The Contact Energy Limited (ASX: CEN) share price is gaining in morning trade, up 3%.

Below we take a look at the ASX energy company’s latest contract announcement.

What did Contact announce?

Contact Energy’s share price is gaining after the company reported on a 15-year, renewable energy power purchase agreement with Genesis Energy Ltd (ASX: GNE).

Key terms of the agreement, signed today, stipulate that commencing in 2025 Contact will supply Genesis with up to 62.5 megawatts of electricity.

That’s equivalent to 41% of the the152-megawatt capacity from the company’s geothermal power station. Contact expects that the power station, currently under development at Tauhara, New Zealand, will be complete in mid-2023.

Commenting on the agreement, Contact Energy’s CEO, Mike Fuge said:

It’s fantastic to see customer support for the country’s leading renewable development. These sort of long-term commitments, backed by the lowest cost projects, are good for New Zealand as they keep electricity prices as low as possible and encourage the development of new renewable generation.

It also demonstrates the importance of the Tauhara development’s role in helping reduce New Zealand’s emissions. The power station will operate 24/7, have low emissions and will not be reliant on the weather.

Genesis’ CEO, Marc England added, “This arrangement with Contact will help us deliver on both our Future-gen strategic targets and our commitment to remove at least 1.2 million tonnes of annual carbon emissions by 2025.”

England said Genesis will have more renewable prospects it will announce to the market in the near-term.

Contact expects Tauhara will replace 1.3 terawatt hours of thermal generation from New Zealand’s electricity system. That should cut some 450,000 tonnes of carbon emissions annually.

The agreement commences on 1 January 2025. The financial details remain confidential at this time.

Contact Energy share price snapshot

Contact Energy’s share price is up 38% over the past 12 months. In comparison, the S&P/ASX 200 Index (ASX: XJO) is up 24% over that same time.

The Contact Energy share price has struggled in 2021, down 9% year-to-date.

The post Why the Contact Energy (ASX:CEN) share price is taking off today appeared first on The Motley Fool Australia.

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• The Damstra Holdings (ASX:DTC) share price is up 50% in a month!

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 Goodman Group (ASX: GMG) share price has sold off sharply this morning after the company released its full-year FY21 results.

Shortly after opening, shares in the industrial real estate investment trust (REIT) tumbled 4.97% to $22.01. They have since regained some ground and at the time of writing are down 3.5% to $22.35.

Goodman share price slumps despite exceeding guidance

• Operating profit of $1.22 billion, up 15% on FY20
• Operating earnings per security (EPS) of 65.5 cents, up 14.1%
• Statutory profit of $2.3 billion
• Distribution of 30.0 cents per share
• Total assets under management (AUM) of $57.9 billion, up 12%
• Portfolio occupancy rate of 98.1% and like-for-like net property income growth of 3.2%

What happened in FY21 for Goodman Group?

In FY21, the Goodman Group share price has been supported by the company’s focus on high barrier to entry markets where land is scarce and use is intensifying.

The company was pleased to highlight that customer demand for space in its locations continues to increase across a range of industries.

“The prolonged impacts of the global pandemic continue to accelerate consumers’ propensity to shift to online shopping. Logistics and warehousing has provided critical infrastructure to enable distribution of essential goods to time-sensitive consumers through this period.”

As a result, the company cited increasing utilisation of its facilities with an occupancy rate of 98.1% at a weighted average lease expire (WALE) of 4.5 years.

This theme has carried through to the company’s development pipeline, with $10.6 billion worth of work in progress.

Encouragingly, the company said there were high levels of pre-commitment at 70% with a 14-year WALE. Additionally, it said projects completed in FY21 were 96% leased.

More broadly speaking, Goodman Group said that “around the world … continues to undertake long-term value-enhancing opportunities by targeting higher and better use through re-zoning or increased floor space ratios with multi-level warehousing facilities”.

Goodman Group’s FY21 results exceeded its latest forecast of $1.2 billion in operating profit or an earnings per share (EPS) growth of 12%.

Despite coming out ahead of its forecasts, the Goodman share price has tanked 3.5% to $23.35.

What did management say?

Goodman Group chief executive officer Greg Goodman was pleased with the company’s performance.

Goodman’s adaptable and flexible approach has enabled our people to continue to perform at a high standard and deliver a very strong result in the current environment, with health and well-being remaining a critical priority.

Mr Goodman also highlighted the tailwinds behind the company’s focus on high-quality real estate.

Long-term structural trends are well established and are resulting in higher utilisation of space and customer demand. This is providing greater visibility around future requirements for space, and accordingly we have increased WIP further to $10.6 billion at June 2021. The development and valuation growth is flowing through to our partnership platform, where total AUM has increased 12% to $57.9 billion in FY21. With strong income and capital growth, our partnerships have delivered average returns of 17.7%.

What’s next for Goodman Group

Looking ahead, Goodman Group said it expects to deliver FY22 operating EPS of 72.2 cents. That would be a 10% increase on FY21 figures.

The company’s forecast FY22 distribution is expected to remain steady at 30 cents per share.

Despite the sharp pullback on Thursday, the Goodman share price has rallied more than 16% year-to-date. It is also up 21% in the past 12 months.

The post Goodman Group (ASX:GMG) share price falls after FY21 results appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun 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 Praemium Ltd (ASX: PPS) share price is climbing higher today.  

At the time of writing, shares in the fintech company are trading higher for the day near their all-time high of $1.28.  

The Praemium share price has perked up after announcing changes to its senior management earlier today.

Let’s take a look at what Praemium announced.

Praemium share price lifts on CEO announcement

The Praemium share price is poised to lift after announcing the appointment of a new Chief Executive Officer (CEO).  

In an announcement to the market earlier today, the company announced the appointment of Anthony Wamsteker as CEO.

Praemium noted that Mr Wamsteker has been part of the company’s board since November 2020, after serving as the Chairman of Powerwrap previously.

Mr Wamsteker has held the role of Executive Director and Interim CEO of Praemium since May 2021.

According to the update, Mr Wamsteker will assume the role effective from the 16^th of August 2021.

The official appointment of Mr Wamsteker follows the shock departure of the company’s previous CEO earlier this year.

More on the Praemium share price

Praemium is a global fintech company that provides technology platforms for managed accounts, investment administration and financial planning.

The company boasts more than 300,000 investor accounts covering over $170 billion in funds globally for more than 1,000 financial institutions.

The Praemium share price has powered along in 2021.

Shares in the fintech have soared more than 95% since the start of the year.

The Praemium share price received a boost recently after reporting a promising quarterly update last month.

For the June quarter of 2021, Praemium reported record quarterly inflows of $1.2 billion.

In addition, it highlighted that total funds under administration (FUA) soared to a record of $41.7 billion.

Praemium’s Australian operations led the charge, with a 223% year-on-year increase in FUA. The company’s international platform had a more subdued performance, up 55% year-on-year.

In addition, Praemium also announced that the company had completed a strategic review of its international operations.

The review concluded with the recommendation that Praemium divests its international business through a formal sale process.

According to the update, Praemium’s board supported the recommendation.

As a result, shares in Praemium will receive extra attention this reporting season.

The company is slated to release its full-year results for the 2021 financial year on Monday 16 August 2021.

The post New CEO announcement boosts Praemium (ASX:PPS) share price appeared first on The Motley Fool Australia.

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Motley Fool contributor Nikhil Gangaram 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 Praemium Limited. The Motley Fool Australia has recommended Praemium 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 Appen Ltd (ASX: APX) share price is sliding this Thursday morning. This comes after the artificial intelligence data services company announced an update to its board.

At the time of writing, the Appen share price is trading for $12.10, down 1.87%.

Appen updates it board

The Appen share price could be on the move today as investors will be digesting the latest update from the company.

According to the release, Appen advised that Richard Freudenstein assumes the role of independent non-executive director effective today. In addition, Mr Freudenstein will succeed Chris Vonwiller’s position as chair on 28 October.

Mr Vonwiller held the title of chair for a period of 12 years and notably was CEO for the company from 1999 to 2010.

Mr Freudenstein brings a wealth of experience to the Appen board. Currently, he is a director for Coles Group Ltd (ASX: COL), REA Group Limited (ASX: REA), and Cricket Australia.

Previously, Mr Freudenstein served as chair for REA Group, as well as director of Ten Network, Foxtel, and Astro Malaysia. He has held the roles of CEO at Foxtel, News Digital Media and The Australian, and was chief operating officer (COO) at British Sky Broadcasting.

Appen outgoing chair, Mr Vonwiller touched on the succession, saying:

Richard is an experienced director and Chairman of large public companies and brings extensive governance expertise to the Board. His experience as a CEO and COO in the fast-evolving media industry also mean he is ideally placed to provide leadership for the next phase of Appen’s development.

We are now working closely to ensure an orderly transition and I am confident that Richard will help to drive the company’s future growth.

Mr Freudenstein went on to add:

Artificial intelligence is transforming the products and services we use every day and Appen plays a unique role in ensuring that AI works for all users in the real world.

Chris has been instrumental in Appen’s success since it was founded 25 years ago by him and his wife, Dr Julie Vonwiller. Under his stewardship, Appen has delivered extraordinary growth and has transformed from an Australia-based language data services provider to a global product led provider of AI data and solutions.

Lastly, William Pulver will retire from the board as non-executive director on 25 August, after being in the role for 11 years. His position will be succeeded as chair of the Nomination and Remuneration Committee by the independent non-executive director, Steve Hasker.

Appen share price summary

It’s been a tough 12 months for Appen shareholders, with the company’s share price falling 65%, and down 50% year-to-date. Appen has a price-to-earnings (P/E) ratio of 30.77, and a trailing dividend yield of 0.80%.

Appen commands a market capitalisation of around $1.5 billion, with approximately 123 million shares on its books.

The post Appen (ASX:APX) share price slides following board renewal appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd and COLESGROUP DEF SET. The Motley Fool Australia has recommended REA Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The GrainCorp Ltd (ASX: GNC) share price has been a very strong performer on Thursday morning.

In early trade, the integrated grain and edible oils company’s shares are up 12% to a multi-year high of $6.12.

Why is the GrainCorp share price rising today?

Investors have been bidding the GrainCorp share price higher following the release of an update on its guidance for FY 2021.

As you might have guessed from the positive reaction, this update has seen the company upgrade its profit expectations for the year.

According to the release, GrainCorp now expects its underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $310 million to $330 million.

This is up from its previous guidance of $255 million to $285 million and is a material increase on FY 2020’s underlying EBITDA of $108 million.

Positively for shareholders and the GrainCorp share price, it is a similarly positive story on the bottom line. Management now expects its underlying net profit after tax to be in the range of $125 million to $140 million.

This is up from its previous guidance range of $80 million to $105 million. It also compares very favourably to a $16 million loss in FY 2020.

Though, management has warned that this upgraded earnings guidance remains subject to several market variables. These include the timing of grain exports, the strength of the new crop, and prevailing weather conditions.

What is driving this outperformance?

The company revealed that this strong performance is being driven by heightened demand for Australian grain. This has bolstered an already outstanding year for the agribusiness segment.

GrainCorp’s Managing Director & CEO, Robert Spurway, commented: “We are pleased to upgrade our FY21 earnings guidance, which reflects the strong performance of our east coast Australian (ECA) grains business, following the bumper 2020/21 harvest.”

“Post-harvest winter receivals and higher summer receivals, coupled with a favourable outlook for the upcoming winter crop, have supported strong export volumes, forward contracted sales and supply chain margins.”

“We’re seeing excellent demand for high quality Australian grain, particularly with recent weather related crop production challenges in the northern hemisphere, and July delivered our biggest month of contracted sales on record,” he added.

What’s next?

Mr Spurway also confirmed that GrainCorp is preparing for the upcoming winter harvest with a strong maintenance and capital investment program. He advised that the total FY 2021 capex was expected to be approximately $55 million. This includes approximately $50 million of sustaining capex.

While the latter is ahead of its target, it is due to the additional storage capacity and other upgrades to the ECA network being made in preparation for another large crop in FY 2022.

The GrainCorp share price is now up 45% since the start of the year.

The post GrainCorp (ASX:GNC) share price jumps 12% on guidance upgrade appeared first on The Motley Fool Australia.

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

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The share price of ASX workplace technology company Damstra Holdings Ltd (ASX: DTC) has been on an absolute tear recently. In just the last month alone, Damstra shares have skyrocketed almost 50% higher (to $1.20, as at the time of writing). So, what is behind this sudden rally in the Damstra Holdings share price?

Company Background

First, a quick look at what Damstra actually does – because it’s actually quite interesting.

Damstra operates in a fairly niche industry. It develops tailored workplace management solutions for corporate clients operating in specialised fields like mining, construction and utilities. These sorts of workplaces often have very specific safety, compliance and regulatory standards they need to meet in order to remain operational. Damstra partners with these clients to develop the systems and processes required for them to exceed the unique demands of their industries.

For example, Damstra recently worked with a mining company to fully digitise its safety compliance forms, delivering a bespoke technology solution that ended up saving the company $1 million a year.

Recent news

The Damstra share price really took off following the release of the company’s fourth-quarter FY21 activities report on 22 July. In it, Damstra reported record quarterly revenues of $9.1 million, a massive jump of 75% over the prior comparative period. The company also brought in record cash receipts during the June quarter, amounting close to $10 million.

Commenting on the results, Damstra CEO Christian Damstra hinted that Damstra had a strong sales pipeline and that further growth could still be on the way. He stated that Damstra remains “in productive contractual negotiations with several potentially material clients in the United Kingdom and North America, all recognised leaders in their respective fields and each with more than 10,000 users.”

Recent moves in the Damstra Holdings share price

Although the recent gains in the Damstra Holdings share price have been great news for shareholders, it’s worth pointing out that it comes at the end of a pretty rough period for Damstra shares.

After surging to a new all-time high price of $2.44 last October, Damstra shares shed close to 70% of their value. Just prior to the company releasing its quarterly activities report, the Damstra share price had plunged to a new 52-week low of just $0.75.

It’s important to keep this context in mind because even despite the recent surge, the Damstra Holdings share price is still down over 20% this year. Investors may still be concerned about the impacts of continued lockdowns in Australia, as well as the resurgence of the delta strain of COVID-19 internationally. However, the announcement of major infrastructure projects in the US could also create possible tailwinds for Damstra.

All these competing factors make Damstra a really interesting company to watch, particularly over the short term. And all eyes will be on the Damstra Holdings share price when the company reports its full-year FY21 results to the market on 26 August.

The post The Damstra Holdings (ASX:DTC) share price is up 50% in a month! appeared first on The Motley Fool Australia.

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Motley Fool contributor Rhys Brock owns shares of Damstra Holdings Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Damstra Holdings Ltd. The Motley Fool Australia owns shares of and has recommended Damstra Holdings 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 AGL Energy Limited (ASX: AGL) share price will be one to watch when trading resumes on Thursday. That’s after the company released its full-year results for FY21 this morning.

At close of trade yesterday, the AGL share price was trading at $7.60 – up 2.15%. The S&P/ASX 200 Index (ASX: XJO) ended yesterday 0.29% higher, for comparison.

Let’s take a closer look at what the energy producer reported.

AGL share price in focus with 34% drop in underlying profits

Investors will be keenly watching the AGL share price this morning after the company reported the following key results:

• Revenue decreased 10.0% on the prior corresponding period (pcp) to $10.9 billion.
• Underlying profits fell 33.5% to $537 million on the pcp.
• Underlying earnings per share (EPS) dropped 31.6% to 86.2 cents.
• Net operating cash outflow before significant items was $870 million – a 35% drop.
• Full year dividend of 75 cents per share (41 cents interim + 35 cents final). This is down 23.5% on the pcp for a yield of 9.87% on the current AGL share price.

What happened in FY21 for AGL?

On the last day of the financial year, AGL announced plans to demerge into two businesses, both listed on the ASX. Accel Energy would focus on low-carbon energy production while AGL Australia’s remit will pertain to multiple energy products as well as energy trading, storage, and supply. The AGL share price slumped on this news.

In June, AGL announced the suspension of its special dividend program, in which it planned to pay 25% of underlying profits over the next 2 years.

Finally, there were multiple updates relating to the company’s current and proposed work sites, including Crib Point, Loy Yang, the Portland smelter, and Liddell.

What did management say?

AGL Energy managing director and CEO Graeme Hunt said:

Our FY21 result reflects a challenging year for AGL Energy as we realised the impact of lower wholesale electricity prices, reduced electricity generation output at peak periods, and the roll-off of legacy supply contracts in Wholesale Gas.

Although wholesale electricity prices have rallied in recent months, our result reflected the impact over the past two years of increasing generation supply and lower demand arising from the COVID-19 pandemic and milder weather.

What’s next for AGL?

As stated, AGL will demerge its business into two entities. It expects this process to be completed by the fourth quarter of this financial year.

AGL also says it will be “continuing” its self-proclaimed “leadership role in the energy transition”. The company is committing to publishing decarbonisation targets and climate roadmaps in the near future.

AGL share price snapshot

Over the last 12 months, the AGL share price has fallen 55.3%. Year to date, it is down 37.3%.

AGL Energy has a market capitalisation of around $4.7 billion.

The post AGL (ASX:AGL) share price on watch following FY21 earnings appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous 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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Investors will be watching the Downer Ltd (ASX: DOW) share price upon market open on Thursday.

This is on the back of the integrated services provider reporting its full-year results to the ASX this morning.

Downer share price on watch after swinging to net profit

• Underlying net profit after tax and amortisation up 21.4% year on year to $261.2 million
• Revenue down 8.8% to $12,234.2 million
• Statutory earnings before interest, tax, and amortisation increased by $371 million to $401 million
• Statutory net profit after tax of $230 million, up from a loss of $105.8 million
• Earnings per share (EPS) of 25.4 cents per share, up from a loss of 26.1 cents per share
• Unfranked final dividend of 12 cents per share, taking full year dividend to 21 cents per share unfranked

What happened in FY21 for Downer

The Downer share price will be in focus this morning after the $3.89 billion company reported its anticipated FY21 results.

On the top line, the company generated $12,234.2 million in group revenue during the 12-month period. This was 8.8% lower year on year and driven by the completion of projects and continued wind-down of nbn contracts. For instance, rollingstock services revenue were lower due to the completion of the Waratah bogie overhaul. Likewise, utilities revenue decreased 21.6% to $581.7 million with nbn contracts drying up.

Additionally, the bottom line benefitted by a 10% decrease to $1,241.7 million in total expenses when excluding one-offs. The lower costs were primarily driven by a reduction in employee benefits following the disposal of businesses, contract completions, and benefits following FY20 restructuring.

Notably, the profitable result was helped along by $447.8 million in cash proceeds from business disposals. This included the divestment of its laundry business, along with the sale of its open-cut mining business, underground mining services, and tyre management business. This refocusing of the company was met with optimism, as the Downer share price moved higher.

On the injury front, Downers’ lost time injury frequency rate (LTIFR) decreased to 0.99 from 1.08. Similarly, the total recordable frequency rate fell to 2.60 from 3.10 per million hours worked.

What did management say?

Commenting on the result, Downer chief executive officer Grant Fenn said:

Our focus on critical urban services has meant that demand has remained strong throughout the
year, resulting in a very resilient performance. I want to acknowledge the effort of
our people as we have continued delivering for our customers.

Underlying earnings were up 21.4% and our cash performance was excellent. If we adjust for
cash outflows from individually significant items recognised as expenses last year, our cash
conversion was 101%. Without that adjustment, it was 92%. Either way, it is a terrific result.

What’s next for Downer and its share price?

Positively, Downer outlined that it has $35.4 billion worth of work-in-hand. Additionally, 90% of that work is in the form of government contracts in Australia and New Zealand. This compares to only 56% of work-in-hand being government-backed contracts five years ago.

Furthermore, the company noted it expects its core urban services business to grow in FY22 on the top and bottom lines. However, Downer failed to given any more granular detail, citing COVID-19 as the reason.

The Downer share price has performed slightly better than the S&P/ASX 200 Index (ASX: XJO) over the past 12 months. Specifically, the contractor has delivered a 28.8% return while the benchmark gained 23.7%.

The post The Downer (ASX:DOW) share price on watch after FY21 earnings appeared first on The Motley Fool Australia.

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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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It’s been a tough year so far for shareholders of ASX space and defence company Electro Optic Systems Holdings Limited (ASX: EOS). The company’s share price has plunged almost 30% in 2021 – to just $4.20, as at the time of writing. This means that Electro Optic Systems shares are now almost 40% below the 52-week high price of $6.92 they set all the way back in November of last year.

Company background

EOS specialises in electro-optic technologies – machinery and other applications that convert light rays into electronic signals. This type of technology supports clients operating in the space, defence and communications sectors. Electro-optic technologies can assist with a diverse range of highly technical and complex scenarios, like satellite tracking, missile defence and even military combat.

What is behind the Electro Optic Systems share price decline?

The reality is that the Electro Optic Systems share price woes stretch back a lot further than just the last 12 months. Prior to the COVID-19 market crash in March 2020, EOS shares were valued above $10 a share – well over twice their current price.

But when COVID struck the Electro Optics Systems share price dropped off a cliff. After looking set to cross $11 for the first time in their history, EOS shares plunged more than 65% in the space of just 6 weeks, dipping below $3.70.

It was pretty apparent why. In its activity report for the quarter ended 31 March 2020, EOS revealed that the coronavirus pandemic had caused disruptions at several points along the company’s product delivery chain.

Given the highly specialised nature of Electro Optic System’s products, many require significant checking, installation and testing by trained professionals – all prior to being accepted by the customer. Lockdowns in many jurisdictions, as well as government-imposed travel restrictions, prevented EOS from performing these crucial steps in its delivery chain.

This all led to the company being forced to massively downgrade its revenue guidance for 2020 – from year-on-year growth of 70% to just 25%. In the end, its total revenues fell short of even that target, increasing 15% to $190.2 million.

What else was in the company’s financials?

EOS, which reports based on a year ending 31 December, released its FY20 results at the end of February. It was a bad result across the board for EOS, with the big drop in revenues translating to an overall net loss after tax of almost $26 million for the year. By comparison, the year before, EOS reported a net profit of almost $18 million.

According to EOS, short-term profitability tanked because the company couldn’t deliver its products to its customers, meaning the majority of its revenues were being delayed to 2021. However, it was still racking up expenses.

For its part, Electro Optics Systems believes it can rebound swiftly as the effects of the pandemic ease globally. According to a presentation given at the company’s Annual General Meeting in late May, EOS expects revenues for 2021 to be between $235 million and $245 million, potentially representing year-on-year growth of close to 30%.

Recent movements in the Electro Optics Systems share price

For a moment there, it almost looked as though the Electro Optics Systems share price was staging a recovery in June. The company’s optimistic revenue guidance, combined with news that its cash receipts were finally beginning to accelerate, sparked a brief rally in the Electro Optics Systems share price.

However, renewed lockdowns and global fears around the spread of the delta strain of coronavirus may be again weighing on the Electro Optics Systems share price – particularly given the impacts COVID has had on its delivery chains. This puts an incredible amount of focus on the company’s first-half FY21 results, to be released to the market on 30 August. EOS will be hoping it can reassure investors that the worst of the pandemic is finally behind it.

The post Here’s why the Electro Optic Systems (ASX:EOS) share price is 40% lower than its 52-week high appeared first on The Motley Fool Australia.

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• Electro Optic Systems (ASX:EOS) share price up 9% on quarterly report

Motley Fool contributor Rhys Brock owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings 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 BHP Group Ltd (ASX: BHP) share price has been a strong performer this year.

Since the start of the year, the mining giant’s shares have risen 22%.

Is the BHP share price still good value?

Given how strong the BHP share price has performed in 2021, investors may be wondering if it is still good value.

Investors may also be wondering how you would begin to value a company like BHP.

Unfortunately, using the traditional price to earnings (PE) ratio is not recommended when valuing a mining share. So, if you’re judging the value of BHP share price purely on this ratio, you may want to reconsider things.

How do you value BHP?

Luckily for investors, the team at Goldman Sachs has provided a breakdown on how it values the mining giant.

Goldman uses an equal blend of its net asset value (NAV) and its next 12-month (NTM) EBITDA estimate to value the Big Australian.

In respect to its NAV, Goldman estimates that BHP’s operations have a NAV of US$179 billion. This equates to US$35.50 per share or approximately A$48.70 per share.

Whereas the company’s NTM EBITDA is estimated by the broker to be US$51 billion. Goldman then applies a 5x EV/EBITDA multiple to this, giving BHP an enterprise value of US$251.3 billion. The broker then subtracts its debt estimate of US$5.9 billion, giving it an equity value of US$254.4 billion or A$66.7 per share.

The final step sees Goldman equally blend its NAV per share of $48.70 with its equity value per share of $66.70, which leads to a valuation and BHP share price target of $57.70.

Are BHP shares in the buy zone?

With the BHP share price currently fetching $52.52, Goldman believes it is in the buy zone.

It recently commented: “Undervalued vs. historical multiple at peak earnings: On an EV/EBITDA basis 1-2yr multiples for BHP look strong at 4x, below the 4.5-5x level in 2011 when earnings last peaked, yet BHP’s balance sheet and FCF are much stronger now.”

The post How do you value the BHP (ASX:BHP) share price? 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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