The BHP Group Ltd (ASX: BHP) share price is slipping amid calls for the company to strengthen its adherence to the Paris Agreement.

The calls were put forward by the Australasian Centre for Corporate Responsibility (ACCR) on behalf of BHP shareholders as a movement to be considered at BHP’s annual general meeting. The ACCR is a shareholder advocacy group.

Right now, the BHP share price is $51.70, 0.77% lower than its previous closing price.

Let’s take a closer look at the news that might be weighing on the resource company’s share price today.

BHP will consider adhering better to Paris Agreement

The BHP share price is slipping after the ACCR’s request for the company to review its links with lobby groups advocating against the Paris Agreement.

The ACCR is representing shareholders calling for BHP to cut ties with industry groups working against the Paris Agreement’s goals.

After Friday’s close, BHP announced the movement would be put to the board at the company’s annual general meeting.

ACCR’s director of climate and environment Dan Gocher commented on the resolution potentially impacting the BHP share price today:

The advocacy by key BHP industry associations throughout the COVID-19 pandemic has been fundamentally at odds with the Paris Agreement’s goals…

The Australian Petroleum Production and Exploration Association (APPEA) claims credit for the Government’s ‘gas-fired recovery’; the Minerals Council of Australia continues to block meaningful environmental and climate action—as well as having the gall to claim that Australian thermal coal could reduce global emissions; while the American Petroleum Institute has recently opposed the Biden Administration’s electric vehicle policy.

It’s the second time the ACCR has brought shareholders’ concerns regarding the Paris Agreement to BHP’s board.

In 2020 ACCR gained the support of 22.4% of BHP’s shareholders when asking for a similar stance from the company. It called for BHP to influence its industry associations to transition to greener practices. Additionally, the ACCR asked BHP not to accept the pandemic as an excuse for their associates neglecting the Paris Agreement.

According to the ACCR, these expectations haven’t been met. It urges shareholders to vote for its latest proposal.

ACCR’s calls came the same day BHP announced it will forge forward with 2 new oil projects.

BHP share price snapshot

Despite today’s slump, the BHP share price has been performing well on the ASX lately.

It has gained 20% since the start of 2021. It is also 29% higher than it was this time last year.

The post BHP (ASX:BHP) share price struggles amid renewed climate pressure appeared first on The Motley Fool Australia.

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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.

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The Qantas Airways Limited (ASX: QAN) share price will be on watch this reporting season.

In an article published in the AFR, Australia’s largest airliner ranks amongst the top 5 companies to watch this August.

Here’s why all eyes will be on the Qantas share price this profit season.

Why will investors be watching the Qantas share price?

Going into this reporting season, Australia’s domestic economy has been rocked by widespread lockdowns.

As a result, many investors will not only be looking at how companies have performed but also what the future holds for them.

According to the article published in the AFR, Qantas will be amongst the most scrutinised companies this earnings season.

Despite the airliner building optimism over the past 12 months, the delta outbreak has cast serious doubts on the future of Australia’s domestic travel market.

The article highlighted Qantas’ decision to stand down 2500 workers last week as a reflection of the crisis.

So, according to the article, investors will be watching a couple of things when Qantas reports its earnings.

Firstly, how badly the damage of the lockdown has been.

Secondly, investors will be interested to know how an extended lockdown might impact the airliner’s future profits

According to the article, analysts from noted broker Citi have already published their expectations.

Analysts are expecting the airliner to report a loss of $1.2 billion for the 12 months to June 30.

In addition, the broker has forecasted that Qantas could generate a profit of $213 million in 2021-2022.

Citi’s analysts estimate that Sydney accounts for 35% to 40% of Australia’s aviation activity.

As a result, investors will be paying attention to how an extended lockdown for Greater Sydney would impact the airliners future profits.

More on Qantas

The last 3 months have not been kind to Qantas.

Shares in the airline have struggled following a plethora of COVID-19 induced travel restrictions and lockdowns.

The seriousness of the dire situation was recently displayed after the airliner stood down 2,500 crew.

The stand-downs follow a drastic reduction in the Qantas’ domestic capacity, with more than 9000 flights cancelled in June.

Despite an initial recovery earlier this year, the Qantas share price is trading more than 5% lower since the start of 2021.

The post All eyes on Qantas (ASX:QAN) shares this reporting season 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. 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 Family Zone Cyber Safety Ltd (ASX: FZO) share price is soaring higher today after resuming trade. This follows the cyber safety company entering a trading halt on Friday with the announcement of a $142 million acquisition.

Since returning to trade, investors have been buying into the company. At the time of writing, the Family Zone share price is swapping hands for 70.5 cents, up 17.5%.

The company’s ambitious acquisition is worth nearly half the current value of Family Zone which has a market capitalisation of $294 million.

Let’s check out the details.

Expanding abroad

On Friday, Family Zone revealed it had executed a binding agreement to acquire United Kingdom (UK)-based digital safety solution provider Smoothwall.

The company is the UK’s leading provider of monitoring and filtering products to the education sector.

Smoothwall services approximately 38% of the UK’s education market. To detail the extent of its market presence, it currently provides services to more than 12,400 schools and 6 million students.

This translates into A$30 million of annual recurring revenue and a pro-forma earnings before interest, tax, depreciation, and amortisation (EBITDA) of roughly A$7 million for the last financial year.

Family Zone believes the acquisition of Smoothwall creates “…the world’s most compelling K-12 digital safety solution incorporating Family Zone’s fast-growing Linewize K-12 solutions, Family Zone’s parental controls, and Smoothwall’s scale and world-leading solutions”.

Accompanying the acquisition announcement was the reveal of a A$146.4 million capital raise to fund the attainment at 55 cents per share.

This would be comprised of a fully underwritten institutional placement of A$71 million and a non-renounceable entitlement offer of A$75.4 million.

As of today, we now know Family Zone has been successful in raising $114.1 million through the institutional offer. Subsequently, the retail offer is aiming to deliver another $32.3 million in capital. The retail offer will open to investors on 11 August 2021.

What’s next for Family Zone and its share price?

The retail portion of the capital raise will close on Friday 20 August 2021. Following this, the announcement of the retail raising outcome will be made on 25 August.

Additionally, It is worth noting that shareholders will experience a significant share dilution.

With roughly 266 million new shares on issue, this would represent more than a 60% increase in shares outstanding. There is potential that such dilution may put downward pressure on the Family Zone share price.

Finally, in Family Zone’s recent June quarter results, the company outlined strong momentum for its immediate future. This is largely driven by the sales cycle and US funding. However, positive regulatory changes are also expected to act as tailwinds.

The post Family Zone (ASX:FZO) share price climbs 17% on UK acquisition appeared first on The Motley Fool Australia.

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• Why Family Zone, IAG, Latitude, & Suncorp shares are charging higher

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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It’s been a wild year for Tesla (NASDAQ: TSLA) stock. When the year started, shares initially surged more than 20%. But the stock has now given up all of those gains, with a year-to-date return of negative 1%. This means the stock has significantly underperformed the S&P 500‘s 18% gain this year.

But one analyst thinks the stock could take off.

“We still really like this stock.”

In February, Piper Sandler analyst Alexander Potter made a bold call, boosting his 12-month price target for the growth stock from $515 to $1,200. He said Tesla deliveries could increase from 500,000 vehicles in 2020 to nearly 900,000 this year. Of course, this projection was made before global supply shortages worsened. Nevertheless, Tesla is growing extremely rapidly. The company’s second-quarter deliveries more than doubled compared to the year-ago quarter, rising to 201,304. 

Following Tesla’s second-quarter earnings release late last month, the analyst reiterated this target, noting that the company looks poised to benefit from market share gains, the monetization of the company’s Autopilot software, and “underappreciated opportunities” in Tesla’s energy business, which includes revenue from battery energy storage and solar energy generation products. 

Further, Potter pointed to Tesla’s strong second-quarter operating margin of 11%, which he expects will see incremental improvement from Tesla’s recently launched Autopilot subscription. 

On Aug. 3, Potter once again reiterated an overweight rating on the stock and a $1,200 price target, saying “We still really like this stock.” He pointed to growing demand for battery electric vehicles overall. 

So what gives?

If shares could truly rise to $1,200, why do so many investors seem to think the stock is worth so much less (based on the stock’s price of just under $700 at the time of this writing). After all, if $1,200 was generally viewed by investors as a likely outcome for Tesla stock within the next 12 months, shares would be trading significantly higher today.

The issue boils down to the stock’s forward-looking valuation. With a price-to-earnings ratio of about 370 at the time of this writing, Tesla shares are largely priced for strong growth for years to come. Since the company’s valuation is based largely on profits far into the future, slight variances in views for Tesla’s future growth trajectory yield dramatically different assumptions about the stock’s intrinsic value today.

Investors, therefore, shouldn’t be quick to buy Tesla stock just because one analyst has a high price target for shares. Still, Potter does notably have some good points about Tesla’s strong business momentum. Even Tesla itself reiterated guidance for vehicle deliveries to grow more than 50% this year — and that guidance was provided during a time that many companies around the world (including Tesla) are negatively impacted by supply chain shortages. Further, Tesla management noted in its second-quarter update that demand for its vehicles was at an all-time high going into Q3.

While a $1,200 price target for Tesla stock would be difficult to justify, shares may be trading low enough for investors to start a small position in the stock.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Tesla stock: Headed to $1,200? appeared first on The Motley Fool Australia.

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Daniel Sparks 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 Tesla. 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.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Tassal Group Limited (ASX: TGR) share price is surging ahead as it got bitten by the merger and acquisition (M&A) bug.

Shares in the salmon farmer jumped 4.4% to $3.53 when the S&P/ASX 200 Index (Index:^AXJO) inched up 0.2% at the time of writing.

The Tassal share price is even outperforming the Insurance Australia Group Ltd (ASX: IAG) share price as it gained 4.3% after announcing a board shake up.

M&A fever sends Tassal share price jumping

Investors are getting excited about the Tassal share price after its rival received a takeover offer. The Huon Aquaculture Group Ltd (ASX: HUO) share price surged close to 40% when it revealed South American food giant JDS was offering $3.85 a share for the Huon.

Huon’s board of directors are urging shareholders to accept the deal as the offer is a 38% premium to its Friday closing price.

The offer is priced at around eight times Huon’s FY20 earnings before interest, tax, depreciation and amortisation. That looks to be a generous multiple given Huon’s track record.

How much could the Tassal share price be worth to an acquirer?

In this market, just about everything is a takeover target. Some high-profile examples include the Afterpay Ltd (ASX: APT) share price, Australian Pharmaceutical Industries Ltd (ASX: API) share price and Galaxy Resources Limited (ASX: GXY) share price.

Little wonder that investors believe Tassal too could make an appetising target. This is particularly so given that the Tassal share price is barely at breakeven over the past year when the ASX 200 has surged 26%.

If the same multiples were applied to the Tassal share price, a bidder could be willing to cough up around $4.30 a share for Tassal – or roughly 20% more than the current share price.

That’s all hypothetical of course, but we can’t let the truth stand in the way of an exciting story!

Smelling fishy

With such a buzz around the sector, investors have forgotten (or chosen to ignore) the controversies surrounding salmon farming in Tasmania.

Environmentalists have warned that large scale farms run by Tassal and Huon is polluting the bay. Mass fish death has captured headlines and pitted scientists against the salmon farmers and state government.

The next big catch

But JDS doesn’t seem concerned about this and said that if it gets all the necessary approvals, the transaction could be completed by year end.

JDS will be paying around $500 million (including debt) for Huon. One billionaire that could be happy is Andrew Twiggy Forrest. He recently paid $20 million for a 7.5% stake in Huon, reported the ABC.

It’s a big question mark if Tassal will get baited by a large suitor. But one thing is for sure, Huon won’t be the last ASX share to get an offer.

The post Why the Tassal (ASX:TGR) share price is surging higher today appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns shares of Galaxy Resources Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Insurance Australia 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 Regis Healthcare Ltd (ASX: REG) share price is having a woeful day on the ASX boards today. This comes after the aged care operator released a statement regarding potential employee underpayments.

At the time of writing, Regis shares are being heavily sold off as a result, down 8.10% to $1.93.

Regis flags employee underpayments

In its notice, Regis advised it has identified possible underpayments made to current and former employees under its enterprise agreements. These payments relate specifically to employee entitlements.

The company blamed the miscalculation on inaccurate entries on its payroll system which has affected a number of workers.

To correct the issue, Regis is working with external auditors to commence a review and determine the amount underpaid. It noted that the process requires an extensive analysis of complex enterprise agreements and historical employee entitlement and payroll data.

Based on preliminary estimates, Regis is expecting potential underpayments to be in the range of $30 million to $40 million. This is taking into consideration the past 6 years of both current and past employees.

Regis managing director and CEO, Dr Linda Mellors said:

While we are deeply disappointed this has occurred, our priority is to identify the amounts owed to our people and paying those amounts as soon as our review is complete. We are also upgrading our payroll system and improving internal processes to mitigate the risk of such issues recurring. Our Board is meeting regularly to monitor progress and ensure remediation occurs in a timely manner. I would like to offer my apologies to our people affected by this issue.

The impact to Regis’ profit before income tax for FY21 is forecasted to be between $6 million and $7 million. The remaining amount is set to be recorded as a prior period restatement in accordance with Australian Accounting Standard AASB.

In addition, the company stated that it is upgrading its payroll system and improving internal processes in the meantime. Employee entitlement underpayments are projected to be minimal in the 2022 financial year.

About the Regis share price

Over the last 12 months, Regis shares have gained around 40% for shareholders. However, year-to-date remains relatively flat, up 3%.

On valuation grounds, Regis presides a market capitalisation of roughly $576 million, with approximately 300 million shares on issue.

The post Regis Healthcare (ASX:REG) share price dives 8% on potential $40m underpayment appeared first on The Motley Fool Australia.

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

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a small gain. At the time of writing, the benchmark index is up 0.1% to 7,544.9 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are charging higher:

Family Zone Cyber Safety Ltd (ASX: FZO)

The Family Zone share price has jumped 16% to 70 cents. Investors have been buying the cyber safety company’s shares following the completion of an institutional placement. Family Zone has received binding commitments to raise $114.1 million at a price of $0.55 per new share. These funds will be used to fund the upfront consideration for the acquisition of UK based K-12 digital safety solutions provider Smoothwall.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price is up 5% to $5.24. This morning the insurance giant announced changes to its board. This will see the company’s Chair, Elizabeth Bryan, retire at its annual general meeting in October. She will be succeeded by Tom Pockett. However, the catalyst for today’s gain isn’t likely to be this. It is more likely to have been driven by a strong result by an insurance rival this morning.

Latitude Group Holdings Ltd (ASX: LFS)

The Latitude share price is up 5% to $2.40. Investors have been buying the instalments and lending company’s shares after it announced an agreement to acquire Symple Loans for $200 million in shares and cash. Symple is a Melbourne-based personal lending fintech. It uses state-of-the-art global technologies, advanced analytics, and proprietary risk-based pricing techniques to deliver simple digital experiences to customers and brokers, fast approvals, and same-day settlements.

Suncorp Group Ltd (ASX: SUN)

The Suncorp share price has jumped 8% to $12.84. The catalyst for this was the release of a strong full year result this morning. For the 12 months ended 30 June, the insurance giant reported a 42.1% increase in cash earnings to $1,064 million. This compares favourably to Goldman Sachs’ estimate of $1,005 million. This strong form allowed Suncorp to declare a special dividend and announce a $250 million on-market share buyback.

The post Why Family Zone, IAG, Latitude, & Suncorp shares are charging higher 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 owns shares of and has recommended Insurance Australia 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The second quarter earnings season wasn’t kind to Amazon.com (NASDAQ: AMZN) shareholders, with shares plunging about 7% the following day. After a boom year in 2020 amid the pandemic, it appears investors are less enthused with Amazon during the reopening, with the stock up just 3.7% on the year, versus a 19% gain for the S&P 500.

Though revenue grew a healthy 27.2% last quarter, that solid growth figure missed analyst expectations. Now that the reopening has begun, Amazon is seeing a deceleration in its core e-commerce offerings.

But while e-commerce is decelerating, Amazon’s smaller but higher-profit segments are booming: Amazon Web Services (AWS) and digital advertising. In fact, if you strip out just those two segments, you could make a case that they are worth as much as Amazon’s entire market cap right now; so even though e-commerce is slowing in the near-term, investors may be getting it pretty much for free.

Cloud and digital advertising: high-growth, high margins

In the second quarter, AWS accelerated 37% to $14.8 billion, up from 32% growth in the first quarter and the highest growth rate since before the pandemic. AWS is Amazon’s highest-margin segment — at least the highest that it discloses, with operating margins coming in at 29.4% over the past 12 months.

Meanwhile, Amazon’s “other” category, which consists mostly of digital advertising, surged a whopping 83% to over $7.9 billion. Amazon doesn’t disclose the profit margin it makes on advertising; however, large-scale rivals Alphabet and Facebook garnered ad services margins of 39.1% and 43% last quarter, respectively. Given how close Amazon’s ads are to making a purchase on its platform, It wouldn’t be unreasonable to assume Amazon’s digital ads business is just as profitable as these other platforms.

Looking at these two segments’ current revenues, AWS is on a $60 billion run-rate, and advertising about a $32 billion run-rate. Assuming 30% operating margins for each (which is possibly conservative for ads), and these segments would generate about $18.5 billion and $10 billion in operating income, respectively; with a 20% tax rate, net profits would be $15 billion and $8 billion.

As stand-alone businesses, it would not be crazy to value AWS at, say, at least 50 times earnings or even more, especially with the 10-year treasury bond yielding around 1.3%. Given AWS’ wide moat, the oligopolistic cloud infrastructure industry, and a clear decade of strong growth ahead of it, one could make the case of giving AWS the same earnings yield as no-growth U.S. treasuries, which would equate to a 77 PE ratio (100/1.3%). If one were to value AWS at 50 times run-rate earnings, that would make it worth $750 billion. At 75 times earnings, that would be a valuation of $1.125 billion.

Meanwhile, Amazon’s advertising business would also garner a pretty hefty multiple, especially given its eye-popping 83% growth rate. Last quarter, both Alphabet and Facebook also reported strong ad growth of 68% and 56%, respectively. However, lapping the first quarter of COVID lockdowns tends to obscure things. Interestingly, prior to the pandemic, Amazon’s ad business appeared to be on a stronger trajectory, logging 44% growth in Q1 2020, versus just 10.4% for Google and 17.6% from Facebook in that quarter.

Google and Facebook tend to trade at a high 20s or low 30s PE ratio, so it’s not crazy to think Amazon’s ad business could garner a 50 multiple or higher, given the higher-growth trajectory. If so, that could make Amazon’s ad business worth $400 billion to $500 billion.

Amazon’s $1.7 trillion valuation seems cheap in retrospect

If one applies these valuation multiples to AWS and advertising, it adds up to anywhere between $1.2 trillion and $1.6 trillion. Meanwhile, all of Amazon is valued at just under $1.7 trillion today.

The world’s leading e-commerce platform, with its captive, expanding base of Prime subscribers, leading fulfillment capabilities for third party sellers, and one-day delivery capabilities, is probably worth a lot more than just $100-$200 billion. And let’s not forget a number of other initiatives going on with grocery, cashier-less checkout, shipping for third parties, a growing pharmacy and healthcare business, and new technologies we probably don’t even know about.

The bottom line is, after a year of pretty much doing nothing, Amazon’s lagging stock is starting to look quite cheap again.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon investors are getting its e-commerce business for free appeared first on The Motley Fool Australia.

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Billy Duberstein owns shares of Alphabet (C shares), Amazon, and Facebook and has the following options: short August 2021 $250 puts on Facebook. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. 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 its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Vital Metals Limited (ASX: VML) share price has been busy this past week.

Shares in the rare earth miner have soared more than 30% since last Monday.

Vital Metals continued the positive momentum today, after releasing a promising update.

Here’s what the company had to announce.

Vital Metals share price surges on US capital markets expansion

The Vital Metals share price has surged today after the company announced its intention to expand into US capital markets.

In its market update, the company informed shareholders that it has engaged a consulting and advisory service.

To that end, Vital Metals noted it has signed an agreement with Ecoban Securities Corporation, specifically with its listing arm Tectonic.

The agreement will see Tectonic serve as the company’s North American investor relations and capital markets consultant and advisor.

Under the agreement, Tectonic will perform a range of services for the promotion and management of securities in Vital Metals.

Vital Metals informed investors that expansion into US capital markets follows the success of its operations at its Nechalacho rare earth project in Canada’s Northwest Territories.

As part of the agreement, the company will issue 10,000,000 3-year unlisted options to Tectonic.

These options will have an exercise price of $0.07 and are subject to various vesting conditions being met.

Tectonic will be familiar to many Vital Metals shareholders. The company assisted the rare earth miner with its $43 million capital raise earlier this year.

More on Vital Metals

Vital Metals is a mining explorer and developer focusing on rare earths, technology metals and gold projects. The company’s flagship projects include the Nechalacho Rare Earth Project and its Wigu Hill project in Tanzania.

Last week, Vital Metals provided a couple of updates on its Nechalacho project.

Last Tuesday, the company first reported outstanding first-pass assay results from the project. Vital Metals highlighted thick zones of mineralisation with total rare earth oxides (TREO) grades above 2%.

This was followed by a production update late last week.

Vital Metals noted that drilling results had intersected high-grade rare earth oxide (REO) mineralisation in the northern wall of the Nechalacho project.

As a result, the company highlighted the potential expansion of the pit beyond the existing mine plan.

At the time of writing, the Vital Metals share price is trading more than 5% higher at 6.1 cents.

Shares in the rare earth miner were up more than 8% earlier, having hit an intra-day high of 6.3 cents.

The post Here’s why the Vital Metals (ASX:VML) share price is flying today 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. 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 Webjet Limited (ASX: WEB) share price has started the week in the red.

In afternoon trade, the online travel agent’s shares are down 2.5% to $5.08.

This latest decline means the Webjet share price is now down 20% from its March high.

Why is the Webjet share price dropping?

The weakness in the Webjet share price today comes despite there being no news out of the company.

However, potentially weighing on its shares today was a broker note out of Macquarie Group Ltd (ASX: MQG) relating to rival Flight Centre Travel Group Ltd (ASX: FLT).

According to that note, the broker has downgraded Flight Centre’s shares to a neutral rating and cut the price target on them by 11% to $15.50.

That note reveals that Macquarie has pushed back its earnings recovery estimate for Flight Centre by six to nine months due to recent lockdowns in Australia following the outbreak of the COVID-19 Delta variant.

It suspects that Flight Centre’s total transaction value (TTV) will now only reach 65% of FY 2019 levels in 2023. This compares to its previous expectation of hitting 80% at that point.

One positive, though, is that corporate demand remains robust thanks to the government and mining sectors.

Is Webjet’s weakness a buying opportunity for investors?

Despite downgrading Flight Centre, Macquarie hasn’t made any changes to its Webjet recommendation at this stage.

It currently has an outperform rating and $6.35 price target on the company’s shares. Based on the current Webjet share price, this implies potential upside of 25% over the next 12 months.

Another broker that might see the weakness in the Webjet share price as a buying opportunity is UBS.

Late last month it put a buy rating and $5.90 price target on its shares. Its analysts see the company as a top re-opening option for investors.

The post Webjet (ASX:WEB) share price tumbles: Is this a buying opportunity? appeared first on The Motley Fool Australia.

More reading

• Why is the Flight Centre (ASX:FLT) share price slipping 2% today?
• These are the 10 most shorted ASX shares
• What’s the outlook for the Webjet (ASX:WEB) share price?
• If you’d invested $2,000 in Webjet (ASX:WEB) shares 10 years ago, here’s what it would be worth now
• Here’s why the Webjet (ASX:WEB) share price moved in circles during July

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 Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel 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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