Tag: Motley Fool Australia

On Wednesday, the S2 Resources Ltd (ASX: S2R) share price rose by 23.81% to $0.13 after the company announced that it had commenced drilling at its Finland site. 

What was in the announcement?

The company announced that initial diamond drilling had commenced at its 100% owned Aarnivalkea East gold target on the large Paana tenement in Finland. The mine is located 20km northwest of a 9 million ounce gold mine that is owned by another company.

The first drill test had revealed gold grades of up to 10.7 grams per tonne, accompanied by arsenic and bimuth, which can help in identifying a path to gold.

Drilling had been scheduled to start in March but had been delayed due to the effects of the coronavirus pandemic. The drilling is being undertaken by the company’s European-based workers, with virtual oversight by its Australian personnel until they are able to resume international travel.

The initial drilling program will consist of approximately ten diamond core holes, these are to be drilled on 3–4 traverses across the previously identified trend. The initial drilling will take about 3–4 weeks to be completed. According to the announcement, the site can be accessed year round for follow up drilling. 

About the S2 Resources share price 

S2 resources is a greenfields gold and base metals explorer. The company has exploration activities in Australia and Finland. According to the company, its exploration is based in mine-friendly areas. The S2 team primarily consists of former directors from Sirius Resources, which had success in nickel exploration.

The company recently discovered two gold prospects in Finland, one of which is being drilled currently.

At the end of the March quarter, S2 resources had $7.3 million cash plus 31% ownership of Todd River Resources Ltd (ASX: TRT). The company continued drilling for gold in Finland while drilling for nickel at two sites in Western Australia.

The S2 Resources share price is up 97% from its 52 week low of $0.066, and while it is flat on the start of 2020 it is up 18% since this time last year.

More reading

• Todd River Resources share price up 50% in 2 days after acquisition news

Motley Fool contributor Chris Chitty has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re planning to invest your money into the Australian share market, then one of the shares listed below could be worth considering whether you’re looking for growth, income, or value.

Here’s why I think these shares are in the buy zone:

Lendlease Group (ASX: LLC)

I think this international property and infrastructure company could be a top option for income investors. Although it has just released its unaudited results for FY 2020 and revealed a sharp decline in profit, I’m confident that the worst is now behind the company. In light of this, I think investors should focus on its long term outlook, which looks very positive thanks to its burgeoning global development pipeline. One broker that is positive on the company is Goldman Sachs. It recently declared its shares as a buy and forecast a 57 cents per share dividend next year. Based on the current Lendlease share price, this equates to a 4.8% dividend yield.

Telstra Corporation Ltd (ASX: TLS)

This telco giant could be a good option for value investors. At approximately 20x estimated full year earnings, I think Telstra’s shares are trading at an attractive level. Especially given its improving outlook and generous dividend yield. In respect to its outlook, I believe a return to growth could be on the cards in the near future thanks to its T22 strategy and the easing NBN headwind. In the meantime, I’m confident its 16 cents per share fully franked dividend is sustainable for the foreseeable future. Based on the latest Telstra share price, this works out to be a generous 4.7% dividend yield.

Xero Limited (ASX: XRO)

Finally, if you’re a growth investor, you might want to consider buying this cloud-based business and accounting software provider. I believe Xero is one of the best growth shares on the ASX and capable of generating very strong returns for investors over the 2020s. This is thanks to its high quality and sticky platform, high retention ratio, and massive global market opportunity. Combined, I expect them to result in strong earnings growth in the coming years.

More reading

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• Why brokers have just downgraded BHP and these ASX stocks today
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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 Xero. The Motley Fool Australia owns shares of and has recommended Telstra Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The PointsBet Holdings Ltd (ASX: PBH) share price has been a strong performer on Thursday.

In morning trade the sports betting company’s shares are up over 10% to $6.09.

Why is the PointsBet share price storming higher?

Investors have been buying PointsBet’s shares after it announced an agreement with BetMakers Technology Group Ltd (ASX: BET). That agreement will see it offer fixed odds betting on horse racing in New Jersey, subject to the receipt of all necessary regulatory and other approvals.

This follows BetMakers signing an exclusive 10-year agreement with New Jersey Thoroughbred Horsemen Association and Darby Development in February to deliver and manage fixed odds horse racing in New Jersey.

According to the release, the agreement sees Pointsbet offer fixed odds betting to New Jersey clients on all Monmouth Park race meetings. After which, it intends to expand the offering into New Jersey to include races and vision from other domestic and international jurisdictions, as and when such content is approved.

In addition to this, the agreement also provides the option for PointsBet to offer fixed odds betting on horse racing to clients in other US states via BetMakers in the future should the opportunity arise.

“Significant opportunity.”

PointsBet Group CEO and Managing Director, Sam Swanell, was pleased with the agreement.

He said: “Securing an agreement with BetMakers is a major step in what we believe to be an important strategy for our US plans. As a Company, we understand thoroughbred, harness and greyhound racing and we intend to capitalise on the expertise we have gained in Australia as we roll out racing products into the US market where legal, starting in New Jersey.”

“We see this as a significant opportunity. Annually, there are twice as many horse races in the US as there are in Australia, with a much larger total prize pool, however the amount wagered per capita in the US on horse racing remains a fraction of that in Australia,” he concluded.

BetMakers CEO, Todd Buckingham, spoke positively on the agreement. He commented: “BetMakers sees Pointsbet as a perfect partner to launch Fixed Odds in the US. We have a great working relationship with Pointsbet, which is one of the fastest growing bookmakers in Australia and the burgeoning US market.”

This news has gone down well with BetMakers shareholders as well. At the time of writing the BetMakers share price is up over 10% to 42 cents.

More reading

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• ASX 200 closes 0.4% higher, Cochlear share price up 6%
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• PointsBet share price zooms 5% higher on Detroit Tigers deal

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The gold price hit a nine-year high and could re-test its record highs later this year even as growing risk appetite pushed share markets higher in overnight trade.

The positive trading session on Wall Street sets up the S&P/ASX 200 Index (Index:^AXJO) for early gains with the futures market tipping a 0.8% rally.

It’s not normal for gold to run higher when risk assets are in vogue, but we aren’t living in normal times.

Gold heading to new highs

The price of the precious metal gained over a dollar to trade at US$1,810 an ounce, the best it’s been since 2011.

This means commodity has returned a little over 30% over the past year, and that’s a little ahead of the outperforming tech-laden Nasdaq Composite (INDEXNASDAQ: .IXIC).

If it can consolidate around the US$1,800 mark, there’s a good chance it can push towards its all-time peak of US$1,920 an ounce that it reached in September of that year.

COVID-19 cure won’t kill the gold bull

I think there’s a good chance we could see the precious metal try to re-take the record over the coming months.

Even if the COVID-19 pandemic was to die down, I don’t think that’s enough to kill gold’s bull run!

Don’t get me wrong, the devastating impact of COVID-19 on the world’s economy is a big supportive factor for the safe haven asset.

The fact that no one knows how the coronavirus playbook ends will continue to put the yellow metal on a pedestal.

Bigger drivers for ASX gold stocks

However, the pandemic is not the biggest driver for the gold price, which was already on an uptrend since late 2018 – long before anyone’s even heard of COVID.

What’s really driving gold is low interest rates and big cash injections by central banks into the financial system.

These stimuli will remain long after a vaccine for the virus is found because the path to economic recovery always takes longer than the fall into recession.

Why gold can keep outperforming post crisis

What will take even longer to fix are government deficits and debt. I am not referring only to Australia but to the US, and that will weigh on the US dollar, particularly once the coronavirus emergency is over.

I believe this explains why the gold price only peaked more than two years after the GFC as the greenback remained weak for a number of years after the financial crisis.

The outlook for the Newcrest Mining Limited (ASX: NCM) share price, Evolution Mining Ltd (ASX: EVN) share price and St Barbara Ltd (ASX: SBM) share price shines bright.

But don’t just buy one or two gold miners. You should buy a basket of them as production issues and company-specific risks can cause you to lose money even if you got the macro call right.

More reading

• Will retail vacancies hurt the Vicinity Centres share price?
• 5 things to watch on the ASX 200 on Thursday
• Altium and these ASX 200 shares could be quality buy and hold options
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• Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie

Motley Fool contributor Brendon Lau owns shares of Evolution Mining Limited and Newcrest Mining Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Retail vacancies are on the rise in Australian cities, but will this hurt the Vicinity Centres (ASX: VCX) share price this year?

Are retail vacancies really climbing in 2020?

They are according to an article in yesterday’s Australian Financial Review. The Australian Retailers Association says vacancy rates hit record levels of more than 20% in Melbourne’s Chapel Street and Bridge Road shopping strips.

Sydney hasn’t been immune either, with vacancies climbing in Oxford Street among other areas.

CEO of the Association, Paul Zahra, said retail strip landlords were ‘living in a different world’ and had ‘continued to hike up rents’.

So, are rising retail vacancies a red flag for retail real estate investment trusts (REITs) in 2020?

What does this mean for the Vicinity Centres share price?

Vicinity Centres shares have been under pressure in 2020. In fact, after slumping 3.7% lower in yesterday’s trade, the Aussie REIT is down 47.2% for the year. That means Vicinity is significantly underperforming the S&P/ASX 200 Index (ASX: XJO).

I don’t necessarily think rising vacancies in retail strips is a worrying sign for Vicinity Centres. The REIT owns and operates large shopping centres including Chadstone in Melbourne and DFO Homebush in Sydney.

On the other hand, it is quite likely these trends are a symptom of wider difficulties for Aussie retail. There is certainly an accelerating trend of online shopping due to the coronavirus pandemic. However, we could also see shopping centres capture some trade from retail strips if vacancies continue to climb.

So.. it’s all good news for Vicinity Centres?

Not so fast. While rising retail strip vacancies could be a minor positive for Vicinity Centres shares, there are still plenty of headwinds.

Retail REITs like Vicinity and Scentre Group (ASX: SCG) are struggling in 2020. Investors are wary of buying in with so much uncertainty surrounding operations and shopper demand on the horizon.

I think it’s hard to see a strong rebound in Aussie retail REIT funds from operations (FFO). That’s especially the case with Victoria re-entering lockdown as of last night. I’d expect to see a careful approach towards re-opening retail stores to their full capacity over the next 12-24 months.

Coronavirus restrictions are certainly a headwind for the Vicinity Centres share price in 2020. Less foot traffic means more trouble for tenants and their landlords. There’s also the unknown around consumer spending patterns in the short to medium term.

Given the Aussie REIT is trading down 47.2% this year, a significant discount has been baked into the price. However, I’m not bullish enough on retail real estate to buy in, given the uncertainty facing the industry right now.

More reading

• Gold jumps to 9-year high with record highs in sight
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• Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Recce Pharmaceuticals Ltd (ASX: RCE) share price is on watch today after the company announced it has entered into an antiviral Sars-CoV-2 screening program. Recce (pronounced ‘recky’) is pioneering a new class of synthetic antibiotics to overcome the urgent global health threat posed by drug-resistant superbugs and secondary bacterial infections associated with viruses such as COVID-19.

These antibiotics are called bactericidal. Therefore, they kill bacteria instead of inhibiting their growth. Consequently, they can still be effective even with repeated use. 

Recce’s intellectual property portfolio consists of 30 issued patents and patent applications. These span the world’s major markets including the United States, Europe, Japan, China and Australia.

Why is the Recce share price on watch?

Following a trading halt that began on Monday afternoon, yesterday Recce announced it has entered into an antiviral SARS-CoV-2 screening program agreement. The agreement is with The Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the University of Melbourne at The Peter Doherty Institute for Infection and  Immunology (Doherty Institute).

Two of Recce’s compounds were selected in the Priority 1 candidate group for the SARS-CoV-2 antiviral screening program. To clarify, for those of us without medical doctorates, SARS-CoV-2 is the virus that leads to the COVID-19 disease. 

A panel of scientific experts in virology, antivirals, and medicinal chemistry assessed submissions, in addition to clinical trials. Moreover, only compounds with the highest likelihood of antiviral or antiseptic impact received Priority 1 status. This means they are eligible for stage 1 laboratory screening trials. 

The two compounds selected are RECCE® 327 and RECCE® 529. The Program is part of the Australian Government’s efforts to identify promising anti-viral candidates and fast-track research into potential treatments for COVID-19. The antiviral focus of the compounds may also see potential benefit against secondary bacterial infections.

Management comments

Dr. John Prendergast, Recce Pharmaceuticals Non-Executive Chairman said, “We are very pleased to have been selected by the CSIRO, one of the largest and most diverse scientific research organisations in the world, to investigate the efficacy of two of our promising compounds against SARS-CoV-2. The compounds’ unique, universal mechanisms of action indicate potential to attack a broad range of viruses and as well, overcome the threat of viruses’ typical hyper-mutation into new and deadly pathogens.”

Recce share price

The company’s primary focus for its RECCE® 327 compound has been to address the unmet need for an effective treatment for sepsis. Sepsis is a life-threatening, inflammatory response to infection that has spread in the body.

To illustrate the size of Recce’s potential addressable market, sepsis kills more people in the US than prostate cancer, breast cancer and HIV/AIDS combined. According to the company, there have been 48.9 million reported cases of sepsis and 11 million associated deaths worldwide. 

The Recce share price has increased 100% year to date and closed at 68 cents on Monday before the pause in trading. This values the company at $92.53 million. The company’s shares, which currently do not pay dividends, resume trading this morning. 

More reading

• Praemium share price rockets after agreeing $55.6 million Powerwrap takeover
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• Gold jumps to 9-year high with record highs in sight

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Treasury Wine Estates Ltd (ASX: TWE) share price will be on watch on Thursday after the release of a business update.

What did Treasury Wine announce?

This morning Treasury Wine provided the market with an update on its performance in FY 2020.

According to the release, the wine company expects its earnings before interest, tax and the agricultural accounting standard SGARA (EBITS) to be between $530 million and $540 million in FY 2020. This compares to its EBITS of $662.7 million in FY 2020.

Management advised that this reflects the impact of the COVID-19 pandemic, which has had a significant impact on its trading performance across all geographies throughout the second half.

Things would have been worse had it not been for cost management initiatives. These initiatives have seen reductions in costs of doing business, including no payment of any discretionary employee incentives which relate to FY 2020 performance outcomes.

The main drag on its performance has been its Americas business, which is expected to report a 37% decline in segment EBITS in FY 2020.

Elsewhere, Treasury Wine expects ANZ segment EBITS to decline 16%, EMEA segment EBITS to fall 18%, and Asia segment EBITS to fall 14%.

Current trading conditions.

Treasury Wine also provided investors with an update on current trading conditions. In China, the company advised that it continues to see positive signs in relation to both consumption and sales depletion recovery following the continued reopening of the country.

But while recent trends are positive, management remains cautious on the short to medium term outlook. It notes that gatherings and social occasions, which drive consumption of luxury wine, are yet to fully recover to previous levels.

In the Americas, and the United States in particular, the company revealed that the retail channel has seen strong value and volume growth across all price points since March. It notes that continued premiumisation is driving 20%+ value and volume growth in luxury and masstige portfolio price points versus the prior year.

Australian vintage update.

The company also revealed that its 2020 Australian vintage (V20) has been impacted by extreme heat during key stages of the growing season.

This has resulted in a smaller volume, higher cost vintage for the company, with total intake approximately 30% lower than the prior year.

Cost impacts from V20 are expected to lead to higher commercial and masstige costs in FY 2021. This is expected to impact all of its sales regions, but will be most notable in the ANZ and EMEA regions.

Strategic update.

Management advised that it has completed the implementation of its new operating model in the United States and expects it to deliver annualised cost savings of at least $35 million in FY 2021. It has also commenced the potential divestment of selected commercial wine brands, which are expected to deliver an acceleration in its premiumisation strategy in the Americas.

And finally, the company continues to look into the potential demerger of its Penfolds business. It advised that recent work supports the view that value will be created by the demerger.

Treasury Wine’s new Chief Executive Officer, Tim Ford, commented on today’s update.

He said: “The second half of fiscal 2020 has been a unique period for the industry and all of the communities in which we operate. I am proud of the way that our people, customers and suppliers have managed through the disruptive impacts of the COVID-19 pandemic giving me continued confidence in our team, brands and operating models and their combined strength.”

“While it is right to remain cautious on the near-term outlook, given uncertainty remains around the timing and pace of recovery in our key markets, we remain optimistic around our return to both margin and profit growth,” he added.

More reading

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• Renewed US-China trade war puts these ASX 200 stocks in the firing line

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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A few weeks ago I wrote an article about why the Afterpay Ltd (ASX: APT) share price could hit $100 in 2020.

It might have seemed crazy at the time, but now leading broker Morgan Stanley is tipping the group’s shares to hit $101.

Why was I bullish on the Afterpay share price?

When I wrote that article on 17 June, the group’s shares were trading at $56.52 with a market capitalisation of $15.1 billion.

It was my view that the ability to maintain a low bad debt expense and continue growing retail merchant networks were key to Afterpay’s future growth. Successful international expansions including the United States and the United Kingdom were another big part of my bullish cash.

At the time, many might have thought the Afterpay share price had topped out. However, the buy now, pay later group’s shares have continued to climb and closed at $66.00 per share yesterday.

What did Morgan Stanley say in its research?

Perhaps unsurprisingly, the leading broker highlighted many of the same themes carrying the Afterpay share price in 2020.

According to an article in the Australian Financial Review, Morgan Stanley is tipping Afterpay to hit $101. That’s a significant increase from its previous price target of just $36 for the buy now, pay later share.

Morgan Stanley said in a note to clients that Afterpay was ‘demonstrating better-than-expected credit quality control, while accelerating sales growth and diversifying away from the fashion category’.

The broker’s most optimistic scenario even had the Afterpay share price tipped to hit $242.80.

Why is everyone so bullish on Afterpay?

Consistently strong trading updates have been the key to Afterpay’s strong share price gains.

That includes Tuesday’s ASX announcement highlighting that underlying Q4 FY20 sales were up 127% year-on-year to $3.8 billion.

The group’s Net Transaction Margin for FY20 is expected to be approximately 2%, which Afterpay sees as the key to longer-term profitability.

Yesterday, Afterpay advised it has successfully raised $650 million through an institutional placement. This will be followed by a $150 million share purchase plan and comes as the company looks to strengthen its balance sheet and fund further expansion in 2020.

That expansion looks set to continue overseas with Afterpay targeting growth in Canada in Q1 FY21.

Would I buy Afterpay shares?

I think there are a lot of tailwinds for the Afterpay share price right now. The group’s trading update on Tuesday showed strong current sales, strategic expansion plans and, overall, painted a pretty good picture.

However, at $66 per share, I’m not sure I’d be buying in right now. While I wouldn’t be surprised to see the Afterpay share price hit $100 in 2020, it looks to be speculative given its astronomic price-to-revenue ratio.

More reading

• 5 things to watch on the ASX 200 on Thursday
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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Is the Westpac Banking Corp (ASX: WBC) share price a buy?

Westpac shares have actually fallen by more than 10% over the past month. The last five months have been a rollercoaster for ASX banks. The Westpac share price fell by 46% between 21 February 2020 and 23 March 2020. It has since rallied 26% higher from the low.

There are a couple of important points about why Westpac’s share price is justifiably higher than it was a few months ago

As one of the big four ASX banks, Westpac’s performance is linked to how the broader economy. Things were looking grim in March 2020 when it was estimated that the jobkeeper package would cost $130 billion. But then it turned out that that estimate was probably $60 billion too high. Less damage to the economy should mean less damage to the Westpac balance sheet.

CoreLogic releases a monthly update about house price movements. Whilst May and June have shown a bit of a decline, there hasn’t been a widespread crash that some economists were fearing.

The second reason to be positive about the Westpac share price is that Australia has mostly gotten COVID-19 under control. Every state except Victoria is reporting there isn’t any community transmission going on. Victoria was also reporting very limited community spread a few weeks ago.

A negative turn

The introduction of lockdowns in Melbourne is definitely not what anyone wanted. A return to limited economic activity will save lives, which is the most important thing. It will mean a slower recovery for the overall economy and the second outbreak could cause a lot more financial pain in Australia’s second biggest city.

It’s a good thing that banks have announced they will extend loan repayment holidays for another four months if borrowers are still experiencing financial hardship. That includes other big ASX banks like Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ). The extension will give borrowers more time to recover from the COVID-19 impacts and hopefully avoid a wave of fire sales of property across the country.

When Westpac released its FY20 half-year result (HY20) it increased its provisions for expected credit losses to $5.8 billion, which included approximately $1.6 billion of additional impairment charges predominately related to COVID-19 impacts. Only time will tell whether this estimate was too low or about right.

The overall HY20 result was pretty tough for shareholders. Cash profit was down 70% to $993 million. Even after excluding ‘notable items’, cash profit was still down 44% to $2.3 billion. Investors were expecting this type of result, it’s why the Westpac share price was down so heavily. 

Another problem on the horizon is the upcoming AUSTRAC penalty for failing to properly report some international transfers. Westpac provisioned $900 million for the fine but it could end up being $1 billion or more.

Is Westpac a good ASX share to buy at this price?

A few months ago I was saying that ASX banks could be decent buys if the recovery was faster than expected. That seems to have happened – Australia is largely heading in the right direction. That’s why the Westpac share price is higher than it was in March and April 2020.

But I don’t think Westpac is out of the woods yet. The RBA interest rate is now very low at just 0.25%. It’s hard for banks to maintain their net interest margin (NIM) if the central bank rate is very lower. A lower NIM will probably result in a lower net profit for Westpac. Interest rates could be very low for some time. 

I don’t think we can buy Westpac shares for the dividend. The interim dividend was deferred and I think the final dividend will probably be reduced by at least 50%.

Westpac is trading at 13x FY21’s estimated earnings. I don’t think it’s cheap enough to warrant buying at this price considering all of the economic uncertainty over the next 12 months.

More reading

• Forget term deposits and buy these strong ASX dividend shares
• ASX 200 down 0.5%: Afterpay completes placement, big four banks tumble
• AFG share price flat despite revealing 30% increase in lodgements
• These ASX shares are swept up by the new Victorian COVID-19 lockdown
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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Wednesday the S&P/ASX 200 Index (ASX: XJO) was out of form and tumbled notably lower amid coronavirus concerns. The benchmark index fell 1.5% to 5,920.3 points.

Will the market be able to bounce back from this on Thursday? Here are five things to watch

ASX 200 expected to rebound.

It looks set to be a better day of trade for the ASX 200 on Thursday. According to the latest SPI futures, the benchmark index is expected to open the day 46 points or 0.8% higher. This follows a positive night of trade on Wall Street which saw the Dow Jones rise 0.7%, the S&P 500 climb 0.8%, and the Nasdaq jump 1.45%. The latter index saw Apple shares hit a record high overnight.

Afterpay share price tipped to hit $101.

The Afterpay Ltd (ASX: APT) share price has been an incredible performer this year but could still go a lot higher from here. This is the view of analysts at Morgan Stanley. According to the AFR, a note to clients on Wednesday evening reveals that the broker has lifted its price target from $36.00 to $101.00. It notes that it is “demonstrating better-than-expected credit quality control, while accelerating sales growth and diversifying away from the fashion category.”

Oil prices rise.

Energy producers such as Beach Energy Ltd (ASX: BPT) and Santos Ltd (ASX: STO) could push higher after oil prices recovered overnight. According to Bloomberg, the WTI crude oil price is up 0.65% to US$40.88 a barrel and the Brent crude oil price is up 0.5% to US$43.31 a barrel. Improving gasoline demand in the United States supported oil prices.

Gold price jumps again.

Gold miners including Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Limited (ASX: NCM) could be positive performers today after the gold price jumped again. According to CNBC, the spot gold price pushed 0.45% higher to US$1,818.40 an ounce. Demand for safe haven assets supported the price of the precious metal.

Vicinity share purchase plan flops.

The Vicinity Centres (ASX: VCX) share price will be on watch after revealing that its share purchase plan flopped. The shopping centre operator’s non-underwritten share purchase plan was aiming to raise $200 million but fell well short of this. Vicinity Centres was only able to raise $32.6 million after receiving just 2,400 applications from eligible shareholders. This follows the successful completion of a $1.2 billion institutional placement at $1.48 per share at the start of June.

More reading

• Altium and these ASX 200 shares could be quality buy and hold options
• ASX 200 drops 1.5% today, Afterpay falls 3%
• Why it’s time to rotate out of JB Hi-Fi share price and these popular ASX stocks: Macquarie
• 2 reasons early super withdrawal might be a bad idea
• Top brokers are urging investors to buy these ASX stocks today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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