to -7 in FY21. This is equal first amongst its peers and marks a 10-point increase from -17 in 2019, the release notes.

NAB also noted that future dividends will be guided by a target payout ratio in the range of 65% to 75% of
sustainable cash earnings, subject to circumstances at the time.

Shareholders enjoyed a cash Return on Equity (ROE) of 10.7% in FY21, a 2.4 percentage point gain over the last year. However, this is still behind its pre-pandemic figures.

Its capital ratio at the end of September 2021 was 13%, and thus above the target range of 10.75% to 11.25%. As such, NAB’s “preference” is to reduce its share count, so it can deliver “better earnings and dividends per share over the long term”.

This is already underway through its $2.5 billion share buy-back, which started in August and is approximately 40% complete already.

NAB also says that it is winding down its financing of fossil fuels over time, while at the same time growing exposure to renewable energy finance. For instance, it notes that it is the only major Australian bank so far to “have set an upper limit on oil and gas extraction and production exposures, and to put restrictions on lending to greenfield gas projects”.

Specifically, Chronican noted that NAB “will not directly finance any greenfield oil extraction project or onboard new customers predominantly focused on oil extraction [nor] we will not lend to new thermal coal mining projects or take on new thermal coal mining customers”.

Target exposures to thermal coal mining are set to be effectively zero by 2030, aside from residual performance guarantees to ensure site rehabilitation, according to the release.

For its own actions, NAB is also “well progressed in [its] target to source 100% of [its] own electricity from renewable sources by 2025”.

Management commentary

Speaking on the announcement, Ross McEwan, NAB’s Managing Director & CEO said:

About half of our 1.3 billion dollar investment spend in the 2022 financial year will be discretionary and will be directed to key strategic initiatives such as further simplification and automation of our systems, as well as enhanced use of data and analytics, to help customers and our bankers. Partnerships in Australia and globally are helping us innovate faster and develop world-class products and services for our customers. We are working with international non-competing banks, big tech and fintech to access global scale and ideas, looking beyond domestic peers as a competitive benchmark. We are investing heavily to protect customers, the bank, and the broader financial system from the growing threat of cyber security, fraud and financial crime.

NAB shares have gained 22% in the last 12 months after rallying around 28% this year to date.

The post Sustainable change? NAB (ASX:NAB) share price spikes after AGM today appeared first on The Motley Fool Australia.

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The author has no positions 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 buy now, pay later (BNPL) shares including Afterpay Ltd (ASX: APT) and Zip Co Ltd (ASX: Z1P) are sinking this morning after US authorities launched an investigation into the sector.

The United States-based Consumer Financial Protection Bureau (CFPB) issued orders to 5 BNPL companies.

The bureau is undertaking the probe to see if BNPL players need to be better regulated and if US consumers are adequately protected.

At the time of writing, the Afterpay share price has plummeted 7.44% to $82.84, while Zip shares are trading 6.97% lower at $4.14.

ASX BNPL shares caught up in consumer probe

The 5 companies targeted in the probe include Afterpay, Zip, Affirm Holdings Inc (NASDAQ: AFRM), Paypal Holdings Inc (NASDAQ: PYPL) and Swedish fintech Klarna.

US investors responded swiftly to the news with Affirm shares crashing by 10.6%, while the Paypay share price lost 1%. It is likely that Paypay is better insulated as BNPL is not its main business.

In its release, the CFPB highlighted concerns over “accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology”.

CFPB director Rohit Chopra said:

Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too.

We have ordered Affirm, Afterpay, Klarna, PayPal, and Zip to submit information so that we can report to the public about industry practices and risks.

Areas of concern

The watchdog is specifically concerned about three areas, including accumulation of debt. Unlike layaway (called layby here) that are typically used for the occasional big purchases, it believes BNPL can quickly become a regulator habit for consumers making smaller but more frequent purchases.

CFPB is concerned that BNPL users can quickly lose track of payments and their growing debt. Consumers can be hit with big fees for missing payments.

Further, as BNPL “credit” is relatively easily given, consumers could end up spending more than they intended.

Are better regulations needed internationally?

The other issue of concern is regulatory arbitrage where BNPL companies may not be following consumer protection laws. For instance, some BNPL products do not provide certain regulatory disclosures.

Also, BNPL applicants do not get the same protections compared to if they were applying for a credit card, even though the application process may look similar.

Afterpay and Zip shares facing more volatility

Finally, there’s the issue of data harvesting. BNPL operators have access to valuable customer data, such as payment histories.

CFPB wants to understand how BNPL companies are using the data. Some companies may be using it for behavioural targeting and data monetisation. This is similar to criticisms levelled against Amazon.com, Inc (NASDAQ: AMZN).

Having said that, the US probe shouldn’t come as too big a surprise to investors. Afterpay, Zip and other BNPL players in Australia have also been subject to similar investigations.

CFPB said it was working with its international partners in Australia, Sweden, Germany and the United Kingdom.

The post ASX BNPL shares tumble today amid US probe appeared first on The Motley Fool Australia.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Brendon Lau owns AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Amazon and PayPal Holdings. 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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Dusk Group Ltd (ASX: DSK) shares are surging today after the company announced an acquisition.

The Dusk share price is currently trading at $3.09, up 5.8% from yesterday’s closing price of $2.92.

Shortly after the market opened this morning, the share price soared to $3.20, up 9.6%.

Dusk is an Australian retailer of home fragrance products with a significant in-store and online presence.

What did Dusk announce today?

Dusk informed ASX investors that it will take over Eroma Group for $28 million.

Eroma is touted as Australia’s leading supplier of candle-making inputs, including fragrance oils, waxes, packaging, and candle-making kits.

The investment will significantly boost Dusk’s online presence. In the year to date, 65% of Eroma’s sales have been online. In contrast, Dusk recorded just 8% of sales online in the same time frame.

The acquisition will involve a $15 million cash payment and a $13 million share placement.

These shares will be issued to all Eroma shareholders including CEO Shane McGrath, who has a 55% stake in the company.

Eroma will continue to trade as a freestanding company within the Dusk Group.

Management comment

Commenting on the acquisition, Dusk managing director and CEO Peter King said:

The acquisition enlarges and diversifies our position in the home fragrance market. It substantially increases the scale of our online operations.

The transaction affords us the opportunity to more fully vertically integrate our sourcing and distribution operations and gives us scope to share certain group resources to enhance performance of both businesses in our group.

Eroma will continue to be led by a strong and focussed management team, and we are excited to welcome them to the dusk family.

Dusk share price snapshot

The Dusk share price has skyrocketed by 65% in the past 12 months. It has zoomed up by about 42% in the year to date.

Dusk commands a market capitalisation of roughly $196 million based on today’s share price.

The post Dusk share price (ASX:DSK) surges 9% on $28 million acquisition 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 recommended Dusk 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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The Corporate Travel Management Ltd (ASX: CTD) share price has returned from its trading halt and is falling.

At the time of writing, the corporate travel specialist’s shares are down 2.5% to $21.72.

Why is the Corporate Travel Management share price falling?

Investors have been selling down the Corporate Travel Management share price after it announced the completion of the institutional component of its capital raising.

According to the release, the company raised $75 million via an institutional placement at $21.00 per new share. This represents a 5.8% discount to the Corporate Travel Management share price prior to the trading halt.

Corporate Travel Management will now push on with its $25 million share purchase plan. These funds will be raised at the lower of the placement price or the five-day volume weighted average price on its closing date.

Why is the company raising $100 million?

The proceeds from the capital raising will be used to acquire the Australian and New Zealand corporate and entertainment travel businesses of Helloworld Travel Limited (ASX: HLO) for $175 million.

This comprises $100 million in cash and $75 million in shares. The latter will be escrowed for 12 months from the date of completion.

Management believes the acquisition will be highly complementary and add industry verticals which are expected to perform strongly as the recovery from COVID-19 continues.

It also expects the deal to be approximately 3% earnings per share accretive excluding synergies and 7% including full run-rate synergies.

The response

A number of brokers responded positively to the deal. One of those was Macquarie Group Ltd (ASX: MQG). In response, the broker upgraded the company’s shares to an outperform rating with an improved price target of $24.70.

Another was UBS. Yesterday its analysts retained their buy rating and lifted their price target to $27.75.

The post Corporate Travel Management (ASX:CTD) share price drops after raising $75m 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 recommended Corporate Travel Management 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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The Healius Ltd (ASX: HLS) share price is on course to end the week in the red.

At the time of writing, the healthcare company’s shares are down 2% to $5.17.

Why is the Healius share price falling?

Investors have been selling down the Healius share price today after it announced an agreement to acquire the entire issued capital of Agilex. It is one of Australia’s leading bioanalytical laboratories.

According to the release, the transaction values Agilex at an enterprise value of $301.3 million.

The release explains that Agilex has a high margin and capital-light business model with immediate and long-term growth potential. This will be enhanced by Healius’ experience operating laboratory businesses and by increased financial capacity to support the delivery of the growth strategy.

Management sees Agilex as a long-term strategic acquisition that provides the company with a platform for growth into the global clinical trials sector and a structurally attractive, higher growth, higher margin adjacency.

Agilex is expected to generate revenue and EBITDA in the range of $36-40 million and $14-16 million, respectively, in calendar year 2022, with strong future earnings growth anticipated. Judging by the Healius share price reaction, investors may believe this makes the transaction value a little on the rich side.

Nevertheless, the acquisition is expected to deliver low single digit earnings per share accretion in the first full year of ownership.

Healius’ Managing Director and CEO, Dr Malcolm Parmenter, said: “The acquisition of Agilex is an exciting opportunity for Healius. Agilex has a talented scientific team with state-of-the-art laboratories and culturally complements Healius. It’s a logical entry point for Healius into the attractive global bioanalytical laboratory services market, and one in which Australia and Agilex, in particular, is wellplaced to service.”

“We see Agilex as a long-term strategic acquisition that adds a global orientation to the Healius network. A business that is growing fast, in a fast-growing market. Agilex is well placed to realise a material step-change in earnings growth over the near to medium-term,” he added.

The post Healius (ASX:HLS) share price falls despite $300m acquisition 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 Bitcoin (CRYPTO: BTC) price dipped again, down 2% in the past 24 hours.

It’s currently trading for US$48,175 (AU$66,908).

While the crypto remains up 63% year-to-date, it’s now down 30% from its 10 November all-time high of US$68,789. At the time it had a market cap of some US$1.2 trillion.

At the current Bitcoin price, the market cap has fallen to US$905 billion.

With the world’s first digital token now in retreat for 5 weeks running, crypto investors are wondering what’s next.

Could the Bitcoin price be set for a bounce?

One thing analysts look at when forecasting the next moves for the Bitcoin price is the 200-day moving average. It’s a technique used for forecasting share price movements as well.

If an asset falls below its 200-day moving average it’s seen as a bearish signal. For Bitcoin, that currently stands at around US$46,000.

Damanick Dantes, a crypto market analyst at CoinDesk, notes that the Bitcoin price (in US dollars) “continues to hold support above $46,000″.

As to what crypto investors can expect next, Dantes forecasts:

Price momentum is starting to turn positive on the daily chart for the first time since October, which preceded a price recovery. This time, however, the uptrend is slowing on the weekly chart, which means upside could be limited beyond $55,000 to $60,000.

A note of caution

Alex Kuptsikevich, analyst at FxPro, sounds a more cautious note on the outlook for the Bitcoin price and the wider crypto market.

He points to tightening monetary policy by the US Federal Reserve and other leading central banks as likely to impact demand for high-risk assets like Bitcoin.

According to Kuptsikevich (quoted by CoinDesk):

Long-term investors should not lose sight of the natural tightening of financial conditions because of these moves, which will slowly but persistently reduce demand for risky assets. The main risk for the crypto market is that we have seen a monetary regime switch in the last couple of months, which promises to take some of the demand for crypto away.

The post Bitcoin (CRYPTO:BTC) price dips again. Could it be set for a bounce? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and recommends Bitcoin. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened 

The world of cryptocurrencies was on fire this morning, and Solana (CRYPTO: SOL) was leading the way. Solana jumped as much as 17.5% in trading over the last 24 hours and as of 11:30 a.m. ET is up 15.1% on the day. 

So what 

The biggest news to hit Solana in the last day is word of a $150 million gaming fund from Forte, Griffin Gaming Partners, and Solana Ventures. As the companies backing cryptocurrencies aim to build utility, using games has become a popular growth strategy, and this is a very large fund to build games for Solana. This follows a $100 million fund by Solana Ventures, FTX, and Lightspeed Venture Partners in November to invest in play-to-earn games. 

Another big announcement came from former first lady Melania Trump, who is launching an NFT on Solana. People can buy a Trump NFT for 1 SOL or $187 on a credit card through MoonPay, and funds will support the Be Best initiative. In a statement, Trump said she hopes to release more tokens in 2022.

Now what 

The theme here is that Solana is becoming a go-to cryptocurrency for utility projects and low-cost NFT sales. Selling a sub-$200 NFT on a blockchain like Ethereum is too expensive, and it’s a race to build lower-cost alternatives. Solana appears to be winning that race against other cryptocurrencies, which is why its value is up sharply today. 

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

The post Why Solana jumped 17% today appeared first on The Motley Fool Australia.

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Travis Hoium owns Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Ethereum. 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.

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

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So far, 2021 has been brutal for the Insurance Australia Group Ltd (ASX: IAG) share price.

The company has battled against paying business insurance claims for COVID-19 disruptions and intense storm activity.

Additionally, IAG’s subsidiary and operator of NRMA Insurance is facing a lawsuit brought about by the Australian Securities and Investments Commission (ASIC), while the company is the subject of a shareholder class action.

As of yesterday’s close, the IAG share price is $4.25, 9.96% lower than it was at the start of this year.

For context, the S&P/ASX 200 Index (ASX: XJO) has gained 9.15% year to date.

But does the future look greener for the insurance company’s stock? Here’s what experts are saying.

What might 2022 bring for the IAG share price?

For bullish investors, experts’ outlook for the IAG share price in 2022 could be worrying.

Morgans slapped the stock with an ‘underweight’ rating and a $3.75 price target last week. However, earlier this month, the broker weighed in on the company’s growth strategy.

IAG recently outlined its plan to generate a cash return on equity of 12% to 13%, driven by customer growth. It’s also aiming for a $250 million profit improvement for its Intermediated Insurance Australia (IIA) business and $400 million of value creation for its Direct Insurance Australia (DIA) division.

Morgans analyst, Richard Coles commented on the company’s plan, saying:

IAG’s overall strategy sounds logical, although history shows it is one thing improving margins in IIA and another thing being able to maintain them. We also retain some skepticism on customer growth targets given IAG has been losing personal lines market share in recent times.

UBS is also feeling bearish.

The broker recently dropped its price target for IAG shares to $4.20 – 21% lower than its previous prediction, made in October – popping a ‘sell’ rating on the stock.

UBS is reportedly worried about ASIC’s lawsuit, which came about due to NRMA overcharging some customers. It’s also concerned about a “substantial ‘claims catch up’” that could hit the company as COVID-19 restrictions ease.

All in all, the two brokers predict the IAG share price currently has a downside of between 1% and 11%.

However, as Livewire reports, Perpetual Investment Management, alongside its portfolio manager and head of equities, Paul Skamvougeras has picked the stock as a winner for 2022.  

The fund believes next year will see fewer major weather events, leading to higher margins for the insurance group.

The post What are experts saying to expect for the IAG (ASX:IAG) share price in 2022? appeared first on The Motley Fool Australia.

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

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Shares in Westpac Banking Corp (ASX: WBC) finished up the trading day on Thursday less than 1% in the red at $20.96.

It’s been a choppy week for the bank following its AGM on Wednesday, considering that shareholders gave the board its first strike by rejecting its remuneration proposal.

Yet, in amidst chairman John McFarlane apologising “unreservedly on behalf of the board”, plus the bank’s $8 billion cost reduction target, Westpac shares have held up well this week and are less than 1% down over the past 5 trading days at the time of writing.

The team at Macquarie have now weighed in on the investment debate and offered some insights into the outlook for the bank’s investors. Could Westpac be a buy right now? Let’s take a look and see.

Is Westpac a buy?

Analysts at Macquarie reckon that Westpac is set to lift its performance in FY22 and that revenue growth could be improved next year.

The firm acknowledges Westpac’s net interest margin (NIM) headwinds that have resulted in a number of analyst downgrades and downward revisions on its earnings outlook.

However, Macquarie reckons this period of compressed margins and lumpy revenues could be finished for Westpac, and believes its home loan division will begin to match its peers from FY22.

With the spread between new home loans to existing loans narrowing for Westpac, this could set the stage for an improved growth outlook at the top for Australia’s oldest bank, it says.

In turn these improving fundamentals could bode in well for Westpac’s share price, according to Macquarie. The firm notes that “while we recognise other challenges, including persistently unrealistic consensus expectations, we see scope for Westpac to unwind some of its recent underperformance”.

Despite its positive tone, the firm remains neutral on its stance and values the bank at $25.50 per share, implying around 22% upside potential at the time of writing.

What are other brokers saying?

Meanwhile, the team at Bell Potter also hold a neutral sentiment on the outlook of the Westpac share price. In a recent note, the broker – like many of its colleagues – reckons Westpac’s ambitious cost reduction of $5 billion by 2024 is a mighty task.

Following the bank’s AGM, Bell Potter says Westpac might have some room to grow in its transformation before it books ongoing revenue growth.

It says that “while profit increased mainly due to an easing off in Covid-19 issues, there is still a lot of work to be done in driving change”.

Bell Potter goes on to note the regulatory challenges Westpac has faced this year alongside its time spent on remediating customer issues and risk budgeting, alongside a shift in strategy.

As such the broker rates Westpac neutral and assigns a $22 price target on its share price, a step in behind Macquarie’s valuation.

In the past 12 months the Westpac share price has gained just 4% after climbing more than 8% this year to date. Over the past month, shares have reversed course and are down 8% in that time.

The post Is it a buy? Here’s what Macquarie is saying about the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.

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The author has no positions 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 Westpac Banking Corporation. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

Shares of Tesla (NASDAQ: TSLA) tumbled on Thursday, declining more than 4% as of 12:40 p.m. ET. The stock is likely down because of knee-jerk selling in many growth stocks on Thursday, following the Federal Reserve’s commentary yesterday about its expectations to raise interest rates next year.

The growth stock’s decline extends a bearish trend for the electric car maker’s shares recently. Share have fallen a total of 15% in December alone.

So what

Many growth stocks were trading lower on Thursday. This is partly evidenced by the tech-heavy Nasdaq Composite‘s near-2% decline as of this writing. The index has more growth stocks in it than the S&P 500, which was down a lesser 0.5% as of this writing.

While Tesla stock has been battered and bruised in recent trading days, the stock is still up a market-beating 32% year to date. And that’s on top of a nearly 700% gain in 2020. Shares, therefore, may simply be taking a breather after an epic run-up over the last two years.

Now what

Looking ahead, investors will be looking for Tesla to report strong vehicle deliveries for its fourth quarter. The company typically reports fourth-quarter deliveries within the first three calendar days of each year. So, investors can expect an update on Tesla’s quarterly deliveries by Jan. 3, 2022. Analysts are largely expecting record deliveries for the period.

Tesla will need to continue growing its vehicle deliveries rapidly in order to justify its high valuation. As of this writing, the stock trades at about 300 times earnings. Though earnings have notably been growing very rapidly. 

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

The post Why Tesla stock is down sharply today appeared first on The Motley Fool Australia.

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Daniel Sparks 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.

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

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