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Fortescue Metals Group Limited (ASX: FMG), kinetic energy, and Formula One – oh my!

Fans of the ASX iron ore giant will be used to hearing of the futuristic technology being produced by the company and its green energy leg, Fortescue Future Industries (FFI). Though, that doesn’t make its ventures any less exciting.

In fact, its latest innovation will likely pique the interest of many Fortescue shareholders. Particularly, as it could bring $200 million of annual cost reductions.

Let’s take a look at the Formula One battery that could see iron ore trains powered by kinetic energy.

The ASX’s Fortescue Metals meets Formula One

ASX iron ore giant Fortescue Metals’ plan to create the world’s first ‘Infinity Train’ has been public knowledge for a few weeks now.

The battery-powered train will generate electricity by using its braking system while travelling downhill. Thus, its batteries will be able to charge using kinetic energy rather than a secondary power source.

Fortescue expects to pay US$50 million over the next two years to get the battery-powered trains to the Pilbara region. And new details of its design have come to light today.

According to reporting by the Australian Financial Review (AFR), the train will use nearly identical batteries to those developed for Formula One’s electric vehicle leg, Formula E.

Williams Advanced Engineering (WAE) created Formula E’s battery technology. FFI acquired the company earlier this month.

Additionally, the kinetic energy harvested from the train’s braking system might produce excess energy, Fortescue chair Andrew Forrest and WEA CEO Craig Wilson told the AFR.

That energy could be funnelled back to Fortescue’s renowned hydrogen operations.  

Previously, Fortescue stated the Infinity Train could see the ASX giant ditching diesel from its iron ore haulage operations.

Without the battery-powered train, the company could be burning 100 million litres of diesel annually in two years’ time, Forrest told the AFR.

Thus, the Infinity Train’s introduction could save Fortescue Metals $200 million each year.

It could also help the company reach its goal of ditching diesel by 2030 and drastically cut its carbon emissions.

Transporting iron ore using diesel-powered trains accounted for 11% of the company’s scope 1 emissions ­in financial year 2021.

While Fortescue Metals has been seemingly kicking goals on the innovation front lately, its performance on the ASX has been lacking.

Right now, the Fortescue share price is 4.5% lower than it was at the start of 2022.

The post What do Fortescue (ASX:FMG), kinetic energy, and Formula One have in common? appeared first on The Motley Fool Australia.

More reading

• Why is the Fortescue (ASX:FMG) share price underperforming BHP today?
• How close is Fortescue (ASX:FMG) Future Industries to making green hydrogen?
• Are 2021’s monster dividends from ASX 200 mining shares sustainable in 2022?
• Red gold! Fortescue (ASX:FMG) share price surges 8% in 2 days
• ACCC takes Facebook’s owner Meta Platforms (NASDAQ: FB) to court over crypto scam ads

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 Bruce Jackson.

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If you’re looking for exposure to the lithium sector, then you may want to check out the three shares listed below.

These lithium shares have been named as buys with material upside potential from current levels. Here’s what you need to know:

Allkem Ltd (ASX: AKE)

The team at Morgans believe this lithium miner could be the best option in the space right now. Its analysts currently have an add rating and $13.25 price target on the company’s shares.

The broker commented: “AKE is a pure play lithium producer with diversified products (spodumene, LiCO and borax) and geographies (WA and Argentina) that is set to expand. The almost completed Naraha plant will allow AKE to grow vertically into the lithium hydroxide market, supported by increased Argentinian brine production. The lithium market has seen strong price increases in CY21 but we don’t see signs of a break to this momentum yet. We expect EV demand to remain strong with geopolitical events and a potentially tight oil market accelerating the shift towards electrification.”

Liontown Resources Limited (ASX: LTR)

Another lithium share to consider is Liontown. Bell Potter is very positive on this lithium developer and has a speculative buy rating and $3.06 price target on its shares. Its analysts note that the company has recently signed a deal with auto giant Tesla, which means that Liontown has sales agreements locked in for more than half of its planned production.

Bell Potter commented: “LTR has entered a binding term sheet with Tesla for supply of up to 150ktpa spodumene concentrate from the Kathleen Valley project, adding to an agreement last month with major global battery producer LG Energy Solution (LGES). LTR now has binding term sheets in place for over half of the expected initial production from Kathleen Valley, with offtake pricing linked to market prices for lithium hydroxide. Lithium price upgrades increase our LTR valuation to $3.06/sh.”

Vulcan Energy Resources Ltd (ASX: VUL)

This lithium developer could another lithium share to buy. The team at Germany-based Alster Research currently has a buy rating and $20.00 price target on the company’s shares. The broker believes that Vulcan is well-placed to benefit from geothermal energy demand and its massive Zero Carbon Lithium project, which is aiming to service the European car market.

It commented: “Aside from the future production of carbon neutral lithium, Vulcan produces geothermal energy and heat. Clearly, Vulcan would benefit from an increasing penetration of geothermal energy by streamlined regulatory procedures, as it would simultaneously help identify and develop the lithium deposits within the granted licenses. In terms of acceptance, Vulcan is already making efforts on its own initiative to convince policymakers and the public of the merits of the technology. Overall, we expect the conditions for Vulcan to receive a further impetus not only due to the conflict, but also due to the fulfillment of climate targets.”

The post Experts name 3 of the best ASX lithium stocks to buy now appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts this Monday
• Why Block, Core Lithium, Liontown, and Qube shares are rising
• ‘Exciting’ results: Here’s why the Liontown (ASX:LTR) share price is climbing 6% today
• Brokers name 3 ASX shares to buy today
• Here’s why the Vulcan (ASX:VUL) share price is charging higher today

Motley Fool contributor James Mickleboro owns Allkem. 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 Bruce Jackson.

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Shares in Mesoblast Ltd (ASX: MSB) are inching higher today and now trade around 3% in the green at $1.13.

Mesoblast shares have struggled of late, down 19% since trading restarted back in January, and down almost 53% in the past 12 months.

Today, Mesoblast informed the market that a new member has joined its board. Whilst the update isn’t market-sensitive in any way, it’s still integral to the company’s growth narrative.

What did Mesoblast announce?

The company advised that Dr Philip R. Krause, M.D. has joined its board of directors. Dr Krause is currently Chair of the World Health Organization COVID Vaccines Research Expert Group.

Mesoblast notes that “most recently he shared responsibility for regulatory authorizations of COVID-19 vaccines in the US.”

For the past decade, the company says that Dr Krause was Deputy Director, Office of Vaccines Research and Review (OVRR) at the US Food and Drug Administration’s (FDA) Center for Biologics Evaluation and Research (CBER).

Dr Krause said that he had followed Mesoblast’s story over the years and that he is looking forward to helping in successfully launching its products, that are “cutting-edge technology.”

“I have followed Mesoblast’s development programs closely and am very much looking forward to help guide the company as it brings its lead products to the market,” he remarked.

“I believe I can make a substantial contribution at this very important time in the company’s transition towards commercialisation”.

Meanwhile, Mesoblast CEO, Dr Silvu Istecu highlighted how pleased the company was in having Dr Krause on board, given his key expertise of the FDA and US markets.

“We are delighted to have Dr Krause join our board,” Istecu noted.

“The biologics development and regulatory expertise that he brings will be invaluable in our ongoing FDA interactions on our lead and follow-on product candidates,” he concluded.

Mesoblast has been under considerable pressure from short sellers lately, regularly finding itself on the daily 10 most shorted ASX shares list these past few weeks.

Jefferies has Mesoblast rated as a hold and values the company at $1.25 per share, in line with the consensus price target.

The consensus price target on Mesoblast shares has crept down from $6.50 in September 2020 alongside the stock price, which is now trading back around 5-year lows.

The post Here’s why the Mesoblast (ASX:MSB) share price is climbing today appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• These were the best performing ASX 200 shares last week
• ASX 200 (ASX:XJO) midday update: Block falls, Nickel Mines jumps
• Mesoblast (ASX:MSB) share price rebounds 15%, what’s been happening?

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 Bruce Jackson.

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The McPherson’s Ltd (ASX: MCP) share price is having a very strong day.

In morning trade, the health, wellness and beauty products company’s shares are up almost 15% to $1.02.

Why is the McPherson’s share price surging higher?

The catalyst for the rise in the McPherson’s share price has been the announcement of an agreement with pharmacy giant Chemist Warehouse Group.

According to the release, the two parties have agreed to establish a unique strategic alliance which has been structured to deliver material commercial and operational benefits to McPherson’s.

As part of the agreement, McPherson’s will be appointed as Chemist Warehouse’s exclusive long-term distributor of a select portfolio of Chemist Warehouse-owned or controlled health and beauty brands outside of the Chemist Warehouse Network in Australia and New Zealand.

The range, which includes Wagner Vitamins, Wagner Body Science, Bondi Protein, Foster Grant, INC and Microgenics, will be made available to all customers within the McPherson’s distribution network for an initial term of five-years commencing on 1 July 2022.

In addition, Chemist Warehouse will increase the portfolio of McPherson’s brands it currently ranges in Australia and New Zealand, to include Moosehead, Maseur, Fusion Health, Stratton, Sugar Baby and Happy Flora. The pharmacy giant will also recognise McPherson’s as a preferred supplier, allowing the company to enjoy the benefits of that status.

What’s the catch?

Chemist Warehouse isn’t doing this out of generosity. It will come at a cost to McPherson’s.

McPherson’s is essentially giving away almost 10% of the company to Chemist Warehouse in exchange for these agreements.

The release notes that the company will issue approximately 14.1 million McPherson’s shares to Chemist Warehouse on 1 July 2022, making the pharmacy chain a substantial shareholder with an interest of 9.9% on a fully diluted basis.

Despite the dilution caused by the material share issue, management expects the agreement to be earnings per share accretive in FY 2023. This is based on agreed sales targets.

Time will tell if that is the case.

The post McPherson’s (ASX:MCP) share price leaps 15% on Chemist Warehouse deal appeared first on The Motley Fool Australia.

More reading

• Janus Henderson (ASX:JHG) share price falls following new CEO appointment
• Incannex (ASX:IHL) share price slips on acquisition news
• Is a dividend boost on the cards for Bluescope (ASX:BSL) shares in FY22?
• Why is the Zip share price getting smashed so much more than other BNPL stocks in 2022?
• Own Telstra shares? Here’s how the telco plans to use drones to create carbon credits

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 Bruce Jackson.

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The Janus Henderson Group PLC (ASX: JHG) share price is in the red today.

Shares in the global fund manager closed at $47.62 yesterday and are currently trading for $45.89.

That puts the Janus Henderson share price down 3.6% in morning trade.

This comes as the company revealed who will be replacing Dick Weil as the new chief executive officer. Weil will be retiring from that position on 31 March.

Who will be taking over as CEO?

This morning, Janus Henderson reported that Ali Dibadj will take the reins as the new CEO, commencing no later than 27 June.

The Harvard educated 46-year-old previously served as chief financial officer and head of strategy at global asset manager, AllianceBernstein Holding.

Commenting on the appointment, Janus Henderson chairman Richard Gillingwater said:

As part of our CEO transition planning, we conducted an extensive internal and external search to identify an executive who both understands our business and has the necessary strategic expertise to help drive the firm’s next phase of growth for the benefit of our clients and shareholders. The Board is confident that Ali is the ideal choice to lead this great company into its next phase of growth and value creation.

Saying he was delighted with the appointment, Dibadj added:

I have long admired Janus Henderson’s commitment to deliver for its clients with investment and servicing excellence. The executive team, the Board, and I look forward to identifying, expediting, and capturing growth and innovation that creates value for our clients, employees, shareholders, communities, and all stakeholders.

Roger Thompson, Janus Henderson’s CFO, will step in as Interim CEO until Dibadj commences.

The company expects that Dibadj will also join the Board.

Janus Henderson share price snapshot

The Janus Henderson share price has struggled this year, down 21.2% since the opening bell on 4 January.

By comparison, the S&P/ASX 200 Index (ASX: XJO) is down 3% year-to-date.

The post Janus Henderson (ASX:JHG) share price falls following new CEO appointment appeared first on The Motley Fool Australia.

More reading

• Incannex (ASX:IHL) share price slips on acquisition news
• Is a dividend boost on the cards for Bluescope (ASX:BSL) shares in FY22?
• Why is the Zip share price getting smashed so much more than other BNPL stocks in 2022?
• Own Telstra shares? Here’s how the telco plans to use drones to create carbon credits
• NAB share price lower despite new $2.5bn buyback

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 Bruce Jackson.

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The Incannex Healthcare Ltd (ASX: IHL) share price is having a tough time this morning. It sunk 7% from the open before recovering most of its losses and is now 0.71% in the red at 69.5 cents.

Investors are pushing Incannex shares lower after the company announced an acquisition deal.

Despite its shares taking a hit today, the medicinal cannabis company is still in the green across all major time frames, having climbed more than 235% in the past year.

What’s impacting the Incannex share price?

The Incannex share price is slipping after the company advised it had executed a term sheet to wholly acquire APIRx Pharmaceutical USA, LLC on a proposed all-scrip transaction price of US$93.3 million.

Incannex says APIRx is “an innovative biotechnology company focused on research, development, and production of prescription pharmaceutical cannabinoid medicines”.

It has 22 active clinical and preclinical research and development projects utilising its own proprietary technologies, the company added.

For Incannex, the acquisition is set to diversify its portfolio and give the company exposure to a wider array of markets, from pain to dementia to addiction disorders, just to name a few.

As a result, the company claims it now has an expanded total addressable market (TAM) of more than US$400 billion annually.

APIRx can also vote to have one board member designated to Incannex’s board after the transaction is completed.

Speaking on the proposed acquisition that might be affecting the Incannex share price today, CEO Joel Latham said:

We believe that bringing together Incannex and APIRx will bolster our position as a leader in the medicinal cannabinoid sector and will further set IHL apart from other players in the industry.

With sizeable addressable markets and intellectual property spanning a multitude of unmet medical needs, we’re positioning Incannex to be a significant player in the pharmaceutical sectors of the future. I’m excited by this acquisition opportunity on multiple fronts and look forward to working with the APIRx team to deliver on our vision of providing treatments which will make genuine differences to the lives of millions of people.

What’s next?

All the necessary steps are underway to get the transaction underway, but shareholder approval is needed first.

The company will hold an extraordinary general meeting to discuss the transaction and attempt to garner shareholder support.

Incannex will update the market on when this meeting will take place. It also provided some high-level cost estimates.

“Incannex anticipates budgeting approximately A$5.0 million of expenditure on the APIRx product suite in the first 12 months,” it said.

“However, the budget may be re-assessed to up to A$10 million following the conclusion, in April, of the Loyalty Option Offer, that could raise up to approximately A$28 million in development capital for the company.”

The Incannex share price is up 19% in the past month of trade and has climbed 9% this year to date.

The post Incannex (ASX:IHL) share price slips on acquisition news appeared first on The Motley Fool Australia.

More reading

• Here’s why the Incannex (ASX:IHL) share price is on ice today
• The Incannex (ASX:IHX) share price is up a whopping 50% in a week. What’s the deal?
• What’s going on with the Incannex (ASX:IHL) share price today?

The author has no positions 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 Bruce Jackson.

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Shares in BlueScope Steel Ltd (ASX: BSL) are performing well lately and have charged 5% into the green over the past month.

On the last check, the Bluscope share price was fetching $20.56 apiece, having finished less than 1% in the red on Thursday.

As commodity baskets soared to record highs in 2021, Aussie miners have been returning cash to shareholders in droves by way of dividends and/or share buybacks.

Analysts at JP Morgan are constructive on Bluescope and reckon FY22 could be a year that sees considerable total shareholder return for those patient enough to stick with the company.

Still generating mammoth free cash flow

JP Morgan analysts note that steel prices have begun to catch up to input costs, with coking coal up around 60% at the time of its report whilst pig iron and iron ore were up 33% and 10% respectively.

The impulse caught up to steel prices in the US and Europe after a delayed response, with steel rebar climbing around 5% in the past month and over 18% since November.

This gain should feed cash down through Bluescope’s P&L, JP Morgan says, resulting in huge amounts of free cash flow (FCF) generation that could be redistributed back to shareholders.

“Despite declining from recent highs, spot spreads are still generating a strong 18% FCF yield for BSL from FY23 onwards, and spot earnings are still within the BBG consensus range,” it said.

“This highlights that despite strong cost inflation, BSL remainshighly FCF generative”.

FCF yield is a ratio that highlights a company’s ability to meet its financial obligations, but also its ability to support dividend growth, and other capital budgeting decisions.

The higher the yield, the greater prospect for Bluescope to reward its shareholders with a consistent stream of income via dividends.

In fact, that’s one thing JP Morgan likes in Bluescope’s investment debate – the fact it has “a shareholder return focus” in its mantra.

The steel giant is one of the broker’s favourite picks in FY22, backed by robust fundamentals and high prospects for outsized return.

“We continue to rate BSL as one of our preferred stocks under coverage, based on its valuation support, growth outlook, ongoing capital management, balance sheet strength, and backdrop of strong demand conditions,” it mentioned.

“Over time, we expect the company to grow domestic volumes in Australia, which should improve margins, while the North Star expansion also offers potential growth”.

With the prospects of a FCF yield in the high teens for FY22, JP Morgan projects Bluescope to deliver a dividend of 50 cents per share, followed by another 50 cent payment in FY23 and then again in FY24.

It also values the company at $25 per share whilst urging its clients to buy up shares at the current prices. Currently, the Bluescope share price is trading below the consensus valuation of $23.50, a spread of roughly $3 per share at the time of writing.

Bluescope share price snapshot

In the last 12 months, the Bluescope share price has climbed 10%, but it has slipped into the red since trading restarted in January.

During the previous month of trade, shares have picked back up and are now trading 5% in the green.

The post Is a 50c dividend on the cards for Bluescope (ASX:BSL) in FY22? appeared first on The Motley Fool Australia.

More reading

• These were the worst performing ASX 200 shares last week
• BlueScope Steel (ASX:BSL) share price sinks 9%
• ASX 200 (ASX:XJO) midday update: CSL and St Barbara charge higher

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 Bruce Jackson.

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The Zip Co Ltd (ASX: Z1P) share price is suffering this year, falling more than its fellow ASX-listed buy now, pay later (BNPL) peers.

And the past 30 days have seen that gap widen. Australia’s biggest BNPL stock has seen its value tumble by around 24% since this time last month. The Zip share price is currently down 3.95% today at $1.58.

For context, the second worst-performing ASX BNPL share is Sezzle Inc (ASX: SZL). Its stock has slipped around 7% over the last month.

Let’s take a look at what might be dragging on the Zip share price lately.

What’s behind the ZIP share price’s recent tumble?

Zip’s stock has tumbled 64% since the start of 2022.

That sees it taking the rear among its BNPL peers, of which Humm Group Ltd (ASX: HUM) has come out as one of the best performers. It has fallen just 12.5% in 2022.

However, the Zip share price has really underperformed over the last month, despite the announcement of a major acquisition.

As most market watchers will be aware, Zip and Sezzle are planning to come together in an all-scrip acquisition by the September quarter, subject to approvals.

Brokers’ mixed opinions regarding the transaction might have weighed on the BNPL provider’s stock lately.

Additionally, Zip’s recent $148.7 million capital raise and the release of its half-year results might have further dampened market enthusiasm for the company’s share price.

Zip officially released its half-year results late last month, detailing an 89% increase in revenue and a 92% increase in transaction volumes.

However, rising costs (the company’s cost of sales increased 192.5% last half) pushed Zip’s gross profits 23.2% lower.

Zip also offered 78.3 million new shares for $1.90 apiece as part of its recent institutional placement. At the time, the offer price represented a 14% discount to Zip’s stock’s previous closing price.

Finally, Zip is currently undergoing a share purchase plan, offering eligible shareholders the option to buy up to $30,000 worth of shares.

Under the plan, each new share will cost participating investors either $1.90 or a 2% discount on the Zip share price’s five-day volume-weighted average price for the period ending 1 April, whichever is lesser.

All that is likely weighing on the BNPL giant’s stock and might be causing it to underperform its peers.

The post Why is the Zip share price getting smashed so much more than other BNPL stocks in 2022? appeared first on The Motley Fool Australia.

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• Leading the pack! ASX tech shares storm higher on Wednesday
• ASX 200 (ASX:XJO) midday update: Block and Zip jump, Fisher & Paykel Healthcare sinks
• From over $12 to $1.53 in little more than a year, why it may not be all bad news for the Zip share price
• Rollercoaster! Zip share price pops then drops
• 2 leading ASX 200 shares to watch as fundies rebalance portfolios

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. owns and has recommended ZIPCOLTD FPO. 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 Bruce Jackson.

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Telstra Corporation Ltd (ASX: TLS) is taking a novel approach at meeting its carbon reduction emissions. One that includes plans for a fleet of tree tending drones.

If you own Telstra shares, you’ll own part of that fleet.

So, what exactly is the S&P/ASX 200 Index (ASX: XJO) telecom giant planning?

How is the telco planning to create carbon credits?

As reported by The Australian Financial Review, Telstra intends to plant 158,000 indigenous trees and shrubs across 240,000 hectares of land in northern New South Wales.

The project will employ drones to plant the seeds and monitor tree health. It’s estimated that the trees will pull some 160,000 tonnes of CO2 from the air over the next 25 years.

The land in question, according to Telstra, isn’t agricultural. Rather it’s land that needs repair and will be returned to its natural state.

As for the reasoning behind the company’s plans, Telstra’s CEO, Andrew Penn said that the price of carbon credits “is quite volatile” and they’re “increasingly difficult to come by”.

According to Penn:

Rather than just shop around, what I said to the team is: ‘Well, why is that the case? Why is that a problem?’ And, of course, part of the problem is we don’t have enough carbon farming projects to, basically, create those carbon credits.

And the telco’s futuristic project isn’t limited to seed planting drones.

“Other technologies we intend to explore include the use of robotics and artificial intelligence to improve pest and weed management,” Penn said. “And drones and sensors to monitor tree health and calculate the carbon stored in trees.”

Penn said Telstra’s networks, which support Australia’s booming digital economy, require a lot of electricity to run.

According to Penn (quoted by the AFR):

That’s driving more and more consumption, which then requires energy to run. So this is part of that overall mix of how we support development of carbon credits but also reduce our absolute [emissions] output at the same time.

How have Telstra shares been tracking?

Telstra shares, up 0.1% in early trade today, have been trailing the benchmark in 2022.

Year-to-date Telstra shares are down 7.5%, compared to a loss of 3% posted by the ASX 200.

The post Own Telstra shares? Here’s how the telco plans to use drones to create carbon credits appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The National Australia Bank Ltd (ASX: NAB) share price is falling on Thursday.

In morning trade, the banking giant’s shares are down 0.75% to $31.49 amid broad weakness in the sector.

This is despite NAB making a positive announcement prior to the market open.

What did NAB announce?

This morning NAB announced that it has now completed its $2.5 billion on-market buy-back, which resulted in a total of 86,925,469 ordinary shares being bought back by the banking giant.

However, it is not settling for that. Thanks to its strong capital position, the bank plans to launch another new on-market buy-back.

According to the release, NAB intends to commence a further on-market buy-back of up to $2.5 billion, bringing the total potential combined size to $5 billion. Subject to market conditions, NAB expects to commence the further buy-back following its half year results release on 5 May 2022.

The release notes that the new buy-back will allow NAB to continue managing its Common Equity Tier 1 (CET1) capital ratio towards its target range of 10.75% to 11.25% over time.

NAB’s Group Chief Executive Officer, Ross McEwan, explained: “Our capital management strategy reflects the importance of maintaining a strong balance sheet through the cycle while allowing us to continue to support growth and deliver improved shareholder returns. The further $2.5 billion on-market buy-back announced today supports our ambition to reduce share count and increase sustainable ROE benefits for our shareholders.”

What impact will this have on its capital position?

NAB advised that it continues to operate well above APRA’s Unquestionably Strong benchmark of 10.50%, with a reported CET1 capital ratio of 12.4% as of 31 December 2021.

The further $2.5 billion on-market buy-back will reduce its CET1 capital ratio by approximately 58 basis points. Combined with other adjustments such as the Citi acquisition, on a pro forma basis, NAB’s CET1 capital ratio would be 11.3%.

This remains comfortably ahead of APRA’s benchmark, which potentially provides scope for even more shareholder returns in the future.

The post NAB share price lower despite new $2.5bn buyback appeared first on The Motley Fool Australia.

More reading

• NAB, ANZ and CBA shares in focus as top broker tips extra $5b share buyback
• Banking gains! NAB share price hits yet another 52-week high
• The National Australia Bank (ASX:NAB) share price target upgraded by a top broker
• Cha-ching! The NAB share price just hit a multi-year high
• Fundie tells why two-thirds of all dividends come from just 7 ASX shares. Guess which ones?

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 Bruce Jackson.

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