Shares in the banking big 4 member Westpac Banking Corporation (ASX: WBC) are inching higher this morning and now trade less than 1% in the green at $20.90.

Westpac shares started to tumble at the end of October after the company revealed its full-year results, leaving many investors and analysts alike unimpressed with its performance.

The Westpac share price has come down hard from a high of $26.23 in October and continued its downward path until climbing again in December.

With this in mind, several leading investment firms have afforded us their opinion on the outlook for Westpac investors. So is Westpac a buy? Let’s find out.

What are brokers saying about Westpac?

The team at Citi reckons Westpac is a buy right now. However, in a recent note, the firm also acknowledges Westpac’s off-market buyback is of less value compared to that of banking rival CBA.

It notes that the complex moving parts involved with off-market buybacks have created a peculiar situation for the bank. This comes after it recently extended the tender period and reworked the discount it was awarding on the offer.

Even after the revision, the bank’s post-tax returns are still a way behind CBA’s 13% gain, the broker notes. City says, “With less tax benefits on offer, we expect Westpac will likely receive significantly less demand than CBA but has pledged to redirect any shortfall into an on-market buy-back.”

Nevertheless, Citi has Westpac as a buy and is attracted to the bank’s current valuation after the pullback in its share price over the last 2 months.

Fellow investment bank Jefferies isn’t so rosy on the outlook for Westpac shares, noting it needs a cultural overhaul rather than focusing on its $8 billion cost-reset strategy in FY24.

Jefferies also is critical of Westpac’s buyback, noting the $3.5 billion off-market purchase of its own shares is less attractive due to the run down in its share price. It says this effectively reduces the fully-franked dividend component of the buyback.

It also forecasts another compression of Westpac’s net interest margin (NIM) in its trading update in January. It points out potential investor dissatisfaction on the horizon if shareholders employ the first no vote strike on its remuneration report at its AGM tomorrow.

Jefferies has Westpac as a hold and values the company at $19.20, implying a small percentage of downside potential at the time of writing.

Finally, Goldman Sachs also weighed in on Westpac’s investment debate in a recent note. Goldman says the bank’s recent results are an indication of a weak platform to grow revenue in FY22.

It too retains its neutral rating on the banking major and thinks the market might need to apply a heavier discount on Westpac’s potential to reach its FY24 $8 billion cost target.

Goldman values the bank at $25.60 per share, even with its neutral rating, implying almost $5 of upside potential at the time of writing.

Meanwhile, Morgans has Westpac as a buy, whereas Jarden, Barrenjoey, and Evans & Partners have it as a sell.

Westpac share price summary

In the last 12 months, the Westpac share price has gained just over 4%, climbing 8% this year to date.

However, during the past single-month period to date, it has reversed course and is now trading around 8% in the red.

The post Is it a buy? Leading brokers analyse the Westpac (ASX:WBC) share price appeared first on The Motley Fool Australia.

More reading

• Could the CBA share price peak have been and gone?
• Is the Westpac (ASX:WBC) share price a buy after falling 19% in 6 weeks?
• Top brokers name 3 ASX shares to buy next week
• ASX 200 (ASX:XJO) midday update: Fortescue CEO steps down, Westpac buyback update
• Westpac (ASX:WBC) share price higher on $3.5bn buyback update

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

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

The Newcrest Mining Ltd (ASX: NCM) share price is edging lower on Tuesday following an asset sale from the company.

At the time of writing, the gold miner’s shares are down 0.60% at $23.08.

Newcrest offloads royalty portfolio

According to today’s release, Newcrest advised it has entered into definitive agreements with Altus Strategies and AlphaStream to sell a portfolio of 24 royalties.

Founded in 2007, Altus is a United Kingdom-based mining royalty company. The business is focused on establishing a diversified portfolio of income generating royalties.

On the other hand, AlphaStream also based in London is a multi-commodity royalty and streaming company.

Under the agreement, Newcrest will receive a total cash consideration of around US$37.5 million from both Altus and AlphaStream.

The royalties are in respect to three gold mines and 21 near-term development and exploration stage projects. In total, 23 of the royalty projects are situated in Australia and one royalty project is in Cote d’Ivoire, West Africa.

Completion of the transaction is expected to occur in two phases. This is due to the rights of first offer/refusal on select Australia exploration royalties.

In addition, the deal is subject to Altus securing financing for the acquisition.

Newcrest managing director and CEO, Sandeep Biswas commented:

We remain focused on capital discipline across our whole business and see the sale of these royalties as an opportunity to unlock value for Newcrest shareholders in response to continued competition for royalty investments.

Newcrest share price summary

Since August 2020, the Newcrest share price has been on a gradual decline, posting a loss of almost 40%. Year-to-date, however, its shares are down 10% for investors.

As Australia’s largest gold miner, Newcrest commands a market capitalisation of roughly $18.88 billion, with approximately 817.96 million shares outstanding.

The post Newcrest (ASX:NCM) share price slides despite US$37 million payday appeared first on The Motley Fool Australia.

More reading

• Macquarie (ASX:MQG) upgraded these ASX gold shares to ‘buy’ for 2022
• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 on Friday
• Top brokers name 3 ASX shares to buy today
• The Newcrest (ASX:NCM) share price is having a year to forget. What’s next?

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

from The Motley Fool Australia https://ift.tt/31WT68o

At lunch on Tuesday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is dropping. The benchmark index is currently down 0.1% to 7,371.5 points.

Here’s what is happening on the ASX 200 today:

Afterpay shareholders vote in favour of takeover

The Afterpay Ltd (ASX: APT) share price isn’t likely to be trading on the Australian share market for too much longer after its shareholders voted in favour of the Square takeover this morning. While the final vote has not yet been revealed, enough proxy votes were cast to clear the 75% hurdle. The deal now only requires approval from the Bank of Spain.

Woolworths shares crash

The Woolworths Group Ltd (ASX: WOW) share price has crashed lower today after the retail conglomerate released an update on its performance during the first half of FY 2022. That update revealed that Woolworths has had a challenging six months. Due largely to COVID related costs, Australian Food EBIT is expected to be $1,190 million to $1,220 million during the first half. This compares to FY 2021 first half (27 weeks) Australian Food EBIT of $1,329 million. In addition, BIG W is expected to post a big reduction in first half earnings.

CSL trading halt

The CSL Limited (ASX: CSL) share price is in a trading halt today. This morning the biotherapeutics company requested the halt so it could launch a capital raising. It is understood that CSL is aiming to raise US$4 billion to partly fund the acquisition of Vifor Pharm for upwards of US$12 billion (A$16.74 billion).

Best and worst ASX 200 performers

The best performer on the ASX 200 today has been the Charter Hall Group (ASX: CHC) share price with a 5.5% gain. This morning Macquarie retained its outperform rating and lifted its price target to $22.90 following yesterday’s strong update. Going the other way, the worst performer has been the Mesoblast LImited (ASX: MSB) share price with a 16% decline. This morning Novartis terminated its agreement with the company that could have been worth US$1.2 billion.

The post ASX 200 (ASX:XJO) midday update: Afterpay takeover vote, Woolworths crashes appeared first on The Motley Fool Australia.

More reading

• Could 2022 be a good year for the Vanguard International Shares ETF (ASX:VGS)?
• Here’s why the Charter Hall (ASX:CHC) share price is leaping another 5% today
• Mesoblast (ASX:MSB) share price crashes 21% after Novartis terminates agreement
• Why is the Coles (ASX:COL) share price sinking 4% today?
• ASX shares that could be impacted by AdBlue shortage

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

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

As we may all be aware, 2021 has been a pretty solid year for investing on the ASX share market. Over the year to date in 2021, the S&P/ASX 200 Index (ASX: XJO) has gained close to 10%. Considering the added bonuses of dividends and franking, that’s an objectively fine performance from ASX shares for the year (touch wood). But what of the Vanguard MSCI Index International Shares ETF (ASX: VGS)? 

Well, it appears VGS was not to be outdone by the ASX 200. VGS units have, year to date, returned just over 27% to its investors since the start of January. But that’s looking backwards. What is the outlook for VGS units going into 2022? Can investors expect another year of near-30% returns from this humble index fund?

Where did VGS’s 2021 gains come from?

Well, to answer that as best we can, let’s dig into how this exchange-traded fund (ETF) is structured. So VGS is one of the widest and most diversified ETFs on the ASX. It covers an astonishing 1,502 individual companies, spread across more than 20 countries. These advanced economies include Canada, Japan, Europe, Singapore, Hong Kong and the United Kingdom. But are mostly dominated by the United States, which commands nearly 70% of this ETF’s weighting.

The US is also heavily reflected in VGS’s top holdings. AS of 31 October, these were:

1. Apple Inc (NASDAQ: AAPL)
2. Microsoft Corp (NASDAQ: MSFT)
3. Amazon.com Inc (NASDAQ: AMZN)
4. Tesla Inc (NASDAQ: TSLA)
5. Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL)
6. Meta Platforms Inc (NASDAQ: FB)
7. NVIDIA Corp (NASDAQ: NVDA)
8. JPMorganChase & Co Inc (NYSE: JPM)
9. UnitedHeath Group Inc (NYSE: UNH)
10. Johnson & Johnson (NYSE: JNJ)

They’re all US companies, together making up close to 20% of VGS’s total weighting despite its 1,502 individual holdings. And all of these top 10 holdings have enjoyed a phenomenal year in 2021 so far. For example, Apple shares are up 25.8% in 2021 so far. Microsoft shares are up almost 56%, while Amazon has had a far more muted year with a 6.4% gain. Tesla has gained 32.4%, while Alphabet Class A shares have put on nearly 69%.

As such, it’s not hard to see why VGS itself has had such a strong year thus far. It’s all helped along by the falling Aussie dollar in 2021 too, no doubt.

What does 2022 hold for the Vanguard MSCI Index International Shares ETF?

So for 2022 to be another top year for VGS units, we would probably have to see another strong showing for these top US shares, especially those in the top echelon (Apple, Microsoft etc.). A further drop in the value of the Aussie dollar against the US dollar would also help.

So only time will tell if 2022 ends up being another great year to hold VGS units. But keep your eye on those top holdings if you want to keep track.

The Vanguard MSCI Index International Shares ETF charges a management fee of 0.18% per annum.

The post Could 2022 be a good year for the Vanguard International Shares ETF (ASX:VGS)? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Afterpay takeover vote, Woolworths crashes
• 5 things to watch on the ASX 200 on Tuesday
• What is the outlook for the ANZ (ASX:ANZ) share price in 2022?
• Here are the top 10 ASX shares today
• Experts tip 2 beaten up ASX shares for gains in 2022

JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Alphabet (A shares), JPMorgan Chase, Johnson & Johnson, Meta Platforms, Inc., and Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Meta Platforms, Inc., Microsoft, and Vanguard MSCI Index International Shares ETF. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Nvidia, and Vanguard MSCI Index International Shares ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

The Charter Hall Group (ASX: CHC) share price is up another 5% right now. That means it’s now up more than 11% this week, bringing this year’s gain to 45%.

Yesterday, the business upgraded its FY22 earnings guidance and updated the market about its funds under management (FUM) growth.

However, this morning the company revealed that it has signed a long-term agreement with one of Australia’s largest companies, Telstra Corporation Ltd (ASX: TLS).

Telstra signs new Charter Hall rental agreement

Charter Hall announced that it has secured a pre-commitment from Telstra at its $450 million development in the Adelaide CBD – 60 King William Street.

The real estate business noted this 10-year agreement builds on Charter Hall’s long-term tenant customer relationship with Telstra, including its global headquarters.

Telstra will relocate its Adelaide workforce to the new office space once completed in 2023.

Joining Federal Government Agency Services Australia at 60 King William Street, Telstra will occupy approximately 6,000 square metres of space across two levels.

Charter Hall Office CEO, Carmel Hourigan said:

We are pleased to be further extending our deep relationship with Telstra and welcoming their team to 60 King William Street, which is set to raise the bar for innovative and sustainable workplaces in South Australia. This agreement brings Telstra’s total leased space with us to more than 130,000sqm across Australia, underpinning the strength of our partnership and reflecting Charter Hall’s ability to deliver high quality, technology enabled buildings to meet the needs of Telstra’s business.

FY22 earnings guidance and FUM growth

The property management business has gone through the process of independently valuing almost all of its properties, resulting in a net valuation uplift of around $3.5 billion as at 31 December 2021.

It was also noted that Charter Hall Long WALE REIT (ASX: CLW) and Hostplus have unconditional ALE Property Group (ASX: LEP) securityholder and court approval to complete the deal on 17 December 2021.

As a result, group FUM is now expected to be $61.3 billion at 31 December 2021.

These valuation uplifts increase FUM and likely the performance fees payable at testing dates during the financial year, so it upgraded its FY22 operating earnings per security (EPS) of no less than $1.05 per security.

The FY22 distribution per security guidance remains unchanged and is for 6% growth compared to the distributions paid in FY21.

Charter Hall managing director and CEO David Harrison said:

It is pleasing to see the hard work we have put into curating and growing high quality portfolios for our fund investors over many years has delivered excellent financial returns, well above expectations and performance fee hurdles.

The resultant performance fees, whilst positive for the group, also highlights the outperformance delivered for investors given fund investors typically receive 80% of excess total returns above the hurdles established at inception of the funds and partnerships.

Charter Hall share price snapshot

The high level of growth of the Charter Hall has seen its market capitalisation rise to $9.7 billion according to the ASX. 

The post Here’s why the Charter Hall (ASX:CHC) share price is leaping another 5% today appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Afterpay takeover vote, Woolworths crashes
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts this Monday
• Why AVZ, Brickworks, Charter Hall, and Senex shares are storming higher
• Charter Hall (ASX:CHC) share price pops 5% to record high on earnings upgrade

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. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/33hIPnQ

It’s a rough day on the ASX for the Coles Group Ltd (ASX: COL) share price despite the company’s silence.

However, fellow Australian supermarket giant, Woolworths Group Ltd (ASX: WOW) released potentially disappointing news to the market this morning.

At the time of writing, the Coles share price is $17.20, down 3.75% from its previous close.

For context, the S&P/ASX 200 Index (ASX: XJO) has slumped 0.22% while the share price of Woolworths has tumbled 8.65%.

Let’s take a look at the news that might be weighing on Coles’ stock this morning.

Coles share price slips amid competitor’s woes

It’s a rough day for the Coles share price after its rival released a worrying trading update that might have inspired a drop in confidence in ASX-listed supermarkets.

This morning, Woolworths updated the market on its performance for the first half of financial year 2022. Within its release, its CEO said that the period’s been “one of the most challenging halves … experienced in recent memory”.

The company stated that it’s had a lacklustre performance due to the impacts of COVID-19‘s Delta strain.

Woolworths has been hit with direct and indirect costs due to COVID-19 outbreaks in the half. Particularly, as the outbreaks caused its supply chain to struggle.  

The disruption to stores and distribution centres has resulted in costs of between $60 million and $70 million over the 6-month period.

Though, its customers’ spending patterns began to normalise when lockdowns in New South Wales and Victoria eased in October.

The market might be assuming Coles experienced the same challenges during the first half.

Some COVID-19-related impacts on Coles’ business were included in its results for the first quarter of this financial year.

The supermarket reported it had footed around $75 million of costs associated with employees needing to isolate, extra staff to ensure check-in compliance and lower productivity.

The Coles share price gained 0.12% on the back of the company’s most recent quarterly results. However, it has fallen 7% since the start of 2021.

The post Why is the Coles (ASX:COL) share price sinking 4% today? appeared first on The Motley Fool Australia.

More reading

• ASX shares that could be impacted by AdBlue shortage
• Woolworths (ASX:WOW) share price sinks 7% amid ‘one of the most challenging halves’
• Could this tasty morsel be next on the acquisition menu for Woolworths (ASX:WOW)?
• Own Coles (ASX:COL) shares? Here’s how the share price performed in November
• Woolworths (ASX:WOW) starts construction of project to double online fulfilment capacity

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

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

The IDT Australia Limited (ASX: IDT) share price is on ice today after the company requested a trading halt.

Before it was put on hold, the IDT share price was trading at 48 cents apiece.

IDT is a Melbourne-based pharmaceutical company involved in manufacturing mRNA for use in COVID-19 vaccines.

Why is the IDT share price halted?

IDT has been granted a trading halt pending an upcoming public announcement on mRNA vaccine production.

The company needs to consider its response to an announcement by the federal government on local mRNA manufacturing.

The company said it’s not in a position to announce this to the market at present.

Early on Tuesday, the government revealed it has struck a deal with Moderna to build a new vaccine manufacturing facility in Victoria. At the time of writing, it’s not clear if IDT will play any role in this deal.

IDT does not expect the trading halt to last more than two days and will make an announcement prior to this time.

What is the company working on?

As reported by Motley Fool Australia, IDT has reported it’s successfully manufactured an mRNA drug product for use in a COVID-19 vaccine candidate.

On Monday, the company provided an update to investors on its mRNA manufacturing initiatives.

The company sees an unmet market need for commercial-scale manufacturing of mRNA.

IDT stated it wants to grow its mRNA facilities to become Australia’s mRNA “manufacturing hub of excellence”.

IDT share price snapshot

In the last 12 months, the IDT share price has sky rocketed 134% and has rallied 159% in the year to date.

Despite this, it’s slipped 2% in the last month and 3% in the past week.

IDT has a market capitalisation of roughly $115 million based on the current share price.

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

More reading

• IDT (ASX:IDT) share price swings as CEO lauds mRNA tech in fight against Omicron
• The Starpharma (ASX: SPL) share price surges on Vietnam launch
• IDT Australia (ASX:IDT) share price rockets 40% on COVID vaccine update

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

from The Motley Fool Australia https://ift.tt/3s8Y0dH

Shares in home retail giant Harvey Norman Holdings Limited (ASX: HVN) are inching higher this morning and now trade less than 1% higher at $5.13 apiece.

With the Christmas holidays are looming around the corner, many of us are still scurrying to organise last minute gift ideas, all whilst trying to wind down for some hard-earned “R&R”.

The markets are feeling the generosity this festive season as well, with the major benchmarks each bouncing off 2-month lows and closing out the past 5 trading days in the green.

With that in mind, it makes sense that investors are searching for some Christmas bargains, and so we delve into the expert commentary to see if Harvey Norman is a good “stock-ing” filler (see what I did there?).

Is Harvey Norman a buy this Christmas?

According to portfolio manager at Market Matters, James Gerrish, yes Harvey Norman its a buy. Speaking to Livewire Markets very recently, Gerrish notes that the big secular tailwind for Harvey Norman – and the wider retail sector – is the high rates of household savings in Australia.

Gerrish says there are $300 billion in pent up household savings that Aussies have accumulated since the onset of the pandemic.

That’s a total of 14% of GDP, a “wall of money” as the portfolio manager puts it. These factors mean Harvey Norman is well-positioned to capitalise on the potential spending of said savings, given its retail focus.

Not only that, but Harvey Norman is trading at valuations cheaper than rival JB Hi-Fi Limited (ASX:JBH), a punishment that Gerrish feels is unwarranted at this stage.

Contrasting this opinion is portfolio manager at Tribeca Investment Partners, Jun Bei Liu, who notes the drawn-out impacts on the Australian retail sector from COVID-19 lockdowns in the same interview with Livewire.

Not only that, but Jun Bei Liu alluded to supply chain and manufacturing bottlenecks that have been spurred on by the pandemic as well, meaning “you can’t get product here and you can’t sell properly”.

However, the portfolio manager notes that Harvey Norman sits in “neutral territory” for Tribeca and she believes the company is “well on track to deliver more capital returns post the first-half results”.

Finally, the team at Goldman Sachs also agree that Harvey Norman could be a buy coming into Christmas, and value the company at $6 per share.

It too feels the company could benefit from an uplift in consumer spending over the Christmas break, backed by the enormous savings pool Australian’s have accumulated these past 2 years.

It maintains its buy rating on the shares and notes that it expects spending to increase for the home category in retail, a direct benefit to Harvey Norman’s earnings.

So with that in mind, it appears that Harvey Norman could be the beneficiary of a huge wave of spending this Christmas if Australian’s decide to dip into that mammoth cash stockpile.

Time will tell if the thesis plays out, especially with the emergence of the new Omicron COVID-19 variant.

Harvey Norman share price summary

In the past 12 months, the Harvey Norman share price has gained almost 11% after rallying more than 9% this year to date.

Despite this, it has just outpaced the benchmark S&P/ASX 200 Index (ASX: XJO)’s return of approximately 10% in the past year.

The post Could Harvey Norman (ASX:HVN) shares be a Christmas cracker of a buy? appeared first on The Motley Fool Australia.

More reading

• Goldman Sachs names 2 ASX 200 shares to buy
• ASX 200 retail shares lift as Aussies head into Christmas with $240bn in savings
• Is the Harvey Norman (ASX:HVN) share price dirt cheap?
• 5 things to watch on the ASX 200 on Tuesday
• Could ASX 200 retail shares deliver some dividend surprises in 2022?

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Harvey Norman Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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

The Mesoblast limited (ASX: MSB) share price has returned from its brief pause and is crashing lower on Tuesday.

In morning trade, the allogeneic cellular medicines developer’s shares are down 21% to a 52-week low of $1.34.

Why is the Mesoblast share price crashing lower?

Investors have been selling off the Mesoblast share price today after it was dealt a massive but not entirely unexpected blow.

According to the release, biotech giant Novartis has chosen to terminate the agreement with Mesoblast relating to using remestemcel-L to treat acute respiratory distress syndrome (ARDS) due to COVID-19.

What happened?

This shouldn’t be a huge surprise to investors given how poorly its trial went last year.

Almost a year to the day, Mesoblast’s trial of remestemcel-L in ventilator-dependent patients with moderate to severe ARDS due to COVID-19 infection was ended early after the Data Safety Monitoring Board concluded that the trial was unlikely to meet the 30-day mortality reduction endpoint at the planned 300 patient enrolment.

This led to the Mesoblast share price crashing 45% on the news. Unfortunately, it has been on a downwards trajectory ever since and its isn’t hard to see why.

Given the state of the company’s balance sheet, this agreement would have been a huge boost.

In November last year, Mesoblast revealed that it could receive a total of US$505 million from Novartis pending achievement of pre-commercialisation milestones for ARDS indications. Furthermore, the company stood to earn additional payments post-commercialisation of up to US$750 million. This was based on achieving certain sales milestones and tiered double-digit royalties on product sales.

That’s ~US$1.2 billion of potential earnings lost with the termination of this agreement.

What now?

Mesoblast advised that it remains highly focused on executing its short term objective to bring remestemcel-L to market for patients with ARDS due to COVID-19.

It notes that the observed mortality reduction with remestemcel-L in patients aged under 65 in the completed COVID ARDS trial, despite having missed the primary endpoint, is considered by Mesoblast to be a sufficiently strong signal to support pursuing an emergency use authorisation (EUA). This is the most direct path to market.

As a result, Mesoblast is preparing to initiate a pivotal Phase 3 trial that may support a COVID ARDS EUA.

The post Mesoblast (ASX:MSB) share price crashes 21% after Novartis terminates agreement appeared first on The Motley Fool Australia.

More reading

• What’s the outlook for ASX biotech shares in 2022?
• These are the 10 most shorted ASX shares
• These were the best performing ASX 200 shares last week
• Standouts: 3 ASX biotech shares that outperformed in November
• Why is the Mesoblast (ASX:MSB) share price blasting 10% 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.

from The Motley Fool Australia https://ift.tt/3yqjun7

The Mineral Resources Ltd (ASX: MIN) share price was jumping between red and green in early morning trade. It now looks to have found some direction.

At time of writing, shares in the S&P/ASX 200 Index (ASX: XJO) miner are up 1.47%.

The broader ASX 200 is under pressure today, down 0.22%, following a selloff in US markets over renewed fear of the Omicron COVID variant, along with a dash of inflation angst.

Below, we take a look at the lithium development partnership that looks to drawing ASX investor interest in Mineral Resources shares.

What lithium development partnership was announced?

The Mineral Resources share price is in the green after gold miners Pantoro Ltd (ASX: PNR) and Tulla Resources PLC (ASX: TUL) – its 50% Norseman Gold Project joint venture (JV) partner – reported on a binding agreement with Mineral Resources to seek and develop lithium deposits in a joint venture across their project.

According to the agreement, Mineral Resources will spend a half million dollars within the first 6 months and another $2.5 million inside the next 18 months, taking its expenditure to at least $3 million within the first 2 years.

The company will also conduct a feasibility study including definition of a JORC compliant resource in those 2 years. That will see Mineral Resources earn 25% of the lithium rights within the Norseman Gold Project tenure. It can earn another 40% of the lithium rights, bringing its ownership to 65%, by funding the project until first production.

Commenting on the partnership with Mineral Resources, Pantoro’s managing director Paul Cmrlec said:

This new partnership is an outstanding outcome for Pantoro to maximise the value of a key mineral asset at Norseman. The agreement allows us to progress without any distraction from our core business of gold development and mining, while maximising value for our shareholders.

Mineral Resources is a development and production focussed company with an excellent track record and reputation. Pantoro has every confidence that Mineral Resources will ensure the successful development of the lithium assets. We look forward to rapidly generating drilling results from the highly prospective Buldania tenements.

Mineral Resources will be the manager of the new JV and be responsible for all expenses until first production begins.

The companies said drilling will start as soon as possible.

Mineral Resources share price snapshot

The Mineral Resources share price has gained 31% this year, outpacing the roughly 10% year-to-date gains posted by the ASX 200.

Over the past month, shares in Mineral Resources are up 23%.

The post Mineral Resources (ASX:MIN) share price gains on new lithium partnership appeared first on The Motley Fool Australia.

More reading

• Minerals Resources (ASX:MIN) share price wobbles on lithium agreement
• What this EV forecast could mean for top ASX 200 resource shares
• 5 best ASX 200 resource shares to hold in November
• Leading brokers name 3 ASX shares to sell today
• Mineral Resources (ASX:MIN) share price jumps on rail agreement

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

from The Motley Fool Australia https://ift.tt/3dT4XXC