The Rio Tinto Limited (ASX: RIO) share price will be one to watch closely on Thursday.

This afternoon the mining giant released its full year results after the market close.

How did Rio Tinto perform in FY 2020?

For the 12 months ended 31 December, Rio Tinto reported a 3% increase in sales revenue to US$44,611 million. This was driven entirely by its iron ore operations, which offset lower revenues across other key commodities.

Iron ore revenue came in 13.4% higher year on year at US$29,202 million. Whereas Aluminium, Alumina, and Bauxite revenue fell 10% to US$9,146 million, Copper revenue dropped 11.8% to US$1,785 million, and Industrial minerals revenue fell 8.4% to US$2,051 million.

Positively, margin expansion led to the mining giant reporting a 13% increase in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to US$23,902 million. And on the bottom line, net earnings were 22% higher year on year at US$9,769 million.

Bumper dividends

Rio Tinto’s free cash flow came in 3% higher than in FY 2020 at US$9,407 million. This followed a 13% increase in capital expenditure to US$6,189 million.

This led to the Rio Tinto board declaring a fully franked final dividend of US$4.02 (A$5.19) per share. This comprises an ordinary dividend of US$3.09 (A$3.99) per share and a special dividend of 93 U.S. cents (A$1.20) per share.

Combined with its interim dividend, Rio Tinto is rewarding shareholders with a fully franked full year dividend of US$5.57 per share (A$7.19). That’s the equivalent of a 5.6% yield and will mean a total of US$9 billion is returned to shareholders in FY 2020.

Management commentary

Rio Tinto’s new Chief Executive, Jakob Stausholm, was pleased with the company’s performance in FY 2020. Though, he conceded that the Juukan Gorge controversy will rightfully overshadow this.

He said: “It has been an extraordinary year – our successful response to the COVID-19 pandemic and strong safety performance were overshadowed by the tragic events at the Juukan Gorge, which should never have happened.”

“During 2020, the agility and resilience of the business and our employees, coupled with strong commodity prices, enabled us to deliver underlying EBITDA of $23.9 billion and Return on Capital Employed of 27%. As a result, the Board has approved a total dividend of 557 US cents per share including a special dividend of 93 US cents per share, representing a 72% full year pay-out ratio, which builds on our five-year pay-out track record.”

“My new executive team and wider leadership of the company are all committed to unleashing Rio Tinto’s full potential. We will increase our focus on operational excellence and project development and strengthen our ESG credentials. Working closely with the Board, we must earn the right to become a trusted partner for Traditional Owners, host communities, governments and other stakeholders but we all recognise that this will require sustained and consistent effort.”

“Safe and well-run operations, together with world-class assets, great people, capital discipline and a strong balance sheet, leave Rio Tinto well placed to generate superior returns for shareholders, invest in sustaining and growing our portfolio, and make a broader contribution to society,” he concluded.

Guidance

Rio Tinto expects its capital expenditure to be around US$7.5 billion in each of 2021 and 2022. This compares to previous guidance of ~ US$7 billion in each year. FY 2023 capital expenditure is included for the first time and is also expected to be around US$7.5 billion.

Each year includes sustaining capex of US$3 billion to US$3.5 billion, of which US$1.2 billion to US$1.6 billion is for Pilbara iron ore.

Management advised that the $0.5 billion increase in FY 2021 and FY 2022 from previous guidance is due to the Australian dollar, which is forecast to strengthen from 69 U.S. cents to 77 U.S. cents.

The stronger Australian dollar is also expected to lead to an increase in Pilbara iron ore unit cash costs. In FY 2021 it expects these costs to be between US$16.70 to US17.70 per tonne. This compares to US$15.40 in FY 2020.

Positively, FY 2021 Copper costs are expected to benefit from a gradual return to higher copper grades at Kennecott and a one-off benefit from higher gold grades at Oyu Tolgoi.

All production guidance remains unchanged for the year ahead.

More reading

• 2 high quality ASX dividend shares to buy right now
• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• 5 things to watch on the ASX 200 next week
• 3 reasons why the Rio Tinto (ASX:RIO) share price is up today
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal

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.

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Credit Intelligence Ltd (ASX: CI1) shares rocketed higher today, up 31.43% to 4.6 cents a share.

The Credit Intelligence share price opened at 3.6 cents this morning after closing at 3.5 cents yesterday. But soon after open, the company’s shares exploded to reach a high of 6 cents a share shortly after lunchtime today.

That means the company’s shares were up around 71% at one point, despite having cooled off since. Today’s closing price also means the Credit Intelligence share price is now up 130% since 16 December last year. Today’s moves were enough to warrant an ASX ‘please explain’ speeding ticket this afternoon as well.

So what is this company? And what is sparking such a dramatic re-valuation?

Credit Intelligence is a debt restructuring and personal insolvency management business. It operates primarily in Hong Kong and Singapore, although the company has expansion plans in place for the Australian market.

What’s been driving the Credit Intelligence share price?

The company likely started turning heads following its annual general meeting late last November. In this meeting, Credit Intelligence reported that its revenues for FY2020 had grown by 125% (from $6.05 million to $13.61 million) and its profits by 384% (from $934,000 to $4.54 million). The company also doubled its dividend and reported earnings per share (EPS) growth of 333%.

Interestingly, Credit Intelligence told investors that the company was being supported by “favourable macroeconomic conditions”. As such, it advised the market that “COVID-19 related unemployment [and the] recession will massively increase demand for [its] services… for years to come” and that these conditions are “not yet reflected in growth numbers”.

Although these announcements were evidently well received by investors at the time, it doesn’t explain what’s happening today with the Credit Intelligence share price. Indeed, the company has not released any market-sensitive information or major announcements in recent days, save for a release back on 8 February.

In that release, Credit Intelligence discussed its plans for a “next-generation, technology-enabled platform that will provide a better solution for the coming wave of millennial debts caused by BNPL [buy now, pay later services]”.

There have been a plethora of companies involved in the buy now, pay later arena being inundated with volume surges and share price spikes this week. As such, it is possible that Credit Intelligence has been caught up in this euphoria.

However, in response to the ASX’s pricing enquiry today, Credit Intelligence flatly denied any knowledge of possible causes for the surge in activity. It did not offer any speculation as to the underlying cause of the Credit Intelligence share price spike either.

More reading

• Telstra (ASX:TLS) full year dividend for 2021 expected to be 16 cents per share, fully franked
• Rio Tinto (ASX:RIO) share price on watch after announcing special dividend
• 3 fantastic ASX shares to buy for strong returns
• Why the Schaffer (ASX:SFC) share price flew 9% today
• Here’s why the Appen (ASX:APX) share price is sinking

Motley Fool contributor Sebastian Bowen 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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If you’re looking to put your money to work by investing in the share market, then you might want to take a look at the ASX shares listed below.

Here’s why they are highly rated and tipped to provide strong returns for investors:

Altium Limited (ASX: ALU)

Altium is the printed circuit board (PCB) design software provider behind the Altium Designer and cloud-based Altium 365 platforms. These platforms are regarded to be the best in the industry and have significant advantages over competitors such as Cadence. Given that PCBs are found inside almost all electronic devices, the company has been benefitting greatly from the proliferation of electronic devices due to the Internet of Things and artificial intelligence markets. Positively, this trend is expected to continue over the 2020s and drive strong sales and profit growth. Analysts at Morgan Stanley are positive on the company. They have an overweight rating and $37.00 price target on the company’s shares.

CSL Limited (ASX: CSL)

Another top ASX share to consider buying is CSL. It is one of the world’s leading biotechnology companies and the name behind the CSL Behring and Seqirus businesses. CSL Behring is the number one player in a global plasma therapies industry worth a massive US$30 billion per year. Whereas the Seqirus business is now the second largest player in the global influenza vaccines industry. Credit Suisse is a fan of CSL and has an outperform rating and $325.00 price target on its shares. While the broker notes that the company is facing plasma collection headwinds, it believes demand remains strong for its therapies and flu vaccines.

Whispir Ltd (ASX: WSP)

Whispir is a software-as-a-service communications workflow platform provider. Its industry-leading software platform allows users to deliver actionable two-way interactions at scale using automated multi-channel communication workflows. Whispir has been growing strongly in recent years but still has a very long runway for growth ahead of it. Management estimates that the Workflow Communications platform as a Service market could be worth US$8 billion per year by 2024. Analysts at Wilsons are positive on the company and currently have an overweight rating and $5.10 price target on its shares.

More reading

• One year on and 50% up, the All Technology Index is booming
• Top brokers name 3 ASX shares to buy today
• AstraZeneca vaccine approved for use in Australia, CSL (ASX:CSL) share price up
• The latest ASX shares upgraded by brokers to “buy” during the reporting season
• 3 things you might have missed from the Altium (ASX:ALU) half year result

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Whispir 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 Schaffer Corporation Limited (ASX: SFC) share price was sent soaring today after the company announced its half-yearly results for FY21. Shares in the industrial company closed the day’s trade at $20, up 9.89%.

Earlier in the day, the Schaffer share price reached a new record high of $20.20.

What sent the Schaffer share price flying?

Schaffer Corporation is involved in a broad range of activities including automotive leather, paving, concrete and limestone product manufacture, and property leasing. Investors reacted positively today to Schaffer’s half-year results for the period ending 31 December 2020. 

The company announced a half year net profit after tax (NPAT) of $23.1 million, up from $13.9 million compared to the prior corresponding quarter (pcp). It is worth noting that the result includes roughly $10 million in unrealised, non cash gains in the group’s investments.

What’s more, the increased NPAT reflected the strong performance in Schaffer’s automotive leather division, which increased profits by 13% over the same period last year. The company generated revenue of $102.1 million for the period, which was up from $92.7 million in the prior corresponding half.

While the leather division performed well, revenue from group investments fell to $4.4 million. Relating to its investments, Schaffer had a pre tax equity value of $181 million, including $7.3 million in new investments and $21.6 million in cash deposits.

Finally in the company’s concrete sector (Delta), revenue fell by 12%. However, while revenue fell to $8.9 million, NPAT in this sector returned to profit for the half at $1 million.

Schaffer also announced an interim fully franked dividend. The company will be paying out 45 cents per share on 12 March, matching last year’s payment.

What now

Schaffer noted that the ongoing global economic uncertainty caused by the impact of COVID-19 makes forecasting difficult, along with potential volatility in key risks such as currency.

Hence, Schaffer expects second half earnings from its automotive leather division to be marginally lower than the strong first half, with its Delta division remaining profitable. Nonetheless, the company advised that the commencement of settlements at North Coogee should release cash and profits for the investments division.

On a more exciting note, there is optimism going forward that Delta will commence a large project during the second half. Civil infrastructure projects are increasing, in part due to government stimulus in response to the pandemic.

More reading

• Here’s why the Appen (ASX:APX) share price is sinking
• Here’s why the Copper Mountain (ASX:C6C) share price closed 7% higher today
• Why the Openpay (ASX:OPY) share price is surging higher today
• The Peninsula Energy (ASX: PEN) share price continues to fly
• Why the McPherson’s (ASX:MCP) share price was crushed today

Motley Fool contributor Daniel Ewing 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 Appen Ltd (ASX: APX) share price dropped by 9% today after it was on the receiving end of a negative broker report.

Analysts at Macquarie Group Ltd (ASX: MQG) issued a painful downgrade of expectations for Appen this year.

Here’s what happened to the Appen share price

Appen shares suffered after Macquarie downgraded the technology business from ‘outperform’ to ‘underperform’.

Macquarie thinks that the FY20 result is now going to be a ‘non-event’ because of increasing competition and this will cause Appen to lose market share. But the broker doesn’t think this competition is a short-term problem – the headwinds could continue for the rest of 2021. It may then lead pricing competition for Appen.

The broker thinks that other brokers could follow suit with downgrades for Appen.

The Australian Financial Review quoted Macquarie analyst talking about how competition could affect things for Appen:

Increased competition has been partially cushioned by greater demand, but supply increase has outstripped demand. Pricing is not yet a lever to differentiate between outsourced solutions, but as competition intensifies in 2021, we see downside risk to street revenue forecasts as this comes into play.

Appen’s new share price target and earnings expectations

Macquarie has set a new price target for Appen of $19. That’s still a potential downside of around 18% despite already falling 9% today.

The broker is now forecasting that Appen will generate 51 cents of earnings per share (EPS) in its FY20 and 65 cents of EPS in its FY21.

That suggests that the Appen share price is now valued at 45 times FY20’s estimated earnings on Macquarie’s projections.

What was in the last trading update?

Appen announced a trading update in December 2020.

In that ASX release, the company referenced the fact that on 15 April 2020 it said that the COVID-19 pandemic may dampen 2020 performance through a slowdown in digital ad spending, a reduction in IT/digital spending, a reduction or cancellation of services from Appen’s smallest customers, interruptions to global hardware supply chains and suspension of face to face projects such as audio data collection.

After completing its November results, Appen said that while the fourth quarter has improved compared to the third quarter, the usual ramp up it normally sees didn’t eventuate.

The Appen share price has fallen 23% since this update.

Management said that the pandemic had disrupted and reshaped the priorities of customers, especially in California. Appen said client resources are being put towards new product areas that enhance their long-term resilience and value which is currently impacting work volumes on some large mature projects. At the time, Appen said that was positive for the company.

The company said that the long-term trends for the business remain very positive, with spending on artificial intelligence growing rapidly at 28% per annum.

Appen said that the structural tailwinds, as well as the strength of the existing pipeline, should support a return to strong growth rates in 2021.

In the trading update, Appen said it’s expecting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY20 to be in the range of $106 million to $109 million, with second half underlying EBITDA expected to be at least 30% stronger than the first half.

More reading

• 2 highly rated ASX tech shares to buy today
• 5 fantastic ASX shares to buy right now
• 2 outstanding ASX tech shares to buy and hold until 2030
• Top ASX shares to buy in February 2021
• 5 of the best ASX shares to buy in February

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. 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 Copper Mountain Mining Corporation CDI (ASX: C6C) closed 7.3% higher today finishing off the session at $2.50. While there was no news today, the Copper Mountain Q4 2020 financial results were released yesterday. 

Let’s take a peek and see if anything in there might have helped to move the Copper Mountain share price today.

Copper Mountain share price jumps after record results

In yesterdays release, the company reported record quarterly production in Q4 2020. During Q4 2020, Cooper Mountain produced 29.1 million pounds of copper equivalent. This was comprised of 23.1 million pounds of copper, 8,959 ounces of gold, and 144,934 ounces of silver.

Additionally, full-year 2020 production exceeded guidance. During this period, Copper Mountain produced 77.6 million pounds of copper. This is significant compared to its previously offered guidance of 70 to 75 million pounds.

Revenue for Q4 2020 was $106.1 million and for the full year was $341.7 million.

Copper Hill reported that earnings per share (EPS) for Q4 2020 was $0.10 and for the full year was $0.18.

Cash flow from operations for Q4 2020 was $50.9 million and for the full year was $121.6 million.

CEO discusses what’s ahead

Commenting on Copper Mountain’s achievements and what lies ahead, Gil Clausen, Copper Mountain’s President and CEO said:

We expect our low-cost profile to remain in 2021 and for production to increase by up to 22% to the range of 85 to 95 million pounds of copper this year. Increased production will be driven by higher grades, as already experienced in the fourth quarter of 2020, and increased throughput and recovery following the commissioning of the 45,000 tonnes per day mill expansion planned for completion in the third quarter of 2021. We remain focused on advancing our organic growth pipeline, which includes the further mill expansion to 65,000 tonnes per day at the Copper Mountain Mine and the Eva Copper Project, while maximizing cash flow to continue to build on our healthy cash position.

The Copper Hill share price has rocketed 225% higher over the past year.

More reading

• Why the Openpay (ASX:OPY) share price is surging higher today
• The Peninsula Energy (ASX: PEN) share price continues to fly
• Why the McPherson’s (ASX:MCP) share price was crushed today
• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• Resonance Health (ASX:RHT) announces its share price is in trading halt

Motley Fool contributor Gretchen Kennedy 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 Openpay Group Ltd (ASX: OPY) share price is lifting as the market nears the close of trade today. This comes after the buy now, pay later (BNPL) company announced a strategic partnership with Officeworks.

At the time of writing, shares in the BNPL provider are up 4.69% to $3.35, after reaching an intraday high of $3.57 in early trade.

Delivering on its growth plans

The Openpay share price is moving higher after another positive update that will boost its presence in the Australian market.

In today’s release, Openpay advised that it has launched its ‘Buy now. Pay smarter.’ plans across Officeworks. The offering will be available both online and instore Australia-wide. Rollout is expected to start this month and run through into March.

Established in 1994, Officeworks is a leading retailer that offers customers a wide range of office supplies, technology, furniture, art supplies, education resources, and print and copy services. The company operates 168 stores nationally and houses more than 4,000 products on its website.

This latest addition to Openpay’s growing list of merchants further underscores the company’ strategy to provide a smart budgeting tool for important consumer purchases. The BNPL company offers various BNPL plans across industries such as automotive, healthcare, home improvement, memberships and education.

Just recently, Openpay signed major Australian brands that included Kogan.com Ltd (ASX: KGN), Surfstitch Group, Dick Smith and Matt Blatt.

Management commentary

Openpay managing director and CEO Michael Eidel hailed the new partnership, saying:

We are delighted to have launched this agreement with Officeworks. By partnering, we can provide a great budgeting tool to help families get their school and work needs sorted, while supporting Officeworks to ‘help make bigger things happen’ for their customers. This approach fits nicely with the higher-value, longer-term plans that we can offer to customers and responds to the growing trend for interest-free instalment payments.

Officeworks managing director Sarah Hunter added:

We are excited to be partnering with Openpay. The flexibility of its BNPL solution will provide our customers with more time to pay for all their computing, technology, furniture and stationery needs to help them make bigger things happen.

Foolish takeaway

The Openpay share price is up more than 150% in the last 12 months. Its shares touched a low of 32 cents in last year’s COVID-19 meltdown in March, before accelerating higher. At today’s price, the company has a market capitalisation of $266.13 million.

More reading

• One year on and 50% up, the All Technology Index is booming
• 3 outstanding ASX growth shares to buy today
• Why is the Splitit (ASX:SPT) share price underperforming Afterpay and Zip?
• Why the Openpay (ASX:OPY) share price is up 17% and could go higher
• 2 of the best ASX growth shares to buy now

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 Kogan.com ltd. The Motley Fool Australia has recommended Kogan.com 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 Peninsula Energy Ltd (ASX: PEN) share price is looking to extend its miraculous run in 2021. Earlier today, Peninsula announced that the company has begun trading on the OTCBQ Venture Market in the US. At the time of writing, the Peninsula share price was trading at $0.17, up 6.25%.

Let’s take a closer look at the announcement and what this means for the Peninsula share price. 

Today’s Announcement

According to the announcement, Peninsula Energy was given the green light by OTC Market Group. The company will be trading under the ticker ‘PENMF’.

Shares in Peninsula Energy have been upgraded to the middle tier of the OTC market. This comes after trading on the OTC Pink Market since January. In the announcement released earlier today, Peninsula advised investors that the upgrade was in response to strong trading volumes.

Listing on the OTCBQ is reserved for penny stocks and small foreign companies. As a result, this will allow overseas investors greater access to securities in Peninsula Energy.

Peninsula’s CEO, Wayne Heili, noted the milestone, stating:

U.S.-based investors have demonstrated a keen awareness of Peninsula and our flagship Lance Project located in the state of Wyoming but they have been limited to trading of shares during Australian market hours.

In response to the update, the Peninsula share price is trading more than 6% higher for the day.

What does Peninsula Energy do?

In the US, there has been bipartisan support to ‘decarbonise’ the country’s power sector by investing in US-produced uranium. This was culminated in the US passing the Omnibus Budget Bill. As part of the initiative, the US Department of Energy has allocated US$75 million towards the establishment of a national strategic uranium reserve. 

Peninsula Energy is an ASX-listed uranium mining company that is poised to benefit from the initiatives of the US government. The company’s flagship Lance Project is located in Wyoming, USA. Notably, it is the only US-based uranium project using a low pH, In-Situ Recovery (ISR) process.

In addition, Peninsula is the only junior uranium producer with long-term sales contracts. The company currently has contracts for up to 5.5 million pounds at US$51-$53 per pound of uranium.

For the fourth quarter of 2020, Peninsula delivered 75,000 pounds of uranium. This allowed the company to generate a net cash margin of US$1.4 million.

Since the start of November, the Peninsula share price has surged more than 170%, reflecting investor optimism in the company.

More reading

• Why the McPherson’s (ASX:MCP) share price was crushed today
• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• Resonance Health (ASX:RHT) announces its share price is in trading halt
• What’s going on with the Cirralto (ASX:CRO) share price?
• 2 high-yielding ASX 200 shares

Motley Fool contributor Nikhil Gangaram 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 McPherson’s Ltd (ASX: MCP) share price continued its disappointing run and sank lower again on Wednesday.

The beauty products company’s shares dropped 11% to $1.21.

This means the McPherson’s share price is now down 60% over the last 12 months and trading within touching distance of a two-year low.

Why did the McPherson’s share price crash lower today?

Investors were selling McPherson’s shares today following the release of a disappointing half year result.

Management blamed the same weakness in the daigou channel that has been impacting A2 Milk Company Ltd (ASX: A2M) and Blackmores Limited (ASX: BKL) for its poor performance.

For the six months ended 31 December, the company reported a 4.1% decline in sales revenue to $101.7 million.

Management advised that it achieved domestic sales growth of 6% during the first half. This was thanks to market share gains from four of its products. However, a 65% decline in export sales more than offset this.

On the bottom line, the company reported a 19.2% decline in underlying net profit after tax to $4.6 million. Though, it is worth noting that this underlying result does not include a $4.3 million provision for excess hand sanitiser inventory.

Despite its weak result, the McPherson’s board has declared a fully franked interim dividend of 3.5 cents per share. This is down from 4 cents per share in the prior corresponding period.

Management commentary

McPherson’s Managing Director, Grant Peck, commented: “McPherson’s 6% revenue growth in the Australian market over the six months to 31 December 2020 illustrates the strength of our brand portfolio and our ability to deliver new product innovations to market. McPherson’s is the second largest Australian supplier of beauty products to the Australian Pharmacy channel.”

“Our existing brand portfolio, with its predominance in the beauty category, is now complemented by the recent acquisition of the Fusion Health and Oriental Botanicals brands and the establishment of McPherson’s Health category. This acquisition, effective 1 December 2020, provides the Group with strong go to market capabilities and product innovation credentials in the Natural Health & Vitamins and Dietary Supplements category, which in Australia is part of the $5.63 billion Health & Wellness retail sales market.”

Outlook

Management warned that there remains an elevated level of uncertainty due to the difficulty of forecasting demand in China.

Furthermore, it notes that consumer behaviour will be difficult to gauge in the short term following an unexpected slowdown in the market in the last quarter of last year.

As a result, it is unable to provide guidance at this stage. However, it suspects that its underlying profits will be materially below what it achieved in FY 2020.

More reading

• Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades
• Resonance Health (ASX:RHT) announces its share price is in trading halt
• What’s going on with the Cirralto (ASX:CRO) share price?
• 2 high-yielding ASX 200 shares
• Why the InvoCare (ASX:IVC) share price tumbled 5% lower today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk and Blackmores 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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While the S&P/ASX 200 Index (ASX: XJO) slumped today, Pilbara Minerals Ltd (ASX: PLS) shares bumped up close to 6% by the market’s close. Furthermore, over the past six months, the Pilbara share price has gained 240%.

So what’s pushing the emerging lithium and tantalum producer’s shares higher today? 

What’s driving the Pilbara share price higher?

Today Citi announced an upgrade to its Pilbara Minerals share price rating from ‘sell/high risk’ to ‘neutral/high risk’. The broker also raised its Pilbara share price target to $1.10, up from $1.00.

According to Citi analysts, electric vehicle (EV) sales proved to be extremely resilient in 2020, growing by ~35% year over year, while overall passenger vehicle sales fell ~20%.

Because of this trend, Citi forecasts a further 15% upside in Chinese battery grade carbonate prices by the fourth quarter of 2021. Citi expects a structural deficit to occur due to increasing EV market demand, thus increasing the price of lithium.

Canaccord Genuity also recently upgraded the Pilbara Minerals share price from ‘sell’ to ‘hold’. The firm expects that EV sales will continue to gain momentum, which will be driven by legislative changes, lower costs and increasing options available to consumers.

Like Citi, Canaccord sees the value of lithium carbonate rising. The group upgraded its lithium carbonate price estimate by ~75% over 2021-2024. Canaccord further noted that this revised pricing forecast resulted in an average 41% increase in price target across its global sector coverage.

Company snapshot 

Pilbara Minerals aims to position itself as a low-cost, long-term, sustainable lithium producer. It owns 100% of the Pilgangoora Lithium-Tantalum Project in Western Australia’s Pilbara region. 

The operation consists of two processing plants. Plant one is a 2 million tonne per annum (Mtpa) mining and processing operation and Plant Two is presently under evaluation.

The Pilbara Minerals share price has shot up by around 300% over the past year. 

Based on the current share price, the company’s market capitalisation is $3.1 billion with 2.9 billion shares outstanding.

More reading

• Pilbara Minerals (ASX:PLS) share price climbed 12% today, but why?
• Why Blackmores, Creso Pharma, Pilbara Minerals, & Zip shares are pushing higher
• Zip and Vulcan were among the most traded ASX shares last week
• 5 lithium shares that are fast-charging up in 2021
• Why the Ioneer (ASX:INR) share price is up 16% this week

Motley Fool contributor Gretchen Kennedy 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 Pilbara Minerals (ASX:PLS) share price jumps 6% on broker upgrades appeared first on The Motley Fool Australia.

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