The Australian Strategic Materials Ltd (ASX: ASM) share price has nudged 1% higher on Thursday after announcing its March quarter activities report. 

Australian Strategic Materials is an integrated materials business and emerging ‘mine to manufacturer’ producer of critical metals. The company owns the Dubbo project in NSW, a proven long-term resource of rare earths.

Currently, the company is developing its metallisation plant in South Korea to produce a range of high-purity metals and alloys. 

At the time of writing, the share price has retreated slightly to $4.82, up 0.84%. 

What’s driving the Australian Strategic Materials share price?

Australian Strategic Materials has continued to progress its key Korean Metals Plant following the signing of a Memorandum of Understanding (MoU) with local provincial and city government bodies. 

The Korean Metals Plan will produce and supply titanium and key rare earth metal alloys to the South Korean market. This comes as part of a broader global move away from China as a key rare earths supplier.

The company’s board has approved the progression of the plant with the initial phase estimated to cost US$9.9 million. Small scale production of metals is expected to commence in the second half of calendar year 2021. The targeted project of titanium powder and rare earths is expected to ramp. This will take production up from 582 tonnes in 2021 to 4,282 tonnes in 2022. 

Current designs for the plant includes planned production levels of 5,200 tonnes per annum. The second phase of capital expenditure will see the installation of a second titanium line. There will also be additional neodymium lines upon the execution of offtake agreements within the South Korean manufacturing sector. 

The Dubbo project

The Dubbo project is ready for construction. All major state and federal approvals and licences in place, alongside a proven process flow sheet and solid project economics. The company is working through an optimisation study, undertaking engineering and test work during the March quarter. The optimisation study is expected to be completed in 3Q21. This will allow time for re-scoping and potential discussions with South Korean parties interested in participating in its build, own, and operate model. 

With everything coming together, the company is also focused on the delivery of metal offtake agreements with titanium consumers and magnet producers in South Korea. Discussions continue to take place with various parties to address the supply of these materials.

Furthermore, the materials are considered critical to the country’s manufacturing sector. The company is progressing discussions with both Korean and global suppliers with the focus on securing binding and committed agreements. 

Why has the share price underperformed in 2021? 

Despite the positive operational progress from the company, the Australian Strategic Materials share price has slumped 25% year-to-date. With that said, the company made its ASX debut on 30 July 2020, where it has run up more than 250% since. 

Recent share price dragging factors could include its $91 million capital raising at a price of $4.80 per share as well as a sharp sell-off from rare earth producer, Lynas Rare Earths Ltd (ASX: LYC). 

More reading

• Province Resources and Zip were among the most traded ASX shares last week
• Why some of your favourite ASX growth shares are free-falling this week
• How the Lynas share price (ASX:LYC) sunk 90% last time this happened 
• Why is the Lynas (ASX:LYC) share price down 14% this week?
• ASX 200 drops, Challenger plummets, Lynas falls

Motley Fool contributor Kerry Sun 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.

The post What has the Australian Strategic Materials (ASX: ASM) share price achieved this quarter? appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3t7VRfa

The embattled St Barbara Ltd (ASX: SBM) share price is catching a break after Citigroup upgraded the gold miner following its devastating sell-off yesterday.

The St Barbara share price jumped 2.7% to $1.92 in early trade when the S&P/ASX 200 Index (Index:^AXJO) advanced 0.2%.

The bounce isn’t enough for St Barbara to reclaim most Wednesday’s losses due to a soft production report.

St Barbara share price tumbling into the “buy” zone

But the dip is a buying opportunity for those with a stronger stomach, according to Citi.

“On a risk-reward basis SBM now looks attractive following yesterday’s 8% selloff—for those willing to look through a likely narrow FY21e production miss and the reality that mining at depth at Gwalia comes with unique operational challenges,” said the broker.

“SBM is now trading on a P/NAV of 0.9x even with a 40% risk-weighting at Simberi and we view the outlook for Gwalia, Australia’s deepest trucking mine, as improving.”

Weak quarter production update

The miner’s March quarter gold output of 82,300 ounces fell short of Citi’s estimates by 19%. Adding insult to injury, all-in sustaining costs (AISC) of A$1649/oz was 17% higher.

Little wonder why the St Barbara share price tanked yesterday!

Gold production from its Gwalia mine was steady in the quarter at 42,700 ounces, which wouldn’t be so bad if the broker hadn’t pencilled in a 10% increase.

“Covid impacts saw Simberi burn cash as production fell to a 5yr low of 19koz with ASIC lifting to an eye-watering A$2426/oz,” added Citi.

“Atlantic also delivered below expectations (-24% Citi/consensus) with 20.6koz Au @ A$1128/oz (+9% vs CitiE).”

Full year guidance at lower end of range

At least management didn’t downgrade its full year production guidance, although it did warn that it would come in at the bottom of its 370,000 to 410,000 ounces forecast.

Meanwhile, the miner changed its ASIC estimate to between $1,440 and $1,520 an ounce for the year. This compares to its previous guidance of $1,360 to $1,510 an ounce.

What is the St Barbara share price worth?

But it looks like the bad news is more than baked into the St Barbara share price. Citi upgraded the shares to “buy” from “neutral” but slapped a “high risk” warning on its bullish call.

The broker also increased its price target on St Barbara by 10 cents to $2.40 a share.

Gold miners haven’t been performing well over the past year as the gold price eased from record highs at over US$2,000 an ounce.

But St Barabra is lagging many of its peers with a loss of around 22%. In contrast, the Evolution Mining Ltd (ASX: EVN) share price and Newcrest Mining Ltd (ASX: NCM) share price have shed 13% and 5%, respectively.

More reading

• Why the Newcrest Mining (ASX:NCM) share price is on watch
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 rises, Kogan jumps, gold miners sold off
• Downer (ASX:DOW) share price may only be at start of a capital return cycle
• The ASX 200 just had its slowest quarter in 12 months

Motley Fool contributor Brendon Lau owns shares of Evolution Mining Limited, Newcrest Mining Limited and St Barbara Ltd. 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.

The post Why this top broker just upgraded the battered St Barbara (ASX:SBM) share price to “buy” appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/2R5MU8D

The LiveTiles Ltd (ASX: LVT) share price is crashing lower on Thursday morning.

In early trade, the employee experience software provider’s shares are down 12.5% to a multi-year low of 17.5 cents.

This latest decline means the LiveTiles share price is now down 44% from its 52-week high or ~75% from its record high.

Why is the LiveTiles share price crashing lower?

Investors have been heading to the exits today following the release of LiveTiles’ third quarter update.

According to the release, at the end of the third quarter, LiveTiles’ annualised recurring revenue (ARR) reached $58.9 million on a reported basis. This was up 7% on the prior corresponding period and just 1.4% since the end of December.

Management blamed much of this weakness on currency headwinds, noting that its growth would have been much stronger had the Australian dollar not strengthened.

However, also weighing on its performance and the LiveTiles share price, was a net reduction in customers.

At the end of March, customer numbers stood at 1,114. This is down by 18 customers since the end of December.

Cash burn continues

Also putting pressure on the LiveTiles share price has been its cash burn and cash receipts.

Although the company reported a 12% year on year increase in cash receipts to $12.2 million, they were down 6% on the prior quarter.

This led to the company recording a net cash outflow from operating activities of $2.3 million, which reduced its cash balance to $16.75 million.

Management commentary

While the market may have reacted negatively to the update, one person that was happy with it was LiveTiles’ Co-Founder and Chief Executive Officer, Karl Redenbach.

He said: ”We are very pleased again with our overall Q3 results, in what continues to be a challenging operating macro environment across the globe, achieving continued growth in our ARR results, reducing our net cash outflows and maintaining a healthy cash position.”

“We’re confident LiveTiles products will continue to gain traction and our growth will continue to accelerate with it,” he added.

More reading

• Why this top broker just upgraded the battered St Barbara (ASX:SBM) share price to “buy”
• Why the Rhipe (ASX:RHP) share price is racing 5% higher today
• Netflix’s downbeat earnings explained
• Why the Nitro (ASX:NTO) share price is surging 6% higher today
• Woolworths (ASX:WOW) share price lower on third quarter sales update

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 LIVETILES FPO. The Motley Fool Australia has recommended LIVETILES FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the LiveTiles (ASX:LVT) share price is crashing 12% lower appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3u27ENl

The Rhipe Ltd (ASX: RHP) share price is racing higher after the company provided investors with a trading update.

At the time of writing, the cloud and software solutions provider’s shares are fetching for $1.82, up 5.8%.

Let’s take a closer look at how Rhipe performed for the period.

Q3 YTD financial performance

Investors appear pleased with the company’s financial update, sending Rhipe shares higher in early morning trade.

For the 9 months ending March 31 (Q3 YTD FY21), Rhipe reported unaudited sales of $273.1 million. This represents a 15% lift from the $236.5 million attained over the prior corresponding period.

Revenue soared to $46.8 million, up 15% when compared against Q3 YTD FY20. Rhipe noted that the continued momentum in Microsoft public cloud products, which includes Office 365 and Azure, drove the result. In total, over 775,000 Microsoft Office 365 licensees were recorded, adding around 16,000 seats per month.

In addition, the company’s services and solutions business also accomplished strong growth.

As a result, gross profit rose to $43.1 million, reflecting a gain of 13% compared to this time last year.

Operating expenses moved slightly higher to $30.1 million, a 5% increase over the prior comparable period. Rhipe stated that higher investment efforts in Q3 are likely to flow into the next quarter.

Group operating profit (gross profit minus operating expenses) came to $13.2 million, up 36% on Q3 YTD FY20. The robust performance was attributed to solid revenue growth with careful cost management by the group.

Rhipe provided an acquisition update saying that cyber security distributor, emt Distribution, is expected to be completed by 30 April 2021. Once the business is integrated into Rhipe’s ecosystem, new opportunities are anticipated to arise from both existing and new clients.

Looking ahead, Rhipe projects full-year operating profit (ending 30 June 2021) to be above $18 million. This is ahead of the previously forecasted guidance of $17.5 million indicated to investors.

Rhipe share price review

The Rhipe share price has moved in circles over the past 12 months, currently sitting in the mid-point of its 52-week range. The company’s shares reached a high of $2.35 in June 2020, before hitting a low of $1.545 last month.

Based on today’s share price, Rhipe has a market capitalisation of around $277 million, with 161 million shares on issue.

More reading

• The ASX shares brokers think you should be watching
• Why AMP, Boral, Rhipe, & Zoono shares are pushing higher
• Rhipe (ASX:RHP) share price rises on cyber security acquisition

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Microsoft. 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.

The post Why the Rhipe (ASX:RHP) share price is racing 5% higher today appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3u1rDf3

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.

Netflix (NASDAQ: NFLX) share prices fell roughly 10% after the company reported first-quarter earnings last week. The global streaming content provider reported revenue in line with expectations and earnings per share above what analysts on Wall Street were predicting.

So why did shares of Netflix fall 10% after the results were made public? 

Slowing subscriber additions

One obvious reason for the drop was Netflix had guided investors that it would add 6 million new subscribers in the quarter. When it was all said and done, it only added 4 million. Subscribers are what fuel Netflix’s business. Almost all of the company’s $7.16 billion in revenue last quarter came from subscriptions.

To make matters worse, Netflix is forecasting it will add only 1 million new members in the second quarter. If it happens as forecast, that will be the lowest quarterly gain since 2016. Management explains that the reason for the slowdown in member growth is the significant pace of signups during 2020. As people anticipated being cooped up in their homes during the pandemic, they signed on to Netflix by the millions.

Management does make a valid point — 36 million people signed up for Netflix in 2020. Still, it wasn’t enough to assuage worried investors.

There is also worry that increasing competition in the streaming wars might make it difficult for Netflix to continue growing. Walt Disney‘s (NYSE: DIS) streaming services are mounting a formidable challenge with over 150 million subscribers across its three main services (Disney+, Hulu, ESPN+).

There has always been volatility in membership growth for Netflix. What’s changed over the last few quarters are the significant challenges posed by competitors. Whereas previously investors may have attributed lower subscriber growth at Netflix to variance, they may now attribute a slowdown to competition.  

What it could mean for investors 

Given the heightened importance of competition, shareholders should expect higher volatility in the stock price following these quarterly announcements of membership totals. If you’re a long-term believer in Netflix, that can work to your advantage. While volatility is generally associated with risk, stocks with higher risk can produce higher returns than a lower-risk counterpart. Besides, Netflix is also reporting lower subscriber churn and it continues to prove itself as a content producer. The seven Oscars it won this year were the most among all the film studios. Competition might slow it down, but it’s not going out of business anytime soon. 

That volatility can also create share price pullbacks that can be a buying opportunity for those with a long-term mindset and willingness to withstand so fluctuation along the way. Despite the recent slowdown in subscriber growth, Netflix is hitting a stride in performance. Overall revenue is nearly triple what it was in 2016. And earnings per share are up an incredible 14 times what they were in 2016.

Moreover, even though you would be getting a business that’s in much better shape, you can now buy Netflix at a forward price-to-earnings ratio near the same level it was before the onset of the pandemic (47.8). 

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

More reading

• Netflix’s pandemic boost is over — but here’s why I’m not worried
• Netflix wins big at the Oscars
• Netflix doubled profits, but it can’t keep paying this price
• Broker weighs in on the Redbubble (ASX:RBL) share price after its 20% dive
• Are Netflix’s woes a warning for ASX tech shares?

Parkev Tatevosian owns shares of Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix and Walt Disney. The Motley Fool Australia has recommended Netflix and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Netflix’s downbeat earnings explained appeared first on The Motley Fool Australia.

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

from The Motley Fool Australia https://ift.tt/330BiGN

In morning trade, the Nitro Software Ltd (ASX: NTO) share price is surging higher.

At the time of writing, the global document productivity software company’s shares are up over 6% to $3.14.

Why is the Nitro share price surging higher?

This morning Nitro released its first quarter update. As you might have guessed from the Nitro share price performance, it was strong performer during the quarter, reporting growth across all key metrics.

At the end of the quarter, the company’s annual recurring revenue (ARR) was 66% higher than the same time last year.

And while it hasn’t provided the actual ARR figure, this growth rate is well ahead of what is required to achieve its FY 2021 ARR guidance. That guidance is for ARR of between $39 million and $42 million, which represents year on year growth of 41% to 52%.

Another positive is the ongoing transition to a software-as-a-service model. At the end of the quarter, subscription revenue accounted for 61% of total revenue. This is up from 53% during FY 2020.

Also growing strongly were its cash receipts from customers, which grew 31% over the prior corresponding period to $12 million.

This strong growth was driven by increased usage and a number of key customer wins and expansions. The latter includes BNY Mellon, Howden Group Holdings, Mace Group, Petrofac, Continental AG, and Jeff Bezos’s Blue Origin.

And although it posted a net cash outflow from operations of $1.5 million, it remains in a very strong financial position to pursue growth opportunities. At the end of the period, Nitro’s cash balance stood at $41.8 million.

“The accelerating multi-year shift to a digital workplace”

Also giving the Nitro share price a boost was commentary from Nitro’s Co-Founder and Chief Executive Officer, Sam Chandler.

Mr Chandler spoke positively about the quarter, the remainder of FY 2021, and its long term opportunity.

He said: “The accelerating sales momentum we demonstrated at the end of FY20 has continued into the current year, with the strategic investments we made in our people, product suite and sales strategy across the past 12 months positioning us well to ride the global work-from-anywhere tailwinds.”

“As the world continues to manage the fall-out from the COVID-19 pandemic, digital-first and digital-only workflows are becoming increasingly entrenched. Throughout FY20, we laid the foundations to lead in this new environment by strengthening our leadership team, sharpening our go-to-market strategy to win and retain customers, and developing our document productivity platform, with the launch of Nitro Sign.”

“The results of this investment are demonstrated by our strong performance in the first quarter, which shows continued growth in ARR and subscription revenue. With a solid balance sheet and a scalable platform for growth, we are confident we can take advantage of the accelerating multi-year shift to a digital workplace to build a truly sizable and substantial enterprise software company.”

Outlook

Nitro has reaffirmed its guidance for FY 2021.

It continues to target ARR between $39 million and $42 million, revenue between $45 million and $49 million, and an operating EBITDA loss between $11 million and $13 million.

More reading

• 2 highly rated ASX tech shares
• 3 excellent small cap ASX shares to watch closely
• 3 exciting small cap ASX shares for your watchlist
• 2 small cap ASX tech shares to buy now
• ASX stock of the day: Nitro Software (ASX:NTO) shares rocket 11%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Why the Nitro (ASX:NTO) share price is surging 6% higher today appeared first on The Motley Fool Australia.

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

The Woolworths Group Ltd (ASX: WOW) share price is under pressure this morning following the release of its third quarter update.

At the time of writing, the retail conglomerate’s shares are down 2% to $40.59.

How did Woolworths perform in the third quarter?

For the three months ended 31 March, Woolworths reported a 0.4% increase in group sales to $16,566 million. This was particularly impressive given that the prior corresponding period benefited greatly from COVID-19 related panic buying.

During the three months, Australian Food sales were down 0.7% on the prior corresponding period to $11,092 million. It was a similar story in New Zealand with sales falling 6.9% in local currency to NZ$1,792 million.

Offsetting this were strong performances by its BIG W, Endeavour Drinks, and Hotels businesses.

BIG W reported an 18.3% increase in sales to $1,024 million, Endeavour Drinks delivered a 6.3% increase in sales to $2,393 million, and the Hotels business reported an 11.5% jump in sales to $390 million.

Another big positive during the quarter was its ecommerce business. Group ecommerce sales increased 64.2% during the third quarter to $1.3 billion.

Management notes that in Australian Food, WooliesX eCommerce sales increased by 90.5% to $878 million with penetration of 7.9% compared to 4.1% in the prior year and 7.7% during the first half.

Management commentary

Woolworths’ CEO, Brad Banducci, was pleased with the quarter, noting that it was a tale of two halves.

He said: “There were two very distinct trading periods in Q3; the first seven weeks before we began to cycle COVID and the second six weeks as we cycled the peak growth of the prior year. Group sales growth was strong in the first seven weeks of the quarter. For the final six weeks, food and drinks sales declined on the prior year as expected, BIG W remained strong, and Hotels’ sales growth started to recover as it cycled closures at the end of Q3 in the prior year.”

“Despite the volatile trading over the quarter on a one-year basis, two-year average growth rates in Australian Food, Endeavour Drinks and BIG W remained above-trend,” he added.

Outlook

As expected, trading conditions are volatile and the company will soon cycle the elevated sales period from May and June 2020.

Mr Banducci explained: “Turning to current trading and outlook, sales growth for the first three weeks of April remained volatile and impacted by prior year growth rates and the timing of public holidays.”

“In Australian Food, total sales were broadly flat compared to last year. This reflects the cycling of mid-single digit sales growth in April last year in comparison to double-digit sales growth in May and June.”

It is a similar story for the Endeavour Drinks, New Zealand, and Big W businesses.

“Endeavour Drinks sales in April remained above last year but are expected to slow when we cycle growth of over 30% in May and June. While in New Zealand, sales growth was materially negative in April, cycling growth of over 20% in the prior year. BIG W sales growth has also slowed in the first three weeks of April, cycling growth in April last year of approximately 20%,” he added.

However, the Hotels business, which was negatively impacted by lockdowns, is expected to perform comparatively strongly.

“We continue to expect sales to decline over the March to June period for all businesses other than Hotels where Q4 F20 sales declined 86.3% on a normalised basis. “

Endeavour Drinks demerger

Woolworths advised that the Endeavour Group demerger remains on target for late June.

Subject to board and regulatory approval, demerger documentation is expected to be released in mid-May.

Dan Murphy’s Darwin Airport development update

In a separate announcement, Woolworths revealed that its plan to open up a Dan Murphy’s store at Darwin Airport has been terminated following a review. This news could be weighing partly on the Woolworths share price.

Mr Banducci said: “The insights and recommendations within the Gilbert Review will serve to strengthen Woolworths Group and Endeavour Group’s future stakeholder engagement. More importantly, it will create a platform for working better together in our engagement with Aboriginal and Torres Strait Islander peoples.

More reading

• 4 ASX shares to boom when inflation goes up: fundie
• 5 things to watch on the ASX 200 on Thursday
• Looming grocery price shock to impact on these ASX shares
• What to expect from the Woolworths (ASX:WOW) Q3 update
• 2 excellent ASX 200 blue chip shares rated highly

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Woolworths (ASX:WOW) share price lower on third quarter sales update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3xAP5SC

The Fortescue Metals Group Limited (ASX: FMG) share price is dropping today following its third quarter update.

At the time of writing, the iron ore producer’s shares are down 2% to $22.14. 

How did Fortescue perform in the third quarter?

Fortescue was a relatively solid performer during the third quarter, achieving flat year on year iron ore shipments of 42.3 million tonnes. This brings its year to date shipments to 132.9 million tonnes, which is 2% higher than the prior corresponding period.

Positively, the mining giant continues to benefit from rising iron ore prices. During the quarter, Fortescue averaged US$143 per dry metric tonne. This was up 17% on the second quarter and represents revenue realisation of 86% of the average Platts 62% CFR Index.

And although its C1 costs increased 16% quarter on quarter to US$14.90 per wet metric tonne (due to seasonally lower volumes and the strength of the Australian dollar), it is still averaging a lowly year-to-date C1 cost of US$13.45 per wet metric tonne.

This means Fortescue is generating significant free cash flow right now.

Management commentary

Fortescue’s Chief Executive Officer, Elizabeth Gaines, said “Fortescue’s excellent operating performance continues to drive strong results, with shipments of 42.3mt in the third quarter contributing to a record shipping performance for the first nine months of the financial year.

“The commissioning of the Eliwana mine has contributed to an increase in both ore mined and processed during the quarter, despite the impact of significant rainfall across our operations in the Pilbara.”

“Against the backdrop of the record performance in our iron ore business and our clean energy focus, Fortescue is well-placed to finish the financial year strongly, as we continue to meet demand from our customers and deliver value for all stakeholders,” Ms Gaines concluded.

Outlook

Pleasingly, Fortescue’s guidance for FY 2021 shipments and C1 costs remain unchanged.

It continues to expect shipments of 178 million tonnes to 182 million tonnes with C1 costs of US$13.50 to US$14.00 per wet metric tonne.

However, its capital expenditure guidance has been revised to a range of US$3.5 billion to US$3.7 billion. This is up from between US$3 billion and US$3.4 billion, reflecting the ongoing strength of the Australian dollar, continuation of critical path works at Iron Bridge, and investments by Fortescue Future Industries in decarbonisation initiatives.

It could be the latter change that is weighing on the Fortescue share price today.

More reading

• 2 ASX dividend shares with big yields
• Is it dangerous investing in ASX resources shares at record highs?
• Record high iron ore price puts these ASX shares in the spotlight this morning
• ASX 200 falls, BHP rises, Afterpay sinks
• A dividend upside to drive the Fortescue (ASX:FMG) share price?

Motley Fool contributor James Mickleboro 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.

The post Fortescue (ASX:FMG) share price lower on Q3 update appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3gJ6PoI

The next couple of weeks will see the big four banks all hand in their latest report cards. Ahead of their releases, I am taking a look to see what the market is expecting from them.

On this occasion, I’m going to look at the Westpac Banking Corp (ASX: WBC) half year result.

What is expected from Westpac in the first half?

Westpac is scheduled to release its half year results on Monday 3 May.

According to a note out of Goldman Sachs, its analysts have pencilled in cash earnings (before one-offs) of $3,400 million. This will be up 242% on the prior corresponding period.

From this, it expects the Westpac board to declare a fully franked 56 cents per share interim dividend.

What else should you look out for?

Goldman has suggested that investors keep an eye on volumes, asset quality, and expenses.

In respect to volumes, the broker is forecasting first half total lending growth of 0.1%. It advised that it will also be paying close attention on commentary around how volumes are trending and whether the bank is on track to return to peer levels.

As for asset quality, Goldman notes that Westpac reported a bad and doubtful debt benefit of $501 million during the first quarter. This was significantly better than the broker was expecting. Positively, the broker appears to be expecting further improvements in its asset quality.

It commented: “We currently forecast 1H21E BDDs/TL of -4bp from 27bp in the previous half and will be interested in hearing management commentary around whether they expect these current trends to persist.”

Finally, Goldman points out that Westpac’s expenses reduced by 2% during the first quarter. And while it acknowledges that management is forecasting expenses to rise slightly over the full year, Goldman is expecting first half expenses to be lower half on half.

It explained: “We are forecasting 1H21E expense growth of -1.1% hoh and note that WBC is due to announce a Cost Reset plan at the 1H21 result.”

Is the Westpac share price good value?

Goldman Sachs currently has a buy rating and $26.67 price target on the bank’s shares.

Based on the latest Westpac share price of $25.30, this implies potential upside of 5.4% over the next 12 months.

Though, this potential return stretches to approximately 10% when you include dividends.

More reading

• ASX 200 rises, Kogan jumps, gold miners sold off
• Why the Westpac (ASX:WBC) share price is pushing higher today
• ASX 200 up 0.5%: Coles Q3 update, Westpac settles class action, JB Hi-Fi loses its CEO
• Top brokers name 3 ASX shares to buy today
• Brokers name 3 ASX shares to buy now

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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.

The post What to expect from the Westpac (ASX:WBC) half year result appeared first on The Motley Fool Australia.

from The Motley Fool Australia https://ift.tt/3u3VAee

It’s been a topsy-turvy 12 months for shareholders of ASX tech company and neobank Tyro Payments Ltd (ASX: TYR). After a surprisingly swift recovery from the COVID-sparked market crash last March, Tyro shares bounced around a bit over the latter half of 2020 before plunging to a new 52-week low of $2.31 in mid-January.

Since then they have rallied again, storming back up to $3.60 as at Wednesday’s close. Despite their mid-January blip, this still puts Tyro shares up over 10% year to date.

Company background

Before investigating the drivers behind the share price volatility, it’s worth taking a look at what Tyro actually does.

Tyro supplies EFTPOS payment terminals to small businesses. In fact, outside of the big four banks, Tyro is the largest supplier of EFTPOS terminals in Australia. The company also provides merchant banking services and develops software to help its clients manage their business banking needs.

Tyro also provides business lending options, and its platform is fully integrated with accounting software developed by fellow fintech Xero Limited (ASX: XRO).

What has driven the Tyro share price volatility?

The January share price collapse was triggered by news the company’s EFTPOS terminals had suffered connectivity issues. This was followed by a short-seller report by Viceroy Research which alleged (among other things) the outage was caused by a faulty software patch that would cost Tyro $12 million to repair.

Tyro put its shares into a trading halt in order to respond to the various allegations made in the Viceroy report – most of which the company claimed were false or misleading. But it wasn’t enough to stop the bloodletting – Tyro shares shed close to 30% of their value in around a week.

More recent news

Tyro has been releasing weekly business updates in response to the ongoing COVID-19 pandemic. In the company’s most recent announcement, covering the week ended 23 April 2021, Tyro reported an 18% rise in total transaction value versus the prior comparative period. As of 23 April 2021, Tyro had processed over $20 billion worth of payments for the fiscal year to date, versus slightly under $17 billion for the same period in FY20.

Where to next for the Tyro share price?

So far, Tyro has done well to shrug off the January short-seller report and keep its share price climbing higher this year. Despite all the recent volatility, as well as the business headwinds created by the COVID-19 pandemic, Tyro shares have now increased around 30% over the last 12 months.

The company has the added benefit of being tied up closely with the post-pandemic economic recovery. As customer foot traffic returns to retailers, restaurants and other small businesses, transaction volumes could continue to grow. However, the obvious flip side to this is that another major coronavirus outbreak and any associated lockdowns could drive more volatility in the Tyro share price.

Despite the risks, Tyro sees itself as an exciting disruptor looking to take some market share away from the major banks. Along with a new generation of other breakthrough ASX tech companies like Xero, Megaport Ltd (ASX: MP1) and Bigtincan Holdings Ltd (ASX: BTH), it will be interesting to see how the Tyro share price performs over the next twelve months.

More reading

• 2 exciting small cap ASX shares tipped for big things
• Why Bubs, Carbon Revolution, Paradigm, & Tyro shares are sinking
• These are the 10 most shorted shares on the ASX
• Tyro (ASX:TYR) share price drops despite April transaction values surging 155%
• 2 outstanding ASX growth shares rated as buys

Rhys Brock owns shares of BIGTINCAN FPO and MEGAPORT FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends BIGTINCAN FPO, MEGAPORT FPO, and Tyro Payments. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Xero. The Motley Fool Australia has recommended BIGTINCAN FPO and MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post The Tyro Payments (ASX:TYR) share price has gained 30% in 12 months appeared first on The Motley Fool Australia.

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