The Qantas Airways Limited (ASX: QAN) share price has rallied almost 35% in the last 12-months. But the company’s shares have struggled from a year-to-date perspective, down by around 2% at the time of writing.

The major breakthrough for the Qantas share price came about on 10 November 2020, when it rallied 11% in intraday trading from $4.68 to $5.20. This was driven by news that Pfizer’s COVID-19 vaccine trials had achieved an efficacy rate of more than 90%.

Surprisingly, the Qantas share price is now trading at similar levels as when the vaccine was still undergoing trials.

With Qantas shares seemingly caught in a tug-of-war between bulls and bears, here are some of the factors that have been at play.

Domestic travel proving to be more “resilient”

In a market update on 20 May, Qantas said that “consumer confidence in domestic travel is proving more resilient compared with earlier in the pandemic”.

The company said it was on track to reach 95% of its pre-COVID domestic capacity for the fourth quarter of FY21.

For FY22, the company said that Qantas and Jetstar expect to average 107% and 120% respectively of their pre-COVID domestic capacities.

The Qantas share price rallied 3.54% on the day of the announcement, from $4.52 to $4.68.

Are lockdowns weighing on the Qantas share price?

Qantas reported that the three-day lockdown in Perth during April cost the group an estimated $15 million in earnings before interest, taxes, depreciation, and amortisation (EBITDA).

The airliner also flagged a $29 million impact from Brisbane’s lockdown in late March and a $400 million hit on EBITDA as a result of the Sydney (Northern Beaches) outbreak in December last year.

Last week, the Sydney city-wide lockdown was extended for another week until 6 pm on Friday 16 July.

With a resurgence in COVID-19 cases coupled with a sluggish vaccine rollout, Qantas shares could see continuing volatility as a result of the pandemic for some time yet.

Scott Morrison’s four-phase plan

Earlier this month, Prime minister Scott Morrison announced a four-phase plan for “a pathway out of the COVID-19 pandemic”.

Phase one, which is pretty much where we are now, would be known as “vaccinate, prepare and pilot”, placing a cap on international arrivals and trialling an alternative form of quarantine for vaccinated travellers.

Phase two would see a reduced travel cap and lockdowns to only occur under “extreme circumstances”. Morrison is hoping to be at phase two in 2022.

By the end of phase three, the prime minister hopes to treat COVID-19 more like the seasonal flu, with no need for lockdowns and abolishing caps for returning vaccinated travellers.

And the final phase was described as things being “back to normal”, allowing uncapped inbound arrivals for all vaccinated travellers without the need for quarantine.

While investors in Qantas shares will no doubt be hoping we’re able to advance to phase two and beyond in the short term, this will be reliant to a large extent on the majority of people becoming vaccinated.

The post It has been a big past year for the Qantas (ASX:QAN) share price appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best ASX transport shares of the 2021 financial year
• The ASX shares with the most to lose from a delayed COVID reopening
• 3 ASX shares looking pretty cheap right now: expert
• ASX travel shares slip as Sydney lockdown extends for another week
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high

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.

from The Motley Fool Australia https://ift.tt/3yO4Rcw

At lunch on Monday, the S&P/ASX 200 Index (ASX: XJO) has followed the lead of US markets and is storming higher. The benchmark index is currently up 0.85% to 7,334.9 points.

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

Wesfarmers makes takeover offer

The Wesfarmers Ltd (ASX: WES) share price is edging higher on Monday. This follows news that the conglomerate has finally found a takeover target. That target is pharmacy chain operator and wholesale distributor Australian Pharmaceutical Industries Ltd (ASX: API). Wesfarmers has offered to acquire the Priceline Pharmacy owner for $1.38 cash per share. This represents a 21% premium to its last close price. Australian Pharmaceutical Industries’ major shareholder, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), has agreed to vote in favour of the proposal.

Mining shares rise

BHP Group Ltd (ASX: BHP) and Rio Tinto Limited (ASX: RIO) shares are pushing higher and playing a key role in driving the ASX 200’s strong gain. Both mining giants are up approximately 3% and 2%, respectively, at the time of writing. This has led to the S&P/ASX 200 Resources index rising a solid 2.3%

CBA shares downgraded

The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher today despite being the subject of a bearish broker note. According to the note, Macquarie has downgraded the banking giant’s shares to an underperform rating but lifted its price target to $88.50. The broker made the move largely on valuation grounds.

Best and worst ASX 200 performers

The Viva Energy Group Ltd (ASX: VEA) share price is the best performer on the ASX 200 with a gain of almost 4%. This morning Goldman Sachs reiterated its buy rating and $2.70 price target on the fuel company’s shares. The worst performer has been the Mercury NZ Ltd (ASX: MCY) share price with a 5% decline. This is despite there being no news out of the electricity company.

The post ASX 200 midday update: Wesfarmers makes API takeover bid, BHP & Rio Tinto rising appeared first on The Motley Fool Australia.

More reading

• Australian Pharmaceutical (ASX:API) share price soars 18% on Wesfarmers bid
• Why the BHP share price is charging higher on Monday
• Wesfarmers (ASX:WES) share price rises on API takeover offer
• Why the Commonwealth Bank (ASX:CBA) share price is beating the ASX 200
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat

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 owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers 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/3e7WOPN

The Patrys Limited (ASX: PAB) share price is starting the week on a strong note. This comes after the therapeutic antibody development company announced new data from non-clinical studies of its cancer-fighting antibody, PAT-DX3.

Patrys is developing a full-sized immunoglobulin G (IgG) antibody and humanised version of a smaller deoxymab antibody fragment to treat cancers through DNA.

During morning trade, the company’s shares are up 13.73% to 5.8 cents.

What did Patrys announce?

In a statement to the ASX, Patrys advised that PAT-DX3 is able to cross the blood-brain barrier (BBB) in an animal model of primary brain cancer. This includes the most aggressive type of cancer, glioblastoma multiforme (GBM).

The company noted that previous studies showed a smaller antibody fragment, PAT-DX1, can cross the BBB. However, this is the first time a full-sized deoxymab (PAT-DX3) has done so.

The company is now planning follow-up studies to compare the effects of both PAT-DX1 and PAT-DX3. Patrys will look at tumour reduction and survival in a range of primary and secondary brain cancer models.

In addition, PAT-DX3 is also being tested to target nanoparticles carrying a payload of anti-cancer drugs specifically to tumours. This allows specific delivery of cancer drugs to multiple types of cancer while having minimal impact on normal, healthy cells.

Patrys CEO and managing director Dr James Campbell said:

We are very excited by this new discovery that opens up a range of development and partnering opportunities for Patrys around PAT-DX3.

As PAT-DX3 shares a common mechanism of action with PAT-DX1, it is expected that it will also localise to both primary and secondary tumours in the brain and selectively kill cancer cells by blocking their DNA Damage Repair (DDR) systems. While Patrys remains focused on preparing for its first-in-human study of PAT-DX1, it is clear that PAT-DX3 is a valuable addition to the company’s deoxymab antibody platform.

About the Patrys share price

During the last 12 months, the Patrys share price has accelerated by more than 380% and more than 141% in 2021. It’s worth noting the company’s share price is nearing its 52-week high of 6.3 cents achieved late last month.

Patrys has a market capitalisation of roughly $105 million, with approximately 1.8 billion shares on its registry.

The post Here’s why the Patrys (ASX: PAB) share price is climbing 13% today appeared first on The Motley Fool Australia.

More reading

• Why we avoid mining and biotech ASX shares: fund manager

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/3i1IsRZ

The Audinate Group Ltd (ASX AD8) share price has picked up right where it left off on Friday. Shares in the Aussie digital audio networking technology company jumped more than 7% this morning on the way to a new all-time high.

So, what’s driving the Aussie growth share to new heights?

Why the Audinate share price is surging higher

The major catalyst for this morning’s move appears to be Friday’s FY21 trading update from the Aussie company.

Audinate reported unaudited FY21 revenue of US$25.0 million, up 23% from US$20.4 million in FY20. That includes a strong finish to the year highlighted by 74% quarter-on-quarter growth.

A strong Aussie dollar against the greenback helped Audinate record A$33.4 million in revenue versus A$30.3 million in FY20.

The Audinate share price rocketed more than 7% this morning to go with a 6.5% gain on Friday. Audinate investors will welcome the news after a major slump in the March 2020 bear market.

However, Audinate noted the global supply of chips and electronic components as a near-term risk to the company’s growth. While the company has met customer demands thus far, a “record backlog of committed sales orders” for FY22 means there may be some delays in fulfilling orders.

Audinate co-founder and CEO, Aidan Williams, was bullish, if circumspect, in his comments:

We are pleased with the FY21 revenue performance and the resilience of the business in the face of COVID related challenges over the last 15 months. While Audinate and our manufacturing customers have successfully navigated supply chain challenges to date, we expect continued uncertainty throughout the remainder of [calendar year 2021].

The Audinate share price has been on a tear in recent months. Shares in the Aussie technology group are up more than 90% since hitting $5.01 per share in August 2020.

Today’s second straight trading day of gains has the company’s market capitalisation pushing $750 million at the time of writing.

Foolish takeaway

Friday’s FY21 trading update, highlighted by the successful launch of Audinate’s first original equipment manufacturer (OEM) Dante video products, has been well-received by shareholders. That’s helped propel the Audinate share price to a new record high to start the week.

The post Audinate share price (ASX:AD8) rockets to new all-time high appeared first on The Motley Fool Australia.

More reading

• ASX 200 drops, Audinate booms, Humm falls
• Why Althea, Audinate, Perenti, & Viva Energy shares are pushing higher
• Audinate (ASX:AD8) share price jumps 6% on FY 2021 update
• Why Alkane, Audinate, Megaport, & Zip shares are rising today
• Top broker picks the emerging ASX tech shares with the biggest upside next month

Motley Fool contributor Ken Hall 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 AUDINATEGL FPO. The Motley Fool Australia owns shares of and has recommended AUDINATEGL 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/3k6D82w

The Nine Entertainment Co Holdings Ltd (ASX: NEC) share price has burst out of the blocks in early trade. Shares in the Aussie entertainment group jumped 2% higher at the open after announcing an executive reshuffle to the market.

Why is the Nine Entertainment share price climbing?

There have been no new ASX announcements from the company on Monday morning. However, an article in The Age on Sunday night suggests a leadership reshuffle could be afoot.

The Age reported that Nine Entertainment CEO Mike Sneesby will reshuffle his senior management after the resignation of Chris Janz. Mr Janz is Nine’s chief publishing and digital officer who will reportedly step down after more than two years in his current role. That news has caused a flurry of trading activity this morning and helped push the Nine Entertainment share price higher.

James Chessell is set to become managing director of publishing for the entertainment group, stepping up from his current position as executive editor of the The Sydney Morning Herald and The Age. The national editor of The Herald and The Age, Tory Maguire, will fill Mr Chessell’s current role. Former chief digital officer at Nine, Alex Parsons, will return to that role as part of the reshuffle.

The news has helped propel the Nine Entertainment share price higher in early trade. Shares in the entertainment group jumped 2% higher to start the day and reached as high as $2.64 per share.

Shares in the $4.4 billion media giant have climbed more than 10% year to date, but remain well shy of the $3.16 per share 52-week high set in early March.

Despite racing higher at the open, the Nine Entertainment share price has pared back some of those gains at the time of writing.

Foolish takeaway

The Nine Entertainment share price jumped higher at the open as the S&P/ASX 200 Index (ASX: XJO) also started the week on the right foot. Shares in the media giant remain up more than 1% at the time of writing at $2.60 a share, as news of an executive reshuffle looks to have investors buying in.

The post Why the Nine Entertainment (ASX:NEC) share price is climbing on Monday appeared first on The Motley Fool Australia.

More reading

• Chalice Mining (ASX:CHN) share price flops on demerger of gold assets
• Why the Commonwealth Bank (ASX:CBA) share price is beating the ASX 200
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• Get ready: There’s a massive buying opportunity coming
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Ken Hall 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/3hU0KES

The Chalice Mining Ltd (ASX: CHN) share price is falling this morning after the company announced plans to demerge its gold assets.

The Chalice Mining share price is currently $7.31 ­– 0.41% lower than its previous closing price.

The fall is particularly noteworthy when compared to the broader market’s gains. Currently, the All Ordinaries Index‘s (ASX: XAO) has gained 0.79% today. The S&P/ASX 200 Index (ASX: XJO) is also in the green, having jumped 0.84%.

On top of its intent to demerge its gold assets, Chalice Mining released assay results from its Pyramid Hill Gold Project.

Let’s take a look at the news putting pressure on the Chalice Mining share price today.

What’s driving the Chalice Mining share price?

Golden demerger

The Chalice Mining share price is in the red following the company’s plan to spin off its gold assets into a new ASX-listed company.

The headline acts during the demerged company’s Initial Public Offering (IPO) would be Chalice Mining’s wholly-owned Pyramid Hill Gold Project and its up-and-coming Viking Project, where the company is earning up to a 70% joint venture interest.

Chalice Mining said the demerger would allow it to focus on its nickel, copper, and platinum group minerals projects.

Chalice Mining expects the demerger to occur during the final quarter of 2021, subject to shareholder and regulatory approval.

Commentary from management

Chalice Mining’s managing director Alex Dorsch commented on the demerger:

The proposed demerger provides an exciting opportunity for our shareholders to benefit from the creation of a standalone, well-funded Australian gold exploration company with a high-quality asset base in Victoria and WA.

The creation of a new gold-focused explorer would be the optimal structure to ensure that the full potential of the gold portfolio can be realised, while allowing Chalice to continue to focus on completing the resource drill-out and rapidly advancing studies at Julimar.

Pyramid Hill Gold Project

In other news potentially driving the Chalice Mining share price today, the company released assay results from its Pyramid Hill Project.

Assay results at the project’s Karri Prospect found high-grade gold intersected over more than 2.5 kilometres of strike length.

Additionally, a second phase of drilling found new shallow gold intersections at the project’s Ironbark Prospect.

Dorsch commented on the findings:

The recent results at Pyramid Hill are tantalising from a greenfield exploration perspective, given the immense regional endowment in the Bendigo Zone.

Chalice Mining share price snapshot

2021 has been a productive year so far for the Chalice Mining share price.

Currently, it has gained 86% year to date. It has also gained 517% since this time last year.

The company has a market capitalisation of around $2.5 billion, with approximately 346 million shares outstanding.

The post Chalice Mining (ASX:CHN) share price flops on demerger of gold assets appeared first on The Motley Fool Australia.

More reading

• Why the Commonwealth Bank (ASX:CBA) share price is beating the ASX 200
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• Get ready: There’s a massive buying opportunity coming
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. 

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

from The Motley Fool Australia https://ift.tt/2TYlW4F

The two S&P/ASX 200 Index (ASX: XJO) shares in the article are expected to pay a relatively high dividend yield in FY22.

Some businesses have been impacted heavily by COVID-19, but some of them are still generating a high level of cashflow which can fund cash returns to shareholders.

These are two ASX 200 dividend shares that might offer a higher yield for investors in 2021:

Charter Hall Retail REIT (ASX: CQR)

This is one of the larger real estate investment trusts (REIT) on the ASX. As the name may suggest, it specialises in owning retail properties.

It’s currently rated as a buy by the brokers at Macquarie Group Ltd (ASX: MQG) with a price target of $4.18. Macquarie expects that the ASX 200 dividend share will pay a FY22 distribution of 25.6 cents, translating into a forward distribution yield of 6.8%.

At 30 June 2021, its portfolio valuation was around $3.65 billion with a weighted average capitalisation rate of 5.8%. It recently had its portfolio revalued which saw an increase of $143 million, or 4.1%, uplift on prior book values.

It has shopping centre convenience retail properties and the REIT’s long weighted average lease expiry (WALE) retail portfolio comprises BP and Coles Group Ltd (ASX: COL) Adelaide distribution centre.

Charter Hall CEO Greg Chubb said:

Our shopping centre portfolio has proven is resilience through the challenges of the last 12 months with strong occupancy, rent collection and retail sales growth. This is now being reflected in asset valuation gains.

Our Long WALE convenience retail assets remain highly attractive given the quality of the tenants, attractive lease structures, duration of leases and high underlying land values. These assets have delivered Charter Hall Retail REIT unitholders highly defensive and reliable earnings over the last twelve months and are now also delivering significant growth in capital values. It’s pleasing to see the results of our on-going portfolio curation delivering these gains.

Its net tangible assets (NTA) is now $4.02.

Super Retail Group Ltd (ASX: SUL)

Super Retail is one of the larger retail businesses on the ASX with a few chains of stores including Supercheap Auto, Rebel Sport, BCF and Macpac.

Credit Suisse thinks the ASX 200 dividend share is a buy, with a price target of $14.45.

The broker thinks that Super Retail will pay a dividend of 49.2 cents in FY22, which represents a grossed-up dividend yield of 5.6%.

In the latest trading update, the business said that it had seen double digit like for like sales growth across each of its businesses, with total growth of 28%.

Due to the continued strength of customer demand, Super Retail has maintained relatively subdued levels of promotional activity in the second half. As a result, the gross profit margin improvement which the group delivered in the first half has been maintained in the second half. It also has a well-stocked inventory position.

Online sales continue to grow as a percentage of overall sales. The contribution margin per transaction is significantly higher for online sales than for in-store sales. Its active club membership continues to grow, with active club members making up a larger percentage of total sales.

The post 2 high-yielding ASX 200 dividend shares appeared first on The Motley Fool Australia.

More reading

• 2 buy-rated ASX dividend shares for income investors
• These high yield ASX dividend shares could be buys
• 2 top ASX dividend shares for income investors next week
• These ASX dividend shares have generous yields
• Charter Hall (ASX:CQR) share price lifts after latest update

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 shares of and has recommended COLESGROUP DEF SET, Macquarie Group Limited, and Super Retail Group 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/3xAPy6D

The SelfWealth Ltd (ASX: SWF) share price is down 11.96% to 40.5 cents this morning after the company announced its fourth quarter results.

SelfWealth is an emerging share trading platform in Australia, offering a flat $9.50 per trade regardless of trade size.

How did SelfWealth perform?

The SelfWealth share price is facing selling pressure this morning despite achieving growth across a number of key reporting metrics.

SelfWealth was pleased to report quarterly operating revenue of $5.11 million, its second-largest quarter on record.

Its revenue growth was underpinned by continued growth across key operating metrics including active traders, client cash and securities held on the platform.

During the quarter, SelfWealth grew its active traders by 9,195 to 95,189, representing a 105% increase on a year-on-year basis.

Total client cash held in Australian dollar cash accounts cruised to a record high of $523 million.

In response to the record cash balances, SelfWealth said this could “suggest that retail investors are somewhat wary of the high valuations in the market at present and have taken some cash out of the market in anticipation of better opportunities in the future”.

In addition, total securities held on Holder Identification Numbers (HIN) continued to trend higher to $5.86 billion, up from $5.15 billion at the end of March.

The company said that growth in securities held on the platform was propped up by the market as well as new clients transferring their securities onto the SelfWealth platform.

However, it’s worth noting the company experienced negative quarter-on-quarter growth in terms of number of trades executed by clients. June quarter trade figures came in at ~357,000, down from a high of ~514,000 in Q3 FY21.

SelfWealth said that “this was in line with an overall drop in equities trading across the ASX”.

In addition, the company said it began implementing a more “aggressive marketing strategy” in the June quarter. As well, it says it’s strengthening its management team with newly appointed CFO Mandy Drake and key hires in technology and product streams.

What did management say?

SelfWealth CEO Cath Whitaker commented on the company’s performance:

“SelfWealth continues to experience double-digit growth in the number of active traders, and our member base is highly engaged with significant new customer acquisition growth from referral channels. We are very pleased that in a quarter with lower market volatility globally, our client base increased, and the cash balances and value of their HIN based securities on the SelfWealth platform grew strongly. Recent diversification of revenue streams has seen US brokerage and Foreign Exchange revenue and increased subscription collections assist in delivering a healthy revenue number for the quarter.

What does SelfWealth have in store for FY22?

SelfWealth announced a number of exciting product and technology plans for FY22.

The company said it is currently negotiating with multiple cryptocurrency exchanges with plans to roll out a new cryptocurrency product in Q2 FY22.

Furthermore, SelfWealth is looking to add additional international markets, including Hong Kong, for its investors. Additional international market options are expected to be available in Q3 FY22.

Unfortunately, the positive news today was unable to inspire investors with the SelfWealth share price tumbling almost 12% to a 13-month low of 40.5 cents.

The post SelfWealth (ASX:SWF) share price dives 11% after fourth quarter results appeared first on The Motley Fool Australia.

More reading

• Why the BHP share price is charging higher on Monday
• The Santos (ASX:STO) share price is having a rough month
• What’s the outlook for the Woodside (ASX:WPL) share price?
• Wesfarmers (ASX:WES) share price rises on API takeover offer
• Healius (ASX:HLS) share price higher on acquisition and rebrand news

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.

from The Motley Fool Australia https://ift.tt/2UDJa02

The BHP Group Ltd (ASX: BHP) share price has been a strong performer on Monday morning.

At the time of writing, the mining giant’s shares are up almost 4% to $51.33.

This leaves the BHP share price trading within sight of its record high of $51.82.

Why is the BHP share price charging higher?

The BHP share price has taken off on Monday following an equally strong night of trade for its US-listed shares on Friday night. The Big Australian’s NYSE-listed shares rose 4% on Friday after US markets raced to record highs.

Also giving the BHP share price a boost was a positive night for a number of key commodities that the mining giant produces.

One of those was oil. According to Bloomberg, the WTI crude oil price rose 2.2% to US$74.56 a barrel and the Brent crude oil price rose 1.4% to US$75.55 a barrel. Traders were buying oil after US inventories declined.

Base metals also performed positively on Friday. According to CommSec, the copper price lifted by 2.1% and the nickel price rose 2.4%. This was driven by news that China has loosened its lending requirements for financial institutions to boost its economic recovery.

And while the spot iron ore price softened by 0.8% to US$214.08 a tonne, this is still significantly higher than BHP’s cost of production.

Can its shares climb even higher?

One leading broker that believes BHP shares can still climb higher from here is Macquarie Group Ltd (ASX: MQG).

According to a note from late last month, the broker has put an outperform rating and $63.00 price target on its shares.

Based on the latest BHP share price, this implies potential upside of almost 23% over the next 12 months excluding dividends. This stretches to over 30% if you include the dividends that Macquarie expects from BHP over the period.

The post Why the BHP share price is charging higher on Monday appeared first on The Motley Fool Australia.

More reading

• Why the Commonwealth Bank (ASX:CBA) share price is beating the ASX 200
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• 3 ASX 200 blue chip shares analysts rate highly
• Up 36%, why the BHP (ASX:BHP) share price has beaten the ASX 200 in the last year
• 5 things to watch on the ASX 200 on Friday

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/3hYimzr

The Australian Pharmaceutical Industries Ltd (ASX: API) share price is trading higher this morning.

At the time of writing, the pharmacy operator’s shares are up 18.34% to $1.36 apiece. Unfortunately for shareholders, Australian Pharmaceutical shares have underperformed the S&P/ASX 200 Index (ASX: XJO) by 18.5% over the past year.

Let’s find out what’s moving the API share price today.

What’s moving API shares on the ASX?

Wesfarmers launches API offer

Shares in ASX-listed API are soaring in early trade this morning following a non-binding offer from Wesfarmers Ltd (ASX: WES). The offer is to acquire 100% of API’s shares outstanding for $1.38 cash per share by way of a scheme for arrangement. This represents a 21% premium to the company’s last close price of $1.145 per share on Friday.

Speaking on the announcement, Wesfarmers Managing Director Rob Scott said:

If the Proposal is successful, API would form the basis of a new healthcare division of Wesfarmers and a
base from which to invest and develop capabilities in the health and wellbeing sector. The combination of Wesfarmers and API is a compelling opportunity to capitalise on API’s strengths and
positioning in these markets while drawing upon Wesfarmers’ capabilities in retail and distribution, our strong
balance sheet and our willingness to invest in our businesses for growth over the long term.

API’s major shareholder, Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) holds 19.3% of the total shares outstanding in the pharmacy chain. The investment company has elected in favour of the proposal and has granted a call option in respect of its API shares in favour of Wesfarmers.

The deal will remain subject to due diligence, entry into the deed, ACCC clearance, API board and shareholder approvals.

Review prompts refocus

In addition to the Wesfarmers bid, the company announced its decision to increase the focus of the company on its pharmacy distribution and two retail businesses, Priceline Pharmacy and Clear Skincare. The outcome follows the completion of a strategic review conducted by the company.

As a result, ASX-listed API plans to discontinue the manufacturing of personal care and over-the-counter products in New Zealand. In its place, the company will seek to outsource its manufacture.

Furthermore, the company anticipates by moving to outsourced contract manufacturing, a lower cost of goods will be generated, in addition to a more consistent product supply. API noted that both had been affected by COVID-related impacts.

Looking at the financial impact of the decision – a net effect of $24.5 million at the earnings before interest and tax level is expected. This will be a one-off charge that contains the carrying value of plant and equipment; inventory; employee; and make good costs. Additionally, the decision to cease manufacturing is estimated to contribute positive cash of $9.7 million in the current year.

API Chief Executive Officer and Managing Director, Richard Vincent said:

By simplifying our operations and focussing on our two retail-facing businesses it will allow us to escalate our investment in our digital capabilities and accelerate the initiatives that will improve our customer experience in both our Priceline Pharmacy and Clear Skincare networks.

Mr Vincent also outlined that more details would be shared at API’s ASX Investor Day.

Lockdowns lead to forecast revision

In this morning’s announcement the pharmacy chain operator made known the impact of recent lockdowns. The lockdowns of June and July have resulted in the temporary closure of 72% of the non-pharmacy company-owned Priceline stores, and 75% of the Clear Skincare clinic network.

As a result, API’s previous forecast of $75 million in full-year underlying EBIT has been revised. Although, on a positive note the company was on track to achieve this number prior to the latest COVID implications.

Regarding the new forecast, Mr Vincent said:

On the basis that there is a relaxation of the existing COVID-19 restrictions in place including New South Wales by the end of July 2021 and no new restrictions between now and our financial year end on 31 August 2021, API now expects its full year underlying EBIT to be circa $66 million to $68 million, and its reported EBIT to be in the range of $31 million to $33 million (unaudited). In the event that the restrictions remain in their current form beyond the end of July the impact is a reduction of approximately $1 million in EBIT per week of extension.

Lastly, API revealed to the ASX its new Marsden Park distribution centre in North-West Sydney remains on time and within budget.

The post Australian Pharmaceutical (ASX:API) share price soars 18% on Wesfarmers bid appeared first on The Motley Fool Australia.

More reading

• Wesfarmers (ASX:WES) share price rises on API takeover offer
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• Where to next for the Wesfarmers (ASX:WES) share price?
• 2 excellent ASX shares that could be buys for a retirement portfolio
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high

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 owns shares of and has recommended Washington H. Soul Pattinson and Company Limited and Wesfarmers 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/3r4ZTVS