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The Qantas Airways Ltd (ASX: QAN) share price is bucking the wider market selloff today, flying 2.5% higher at the time of writing.

This comes after the airline released several key updates to the market this morning. Those include a projected return to profitability next financial year alongside plans to fly the world’s longest direct flights commencing in 2025.

Here’s what you need to know.

Qantas share price lifts on record-breaking flight plans

If you’ve ever flown to New York or London, you’ll be well aware of the extra hours it takes to get there due to refuelling stops.

Today, the Qantas share price looks to be getting a boost following the announcement of major domestic and international fleet decisions.

On the domestic front, Qantas ‘Project Winton’ will see the airline work on renewing its fleet of narrow body jets as it progressively retires its Boeing 737s and 717s. The company reported it has firm orders for 20 Airbus A321XLRs and 20 A220-300s. It expects the first aircraft to be delivered in the latter months of 2023.

On the international front, with what could save international travellers many hours of stopover delays, the airline reported that its Project Sunrise had been given the green light by its board. This will see Qantas buy 12 new Airbus A350s to fly direct routes from Australia to international destinations, including London and New York.

The flights are expected to commence out of Sydney in 2025. These will be the longest direct flights offered by any airline in the world.

The Qantas share price could also be getting a lift from ESG focused investors, with the report that the new aircraft and engines will reduce emissions by 15% or more.

Commenting on Project Sunrise, Qantas CEO Alan Joyce said:

Throughout our history, the aircraft we’ve flown have defined the era we’re in. The 707 introduced the jet age, the 747 democratised travel and the A380 brought a completely new level of comfort.

The A350 and Project Sunrise will make any city just one flight away from Australia. It’s the last frontier and the final fix for the tyranny of distance. As you’d expect, the cabin is being specially designed for maximum comfort in all classes for long-haul flying.

The company said it will fund the new planes within its debt range and through earnings “while still leaving room for shareholder returns”.

“The Board’s decision to approve what is the largest aircraft order in Australian aviation is a clear vote of confidence in the future of the Qantas Group,” Joyce added.

What other updates were reported?

Qantas also released its third-quarter (Q3) trading update this morning.

ASX investors could be bidding up the Qantas share price after it revealed that domestic travel numbers were rebounding faster than expected. Domestic numbers are now back at levels not seen since before the onset of COVID-19 saw state borders slam shut.

Both leisure and business travel demand was said to be rebounding strongly.

While demand for international travel was also reported to be robust, pandemic restrictions in some international markets continued to throw up headwinds here in the shorter term.

Financially, the airline’s net debt levels were down to $4.5 billion as at 30 April, similar to pre-COVID debt figures.

Looking ahead to the second half of 2022 (2H FY22), underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) are forecast to come in at $450 million to $550 million. Underlying EBITDA in the first half came in at a loss of $245 million.

Qantas said it is on track to return to profitability in the 2023 financial year. It expects capital expenditure for FY23 to come in at $2.3 billion to $2.4 billion, in line with its previous forecasts.

“After a few false starts, we’re finally seeing a sustained recovery in travel demand,” Joyce said. “People have confidence in domestic borders now that we’ve shifted to living with COVID and that’s bringing us back towards pre-pandemic levels of flying.”

Qantas share price snapshot

The Qantas share price has gained 16% so far in 2022, well outpacing the year-to-date loss of around 2% posted by the S&P/ASX 200 Index (ASX: XJO).

The post Qantas share price lifts off on projected return to profitability appeared first on The Motley Fool Australia.

More reading

• ‘Clear vote of confidence’: Qantas share price on watch following key updates
• Travel’s back! 3 ASX shares this expert loves right now
• Why this fundie is tipping 120% upside for the Qantas share price
• Why are ASX 200 travel shares having a first-class end to the week?
• When did Qantas last pay a dividend?

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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Once a week I like to look at ASIC’s short position report to find out which shares are being targeted by short sellers.

This is because I believe it is well worth keeping a close eye on short interest levels as high levels can sometimes be a sign that something isn’t quite right with a company.

With that in mind, here are the 10 most shorted shares on the ASX this week according to ASIC:

• Flight Centre Travel Group Ltd (ASX: FLT) remains to be the most shorted ASX share despite its short interest easing to 17%. The Flight Centre share price is up 23% in 2022 but short sellers don’t appear to believe these gains will last.
• Betmakers Technology Group Ltd (ASX: BET) has seen its short interest rise to 13.2%. This betting technology company’s shares are trading within a whisker of a 52-week low amid concerns over its valuation and cash burn.
• Nanosonics Ltd (ASX: NAN) has short interest of 11.9%, which is down slightly week on week. Short sellers have been going after this medical device company since it announced a major change to its sales model in the United States.
• Polynovo Ltd (ASX: PNV) has seen its short interest rise again to 10%. Valuation concerns and an inconsistent performance appear to be weighing on this medical device company’s shares.
• Webjet Limited (ASX: WEB) has short interest of 9.7%, which is down week on week. Short sellers may believe the market is too bullish on the travel market recovery.
• Kogan.com Ltd (ASX: KGN) has seen its short interest climb again to 9.6%. Short sellers will have been celebrating last week after another disappointing update sent this ecommerce company’s shares crashing to a multi-year low.
• Zip Co Ltd (ASX: Z1P) has seen its short interest fall to 8.9%. This buy now pay later provider’s shares also dropped to a multi-year low last week, much to the delight of short sellers.
• EML Payments Ltd (ASX: EML) has seen its short interest ease to 8.7%. This payments company’s shares crashed lower last week after it downgraded its profit guidance following a tough third quarter.
• AMA Group Ltd (ASX: AMA) has 8.7% of its shares held short, which is up slightly week on week. This crash repair company disappointed the market earlier this year with a half year loss of $46.3 million.
• Mesoblast limited (ASX: MSB) has seen its short interest edge higher to 8%. Short sellers have been targeting this biotech amid disappointing trial results and significant cash burn.

The post These are the 10 most shorted ASX shares appeared first on The Motley Fool Australia.

More reading

• Travel’s back! 3 ASX shares this expert loves right now
• These were the worst performing ASX 200 shares last week
• Why Kogan, Reliance, ResMed, and Sandfire shares are dropping
• Why is the Flight Centre share price trouncing ahead of the ASX 200 today?
• Why is the Webjet share price flying higher on Friday?

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 Betmakers Technology Group Ltd, EML Payments, Kogan.com ltd, Nanosonics Limited, POLYNOVO FPO, and ZIPCOLTD FPO. The Motley Fool Australia has positions in and has recommended EML Payments, Kogan.com ltd, and Nanosonics Limited. The Motley Fool Australia has recommended Betmakers Technology Group Ltd, Flight Centre Travel Group Limited, and Webjet 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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The AMP Ltd (ASX: AMP) share price rallied more than 21% last month as investors upped expectations that the company has finally turned a corner.

The embattled wealth manager is selling assets to shore up its balance sheet and to streamline its business.

There is also optimism that the reinvented AMP will benefit from a reported severe shortage of financial advisors.

AMP shares trading outlook improving

According to media and industry reports, there is an advisor exodus due to higher regulatory requirements that some believe are too strict. The lack of advisors has sent the cost of financial advice sharply higher.

Meanwhile, the demand for expert advice is strong, given volatile markets and imminent possible interest rate hikes. If AMP can capitalise on the growing market opportunity, its trading outlook won’t look as dire as it did in January this year. That is when the AMP share price slumped to an all-time low of $0.87.

AMP share price boosted by capital return hopes

While any transformation takes time and money, at least AMP won’t have to worry too much about the latter.

The agreements it announced in the last few months could see its coffers swell by up to $2 billion.

AMP entered into a sale agreement of its Collimate Capital’s international infrastructure equity business to DigitalBridge Investment Holdco on 28 April. AMP will be paid an upfront amount of $462 million and a total value of up to $699 million.

Up to $2 billion cash splash

This is on top of the $430 million sale of Collimate’s domestic infrastructure equity and real estate business announced the day before.

Throw in the $578 million it will get from the sale of the infrastructure debt platform completed in February 2022, and the total AMP will receive surges to around $1.5 billion. AMP stands to reap up to circa $2 billion in cash if earnouts are included.

AMP estimates that it will cost around $20 million post tax to separate the assets from the main group for the sale.

How AMP shareholders might be rewarded

There is another reason why the AMP share price is responding positively to the divestments. Management will use part of the proceeds to repay debt and return most of the cash to shareholders.

AMP is likely to undertake an on-market share buy-back, which will support the AMP share price. It will also look at a capital return program. This could take the form of a special dividend, like it did in September 2020, or an off-market share buyback.

The post The AMP share price soared 21% in April. Here’s why appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in April
• These were the best performing ASX 200 shares last week
• 3 ASX All Ordinaries shares that soared more than 9% today
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares on Thursday

Motley Fool contributor Brendon Lau has positions in AMP Limited. 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 Bank of Queensland Limited (ASX: BOQ) share price dropped in April 2022, materially underperforming the S&P/ASX 200 Index (ASX: XJO) which only fell by 1% last month.

Last month, the bank announced its FY22 first half result for the six months to February 2022. Let’s have a look at some of the numbers that BOQ reported to investors:

Half-year earnings recap

A lot of investors like to pay close attention to the results that businesses report every six months. It can give an indication of profitability as well as the outlook.

BOQ reported that it generated $212 million of statutory net profit after tax (NPAT). This was an increase of 38%. Cash earnings after tax rose by 14% to $268 million. Profitability can have an influence on companies’ share prices.

Meantime, the bank’s operating expenses declined by 3% to $461 million.

However, the net interest margin (NIM) declined 12 basis points to 1.74% in the second half of FY21. The bank said the majority (seven basis points) of the decline was due to “industry dynamics including ongoing competition, higher fixed rate lending volumes and volatile swap rates, and a further five basis points relating to increased liquidity during the period”.

BOQ managed to grow its housing loans by $2.6 billion and business loans by $0.6 billion.

The bank’s common equity tier 1 (CET1) ratio declined by 12 basis points from the second half of FY21 to 9.68%.

BOQ said that the result demonstrated the “disciplined execution of the ME integration and digital transformation program” and represented the fifth consecutive half of improved underlying performance.

It said that key integration milestones for ME Bank have been delivered on the accelerated timeline and within the committed expense profile, with $33 million of run-rate synergies delivered during the half. Synergy benefits have been increased from a range of $70 million to $80 million to the new goal of $95 million in FY24 and beyond.

Management noted that its asset quality remains “sound” with “prudent” collective provision levels.

The challenger bank’s board decided to pay an interim dividend of 22 cents per share, representing a dividend payout ratio of 53% for the first half of FY22.

BOQ outlook

Investors may take the outlook into consideration when it comes to the BOQ share price.

It said that Australia is well placed for a continued economic recovery though there is uncertainty with elevated inflation, rising interest rates, and other disruptions.

BOQ is focused on delivering 2% positive ‘jaws’ in FY22. It also noted that momentum continues to build, with BOQ and Virgin Money Australia gaining market share.

It’s expecting the NIM headwinds to ease while the continued benefits of its integration and productivity programs should reduce costs by at least 1%.

What do brokers think of the BOQ share price?

Citi thinks that BOQ is a buy, with a price target of $10.25 but noted it may have been revenue growth that disappointed the market.

Morgans is more optimistic, with a price target of $11 – that implies a potential rise of more than 30%. This broker’s numbers put the BOQ share price at nine times FY23’s estimated earnings with a potential grossed-up dividend yield of 9.5% in the 2023 financial year.

The post Why did the Bank of Queensland share price tank 7% in April? appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX 200 shares in April
• Hoping to bag the Bank of Queensland dividend? Read this
• Direct indexing: What is this latest investing fad?
• 5 things to watch on the ASX 200 on Monday
• These were the worst performing ASX 200 shares last week

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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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 cryptocurrency market is seeing another day of sell-offs today. The prices of Shiba Inu (CRYPTO: SHIB), Ethereum (CRYPTO: ETH), and Dogecoin (CRYPTO: DOGE) tokens were losing ground in conjunction with the sell-off momentum. They were down roughly 5%, 2.1%, and 1.6%, respectively, over the previous 24 hours of trading as of 10:15am Sunday.

Nearly every top-100 cryptocurrency token has seen sell-offs over the last day of trading. In fact, excluding stablecoins, only TRON‘s token was in the green over the period.

So what?

Investors have been taking money off the table lately and moving out of investments that have high-risk profiles, and it’s led to major pullbacks that have shaped the overall momentum for cryptocurrencies and stocks. To put the trend in perspective, the tech-heavy Nasdaq Composite index just had its worst month since 2008, and rising bearish sentiment is also shaping trading in the crypto space. 

It’s also possible that recent comments from Berkshire Hathaway‘s CEO Warren Buffett and vice chairman Charlie Munger are factoring into the sell-off. Berkshire held its shareholder meeting in Omaha yesterday, and the executives made some scathing comments about Bitcoin (CRYPTO: BTC) and the cryptocurrency market as a whole. Speaking on the current crypto market leader, Buffett had this to say: “If you told me you owned all the Bitcoin in the world and you offered it to me for $25, I wouldn’t take it. What would I do with it?”

While bearish comments from the two Berkshire luminaries are nothing new, it’s possible that the latest round of critiques from the pair have been particularly resonant amid the current market conditions. Worrying levels of inflation have the Federal Reserve on track to raise interest rates well above current levels before the year is out, and rising rates have typically meant a challenging backdrop for speculative investments. 

Many investors and analysts have raised the concern that rising interest rates could push the US economy into recession because loans becoming more expensive will make businesses less likely to pursue new growth initiatives. The same general principle can be applied to buying stocks and cryptocurrencies. When taking on debt is cheap, some of that capital flows into relatively high-risk assets and stocks. When rates are higher, those kinds of investments typically become less attractive.

Now what?

In some respects, the current macroeconomic situation is without recent historical precedent to draw comparisons to. The cryptocurrency market also remains relatively young in the scheme of things, and that makes it difficult to forecast how it will perform if economic conditions worsen significantly. 

The Department of Commerce recently published a report showing that the US economy had contracted 1.4% year over year in the first quarter. Given that the Fed only implemented a 25 basis point rate increase in the middle of March, the fact that gross domestic product unexpectedly slipped in the quarter while inflation continued to run hot is concerning, and it could point to a tough backdrop for cryptocurrencies and other high-risk investments going forward. 

While Ethereum provides a blockchain network that applications and services can be built on, cryptocurrencies like Shiba Inu and Dogecoin primarily function as mediums of exchange and as speculative assets. That suggests that Ethereum’s Ether token might hold up relatively well if turbulence continues to roil the broader crypto market, but again, there’s not a whole lot in the way of historical precedent to base projections on. 

Bitcoin kicked off the cryptocurrency trend with its release back in 2009, but even the current crypto market leader didn’t start to see significant adoption until years later. Outside of the pandemic market-driven crash that occurred in March 2020, in which leading cryptocurrencies performed worse than stocks before roaring back to big gains, there’s not much to look at when it comes to determining how digital tokens might fare amid intense bearish conditions. As such, it’s probably best to move forward with the understanding that most cryptocurrencies are high-risk, high-reward investments.

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

The post Why Shiba Inu, Ethereum, and Dogecoin are sinking today appeared first on The Motley Fool Australia.

More reading

• Crypto king Bitcoin to be dethroned by this hot rival: experts
• Bitcoin will be worth $590,000 by 2030: experts
• Bitcoin, Ethereum, and Cardano are turning it around today. Here’s why
• Bitcoin price leaps 4% but is the leading crypto due for a big retrace?
• Why Bitcoin, Ethereum, and XRP are struggling today

Keith Noonan 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 Berkshire Hathaway (B shares), Bitcoin, and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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Experts are liking the look of some ASX lithium shares. The growing interest in lithium stocks comes on the back of escalating lithium prices on global markets over the past year.

In fact, one Australian lithium miner has just achieved a price of US$5,650 per dry metric tonne of spodumene concentrate through a Battery Material Exchange (BMX) auction.

Here are two lithium ASX shares rated as buys by brokers:

Pilbara Minerals Ltd (ASX: PLS)

Pilbara is the business that just benefited from that auction.

The company also said there was a “strong sales price dynamic” during the three months to March 2022. Further, battery grade chemical pricing is suggesting another “significant step-up” in the offtake concentrate sales price during the quarter for the three months to June 2022.

The ASX lithium share said that its production of 81,431 dry metric tonnes for the last quarter was impacted by “resourcing shortfalls” in staff and contractors due to COVID-19 impacts and the tight labour market.

It generated operating flow of $113.9 million and it’s investing in projects to capture more of the lithium value chain. Pilbara said a scoping study has provided preliminary support for the development and construction of a demonstration plant chemicals facility at Pilgangoora, producing value-added lithium phosphate salts through a calcination and refining process.

The broker Citi rates Pilbara as a buy, with a price target of $3.60 because of the strong pricing environment. That implies a potential rise of more than 20%.

Allkem Ltd (ASX: AKE)

Allkem is another ASX lithium share that is benefiting from the rise in the lithium price. Over the last year, the Allkem share price has risen by more than 80%.

This company has a strategy to increase its lithium production threefold by 2026 and maintain a 10% market share of the global lithium market over the next decade.

In the three months to March 2022, Mt Cattlin produced 48,562 dmt of spodumene concentrate, generating revenue of US$143.8 million. The Olaroz lithium facility produced 2,972 tonnes of lithium carbonate with sales of 3,157 tonnes, generating revenue of US$86 million. It said that lithium carbonate prices for the fourth quarter of FY22 are expected to be approximately US$35,000 per tonne.

Allkem’s group gross operating cash margin was approximately US$189 million which, it said, reflected “strong market demand and high sales prices”.

The ASX lithium share said that Olaroz stage 2 reached 77% construction completion with first production expected to commence in the second half of the calendar year. At Naraha, plant commissioning works will occur during the three months to June 2022 with first production expected in the three months to September 2021. Pond construction at Sal de Vida stage 1 started in January and first production is expected in the second half of 2023.

Citi also rates Allkem as a buy, with a price target of $16. That’s a potential rise of 30% over the next year if the broker ends up being right.

The post 2 ASX lithium shares to buy in May 2022: brokers appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy next week
• Here are the 3 most heavily traded ASX 200 shares on Friday
• Despite dropping 17% in April, is the Pilbara Minerals share price still overvalued?
• Why Cettire, Newcrest, Silver Lake, and Whispir shares are tumbling lower
• Why AMP, Fortescue, Pilbara Minerals, and Sandfire shares are racing higher

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 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 Liontown Resources Limited (ASX: LTR) share price is trading lower on Monday despite the release of a positive update.

At the time of writing, the lithium developer’s shares are down 3.5% to $1.41.

Why is the Liontown share price falling on Monday?

Investors have been selling down the Liontown share price on Monday after broad market weakness offset the release of a positive update out of the lithium miner.

In respect to the latter, this morning the company confirmed that it has executed its first definitive full-form offtake agreement for the supply of lithium spodumene concentrate from the Kathleen Valley Lithium Project in Western Australia.

According to the release, LG Energy Solution (LGES) has signed a five-year deal and agreed to purchase 100,000 dry metric tonnes (dmt) of lithium spodumene in the first year. This will then increase to 150,000 dmt per year in subsequent years, which represents almost one-third of the project’s start-up SC6.0 production capacity of ~500,000 tonnes per annum.

LGES is a global leader in delivering advanced lithium-ion batteries for electric vehicles (EVs), mobility and IT applications, and energy storage systems.

In addition, the release reveals that pricing will be determined using a formula-based mechanism referencing market prices for battery-grade lithium hydroxide monohydrate.

Both volume and pricing are in line with what was agreed by the two parties in a term sheet announced by Liontown in January.

Management commentary

Liontown’s Managing Director and CEO, Tony Ottaviano, was pleased to see the talks progress to a full form agreement.

He commented: “We are delighted to have concluded negotiations with LG Energy Solution allowing us to execute our first full form Spodumene Concentrate Offtake Agreement for up to 30% of our production. This establishes the foundation for a long-term partnership and we are proud that we will be supplying lithium from the Kathleen Valley Project to LGES, a respected global leader in the lithium battery value chain.”

The post Liontown Resources share price tumbles despite lithium update appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares on Wednesday
• Why is it such a mixed day of trade for ASX lithium stocks?
• What are the 10 biggest ASX shares in the lithium space
• Why has the Liontown share price tumbled 20% in 8 days?
• Which ASX lithium shares does Macquarie tip to outperform?

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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Experts have rated the two ASX dividend shares in this article as a buy. That means that brokers think the share price is attractively valued and the projected dividend yield is relatively high.

Businesses that pay a sizeable part of their profit out each year as a dividend can provide investors with elevated income.

Here are two businesses that are buy-rated:

Inghams Group Ltd (ASX: ING)

Inghams is one of the biggest poultry businesses in Australia. In the first half of FY22, the company’s core poultry volume was 237.1kt [kilotons]. To put into context how much poultry we’re talking about, one kt is equivalent to 1,000 metric tonnes.

The company’s shares are currently rated as a buy by the broker Credit Suisse, with a price target of $4.05. In FY23, the broker is expecting Inghams to pay a grossed-up dividend yield of 8.6%.

The ASX dividend share’s FY22 first half reflected the “resilience” of the business, according to management, as well as the “ongoing benefits of the company’s continuous improvement program”.

Inghams has faced COVID-19 impacts, like many other businesses. However, the company is confident about the future as the impacts of the Omicron variant recede. Inghams has dealt with “significant” cost pressures with overtime, transport, and compliance costs.

HY22 saw underlying net profit after tax (NPAT) growth of 5.9% to $39.7 million, though the first few weeks of the second half saw the company’s profitability hit by Omicron impacts.

Nick Scali Limited (ASX: NCK)

Nick Scali is one of the largest furniture businesses in Australia. It operates both Nick Scali and Plush-Think Sofas, after acquiring this business.

It’s currently rated as a buy by the broker Citi, with a price target of $17.60. That implies a potential rise of around 70% over the next year.

Citi was impressed by the FY22 half-year result.

Nick Scali reported in HY22 that net profit (only) fell by 6.6% to $35.6 million. The Nick Scali division saw its gross profit margin rise by another 30 basis points to 64.3%.

The outstanding order bank at the end of January 2022 was 70% higher than in the previous year and the ASX dividend share’s suppliers have reinstated normal lead times, which “should facilitate revenue growth over the coming months”.

Nick Scali has a long-term target of at least 85 Nick Scali stores and 90 to 100 Plush stores.

Online sales are another area of potential profit growth for the business. They offer a relatively high earnings before interest and tax (EBIT) margin compared to the rest of the business. In HY22, Nick Scali’s online revenue was $13.7 million, generating an incremental $8 million EBIT contribution.

However, in a trading update, Nick Scali said that trading in January in Nick Scali stores was down 6% due to a 25% decline in store traffic.

Citi is expecting Nick Scali to pay a grossed-up dividend yield of 10.5% in FY22.

The post 2 buy-rated ASX dividend shares that experts like appeared first on The Motley Fool Australia.

More reading

• 2 ASX dividend shares to buy this month: expert
• Be as overweight ‘as you can possibly stomach’ in ASX shares right now: fundie

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 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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Motley Fool Australia Chief Investment Officer Scott Phillips joined Peter Overton on Nine’s Late News on Sunday night to discuss the big economic week ahead, including the RBA’s big rates decision, job ads, retail sales, and a soft start to the week for the ASX.

[youtube https://www.youtube.com/watch?v=mJqxoUXH35o?feature=oembed&w=500&h=281]

The post Buckle up! Rates, jobs and more. The biggest economic week in ages: Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

More reading

• Here are 2 ASX tech shares to buy according to brokers
• These were the best performing ASX 200 shares in April
• Buy these 2 impressive ASX shares in May 2022: experts
• NAB share price drops amid AUSTRAC update
• Own Newcrest shares? Here’s how the share price performed in April

Motley Fool contributor Scott Phillips 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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ASX tech shares could be attractive investments, according to some of Australia’s leading investment brokers.

The first few months of 2022 have seen volatility pick up on the ASX amid strong inflation and the prospect of rising interest rates.

After the recent declines, brokers think these two ASX tech shares are opportunities.

Booktopia Group Ltd (ASX: BKG)

Since the start of the 2022 calendar year, the Booktopia share price has dropped around 50%.

The company has seen revenue continue to grow, however profitability declined in the first half of FY22. It said that revenue increased by 15.5% to $130 million, while earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 49% to $4.1 million.

Booktopia explained that first-half revenue and profit were impacted by the Sydney lockdowns. Its distribution centre is located in one of the areas of Sydney that saw the most restrictive lockdowns. The company decided to limit marketing and forego sales to focus on protecting employees and comply with government regulations.

Management said that operations have largely returned to a more normal environment and the business can “now resume strong revenue growth but with a renewed focus on improving earnings” without compromising areas required to support longer-term growth.

The ASX tech share is aiming to secure a market share of the growing online book market.

It’s currently rated as a buy by the broker Morgans, with a price target of $1.85. That’s around 160% higher than where it is today.

Life360 Inc (ASX: 360)

Life360 operates a platform for families with features including communications, driving safety, and location sharing.

In its latest quarterly update, it said that it achieved 63% year-on-year growth in subscription revenue. Annualised monthly revenue has increased to US$166.1 million. Monthly active users increased 36% year on year to 38.3 million, an 8% increase quarter on quarter.

Average revenue per subscription (including Tile and Jiobit) increased 16% year on year, with 15% growth for the ‘core’ Life360 business.

However, the ASX tech share did announce that its US dual listing plans have ceased.

Management said that there were highly encouraging trial results of the Tile upsell offer, which led to a 35% uplift in Life360 subscriptions compared to the control group.

Life360 is accelerating the integration of Tile and Jiobit (tracking devices) to deliver targeted sustainable cash flow by late 2023. The company expects 2024 to be the first full year of positive cash flow.

In 2022, the tech company expects its core Life360 subscription revenue to rise more than 50%. It expects consolidated revenue to be in a range of between US$245 million to US$275 million. And it expects underlying EBITDA to be a loss of between US$32 million to US$38million.

Life360 is currently rated as a by the broke Morgan Stanley, with a price target of $8.60.

The post Here are 2 ASX tech shares to buy according to brokers 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 positions in and has recommended Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Booktopia Group Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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