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The Zip Co Ltd (ASX: ZIP) share price crashed to a near four-year low this morning as the ASX tech sector came under intense selling pressure.

The S&P/ASX All Technology Index (ASX: XTX) shed almost 6% shortly after the open following a poor lead from its US counterparts. This makes the tech sector the worst performer so far today.

Inflation fears pressuring the Zip share price

The higher-than-expected inflation reading from the world’s largest economy is stoking the fires of fear. Overnight it was revealed that US inflation is currently at 8.3%, which remains close to the 40-year high of 8.5% recorded in March. Investors are worried that the US Federal Reserve will have to aggressively raise interest rates to cool rising prices.

Higher rates are bad news for risk assets, particularly growth shares which typically trade at a premium with little to no profits.

Given how globalised markets are, rising US rates could also put more pressure on the Reserve Bank of Australia to lift rates here.

More bad news

Little wonder the Zip share price has lost a further 5% to hit 95.5 cents at the time of writing. It was only two days ago that the buy now, pay later (BNPL) share crashed under $1 due to much to the same headwinds.

But there could be more bad news for long-suffering Zip shareholders. Charities and consumer groups are calling for tighter regulation on the BNPL sector – no matter who wins government this month.

The surging cost of living is pushing more vulnerable consumers to use BNPL services to pay for daily essentials, according to these groups.

How the Zip share price is performing

Zip isn’t the only ASX tech share feeling the pain from the wider tech sell-off this morning. Shortly after open, the Block Inc (ASX: SQ2) share price crashed 15.8% to a new 52-week low of $102. The Splitit Ltd (ASX: SPT) share price lost 7.1% to 26 cents and Humm Group Ltd (ASX: HUM) shed 2.7% to 72 cents.

However, over the past year, the Zip share price has been the laggard within the group. Zip shares have collapsed 85%. The Block share price is down 41% and the Splitit share price has lost 60%. The Humm share price is faring better with a more modest 17% decline.

The post Zip share price tumbles 5% to another multi-year low appeared first on The Motley Fool Australia.

More reading

• How much further can ASX 200 tech shares tumble? Macquarie weighs in
• Why AUB, Block, BrainChip, and Pushpay shares are sinking
• ASX 200 tech shares are staging a remarkable recovery today
• Technophobia? Why ASX 200 tech shares are getting hammered again
• It’s happened: Zip share price tumbles below $1 for first time since 2018

Motley Fool contributor Brendon Lau has positions in Block, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Block, Inc. and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended Block, Inc. The Motley Fool Australia has recommended Humm Group 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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Shares in Orica Ltd (ASX: ORI) are lifting from the open today amid the release of its half yearly report and set of accounts.

At the time of writing, the Orica share price is resting at $16.38 after pushing more than 4% higher on the day.

In wider market moves, the S&P/ASX 200 Materials Index (ASX: XMJ) is flat from the open, currently resting at 16,722.

Orica grows earnings per share 94%

• Sales revenue of $3,277 million during the half, up $2,623 million the same time last year
• Statutory net loss after tax (NLAT) of $85 million down from statutory Net Profit After Tax (NPAT) of $79 million in the prior corresponding period (pcp).
• Underlying EBIT of $245 million, up 58% on the pcp
• Ammonium nitrate (AN) volumes of 2.0 million tonnes up 5% on the pcp
• Underlying earnings per share (EPS) of 36.1 cents, up 94% on the pcp
• Net debt of $1.6 billion and gearing at 38.3%, apparently within target range
• Unfranked interim dividend of 13.0 cents per ordinary share, representing a payout ratio of 41%

What else happened this period for Orica?

Orica printed sales revenue for the half of $3,277 million, a 25% jump on the same period last year. This carried through to a NLAT of $85 million, well down on the pcp’s $79 million net profit.

Part of the loss was underscored by a $61 million tax payment and a net loss on sale of Minova after tax of circa $91 million.

Total capital expenditure (CAPEX) was apparently in line with expectations for the first half. On this, Orica expects its full year CAPEX to remain in line with forecasts of $340 million–$360 million.

Meanwhile, underlying EBIT came in at $245 million which represented a circa. 60% gain on the year. Even with the half-year loss, Orica managed to declare a 13 cents per share dividend on a 41% payout ratio.

Shareholders can expect the payment into their brokerage accounts on 8 July 2022, per the company’s release.

Orica also mentioned its gearing remains at around 38% which is within the target range of 30–40%.

Management commentary

Speaking on the results, Orica Managing Director and CEO Sanjeev Gandhi said:

Our first half result reflects the relentless efforts of our team in improving performance, in line with our refreshed strategy that we outlined in November 2021. Focusing on three value drivers that aligns with Orica’s strengths, the refreshed strategy aims to deliver solutions and technology that drive productivity and innovation for customers and provide enduring value to shareholders and other stakeholders.

What’s next for Orica?

Orica mentioned that it expects performance to continue into H2 FY22.

Regarding its forecasts, Gandhi said:

We expect steady commodity growth, particularly in gold, copper and quarry and construction in the second half which will continue to drive demand for our products and services.

We expect the momentum in earnings from the underlying businesses to continue, despite the planned exit from our operations in Russia, the supply chain challenges associated with Russia-Ukraine, and the divestment of Minova.

Orica share price snapshot

In the last 12 months, the Orica share price has gained 22% after climbing another 20% this year to date.

The post Orica share price spikes amid 25% jump in sales revenue appeared first on The Motley Fool Australia.

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

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

What happened 

The news in the crypto market continued to get worse after Tuesday’s de-peg of TerraUSD (CRYPTO: UST) from the U.S. dollar, as well as the drop in Bitcoin (CRYPTO: BTC). This has effectively caused a cascade of selling and has led to outright panic in some circles. And even the most useful crypto assets are down big Wednesday. 

At noon ET, the value of Ethereum (CRYPTO: ETH) had fallen 3.6% in the prior 24 hours, Solana (CRYPTO: SOL) had dropped 19.9%, and Cardano (CRYPTO: ADA) was down 13.2%. 

So what 

The biggest news of the day was that the TerraUSD stablecoin lost its peg to the dollar. That token’s value fell to as little as $0.30 or so, and as of late Wednesday afternoon, was still only at $0.63. This crisis in what was viewed previously as a safe asset has created a cascade of impacts and drops in the prices of nearly all major tokens. According to Coinglass.com, $859 million worth of cryptocurrency positions have been liquidated in the last 24 hours alone, and if prices continue to fall, that number will likely go higher.

When such big tumbles occur, broad panic can set in. That’s what we’re seeing Wednesday with relatively smaller market cap tokens, like Solana and Cardano. Selling leads to more selling, and because those tokens have no tangible assets to fall back on, there’s no clear floor underneath their prices.

Ethereum, which is a top token for use in smart contracts, was actually holding up relatively well, which shows some of the strength in leading cryptocurrencies on a relative basis. 

It doesn’t help that the stock market is also dropping this week. The quarterly earnings reports that companies have been delivering haven’t been as strong as some investors expected, and that’s leading to a further “risk off” trade in the market. Cryptocurrencies are highly risky, so in this environment, there are naturally going to be a lot of sellers. 

Now what 

It certainly looks like all-out panic is setting into the crypto market. Investors are getting liquidated in some cases, and some of the investment theses behind cryptocurrencies are falling apart. 

What’s special about Ethereum, Solana, and Cardano is that they’re all utility tokens, allowing developers to build applications on top of their blockchains. And billions of dollars are flowing into the cryptocurrency development ecosystem, which will lead to innovations over the next decade or more. In time, that should drive values higher, although we don’t know when those upsides might be seen. 

I think we’re starting to see the panic in the market reach a peak, and similar moments have typically been buying opportunities for great long-term assets. In cryptocurrency, I think the lasting tokens and blockchains will be those that developers use most to provide digital or real-world utility for users. These three cryptocurrencies are on the top of that list.

That said, there’s likely to be more volatility ahead, and this may not be the bottom. So, investors buying now should be prepared, because these are long-term investments, and in the near term, trading in crypto can be unpredictable, as was demonstrated again this week. 

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

The post Why Ethereum, Solana, and Cardano all plunged today appeared first on The Motley Fool Australia.

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• Why Ethereum, Dogecoin, and The Sandbox dropped today
• Why Cardano is rising today

Travis Hoium has positions in Ethereum and Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin, Ethereum, and Solana. The Motley Fool Australia owns and has recommended Bitcoin, Ethereum and Solana. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. 

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

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ASX tech shares have taken a bigger beating than any other sector on the S&P/ASX 200 Index (ASX: XJO) during the market sell-off – and there could be more pain to come, according to a top broker.

The dire warning from Macquarie Group Ltd (ASX: MQG) comes after the ASX 200 tech sector crashed nearly 16% over the past month.

That’s worse than the 11% plunge by the second-worst performing Materials sector.

More downside for ASX 200 tech shares

The tech meltdown is largely triggered by rising global interest rates. Growth shares are more sensitive to higher rates than others, and ASX 200 tech shares sit at the head of the growth table.

But bargain-hunters hoping to pick the bottom of the market may have to wait longer. Macquarie thinks valuations are still too high after analysing the performance of the sector over the longer term.

The broker used the enterprise value-to-sales (EV/sales) yardstick as a measuring tool. This is one of the preferred measures for the sector given that many are yet to turn a profit.

ASX tech valuations still looking expensive

While EV/sales multiples have come off their peaks following tech correction, they are still at a 33% premium compared to the 2010 to 2015 period, noted Macquarie.

Further, the current average multiples are still around double what they were in the early 2000s, as the dot-com bubble popped.

Based on Macquarie’s calculations, there could be a further 25% downside for ASX tech shares.

“History suggests a sector reset may take longer and be more painful than current market expectations based on consensus ratings and investor feedback,” said the broker. “We maintain our cautious outlook on the tech sector.”

Most expensive ASX 200 tech shares

But some ASX 200 tech shares are particularly at risk of a further sell-down. Macquarie flags the Altium Limited (ASX: ALU) share price as the most overvalued.

The broker’s one-year forward EV/sales estimate for the circuit board design software maker is 10.7 times. That’s 92% ahead of its historical trough and 49% above its historical average.

Is there value in the ASX tech sector?

However, there are three ASX 200 tech shares that are trading below their historical average and the average of the ASX 300 IT benchmark.

Mind you, this in itself doesn’t necessarily make the shares a “buy”. But in case you are wondering, the three are the Appen Ltd (ASX: APX) share price, Block Inc CDI (ASX: SQ2) share price, and Nearmap Ltd (ASX: NEA) share price.

Of the three, Block is the only one that Macquarie rates as “outperform”.

The post How much further can ASX 200 tech shares tumble? Macquarie weighs in appeared first on The Motley Fool Australia.

More reading

• Is the Altium share price now great value after dropping 30% in 2022?
• What’s up with the Appen share price on Wednesday?
• Why AUB, Block, BrainChip, and Pushpay shares are sinking
• ASX 200 tech shares are staging a remarkable recovery today
• Why did the Xero share price just rebound 6%?

Motley Fool contributor Brendon Lau has positions in Block, Inc., Macquarie Group Limited, and Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Appen Ltd, Block, Inc., and Nearmap Ltd. The Motley Fool Australia has positions in and has recommended Block, Inc. and Nearmap Ltd. The Motley Fool Australia has recommended Macquarie Group 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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The Xero Limited (ASX: XRO) share price is tumbling on Thursday morning.

At the time of writing, the cloud accounting platform provider’s shares are down 10% to a new 52-week low of $78.25.

Why is the Xero share price sinking today?

Investors have been selling down the Xero share price on Thursday for a couple of reasons.

The first is significant weakness in the tech sector following another selloff on the Nasdaq index overnight. This has led to the S&P/ASX All Technology Index falling a sizeable 5.1% this morning.

The other catalyst for the weakness in the Xero share price has been a negative reaction to the company’s full-year results.

What did Xero report?

For the 12 months ended 31 March, Xero reported a 29% increase in revenue to NZ$1.1 billion and a 28% jump in annualised monthly recurring revenue (AMRR) to NZ$1.2 billion.

This was underpinned by a 19% increase in total subscribers to 3.3 million thanks to growth in all markets. However, this subs growth wasn’t quite as strong as some were expecting, which could explain some of the weakness in the Xero share price today.

It was a similar story for its earnings, which fell short of expectations due to weaker operating margins.

The company reported an 11% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$212.7 million and a net loss of NZ$9.1 million.

What was the response?

Goldman Sachs has responded to Xero’s full-year results and described it as “solid”, though acknowledges that the company missed on revenue, earnings, and subscribers.

It commented:

XRO reported FY22 Sales/EBITDA/NPAT +29%/+11%/-NZ$37mn vs. pcp to NZ$1,097mn/NZ$213mn/-NZ$9mn, which was -1%/-2%/-NZ$13mn vs. GSe. Cash conversion was strong (GOCF +8% to NZ$236mn, = 111% of EBITDA), with XRO net cash decreasing to NZ$51mn (vs. NZ$257mn at FY21).

2H22 Sub growth was marginally softer vs. expectations (+258k vs. GSe +298k), with this weakness across all geographies (i.e. ANZ -10k, vs. GSe, International -30k). This is despite a solid churn profile in 2H22, with ANZ churn declining again. We note the UK business had subdued 3Q net adds, with 4Q improving.

Is the Xero share price in the buy zone?

Goldman Sachs currently has a buy rating and $133.00 price target on the company’s shares. This implies major upside potential for the Xero share price.

However, it is worth remembering that this recommendation and price target could change in the coming days once the broker has updated its financial model.

The post Xero share price sinks 10% to 52-week low following FY22 results miss appeared first on The Motley Fool Australia.

More reading

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• 5 things to watch on the ASX 200 on Thursday
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• Why EOS, Pendal, PolyNovo and Xero shares are charging higher
• Why did the Xero share price just rebound 6%?

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 Xero. The Motley Fool Australia has positions in and has recommended Xero. 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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Crypto investors woke today to the realisation that so-called stablecoins are not so stable at all.

This comes as TerraUSD (CRYPTO: UST) – intended to be pegged to the US dollar – plunged to an all-time low of 30 US cents overnight.

In a sign of the ongoing volatility in crypto markets, including within the stablecoin subsector, UST has rebounded from those lows and is currently worth 81 US cents.

Whether it will hold there, return to its intended peg of US$1, or plunge back to new lows is anyone’s guess at this stage.

‘Stabilising’ crypto loses 97% of its value

The even bigger carnage happened to the crypto that’s intended to keep UST in line with the US dollar. Or stable, in other words.

Terra (CRYPTO: LUNA) plunged 97% overnight, dropping to US$1.04. LUNA traded for as high as $19.17 over the course of the day. At the time of writing, LUNA has edged higher to US$1.05, down 94% from this time yesterday.

So, what’s going on?

Why the massive sell-off?

If you’re not familiar with LUNA, CoinMarketCap explains that: “Terra’s native token, LUNA, is used to stabilise the price of the protocol’s stablecoins.”

Those stablecoins are UST.

Some stablecoins are backed by the asset they’re pegged to, like US dollars. Some are backed by other cryptos like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH).

Still others, like Terra’s UST, use algorithms to maintain their pegs. UST attempted to do this by enabling crypto investors holding its stablecoin to swap it for US$1 worth of LUNA at any stage.

That was meant to keep UST trading within a close range of the US dollar, as any dip below that could be regained by moving into LUNA.

However, the system ultimately relies on crypto investor confidence. And that confidence looks to have gone missing.

According to analysts at Coinbase (quoted by Markets Insider): “The exact reason UST became untethered from the dollar remains unclear, but on Saturday, hundreds of millions of dollars’ worth of both UST and LUNA were rapidly sold across exchanges, pushing UST to around 98 cents.” Not long after that, they said, “panic set in”.

Commenting on the meltdown at Terra, Nikita Fadeev, head of crypto fund Fasanara Digital, said (courtesy of Bloomberg):

Many people were caught off guard. Everything broke there. It is full capitulation … It will get worse before it will get better. Way too much UST is looking to exit, and the death spiral is very reflexive at these levels. It’s a long road ahead.

“Once liquidity evaporated, this perpetuated the collapse of the stablecoin,” Clara Medalie, research director at Kaiko, added.

Do Kwon, the billionaire crypto investor whose Terraform Labs developed UST and LUNA, tried to stem the sell-off by issuing US$1.5 billion of loans in UST and Bitcoin.

But Bryn Solomon from crypto trading platform Mgnr.io doesn’t believe there will be many takers.

“At this stage, I don’t think these firms will have the risk appetite to support it,” he said. “Algorithmic stables are a confidence game. Once confidence is lost, it’s game over.”

The post Is it ‘game over’? Top crypto plunges 97% overnight in stablecoin rout appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Bitcoin and Ethereum. The Motley Fool Australia has positions in and has recommended Bitcoin and Ethereum. 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 Qantas Airways Limited (ASX: QAN) share price has suffered over the last two years, but experts are bullish on the stock’s future.

Shares in ‘the flying kangaroo’ reached an all-time high of $7.46 in December 2019. That was mere months before Australia’s borders slammed shut amid the outbreak of the coronavirus pandemic.

Its stock tumbled to a multi-year low of $2.03 in March 2020 and has trended upwards since.

As of Wednesday’s close, the Qantas share price is $5.31. That’s 161% higher than its lowest point of the pandemic but 40.5% below its record high.

Could the S&P/ASX 200 Index (ASX: XJO) airline be taking off to soar at that height again? Let’s look at what experts are predicting for the national carrier’s stock.

Qantas closes in on return to profitability

The Qantas share price was boosted earlier this month when the airline announced it anticipates it will return to profit next financial year.

The airline told the market it hopes to be earnings before interest, tax, depreciation, and amortisation (EBITDA) positive this quarter. The prediction came after the demand for domestic travel recovered faster than expected.

It also predicted it will post EBITDA of between $450 million and $550 million for the current half.

Finally, the airline’s net debt has fallen below pre-COVID levels, sitting at $4.5 billion.

On top of that, Qantas has ordered 12 new Airbus A350’s as part of its ‘Project Sunrise’. The jets are earmarked to fly non-stop from Sydney to London and New York.  

No doubt many investors are looking forward to the company’s recovery over the next few years. And for good reason.

Expert: Qantas share price could double

Northscape Capital portfolio manager and analyst Richard Maynier believes Qantas has tackled most COVID-19 challenges with ease, coming out the other end stronger.

“We think investors will be surprised by how quickly profits rebound … there is good upside in the stock,” Maynier was quoted by The Australian as saying.

L1 Capital joint managing director and chief financial officer Mark Landau is also bullish. He thinks the Qantas share price could double if the company meets its financial year 2024 guidance.

“Over the past decade, Qantas has traded at a 40% discount to the ASX Industrials Index. I believe that discount deserves to be smaller today, given Qantas is a better business than it was five or 10 years ago,” Landau continued, courtesy of the newspaper.

“It generates a higher return on capital, better cashflow conversion and it generates a much larger proportion of its earnings from its high-growth loyalty division, which warrants a far higher multiple than a traditional airline.”

Finally, Barrenjoey Capital Partners analyst Matt Ryan notes the airline has “moved past balance sheet repair and is investing for growth”.  

The broker reportedly expects the Qantas share price to reach $6.40 over the next 12 months. That represents an upside of nearly 30%.

The post The Qantas share price is sitting around 40% below its all-time high. Is it a no brainer? appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper 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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Experts have revealed some quality ASX growth share picks that they believe are opportunities at the current valuations.

There has been plenty of volatility on the ASX share market in recent months. Lower prices could mean better value for these two growing businesses:

Serko Ltd (ASX: SKO)

Serko describes itself as a leader in online travel booking and expense management for the business travel market.

In terms of how much of a decline it has seen, the Serko share price has fallen by around 40% in the past six months to its current price of $4.28.

It’s currently rated as a buy by a few different brokers, including Citi. The price target is $5.75, implying a potential rise of more than 34% over the next year. The broker believes the partnership with Booking will be a key area of interest in the upcoming report from the ASX growth share.

Citi is expecting Serko’s volume to keep growing as it recovers from the impacts of COVID-19.

In its February 2022 trading conditions update, the company said the Omicron COVID variant had reduced business travel volumes in key markets and the expected revenue for FY22. Booking.com business volumes were “significantly impacted” in December up until mid-January. However, in the week prior to the update, volumes were back to approximately 90% of October 2021 volumes.

The ASX growth share’s revenue for FY22 is now expected to be between NZ$18 million and NZ$20.5 million.

The company is due to hand in its full-year result on 18 May.

Step One Clothing Ltd (ASX: STP)

For readers that haven’t heard of Step One Clothing before, it’s a direct-to-consumer online retailer for ‘innerwear’. It says that it offers an “exclusive range of high-quality, organically grown and certified, sustainable and ethically manufactured innerwear that suits a broad range of body types”.

The Step One Clothing share price has also seen a hefty decline in recent times. Over the last six months, Step One Clothing shares have dropped by around 82% to 48 cents at the time of writing.

It’s currently rated as a buy by the broker Morgans with a price target of $2.40. That implies a potential rise of around 400% over the next year.

The broker likes the expanding product range of the business, with expectations for a good end to FY22, going into FY23. The broker thought the market had been too harsh on this ASX growth share.

In that FY22 half-year result, Step One reported revenue of $38.1 million, which was up 11.7%. Its gross profit margin improved from 82.1% to 83.1%. The company also boasted of “strong” returning customer order rates. Returning customers increased from 39% to 60%.

The company is looking to grow in the UK and the US. It has launched a women’s line and a sports range.

In FY22, Step One is expecting to grow sales by between 21% and 25%, with pro-forma earnings before interest, tax, depreciation, and amortisation (EBTIDA) of $15 million.

The post 2 ASX growth shares that experts love right now appeared first on The Motley Fool Australia.

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• Why Bellevue Gold, CSL, Endeavour, and Serko shares are pushing higher today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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 positions in and has recommended Serko Ltd. The Motley Fool Australia has recommended Serko Ltd. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

So much for being immune to the tech stock sell-off. The stock of Apple (NASDAQ: AAPL), which earlier this year largely held its value while peer techies fell in price, couldn’t escape the trend on Wednesday. The company’s shares lost more than 5% on some scraps of bearish news.

So what

The first is about a competing product, namely a smartwatch from Alphabet‘s (NASDAQ: GOOG)(NASDAQ: GOOGL) Google. Following rumors that Google would unveil such a product, the company confirmed this today at its annual I/O developer conference. While officials weren’t exactly full of details about the Pixel Watch, they did reveal that it’ll be released later this year.

Apple is the dominant smartwatch maker in the world by far, holding more than 30% of global market share in the product category. The runner-up is notably behind: Samsung (OTC:SSNLF), with barely over 10%. So there’s certainly opportunity here for a determined entrant, like Alphabet, with a snazzy new product.

Another news item that could be considered slightly negative is Apple’s announcement that it will halt production of the iPod. It was a revolutionary product when released as a digital music player in 2001, but it has been replaced over time by smartphones that typically bundle a music app into their native software suites.

The iPod long ago ceased to be a significant product for Apple; most smartphone owners are happy to use their beloved devices as jukeboxes. But maybe the jettisoning of the iPod is an uncomfortable reminder that the company hasn’t introduced a world-shaking, hotly innovative product in quite some time.

Now what

Neither of these developments warranted Wednesday’s sell-off. But in such an environment for tech stocks, sensitive investors react to even the most minor difficulties and challenges…and tend to pull the trigger on big sector names more readily than usual.

Apple remains a solid company that’s still finding ways to grow, however. So for me, it’s worthwhile to hang on to the stock in the hope of riding out this negative wave. 

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

The post Why Apple stock withered on Wednesday appeared first on The Motley Fool Australia.

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• Why Apple, Meta Platforms, and Salesforce stocks plunged today
• Worried about inflation? Here’s what Warren Buffett says Berkshire Hathaway is doing
• What Apple and Amazon said after hours Thursday
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Eric Volkman has positions in Apple. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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The Westpac Banking Corp (ASX: WBC) share price is in focus after the bank recently reported its FY22 half-year result.

Could the big four ASX bank now be a smart opportunity for investors to consider?

Before getting to what some investment experts may think, let’s look at what Westpac reported for the first six months of FY22.

Earnings recap

There were two sets of comparisons that Westpac told investors about on Monday – how the FY22 first half compared to the second half of FY21 and the first half of FY21. And it appears the results were well received, with the Westpac share price rising 3.23% on the day.

Compared to the first half of FY21, the HY22 statutory net profit after tax (NPAT) fell by 5% to $3.28 billion and cash earnings declined by 12% to $3.1 billion. Revenue dropped 8% and costs declined 10%.

Compared to the second half of FY21, the statutory net profit was up 63% to $3.28 billion. Cash earnings increased 71% to $3.1 billion. Revenue dropped 3% and costs fell 27%.

Westpac’s board declared a fully franked interim dividend of 61 cents per share. That compares to the FY21 final dividend of 60 cents per share and 58 cents per share for the FY21 interim dividend.

The big four ASX bank said that “asset quality has improved and most credit quality metrics are back to pre-COVID levels, however, we increased overlays in our provisions for supply chain issues, inflation, expectations of higher interest rates, and recent floods”.

Westpac has reduced its headcount by more than 4,000 as it tracks towards the target of an $8 billion cost base by FY24.

Over the half, total lending rose by $8.8 billion and total deposits increased by $20.6 billion.

The company said its Australian mortgage portfolio grew off the back of owner-occupied mortgages, but it wants to lift performance in investor lending. It also said that it has built on its momentum in business lending.

Westpac’s net interest margin (NIM) declined from 1.99% at the end of the second half of FY21 to 1.85% in the first half of FY22.

In terms of the outlook, Westpac noted that “demand for housing has already shown some signs of easing and rising interest rates are expected to contribute to a moderation in house prices next year”.

It also reminded investors that as interest rates rise, it is coming from a low base and the bank is already assessing loan applications on higher rates.

Is the Westpac share price a buy?

The broker UBS thinks that it is, with a price target of $27. That implies a potential rise of around 12% over the next year on the current Westpac share price of $24.11. Its cost reduction plan and asset quality were positives.

UBS thinks Westpac is valued at a decent discount to its big four ASX bank rivals of Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Australia and New Zealand Banking Group Ltd (ASX: ANZ).

However, Credit Suisse is currently ‘neutral’ on the bank, with a price target of $24.40. It said there is a question of whether the big bank will be able to reach its cost-cutting goals considering the inflation environment.

The post Is the Westpac share price a smart bank buy today? appeared first on The Motley Fool Australia.

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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 recommended Westpac Banking Corporation. 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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