Investors might not be used to the Australian Ethical Investment Limited (ASX: AEF) share price having a rough time. After all, this is an ASX 200 share that has given investors close to a 150% return year to date in 2021 alone. But the past week has not been kind to this market darling.

Australian Ethical shares have lost a nasty 17% since just last Tuesday’s market close. That’s including the 4.12% drop to $12.10 a share that we see just this Tuesday so far. So what’s gone so wrong for Australian Ethical over the past week or so?

Well, the primary driver seemed to be the earnings guidance update the company released on 1 December. Australian Ethical reported a 9% increase in funds under management (FUM) against 30 June to $6.64 billion as of 31 October. It also informed investors that it is expecting underlying profit before tax to be between $5 million and $5.5 million for the half year ending 31 December. That’s an 8% or so increase on its half year to 31 December 2020.

It seems investors were expecting a little more from the company. That’s going off the fact that the Australian Ethical share price has lost just over 17% since this update was released. There have been no other major news or announcements out of the company since.

Digging into the Australian Ethical share price’s week of woe

Another concern could be Australian Ethical’s arguably lofty valuation. Even after the past week’s falls, Australian Ethical shares, as of today, still trade on a price-to-earnings (P/E) ratio of 138.9.

Here’s how an article in the Australian Financial Review (AFR) last week described this valuation:

The green mania has helped AEF’s valuation rocket 1465 per cent over the past five years to $1.57 billion. In other words, it’s a fund manager that trades on around 141 times profits.

To put that in context, if emerging markets were still an investment mania and Asia-focused [Platinum Asset Management Ltd (ASX: PTM)] traded on 141 times last year’s profit of $163.3 million, shares would sell for $39.22 on a $23 billion valuation today. In reality, they closed at $2.65 on Wednesday [last week] on a market cap of $1.55 billion…

So we might have an answer for Australian Ethical’s nasty week if we take all of this into account. Even so, investors perhaps can’t complain too loudly with a year to date gain of nearly 150% still under the belt.

At it current share price, Australian Ethical has a market capitalisation of $1.37 billion. Its trailing dividend yield is sitting at 0.57%.

The post Why has the Australian Ethical (ASX:AEF) share price tanked 17% in a week? appeared first on The Motley Fool Australia.

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• Top broker tips 30% upside for the Brickworks (ASX:BKW) share price. Here’s why
• 5 things to watch on the ASX 200 on Tuesday
• Can NAB (ASX:NAB) shares ever close in on CBA’s market cap?

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. owns shares of and has recommended Australian Ethical Investment Ltd. The Motley Fool Australia has recommended Australian Ethical Investment Ltd. 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 printed circuit board developer Altium Limited (ASX: ALU) are inching lower this afternoon and now trade less than 1% in the red at $41.01.

Altium shareholders will rejoice in the company’s performance over the past 3 months. Shares bounced off a low of $31.18 in late September and have been on the upward trajectory ever since, and are now trading near all time highs.

Has Altium passed its use-by date? Let’s take a closer look at what the experts think.

Does the Altium share price have the legs to keep rising?

Investors responded positively to Altium’s AGM last month, sending the stock over 5% higher on the day of the release.

The gain pushed out an extended bull-run for the company, which has climbed more than 31.5% in the last 3 months. In that period, it has traded as high as $43.18 – a record high for its share price.

Altium’s recent trading update has the team at investment bank Citi hot on its heels. The firm reckons that Altium is well on track to beat the consensus forecast on its annual revenue.

In a recent note to clients, Citi points out that Altium is tracking above the lower end of sales guidance of $209 million–$217 million and EBITDA margins of 34%–36%.

For reference, the consensus or average of analyst estimates on Altium’s revenue is currently at $212 million, Citi says.

It also acknowledges that Altium grew its cloud-platform user base by 35% since August, which it reckons is a positive catalyst for the share price, and consequently rates it as a buy.

Fellow investment bank Jefferies is on the same page as Citi when it comes to its assessment of Altium.

The firm reckons that Altium has potential to continuously capture market share of the enterprise market.

It too thinks Altium is a buy after re-rating the stock in a recent note to clients. In its reasoning, the firm says that it has spoken to an unnamed industry expert, as well as that Altium is cheaper and easier to use than products from its competitors.

Not only that, Altium’s cloud-service adoption and integration capacity is also attractive to Jefferies, alongside its recent trading update, further affirming the broker’s buy rating.

Jefferies values Altium at $48.83 after raising its price target by 66% in a recent model update.

Altium share price summary

In the last 12 months, the Altium share price has gained almost 13% after rallying more than 20% this year to date.

It has held gains over the past 3 months and is now up almost 2.5% in the previous month, having just come off its all time highs in early December.

The post The Altium (ASX:ALU) share price is trading near all time highs. These brokers reckon there is more to come appeared first on The Motley Fool Australia.

More reading

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• Is Altium (ASX:ALU) still a takeover target at the current share price?
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• 2 strong ASX tech shares growing rapidly

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Altium. 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 Imugene Limited (ASX: IMU) share price is up today on the back of a positive cancer treatment update.

Shares in the biopharma company are currently trading at 50 cents, up 5.26%.

Let’s take a look at what’s going on at Imugene.

What did the company announce?

The Imugene share price is climbing today after the company announced an update regarding a phase 1 clinical trial.

Imugene is developing therapies that aim to use the body’s immune system to treat cancer tumours.

Today, the company announced a second patient with triple-negative breast cancer (TNBC) has been given a dose of CHECKvacc.

CHECKvacc is an oncolytic virotherapy candidate currently in phase 1 clinical trial at the City of Hope cancer research centre in Los Angeles, USA. TNBC is an aggressive form of the disease with a survival rate of just 12 months.

The trial aims to evaluate the safety and efficacy of the administration of CHECKvacc in patients with metastatic TNBC.

The company says the current trial design will involve a dose escalation. It is also planning to expand the trial to 12 patients. The first patient treated with the cancer therapy has had no safety issues to date.

Comment from management

Speaking on the update that’s likely fuelling the Imugene share price today, managing director and CEO Leslie Chong said:

We hope that in time, CHECKvacc provides an improved outcome for the many women who are diagnosed every year with triple-negative breast cancer.

We look forward to seeing the results of this trial and bringing continued updates to the medical community and our stakeholders moving forward.

Imugene share price snap shot

In the past 12 months, the Imugene share price has soared by 298%. It has also risen 398% this year to date.

For perspective, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned 9% in the past year.

The share price low this year is 9 cents, while the yearly high is 63 cents.

The post Imugene share price (ASX:IMU) pops 5% in cancer trial update appeared first on The Motley Fool Australia.

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• Why is the Imugene (ASX:IMU) share price falling today?
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• Here are the top 10 ASX shares today
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Tesserent Ltd (ASX: TNT) share price is rebounding strongly from yesterday’s heavy falls. This comes after the company announced the acquisition of two companies, boosting its presence in the federal government cybersecurity space.

At the time of writing, the internet security services provider’s shares are fetching 16.5 cents apiece, up 10%.

Tesserent cements leading position in cybersecurity solutions

Investors are fighting to get a hold of Tesserent shares following the company’s positive update.

According to its release, Tesserent advised it has acquired Pearson Corporation and Claricent through two separate share purchase agreements.

Both companies were targeted due to their strong position in the federal government marketplace.

Based in Canberra, Pearson Corporation is an IT consulting firm that has demonstrated experience in information security management services. The company operates in both the public and private sectors, providing expertise in cybersecurity, Microsoft, Carbon Black, and Ivanti products.

Notably, its services have assisted in delivering Essential 8 compliance for Commonwealth entities around Australia.

Tesserent’s other acquisition Claricent is a private Australian company that specialises in governance risk and compliance (GRC) services.

Both additions are expected to immediately integrate into Tesserent’s ecosystem, particularly its North Security business. This area is tasked with leading the company’s federal government team by delivering deliver large multi-year projects.

Tesserent is set to pay $28.8 million for Pearson and $4.13 million for Claricent through a mix of cash and company shares. In total, the price tag of both acquisitions is $32.93 million.

The amounts are due to be paid in two instalments. Around 50% of the enterprise value will be paid on completion which is slated for December 2021. The remaining 50% is to be paid on the finalisation of audited accounts, estimated sometime in September 2022.

Tesserent chair Geoff Lord welcomed the newly-acquired businesses, saying:

… These acquisitions cement our position as the leading ASX-listed provider of cybersecurity solutions and services into Federal Government and the leading provider of Essential 8 consulting services, as well as contributing to our annual revenue and adding significant recurring EBITDA to the Group.

Tesserent share price summary

Despite the company’s latest announcement, the Tesserent share price has failed to take off in 2021, down more than 50%. The company’s shares reached a 52-week high of 44 cents in January, before gradually declining during the year.

Based on today’s price, Tesserent commands a market capitalisation of roughly $199 million and has approximately 1.21 billion shares outstanding.

The post Tesserent (ASX:TNT) share price leaps 10% on acquisition news appeared first on The Motley Fool Australia.

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

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It has been a positive day for the Westpac Banking Corp (ASX: WBC) share price on Tuesday.

In afternoon trade, the banking giant’s shares are up almost 1% to $20.90.

Why is the Westpac share price rising today?

Today’s gain by the Westpac share price appears to be due to improving investor sentiment following a strong night of trade on Wall Street. That was driven by optimism that the Omicron variant may not be as bad as feared.

In addition, a bullish broker note out of Morgans on Monday may have given the Westpac share price a lift. Its analysts have reiterated their add rating and $30.50 price target, as well as dismissing concerns that the bank is a value trap.

Anything else?

While it is unlikely to be the reason the Westpac share price is rising today, the banking giant has announced a small acquisition.

According to the release, Westpac has agreed terms to acquire money management app, MoneyBrilliant, from AMP Limited (ASX: AMP) and management shareholders.

The release notes that MoneyBrilliant is a budgeting and cashflow tool that helps users manage their money by providing practical insights and displaying their financial accounts in the one place. This technology will ultimately be integrated into Westpac’s digital banking app.

Westpac’s Chief Executive of Consumer & Business Banking, Chris de Bruin, commented: “The acquisition of MoneyBrilliant is another important step in Westpac’s digital strategy. In recent years we’ve seen demand grow for simple and practical digital tools to help customers manage their personal finances. We look forward to further building on MoneyBrilliant’s existing capabilities and making these available to our customers.”

The transaction is expected to complete by next month, subject to various customary closing conditions. No details have been provided on the price Westpac has paid for the app.

The post Why did Westpac (ASX:WBC) just buy this app from AMP? appeared first on The Motley Fool Australia.

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• Is the Westpac (ASX:WBC) share price a value trap or a bargain buy?

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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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The Fortescue Metals Group Limited (ASX: FMG) share price is underperforming today after getting slugged by a broker downgrade.

JPMorgan cut its rating on the ASX iron ore miner to “neutral” from “overweight” as it rebased its forecast for China’s steel output.

But it isn’t only the Fortescue share price that’s lagging. The Rio Tinto Limited (ASX: RIO) share price also got downgraded to “neutral” by the same broker today.

Fortescue share price falling behind

Shares in Fortescue slumped 0.5% to $17.07 while the Rio Tinto share price was trading close to breakeven during lunch time trade.

In contrast, the BHP Group Ltd (ASX: BHP) gained around 0.4% to $39.76 while the S&P/ASX 200 Index’s (Index:^AXJO) added 0.6%.

“We have rebased our China steel production estimates significantly lower (-7% in 2022) which leads us to cut iron ore prices to $92/90/t in 2022/23,” said JPMorgan.

“For the miners, our RIO and FMG NPVs fall 9-10% to within range of the share price. Given the relatively bearish China steel backdrop, we no longer see catalysts to drive a re-rating in the stocks.”

BHP share price dodges a bullet

The BHP share price could also have been hit by a downgrade, but the broker is restricted from giving a recommendation on the shares.

Further, iron ore contributes more to Fortescue’s and Rio Tinto’s bottom line than it does to BHP.

Large investment weighs on Fortescue’s outlook

But there’s another drag on the Fortescue share price. This relates to Fortescue Future Industries (FFI) – a pet project by Fortescue’s chair Andrew Forrest. FFI is developing hydrogen as a future fuel source to replace polluting fossil fuels.

“FMG’s ambitious hydrogen production target (15Mt by 2030) suggests material capex will need to be deployed in the short to medium term,” said JPMorgan.

“Under a higher iron ore price scenario, we believe investors would be willing to tolerate this (to some extent).

Our latest price deck leaves FMG with a relatively low FY23E FCF yield of 6%, meaning ND [net debt] will need to rise in order to accomplish FFI’s ambitions, and dividend payouts may come down.”

Rio Tinto share price also getting benched

Meanwhile, Rio Tinto’s recent disappointing production update contributed to the broker’s downgrade decision.

The ASX miner lowered its medium-term Pilbara capacity forecast to between 345 million tonnes (Mt) and 360Mt. Its initial estimate was 360Mt.

Further, Rio Tinto warned of ongoing cost pressure, lower quality ore output and significantly greater capex to sustain ore output.

JPMorgan’s 12-month price target on the Fortescue share price dropped $2 to $20 a share. It’s target on the Rio Tinto share price was lowered to $102 from $113 a share.

The post Rio Tinto (ASX:RIO) and Fortescue (ASX:FMG) share prices hit by broker downgrade appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Fortescue Metals Group Limited, and Rio Tinto Ltd. 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 S&P/ASX 200 Index (ASX: XJO) is following the lead of US markets and heading higher. At the time of writing, the index is up 0.6%. ASX 200 travel shares are up much more.

The Qantas Airways Limited (ASX: QAN) share price is up 4.2%; the Webjet Limited (ASX: WEB) share price is up 3.9%; and shares in Flight Centre Travel Group Ltd (ASX: FLT) have gained 5% since this morning’s opening bell.

What’s happening with the travel industry?

ASX 200 travel shares have proven particularly vulnerable to any fresh news relating to COVID-19 for obvious reasons. When international and domestic borders are closed to contain the virus, their business evaporates.

For that reason, shares such as Qantas, Webjet and Flight Centre took some of the hardest hits when the coronavirus went global in February and March 2020. These same shares then posted some of the biggest gains on the early vaccine announcement in November last year.

And this pattern has continued to play out since.

Positive news on the virus front tends to see ASX 200 travel shares rally, while negative news tends to see them fall harder than the broader index.

When news of the Omicron COVID variant broke, all major global share markets sold off. And travel shares were again the biggest losers.

Now the first glimmer of hope is arising that Omicron may not be the viral Bogeyman the world first feared.

Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, is one of the most influential people on the planet when it comes to the ongoing pandemic. And over the weekend, Fauci told CNN: “Thus far it does not look like there’s a great degree of severity to it, but we’ve really got to be careful before we make any determinations that it is less severe or doesn’t really cause any severe illness.”

Despite his added note of caution, the Nasdaq closed up 0.9% yesterday (overnight Aussie time), buoyed by travel shares such as United Airlines Holdings Inc (NASDAQ: UAL). United closed up 8.3% yesterday.

Today, we’re seeing a similar pattern playing out on the ASX 200 with travel shares leading the charge.

How have these ASX travel shares performed in 2021?

All 3 of the ASX 200 travel shares listed above are in the green in 2021.

The Qantas share price has gained 5.3%, Webjet shares are up 7.8%, and the Flight Centre share price is up 13.4%.

The post Here’s why ASX 200 travel shares are taking off today 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 Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Bank of Queensland Limited (ASX: BOQ) share price has been a strong performer today.

In afternoon trade, the regional bank’s shares are up 5.5% to $8.02.

Why is the Bank of Queensland share price pushing higher?

The Bank of Queensland share price is rising today after investors responded positively to the release of a trading update ahead of its annual general meeting.

According to the release, the regional bank’s growth momentum has continued throughout the first quarter of FY 2022. It reported strong application volumes across both the housing and business lending portfolios.

And while the bank has revised its net interest margin guidance lower, this didn’t appear to come as a surprise to the market following recent updates from the big four banks.

Furthermore, management is aiming to offset this margin weakness with a 1% reduction in expenses in FY 2022 through additional productivity benefits. All in all, this means that its full year guidance of at least 2% positive jaws (income growth exceeding expense growth) remains in place.

What was the reaction?

Analysts at Goldman Sachs have responded positively to the update. As a result, the broker has reiterated its buy rating and lifted its price target slightly to $9.67.

Based on the current Bank of Queensland share price, this implies potential upside of ~20% for investors.

In addition, Goldman is forecasting a fully franked ~44 cents per share dividend in FY 2022. This implies a 5.5% yield, bringing the total return on offer to ~26%.

Goldman commented: “Our recently revised FY22E revenue growth on pro-forma FY21A had been 1.2% and costs of -0.4%. This compares to their updated implied revenue growth guidance of +1% (i.e. at least 2% positive jaws guidance) and expenses of -1%. Therefore, with costs run-rating mildly better than we had expected, we make minor revisions to our FY22/FY23/FY24E EPS of +0.5%/+0.4/+0.1% and our TP moves to A$9.67 from A$9.66.”

“Overall we maintain our Buy recommendation on BOQ, which we believe has more offsets to these mortgage NIM pressures in the form of i) BOQ’s more rate sensitive deposit book, and ii) the continued delivery of ME Bank synergies,” it concluded.

The post Why the Bank of Queensland (ASX:BOQ) share price is racing 5% higher today 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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Betashares Crypto Innovators ETF (ASX: CRYP) is a newcomer to the ASX.

When CRYP hit the boards on 4 November, the exchange traded fund (ETF) broke all the records for a managed investment fund on its first day of ASX trading, finishing with net buys of $39.7 million.

While the early days delivered some handsome gains to investors, CRYP has struggled over the past week.

Why is CRYP down 15% this past week?

At this morning’s opening bell, the ETF was down 18% over the past week. With today’s intraday gain of 4.14%, the CRYP share price still remains 16% in the red.

So what’s going on?

Part of the answer lies in the falling price of the world’s top cryptocurrency.

Bitcoin (CRYPTO: BTC) sold off alongside other risk assets this past week, and remains down 13% over the past 7 days. One Bitcoin is currently worth US$50,501 (AU$72,141), according to data from CoinMarketCap.

Bitcoin is up 3% in the past 24 hours, however, likely tying into the lift in the CRYP share price today.

The other part of the puzzle lies in the fact that the ETF doesn’t invest directly in Bitcoin or indeed in any altcoins.

Instead, the ETF works to track the performance of an index of companies deeply involved in crypto activities.

CRYP currently has 32 holdings. Its top 5 holdings as of this morning are:

1. Silvergate Capital Corp (12.3%)
2. Marathon Digital Holdings Inc (10.3%)
3. Coinbase Global Inc (10.2%)
4. Galaxy Digital Holdings Ltd (9.9%)
5. Microstrategy Incorporated (9.5%)

A quick review of the above companies’ share price performance over the past week reveals they’re all deeply in the red, down anywhere from 15% to as much as 20%.

So, now we know why CRYP was down 18% at market open this morning, and remains down 16% over the past week.

But what can ASX investors expect in the year ahead from the ETF.

What’s next for the crypto ETF?

The performance of CRYP, as we looked at above, is linked to the performance of the crypto-related companies that the ETF invests in. And the performance of those companies, in turn, is closely tied to the performance of Bitcoin and the wider world of altcoins.

So what’s ahead for 2022?

For some insight into that question, we turn to Josh Gilbert, crypto analyst at multi-asset investment platform eToro.

According to Gilbert:

2021 was a remarkable year for cryptoassets, from the retail surge in Q1 with new all-time highs to market corrections and new all-time highs in Q4. Global adoption of cryptoassets is accelerating at an extraordinary pace and we can expect this trend to continue well into 2022.

Looking ahead to what could spur Bitcoin and other cryptocurrencies onwards in 2022, Gilbert added:

DeFi [decentralised finance] is anticipated to play a more significant role than we’ve ever seen before, with the continued growth from NFTs [non-fungible tokens], the metaverse and Web 3.0. Although some of these trends may take a while to reach their full potential, 2022 will certainly act as a sounding board for their acceleration.

DeFi, among other things, can deliver smart contracts via cryptocurrency blockchains.

The growth of smart contracts, Gilbert said, “could help to facilitate more innovative shipping and logistics processes, and merchants could have the ability to sell to customers in more countries with less friction”.

Gilbert also drew a parallel to the past 2 bull runs for Bitcoin and other cryptocurrencies, saying the current bull market looks to have some legs left in 2022. Which would offer some steady tailwinds for the CRYP share price.

According to Gilbert:

In 2013 and 2017 we saw crypto bull markets and have now experienced this again in 2021. Nevertheless, I don’t think we’ve yet to see the dramatic price action we saw during these periods. If history is anything to go by, this could mean that we haven’t quite seen the peak for crypto yet and 2022 could be a key year.

In a nod to the historic volatility of cryptocurrencies, Gilbert added, “In the same breath, investors should remember that we may then experience a ‘crypto winter’.”

The post Betashares CRYPTO ETF (ASX:CRYP) drops 16% in the past week. What’s next? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and 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.

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The Cochlear Limited (ASX: COH) share price is back on form on Tuesday.

In afternoon trade, the hearing solutions company’s shares are up 1% to $213.25.

This means the Cochlear share price is now up 12% in 2021.

Where next for the Cochlear share price?

Unfortunately, one leading broker is calling time on the Cochlear share price gains.

According to a recent note out of Goldman Sachs, its analysts have retained their sell rating and $197.00 price target on the company’s shares.

Based on the current Cochlear share price, this implies potential downside of almost 8% for its shares over the next 12 months.

What did the broker say?

While Goldman Sachs expects trading conditions to improve given the vaccine rollout, it does have concerns that demand could take longer to recover. This is due to a combination of cochlear implant surgeries being highly elective and potential hesitancy from older patients.

Goldman said: “Although improving vaccination rates against a challenging comparator should set up COH for a relatively stronger period, implant surgeries are highly elective. Although COH is a high-quality operator, leveraged to a recovery in procedure volumes, it is possible there is some persistent hesitancy amongst a proportion of its target market in DMs (aged 70+).”

In addition, although the broker is a fan of the company, it doesn’t see enough value in the Cochlear share price to change its recommendation to something more positive at this point.

“Whilst there are many reasons to like the stock, at current valuation, we continue to see better value elsewhere across our coverage (COH 29.7x 2022E EV/EBITDA for +3% FY19-22E NPAT CAGR). We are Sell-rated on COH with a 12m TP of A$197 based on our target NTM EV/EBITDA multiple of 26.2x,” Goldman explained.

The post Why this top broker says the Cochlear (ASX:COH) share price is heading lower 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. owns shares of and has recommended Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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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