The Beacon Lighting Group Ltd (ASX: BLX) share price is powering ahead today after releasing a trading update.

At the time of writing, the retailer’s shares have jumped 3.59% higher to $2.02. At one point, the company’s share price hit an intraday high of $2.10 before some profit taking occurred.

How is Beacon Lighting performing to date?

The share price reaction from Beacon Lighting indicates that investors are pleased with the company’s performance.

According to this morning’s release, Beacon Lighting advised positive trading momentum has continued to run into the second half of FY21.

As a result, the group is anticipating net profit after tax (NPAT) to come in between $35.5 million and $37.5 million. This represents a massive increase from the underlying NPAT achieved in FY20 of $20.4 million.

Beacon Lighting noted that retail trading conditions have had a positive effect on its in-store segment. Pleasingly, both retail and online sales along with management’s diligent cost control has attributed to the robust performance.

However, the company stated that there is still some uncertainty in the general economic recovery. Any adverse material event could derail Beacon Lighting’s profit guidance for the upcoming full year ending 27 June 2021.

Beacon Lighting Group CEO, Glen Robinson touched on the company’s performance saying:

Thanks to our adaptable team and the continued support of our valued customers, Beacon Lighting has been able to achieve outstanding results. During the year, Beacon Lighting has continued to innovate with the latest designs in lighting and ceiling fans, store expansion and formats, service to our trade customers and the online shopping experience. Together with specialist customer advice and great value, the Beacon Lighting team has been able to achieve exceptional results in FY2021.

The company is scheduled to released its full-year audited results on 19 August 2021.

Beacon Lighting share price snapshot

Over the past 12 months, Beacon Lighting shares have accelerated more than 150%, with year-to-date performance sitting close to 20%. The company’s share price reached a multi-year high of $2.10 today before pulling back slightly.

Based on today’s price, Beacon Lighting presides a market capitalisation of roughly $448 million, with approximately 223 million shares outstanding.

More reading

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• Leading broker just upgraded these ASX shares to “buy”
• Why Flight Centre (ASX:FLT) and Webjet (ASX:WEB) shares are being hammered today
• 2 excellent ASX 200 blue chip shares to buy
• ASX 200 up 0.95%: Qantas update, Nufarm’s profits surge

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China’s most-traded iron ore futures tumbled as much as 8% on Wednesday to hit ~1,100 yuan/tonne. This comes as its state council vowed to curb the unreasonable rise in commodity prices. Consequently, the BHP Group Ltd (ASX: BHP) share price slumped 3.42% on Wednesday, while the Fortescue Metals Group Limited (ASX: FMG) share price shed a similar 3.14%. 

The fall has continued today. At the time of writing, the BHP share price is trading 1.51% lower to $48.06. At the same time, Fortescue is down 0.22% to $22.78. 

China to stabilise its commodity market 

Steel, iron ore, and copper prices have surged in the last 12-months. This has been fueled by an increase in global liquidity, supply-side constraints, and post-lockdown recoveries. China has been a driving force behind the uplift in commodity prices, with commodity hungry investments in sectors such as technology, infrastructure, and transport. 

According to a statement released after a State Council meeting, China will look to strengthen the management of both supply and demand-side factors to curb “unreasonable” increases in commodity prices and prevent the pass-through to consumers. 

The meeting reported a focus on adjustments on trade and stockpiling, reinforced inspections on behaviours that bid up prices, and a crackdown on malicious trading. 

The country also urged coal producers to lift production to meet peak demand in summer. 

This caused China’s iron ore futures to tumble as much as 8%, with other materials including coking coal, thermal coal, hot-rolled coil, and steel rebar futures to slide between 5.5% and 6.8%. 

Is the Fortescue and BHP share price in trouble? 

The Fortescue and BHP share price are arguably iron ore price proxies. With iron ore surging to never before seen prices, iron ore miners have followed suit, soaring to all-time record highs alongside market-leading dividends. 

China’s policies are still in its early days, with iron ore prices still sitting at record levels, above US$200/tonne. 

To add some perspective, iron ore prices were fetching around US$160/tonne at the start of the year. In September 2020, they were fetching US$120/tonne and US$90/tonne before COVID-19 hit in March last year. Iron ore prices have truly come a long way. 

Earlier in March, China took aim against its industrial hub, Tangshan, with new emission policies put in place to limit or halt production. This saw the BHP share price tip to $44 in late March. However, it wasn’t long before its shares regained losses to set a new all-time record high of $51.82 by 11 May. 

Clearly China’s announcements can have an immediate push pull effect on Fortescue and BHP shares, or rather, market sentiment towards ASX iron ore miners. However, it may not necessarily have an effect on iron ore prices in the short to medium term. 

More reading

• ASX 200 sinks, EML plunges, Appen soars
• Should ASX iron ore producers worry as China plans to up its own production?
• These iron ore miners are outperforming the BHP (ASX:BHP) share price in 2021
• CSL (ASX:CSL) share price backtracks despite renewed optimism
• Why BHP, EML Payments, Laybuy, & St Barbara are sinking today

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ASX investors wanting to make the most of the market uncertainty might be interested to know that JPMorgan just upgraded two ASX shares to “buy”.

The S&P/ASX 200 Index (Index:^AXJO) has been swinging between inflation fears and an improving economic outlook of late.

I won’t be surprised to see ASX shares to enter a period of consolidation before heading higher later this year.

ASX shares upgraded to buy during the market volatility

If you are looking for what you can buy during this dip, the Orocobre Limited (ASX: ORE) share price could be one to watch.

This is because JPMorgan upgraded the lithium miner to “overweight” as it mulls its merger with the Galaxy Resources Limited (ASX: GXY) share price.

Big upside for the Orocobre share price

The marriage will create the world’s fifth largest lithium producer if the combined group’s 2030 production forecasts are used as the benchmark.

“The combination of ORE and GXY presents a unique, pure lithium producer with a diversified, low carbon, strategic and growing production base,” said JPMorgan.

“Assuming timely deal completion and including Olaroz Stage 3 in our valuation our ORE PT [price target] is $7.15/share.”

Upgraded to buy on the dip

Another that the broker upgraded to “overweight” from “neutral” is the Credit Corp Group Limited (ASX: CCP) share price.

The Credit Corp share price has underperformed the ASX Small Ordinaries Index by around 20% since March this year.

The underperformance was driven by worries that the Purchase Debt Ledger (PDL) industry in Australia and the US was not recovering as quickly as the market would like.

Set for the rebound

This is in part due to measures taken by both governments to protect consumers from debt collectors during COVID-19.

But recent updates by Credit Corp and its rivals show there’s light at the end of the tunnel. This may be particularly so for the US.

“As forbearance measures in the US are expected to progressively roll-off in the coming months, CCP remains well positioned to capitalised on a recovery in industry PDL supply,” said JPMorgan.

“With a balance sheet that is net cash and access to credit facilities with duration now extending to 2024 and 2025, the business has access to ~A$400m of liquidity to deploy.”

The broker’s 12-month price target on the Credit Corp share price is $31.50 a share.

More reading

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• These could be the next up and coming ASX lithium shares

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It has been a mixed day of trade for the travel sector on Thursday. In one corner you have the Qantas Airways Limited (ASX: QAN) share price ascending.

Whereas in the other, you have Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB) shares tumbling lower.

What is happening?

Today’s movements all appear to relate to a market update out of Qantas this morning.

Positively, that update reveals that a sustained rebound in domestic travel demand is continuing to drive the airline operator’s recovery from the COVID-19 pandemic.

So much so, Qantas expects to be statutory free cash flow positive for the second half of FY 2021. Though, it is worth noting that this guidance assumes no further lockdowns or significant domestic travel restrictions.

So why are travel agents tumbling?

Given the above, you would expect all travel shares to be pushing higher today. However, a comment by Qantas in relation to its cost reductions has spooked shareholders of travel agents.

Qantas advised that it is aiming to reduce its costs of sale by lowering front-end commissions paid to travel agents on international tickets from 5% to 1%.

And while the change won’t take effect until July 2022, in order allow the industry to adapt, it will eat significantly into the margins of Flight Centre and Webjet when it does. There may also be concerns in the market that other airlines will follow Qantas’ lead and cut their own commissions to travel agents as well in the future.

At the time of writing, the Flight Centre share price is down 5.5% to $14.48 and the Webjet share price is 5% lower at $4.47. Elsewhere, the Corporate Travel Management is down 3% and the Helloworld Travel Ltd (ASX: HLO) share price has lost 6% of its value.

More reading

• ASX 200 up 0.95%: Qantas update, Nufarm’s profits surge
• Brokers name 3 ASX shares to buy now
• Is the Webjet (ASX:WEB) share price in the buy zone after its results?
• Qantas (ASX:QAN) share price takes off following market update
• 5 things to watch on the ASX 200 on Thursday

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Some S&P/ASX 200 Index (ASX: XJO) blue chip shares are excellent and might be worth thinking about for your portfolio.

When you can find a business that’s quite defensive during recessions, and demonstrating good growth during normal times, then that could be a really attractive long-term investment.

These two ASX 200 blue chip shares could be excellent ideas:

Xero Limited (ASX: XRO)

Xero is building a reputation as a world leader in the cloud accounting space. It has close to 3 million subscribers spread across numerous countries including New Zealand, Australia, the UK, the USA, South Africa and Singapore.

The business is heavily focused on long-term growth, rather than short-term profitability. Management believe this will drive the most value for shareholders. After a period of cautious spending during COVID-19, Xero is getting back to expectations for total operating expenses to be 80% to 85% of operating revenue in FY22.

That spending is on things like product development and marketing. The Xero product is why it has subscribers, so it should try to ensure it has the best product that keeps getting better. Marketing is what brings new subscribers. Those new subscribers are coming with a long lifetime expectation, so it adds value to the business and gives the ASX 200 share further operating leverage.

Xero has been finding bolt-on acquisitions that it expects to add value, faster, for subscribers and improve the Xero offering. Those acquisitions were Planday, Tickstar and Waddle.

Management believe that small businesses will be a major driver of economic recovery in a post-pandemic world. This is Xero’s main client base. But even during downturns, businesses need to keep doing their bookkeeping and tax returns so that the ATO knows about their profit (or less) position, wages and so on.

Bapcor Ltd (ASX: BAP)

Bapcor is Australasia’s biggest auto parts business. Not only is it the market leader in Australia and New Zealand, but it also now owns 25% of a leader in Asia. Tye Soon is a Singapore-listed auto parts business that has operations in several Asian countries.

In a normal recession, Bapcor might be able to expect elevated levels of demand due to people trying to extend the life of their vehicle if a part breaks by replacing that part, rather than buying a new vehicle.

COVID-19 has been a particularly strange recession because there has been elevated levels of second hand car sales as well as very strong retail sales at Autobarn.

Burson is really driving profit higher. It’s demonstrating all the growth you could want – same store sales increasing, more Bursons opened and profit margins increasing.

A promising area of future growth for Bapcor is that Burson is starting a network in Thailand. After that, there may be more Asian countries on the horizon for Burson to grow into.

Asia is a huge region with a very large population. Bapcor is well-placed to grow its profit domestically with an ever-expanding network as well as growing earnings from Asia. According to Commsec, the Bapcor share price is valued at 20x FY22’s estimated earnings.

More reading

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• ASX 200 sinks, EML plunges, Appen soars
• What does zero wage growth mean for the ASX 200?

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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) is rebounding from yesterday’s selloff. The benchmark index is currently up 0.95% to 6,998.5 points.

Here’s what is happening on the market today:

Nufarm half year results

The Nufarm Ltd (ASX: NUF) share price is pushing higher on Thursday after the release of the agricultural chemicals company’s half year results. For the six months ended 31 March, Nufarm reported revenue of $1.65 million and underlying EBITDA of $233.6 million. This represents an increase of 20% and 118%, respectively, over the prior corresponding period. However, management warned that its full year earnings would be significantly weighted to the first half.

Qantas update

The Qantas Airways Limited (ASX: QAN) share price is ascending today following the release of a market update. That update reveals that a sustained rebound in domestic travel demand, and the performance of its Freight and Loyalty divisions, is continuing to drive the company’s recovery from the COVID-19 pandemic. As a result, it expects to be statutory free cash flow positive for the second half of FY 2021.

Travel agents tumble

Also included in Qantas’ market update was the revelation that it plans to cut travel agent commissions from 5% to 1% for international flights in 2022. This hasn’t gone down well with shareholders of travel agents including Flight Centre Travel Group Ltd (ASX: FLT) and Webjet Limited (ASX: WEB). The shares of both travel companies are tumbling on the news.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the EML Payments Ltd (ASX: EML) share price with a 13% gain. The payments company’s shares are rebounding after crashing 45% lower on Wednesday. The worst performer has been the Iluka Resources Limited (ASX: ILU) share price with a 6% decline following a bleak update on its Sierre Rutile operation.

More reading

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• Qantas (ASX:QAN) share price takes off following market update
• Nufarm (ASX:NUF) share price up 5% after doubling half year earnings

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Arguably, markets around the world are beginning to price in a higher-interest-rate environment. Unfortunately for ASX-listed growth shares, that makes high price-to-earnings (P/E) ratios a whole lot less attractive.

But many investors are still seeking alternative investments when cash is producing such dismal returns. In such times, value stocks tend to regain favourability. These are companies able to produce earnings that are also trading on reasonable multiples.

Below are 3 ASX shares that are profitable and are currently trading at below-industry-average P/E ratios.

How do these ASX shares compare to their peers?

Tribune Resources Ltd (ASX: TBR)

Tribune Resources is a small gold mining company with projects in East and West Kundana in Western Australia. It’s been a bumpy ride for shareholders over the years, and the last 12 months have been rather fruitless. Disappointingly, this ASX gold mining share has fallen by around 27% in the past year.

However, the company is profitable and generated $47.35 million in net profits after tax for the full year ending 31 December 2020. Based on Tribune’s current market capitalisation of $275 million, that puts it on a 6.1 P/E ratio.

It’s worth noting that earnings are highly dependent on the price of gold. Though, comparing Tribune’s earnings multiple to the industry average of 13.6, it appears to be trading at a discount.

Aurelia Metals Ltd (ASX: AMI)

Upping the size of the company, Aurelia Metals is a $493 million gold and base metals miner. Holding three operational gold mines across New South Wales, Aurelia has had a good run. The past year has seen the company’s share price surge by around 32%.

Despite the rally, Aurelia is still trading at a discount compared to the industry average. Delivering earnings per share (EPS) of 3.7 cents ending 31 December 2021, Aurelia is trading on an earnings multiple of 10.7.

Brickworks Limited (ASX: BKW)

Now we’re talking large caps. Brickworks is a $3.11 billion company specialising in property, investments, and building products. This company has certainly stood the test of time, dating back to 1930.

Holding a 39.4% interest in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks extends beyond a simplistic ASX-listed brickmaker share. The diversified business pulled in $71 million in statutory profits for 1HFY21.

Based on company filings, Brickworks delivered earnings per share of $2.15 for the period ending 31 January 2021. That puts the company on an earnings multiple of 9.4 times. This represents a significant discount to the materials industry average of 22.5 times.

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The Auckland International Airport Ltd (ASX: AIA) share price is on the rise today. This is despite the company announcing the departure of its chief executive.

At the time of writing, the airport operator’s shares are swapping hands for $6.91, up 1.4%.

What did AIA announce this morning?

Investors are pushing AIA shares higher today after investors appear unfazed by the news.

Mr Littlewood stated that he remained as chief executive longer than planned due to the unexpected emergence of COVID-19. In that time, he focused his efforts in seeing the company through the COVID-19 response and safe re-opening of borders.

AIA chair, Patrick Strange touched Mr Littlewood’s tenure, saying:

From his appointment as Chief Executive in 2012 up to the emergence of COVID-19 early last year, Adrian has led the organisation through a period of significant growth and development across all areas of the business while delivering strong shareholder returns.

Over the past year, Adrian has shown his considerable leadership skills through some of the most challenging times the business has ever faced. With the sudden and highly disruptive impact of COVID-19 on the company’s core business, Adrian has led a business response that has not only ensured the health, safety and wellbeing of Auckland Airport staff and travellers, but has also ensured the business is well placed for the future.

The resumption of travel to Australia and the Cook Islands has marked a progressive recovery for AIA. Future re-opening of selected international borders is being discussed with the New Zealand government.

Mr Littlewood noted that he hopes the company’s airport infrastructure development plan will continue during his time. He said:

While COVID- 19 up-ended our multi-billion-dollar airport infrastructure development, the reset of our 30-year master plan and the start on its eight anchor projects and the hundreds of enabling projects is an ambitious but important programme that has set the path for restarting as the recovery builds.

AIA will now begin a search to replace Mr Littlewood, with both internal and external candidates being considered.

About the AIA share price

Over the last 12 months, AIA shares have performed relatively well in spite of the current global economic conditions. The company’s share price has travelled north of 25% in that time frame.

On valuation grounds, AIA has a market capitalisation of roughly $10 billion, with more than 1.4 billion shares outstanding.

According to this morning’s release, AIA advised that its chief executive, Adrian Littlewood has decided to step down. This comes after spending almost 9 years in the role, which will see him retire towards the end of 2021.

More reading

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Australia’s top brokers have been busy adjusting their estimates and recommendations once again. This has led to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

CSL Limited (ASX: CSL)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this biotherapeutics company’s shares to $312.00. The broker believes that CSL’s new plasma collection platform could increase yields by 10% per donation in the future. It feels this could give its gross profit a big boost if regulatory approval is granted later this year or early in 2022. The CSL share price is trading at $278.51 on Thursday.

EML Payments Ltd (ASX: EML)

Another note out of Macquarie reveals that its analysts have retained their outperform rating but slashed the price target on this payments company’s shares to $4.00. This follows news that the Central Bank of Ireland has concerns over its Prepaid Financial Services business, which could see its licence revoked. Macquarie has adjusted its valuation to account for the worst-case scenario. However, it is optimistic this will not happen. The EML Payments share price is recovering today but is still well below this price target at $3.18.

Webjet Limited (ASX: WEB)

Analysts at Credit Suisse have retained their outperform rating but trimmed their price target on this online travel agent’s shares to $5.20. This follows the release of its full year results on Wednesday. According to the note, the broker has reduced its FY 2022 estimates to reflect a delay in international travel. However, it remains positive on the future and expects Webjet’s earnings to grow strongly once the crisis passes. Particularly given pent-up demand and its stronger margins. The Webjet share price is fetching $4.51 this morning.

More reading

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• 5 things to watch on the ASX 200 on Thursday
• ASX 200 sinks, EML plunges, Appen soars

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The Webjet Limited (ASX: WEB) share price is trading lower on Thursday. At the time of writing, the online travel agent’s shares are down 4% to $4.52.

This means the Webjet share price is now down 29% from its 52-week high.

Is the Webjet share price in the buy zone?

According to a note out of Goldman Sachs this morning, its analysts believe the Webjet share price is in the buy zone.

Goldman has reiterated its buy rating but trimmed its price target on Webjet’s shares to $6.40 following the release of its full year results on Wednesday.

Based on the current Webjet share price, this implies potential upside of 44% over the next 12 months.

What did Goldman say?

The note reveals that Webjet fell 9.7% short of the broker’s revenue expectations during FY 2021. This was due to a weaker than expected performance from its Webbeds business.

However, thanks to lower than forecast costs, Webjet outperformed its EBITDA forecasts by 5.5% over the period.

Commenting on the result, the broker said: “We observe no key concerns in regard to the longer term strength of the business which remains a key driver of our positive thesis on Webjet. WEB reported improved revenue margins in the B2B segment vs. 1H21, alleviating concerns around structural shifts in industry margins. However, in the near term recovery has been slower than expected. We expect shorter dated travel bookings to also be a contributor to this factor. However, we make negative revisions in our short term earnings, especially in the Europe B2B business.”

Earnings estimates

Looking ahead, Goldman has revised its earnings estimates lower to reflect the slower recovery.

Instead of earnings per share of 5 cents in FY 2022, it now expects a loss of 2 cents per share. After which, it is forecasting earnings per share of 18 cents in FY 2023 and then 28 cents in FY 2024.

Based on these forecasts, the Webjet share price is trading at 25x FY 2023 earnings and 16x FY 2024 earnings. While this isn’t cheap, the broker believes it is good value given its strong long term growth potential.

More reading

• 5 things to watch on the ASX 200 on Thursday
• ASX 200 down 1.7%: Appen jumps 12%, EML Payments crashed 37%
• Webjet (ASX:WEB) share price lower after FY 2021 results
• 5 things to watch on the ASX 200 on Wednesday
• These are the 10 most shorted shares on the ASX

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