The oOh!Media Ltd (ASX: OML) share price is tumbling as the effects of the pandemic on its business are becoming increasingly apparent.

Shares in oOh!Media closed today’s trade at $1.51 – 1.95% lower than Friday’s close.

The oOh!Media share price has also fallen 18.55% in just 30 days.

The significant fall has occurred despite the out-of-home advertising company not releasing any price-sensitive news since May.

Let’s take a look at what might be driving the oOh!Media share price down lately.

COVID-19 taking its toll

As most would assume, as people stay at home while lockdowns rage, less money is put into outdoor advertising. And that’s exactly what’s happened to oOh!Media.

It reported a 34% drop in revenue in its results for the 2020 calendar year. The oOh!Media share price also fell 46% over 2020.

PwC’s Australian Entertainment. & Media Outlook 2021- 2025 found the media and marketing landscape has shifted considerably since the beginning of the pandemic, with out-of-home advertising one of the hardest-hit segments.

However, it reports it’s starting to see “green shoots” from the segment, driven by demand for roadside billboards.

Unfortunately, over the last month, Australia has experienced the greatest number of people in lockdown since early 2020.  

Since this time last month, areas of Queensland, Perth, Western Australia’s Peel region, Darwin, and Alice Springs have had lockdowns imposed and lifted again.

Meanwhile, Sydney has been enduring a 3 week ‘soft’ lockdown and has another 11 days of hard lockdown to get through in an attempt to shake the COVID-19 Delta strain.

Similarly, Victoria entered what was a 5-day lockdown last Thursday. Today, it was extended for an indefinite period.

Additionally, oOh!Media has reportedly decided to sell Junkee Media by the end of the year. The decision may be another weight on the oOh!Media share price lately.

It seems it might get tougher for the oOh!Media share price, Sydney, and Victoria before it gets better.

oOh!Media share price snapshot

The company’s poor performance over the past month has pushed the oOh!Media share price into the ASX red.

It’s currently 8.7% lower than it was at the start of 2021. However, it has gained 81.4% since this time last year.

The company has a market capitalisation of around $906 million, with approximately 598 million shares outstanding.

The post Why the oOh!Media (ASX:OML) share price has dropped 18% in a month appeared first on The Motley Fool Australia.

More reading

• The oOh!Media (ASX:OML) share price is falling today. Here’s why
• Pssst… here’s a cheap COVID-recovery ASX share
• COVID-19 lockdown hits oOh!Media (ASX:OML) share price

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 recommended oOh!Media 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 Fortescue Metals Group Limited (ASX: FMG) share price has been a very impressive performer over the last 12 months.

Since this time in 2020, the iron ore producer’s shares have risen by an impressive 55%.

The good news is that despite the strong rise in the Fortescue share price, analysts still believe investors will be rewarded with incredibly generous dividends in the near term.

The Fortescue dividend

One leading broker that believes the Fortescue dividend will be enormous in the near term is Bell Potter.

According to a note out of the broker, its analysts note that the iron ore price has remained stronger than expected. As a result, it has revised its iron ore forecasts upwards and adjusted its earnings and dividend estimates accordingly.

Bell Potter said: “Our FY21 dividend increases 1.3% to A409cps, inclusive of a fully franked final dividend payment of A262cps (from A257cps), a 10.2% yield on its own. Our forecast prospective 12-month dividend payouts lift 5.7% to A460cps (from A435cps) as 1HFY22 captures our higher iron ore price forecast, for an interim payment of A198cps and forecast 17.9% fully franked yield.”

However, despite this sizeable yield, Bell Potter is only recommending Fortescue as a hold with a $24.06 price target.

Is anyone more positive on the Fortescue share price?

One leading broker that is more positive on the Fortescue share price is Macquarie. Its analysts have an outperform rating and $27.00 price target on its shares at present.

The broker is forecasting fully franked dividends of $3.45 per share in FY 2021 and then $2.45 per share in FY 2022.

Based on the latest Fortescue share price of $25.42, this will mean yields of 13.6% and 9.6%, respectively, over the next two years. Macquarie believes current spot iron ore prices pose significant upside risk to earnings and dividend estimates.

The post How big will the Fortescue (ASX:FMG) dividend be over the next 12 months? appeared first on The Motley Fool Australia.

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• July’s been a great month so far for the Fortescue Metals (ASX:FMG) share price
• Guess which sector this week’s top performing ASX 200 shares all come from
• Why the BlueScope (ASX:BSL) share price could be set to jump higher
• These 2 ASX dividend shares are offering trailing yields of 10% today

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

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The Bitcoin (CRYTPO: BTC) price slid lower again over the past 24 hours, falling 1% to US$31,826 (AU$43,008).

That brings Bitcoin’s losses to 7% since this time last week. And it leaves the world’s biggest crypto with a market cap of US$597 billion, according to data from CoinDesk. That’s still a sizeable figure. But it’s a far cry from the nearly US$1.2 trillion market cap it claimed at its peak in mid-April, when it was trading for a record high US$64,829.

With Bitcoin down 51% since then, some crypto analysts are forecasting it’s approaching strong support.

Will Bitcoin find a floor at US$30,000?

I’d rather try predicting next year’s weather than the price of Bitcoin next week. And I’d probably have more luck at it.

But when it comes to where the digital token is likely to head from here, there are plenty of industry experts toiling away to bring us the answer. And the latest word on the street is that US$30,000 could provide a floor for the sliding Bitcoin price.

Aside from 30,000 being a nice round number (humans like numerals that match evenly with the number of fingers we have), some analysts believe options trading activity can shine the light on what to expect next.

As Bloomberg reports:

In options, $30,000 is the most-sold downside strike price for July and August, signaling confidence among such traders that the level will hold, according to Delta Exchange, a crypto derivatives exchange. It “should provide a strong support to the market,” Chief Executive Officer Pankaj Balani said.

Blockdaemon’s CEO, Konstantin Richter, also isn’t overly concerned with Bitcoin’s recent price falls. “If it goes down fast, it can go up fast. That’s just what crypto is,” he said.

Richter said the price would need to go below US$20,000 before shaking out institutional demand, which helped push Bitcoin back into the limelight over the past year.

The post Down 7% over the week, will Bitcoin find a floor at US$30,000? appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin. 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 RareX Ltd (ASX: REE) share price has surged into the green during afternoon trading.

RareX shares reached 10.5 cents intraday before closing at 9.2 cents apiece, a 13.58% gain on the day.

Let’s take a look at the tailwinds behind RareX’s share price this Monday.

Quick recap on RareX

RareX is a minerals exploration company that focuses on developing rare earths deposits.

Its major focus is the Cummins Range rare earth project in the East Kimberly region of Western Australia.

The Cummins Range mine contains a high percentage of the rare earth elements Neodymium and Praseodymium.

RareX has a market capitalisation of around $40 million.

Upgrade to Cummins Range resource

In an announcement today, RareX delivered a major resource upgrade at its Cummins Range rare earths project.

It stated the project had realised a 46% increase in deposits in overall tonnes to 18.8 million tonnes, at 1.15% total rare earth oxides (TREO).

The TREO findings included 0.23% Neodymium and Praseodymium, in addition to 0.14% of “potential by-product” niobium pentoxide.

The company also posted a “maiden indicated resource of 11.1 million tonnes at 1.34% TREO and 0.17% niobium pentoxide, with an additional 4.9 million tonnes at 2.11% and 0.23% niobium pentoxide”.

Niobium pentoxide is a precursor for many alloys and is even used as a raw material in the production of glass for spectacles.

The company firmly believes Cummins Range has the potential to expand further in terms of overall size and grade.

In the release, RareX managing director Jeremy Robinson said:

Importantly, we believe that there is enormous scope to grow the resource further, both in overall size and grade. We have seen some very encouraging indications from the recent expansionary drilling and we are really looking forward to seeing what the upcoming diamond drilling will reveal.

RareX also announced a new 6,000 metre reverse circulation (RC) drilling program to expand its Cummins Range resource further.

Investors immediately rewarded the RareX shares following the announcement, driving prices up 21% to the intraday high of 10.5 cents.

RareX share price snapshot

The RareX share price has had a choppy year to date, posting a loss of ~19% since January 1.

Despite this loss, RareX shares have gained 10% over the previous 12 months.

However, both of these returns have lagged the S&P/ASX 200 Index (ASX: XJO)’s return of ~21% over the past year.

The post Rarex share price leaps 21% intraday on resource upgrade appeared first on The Motley Fool Australia.

More reading

• Aeon Metals (ASX:AML) share price drops 11% on placement update
• Why the Treasury Wine (ASX:TWE) share price has soared 24% in 2021
• What these 5 outperforming ASX shares have in common
• Top broker still thinks the Qantas (ASX:QAN) share price is great value
• Is the BOQ (ASX:BOQ) share price a buy for dividends?

The author Zach Bristow 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 Aeon Metals Ltd (ASX: AML) share price came out of a trading halt today following a successful placement.

The mineral exploration company’s shares closed the day at 6.5 cents, down 10.96%.

What drove the Aeon Metals share price lower?

A catalyst for today’s fall in Aeon Metals shares is that investors may be concerned about an impending share dilution.

According to its release, Aeon Metals advised that it has successfully received commitments to raise $9.5 million (before costs). The placement gathered support from sophisticated and professional investors, including the company’s major shareholder OCP Asia. This comes after the 24-month OCP loan facility maturity extension announced last week.

In total OCP Asia subscribed for $4.4 million in the placement, representing almost half of the entire offer. Adding to the mix, all members of the Aeon board also submitted their interest, applying for $100,000 worth of shares.

The participation from OCP Asia and Aeon Metals board members is subject to shareholder approval at an upcoming general meeting.

Aeon Metals listed the issue price for its new ordinary shares at 5.8 cents apiece. This reflects a 20.6% discount to the last closing price of Aeon Metals shares on 14 July (at 7.3 cents).

The shares will be split across two separate tranches, with the first portion coming under the company’s listing rule 7.1 and 7.1A. This allows them to issue approximately 86.2 million shares without shareholder approval.

The second portion of shares (roughly 77.5 million) will be subject to shareholder approval at a meeting in August.

Aeon will allocate the proceeds of the placement to a number of initiatives:

• Ongoing Pre-Feasibility Study (PFS) activities on the Walford Creek Cu/Co Project (PFS scheduled for completion in Q1 CY2022)
• Ongoing extensional and infill resource drilling at Walford Creek
• New regional copper exploration activities
• General working capital
• Costs of the placement and SPP

Furthermore, the company will offer a share purchase plan (SPP) to retail investors to raise an additional $3 million. The SPP will be offered at the same price as the placement. The closing date of the SPP is 18 August.

What did the head of Aeon Metals say?

Managing director and CEO of Aeon Metals Dr Fred Hess commented:

Aeon is currently advancing both its site drilling campaign and metallurgical testwork to support the Walford Creek PFS, which is expected to be completed during Q1 CY2022.

We also intend to move quickly to commence a regional exploration program, primarily focused on our substantial tenement package to the east of Walford Creek, the Basin Edge Project, and our tenements to the west of Mt Isa, prospective for IOCG and sedimentary copper style targets.

About the Aeon Metals share price

It’s been a tough ride for Aeon Metals shareholders, with the company’s shares falling by more than 45% year to date. Looking at a longer time frame, the Aeon Metals share price is down more than 27% since this time last year.

Based on today’s price, Aeon Metals presides a market capitalisation of around $49.46 million, with 677 million shares outstanding.

The post Aeon Metals (ASX:AML) share price drops 11% on placement update appeared first on The Motley Fool Australia.

More reading

• Rarex share price leaps 21% intraday on resource upgrade
• Why the Treasury Wine (ASX:TWE) share price has soared 24% in 2021
• What these 5 outperforming ASX shares have in common
• Top broker still thinks the Qantas (ASX:QAN) share price is great value
• Is the BOQ (ASX:BOQ) share price a buy for dividends?

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 Treasury Wine Estates Ltd (ASX: TWE) share price has gotten off to a flyer in 2021. While the S&P/ASX 200 Index (ASX: XJO) has gained 9.1%, Treasury Wines has soared 24.4% higher this year.

So, what’s helping the Aussie wine business’ shares outperform this year?

Why the Treasury Wine share price has soared in 2021

It always pays to look at recent announcements when analysing share price performance. For Treasury Wine, it’s been a busy start to the year.

There has been quite a bit of volatility in the Treasury Wine share price in the last 12 months or so. One of the biggest factors was the threat of increased tariffs from China.

China is a major purchaser of Aussie wines and Treasury Wine shares sank in March after China slapped a 175% tariff on the company’s Australian country of origin wine in containers of two litres or less for the next 5 years.

However, the Treasury Wine share price isn’t up 24% this year for nothing. In fact, since that March 29 announcement, shares in the wine group are up more than 12%.

A strong strategic & financial update has certainly helped. The Treasury Wine share price shot 11.5% in the space of 5 trading days after its 2021 Investor Day announcements on May 12.

Treasury Wines flagged a 33% jump in second half earnings before interest, tax, the agricultural accounting standard SGARA and material items (EBITS). The group expects FY21 EBITS of $495 million to $515 million, which was above then-market expectations.

Strong EBITS margins across key portfolios like Penfolds (40-45% target) and Treasury Americas (25% target), combined with plans to slash its cost base, had investors buying in.

That helped propel the Treasury Wine share price to climb higher in May. That momentum has been continued in June and July despite no further announcements from the Aussie group.

Treasury Wine isn’t the only Aussie wine share on the move right now. The Digital Wine Ventures Ltd (ASX: DW8) share price slumped 12% lower on Monday after announcing a strategic acquisition.

The Aussie online wine seller will acquire Parton Wine Group after raising $7.5 million from its investors. Investors sold down on the news with the Digital Wine share price slumping lower.

Foolish takeaway

The Treasury Wine share price has been outperforming so far this year. Beaten down on the China tariff news, strong earnings and cost-cutting have helped fuel the Aussie wine group’s valuation in 2021.

Investors will be watching the company’s 19 August results release closely for further indications of growth.

The post Why the Treasury Wine (ASX:TWE) share price has soared 24% in 2021 appeared first on The Motley Fool Australia.

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• Are the 10 highest paid ASX 200 CEOs worth their paypackets?

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 owns shares of and has recommended Treasury Wine Estates 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 rising tensions between Canberra and Beijing have thrown up a headwind for many ASX shares.

But those same tensions have also boosted demand for select goods, services and commodities produced outside of China. And that’s helped other ASX shares post some strongly outperforming gains over the past 12 months.

The 5 ASX shares we’ll look at here have all gained between 2 and 9 times as much as the All Ordinaries Index (ASX: XAO) over the last full year. And this is over a year where the All Ords gained 24%.

What these 5 outperforming ASX shares have in common

The ASX shares we’ve put under the spotlight today are:

• Australian Strategic Materials Ltd (ASX: ASM)
• Iluka Resources Ltd (ASX: ILU)
• Dreadnought Resources Ltd (ASX: DRE)
• Hastings Technology Metals Ltd‘s (ASX: HAS)
• Lynas Rare Earths Ltd (ASX: LYC)

To see what they have in common you need only look at Lynas’ full company name.

That’s right. They’re all involved (to varying extents) in exploring for, or producing, rare earth elements.

What are rare earth elements?

In a nutshell, there are 15 different rare earth elements. And they’re not really rare in terms of their abundance in the earth. What makes them rare is they’re usually found with very limited concentrations. That means you need to dig up and process a lot of rock to get to the few useful bits.

While many people can’t name a single rare earth element, they’re used across a growing range of modern technologies. They include powerful magnets which you’ll find in wind turbines and electric motors. Other rare earth elements are crucial in making your smartphone smart, and several are increasingly important to national defence in aircraft, vessels, and high-tech ground vehicles.

How China is boosting demand for Australia’s rare earth elements

Depending on the source you’re using, you’ll find China produces somewhere in the range of 70-90% of the global supply of rare earth elements.

But that’s a statistic the West, driven by efforts from the United States, aims to change.

With tensions between China and the West rising, nations are looking beyond the Middle Kingdom to ensure a secure supply. And with Australia home to the 6th largest deposits of economically viable rare earth elements on Earth, according to CSIRO’s Critical Energy Minerals Roadmap, ASX shares involved in this niche sector have been garnering increased investor attention.

According to Jeffrey Wilson, research director at the Perth USAsia Centre (quoted by msn.com):

China’s monopoly over these minerals that are critical for technologies gives it a really powerful economic weapon. And indeed it has cut off supply of rare earths in the past to Japan in 2010. Of late, there have been a number of threats made that it might cut off supply to the United States in the future.

So, as China’s relationships with a number of countries — Australia, Japan, the US, and Europe — has steadily gotten worse over the past 12 months, there’s a present threat that China may use its monopoly to deploy the rare earths weapon to punish others if they fall into diplomatic disagreements.

When the world’s 2 biggest economies get into a tug of war over a group of elements critical to their military and technological ambitions, investors tend to take note.

You can see this by looking at the performance of today’s 5 ASX shares involved in the rare earth elements game.

How have these ASX shares been moving?

Beginning with the biggest of our rare earths ASX shares, with a market cap of roughly $5.6 billion, Lynas has gained 201% over the past 12 months. Lynas is the world’s second largest producer of rare earths and currently remains the only “significant producer” outside China. The company’s Mt Weld mine in Western Australia is amongst the highest grade rare earths mines in the world.

International mineral sands company Iluka has also strongly outperformed the benchmark over the 12 months. Iluka’s rare earths projects include Eneabba in Western Australia and Wimmera in western Victoria. The Iluka share price is up 85% since this time last year.

In the small-cap space, we have Dreadnought Resources and Hastings Technology Metals.

The Dreadnought share price is up 360% over the last 12 months. And it’s rocketing today, up 18% after reporting the presence of high-grade rare earths elements at its Western Australian Yin Prospect.

Meanwhile, Hastings, whose Yangibana rare earths project is under construction in West Australia, has seen its share price gain 50% in 12 months.

Leaving off with our biggest share price gainer, we have Australian Strategic Materials, up 429% year-on-year.

This ASX share is in a trading halt today pending an announcement on its Dubbo project in New South Wales. The company indicated it plans to develop Dubbo to “supply globally significant quantities of zirconium and rare earth metals, as well as contribute to the niobium and emerging hafnium industries”.

The post What these 5 outperforming ASX shares have in common appeared first on The Motley Fool Australia.

More reading

• Why the Dreadnought Resources (ASX:DRE) share price is charging 8% higher
• Australian Strategic Materials (ASX:ASM) share price stilled by trading halt
• Why the Iluka (ASX:ILU) share price is down today
• 5 best ASX 200 mining and resource shares of financial year 2021
• Shares in Australian Strategic Materials (ASX:ASM) end their miraculous run

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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Could the Bank of Queensland Limited (ASX: BOQ) share price be worth looking at right now?

BOQ is one the largest second tier ASX banks below Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

What has happened to the BOQ share price recently?

Today, the BOQ share price is down. The lockdowns are ongoing in Sydney and Melbourne. But the share prices of CBA, Westpac, ANZ and NAB are down a little more than BOQ at the time of writing.

BOQ shares are up almost 49% over the last 12 months. However, since March 2021, it hasn’t moved much.

In April 2021, the bank announced its FY21 half-year result. The company revealed growth across a number of areas.

Half-year cash earnings after tax went up 9% to $165 million. Statutory net profit after tax (NPAT) grew by 66% to $154 million. The net interest margin improved by 3 basis points to 1.95%. BOQ’s common equity tier 1 (CET1) capital ratio improved by 12 basis points to 10.03%.

Income-seekers may have noticed that the bank paid an interim dividend of 17 cents per share, which was an increase of 11 cents per share.

At the time of the HY21 result, BOQ said that the economic outlook appears more positive and is showing encouraging signs of improvement. The bank also said it remains committed to sustainable profitable growth, supporting returns to shareholders and a dividend payout ratio target range of 60% to 75% of cash earnings.

The ME Bank acquisition

BOQ recently completed the acquisition of ME Bank for a cash consideration of $1.325 billion.

When the regional bank first announced the deal, it said it would create a compelling alternative to the big banks.

The deal is expected to deliver material scale, broadly doubling the retail bank and providing diversification. Management believe there is a clear pathway to a scale, common, cloud based digital retail bank technology platform.

BOQ believes the deal is financially compelling. It’s expected to be low double-digit to mid-teens accretive for cash earnings per share (EPS). It’s expected to be cash return on equity (ROE) accretive by over 100 basis points including full run-rate synergies in the first year. Anticipated annualised pre-tax synergies are expected to be $70 million to $80 million.

 The BOQ managing director and CEO George Frazis said:

The acquisition of ME Bank is strategically aligned and financially compelling. It further strengthens our multi-brand strategy, delivers material scale, provides portfolio diversification and enables the acceleration of the digital strategy towards a common digital retail bank technology platform.

Is the BOQ share price a buy for dividends?

The brokers at Macquarie Group Ltd (ASX: MQG) believe that BOQ shares are a buy, with a price target of $10. That suggests the BOQ share price could go up over 10% in the next 12 months, if it ends up being correct.

Macquarie believes that BOQ will pay an annual dividend of 37 cents in FY21 and 47 cents in FY22. That translates into a fully franked dividend yield of 4.2% and 5.3% respectively.

The post Is the BOQ (ASX:BOQ) share price a buy for dividends? appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• The Bank of Queensland (ASX:BOQ) share price is having a good year. Here’s why
• The Bank of Queensland (ASX:BOQ) has officially acquired ME Bank
• Bank of Queensland shares outperforming all ASX 200 banks this month
• Why this broker reckons Bank of Queensland (ASX:BOQ) shares are a buy

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 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 Qantas Airways Limited (ASX: QAN) share price is under pressure on Monday.

In afternoon trade, the airline operator’s shares are down 1.5% to $4.64.

Why is the Qantas share price under pressure?

The weakness in the Qantas share price on Monday appears to have been driven by concerns over Australia’s COVID-19 outbreak.

With New South Wales continuing to report high levels of new infections and Victoria extending its lockdown, investors appear to believe the domestic travel market recovery could be further delayed.

Fellow travel shares Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) are also trading notably lower today.

Is this a buying opportunity?

According to a note out of Citi this morning, its analysts see a lot of value in the Qantas share price at the current level.

This morning the broker retained its buy rating, albeit with a trimmed price target of $5.61.

Based on the current Qantas share price, this implies potential upside of almost 21% over the next 12 months.

What did the broker say?

The broker has been looking into border restrictions and lockdowns. While these will weigh on the company’s performance, Citi believes Qantas will be okay financially if it is just New South Wales that is locked down.

Citi commented: “Given heightened lockdown fears, we attempt to look through the noise and quantify the potential impact of border restrictions. Overall we estimate the relevant number we’ll keep our eye on is ~60% for capacity. At this level we believe EBITDA loses will be manageable, and only minor strain placed on the balance sheet. Theoretically we estimate capacity could remain at this level with just New South Wales locked down. However, the same can’t be said if we go into sustained lockdowns in other major states at the same time.”

In light of this, it is keeping its buy rating on the Qantas share price for the time being. Though, it may reassess its recommendation if things escalate.

The post Top broker still thinks the Qantas (ASX:QAN) share price is great value appeared first on The Motley Fool Australia.

More reading

• It hasn’t been a great 2021 so far for the Qantas (ASX:QAN) share price
• Fresh blow to ASX 200 travel shares as Victoria lockdown looms large
• Will the Qantas (ASX:QAN) share price take off soon?
• It has been a big past year for the Qantas (ASX:QAN) share price
• Here are the 5 best ASX transport shares of the 2021 financial year

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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The Wesfarmers Ltd (ASX: WES) share price is reaching new heights despite a disappointing day for the entire market.

At the time of writing, shares in the retail conglomerate are trading for $59.64 – up 0.88%. Earlier, shares reached an intraday high of $59.68. That’s an all-time record for the company. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.87% lower today.

While the company hasn’t made any market announcements today, it has been in the news over the past few days. Let’s take a closer look.

Recent market news

On Friday, Wesfarmers took another step in diversifying its already diversified business when its Mt Hollard lithium project in Western Australia received ministerial approval.

Wesfarmers looks intent on cashing in on the lithium boom. The commodity’s price has been surging as demand for the metal increases along with the demand for electric vehicles.

Managing Director Rob Scott said at the time:

The development of the Mt Holland lithium project presents an attractive investment for Wesfarmers shareholders. The project capitalises on our Chemicals, Energy and Fertilisers divisions’ chemical processing expertise and Western Australia’s unique position to support growing global demand for electric vehicle battery materials which will make a crucial contribution to global efforts to reduce greenhouse gas emissions.

The news sent the Wesfarmers share price higher on that day too.

Also making the rounds recently was the company’s proposed purchase of Australian Pharmaceutical Industries Ltd (ASX: API).

Wesfarmers made a non-binding, indicative offer to acquire 100% of the Priceline Pharmacy owner for $1.38 cash per share. As Motley Fool previously reported, the offer represented a premium of 21% on its last traded price before news of the takeover bid.

Rob Scott said of the decision to invest in the retail chemist owner:

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.

How about lockdowns?

In this day and age, the COVID-19 pandemic and its effects on companies is often worth a mention.

Australia’s 2 largest cities, Sydney and Melbourne, are both in lockdown to prevent the spread of the highly infectious Delta variant of the virus.

Historically, consumer staple and retail shares have done well during lockdown. The theory is stay-at-home order limits people’s options on what they can spend their money on.

Companies that are allowed to stay open and/or can provide pick-up and takeaway services, such as Wesfarmers retail division, Domino’s Pizza Enterprises Ltd (ASX: DMP), and Metcash Limited (ASX: MTS) tend to do well in such an environment.

The Wesfarmers share price, as well as Domino’s and Metcash, are all in the green today despite the general market downturn.

Wesfarmers share price snapshot

Over the past 12 months, the Wesfarmers share price has increased around 28%. Year-to-date, the company’s value has risen 18%.

Wesfarmers has a market capitalisation of $67 billion.

The post Why the Wesfarmers (ASX:WES) share price just hit a new all-time high appeared first on The Motley Fool Australia.

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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 Wesfarmers Limited. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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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