The prices of ASX coal shares Whitehaven Coal Ltd (ASX: WHC), and Yancoal Australia Ltd (ASX: YAL) were mixed today as coal mining returned to full operations after the New South Wales floods.

At the close of trade today, shares in Whitehaven were down 1.41%, trading at $1.75, while Yancoal shares finished the day up 2.24% at $2.28.

NSW flooding subsides, mining resumes

Unprecedented flooding in NSW impacted mining operations throughout the state earlier this week.

According to the Australian Financial Review (AFR), rail lines in the Hunter were shut down, vessel movements out of the Port of Newcastle slowed, and operations were suspended at both Yancoal and Glencore PLC.

The Australian Rail Track Corporation (ARTC), which manages interstate railways, said on Wednesday it would resume “limited” rail operations in the Hunter Valley, between Newcastle and Maitland.

The government body said coal services “resumed in a limited capacity” following minor restoration works after floodwaters receded at Sandgate. The network between Narrabri North and Moree remained closed due to continued flooding in the north-west of the Hunter Valley Network.

Let’s take a look at how the 2 ASX coal shares fared as floodwaters recede and mining operations resume.

Whitehaven

Based in the Gunnedah Basin, Whitehaven relies on rail to freight its product to the Port of Newcastle.

While spared the massive downpours, the Gunnedah area faced disruptions as it was cut off from the Hunter Region floodwaters. The miner advised 3 days ago that its operations at mining sites, as well as at the Port of Newcastle, were hampered by the flooding.

When Motley Fool Australia reached for comment, a Whitehaven spokesperson advised there were no further updates regarding its operations.

Yancoal

Operating within the Hunter region, Yancoal advised today that production was resuming.

A company spokesperson told Motley Fool:

Production has now resumed at Yancoal’s open-cut MTW and Stratford/Duralie operations in the Hunter Valley region, following the recent heavy rainfall event. Further operational details will be provided in the 1Q 2021 production report, which will be released before the end of April.

ASX coal shares price snapshot

Both the Whitehaven and Yancoal share prices have surged over the last 6 months. Each company increasing value by 67.77% and 17.99%, respectively.

The recent rise in each companies’ share price is being attributed to the rise in coal price. Presently, coal is trading for US $92.22 a tonne, 53.37% higher than 6 months previously.

Whitehaven’s market capitalisation is $1.8 billion, while Yancoal’s is $2.9 billion.

More reading

• Some of the ASX 200 companies that drove Australian exports to record levels
• This primitive commodity is set to overtake the iron ore price rally
• What’s happening with the Whitehaven Coal (ASX:WHC) share price today?
• Why is the Whitehaven Coal (ASX:WHC) share price up 12% this month?
• How does China really feel about Australian iron ore and coal?

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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The Oxford-AstraZeneca PLC (LON: AZN) COVID-19 vaccine has travelled a bumpy road through its development and rollout. Marred with accusations of the vaccine causing blood clots, regulatory and government pressures have weighed on the drug developer and its acceptance.  

According to the latest press release from AstraZeneca, the company has revised the vaccine’s efficacy from 79% to 76%, following further analysis with an additional 49 symptomatic COVID-19 cases.

Details of the COVID-19 vaccine findings

After scrutiny from the US National Institute of Allergy and Infectious Diseases for purportedly out-of-date data in the original phase 3 preliminary study, AstraZeneca conducted a fuller analysis to lay any claims to rest.

The findings, which were published yesterday, included 32,449 participants. Of those participants, 190 were symptomatic with COVID-19. This provided the drug developer an additional 49 cases compared to its original analysis.

Following the double-blind placebo study, AstraZeneca found its vaccine to have an efficacy of 76% rather than the previous 79%. Notably, the vaccine was found to have a 100% efficacy against severe or critical disease and hospitalisation. Furthermore, for individuals aged 65 years or older, the vaccine proved to be 85% effective.

Perhaps most importantly, considering the swarm of allegations, the vaccine was well tolerated, and no safety concerns related to the vaccine were identified.

Commenting on the further substantiated results, Executive Vice President Mere Pangalos stated:

The primary analysis is consistent with our previously released interim analysis and confirms that our COVID-19 vaccine is highly effective in adults, including those aged 65 years and over. We look forward to filing our regulatory submission for Emergency Use Authorization in the US and preparing for the rollout of millions of doses across America.

Australia’s AstraZeneca rollout in progress

The COVID-19 vaccine rollout continues in Australia. On Monday the government commenced phase 1B of the rollout. Phase 1B includes the following priority groups:

• Elderly adults aged 80 years and over
• Elderly adults aged 70 years and over
• Health care workers not vaccinated in phase 1A
• Aboriginal and Torres Strait Islander adults over 55
• Adults with a specified medical condition
• Adults with a severe disability who have a specified underlying medical condition
• Critical and high-risk workers including defence, police, fire, emergency services, and meat processing

The AstraZeneca vaccine was also recently approved by the Therapeutic Goods Administration (TGA) for local production by CSL Ltd (ASX: CSL) in Melbourne.

The biopharmaceutical giant sent out its first batch on Wednesday morning, containing 832,200 doses. Production is expected to ramp up as the company targets 50 million doses by the end of the year.

More reading

• Is the CSL (ASX:CSL) share price on the road to recovery?
• 2 blue chip ASX 200 shares that could be strong buys
• Top brokers name 3 ASX shares to buy today
• Down 18%: Is the CSL (ASX:CSL) share price a buy?
• Is now the time to invest into the CSL (ASX:CSL) share price?

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 CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Aurizon Holdings Ltd (ASX: AZJ) share price dipped slightly lower today. That’s despite the company finalising a deal to sell its Queensland rail terminal to Pacific National for $205 million.

The deal, which was announced in 2017, was initially blocked by the Australian Competition and Consumer Commission (ACCC), following a lengthy legal battle.

At close of trade, shares in the railway operator were trading for $3.88 – down 0.77%. By contrast, the S&P/ASX 200 Index (ASX: XJO) finished the day 0.49% higher.

Let’s take a closer look at the deal and its history.

Aurizon’s $205 million deal

The Aurizon share price fell today despite the cash injection. In a statement to the ASX, Aurizon announced the deal to sell the Acacia Ridge Terminal in Queensland was finalised. Before today’s announcement, Aurizon had already received a $35 million, non-refundable payment. The remaining $170 million was received today.

The company expects a tax bill of $40 million from the sale. When the Foreign Investment Review Board cleared the sale in February 2021, the contract became unconditional.

The sale marks the final stage of Aurizon’s exit from its “loss-making Intermodal business,” according to the company. There were 2 other stages:

1. Closure of the Interstate intermodal business (outside Queensland) completed in December 2017
2. Sale of the Queensland Intermodal business to Linfox which was completed on 31 January 2019 ($7.3 million received by Aurizon).

Aurizon vs the ACCC

In 2018, the ACCC announced its intentions to block the terminal’s sale. The government body cited its belief the sale would lessen competition and “would deter a new entrant from providing interstate rail linehaul services in competition with Pacific National.”

In 2019, the Federal Court dismissed the ACCC’s objections to the deal. The agency subsequently appealed the decision to the High Court. In 2020, the High Court refused to hear the case and thus, the Federal Court’s decision stood. Aurizon and Pacific National completed the deal soon after.

Aurizon share price snapshot

Over the last 12 months, the Aurizon share price has fallen 8.27%. Before the coronavirus crash of March last year, Aurizon shares were trading as high $5.65 in 2020.

Aurizon has a market capitalisation of $7.1 billion

More reading

• Top brokers name 3 ASX shares to sell today
• Is Australia’s stagnant wage growth worse than we thought?
• The 3 highest paying ASX 200 dividend shares

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings 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 Mineral Commodities Limited (ASX: MRC) share price spent today in freefall after the termination of its CEO. The notice was issued after close of trade yesterday, with today being the first time investors had the chance to react. 

The Mineral Commodities share price opened 2.8% down on yesterday’s close, but by midday it was down by 20% and at close of trade it hit a 25% loss.

Let’s look deeper into the CEO’s sacking.

“The Board’s relationship with, and the provision of CEO services by, Mr Caruso became untenable” 

Mineral Commodities reported last night that Mark Caruso was forced out of the role of CEO due to a “breakdown” between himself and the board.

What caused the breakdown is a mystery, with the only explanation given by the company vague.

According to the company, the CEO’s sacking followed a “commencement of enquiries into a potential related party matter”.

Perhaps foreseeing enquires into what the matter may be, the company continued: “Those enquiries are ongoing and the company is unable to provide further detail at this time.”

Your guess is as good as mine as to what muddied the relationship between Caruso and the board. Such ambiguity likely didn’t help Mineral Commodities’ share price today.

Caruso had held the role of CEO at Mineral Commodities since 2012.

The company’s chair, David Baker, and its non-executive director, Russell Tipper, will now take on the role of acting CEO. The board will begin its search for a replacement CEO immediately.

In its statement the company described the situation as “regrettable”. Particularly given Caruso’s contribution to its growth.

The company finished its announcement by reiterating the apparent necessity of the move.

“The Board has resolved that it is in the best interests of the Company, and in line with its legal and governance obligations to proceed in this way,” it said.

Mineral Commodities share price snapshot

After today’s drama, the Mineral Commodities share price has lost any gains it has made on the ASX in 2021. It’s currently down 25% year to date. Though, it’s still up 58% over the last 12 months.

At the time of writing, Mineral Commodities’ share price is 27 cents, down from its previous close of 36 cents.

The company has a market capitalisation of around $164 million, with approximately 456 million shares outstanding.

More reading

• Aurizon (ASX:AZJ) share price dips despite finalising $205 million sale
• Here’s why the Food Revolution (ASX:FOD) share price jumped 8% today
• The ASX 200 keeps climbing, TPG drops on Teoh departure, AMP still has a CEO
• ASX 200 travel shares poised to see pent up travel demand unleashed
• Where to reinvest your Telstra (ASX:TLS) dividends

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 Food Revolution Group Ltd (ASX: FOD) share price had a very healthy day today. The share price was sent shooting for the sky after the company provided an update on sales of its product at Coles Group Ltd (ASX: COL), and new deals with Woolworths Group Ltd (ASX: WOW) and Metcash Limited (ASX: MTS).

The Food Revolution share price was as high as 4.4 cents today – up 18.5%. At close of trade, shares in the food producer had retreated and are trading for 4 cents each – up 8.11%.

Let’s take a closer look at Food Revolution’s announcement with Coles and Woolworths.

What did Food Revolution announce today?

In a statement to the ASX, Food Revolution Group announced Metcash will sell its ‘Juice Lab Super Shots’ from April. As well, Woolworths Supermarket and Metro stores will stock the item from May. On 9 March, the company began selling its products at Coles stores.

In its announcement, Food Revolution said sales for the 60mL drink were already exceeding expectations. Coles ranges the ‘Super Shots’ in over 1000 stores already. The group sells the drink in 3 varieties – ‘Focus’, ‘Immunity’, and ‘Digest’.

Coles sells the product for a base price of $3.50, although this week it is on special for $2.00.

Words from the CEO

Speaking on today’s announcement, Food Revolution CEO Tony Rowlinson said

We are delighted as to the positive response to Juice Lab Wellness shots by our retail partners. Having FOD’s largest customer Woolworths onboard is a fantastic outcome.

The initial consumer offtake in Coles has been excellent and the team have done a good job meeting the increased demand. With consumers globally seeking products that deliver against immunity and provide functional benefits due to COVID- 19, we are well positioned with our extended range of wellness beverages and carbonated beverages to be rolled out into the market.

Getting the Juice Lab shots ranged provides us with the catalyst to introduce extended Juice Lab offerings.

The company estimates the Australian health and wellness market to be valued at $650 million.

Food Revolution share price snapshot

Despite today’s impressive gains, Food Revolution has been on a downward trend over the past year. 12 months ago, shares in the company were swapping hands at 7.2 cents each – a 41.7% drop in share price at today’s rate.

In fact, at the end of 2018, the Food Revolution share price was as high as 20 cents.

Food Revolution’s market capitalisation is $33.2 million.

More reading

• 2 top ASX ETFs to buy right now
• Don’t ever buy defensive shares: fundie
• 2 ASX 200 blue chip shares to buy
• Why is the Woolworths (ASX:WOW) share price up 5% in a week?
• How are ASX 200 shares faring in the carbon revolution?

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The S&P/ASX 200 Index (ASX: XJO) rose by around 0.5% to 6,824 points.

One business lost its talisman founder and this saw a heavy decline of its share price.

TPG Telecom Ltd (ASX: TPG)

The TPG share price fell by around 7% today after it was announced that David Teoh is resigning from his position from being the chair and a director.

Mr Teoh shared some comments about his thoughts of the business and his decision to leave:

I am proud and humbled to have led the company from its founding, through its exciting growth over the years, and most recently into its merger with Vodafone Hutchison Australia. There have been many challenges along the way, but I firmly believe that consumers in Australia have greatly benefited from TPG’s competitive business approach, and that they will continue to do so.

I am leaving TPG Telecom in good hands with Inaki and has team, and I am confident in its strong future. After nearly 30 years leading TPG, I feel that now is the right time for me to hand over the reins and focus on other interests.

TPG’s management said that the integration is progressing well between Vodafone Hutchison Australia and TPG and it has made a strong start as a merged company. It is trying to make the most of its significantly increased scaled and opportunities.

Pointsbet Holdings Ltd (ASX: PBH)

Pointsbet has announced that Pointsbet USA and Penn National Gaming have agreed to extend the online gaming services framework agreement to provide Pointsbet with online sports betting and iGaming market access in Pennsylvania and Mississippi, subject to enabling legislation and licensure in each of those states. Pennsylvania currently permits online sports betting and iGaming.

The company will pay Penn National Gaming a portion of the net gaming revenues derived from each additional state.

Pointsbet Group CEO Sam Swanell said:

We are very excited about adding another two guaranteed online market access points to our portfolio in Pennsylvania and Mississippi. A mature, total addressable sports betting and iGaming market in Pennsylvania is estimated to be over US$1.75 billion per annum. Further, Pennsylvania is home to Philadelphia, the fourth largest media market in the United States, inclusive of southern New Jersey and a regional pillar of the Comcast-NBC Universal asset portfolio. NBC Sports Philadelphia owns the in-game broadcast rights to the Phillies, 76ers, and Flyers covering over 290 live events per year across 4.1 million households.

AMP Limited (ASX: AMP)

Today, AMP confirmed there has been no change to the CEO’s position and that Mr De Ferrari has not resigned despite the media speculation.

The ASX 200 financial business said that the board and Mr De Ferrari are working together and constructively discussing the future strategy and leadership of the group, after the completion of AMP’s portfolio review.

Those discussions are ongoing and AMP will provide updates as required.

More reading

• ASX stock of the day: Pilbara Minerals (ASX:PLS) tops the ASX 200
• Why Galilee Energy, Hansen, Polynovo, & TPG shares are tumbling lower
• AMP (ASX:AMP) share price takes wild ride on CEO’s future
• 2 top ASX ETFs to buy right now
• Why the CIMIC (ASX:CIM) share price is lifting this morning

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 and recommends Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings 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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When COVID-19 morphed from a concerning new virus into a global pandemic in February 2020, S&P/ASX 200 Index (ASX: XJO) shares took a beating like never before.

Indeed the 33% selloff the market endured in a period of just 1 month (21 February through to 20 March) ranks as the most ferocious and rapid bear market in ASX 200 history.

While no shares were entirely spared in the initial wave of panic selling, ASX 200 travel shares took some of the heaviest losses.

ASX 200 travel shares smashed by border closures

When domestic and international air travel ground to a virtual standstill the Qantas Airways Ltd (ASX: QAN) share price plummeted 64%. The Sydney Airport (ASX: SYD) was also ravaged, losing 42% in that same month.

While both Sydney Airport and Qantas have regained much of those losses, the 2 ASX 200 travel shares remain well below their early pre-pandemic levels as they await the return of high-volume air traffic.

At the current $5.96 per share, Sydney Airport’s share price is down 34% from where it was trading on 27 December 2019.

Qantas, currently at $5.11 per share, is down 30% since that same date.

With those figures in mind, shareholders and investors sitting on the sidelines are eagerly waiting for travellers’ pent-up demand to be let off the leash.

The travel bug unleashed

Max Levchin is the CEO of United States’ based payments company Affirm Holdings Inc (NASDAQ: AFRM).

As Bloomberg reports, Affirm Holdings has been “striking partnerships in industries where he expects consumer demand to bounce back post-pandemic“.

These include US listed travel shares American Airlines Group Inc (NASDAQ: AAL) Delta Air Lines Inc (NYSE: DAL).

Why?

Levchin says as travel option reopen he expects:

[A] quarter, or maybe a year, of unstoppable desire to not be in the same city or same four walls… Everyone wants to go to Miami right now, and it’s a pretty good preview of what’s going to happen – you’ll see a good amount of travel, experience buying, all sorts of fun stuff is coming our way.

Of course, that unstoppable pent-up demand for travel won’t last forever.

As Levchin says, “The question is, how long will it take for people to say, ‘OK, I’ve got the travel bug out of the way?”

More reading

• How does the Afterpay (ASX:APT) share price size up against US-listed Affirm?
• Is the Affirm share price dragging ASX BNPL shares lower?
• Qantas (ASX:QAN) share price lifts after ACCC ruling
• The Regional Express (ASX:REX) share price has fallen after fresh Qantas challenge
• Did Powell just blink first in the Fed’s staring contest with inflation?

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Delta Air Lines. 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 a Telstra Corporation Ltd (ASX: TLS) shareholder then you’ll be pleased to learn that today is payday. This morning the telco giant paid shareholders its fully franked interim dividend of 8 cents per share.

While many shareholders will use this for income or use its dividend reinvestment plan, others may want to reinvest these funds into other ASX shares. If that’s you, then you might want to take a look at these highly rated shares:

Goodman Group (ASX: GMG)

The first ASX share to look at reinvesting these funds into is Goodman Group.

Goodman develops and owns a high quality portfolio of assets across a number of countries. This portfolio has been curated with its gateway city strategy in mind.

Management’s focus is on investing in and developing high quality industrial properties in strategic locations. These are close to large urban populations and in and around major gateway cities globally. This is where demand is strong and transformational changes are driving significant opportunities.

An example of this is the company’s asset in Oakdale West Industrial Estate which is leased to Amazon Australia. Last week the company revealed that the fulfilment centre is on track for completion by the end of the year.

Once operational, the centre will house up to 11 million items and will be equipped with the most advanced Amazon Robotics technology to assist employees and serve customers.

Macquarie recently upgraded Goodman’s shares to an outperform rating and lifted its price target to $20.39.

Westpac Banking Corp (ASX: WBC)

If you’re looking for more dividends, then you might want to consider Westpac.

Although the big four banks have rallied strongly over the last few months, it doesn’t appear to be too late to invest.

Especially given the improving economic outlook, the booming housing market, the removal of dividend restrictions, and the relaxation of responsible lending rules.

One broker that believes the Westpac share price can continue to rise is Morgans. Last month the broker put an add rating and $27.50 price target on its shares. It is also forecasting fully franked dividends of $1.32 per share in FY 2021 and $1.43 per share in FY 2022.

Based on the latest Westpac share price of $24.34, this will mean 5.4% and 5.9% yields, respectively.

More reading

• Why the Telstra (ASX:TLS) share price just hit a 7-month high
• Why Galaxy, HUB24, Paradigm, & Telstra shares are pushing higher
• Why the Centuria Industrial (ASX:CIP) share price is gaining today
• Telstra (ASX:TLS) share price on watch following NZ update
• Don’t ever buy defensive shares: fundie

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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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If you’re currently in retirement or approaching it, you’ll probably be looking for ways to boost your income in this low interest rate environment.

But which ASX shares should you turn to? Two top options for retirees to look at are listed below. Here’s what you need to know about them:

BWP Trust (ASX: BWP)

BWP could be a good ASX share to buy for a retirement portfolio. It is a commercial real estate investment trust with a focus on warehouses.

The company generates the vast majority of its rental income from properties leased to home improvement giant Bunnings Warehouse.

At the last count, BWP leased 68 of its 75 properties to the hardware giant, making it the largest owner of Bunnings properties.

Given the strength of the Bunnings business, this has proven to be a big positive. Particularly for shareholders that have benefited from growing distributions over the last decade. And with Bunnings experiencing strong demand again in 2021, the future looks positive for BWP.

Ord Minnett is expecting the company to pay an 18 cents per share distribution in FY 2021. Based on the current BWP share price, this represents a 4.5% distribution yield.

Transurban Group (ASX: TCL)

Another ASX share to look at for a retirement portfolio is Transurban. It is one of the world’s leading toll road operators.

Given the quality of its roads, the time-savings they provide, and their strong pricing power, Transurban looks well-placed to resume its growth again once the pandemic passes and traffic volumes recover. This should be supported by new developments and growth projects over the coming years.

One broker that is positive on the company is Macquarie. It recently put an outperform rating and $14.76 price target on its shares.

Furthermore, the broker is forecasting dividends of 40.5 cents per share and 60.4 cents per share in FY 2021 and FY 2022, respectively. Based on the current Transurban share price, this equates to yields of 3.1% and 4.7% over the next two years.

More reading

• Why the Transurban (ASX:TCL) share price is on watch
• 3 ways to help protect your ASX share portfolio against inflation
• 2 quality ASX dividend shares to buy this month
• ASX 200 Weekly Wrap: Inflation fears hold ASX down
• 2 top ASX dividend shares to buy for your income portfolio

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban Group. 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 Hub24 Ltd (ASX: HUB) share price is zooming higher but this could be the perfect time to lock in profits, according to JPMorgan.

The Hub24 share price surged 5% to $21.80 in the last hour of trade and has increased by three-fold over the past year.

But JPMorgan thinks now is the time to sell the shares as it downgraded Hub24 to “underweight” (equivalent to a “sell”).

Margin squeeze triggers downgrade for Hub24

The downgrade comes after Hub24’s rival, the Netwealth Group Ltd (ASX: NWL) share price, said its deposit agreement with the Australia and New Zealand Banking GrpLtd (ASX: ANZ) was terminated.

The agreement paid Netwealth an enviable 95 basis point premium over the cash rate for deposits on its platform.

The cash rate is currently set at 0.1% by the Reserve Bank of Australia (RBA). You’d be hard pressed to find a rate close to 1% for your cash!

Small cut makes for material drop in earnings

“Cash margin drops straight through to EBITDA for HUB and NWL,” said JPMoran.

“And any repricing or downward pressure on the rate is likely to have a material impact on earnings.

“At a high level, cash margin currently accounts for ~34% of NWL’s FY21E EBITDA and up to 47% of HUB’s FY21E EBITDA.”

How low rates will hurt Hub24 and Netwealth share prices

The broker estimated that every 10-basis point (0.1%) decrease in the cash margin will cut around 4% off both companies’ earnings before interest, tax, depreciation and amortisation (EBITDA) figure.

“Given where interest rates are, and the messaging from the RBA, we have rebased our FY23 estimates to a cash margin of 55bps (i.e., 45bps over a 10bps overnight cash rate),” added JPMorgan.

“This translates into a ~20% reduction in FY23E EBITDA for both HUB and NWL.”

The cash rate is unlikely to move higher anytime soon too. The RBA has given a verbal commitment to keep the rate at record lows till 2024 at least as Australia cycles through the economic impact of COVID-19.

Valuation downgrade

The impact of JPMorgan’s revised cash margin assumption led to a drop in its 12-month price target on the Hub24 share price to $18.30 from $23.30 a share.

The Netwealth share price isn’t spared either. The broker’s 12-month target on the ASX share falls to $11.80 from $14.50 a share.

And in case you are wondering, JPMorgan’s recommendation on Netwealth is kept at “underweight”.

More reading

• What moved the Commonwealth Bank (ASX:CBA) share price this week
• Why Galaxy, HUB24, Paradigm, & Telstra shares are pushing higher
• Is it time to buy HUB24 (ASX:HUB) and Netwealth (ASX:NWL) shares?
• ASX 200 rises, Brickworks builds, Netwealth sinks
• Why Airtasker, Netwealth, Piedmont Lithium, & Resolute Mining are tumbling lower

Brendon Lau owns shares of Australia & New Zealand Banking Group Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd. The Motley Fool Australia owns shares of Netwealth. The Motley Fool Australia has recommended Hub24 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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