On Tuesday, the S&P/ASX 200 Index (ASX: XJO) was on form and pushed higher. The benchmark index rose 0.5% to 7,006 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 expected to rise

The Australian share market looks set to rise again on Wednesday following a mixed night of trade on Wall Street. According to the latest SPI futures, the ASX 200 is expected to open the day 22 points or 0.3% higher this morning. In late trade in the United States, the Dow Jones is up 0.2%, the S&P 500 is up 0.1%, and the Nasdaq is down 0.1%.

Virgin Money UK update

The Virgin Money UK (ASX: VUK) share price will be on watch today after it released its first quarter update. According to the release, the UK based bank revealed that its net interest margin (NIM) improved from 170bps to 177bps thanks to higher hedge contributions, lower cost of funds, and a higher yielding lending mix. Management now expects its full year NIM to be ~175bps.

Oil prices soften

Energy producers such as Beach Energy Ltd (ASX: BPT) and Woodside Petroleum Limited (ASX: WPL) could have a subdued day after oil prices softened. According to Bloomberg, the WTI crude oil price is down 0.1% to US$88.03 a barrel and the Brent crude oil price has fallen 0.2% to US$89.06 a barrel. Traders appear concerned that OPEC could increase production to tame prices.

Gold price rises

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) will be on watch after the gold price pushed higher. According to CNBC, the spot gold price is up 0.3% to US$1,801.40 an ounce. The gold price pushed higher after the US dollar softened.

CBA rated as a sell

The Commonwealth Bank of Australia (ASX: CBA) share price could be a sell according to analysts at Goldman Sachs. This morning its analysts have retained their sell rating and $82.57 price target on its shares. The broker believes CBA’s modest growth prospects don’t justify the multiples its shares trade on.

The post 5 things to watch on the ASX 200 on Wednesday appeared first on The Motley Fool Australia.

More reading

• What are you really getting when you buy Northern Star (ASX:NST) shares?
• Here are the top 10 ASX shares today
• Why did the ASX 200 lift on the latest RBA rate decision?
• This top ASX broker tips Coles (ASX:COL) shares for 20% upside
• ASX 200 lifts off on RBA interest rate decision

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 certainly are a lot of options for investors to choose from on the Australian share market.

But three that could be fantastic options right now are listed below. Here’s what you need to know about them:

Goodman Group (ASX: GMG)

The first ASX share to consider buying is Goodman Group. It is a leading integrated commercial and industrial property company that owns a collection of high quality assets. It also has a significant development pipeline which will add to its portfolio during the coming years. Positively, many of Goodman’s assets have exposure to structural tailwinds such as ecommerce and the digital economy. As a result, they look likely to be in demand with customers for a long time to come. This should be supportive of rental income and distribution growth over the next decade.

Macquarie is a fan of Goodman. It currently has an outperform rating and $26.63 price target on its shares.

ResMed Inc. (ASX: RMD)

Another ASX share to consider is ResMed. This sleep treatment-focused medical device company appears well-placed for growth during the 2020s thanks to its industry-leading products, sizeable market opportunity, and a major competitor product recall. ResMed also has a growing ecosystem of connected devices generating invaluable data insights. This could give it a real edge over the competition in the future and puts it in a great position to benefit from the shift to home healthcare.

This week Morgans put an add rating and $40.46 price target on the company’s shares.

Xero Limited (ASX: XRO)

A final ASX share to look at is Xero. It provides small and medium sized businesses with a cloud-based business and accounting solution. It has been growing strongly over the last few years thanks to its international expansion, acquisitions, and the transition to the cloud. Positively, all these drivers are still in place and should be supported by its burgeoning app ecosystem. If the company can monetise this ecosystem and continue its international expansion, it could support strong revenue growth over the 2020s.

Goldman Sachs is bullish. The broker currently has a buy rating and $158.00 price target on its shares.

The post 3 fantastic ASX shares to buy this month appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• Broker upgrade sends ResMed (ASX:RMD) share price charging higher
• 5 things to watch on the ASX 200 on Monday
• 3 ‘champion stocks’ for ASX investors 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. owns and has recommended Xero. The Motley Fool Australia owns and has recommended Xero. The Motley Fool Australia has recommended ResMed Inc. 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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Key points

• The Archer Materials share price soared by 12% today
• This came after the company advised of a significant technological achievement
• Archer Materials is one of only a few companies globally developing qubit processor chip technology in the semiconductor industry

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The Archer Materials Ltd (ASX: AXE) share price spiked well into the green today and finished trading 12% higher at $1.21.

Investors piled into Archer Materials following a company announcement about its mobile compatible chip technology.

Market participants crowded into Archer on a volume 340% higher than its 4-week trading average. Let’s take a look.

Archer detects quantum information using mobile chip tech

The Archer Materials share price soared today after the company advised it has reached a “major technical feat” in its 12CQ quantum chip development using mobile compatible chip technology.

Archer used the mobile chip technology to detect quantum information at room temperature and in a controlled environment.

The advancement is seen as a huge win in quantum computing circles as it paves the way to implement “complex qubit control”. This, Archer says, is “a fundamental requirement for quantum computing processor chips to operate”.

“High electron mobility transistor (HEMT) technology was used to detect and characterise the 12CQ qubit material,” the company notes. HEMT devices are used widely in integrated circuits – such as in mobile phones – and are known in the semiconductor industry for low power consumption.

As a result, the company and its associates have now used a single-chip integrated electron spin resonance (ESR) detector based on HEMT technology to “detect and characterise qubit material in a controlled atmosphere at room temperature”.

“Unoptimised” ESR chip devices were sensitive enough to detect the electron spin in a few picolitres of qubit material at room temperature. For reference, 1 picolitre is a trillionth of a litre.

From its observations, Archer and colleagues found the quantum states were sufficiently well preserved when operating in an on-chip environment.

Archer Materials also notes it is the only ASX listed company – and one of a few companies globally – developing qubit processor chip technology in the semiconductor industry.

Management commentary

Speaking on the update that fuelled the Archer Materials share price today, CEO Dr Mohammad Choucair said:

Archer’s 12CQ chip development is unique as we have the potential to enable quantum powered mobile devices. Our technology advance provides direct proof to support this exciting possibility. HEMT technology is well established and widely used in the semiconductor industry, so its use in the development of qubit control devices is consistent with the company’s strategy to make the 12CQ chip compatible with modern electronics.

Archer Materials share price snapshot

In the last 12 months, the Archer Materials share price has soared by more than 69%. It has also climbed 7.5% this year to date.

It has substantially outperformed the benchmark S&P/ASX 200 Index (ASX: XJO) in that time, as shown on the chart below.

The post Archer Materials (ASX:AXE) share price leaps 12% on ‘major technical feat’ appeared first on The Motley Fool Australia.

More reading

• Here’s why the Archer Materials (ASX:AXE) share price rocketed 32% today

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

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Key points

• The Woolworths share price was hit with news of COVID-19-induced costs in December
• The supermarket giant was also plagued by supply chain issues in January as staff were forced to self-isolate
• Some experts are predicting such dilemmas will be a key issue during the February reporting season

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It’s been a rough couple of months for Woolworths Group Ltd (ASX: WOW) shares. The supermarket giant battled COVID-19‘s Delta variant before Australia was hit with the current Omicron outbreak.

Each outbreak delivered the company its own challenges, including supply chain and cost disruptions. But that should be over by the time the company reports in February, right?

Here’s why it might be worth considering supply chain woes in the company’s first-half results.

As of Tuesday’s close, the Woolworths share price is $34.57. That was up 0.44% on the day.

What might Woolworths report this earnings season?

COVID-19 has wrought havoc on many ASX shares and Woolworths has been among them.

Early last month, the Omicron variant reportedly saw 35% of the company’s distribution centres’ staff isolating — either from contact with, or infected by, the virus.

The company put out a statement asking for calm as it worked to restock bare shelves in New South Wales and Queensland.

Now, some fund managers are expecting such supply chain issues to be a major talking point during the February reporting season.

Tribeca Investment Partners portfolio manager Jun Bei Liu was recently quoted by The Australian as saying:

The supply chain disruption is going to be severe. Companies first started talking about this issue 12 months ago, and many of us thought the disruption should be gone by now but on the contrary, it’s actually gotten worse because labour shortages are so severe.

The publication also spoke to Cyan Investment Management principal Dean Fergie who said:

Certainly the commentary going forward won’t be overly positive in light of rising interest rates and continued uncertainty, and the fact that we’re just not seeing that opened-up economy, back-to-normal behaviour yet.

The supermarket giant reinstated product limits in mid-January after COVID-19 anxieties saw customers stripping shelves once more.

Additionally, back in December, the supermarket’s stock dropped 7% after it announced it had been hit with increased costs during outbreaks of the virus.

At the time, its CEO stated disruptions to efficiency and end-to-end stock flow had brought significant expenses.

It goes without saying there will be plenty of eyes on the supermarket this month. Woolworths is expected to drop its results for the first half of financial year 2022 on 23 February.

The post Will supply chain issues continue to dog Woolworths (ASX:WOW) when it reports this month? appeared first on The Motley Fool Australia.

More reading

• Could this help Woolworths (ASX:WOW) withstand the current climate of uncertainty?
• Why is the Woolworths (ASX:WOW) dividend smaller than Coles?
• Are ASX consumer staples shares really ‘safe’ to hold in a market selloff?
• Own Woolworths (ASX:WOW) shares? Here’s why the supermarket is hitting headlines
• How did the Woolworths (ASX:WOW) share price perform 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. 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 Northern Star Resources Ltd (ASX: NST) share price has enjoyed a solid day of gains on the ASX boards today. Northern Star shares closed at $8.47 apiece, up a healthy 2.17% for this Tuesday’s trading.

Given this ASX gold miner was one of the most prominent gold shares of 2021, thanks mostly to its blockbuster merger with the old Saracen Mineral Holdings Ltd, it might be a good idea to check out this company and see what’s under the hood.

The ASX gold sector is dominated by just a few large-cap shares. Northern Star is a heavy hitter, with its current market capitalisation of $9.65 billion. But the ‘big dog’ is still Newcrest Mining Ltd (ASX: NCM), with its market cap of $17.62 billion. So let’s see how Northern Star measures up against Newcrest.

How do Northern Star shares compare to Newcrest?

As it currently stands, Northern Star is priced with a price-to-earnings (P/E) ratio of 7.36. That gives this company a trailing dividend yield of 2.26%.

In contrast, Newcrest currently commands a P/E ratio of 10.78 and a trailing market capitalisation yield of 3.47%.

Northern Star currently has 9 Australian gold projects in operation, as well as one in Alaska. The company sold 1,595 million ounces of gold across FY21, achieved with an annualised all-in sustaining cost of $1,583 per ounce.

Contrast that to Newcrest. Newcrest has a slightly more diversified portfolio of mining projects. Its flagship mine is Cadia, in New South Wales. But it also owns another mine in Western Australia, as well as Lihir in Papua New Guinea and Red Chris in Canada. Newcrest recorded production of 2.1 million ounces of gold in FY21, achieved with an all-in sustaining cost of approximately $1,289 per ounce.

So that’s how Northern Star compares to its fellow large-cap ASX gold miner Newcrest. It seems investors have decided to price Newcrest shares at a slightly higher P/E multiple to that of Northern Star. This is perhaps due to Newcrest’s lower-cost operations and higher gold output.

So if you own Northern Star shares, this is what you’re getting with your investment.

The Northern Star share price has been struggling recently. It remains down a nasty 35% over the past year. However, investors have enjoyed a pleasing 112% gain over the past 5 years.

The post What are you really getting when you buy Northern Star (ASX:NST) shares? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Own ASX gold shares? World Gold Council reports big boost in demand
• 5 things to watch on the ASX 200 on Monday
• Why AnteoTech, Newcrest, Nitro, and ResMed shares are falling
• ASX 200 (ASX:XJO) midday update: ResMed and PointsBet disappoint

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

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Key points

• The AnteoTech share price shot 15% higher today
• It follows media speculation RATs not approved by the TGA may be imported into Australia
• Yesterday, the company’s shares fell 13%

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The AnteoTech Ltd (ASX: ADO) share price surged today in a massive turnaround from its plummet yesterday.

The scientific research company’s shares finished the day at 22.5 cents, a 15.38% gain. In contrast, the S&P/ASX 200 Index (ASX: XJO) closed up 0.49% today.

Let’s take a look at what might have impacted the AnteoTech share price today.

What’s happening at AnteoTech?

AnteoTech has developed a COVID-19 rapid antigen test (RAT) for its EuGeni Reader diagnostic platform. However, the company is still awaiting approval from the Therapeutic Goods Administration for its use in Australia.

Now speculation is mounting that RATs not currently approved by the TGA could be allowed into Australia.

The Guardian reported today the federal government has “quietly agreed” to allow unapproved rapid antigen tests into the country for personal use.

AnteoTech’s share price has surged today after a 13% fall yesterday.

As my Foolish colleague Aaron reported, the company is continuing to engage with the TGA on regulatory approval for its RAT test. AnteoTech also received $1.96 million from the federal government’s Research and Development tax incentive scheme.

The regulator has asked the company to supply more clinical data. Chief executive officer Derek Thomson said:

The TGA has advised us we must add prospective clinical data to support our test performance claims generated using stored samples to align our technical data with the [Medical Device Coordination Group] MDCG guidelines.

We are currently collecting this data via trials in Australia and Europe, which will also provide the required data set for entry to the EU Common List and [In Vitro Diagnostic Regulation] IVDR registration.

The company’s application for TGA approval was submitted in September. The Australian reported that although the RATS are not approved for use in Australia, they are made in Eight Miles Plains in Queensland and shipped offshore.

Meanwhile, federal opposition leader Anthony Albanese pledged on Sunday to prioritise locally-manufactured RAT tests if elected, The Canberra Times reported.

Share price snapshot

The AnteoTech share price has skyrocketed 125% in the past year. However, it’s dropped around 26% in the past month and is down 39% in the past week alone.

In contrast, the broader ASX 200 Index has returned about 5% in the past 52 weeks.

AnteoTech has a market capitalisation of $444 million based on its current share price.

The post AnteoTech (ASX:AD) share price surges 15% as COVID-19 RAT race continues appeared first on The Motley Fool Australia.

More reading

• Why did the AnteoTech (ASX:ADO) share price tumble 13% on Monday
• Why Ansell, AnteoTech, Dubber, and NIB shares are dropping
• Why AnteoTech, Newcrest, Nitro, and ResMed shares are falling
• Why the AnteoTech (ASX:ADO) share price is plummeting 23% on Friday
• Why Anteotech, Appen, Boral, and Kogan shares are rising today

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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Key points

• ASX 200 tech shares were among the top performing stocks on the index today
• It comes as Block officially takes over Afterpay and the Nasdaq Index dodged recording its worst January ever
• Among the leaders were the share prices of Block, Appen, Zip, and Brainchip

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The S&P/ASX 200 Index (ASX: XJO) spent the day in the green, and its best-performing sector was way out in front of its competition.

The S&P/ASX 200 Info Tech Index (ASX: XIJ) led the market, recording a 2.4% gain by Tuesday’s close.

For context, the ASX 200 ended 0.49% higher while the All Ordinaries Index (ASX: XAO) gained 0.61%.

Let’s take a look at which shares rallied to boost the tech sector on Tuesday.

Why did ASX 200 tech shares outperform today?

The ASX 200 was led by technology stocks today as some market favourites surged higher.

The Appen Ltd (ASX: APX) share price was at the front of the pack with a gain of 7.9%.

The Block Inc CDI (ASX: SQ2) share price was also among the best performing ASX 200 stocks today, having surged 6%. That followed its Nasdaq listing’s 10.79% increase in Monday’s session. It was also potentially bolstered by its official unification with Afterpay today.

Meanwhile, the Zip Co Ltd (ASX: Z1P) share price lifted 4.7% on the same day its former rival Afterpay was removed from the index entirely.

Other ASX 200 winners included Codan Limited (ASX: CDA), Life360 Inc (ASX: 360), and Altium Limited (ASX: ALU). They gained 4.1%, 4.2%, and 3.5% respectively.

Meanwhile, among the leaders of the All Ords were Brainchip Holdings Ltd (ASX: BRN), up 16.1%, and ELMO Software Ltd (ASX: ELO), which rose 7.5%. The latter’s stock was boosted by an update on its half-year performance.

The tech sector was likely bolstered by the recent performance of the Nasdaq Composite Index (NASDAQ: .IXIC).

Against plenty of odds, it avoided recording its worst January ever by gaining 6.6% over the last 2 sessions of the month. It rose 3.1% on Friday and gained 3.4% yesterday.

That left it 8.9% lower than it was at the end of December.

The post Why did these tech shares lead the ASX 200 today? appeared first on The Motley Fool Australia.

More reading

• Afterpay takes a bow, officially uniting with Block (ASX:SQ2) shares on the ASX
• How much value would buying Sezzle add to the Zip (ASX:Z1P) share price?
• These are the 10 most shorted ASX shares
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• 2 excellent ASX tech shares for investors in February

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 Altium, Appen Ltd, Block, Inc., Elmo Software, Life360, Inc., and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Appen Ltd and Elmo Software. 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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Key points

• Corporate Travel Management shares could be very cheap according to Morgans
• Its analysts have named the company as their top pick in the travel sector
• The broker’s price target implies 36% upside for investors

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If you’re interested in gaining exposure to the travel sector, then Corporate Travel Management Ltd (ASX: CTD) shares could be worth considering.

That’s the view of the team at Morgans, which sees significant value in the corporate travel specialist’s shares.

What is Morgans saying about Corporate Travel Management?

According to the note, the broker is a fan of its proposed acquisition of the corporate business of Helloworld Travel Ltd (ASX: HLO).

It commented: “Corporate Travel Management recently announced its second major acquisition during COVID with Helloworld’s corporate travel business in ANZ for A$175m. The acquisition price appears reasonable, it meets CTD’s strict investment criteria, there are material synergies on offer, it is nicely EPS accretive, and significantly scales its ANZ business while further diversifying its client base and service offering.”

And while it acknowledges that the Omicron variant of COVID-19 has pushed back its earnings recovery, it is confident that demand will recover when it is safe to travel again.

Its analysts explained: “Some of CTD’s 2Q22 and 3Q22 will be impacted by the Omicron variant which has slowed travel demand globally. When trading slows, this impacts CTD’s margins given it has rehired staff in anticipation of the recovery. Most in the industry expect that travel demand will materially improve from March. We have consequently revised our forecasts. We continue to assume that earnings recover fully in FY24.”

Are Corporate Travel Management shares good value?

The broker notes that Corporate Travel Management shares are its key pick in the travel sector and could be very cheap at current levels.

Morgans has an add rating and $29.00 price target on them. Based on the current Corporate Travel Management share price of $21.31, this implies potential upside of 36% for investors over the next 12 months.

The post Top broker says Corporate Travel Management (ASX:CTD) shares can rise 36% appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• Why Corporate Travel Management, Goodman, Lendlease, and Uniti shares are rising today
• Leading brokers name 3 ASX shares to buy today
• 5 best ASX 200 travel shares of 2021
• 2 ASX travel shares that flew higher than Flight Centre (ASX:FLT) in 2021

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. owns and has recommended Helloworld Limited. The Motley Fool Australia owns and has recommended Helloworld Limited. 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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Today, the S&P/ASX 200 Index (ASX: XJO) rallied off the back of a strong showing on Wall Street last night. On top of this, the Reserve Bank of Australia decided to keep interest rates on hold. At the end of the session, the benchmark index finished 0.49% higher at 7,006 points.

It was a good day for investors on Tuesday with nearly all sectors finishing in the green. However, the materials sector broke the trend with its 1.2% decline today. Fortunately, the ground was more than made up by other performing sectors such as tech and utilities.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Pendal Group Ltd (ASX: PDL) was the biggest gainer today. Shares in the global investment company jumped 7.28% despite there being no new announcements from the company. Find out more about Pendal Group here.

The next biggest gaining ASX share today was Judo Capital Holdings Ltd (ASX: JDO). The small and medium-sized focused bank pushed 6.56% higher, once again with no news being published by the company. Uncover the latest Judo Capital Holdings details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Pendal Group Ltd (ASX: PDL)	$5.16	7.28%
Judo Capital Holdings Ltd (ASX: JDO)	$2.03	6.56%
Imugene Ltd (ASX: IMU)	$0.33	6.45%
AVZ Minerals Ltd (ASX: AVZ)	$0.745	6.43%
Boral Ltd (ASX: BLD)	$6.21	5.79%
AMP Ltd (ASX: AMP)	$0.92	5.14%
Dicker Data Ltd (ASX: DDR)	$13.36	5.11%
Flight Centre Travel Group Ltd (ASX: FLT)	$17.34	4.84%
Zip Co Ltd (ASX: Z1P)	$3.31	4.75%
Magellan Financial Group Ltd (ASX: MFG)	$19.46	4.57%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• Why did the ASX 200 lift on the latest RBA rate decision?
• This top ASX broker tips Coles (ASX:COL) shares for 20% upside
• ASX 200 lifts off on RBA interest rate decision
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• ASX 200 shares offer 12% upside after sell-off: JP Morgan

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Dicker Data Limited, Judo Capital Holdings Limited, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Flight Centre Travel 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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Key points

• The Ansell share price fell again today after sinking 14% yesterday
• Macquarie upgraded the Ansell share price to “neutral” from “underperform”
• But the modest upside to Macquarie’s price target didn’t seem to excite investors

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The Ansell Limited (ASX: ANN) share price struggled for a second successive day on Tuesday, slipping 0.34% lower by the close of trading.

The personal protective equipment maker’s shares were in the red for much of the day save for a couple of spikes before closing at $26.67 apiece. For comparison, the S&P/ASX 200 Index (ASX: XJO) finished up 0.49%.

Today’s fall follows a 14% crash in the Ansell share price yesterday when the company released a disappointing trading update.

It also comes despite a top broker upgrading the company’s shares.

Ansell share price struggles despite upgrade

The big sell-off yesterday prompted Macquarie Group Ltd (ASX: MQG) to lift its recommendation on Ansell. But this doesn’t appear to have been enough to motivate bargain hunters to jump in.

This is likely because Macquarie upgraded the Ansell share price to “neutral” from “underperform”. The broker doesn’t think the shares have fallen far enough to be considered cheap.

Big earnings miss

While Ansell’s 1H FY22 revenue was largely in line with Macquarie’s expectations, earnings were nearly 20% under forecasts.

“This reflected impacts due to COVID-19 (reduced labour availability), supply chain constraints (delivery delays, higher freight costs), and weaker demand in Exam/Single Use (customer de-stocking),” said Macquarie.

To make matters worse, Ansell is unable to pass on the higher costs – at least not yet. This resulted in the earnings before interest and tax (EBIT) margin falling to 11% in the half, or 6.5 percentage points below 1H FY21.

Gloves come off for Ansell

What is also hurting Ansell is that its facility in Malaysia was forced to shut due to rising COVID cases. Meanwhile, US authorities have banned the import of disposable gloves from YTY Industry Holdings, a major supplier of gloves for Ansell.

“Combined with an expectation of a continuation of operational challenges/supply chain disruption into 2H22 and preliminary 1H22 results, FY22 guidance has been revised to US125-145 cents, with the mid-point ~27% below the mid-point of previous guidance (US175-195 cents) and ~20% below FactSet consensus,” added Macquarie.

What is the Ansell share price worth?

But there is a silver lining. The significant drop in the Ansell share price limits the downside risks to the investment.

“While acknowledging earnings uncertainty for 2H22 and into FY23, we see our revised forecasts as capturing downside risk within Exam/Single Use as well as broader COVID-19/supply chain impacts,” explained Macquarie.

The broker’s 12-month price target on Ansell is $28.30 a share. This implies an upside of 6%, based on today’s closing price.

Ansell shares are down around 30% over the past 12 months and 15% this year to date.

The post Ansell (ASX:ANN) share price falls again amid broker upgrade appeared first on The Motley Fool Australia.

More reading

• How will ASX shares perform this earnings season? Experts explain what to look for
• Why Ansell, AnteoTech, Dubber, and NIB shares are dropping
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• Ansell (ASX:ANN) share price crashes 20% as guidance slashed
• 2 ASX shares that could be buys for both growth and dividends

Motley Fool contributor Brendon Lau owns Ansell Ltd. and Macquarie Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ansell Ltd. and Macquarie 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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