The Elixir Energy Ltd (ASX: EXR) share price has been struggling recently. While shares in the exploration and development company are still leaps and bounds above their value at the start of the year, the wheels have fallen off in the last fortnight.

Unfortunately for shareholders, the Elixir Energy share price has shaved off 15.62% in the last 2 weeks of trade. As a result, the current price is pinned at 27 cents per share, at the time of writing.

What’s weighing on the Elixir Energy share price?

Prior to the descending share price, Elixir was enjoying a run of positive sentiment from the market. The last announcement to hit the market before the beginning of the sell-off related to its hydrogen project in Mongolia.

According to the update, the project was progressing as Elixir entered into a memorandum of understanding with Mongolia’s Ministry of Energy to investigate the hydrogen project’s potential future. Since then, the company has released 2 more price-sensitive announcements, which have been met with selling pressure.

On 27 October, Elixir Energy updated the market with data from its assessment of the Nomgon 6 well in Mongolia. The testing indicated the presence of methane. Among other results, this data will be fed into construction of Elixir’s first long-term pilot production program.

From there, Elixir Energy released its annual general meeting presentation the following day. Other than outlining the company’s achievements to date, the presentation highlighted a forward trajectory. Namely, the oil and gas explorer is expecting its 2022 to involve drilling, pilot programs, infilling seismic grid, developing plans, and hydrogen.

Quarterly numbers

Finally, the last announcement released was Elixir’s quarterly report for the period ending 30 September 2021. In the report, the explorer highlights the ongoing energy shortage as a positive sign for the company’s prospects. However, investors might have taken notice of the cash burn.

Due to its operations still being in the exploratory stage, Elixir Energy reported zero revenue for the period. As a result, the company’s net cash from operating activities was an outflow of $331,000 during the quarter. Although, Elixir still holds $30.9 million in cash and cash equivalents.

While the Elixir share price has weakened recently, it is still up 116% year to date.

The post The Elixir Energy (ASX:EXR) share price is down 15% in 2 weeks. What’s happening? appeared first on The Motley Fool Australia.

More reading

• Elixir Energy (ASX:EXR) share price lifts 5% on hydrogen update

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. 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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If you’re looking for a few new additions to your portfolio in November, then look no further.

Analysts at Morgans have picked out a number of ASX shares that they class as their best ideas for the month.

The first two I looked at can be found here. Whereas below are two more that the broker rates highly in November:

Sonic Healthcare Limited (ASX: SHL)

The first ASX share to look at is this healthcare company. Morgans is positive on Sonic due partly to its belief that COVID-19 testing demand will remain strong for the foreseeable future. In addition, it likes the company due to its strong balance sheet. It feels this gives it opportunities to make earnings accretive acquisitions.

It explained: “We see COVID-19 testing continuing into the foreseeable future, with growth potential in COVID serology testing. SHL’s global base business is increasingly resilient, benefitting from geographical diversity. Strong B/S (gearing 21.6x; A$1.3bn headroom) opening the door to acquisitions, contracts and JVs.”

Morgans has an add rating and $45.98 price target on Sonic’s shares.

Woodside Petroleum Limited (ASX: WPL)

Another ASX share that the broker is a fan of is Woodside. It believes the energy producer is well-positioned to benefit greatly from the transformative merger with the petroleum assets of BHP Group Ltd (ASX: BHP).

Morgans commented: “We believe WPL has benefited from being in the right place, at the right time. With: 1) BHP/WPL having an existing relationship, 2) BHP eager to boost its ESG profile, and 3) WPL being a quality operator (safe hands which is important for BHP). From an economic standpoint we think WPL is clearly getting the better of the deal, with synergies not baked into deal metrics and BHP willing to accept a discount. The deal is transformative, lifting WPL into being a top 10 global E&P with +2 billion barrels of 2P reserves, with EBITDA of US$4.7bnpa and growth options.”

The broker currently has an add rating and lofty $29.65 price target on Woodside’s shares.

The post 2 more of the best ASX shares to buy in November according to this top broker appeared first on The Motley Fool Australia.

More reading

• Here are 2 ASX dividend shares that could provide steady passive income
• 5 things to watch on the ASX 200 on Wednesday
• How did the Woodside Petroleum (ASX:WPL) share price perform in October?
• 5 things to watch on the ASX 200 on Tuesday
• 5 things to watch on the ASX 200 on Monday

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 Sonic Healthcare 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 Paradigm Biopharmaceuticals Ltd (ASX: PAR) share price has returned from its trading halt and is charging higher on Wednesday.

At the time of writing, the biopharmaceutical company’s shares are up 30% to $2.69.

Why is the Paradigm share price charging higher?

The catalyst for the rise in the Paradigm share price today is the release of a positive update relating to its investigational new drug (IND) application to proceed with a phase 3 trial.

This trial aims to evaluate injectable pentosan polysulfate sodium (PPS/Zilosul) for the treatment of pain associated with knee osteoarthritis.

According to the release, the US Food and Drug Administration (FDA) has cleared Paradigm’s IND application, allowing the company to commence with the trial.

This will no doubt come as a big relief to shareholders. In June and September, Paradigm received feedback from the FDA requesting further information relating to the trial. This cast a few doubts on whether it would ultimately be approved.

However, today’s release notes that FDA advised that the company’s responses sufficiently addressed its questions.

What’s next?

Central ethics committee approval has also been received and the company is now focused on site initiation in the US. Patients are expected to begin screening in both the US and Australia during the current quarter.

In addition to commencing in the US and Australia, Paradigm is also entitled to commence clinical trials in EU member countries. As a result, the company now has a clear harmonised path to global approval of Zilosul.

Ten sites in Europe and the United Kingdom have been identified and are expected to be initiated during the first half of 2022.

This is a big positive given its huge market opportunity. Paradigm highlights that osteoarthritis affects more than 72 million people in the US, EU, Canada and Australia. This number is expected to increase meaningfully in the future due to ageing populations.

Paradigm’s CEO and Interim Chair, Paul Rennie,  said: “The opening of the Trial in the USA – the largest global pharmaceutical market, is a major milestone for the Company. This milestone represents a substantial de-risking of the Company’s lead clinical program and is a testament to the Company’s expertise, commitment and determination. As the Company progresses with the Trial, we expect there will be increasing interest from the pharmaceutical industry in the commercial value of this potential blockbuster therapeutic.”

The post Paradigm (ASX:PAR) share price shoots 30% higher on FDA update appeared first on The Motley Fool Australia.

More reading

• Why the Paradigm (ASX:PAR) share price is pushing higher today

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 BHP Group Ltd (ASX: BHP) share price is pushing higher on Wednesday morning.

At the time of writing, the mining giant’s shares are up almost 1% to $35.82.

Why is the BHP share price rising?

The BHP share price is rising today after a potentially positive update offset further weakness in iron ore prices.

In respect to the latter, according to CommSec, the spot iron ore price fell US$6.85 or 6.6% during overnight trade to US$96.45 a tonne.

As for the former, BHP released an update on its pursuit of Noront Resources.

According to the release, the company is currently in discussions with Wyloo Metals regarding its potential support of BHP’s C$0.75 per share offer to acquire Noront Resources. This offer is being recommended by the Noront Board.

Wyloo Metals, which is controlled by Fortescue Metals Group Limited (ASX: FMG) Chair Twiggy Forrest and owns a 37% stake in Noront, has been battling BHP for control over the Canadian miner.

Both businesses appear to be attracted to Noront Resources due to its controlling interest of major discoveries in the Ring of Fire. This is an emerging multi-metals area located in the James Bay Lowlands of Northern Ontario, Canada.

No real details have been provided regarding what the discussions entail. However, BHP revealed that the two parties are considering a mutually beneficial arrangement.

BHP commented: “BHP and Wyloo Metals have engaged in initial conversations and are considering a mutually beneficial arrangement regarding the acquisition of Noront by BHP. There is no assurance that any agreement will be reached between BHP and Wyloo Metals.”

The post BHP (ASX:BHP) share price rises amid Noront Resources takeover update appeared first on The Motley Fool Australia.

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• Top broker names 2 of the best ASX share ideas for November
• Why did the BHP (ASX:BHP) share price go backwards in October?
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• Here’s why the BHP (ASX:BHP) share price is down 13% so far in 2021
• BHP (ASX:BHP) share price lifts as Morgans tips 20% upside

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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November 2021 could be a good month to buy some leading ASX shares. Indeed, every month could be a good month to consider ASX shares for the long-term.

There are some ASX shares that have growth plans for the long-term and may be worth looking into.

With that in mind, here are two ASX share options that may be worth thinking about:

Adairs Ltd (ASX: ADH)

Adairs is a leading retailer of homewares and furnishings.

The company has a number of growth avenues that it is pursuing.

Adairs says that total sales are highly correlated to the number of its Linen Lover members. Each new member adds approximately $400 in total sales. The average annual growth in membership numbers of the last five years was 14.5%.

Member retention initiatives and the facilitation of online sign-ups through the upgrade of its digital platform in FY22 offer “significant upside to existing growth rates”.

The company also says that growing store floor space through new and upsized stores will continue to drive store sales. Store sales are “highly correlated to store floor space”. Each additional square typically adds around $4,000 in store sales.

The ASX share is expecting to grow floor space by at least 8% in FY22 and at least 5% per annum for the following five years through new and upsized stores.

Adairs is also working on selling more products online. Multi-channel customers typically spend around 110% more than online-only customers and 40% more than store-only shoppers each year. Online sales made up more than a third of total sales in FY21.

At the current Adairs share price, it is valued at 11x FY22’s estimated earnings with a forward grossed-up dividend yield of 8.5%.

Bubs Australia Ltd (ASX: BUB)

The Bubs share price has had a very volatile prior 12 months. It has been as high as $0.75 and as low as $0.32. In just the last month, it has risen by 57% to $0.58.

Bubs is seeing a recovery in demand for its products, which could be a sign of further improvement for what’s to come. It reported this in the first quarter of FY22.

Bubs saw total gross revenue growth of 96% year on year to $18.5 million. This was also an increase of 45% quarter on quarter.

The infant formula gross revenue rose 124% year on year, whilst adult goat milk powder total gross revenue doubled year on year.

It’s the international growth that is demonstrating the biggest growth levels in percentage terms.

Management said that there was a “strong” rebound of China-facing business seeing revenue rise 156% year on year. Infant formula daigou sales increased 648% year on year and 265% quarter on quarter. The infant formula cross-border e-commerce sales went up 49% year on year and 19% quarter on quarter.

Excluding China, international revenue was up 489%, contributing 24% of quarterly sales. Export sales of Bubs infant formula to markets outside of China rose 154%.

The post 2 ASX shares that could be buys in November 2021 appeared first on The Motley Fool Australia.

More reading

• Why the Bubs (ASX:BUB) share price has rocketed 51% in a month
• 2 ASX growth shares that could be buys in November 2021
• The Adairs (ASX:ADH) share price has dropped 24% since June. What’s happening?
• Bubs (ASX:BUB) share price higher on new product launch
• 2 ASX dividend shares that could be buys with yields above 5%

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia owns shares of and has recommended ADAIRS FPO. The Motley Fool Australia has recommended BUBS AUST FPO. 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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Exchange-traded funds (ETFs) have exploded in popularity over the last few years.

The last couple of years, especially, has seen new all-time highs on a monthly basis for incoming flows for the Australian ETF industry.

September saw $2.9 billion added to local ETFs, according to BetaShares, which was yet another record.

“The industry ended September 2021 at a fresh all-time high of $125.3 billion total market cap, with total industry growth of $200m for the month,” said BetaShares co-founder Ilan Israelstam.

“Industry growth over the last 12 months has been 75.5%, for a total of $53.9 billion net growth over this period.”

Retail investors are favouring these products for the instant diversification, and sometimes active management, they provide. 

There are now thematic ETFs that provide many different investment angles.

Some provide access to investments that are not readily available to the typical Australian retail investor, like overseas markets or unlisted assets.

The ASX on Thursday will even welcome its first-ever cryptocurrency themed ETF.

This is all fantastic. So why would any investor want to buy individual shares these days?

Nucleus Wealth spokesperson Jayden Stent had a go at explaining why Australians will still want to invest directly into shares.

Not all ETFs are passive

One potential trap is the volatility of some ETFs.

“You don’t want to be lulled into thinking that because some ETFs offer low volatility that all ETFs are the same,” Stent wrote on a Nucleus blog.

ETFs initially built up their reputation as index-followers that allow “passive” investing. But now there are so many thematic funds out there, that stereotype doesn’t necessarily hold.

“The potential for large swings will mainly depend on the type of the fund. For instance an ETF that tracks a specific industry such as oil or gas services,” said Stent.

“The viability of an ETF can be dependent on the economic and social stability of a particular country. Investors [need] to take note of what the ETF is tracking and what are the underlying risks associated with it.”

Expenses and liquidity

Investors need to be wary of the expenses charged by the ETF operator — something that you never have to encounter when buying shares directly.

“It’s important for investors to be aware that ETFs have what’s known as an expense ratio,” said Stent.

“This is a measure of what percentage of a fund’s total assets are required to cover various operating expenses each year. This has an effect on total returns — i.e. the higher the expense ratio, the lower the total returns will be for investors.”

Stent warned that liquidity is “one of the biggest detractors” for ETFs.

“That is, when you buy something, is there enough trading interest that you will be able to get out of it relatively quickly without moving the price?

“If an ETF is thinly traded there can be problems getting out of the investment, depending on the size of your investment in relation to the average trading volume.”

Control of your investments

The most obvious disadvantage of ETFs is the inability to pick and choose the companies invested.

“This means that an investor looking to avoid a particular company or industry for a reason — such as moral conflict — does not have the same level of control as an investor with direct individual share holdings.”

Because ETFs are a basket of different shares, tax treatment of capital gains and dividends can become complicated, as The Motley Fool has previously reported.

“Because different ETFs treat capital gains distributions in various ways, it can be a challenge for investors to have the control they need and would get from direct share holdings,” said Stent.

The post Why invest directly in shares when there are ETFs for everything now? appeared first on The Motley Fool Australia.

More reading

• Altium (ASX:ALU) share price in focus after broker upgrade
• AMP (ASX:AMP) share price on watch following $500m divestment
• Here are 2 ASX dividend shares that could provide steady passive income
• What these leading brokers are saying about the Westpac (ASX:WBC) share price
• 2 consumer ASX shares looking good now: expert

Motley Fool contributor Tony Yoo 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 Altium Limited (ASX: ALU) share price could be on the move on Wednesday.

This follows the release of a broker note out of Bell Potter this morning.

What did Bell Potter say about the Altium share price?

The good news for shareholders is that Bell Potter sees a lot of value in the Altium share price at the current level.

According to the note, the broker has upgraded the company’s shares to a buy rating and lifted the price target on them from $32.50 to $42.50.

Based on the current Altium share price of $37.33, this implies potential upside of almost 14% for its shares over the next 12 months.

What did the broker say?

The note reveals that this upgrade was predicated largely on the belief that Altium could still be a takeover target of US software giant Autodesk.

Earlier this year, Autodesk tabled a $38.50 per share takeover offer and then reportedly followed that up with a $40.00 per share verbal offer. While this was a significant premium to the Altium share price at the time, the Altium Board wasn’t interested and rejected both proposals.

Although this led to the end of takeover talks, Bell Potter suspects that Autodesk will return. This is due to its belief that Autodesk needs Altium’s software to complete its platform.

The broker explained: “We have looked closely at Autodesk and what it is trying to achieve with its Fusion 360 platform and come to the conclusion that the ECAD functionality of the platform – provided by the recently integrated EAGLE – is probably not enough to deliver on the aim of the platform and effectively converge both the mechanical and electrical design processes.”

“For this reason we believe Altium is still a takeover target for Autodesk as its PCB design software – Altium Designer (AD) – is high powered enough to provide the required functionality and so would be key in enabling Fusion 360 become the platform of choice for converged processes. Given the size of the prize is so large and is effectively a race with other industry heavyweights like Dassault Systèmes and Siemens we figure Autodesk will likely be back with a revised bid at some stage,” it added.

Anything else?

In addition to this, the broker believes that trading conditions are favourable for Altium (and particularly its Octopart search engine). As a result, it suspects that there could be a “soft upgrade” to its FY 2022 guidance at its annual general meeting this month.

All in all, the broker believes the above makes the Altium share price good value right now for investors.

The post Altium (ASX:ALU) share price in focus after broker upgrade appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Wednesday
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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 Altium. The Motley Fool Australia owns shares of and has recommended Altium. 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 AMP Ltd (ASX: AMP) share price will be on watch on Wednesday morning.

This follows the release of an announcement by the financial services company this morning.

Why is the AMP share price on watch?

Investors may want to keep an eye on the AMP share price today after it made a divestment announcement.

According to the release, the company has agreed to divest its 19.13% equity interest in Resolution Life Australasia (RLA) for a consideration of $524 million to Resolution Life Group.

The sale of the RLA holding will complete AMP’s exit from its former life insurance and mature business, AMP Life, which it sold to Resolution Life in 2020 for a total consideration of $3 billion.

The release notes that the divestment has been agreed ahead of the expiry of the 18-month standstill period agreed as part of the 2020 sale. It values the RLA stake at its carrying value in AMP’s accounts at 30 June 2021.

However, as part of the divestment agreement, AMP and RLA have agreed to settle a number of post-completion adjustments and certain claims between the parties. This has resulted in a net payment of $141 million to RLA from AMP.

AMP had partly provisioned for these items, but following the acceleration of this settlement will record an additional one-off expense of approximately $65 million in FY 2021.

Nevertheless, management notes that the divestment will strengthen AMP’s available capital by approximately $459 million. This provides further flexibility ahead of its planned demerger of AMP Capital’s Private Markets business.

AMP’s Chief Executive, Alexis George, commented: “This divestment brings to a close our long and proud involvement in life insurance in Australia and New Zealand. It enables us to realise capital to further strengthen our balance sheet ahead of our demerger and continue supporting our businesses.”

“The separation of our businesses is progressing well and will continue until mid-next year as planned. We will continue to provide transitional services to RLA, as agreed, and will have a shared customer and adviser connection into the future,” she concluded.

The post AMP (ASX:AMP) share price on watch following $500m divestment appeared first on The Motley Fool Australia.

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• Why has the AMP (ASX:AMP) share price leapt 17% in a month?
• What this broker thinks of the AMP (ASX:AMP) share price after its update
• Why AMP, Aristocrat, Brainchip, and Healius shares are racing higher
• AMP (ASX:AMP) share price gains 3% despite FUM falling by $7b

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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Some investors may be looking for ASX dividend shares that may be able to offer steady passive income.

Whilst Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) has the longest dividend growth record, there are other businesses that also have a long-term record of dividend growth.

These are businesses that are growing organically and also regularly doing things with excess capital like making acquisitions and/or doing share buybacks.

Here are two ASX dividend shares that may be able to grow their dividends in the coming years:

Sonic Healthcare Ltd (ASX: SHL)

Sonic Healthcare has grown its ordinary dividend for several years in a row. It operates in the healthcare space, specifically in areas like pathology and imaging. These are areas that tend to see fairly consistent demand year to year.

The company has stated that it is operating a progressive dividend policy. In FY21 alone it grew the annual dividend by 7%, with an 8% increase of the final dividend.

Sonic Healthcare has operations in numerous countries including the USA, Germany, Australia, the UK, Ireland and Switzerland.

The company has been doing a high level of COVID-19 PCR and serology tests, with the Delta variant leading to a higher level of testing. Sonic also believes that there are increasing opportunities for commercial COVID-19 testing (such as travel testing and others).

Sonic has seen its profit surge since the onset of COVID because of all the testing, whilst utilising existing infrastructure, leading to operating leverage. FY21 net profit grew by 149% to $1.3 billion.

The ASX dividend share is expecting demand for COVID PCR testing to continue into the foreseeable future. Management said that geographical diversification is providing increased opportunities for expansion, and risk mitigation. The base business is “increasingly resilient” to pandemic waves, with “strong” underlying drivers of demand for healthcare services.

At the current Sonic Healthcare share price, it has a partially franked dividend yield of 2.25%.

Amcor CDI (ASX: AMC)

Amcor describes itself as a global leader in developing and producing packaging for food, beverage, pharmaceutical, medical, home and personal care, and other products. It operates across 230 sites, around 47,000 employees, operating in more than 40 countries.

The company has been steadily growing its earnings and dividends over the last 10 years.

Amcor has acquired the Bemis business in the US. It achieved $75 million of cost synergies in FY21 and expects the total to exceed the original $180 million by at least 10%.

In FY21, the business grew its dividend from US$0.46 per share to US$0.47 per share, an increase of 2.2%. The last financial year also saw US$350 million of shares repurchased in FY21, which equated to approximately 2% of outstanding shares.

The ASX dividend share has been growing its profit margins, helping its profit grow quicker than revenue. FY21 net sales rose 3% to US$12.86 billion, earnings before interest and tax (EBIT) grew 8% to US$1.5 billion, whilst net income rose 13% to US$1 billion.

Amcor is expecting another “strong year” in FY22. It’s expecting to grow its adjusted earnings per share (EPS) by between 7% to 11%.

The Amcor CEO Ron Delia said:

Amcor is now better positioned strategically than ever with global scale, strong innovation capabilities and greater exposure to more attractive, higher growth end markets like healthcare and protein which offer more potential for differentiation and growth.

The post Here are 2 ASX dividend shares that could provide steady passive income appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company 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 owns shares of and has recommended Amcor Limited and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has recommended Sonic Healthcare 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 banking giant Westpac Banking Corporation (ASX: WBC) have fallen off the cliff in the last week of trading, wiping 14% in gains in a number of days.

Westpac shares fell sharply following the release of its full-year results which came in behind the consensus of analyst expectations on a few fronts.

Now, the experts have weighed in with their analyses, offering investors their insights into the outlook for the Westpac share price.

What are analysts saying about Westpac shares?

The team at investment banking giant Morgan Stanley was less than impressed with Westpac’s performance for the year.

In fact, it was far worse than the broker was expecting. Morgan Stanley didn’t factor in challenges Westpac may face in addressing what it called “legacy issues” of weak franchise growth, poor integration of St George Bank, and sloppy capital management.

The broker reckons the visibility is poor on how Westpac intends to achieve its $8 billion cost target and actually increased its FY22 expenses modelling for the bank by 5%.

It subsequently downgraded its rating from overweight to equal weight and trimmed its price target by 14% to $24.80.

Fellow broker Citi has also chimed in, claiming that Westpac faces “execution risks” on its cost targets based on its cost base for FY21.

Citi reckons that “while the pathway implies a sharp run-off in costs”, the higher cost base from FY21 is a “higher than expected starting point [that] raises execution risk”.

It also notes the bank provides no specific guidance on how it intends to achieve its $8 billion cost base, a worrying sign for the broker.

From its analysis, Citi reckons that the timing of the decline in cost base will “depend on incremental productivity; run-off of fixed costs and removal of specialist businesses”.

What else is being said?

Meanwhile, Macquarie Group Ltd (ASX: MQG) saw the downgrades coming all along after the bank’s results. It expected “significant consensus earnings downgrades on the back of [the] result”.

It, too, was disappointed with Westpac’s higher-than-expected expenses in 2H FY21 and acknowledged “the market will be more cautious on the expenses trajectory following [the] result”.

Macquarie also alludes to ANZ’s challenges in reducing its expense base, which Westpac also isn’t immune to.

Analysts at the Aussie broker stated that Westpac’s share price gains may have also come at the expense of its net interest margin.

As such, its forecasted earnings per share (EPS) of $1.63 – which sits 9% below the consensus number – “no longer looks overly conservative”, according to the broker.

Aside from this, as The Motley Fool reported earlier, Goldman Sachs gave its price target and recommendation on Westpac shares a haircut as well.

Westpac share price snapshot

Despite its most recent nosedive, the Westpac share price has climbed 19% this year to date and almost 30% in the last 12 months.

That’s still a marginal step ahead of the benchmark S&P/ASX 200 Index (ASX: XJO)’s climb of around 25% in that time.

The post What these leading brokers are saying about the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.

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The author Zach Bristow 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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