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The Santos Ltd (ASX: STO) share price has slipped into the red after the ASX oil share reported its FY23 result on Wednesday morning. Shares are trading down 1% at $7.33 at the time of writing.

Santos share price falls after weak result

• Sales revenue dropped 24% to US$5.9 billion
• EBITDAX (earnings before interest, tax, depreciation, depletion, exploration, evaluation and impairment) down 28% to US$4.1 billion
• Free cash flow from operations down 42% to US$2.1 billion
• Underlying net profit after tax (NPAT) down 42% to US$1.4 billion
• Statutory NPAT declined 33% to US$1.4 billion
• Final dividend of US 17.5 cents, up 16%

Santos advised that total revenue declined due to lower volumes and realised prices for its production. It also reported its unit production costs rose by 11% to US$7.61 per barrel of oil equivalent.

What else happened in FY23?

Santos reported that the Barossa gas project was now 67% complete, with the first gas expected in the third quarter of 2025. The pipeline that will deliver gas from the field to Darwin LNG was 68% complete, and more than 50% of the pipe had been laid.

The first Barossa well has been completed, and the second well is underway. Initial well flow rates are “in line with expectations”.

When complete, Barossa is expected to add 1.8 million tonnes per annum to the company’s LNG portfolio. The Santos share price has been affected by various stages of the Barossa project’s progress and environmental attention.

Regarding the Pikka project, Santos said phase one was now more than 40% complete, with first oil expected in the first half of 2026.

The ASX oil share also said that phase one of the Moomba carbon capture and storage project “remains on track” for the first injection in mid-2024.

What did Santos management say?

Santos managing director and CEO Kevin Gallagher said:

Today’s results demonstrate the capability of Santos to generate strong cash flow, develop major projects and deliver sustainable shareholder returns.

Our critical fuels are a necessary component in the energy security of Australia and Asia, and will be required to provide affordable and reliable energy whilst the world transitions to lower-carbon alternatives.

What’s next for Santos?

The ASX oil share provided guidance for 2024. It expects to produce between 84 to 90 million barrels of oil equivalent (mmboe). Sales volume is expected to be between 87 to 93 mmboe.

Santo expects capital expenditure related to sustaining capital, including decommissioning, to be around US$1.25 billion. Major project capital expenditure, including Santos Energy Solutions, is expected to be around US$1.6 billion.

The company’s guides for unit production costs are between US$7.45 to US$7.95 per barrel of oil equivalent.

Santos share price snapshot

Prior to today’s movements, the Santos share price had climbed 8.7% over the past year, compared to a 3.8% rise for the S&P/ASX 200 Index (ASX: XJO).

The post Santos share price slips on 42% profit drop in FY23 result appeared first on The Motley Fool Australia.

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• Why the Santos share price could surge in 2024 without Woodside

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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Passive income is a key goal of mine, and I’m now receiving a sizeable sum of annual dividends.

However I started with $0 several years ago, and it took time to grow.

It has been a volatile journey, and there were some dud investments along the way. But, I’m pleased with how things are going.

I’d say there are three things that have helped get me to more than $5,000 of annual passive income.

Regularly investing

It takes money to make money, including with the ASX share market. Compounding is a powerful tool, but I needed to add snow to the money snowball which can make it grow faster.

I’ve tried to invest in the ASX share market every month, with the size of the investment depending on how my household’s income and expenses play out each month.

Everyone’s finances are different, but let me demonstrate what investing $1,500 per month can do – if the portfolio returns an average of 10% per annum and grows for 10 years, the portfolio would become worth $287,000. My portfolio is worth nowhere near as much as that, but I can see how much growth can help my portfolio’s returns in the future.

A $287,000 portfolio with a 5% dividend yield would make $14,350 of annual dividends.

Choose businesses with growing passive dividend income

I have filled my portfolio with businesses that can deliver dividend growth and hopefully capital growth themselves. By making those picks, I believe that will mean I need to contribute less of my own money.

For example, in my portfolio, I own ASX dividend shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Brickworks Limited (ASX: BKW) and L1 Long Short Fund Ltd (ASX: LSF), which have been building a reputation for passive income growth.

Long-term dividend growth is an attractive feature. Annual dividend income of $100 which grows by 10% thanks to a dividend increase reaches $110 next year. That doesn’t sound like much.

Fast forward to receiving $5,000 of annual income – a 10% rise would take that to $5,500. That’s a lot of extra cash flowing in for one year.

That’s why I like looking at businesses that have a habit of delivering good dividend growth.

Investing during market dips

As I’ve mentioned, I do regularly invest every month. I’ve significantly increased the size of my investments when share prices drop heavily.

Low share prices can boost the dividend yield from ASX dividend shares. For example, if an investment has a 5% dividend yield and the share price drops 30%, the yield (for new investors) is boosted to 6.5%.

I invested heavily during the 2020 COVID-19 crash and during 2022 to supercharge my dividend income, with a particular focus on the listed investment company (LIC) WAM Microcap Limited (ASX: WMI). I like the growth potential of ASX small-cap shares, and the LIC normally pays a large dividend yield to shareholders.

Recently, I have been investing in a number of S&P/ASX 200 Index (ASX: XJO) shares that I think have long-term (passive dividend income) potential.

The post How I built $5,000 of passive income starting with $0 appeared first on The Motley Fool Australia.

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• Owners of Brickworks shares haven’t seen a dividend cut for 47 years!
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Motley Fool contributor Tristan Harrison has positions in Brickworks, L1 Long Short Fund, Wam Microcap, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia has positions in and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. 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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Earnings season has gone up a gear on Wednesday with a large number of results being released to the market.

Four results from the ASX 200 REIT sector that have dropped today are summarised below. Here’s how they performed during the half:

Charter Hall Group (ASX: CHC)

The Charter Hall share price is down 0.5% to $12.01. This morning, the property company reported operating earnings of $195.1 million and operating earnings per share of 41.2 cents. This was broadly in line with expectations, which has allowed management to reaffirm its guidance for FY 2024 operating earnings per share of 75 cents per share. Charter Hall is paying an interim distribution of 22.1 cents per share.

National Storage REIT (ASX: NSR)

The National Storage share price is down 0.5% to $2.31. This self-storage provider released its half-year results and reported a 6% increase in underlying earnings per share to 5.6 cents. This has allowed the company to reaffirm its FY 2024 underlying earnings per share guidance of at least 11.3 cents. Management has also reaffirmed its plan to distribute 90% to 100% of underlying earnings this year.

Scentre Group (ASX: SCG)

The Scentre share price is up 2% to $3.04. This morning, this shopping centre operator released its full-year results and reported a 2% increase in revenue to $2,510.3 million and a 16.7% lift in profit after tax to $1,069 million. In 2023, the company welcomed 512 million customer visits to its Westfield destinations and its business partners achieved sales of $28.4 billion. Scentre is paying a final dividend of 8.35 cents per share.

Stockland Corporation Ltd (ASX: SGP)

The Stockland share price is up 0.5% to $4.63. This follows the release of the ASX 200 REIT’s half-year results. Stockland reported statutory profit of $102 million, compared with $301 million a year earlier. In addition, the company’s funds from operations (FFO) came in at $266 million versus $353 million in the prior corresponding period. This reflects the material skew in Masterplanned Communities (MPC) settlement volumes to the second half. Stockland is paying a first-half distribution per share of 8 cents.

The post Here are 4 ASX 200 REITs results catching the eye on Wednesday appeared first on The Motley Fool Australia.

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• 3 high-quality ASX 200 dividend shares to buy for a second income
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The WiseTech Global Ltd (ASX: WTC) share price is charging higher today.

Shares in the S&P/ASX 200 Index (ASX: XJO) tech stock closed yesterday trading for $79.85. In morning trade on Wednesday, shares are swapping hands for $86.50, up 8.3%.

For some context, the ASX 200 is down 0.5% at this same time.

This follows the release of WiseTech’s half-year financial results for the six months ending 31 December (1H 2024).

WiseTech share price leaps on earnings boost

• Revenue of $500 million, up 32% from 1H 2023
• Earnings before interest, taxes, depreciation and amortisation (EBITDA) of 230 million, up 23% year on year
• Underlying net profit after tax (NPAT) of $128 million, up 5% from 1H 2023
• Interim fully franked dividend of 7.7 cents per share, up 17%

What else happened during the first half for WiseTech?

One of the biggest events during the half-year was WiseTech’s acquisition of MatchBox Exchange in October. The company notes this has further enhanced its CargoWise Landside Logistics.

And the WiseTech share price may be getting a boost from the 40% year on year increase in CargoWise revenue, which reached $421 million for the six months. This was driven by recent M&A as well as customer growth, including new Large Global Freight Forwarder (LGFF) rollouts.

In other strong financial metrics, the EBITDA margin of 46% came in ahead of expectations.

And the company reported a 13% increase in free cash flow from the prior corresponding half-year to $155 million.

As at 31 December, WiseTech had a total liquidity of $445 million from cash and undrawn debt facilities.

And the logistics software provider boosted its R&D investments by 54% year on year to $178 million, or 35% of total revenue. This helped deliver 576 new product enhancements over the six months.

On the cost front, WiseTech’s efficiency program was reported to be on track to deliver $15 million in net savings in FY24. The company is aiming for $40 million in annual savings.

What did management say?

Commenting on the results lifting WiseTech share price today, CEO Richard White said:

We continue to focus on enhancing our core CargoWise platform in pursuit of our vision to be the operating system for global logistics. Innovation remains a critical driver of our growth.

We have increased our investment in research and development over the last five years, investing over $1 billion to deliver more than 5,500 product enhancements which creates substantial value for our customers and underpins revenue growth…

Adding to our list of Top 25 Global Freight Forwarders, we have secured a CargoWise global rollout with Sinotrans, bringing our penetration of the Top 25 Global Freight Forwarders to 13, which is more than half of the Top 25. We also secured large global freight forwarder rollouts with APL Logistics and Yamato Transport, taking us to 49 LGFFs overall.

What’s next?

Looking at what might impact the WiseTech share price in the months ahead, the company reaffirmed its FY 2024 guidance range for revenue of $1.04 billion to $1.10 billion, an annual growth rate of 27% to 34%.

FY 2024 EBITDA is forecast to be in the range of $455 million to $490 million, with an annual growth rate of 18% to 27%.

And WiseTech lifted its full year EBITDA margin guidance range to between 44% and 46%, following on the EBITDA margin strength of the half year just past.

“Our highly cash-generative business model and strong liquidity continue to provide a solid platform to fund long-term sustainable growth,” White said.

WiseTech share price snapshot

The WiseTech share price is up 55% in 12 months.

So far, in 2024, the ASX 200 tech stock has gained 13%.

The post WiseTech share price leaps 8% today as revenues surge appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended WiseTech Global. The Motley Fool Australia has positions in and has recommended WiseTech Global. 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 Commonwealth Bank of Australia (ASX: CBA) share price is having a tough time on Wednesday.

In morning trade, the banking giant’s shares are down 2.5% to $114.10.

Why is the CBA share price sinking today?

Don’t worry, today’s weakness is not because of a bad update or a broker downgrade.

In fact, today’s decline could be classed as good news for investors.

That’s because the company’s shares are falling on Wednesday after trading ex-dividend for its upcoming interim dividend.

When a share goes ex-dividend, it means the rights to the forthcoming payout are now settled.

Basically, anybody that buys shares today will not receive the bank’s dividend when it is paid next month. Instead, it will go to the seller of its shares even though they don’t own them on the payment date.

In light of this, a share will usually drop in line with the value of the dividend to reflect this. After all, a dividend is part of a company’s valuation and you wouldn’t want to pay for something you won’t receive.

The CBA dividend

Last week, CBA released its half-year results and reported a 0.2% lift in operating income to $13,649 million and a 3% decline in cash net profit after tax to $5,019 million.

Despite this earnings decline, the CBA board elected to increase its interim dividend to a fully franked $2.15 per share. This was a 2.4% increase on last year’s dividend and meant a payout ratio of 72% (from 68% a year earlier).

Eligible shareholders can now look forward to receiving this payout next month on Thursday 28 March.

What’s next?

According to a note out of Goldman Sachs, its analysts expect a fully franked final dividend of $2.40 per share in August. This will bring its FY 2024 dividend to $4.55 per share.

The post Why is the CBA share price sinking on Wednesday? appeared first on The Motley Fool Australia.

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• High rates, falling profits: Why are ASX bank shares losing out this reporting season?
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. 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 Scott Phillips.

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Rio Tinto Ltd (ASX: RIO) shares are falling on Wednesday morning.

At the time of writing, the mining giant’s shares are down 2.5% to $124.90.

Why are Rio Tinto shares falling today?

Investors have been selling the company’s shares today after significant iron ore price weakness offset the release of an announcement ahead of its full-year results release tonight.

The benchmark iron ore price fell 5% overnight ti US$120.85 a tonne.

This has overshadowed news that Rio Tinto has signed Australia’s largest renewable power purchase agreement (PPA) to date to supply its Gladstone operations in Queensland.

According to the release, the 25-year agreement will see the company buy the majority of electricity from Windlab’s planned 1.4GW Bungaban wind energy project.

Combined with last month’s PPA for the Upper Calliope solar farm in Queensland, Rio Tinto will be the biggest industrial buyer of renewable power in Australia.

Rio Tinto will be buying 80% of all power generated from the Bungaban wind energy project over 25 years, with the remaining 20% of the project’s generated electricity supplying Australia’s National Electricity Market. The project is targeted to start in late 2025 and is expected to produce electricity by 2029.

Management notes that it is another major step in the work to repower the company’s Gladstone production assets, the Boyne aluminium smelter, Yarwun alumina refinery, and Queensland Alumina refinery.

Rio Tinto’s Chief Executive, Jakob Stausholm, was pleased with the agreement. He said:

This agreement with Windlab builds on our momentum in our work to repower our Gladstone operations and provide a sustainable future for heavy industry in Central Queensland. The task remains challenging, but we have a pathway to provide the competitive, firmed power our Gladstone plants need and we are continuing to work hard with all stakeholders, including the Queensland and Australian governments, on getting there.

Competitive capacity, firming, and transmission, are critical to developing a modern energy system that can ensure more large-scale renewables development in Queensland and help guarantee the future of Australian industry.

The post Rio Tinto shares tumble despite massive renewable power agreement appeared first on The Motley Fool Australia.

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More reading

• ASX mining shares up amid Labor plan to spend multibillions on renewables revolution
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is charging higher on Wednesday.

In morning trade, the pizza chain operator’s shares are up 4% to $41.30.

This follows the release of the company’s half-year results.

Domino’s share price higher on half-year results

• Network sales up 8.8% to $2.14 billion
• Same Store Sales growth of 1.25%
• Online sales up 11.8% to $1.71 billion
• Earnings before interest and tax (EBIT) down 5.3% to $107.9 million
• Net profit after tax down 13% to $62.3 million
• Unfranked interim dividend down 18.4% to 55.5 cents per share

What happened during the half?

For the six months ended 31 December, Domino’s reported an 8.8% increase in sales to $2.14 billion. This reflects a 1.25% increase in same store sales and an 11.8% lift in online sales.

The star of the show for the company was its Australia and New Zealand segment, which delivered its strongest top line growth in six years. This helped offset the previously disclosed significant weakness in Asia, which recorded an 8.9% decline in same store sales.

Things weren’t quite as positive on the bottom line, with Domino’s posting a 13% decline in net profit after tax to $62.3 million. Once again, it was the company’s Asia operations weighing on its performance. ANZ EBIT was largely flat, Europe EBIT rose 41.5%, and Asia EBIT sank 42.5%.

In light of its earnings decline, the Domino’s board elected to cut its interim dividend by 18.4% to 55.5 cents per share.

Management commentary

Domino’s Group CEO and Managing Director, Don Meij, acknowledged that it wasn’t a strong half but remains positive on the future. He said:

Today’s results show we are rebuilding, and the sales initiatives we have applied in Australia/New Zealand are getting traction in some of our international markets. They also show more is required to get the same results across all 12 of our markets.

The past 12 months have reinforced the importance of launching inspired new products, designed for delivery, to give customers more choice on more occasions – whether it’s a family bundle, a lunchtime offering, or an on-the-go snack. Our approach is unchanged; the difference in our performance across markets is our execution.

Outlook

One thing that is likely to be giving the Domino’s share price a lift today is management’s outlook commentary.

It notes that recent trading has demonstrated Domino’s successful approaches in one market have applications across multiple markets.

For the first seven weeks of the second half, its same store sales growth is as follows:

• ANZ up 8.39%
• Europe down 0.64%
• Asia up 0.34%

In respect to the Asia market, same store sales are now positive in the troubled Japan business (+6.7%). This could be a sign that the company has managed to turn around its fortunes at last.

Mr Meij concludes:

As we work to serve our customers across different countries, cultures and taste preferences, our customers share a common desire for high quality meals, delivered fast, at an affordable price. We believe Domino’s is well placed for this future, and we will work hard to deliver.

The post Domino’s share price charges higher on improving outlook appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has positions in Domino’s Pizza Enterprises. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Domino’s Pizza Enterprises. The Motley Fool Australia has recommended Domino’s Pizza Enterprises. 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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ASX growth stock Johns Lyng Group Ltd (ASX: JLG) is one of the most exciting S&P/ASX 200 Index (ASX: XJO) shares in my opinion.

Johns Lyng specialises in providing rebuilding and restoration services after insured events such as fire, storms and flooding.

There are four key reasons why I really like the ASX growth stock.

Strong catastrophe growth

The company has a growing catastrophe response division which is growing at a very fast rate.

It saw catastrophe revenue of $371.3 million in FY23, which was an increase of $125.3 million.

The ASX growth stock has increased its capabilities and presence, but there has also seemed to be an increasing number of damaging and expensive storms. This is increasing the volume of (potential) work for the company.

Storm activity in Australia and the US is obviously unpredictable, but it does seem to be happening regularly enough for the company to generate sizeable earnings, even if it’s lumpy.

Good core growth

The company’s insurance building and restoration services division is reporting impressive double-digit growth in each result – in FY23, its business as usual (BaU) revenue grew 32.2% to $775.3 million.

While we can’t assume that percentage growth rate will last forever, it’s compounding at a pleasing pace over time, which is making the business much bigger.

Thankfully, it seems like a scalable business, where the ASX growth stock’s profit can grow faster than revenue.

FY23 total revenue rose 43.2% to $1.28 billion, total earnings before interest, tax, depreciation and amortisation (EBITDA) grew 42.9% to $119.4 million and total net profit after tax (NPAT) went up 64.3%.

International expansion

When the company first listed several years ago, it had 20 locations nationally. It is now a multi-national business with 111 Australian and New Zealand locations and over 51 locations in the US.

It wasn’t too long ago that it expanded into New Zealand, opening further growth for the company.

The US is a massive market, where it could become a very sizeable player if it’s able to take material market share there. It was recently appointed to the Allstate emergency response and mitigation panel, which is one of the largest insurance companies in the US.

Management has also indicated that the ASX growth stock can take its business model to other countries.

Defensive expansion

As we can see, the core offerings of the business are compelling. I also like the additional growth that the business is creating by making acquisitions in adjacent areas where it can create synergies with the existing businesses.

One of the areas where it’s growing is in the strata/body corporate management space. Not only does this sector have annuity-like earnings each year, but it can also utilise Johns Lyng services where appropriate for repairs at repairs.

Another area that Johns Lyng has expanded into is fire, gas and electrical testing and compliance. Again, the earnings from this division can be annuity-like, and there are synergies that can be extracted.

I think the ASX growth stock can make numerous bolt-on acquisitions in the years ahead, which is a good tailwind.  

The post 1 attractive ASX growth stock for 2024 and beyond appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has positions in Johns Lyng Group. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Johns Lyng Group. The Motley Fool Australia has recommended Johns Lyng Group. 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 rise of the NVIDIA Corporation (NASDAQ: NVDA) stock price has been truly astonishing. Even by the lofty standards of the ‘magnificent seven’ US tech stocks like Alphabet, Amazon and Meta Platforms.

As recently as January last year, Nvidia shares were going for around US$148 each. Today, nothing can seem to stop this semiconductor stock‘s rise.

The company is now commanding a share price above US$690 – US$694.52 as of last night. That means that Nvidia investors have enjoyed a monstrous return of almost 400% in little over a year.

This jaw-dropping rise has resulted in Nvidia now commanding a market capitalisation of US$1.72 trillion. A few years ago, this would easily have been enough to grant Nvidia the title of ‘world’s most valuable stock’. But not today.

Despite having a market cap that is larger than many countries’ entire economies, Nvidia still trails behind valuation titans like Microsoft (US$3 trillion), Apple (US$2.82 trillion) and Saudi Aramco (US$2.06 trillion). Today, Nvidia is the world’s fourth-most valuable public company.

So Nvidia investors might be asking themselves today, particularly after the past few months’ stock performance, what it might take for their company to take out this crown.

What would it take for Nvidia to be the world’s most valuable stock?

One of the primary reasons why Nvidia shares have expanded in value in recent months has been a massive expansion in the company’s price-to-earnings (P/E) ratio – or what investors are willing to pay for $1 of Nvidia’s earnings.

As recently as October, investors were assigning a P/E ratio of around 55 to Nvidia shares. Today, investors are willing to pay an earning multiple of over 95 on those same shares.

This of course has been prompted by the explosive growth Nvidia has been reporting in recent months.

Back in November, we covered the company’s latest quarterly earnings report. This showed that, despite Nvidia’s gargantuan size, the company was able to grow its revenues by a blistering 206% year-on-year to US$18.12 billion.

Net income was up an even more unbelievable 1,259% to US$9.24 billion, helped by a rocketing gross margin of 74%.

So with numbers like that, it’s not hard to see why investors have doubled the premium they are willing to pay for Nvidia shares just over the past few months.

But even so, the fact remains that Nvidia is still more than US$1 trillion away from being the world’s most valuable company.

The likes of Apple and Microsoft are still growing their revenues and earnings at a healthy pace (although nothing like Nvidia has been).

So for Nvidia to have a shot at being number one, it will need to keep growing its numbers at the same pace it has for a few years yet. Or else investors will need to continue to expand the earnings multiple they are happy to pay for the company.

A $9 trillion company?

Of course, one, or even both of these scenarios are entirely plausible. In fact, some analysts reportedly think it’s likely. Here’s what one of our Fool colleagues over in the US recently wrote:

According to consensus estimates, Nvidia’s earnings could increase at an annual rate of 102% over the next five years. The company ended fiscal 2023 with earnings of $3.34 per share, meaning its bottom line could jump to $107 per share if it keeps doubling each year for the next five years.

Using the Nasdaq-100 index’s forward earnings multiple of 29 as a proxy for tech stocks, Nvidia’s stock price could hit $3,100 in five years. That would be 5x the company’s current stock price.

If the Nvidia stock price indeed increases by five-fold over the coming five years, it would be looking at a market capitalisation of almost US$9 trillion.

That could easily catapult the company to the largest on the planet – provided another stock doesn’t balloon at an even faster pace of course.

But only time will tell if this comes to pass.

The post Could Nvidia become the most valuable stock on earth? appeared first on The Motley Fool Australia.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has positions in Alphabet, Amazon, Apple, Meta Platforms, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet, Amazon, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool Australia has recommended Alphabet, Amazon, Apple, Meta Platforms, and Nvidia. 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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Woolworths Group Ltd (ASX: WOW) shares will be keenly monitored on Wednesday after the supermarket giant revealed its half-year results and a shock exit for its chief Brad Banducci.

What did the company report?

• Revenue up 4.4% to $34.64 billion
• Profit before significant items up 2.5% to $929 million
• Loss after significant items up 192.4% to $781 million
• Interim dividend 47 cents per share

The significant items were dominated by a $1.5 billion non-cash write-down of the Woolworths New Zealand business, which was forewarned last month.

The major news accompanying the result was that long-serving chief executive and managing director Banducci would retire on 1 September. He exits after 8.5 years in the role, to be replaced by the current boss of WooliesX, Amanda Bardwell.

What else happened in the first half?

A boardroom fight at the owner of Dan Murphy’s, Endeavour Group Ltd (ASX: EDV), has meant that Woolworths decided recently that it no longer has “significant influence” over that business with its 9.1% legacy stake.

That and the poor performance of the New Zealand business has meant the share price has spiralled 4% down over the past six months before trade on Wednesday.

What did management say?

“The group’s first half F24 result was mixed and reflects solid results from Australian Food and Australian B2B somewhat offset by the impacts of a very challenging trading environment on New
Zealand and BIG W. Encouragingly, customer scores have held up with Group VOC NPS of 50, down one point on the prior year. Customer care and shelf availability were the highlights. However, our customers’ concerns about the cost of living continues to impact our value for money scores, which remains our key focus for H2.

“It has been a privilege to be a member of the Woolies team and one I have never taken for granted. We have a wonderfully talented and passionate team at Woolworths Group, as personified in Amanda Bardwell, and I look forward to working with Amanda and our team over the next few months as we set ourselves up for the next chapter.”

Brad Banducci, chief executive and managing director

What’s next for Woolworths?

Customers continue to be cost-conscious, so the supermarket giant is treading lightly with margins and prices.

“Sales in the first seven weeks of H2 F24 have continued to moderate reflecting lower inflation and a more cautious consumer,” said Banducci.

“Delivering value for customers remains our number one priority for H2.”

In the Australian grocery business, sales increased by about 1.5% for the first seven weeks of the second half.

“While underlying cost inflation (including wages) in H2 is expected to remain high, we have a strong productivity pipeline in place for H2 (and into F25). However, EBIT growth in H2 is expected to be below H1.”

Woolworths share price snapshot

Before market open on Wednesday, Woolworths shares were down 2.3% for the past year. However, long-term investors have done okay with a 47.8% gain over the past half-decade.

The post Woolworths shares on watch after CEO exit and $781 million loss appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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 Scott Phillips.

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