In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to start the week with a gain. At the time of writing, the benchmark index is up 0.2% to 7,078.3 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are storming higher:

Eagers Automotive Ltd (ASX: APE)

The Eagers Automotive share price has climbed 4% to $16.21. Investors have been buying the auto retailer’s shares after Morgan Stanley responded positively to its recent trading update. The broker notes that Eagers Automotive is trading well-ahead of expectations so far in FY 2021. In addition, the broker believes it is well-placed to be a much more profitable company in the future. Morgan Stanley has retained its overweight rating and lifted its price target to $18.00.

Orocobre Limited (ASX: ORE)

The Orocobre share price has jumped 5% to $6.50. Investors have been scrambling to buy its shares after it announced a merger with fellow lithium producer Galaxy Resources Limited (ASX: GXY). The company notes that the merger will create the fifth largest global lithium chemicals company with a diversified production base and exciting growth platform. The Galaxy share price is rising on the news as well.

Sims Ltd (ASX: SGM)

The Sims share price has surged 10% higher to $16.78. The scrap metal company’s shares were given a boost today from the release of a trading update. According to the release, Sims is expecting to achieve underlying earnings before interest and tax (EBIT) of around $260 million to $310 million in FY 2021. This compares to an underlying loss before interest and tax of $57.9 million in FY 2020 and underlying EBIT of $230.3 million in FY 2019.

Titomic Ltd (ASX: TTT)

The Titomic share price has risen almost 6% to 55.5 cents. This morning the digital manufacturing solutions provider announced an agreement to acquire the assets of US-based Tri-D Dynamics. It is a Silicon Valley-based design and manufacturing company developing smart pipe infrastructure for the 21st-century economy. Tri-D Dynamics aims to upgrade and electrify infrastructure by embedding electronics directly into metal structures to outfit them with digitally connected technology.

More reading

• Galaxy Resources (ASX:GXY) share price jumps on merger news
• Why the Sims (ASX:SGM) share price is on watch today
• Galaxy (ASX:GXY) and Orocobre (ASX:ORE) announce mega lithium merger
• The Eagers (ASX:APE) share price is near all-time highs
• Why Eagers Auto, Mayne Pharma, Monadelphous, & Newcrest are pushing higher

Motley Fool contributor James Mickleboro owns shares of Galaxy Resources Limited. 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 Smartpay Holdings Ltd (ASX: SMP) share price has jumped in afternoon trade after the payment technology company released its trading update for the fourth quarter.

At the time of writing, the Smartpay share price is trading at 92.5 cents a share, an increase of 4.5%.

High growth story continues

It appears the payment solution providers’ trading update has fallen roughly in line with shareholder expectations. Despite the continuation of growth metrics, the Smartpay share price has failed to gain momentum.

The company’s fourth quarter, ending 31 March, experienced continued growth in Australian acquiring revenues. Smartpay delivered a 97% year-on-year revenue increase to $5.784 million – a further 15% increase on the previous quarter.

Additionally, Smartpay’s transacting terminals reached record levels. At the end of March, the company’s payment terminals in use reached 6,754 – up from 5,775 from the previous quarter.

Total quarterly revenue for the company came in at NZ$10.05 million on a consolidated basis for both Australia and New Zealand operations. This reflects an increase of 36% year-on-year for the business.

Potentially disappointing shareholders, the company did not indicate growth in its New Zealand operations. Instead, Smartpay stated, “Our New Zealand business provided stable and consistent revenue contribution through the quarter.”

Context is important for Smartpay share price

Smartpay is a much smaller peer of ASX-listed Tyro Payments Ltd (ASX: TYR). Comparing the two competitors we can see how Smartpay is stacking up.

Based on current metrics, Tyro is generating roughly 7.1 times more revenue than its smaller contender. However, the company is utilising 10.1 times more transacting terminals than Smartpay to do so, at 68,338.

Adding to this, despite only accruing sevenfold the revenue, Tyro is valued at 9.7 times the market capitalisation of Smartpay. This might explain why the returns from the Smartpay share price have outpaced its bigger competitor over the last year (108% versus 38.6%).

The market might be imposing a discount on the smaller terminal provider, given the heightened risk profile. This risk was displayed during the COVID-19 crash, as the Smartpay share price fell dramatically 64% in one month.

More reading

• Top broker picks ASX shares next in line for a profit upgrade
• Why the Smartpay (ASX:SMP) share price is up 30% in 2021
• Top brokers name 3 ASX shares to buy next week
• 3 ASX shares brokers have rated a buy today
• 4 reasons why the Tyro (ASX:TYR) share price is rated as a buy

Mitchell Lawler 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 Tyro Payments. 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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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.

Tesla Motors (NASDAQ: TSLA) is moving past a legal dispute it got into with one of its former engineers. The company settled a lawsuit it brought in 2019 against Cao Guangzhi, accusing him of copying the source code of its Autopilot assisted driving software platform. Tesla had alleged Cao had done so before joining XMotors, the U.S. business of China-based autonomous-driving company Xpeng (NYSE: XPEV).

Under the terms of the settlement, Cao will financially compensate Tesla for his actions. The precise amount has not been disclosed.

Autopilot is a high-profile feature in Tesla automobiles. Although the name implies an autonomous driving system, Autopilot is actually a set of assisted-driving solutions including next-generation cruise control and parking assist. The company has intimated that, in time, Autopilot will include self-driving functionalities.

Tesla has not commented on its settlement with Cao. The former employee’s legal representative, in a statement sent to Reuters, claimed that Cao did not provide any Tesla data to Xpeng or any other entity. In addition, said the representative, Cao didn’t personally access any of Tesla’s information.

The news agency added that XMotors “said it respected intellectual property rights and relied on its in-house developed proprietary R&D and intellectual property.” XMotors was not a party in the lawsuit brought by Tesla. Cao is no longer employed at the Chinese company.

Although this can’t be considered a major legal issue — and therefore a big victory — for Tesla, it is an encouraging sign that the company is ready and able to vigorously defend its business. Autopilot is an attractive feature that helps draw customers, and as such it’s worth protecting.

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

More reading

• Could Tesla’s electric vehicle deliveries soar 85% this year?
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• Why Tesla stock soared higher on Tuesday
• The stock that I’d hold for the next 5 years: fundie
• Tesla and Palantir were some of the most popular US shares last week

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

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The GPT Group (ASX: GPT) share price is slipping into negative territory today after the company announced an update on its earnings and distribution guidance for FY21.

At the time of writing, GPT shares are backtracking 1.3% to $4.75.

Founded in 1971, GPT is a property investment company. The group owns and manages a diversified portfolio of Australian retail, office and logistics property assets.

GPT also manages three funds, the GPT Wholesale Office Fund (GWOF), the GPT Wholesale Shopping Centre Fund (GWSCF) and the GPT Metro Office Fund (GMF).

What did GPT announce?

In today’s release, GPT advised that it expects to deliver an increase in both funds from operations (FFO) and distribution per security (DPS) metrics for FY21. It stated that FFO per security is set to grow 8%, with DPS soaring 12% when compared to FY20.

The guidance statement from the company’s assessment that the current economic climate continues to recover. GPT noted that any significant disruptions from COVID-19 could derail its projections for the remainder of the year.

What did the CEO say?

GPT CEO Bob Johnston touched on the company’s recovery and outlook, saying:

It is pleasing to see Australia’s economy continuing to benefit from the post COVID-19 recovery and the disruption to our operations is abating. While risks remain, including the speed of recovery of our Melbourne Central Shopping Centre and further COVID-19 related disruptions, trading conditions over the first quarter have provided us with sufficient confidence to announce earnings and distribution guidance for the 2021 full year.

The group’s high-quality portfolio has proved resilient throughout the pandemic. Consumer confidence continues to be strong driving foot traffic at our shopping centres, office utilisation is steadily increasing and demand for logistics assets remains strong reflecting the increased economic activity.

GPT share price snapshot

Over the past 12 months, the GPT share price has gained around 15%, with year-to-date sitting up roughly 5%. The company’s shares reached a 52-week high of $4.94 in mid-November 2020, before treading lower and again moving higher.

Based on valuation grounds, GPT commands a market capitalisation of about $9.2 billion, with almost 2 billion shares outstanding.

More reading

• This beaten-down ASX sector could soon be turning the corner

Motley Fool contributor Aaron Teboneras 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 Santos Ltd (ASX: STO) share price is falling today after global ratings agency Fitch issued it with a first-time rating.

The Santos share price is down 1.19% at the time of writing, trading at $7.07 per share.

Santos is one of the leading independent oil and gas producers in the Asia-Pacific region, providing energy to homes, businesses and major industries across Australia and Asia.

Fitch Ratings is a leading provider of credit ratings, commentary and research for global capital markets.

What is the Santos Fitch rating?

Fitch Ratings has assigned Santos Limited a first-time rating of ‘BBB’ with a Stable Outlook. The agency has also assigned Santos a senior unsecured rating of ‘BBB’. 

Fitch’s report said fixed-price gas contracts were of immense benefit to Santos’ low credit risk.

Santos’ rating is supported by its position as the second-largest oil and gas producer in Australia, with a large share of domestic gas sales, which are typically on long-term fixed-price contracts that provide it with greater revenue stability than similarly rated peers.

This provides Santos with greater diversification from oil-linked revenue than its peers, providing some earnings stability. This was evident in 2020 when Santos’ average realised domestic gas price fell only 9.8% compared with a reduction of over 33% in its average realised oil and LNG prices.

Fitch considers an upgrade unlikely over the medium term due to the growth projects in the pipeline.

What does Santos’ Fitch rating mean?

Fitch’s credit ratings relating to issuers are an opinion on the relative ability of an entity to meet financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims or counterparty obligations

Fitch’s credit ratings do not directly address any risk other than credit risk

Fitch can issue 11 ratings, spanning from AAA (the lowest expectation of risk) all the way down to RD and D, which signify a restricted default and default rating (bankruptcy) respectively.

Santos’ BBB rating means that the company has a good credit quality. BBB ratings indicate that expectations of default risk are currently low.

Fitch considers Santos’ capacity to pay its financial commitments is adequate, but adverse business or economic conditions are more likely to impair this capacity than they would an A-rated business.

Santos share price snapshot

The Santos share price is up marginally the past week against broader 3% losses over the past month. It’s gained 65% over the past 12 months, beating the energy sector by 44%.

More reading

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• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Lucas Radbourne-Pugh 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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Spacetalk Ltd (ASX: SPA) shares are gaining today after an announcement from the company regarding a new sales channel for its LIFE smartwatch. At the time of writing, the Spacetalk share price is trading 6.45% higher to 16.5 cents.

Let’s look closer at today’s announcement from the communications technology company.

What’s driving the Spacetalk share price?

The Spacetalk share price is climbing today after the company advised its new B2B2C (business to business to consumer) channel will begin operating on 1 June 2021, coinciding with the launch of the LIFE watch’s fall detection feature.

The new B2B2C channel will see the watch retailing through ACH Group. ACH Group is a leading aged care organisation with accommodation options in Adelaide, Melbourne and the Fleurieu Peninsula in South Australia. It supports more than 20,000 older Australians to live well at home and in residential care and independent living units.

The watch’s fall detection feature, developed in collaboration with ACH Group, is in the final stages of completion. It will use artificial intelligence to continually improve its accuracy rate, improving as more people use the devices. The new feature will be automatically enabled on all LIFE devices through a free upgrade.

LIFE’s price point has also been adjusted. The device will now retail for $399, while access to the paired Spacetalk app will cost users $7.99 per month.

Due to the new price point, eligible customers may now purchase LIFE with funding from Commonwealth Home Support, Home Care, or the National Disability Insurance Scheme.

More about LIFE

Not including the up-and-coming fall detection feature, LIFE includes SOS alerts, a GPS locator, a 4G phone, and reminders that can be used for medications and appointments.

It can also give emergency responders access to a wearer’s medical history and information.

Currently, LIFE is available at JB Hi-Fi Limited (ASX: JBH) stores and will soon be launched in Harvey Norman Holdings Ltd (ASX: HVN) stores.

Commentary from management

Spacetalk’s CEO Mark Fortunatow said receiving ACH Group’s feedback on and support of LIFE was extremely valuable, saying:

We listened, and set about incorporating ACH Group’s suggestions, which included fall detection technology and re-positioning pricing to meet the eligibility requirements for Australians to access Government funding through the Commonwealth Home Support, Home Care and NDIS programs. Our commercial arrangement with ACH Group to sell the device and the accompanying Spacetalk App opens an exciting new B2B2C distribution channel for LIFE and broadens its market reach.

ACH Group’s CEO Frank Weits also commented on LIFE and its B2B2C channel. He said:

ACH Group recognised that LIFE could fill a gap in the market. Together with its newly incorporated suggested improvements we believe this high quality, stylish smartphone watch will offer peace of mind to older people…

Spacetalk LIFE is a fantastic example of two industry leaders collaborating to bring new, leading-edge and world-class aged care technology to market. LIFE can increase an older person’s confidence and their safety, whilst supporting independence, health living, and social connections.

Spacetalk share price snapshot

The latest news on the company’s LIFE watch has given the Spacetalk share price yet another boost. 

Currently, Spacetalk shares are up 50% year to date. They are also up by 83% over the last 12 months.

Spacetalk has a market capitalisation of around $25 million, with approximately 165 million shares outstanding.

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Motley Fool contributor Brooke Cooper 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 Vimy Resources Ltd (ASX: VMY) share price is plummeting in early afternoon trade. This comes after the company announced it has completed an equity raising, and opened a Share Purchase Plan (SSP) offer.

At the time of writing, the uranium producer’s shares are swapping hands for 11.5 cents, down 14.8%.

Placement complete

Investors are heading for the hills, dumping Vimy shares as impending share dilution appears on the horizon.

According to its release, Vimy advised it has received firm commitments to raise $18.5 million from institutional and sophisticated investors. The strong support saw a number of new domestic and international customers to be added to the company’s registry.

The well-supported placement will see Vimy create 168.2 million new ordinary shares at an issue price of 11 cents apiece. This represents a 21.9% discount to the 5-day volume weighted average price (VWAP) of 14.1 cents on 14 April 2021. It’s worth noting that the offer price is a slight markdown on today’s current share price drop to 11.5 cents.

The new ordinary shares to be issued represent 21.6% of the existing shares on issue. Under listing rule 7.1, Vimy will allocate 92 million shares to investors. In addition, the company will also use an extension – listing rule 7.1A to issue the remaining 76.2 million shares.

The proceeds will be used to deliver a number of strategic objectives at the Mulga Rock and Alligator River Projects. This includes infrastructure and road upgrades as well as exploration and field work testing. In addition, the funds received are expected to pay for general working capital costs and strengthen Vimy’s balance sheet.

Vimy managing director and CEO Mike Young commented:

The growing positive sentiment for nuclear clean energy has been the catalyst for this growth. Vimy is in a unique position to capitalise on the supply shortage by progressing the Mulga Rock Project into development, where our first stage AISC is less than the uranium spot price.

Share Purchase Plan offer

Complimenting the placement, Vimy will seek to raise $3 million from eligible shareholders through a SSP. The shares will be offered at the same price of the equity raise at 11 cents per share. It is expected that around 27.3 million new ordinary shares will be issued if fully taken up.

About the Vimy share price

Despite today’s fall, the Vimy share price has shot up over 150% in the past 12 months. When looking at year-to-date performance, the company’s shares are sitting on a gain of more than 40%.

Based on valuation grounds, Vimy has a market capitalisation of roughly $91.1 million with 778.6 million shares on issue.

More reading

• Why the Vimy Resources (ASX:VMY) share price is charging 8% higher

Motley Fool contributor Aaron Teboneras 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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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Beach Energy Ltd (ASX: BPT)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted the price target on this energy producer’s shares to $2.10. While the broker acknowledges that there are risks relating to its Western flank oil production at the moment, it overlooks this due to the long term potential of its growing gas business. In addition, the broker notes that arbitration has ruled in favour of Beach Energy and guaranteed higher prices at the Otway Gas project for the next three years. The Beach Energy share price is fetching $1.76 on Monday afternoon.

DEXUS Property Group (ASX: DXS)

A note out of Morgan Stanley reveals that its analysts have upgraded this property company’s shares to an overweight rating with an improved price target of $11.70. According to the note, the broker believes that demand for office space won’t fall as much as feared and suspects that rental weakness could be bottoming now. Looking ahead, it feels that signs of improvement could lead to a re-rating of its shares to higher multiples. The DEXUS share price is trading at $10.29 on Monday.

Goodman Group (ASX: GMG)

Another note out of Macquarie reveals that its analysts have retained their outperform rating and $20.39 price target on this commercial property company’s shares. According to the note, the broker has been looking at its US operations. It notes that there are significant developments planned in the market which have a lot of potential. Outside this, the broker appears to believe Goodman is well-placed for growth and feels that the risks to its earnings are to the upside right now. The Goodman share price is fetching $19.03 this afternoon.

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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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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.

Bloomberg is reporting that Amazon (NASDAQ: AMZN), the king of e-commerce, is getting more aggressive with its physical retail investments. Sources told the news outlet the company plans to open 28 new Amazon Fresh stores across the U.S. this year, adding to its 11 current locations. Amazon Fresh is a supermarket concept that, according to the company, offers high-quality food at low prices with an integrated offline and online experience.

Should investors in grocery companies like Kroger (NYSE: KR), Walmart (NYSE: WMT), and Sprouts Farmers Market (NASDAQ: SFM) be worried about Amazon’s new brick-and-mortar venture? Let’s take a look.

The Amazon Fresh concept

To elaborate, this is a new grocery store concept that is trying to create a seamless offline and online experience by bringing Amazon’s e-commerce expertise to physical locations. The stores offer free same-day grocery delivery for Amazon Prime members, integration with Alexa to manage shopping lists, and for those who shop in person, the ability to skip checkout lines by using Amazon Dash Cart. All in all, it looks like a standard supermarket with some technology layered on top that could potentially improve the shopping experience for customers.

Amazon’s currently open supermarkets are located in California and Illinois. If these and the planned new stores are successful, you can expect their numbers to grow significantly over the next few years.

Which companies could this hurt?

Whenever Amazon or any company with a lot of capital enters a new business or niche, it is important to look at what other businesses it could impact. With Amazon Fresh, this means others supermarkets. Every grocery chain, including Kroger, Sprouts Farmers Market, and Grocery Outlet (NASDAQ: GO), as well as general merchandise retailers such as Walmart and Target (NYSE: TGT), will be watching to see if Amazon Fresh gains traction with consumers.

The most vulnerable companies to Amazon Fresh would be cost- and health-focused supermarkets like Sprouts Farmers Market, Trader Joe’s, and local food co-ops. These outlets target health-conscious consumers looking for something beyond the standard grocery experience, which is exactly the audience Amazon appears to be going after first with this supermarket concept.

Why investors shouldn’t worry

Amazon entering the brick-and-mortar grocery business is not something to scoff at. However, investors should remember that grocery represents a gigantic market with an estimated 38,000 stores and $700 billion spent on groceries in the U.S. each year. So even if the company opens 1,000 Amazon Fresh locations over the next decade, that would leave plenty of market share for the incumbent grocers.

Lastly, Amazon has a history of poor performance when experimenting with physical retail concepts. Its acquisition of Whole Foods in 2017 didn’t disrupt the market like many expected. In fact, many people would argue the Whole Foods experience has gotten worse since the chain was acquired by Amazon since it seems like stores are optimized for delivery and fulfillment — to the detriment of the in-store experience. Its other test concepts like Amazon Go and Amazon 4-Star haven’t gotten much traction (at least, not yet). That could change with Amazon Fresh, but if history is any guide, investors shouldn’t rush to sell their grocery store stocks just because Amazon has designs on becoming a competitor. 

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

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• Tesla and Palantir were some of the most popular US shares last week

Brett Schafer owns shares of Sprouts Farmers Markets. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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In 2021, the Westpac Banking Corp (ASX: WBC) share price has performed better than any of the other big four banks. Since the beginning of January, its value has appreciated by a tidy 29.3%.

In comparison, Australia and New Zealand Banking GrpLtd (ASX: ANZ) is up 25.2%, National Australia Bank Ltd. (ASX: NAB) is 16.6% higher, and the Commonwealth Bank of Australia (ASX: CBA) share price is only 5.8% greater.

Today, at the time of writing, the Westpac share price is up 0.2%. By contrast, the S&P/ASX 200 Index (ASX: XJO) is 0.34% higher.

Let’s take a closer look at some of the major stories this year that have had a material impact on the Westpac share price.

What’s affected the Westpac share price in 2021?

First quarter FY21 results

After revealing an approximate 200% growth in net profits after tax for the quarter, compared to the previous reporting period at the end of FY20, the Westpac share price jumped 5%. Profits grew because of an impairment benefit of $501 million from improved credit quality, stronger economic outcomes and a better economic outlook.

In the report, the bank reported cash earnings of nearly $2 billion – up 54% excluding notable items. Notable items included provisions for AUSTRAC proceedings, refunds, payments, costs and litigation, write-down of intangibles and asset sales and revaluations.

Of course, it should be noted Westpac’s revenues and profit margins in FY20 were severely impacted by the economic effects of the COVID-19 pandemic. By the time of the update, Westpac reported consumer delinquencies over 90 days, and mortgage deferrals were down compared to the previous quarter.

Bullish broker ratings

Another factor influencing the strong growth in the Westpac share price are the buy ratings placed on the bank by leading stockbrokers.

Citi, JP Morgan, and Goldman Sachs all have buy ratings on Australia’s second-largest bank by market capitalisation. JP Morgan expects the Westpac share price to hit a 52-week high of $27.50.

Projected dividend yield

CommSec is projecting Westpac to pay a fully franked dividend of $1.09 per share. In FY20, Westpac only paid a dividend of 31 cents per share.

JP Morgan is even more optimistic. The broker expects Westpac to pay an even larger dividend of $1.32 per share. If that were the case, it would be excellent news for the Westpac share price.

APRA finishes investigation into Westpac

In early March, the Australian Prudential Regulation Authority (APRA) announced it was closing its 3-month investigation into the bank over allegations it had breached anti-money laundering and counter-terrorism laws. The government authority found no evidence the bank had breached these laws. The news saw a lift in the Westpac share price.

It did, however, impose several restrictions on the bank. These include a court enforceable undertaking to implement an integrated risk governance remediation plan and a $1 billion operational risk capital add-on.

New Zealand demerger

In response to enquiries by the Reserve Bank of New Zealand (RBNZ) over risk governance and liquidity risk management, Westpac announced it was looking into possibly demerging its New Zealand arm from its main operations.

Goldman Sachs reviewed the impacts of a potential demerger and still set a price target of $25.94. That’s 2.16% higher than the current Westpac share price.

More reading

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• This underperforming ASX large cap is sitting on a ~10% dividend yield

Motley Fool contributor Marc Sidarous 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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