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.

Facebook (NASDAQ: FB) blew away estimates in its second-quarter earnings report.

Revenue jumped 56% year over year to $29.1 billion, beating expectations, while earnings per share doubled from the lockdown-afflicted quarter a year ago to $3.61, ahead of the consensus at $3.02.

In spite of that strong performance, Facebook share prices fell 4% on the results as its growth lagged that of Google-parent Alphabet and as it said it expected revenue growth to decelerate significantly in the second half of the year.

The second-quarter results were revealing in more ways than just the headline numbers, however. Let’s take a look at three of the biggest takeaways from the report.

1. The end of IDFA wasn’t a big deal

For a long time, Facebook had relied on identity tracking tools known as Identity for Advertisers to help personalize ads. With its rollout of iOS14, Apple gave users the ability to opt out of ad tracking, essentially killing IDFA.

Facebook CEO Mark Zuckerberg had warned about this in dire terms back on the January earnings call, saying back then: “Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own. This impacts the growth of millions of businesses around the world, including with the upcoming iOS14 changes, many small businesses will no longer be able to reach their customers with targeted ads.” Chief operating officer Sheryl Sandberg said that if personalized ads disappeared entirely, advertisers would lose 60% of their website sales.

Based on those forecasts, it seemed like Apple’s new policy, which rolled out at the end of April, was going to have a dramatic effect on Facebook’s performance, but as the quarterly results show, that wasn’t the case. IDFA also barely warranted a mention on this earnings call. CFO David Wehner did say he expected the headwinds from the ad tracking transparency policy to increase, but based on the Q2 performance and the adjustments Facebook has made in ad tracking, the impact from the end of IDFA seems unlikely to be material.

2. Mark Zuckerberg will see you in the metaverse

Zuckerberg had laid out his view of the future on previous earnings calls, saying that the dominant computing platforms have historically shifted every 15 years — from personal computers to the internet to mobile technology. The next computing platform he believes will be virtual reality, and that is why Facebook is investing heavily in Oculus and other VR tools at Facebook Reality Labs.

However, Zuckerberg went even deeper this time around, describing a “metaverse,” or a digital world where people will interact with each other in the future. The Facebook chief described it as:

…[a] virtual environment where you can be present with people in digital spaces. You can kind of think about this as an embodied internet that you’re inside of rather than just looking at. We believe that this is going to be the successor to the mobile internet.

Facebook and others must build this world before they can monetize it, but there is plenty of potential for monetization, including ads, e-commerce, and the potential for a creator platform. Right now, Oculus and Facebook Reality Labs are among the biggest focuses of its research and development spending, so investors should expect big things in this area in the coming years.

3. Take guidance with a grain of salt

Facebook didn’t give specific guidance, but investors reacted poorly to its warning about a slowdown in revenue growth. Naturally, the social media titan was expected to put up slowing year-over-year growth after it lapped the weakest quarter in the pandemic, but it’s also worth remembering that Facebook has a habit of sandbagging its guidance for all kinds of reasons, including limits on ad load, IDFA, regulatory pressure, or slowing user growth. It almost always puts up impressive growth regardless.

This time around, Wehner said two-year revenue growth rates would decelerate modestly in the second half of the year. In the first quarter, its two-year revenue growth rate was 74% and in Q2 it was 72%. If that trend continued, it would be 70% in the third quarter and 68% in the fourth quarter. That would imply 40% revenue growth in the third quarter and 26% in the fourth quarter. Those are still very strong numbers, and Facebook could easily top those if the economic recovery continues to be strong.

The company also said its expense would be higher in the second half of the year, but it’s still on track to make about $25 billion in operating income based on the numbers above and its spending forecast, which is better than the $23.7 billion it made in the first half of the year.

Whatever happens, there’s no reason to overthink guidance here. Management called the macro environment “very strong” on the call, and the results back that up. With IDFA nearly a non-factor and the metaverse gradually moving into focus, Facebook has no plans to slow down anytime soon.

While the 4% share price drop may be disappointing, there’s no reason for long-term investors to change their thesis here.

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

The post 3 key takeaways from Facebook’s earnings report appeared first on The Motley Fool Australia.

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Jeremy Bowman owns shares of Facebook. 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), Apple, and Facebook. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, 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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On Monday I looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Credit Suisse, its analysts have retained their underperform rating and $5.50 price target on this infant formula company’s shares. Although the broker acknowledges that there have been improvements on Chinese ecommerce platforms, it doesn’t see a big enough improvement to become more positive. It continues to believe that demand will be weak and weigh on its earnings in the near term. The A2 Milk share price is currently fetching $6.01.

Bubs Australia Ltd (ASX: BUB)

A note out of Citi reveals that its analysts have retained their sell rating and cut their price target on this junior infant formula company’s shares to 33 cents. According to the note, the broker has reduced its estimates to reflect a slower than expected recovery due to international border closures. In addition, the broker has concerns about the prospect of lower gross margins and the potential for inventory provisions. Citi also highlights that Bubs’ sales were down 2% over the prior corresponding period in the fourth quarter. The Bubs share price is trading at 41 cents today.

Mineral Resources Limited (ASX: MIN)

Analysts at Morgan Stanley have retained their underweight rating but lifted their price target on this iron ore and lithium focused mining company’s shares to $49.70. According to the note, the broker has increased its earnings estimates for the coming years. However, that isn’t enough for a more positive rating. The broker continues to believe that the market is overlooking project execution risks and the potential for widening discounts for low grade iron ore. The Mineral Resources share price is fetching $59.72 this afternoon.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares are beating the iron ore majors – again
• These are the 10 most shorted ASX shares
• Why a2 Milk, Afterpay, Dicker Data, & Oil Search shares are charging higher
• Up 275% today, Red Hill Iron (ASX:RHI) share price enters stratosphere
• Why the Mineral Resources (ASX:MIN) share price will be on watch today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Xero and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended Xero. 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 Commonwealth Bank of Australia (ASX: CBA) share price has been contending with the $100 mark for the last couple of months.

Yesterday, the banking giant’s shares reclaimed the century price tag. Though, the latest broker notes indicate the triumph may be brief for CBA investors.

What brokers are saying about the CBA share price?

Despite blazing a 45% share price gain over the past year, some analysts aren’t looking favourably on CBA.

According to a recent note, Morgan Stanley analysts have retained their underweight rating and price target for this banking giant’s shares. The broker’s price target represents roughly a 12% indicative downside to the current CBA share price.

The broker expects a solid result from Australia’s largest bank later this month, but it has concerns over the current lockdowns, with outlook commentary potentially shaky at best.

Additionally, Morgan Stanley considers CBA to be expensive with it trading on a price-to-earnings ratio (P/E) of 27.1. Whereas the average P/E ratio for Australian banks is around 15.7. Analysts from the investment bank suggest investors look elsewhere for ‘value’.  

Earnings just around the corner

The CBA share price will come into focus next week as the company gets set to report its FY21 results. The big four bank will release its full-year financials on Wednesday 11 August.

According to Bloomberg, net profit after tax is estimated to be $9.57 billion with dividends of $2.09 per share. However, we will have to wait to see what CBA reports and how the share price reacts.

The post Leading broker slaps $89 target on CBA (ASX:CBA) share price appeared first on The Motley Fool Australia.

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• CBA (ASX:CBA) share price lifts amid soaring property prices
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• What’s moving the Commonwealth Bank (ASX:CBA) share price this week
• Should you buy CBA (ASX:CBA) shares in July 2021 for the dividend yield?

Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia. 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 give back some of yesterday’s gains. At the time of writing, the benchmark index is down 0.25% to 7,473.6 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

Afterpay Ltd (ASX: APT)

The Afterpay share price has jumped a further 12% to $129.02. Investors have been buying the buy now pay later provider’s shares in response to a rise in the Square share price overnight. This is because the takeover proposal will see Afterpay shareholders receive 0.375 Square shares for every Afterpay share they own. As a result, any rise (or fall) in the Square share price will increase (or decrease) the value of the offer. I’ve explained this in more detail here.

Bellevue Gold Ltd (ASX: BGL)

The Bellevue Gold share price is up 2% to $1.10. This follows the release of the gold explorer’s drilling results from its Bellevue Gold Project. These latest results demonstrate the potential for further increases in the resource and mine life beyond its Stage 2 feasibility study.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up 3% to $1.95. Today’s decline may have been driven by a positive broker note out of Macquarie. According to the note, the broker was pleased with the results of the lithium miner’s battery materials exchange (BMX) auction. This led to Macquarie retaining its outperform rating and $2.00 price target on the company’s shares.

Zip Co Ltd (ASX: Z1P)

The Zip share price has stormed 9% higher to $7.89. Investors continue to buy the buy now pay later provider’s after Afterpay’s takeover sparked hopes that Zip might receive an offer as well. Particularly given recent speculation that rival Klarna has been building a position in the company. This morning Citi retained its buy rating and $8.90 price target on the company’s shares. It notes that its Square-Afterpay deal increases the takeover appeal for Zip.

The post Why Afterpay, Bellevue Gold, Pilbara Minerals, & Zip are charging higher appeared first on The Motley Fool Australia.

More reading

• Here’s why the Zip (ASX:Z1P) share price is rocketing 8%
• Why ASX lithium shares are beating the iron ore majors – again
• Up another 12%, why the Afterpay (ASX:APT) share price keeps pushing higher
• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Afterpay share price surges on takeover. Oil Search, Santos do a deal. Scott Phillips on Nine’s Late News

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Vital Metals Limited (ASX: VML) share price is up 4% in early afternoon trade.

We look at the ASX resource share’s latest rare earths drilling results below.

What assay results did Vital Metals report?

Vital Metals shares are gaining after the company reported outstanding first-pass assay results at its 100% owned Nechalacho Rare Earth Project in Canada.

According to the release, the results from its Tardiff Zones 2 and 3 could significantly extend the project’s mine life.

Of the 10 holes it drilled across Tardiff Zones 2 and 3, Vital said every one hit extensive mineralisation. Those included thick zones with total rare earth oxides (TREO) grades above 2%. The best results highlighted from Zone included:

• 1 metres at 3.03% TREO
• 0 metres at 2.05% TREO

Vital Metals plans additional drilling to fully define the Tardiff zones, which remain open in all directions.

Commenting on the results, Vital Metals managing director Geoff Atkins said:

Drilling results from Tardiff Zones 2 and 3 have shown the potential for Nechalacho to be a much larger rare earths operation than we anticipated. We completed the drilling at Tardiff as part of defining a Mine Plan for Stage 2 operations at Nechalacho, which will initially focus on Tardiff Zone 1.

But, with the results showing mineralisation in both Zone 2 and 3 remaining open, we will plan further drilling in these areas over the next year to get a better understanding of the mineralisation and determine if the three zones are connected.

The company reported it is commencing Stage 1 rare earth production at Nechalacho via ore sorting. It intends to mine its North T deposit in Stage 1 and focus on the Tardiff deposit in Stage 2, with plans to construct a large-scale rare earth mining and processing operation.

“With the commencement of production at Nechalacho, we are excited about the future of this project,” Atkins said. He added that it has the potential to grow into “one of the world’s best light rare earth projects”.

Vital Metals share price snapshot

Over the past 12 months the Vital Metals share price is up an impressive 400%. By comparison the All Ordinaries Index (ASX: XAO) has gained 28% over that same time.

Year-to-date the Vital Metals share price is up 67%.

The post Here’s why the Vital Metals (ASX:VML) share price is flying higher today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Vital Metals (ASX:VML) share price is flying higher today

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. Bernd Struben 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 Zip Co Ltd (ASX: Z1P) share price is off to a flying start today. At the time of writing, shares in the buy now, pay later (BNPL) provider are trading for $7.88 – up 8.84%.

Much like yesterday, Zip is following on from its BNPL compatriot Afterpay Ltd’s (ASX: APT) success in intraday trading.

The Afterpay share price is currently $129.00. That’s an incredible 12.4% higher today and 33.5% greater over the last 2 days.

As many are well aware, Afterpay is in the midst of a takeover bid by Square Inc (NYSE: SQ). Shares in square have risen 10% overnight and since Square will be acquiring Afterpay shares through scrip, it has increased the value of its bid for the Aussie BNPL leader.

Zip will become an Aussie BNPL leader

As Motley Fool has reported, once Square acquires Afterpay, Zip will be the largest BNPL provider on the ASX by market capitalisation. This may be another reason for the rising Zip share price.

Square will establish a secondary listing on the ASX via CHESS depository interests (CDIs) for the thousands of its new Aussie shareholders. It, however, is not exclusively a BNPL provider. The same applies to the Commonwealth Bank of Australia (ASX: CBA), which will launch its own BNPL service soon.

Competition in the sector is heating up. While there are the established players like Zip, Afterpay, and Sezzle Inc (ASX: SZL), among others, news recently broke that Paypal Holdings Inc (NASDAQ: PYPL) and Apple Inc (NASDAQ: AAPL) have entered, or will soon enter, the BNPL market.

The Zip share price fell on the news of Apple and PayPal entering the market, as did the rest of the BNPL sector.

Zip share price snapshot

One can see the volatile ride the Zip share price has gone on over the last year or so.

Over 6 months its share price is down 1.15% but year-to-date it’s up an incredible 39%. Over 12 months, the share price is up slightly less – 34%.

Zip’s 52-week, and all-time high, is $14.53. The current share price is about 45% lower than this milestone achievement.

The post Here’s why the Zip (ASX:Z1P) share price is rocketing 8% appeared first on The Motley Fool Australia.

More reading

• Up another 12%, why the Afterpay (ASX:APT) share price keeps pushing higher
• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Afterpay share price surges on takeover. Oil Search, Santos do a deal. Scott Phillips on Nine’s Late News
• Here are 4 sure-fire ways to catch the next 10-bagger
• Square up 10%. What does this mean for the Afterpay (ASX:APT) share price?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Apple, PayPal Holdings, Square, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple and PayPal Holdings. 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 an ugly day for the PointsBet Holdings Ltd (ASX: PBH) share price after the completion of its institutional placement and entitlement offer.

At the time of writing, shares in the sports betting company have tumbled 11.87% to an 8-month low of $9.95.

Why the PointsBet share price is getting slammed

Capital raising discount

PointsBet’s placement and entitlement offer will issue new shares at an 11.4% and 32.8% discount to its last closing price of $11.91 on Wednesday, 28 July.

The size and discount of the capital raising may negatively impact existing shareholders since it results in share dilution.

This means that existing shares reflect a smaller percentage of ownership and are, thus, less valuable.

Co-founder sell-down

Independent of the capital raising, PointsBet’s co-founders have elected to sell a portion of their holdings.

Co-founders Nick Fahey and Andrew Fahey will sell 2.0 million shares in aggregate or 15% of their holdings.

In addition, Group CEO Sam Swanell will also be selling 0.9% million shares, also 15% of his holdings.

PointsBet quarterly

Another factor impacting the PointsBet share price might be its fourth-quarter update which was announced during its trading halt.

The fourth-quarter update highlighted triple-digit growth across key operating metrics such as betting turnover, active clients and gross win.

However, PointsBet’s explosive growth comes with a hefty price tag, with the company experiencing a net cash outflow of $81.9 million in the fourth quarter.

Third capital raising in two years

PointsBet has proven itself as a cash hungry business, raising approximately $800 million in the last two years.

In October 2019, just five months after the company’s Initial Public Offering, it elected to raise $122.1 million to support marketing and client acquisition, product development and US business development.

By September 2020, PointsBet announced its second capital raising, seeking to raise $303 million to fund its deal with NBCUniversal.

PointsBet share price snapshot

PointsBet has now entered negative year-to-date territory, down 17% in 2021.

Its shares have slumped almost 50% from their all-time high of $18.13 on 16 February.

The post What’s driving the PointsBet (ASX:PBH) share price sharply lower? appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Why the PointsBet (ASX:PBH) share price is crashing 12% lower on Tuesday
• Brokers name 3 ASX shares to buy today
• Why is PointsBet (ASX:PBH) raising $400 million?
• PointsBet (ASX:PBH) share price halted after Q4 update

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. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet 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 Parkd Ltd (ASX: PKD) share price is racing past most ASX shares today with its emphatic rise. This comes after the construction technology company announced two important updates to the market on Tuesday morning.

At the time of writing, Parkd shares are swapping hands for 6.6 cents, up an astonishing 78.38%.

What did Parkd announce?

Investors are fighting to get a hold of Parkd shares following the company’s update on its opportunities in the car parks market.

In its first release, Parkd advised it has signed a memorandum of understanding (MOU) with the University of South Australia.

The framework enables Parkd to undertake a 90-day due diligence process to assess the feasibility to develop a multi-storey car park. The development opportunity is being considered at the University’s Adelaide central business district (CBD) site.

The terms of the MOU offer an exclusive 3-month period for Parkd to explore and evaluate the project’s economic viability.

In addition to that announcement, Parkd also provided a second release to the ASX. The company stated it has signed a binding heads of agreement (HOA) with Axiom Properties Ltd (ASX: AXI).

The HOA will see both parties seek opportunities within Australia for developing and constructing car parks in the private and public sectors.

During the 18-month term of the HOA, the partnership aims to use Axiom’s experience in funding property development. Furthermore, Parkd will employ its knowledge in delivering technical design and construction solutions.

Any awarded contracts are to be negotiated between the pair and will involve entering a formal agreement governing the project at hand.

Parkd chair Bronte Howson commented:

This partnership presents an exciting opportunity for PARKD to provide an alternate funding solution to traditional capital expenditure. Providing fully funded projects via AXIOM would be a game changer and will provide the impetus for PARKD to realise opportunities that are currently impeded by lack of available funding.

Parkd share price summary

Founded in 2016, Parkd designs lightweight concrete modular car parking systems. The company focuses on supplying and building multi-storey car parks for an array of retail centres, hospitals, airports, universities, and more.

In the past 12 months, the Parkd share price has stormed 230% higher, with year-to-date returns up 65%. The company’s shares reached a high of 8.5 cents in April 2021.

The post Why the Parkd (ASX:PKD) share price is soaring 78% today appeared first on The Motley Fool Australia.

More reading

• Here’s why the Vital Metals (ASX:VML) share price is flying higher today
• Here’s why the Zip (ASX:Z1P) share price is rocketing 8%
• What’s driving the PointsBet (ASX:PBH) share price sharply lower?
• Why ASX lithium shares are beating the iron ore majors – again
• Up another 12%, why the Afterpay (ASX:APT) share price keeps pushing higher

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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The mining sector is dragging on the market this morning – but that’s not the case for ASX lithium shares which are trading higher.

The underperformance of the sector is primarily due to the fall the big ASX mining shares, which are all exposed to iron ore.

The Fortescue Metals Group Limited (ASX: FMG) share price dropped 2% to $23.91, the BHP Group Ltd (ASX: BHP) share price shed 1.6% to $52.85 and the Rio Tinto Limited (ASX: RIO) share price surrendered 1.2% to $131.62 at the time of writing.

Our largest miners were the main drags on the S&P/ASX 200 Index (Index:^AXJO) as it dipped 0.2%.

ASX lithium shares bucking the downtrend

However, the smaller ASX lithium shares are bucking the trend. The Galaxy Resources Limited (ASX: GXY) share price rallied 3.2% to $4.84 and Pilbara Minerals Ltd (ASX: PLS) share price added 2.1% to $1.95.

This rotation has been playing out in recent days and could continue for a little while yet.

This is because the outlook for both commodities have started to diverge – and quite rapidly.

Iron ore could fall deeper into bear market

The price of iron ore has fallen into a bear market and Morgan Stanley believes the steel making mineral has passed its peak.

“The iron ore price is falling, down to $181/t from a high of $222/t in early July, pulled down by rapidly slowing Chinese demand,” said the broker.

“We see further downside price pressure, as we expect the incremental market tightness that pushed iron ore through the $200/t barrier during 1H to fully unwind in 2H21.”

Morgan Stanley is forecasting the average price for the ore will tumble to US$160 a tonne by the 2021 December quarter. More worryingly, it warned that even that estimate may prove to be too optimistic.

Brighter outlook for ASX lithium shares

Meanwhile, the outlook for lithium continues to power up. Macquarie Group Ltd (ASX: MQG) noted that spodumene spot prices have surged to over US$1000 a tonne.

“Global passenger electric vehicle sales rose 153% YoY in June to 540k vehicles and 161% YoY in the first half to 2.4m vehicles,” said the broker.

“Macquarie’s Commodities Strategy Team believed that full-year 2021 sales should be well above 5mt and upgraded their forecast from 4.8m to 5.3m vehicles.

“An expected end-year surge in sales in Europe and China could take the final figure even higher.”

ASX shares to buy

In this context, Rio Tinto Limited’s (ASX: RIO) move to expand aggressively into lithium looked well timed. But it will be 2026 before its Jadar project will hit first production.

Macquarie’s top buys in the sector are the Mineral Resources Limited (ASX: MIN) share price, IGO Ltd (ASX: IGO) share price and Pilbara Minerals share price.

The post Why ASX lithium shares are beating the iron ore majors – again appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• This leading broker believes Fortescue Metals (ASX:FMG) shares can lift
• ASX 200 shares to shift earnings growth up a gear in FY22 – Expert
• Own BHP (ASX:BHP) shares? Here’s what to look for during reporting season
• Own Fortescue (ASX:FMG) shares? Here’s what to look for during reporting season

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Fortescue Metals Group Limited, Galaxy Resources Limited, Macquarie Group Limited, and Rio Tinto Ltd. 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 Macquarie 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 Afterpay Ltd (ASX: APT) share price has continued to rally higher following its $39 billion takeover proposal from Square Inc (NYSE: SQ) on Monday.

At the time of writing, shares in the leading buy now pay later giant have added another 12.23% to $128.86 and up an astonishing 33.5% this week.

Get used to the Square and Afterpay share price moving together

The Square and Afterpay share prices are now intrinsically linked together following the takeover proposal.

The terms of the takeover is an all-scrip offer, where Afterpay shareholders will receive a fixed exchange ratio of 0.375 Square shares for each Afterpay share they own on the record date.

While the exchange ratio is fixed, the Square share price is the variable that could continue to move Afterpay, moving forward.

Square jumps 10% overnight

Square shares rallied strongly overnight in response to its Afterpay takeover proposal.

The Square share price rallied as much as 13.60% intraday to a near all-time high of US$280.88.

By market close, the company’s shares closed 10.16% higher to US$272.38.

The rally also witnessed significant volumes, with approximately 45.73 million shares changing hands, compared to Square’s 10-day average of approximately 10.74 million.

At a closing price of US$272.38, this would imply that one Afterpay share is worth US$102 or A$138.49.

Signs of life in the BNPL sector

The surging Afterpay share price appears to be bringing life back into the BNPL sector, with gains across the board.

Overnight, the Affirm Holdings Inc (NASDAQ: AFRM) share price rallied 14.90% to US$63.71.

While the likes of Zip Co Ltd (ASX: Z1P) and Sezzle Inc (ASX: SZL) have rallied 15.21% and 5.13% in the last two days.

Even smaller, beaten up BNPL players such as Openpay Group Ltd (ASX: OPY), Laybuy Holdings Ltd (ASX: LBY) and Splitit Ltd (ASX: SPT) have jumped 8.42%, 15.12% and 10.87% respectively.

The post Up another 12%, why the Afterpay (ASX:APT) share price keeps pushing higher appeared first on The Motley Fool Australia.

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• Square up 10%. What does this mean for the Afterpay (ASX:APT) share price?
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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. owns shares of and has recommended AFTERPAY T FPO, Affirm Holdings, Inc., Square, and ZIPCOLTD FPO. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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