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The Rio Tinto Limited (ASX: RIO) share price is falling on Tuesday morning despite announcing acquisition plans.

At the time of writing, the mining giant’s shares are down 4% to $106.36.

Rio Tinto share price lower despite acquisition proposal

The Rio Tinto share price is falling on Tuesday despite announcing a proposed acquisition.

According to the release, the company has made a non-binding C$34 per share proposal to acquire the remaining ~49% of the issued and outstanding shares of Turquoise Hill that it doesn’t already own. This equates to a total consideration of ~US$2.7 billion in cash.

If the deal were to complete, it would mean Rio Tinto’s share of the Oyu Tolgoi copper operation in Mongolia increases to 66%.

The release notes that the proposed transaction follows the recent comprehensive agreement reached between Rio Tinto, Turquoise Hill, and the Government of Mongolia to move the Oyu Tolgoi project forward, reset the relationship between the partners, and approve commencement of underground operations.

Management believes it would simplify the Oyu Tolgoi ownership structure, strengthen Rio Tinto’s copper portfolio, and reinforce its long-term commitment to Mongolia.

In addition, Rio Tinto highlights that the proposed transaction provides Turquoise Hill minority shareholders with the ability to realise compelling, immediate and certain value for their shares at a time when uncertainties inherent in the development of the underground operations and funding of such development remain.

However, it warned that no agreement has been reached between Rio Tinto and Turquoise Hill, and there can be no assurance that any transaction will result from these discussions. Furthermore, it stressed that even if a transaction is agreed, there can be no assurances as to its terms, structure or timing.

Management commentary

Rio Tinto’s Chief Executive, Jakob Stausholm, commented: “Rio Tinto strongly believes in the long-term success of Oyu Tolgoi and Mongolia, and delivering for all stakeholders over the long-term. That is why we want to increase our interest in Oyu Tolgoi, simplify the ownership structure, and further strengthen Rio Tinto’s copper portfolio. We believe the terms of proposal are compelling for Turquoise Hill shareholders.”

“The Proposed Transaction would enable Rio Tinto to work directly with the Government of Mongolia to move the Oyu Tolgoi project forward with a simpler and more efficient ownership and governance structure. With our relationship reset and the underground operations commenced, this transaction demonstrates our clear and unequivocal long-term commitment to Mongolia,” he added.

Response

Analysts at Goldman Sachs have responded to the news. And despite what the Rio Tinto share price performance may indicate, the broker appears to believe the deal is a good one and at a sizeable discount to its true value.

It commented: “OT [Oyu Tolgoi] is one of RIO’s most important growth assets as the project will double RIO’s earnings from copper to over 25% on our estimates, will be long life (+40yrs), low cost (1st quartile), has +50% expansion potential, and in our view is under explored.”

“We value OT at US$23.8bn (before capex revisions/project finance) on a 100% basis at our long run copper price (US$4.12/lb real $ from 2026), and RIO’s current 34% effective share at US$9.1bn (A$8.1/sh; incl. fees). The ~US$2.7bn offer equates to an EV of US$9bn including TRQ’s net debt as at 31 Dec of US$3.6bn, which implies a valuation of US$13.6bn for 100% of OT; the offer therefore represents a 43% discount to the valuation contained in our price target,” it adds.

The post Rio Tinto (ASX:RIO) share price tumbles despite Oyu Tolgoi transaction news appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Tuesday
• Why is the Rio (ASX:RIO) share price down 12% in a week?
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• These were the worst performing ASX 200 shares last week
• Guess which 3 ASX 200 shares are among the top 10 dividend payers in the world

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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What does an ASX-listed skin laser clinic have in common with a logistics business?

They’ve both been named as ASX shares to buy right now by experts.

And they’re both named Silk.

Silky 59% upside in share price

The share price for Silk Logistics Holdings Ltd (ASX: SLH) has plunged 5.9% for the year so far, but Morgans investment advisor Jabin Hallihan reckons it’s a buying opportunity.

“Silk Logistics utilises an asset-light, technology-enabled, flexible business model that guards against increasing costs as they are passed through to customers with a margin,” he told The Bull.

The Melbourne-headquartered business handles logistics from the port and wharf to warehousing and supply chain distribution.

Hallihan thought Silk Logistics had a positive February reporting season.

“The company generated revenue of $182.5 million in the 2022 first half — an 18.5% increase on the prior corresponding period,” he said.

“The full-year outlook is for solid growth. Our 12-month price target is $3.31 a share.”

That is a stunning 59% upside from the closing stock price on Monday. 

Silky move into New Zealand and Victoria 

The Silk Laser Australia Ltd (ASX: SLA) share price has dropped a painful 30.6% already this year.

But Wilsons investment advisor Peter Moran is still recommending the laser clinic network to clients as “overweight”.

He liked the look of the first-half result despite potential customers being unable to visit due to COVID-19 lockdowns and precautions.

“The company also benefited from the acquisition of Australian Skin Clinics (ASC), which moved under Silk Laser’s control in September,” Moran said.

“The 56 ASC clinics are being smoothly integrated and provide a growth opportunity in Victoria and New Zealand, which had been previously missing from Silk’s footprint.”

While coverage for the $158 million small-cap company is scarce, both analysts surveyed on CMC Markets rate Silk Laser as a “buy”.

The Silk Laser share price closed Monday at $2.97.

The post 2 ASX shares to buy for CHEAP that have the same name: experts appeared first on The Motley Fool Australia.

More reading

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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended SILK Laser Australia Limited. The Motley Fool Australia has recommended SILK Laser Australia 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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Fortescue Metals Group Limited (ASX: FMG) is reportedly in discussions with Egypt’s prime minister about potential green hydrogen opportunities.

According to reporting by Ahram Online, Fortescue founder Andrew Forrest was in Cairo on Monday to meet with Mostafa Madbouly.

Why is Fortescue thinking about green hydrogen?

Fortescue Future Industries (FFI) is the division of Fortescue that is looking to decarbonise Fortescue’s operations.

But, it also wants to invest to create a global portfolio of green energy projects to supply 15 million tones per year of renewable green hydrogen by 2030.

Potential Egypt projects

Ahram Online reported that Egypt is keen on exploring opportunities to work with international partners in renewable and “especially green hydrogen”.

The Egyptian prime minister said that Egypt is going to announce a national strategy to grow the production, use and export of clean energy, particularly green hydrogen. In November 2022, Egypt will be hosting COP27, the UN conference about the climate.

It was reported by Ahram Online that Egypt wants Fortescue to “establish and expand” green hydrogen projects in Egypt. One example given was the Benban Solar Park in Aswan in Upper Egypt. This is where there are 32 solar energy projects that come with a total capacity of 1,465 MW.

Dr Forrest reportedly said that the ASX share is ready to start putting money into Egypt to make green hydrogen energy. He said that Egypt is an ideal choice to make green hydrogen, become a regional hub and export that energy to Europe.

The meeting supposedly ended with an agreement between Fortescue and Egypt to finalise a plan for these proposed projects to be done in Egypt.

Fortescue Future Industries has been busy

It has been a busy few months for the business.

FFI recently completed the acquisition of Williams Advanced Engineering (WAE). It’s being vertically integrated into Fortescue and will be managed by FFI. WAE has critical technology and expertise in high-performance battery systems and electrification to help decarbonise Fortescue.

The WAE acquisition will also establish a significant new global battery growth business opportunity for Fortescue.

The ASX share has also announced a zero-emission infinity train – it’s developing a regenerating battery electric iron ore train.

It will use gravitational energy generated on the downhill loaded sections of the iron ore miner’s rail network to recharge its battery electric systems, without any additional charging requirements for the return trip to reload. This self-sustaining system will increase operational efficiency, lower maintenance costs and eliminate diesel and CO2 emissions from Fortescue’s iron ore trains.

The post What’s going on with Fortescue (ASX:FMG), green hydrogen and the Egyptian prime minister? appeared first on The Motley Fool Australia.

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• Top brokers name 3 ASX shares to sell next week
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• Own Fortescue (ASX:FMG) shares? Here’s why the miner has just hired the RBA’s deputy governor
• Is the Fortescue (ASX:FMG) share price a buy right now?
• Record $36bn in dividends could help ASX share market recovery

Motley Fool contributor Tristan Harrison owns Fortescue Metals Group 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 Bruce Jackson.

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The Bank of Queensland Limited (ASX: BOQ) share price could be great value.

That’s the view of the team at Morgans, which sees material upside for its shares over the next 12 months.

What did the broker say about the Bank of Queensland share price?

According to a note, Morgans has retained its add rating and $11.00 price target on the regional bank’s shares.

Based on the current Bank of Queensland share price of $8.01, this implies potential upside of 37% for investors.

And that’s before dividends. Morgans is expecting a fully franked dividend of 48 cents per share in FY 2022. This represents a generous 6% yield, which brings the total potential return on offer with its shares to 43% over the next 12 months.

Why is Morgans bullish?

Morgans believes the Bank of Queensland share price offers significant value for money right now. Particularly given how it is “trumping peers on growth momentum” and realising cost synergies from the acquisition of ME Bank at a quicker than expected rate.

The broker commented: “We see exceptional value in Bank of Queensland’s stock. The Company has been executing well on its transformation program, it continues to grow its home loan book at above-system levels, we don’t expect its NIM to fare worse than the industry-wide trend, and cost synergies associated with the ME Bank acquisition are being realised at a faster rate than originally anticipated.”

“Over the next 12 months, we expect good operational momentum relative to peers to be supportive of the share price. Beyond the next 12 months, we expect cost efficiency improvements in particular to be supportive of the share price,” it added.

All in all, Morgans appears to see the Bank of Queensland share price as a top option for investors looking for exposure to the banking sector right now.

The post Bargain buy? Broker tips Bank of Queensland (ASX:BOQ) share price to rise 37% appeared first on The Motley Fool Australia.

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• Looking for ASX shares in these uncertain times? Top broker says these sectors are now ripe for the picking
• Here’s how the Bank of Queensland (ASX:BOQ) share price performed in February

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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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.

American depositary shares of Chinese electric vehicle (EV) maker Nio (NYSE: NIO) have fallen sharply so far in 2022. The stock is down 55% year-to-date, and its decline accelerated in recent weeks. This comes as the company has worked to expand its sales footprint into Europe and to increase its production capacity. 

But Nio has had four consecutive months of decreasing vehicle deliveries, due in part to the supply chain issues that have been affecting most automotive companies globally. Most recently, however, a new operational challenge has been added to its list of them. 

Nio is getting hit hard again Monday as U.S.-listed Chinese companies are looking more at risk of being delisted. In December 2020, the Holding Foreign Companies Accountable Act (HFCAA) became law, allowing the Securities and Exchange Commission to delist foreign companies that fail to meet U.S. accounting and audit standards for three straight years. 

Last week, five Chinese companies were specifically named as being in danger of meeting that criterion, meaning they could be delisted in 2024 if they fail to comply. Neither Nio nor any other EV maker was on that list. But that hasn’t stopped investors from selling shares based on the perceived risk. Nio also completed a successful listing on the Hong Kong Stock Exchange last week. Investors may believe that move was in preparation for a potential delisting of its American depositary shares. 

The geopolitical climate isn’t helping with investor confidence either. There are added uncertainties regarding the prices and availability of many commodities as Russia’s invasion of Ukraine continues. Investors may also be weighing how Europe, the U.S., and others will view China’s position during and after that conflict. 

Investors need to balance short-term news and uncertainties with long-term plans and potential. There are always risks when investing in equities. While what appears to be panic selling may provide an opportunity for investors to buy Nio shares at lower valuations, they should also be sure to weigh the potential risk of delisting. That means allocating funds for any position appropriately, knowing the investment could be lost in a worst-case scenario. 

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

The post Is the plunging Nio share price an opportunity? appeared first on The Motley Fool Australia.

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Howard Smith owns NIO Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended NIO Inc. 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.

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

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Growth shares have fallen out of favour with investors this year. While this is disappointing, it could have created a buying opportunity for long term focused investors.

With that in mind, listed below are two ASX growth shares that are trading well below their recent highs and have been rated as buys. Here’s what you need to know about them:

Aristocrat Leisure Limited (ASX: ALL)

Aristocrat Leisure is a leading global gaming content and technology company and top-tier mobile games publisher. It offers a diverse range of products and services including electronic gaming machines, casino management systems, and free-to-play mobile games.

It has been growing at a strong rate over the last decade and looks well-placed to continue this positive trend in the coming years thanks to its strong market position and the growing popularity of its games.

Morgans is a fan of the company. It has an add rating and $52.00 price target on its shares. This compares to the latest Aristocrat share price of $35.40.

Its analysts recently commented: “There are strong product tailwinds for ALL and it is clearly excelling in the land based arena with game content outperforming peers.”

Nitro Software Ltd (ASX: NTO)

Nitro is a global document productivity software as a service (SaaS) company accelerating digital transformation. As a global player in the eSign and workflow productivity market, Nitro allows organisations to drive better business outcomes through 100% digital document processes and fast, efficient workflows.

The company has over 3 million licensed users and 13,000+ business customers across 157 countries. This includes over 67% of the Fortune 500 and three of the Fortune 10.

Goldman Sachs is very positive on Nitro and has a buy rating and $2.60 price target on its shares. This compares to the latest Nitro share price of $1.19.

The broker notes that it has a huge total addressable market to grow into in the future. It commented: “Nitro Software is a global enterprise software challenger in a US$34bn TAM across PDF, e-signing and workflows. Nitro operates in large, underpenetrated markets supported by structural growth tailwinds including remote work, enterprise digitisation and e-signing adoption.”

The post Analysts name 2 ASX growth shares to buy with 40%+ upside appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Nitro Software 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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Sometimes even the experts can’t work out what’s going on.

Many ASX-listed companies put out excellent financial results and outlook, but for some reason the market continues to hate them.

This is the frustration facing the team at Forager at the moment.

“While half-yearly results were reported [in February] by most ASX-listed companies, they were not the main drivers of share prices,” read a Forager Australian fund memo to clients.

“The month started with a lot of focus on increasingly concerning signs of inflation and the prospect of higher interest rates, and ended with Russia mounting a full-scale military invasion of Ukraine.”

Forager is keeping the faith with 2 ASX shares in particular that have really copped the thumbs down in recent times: 

Why is the market punishing good businesses?

Perenti Global Ltd (ASX: PRN) and Macmahon Holdings Limited (ASX: MAH) are both mining services providers.

According to Forager analysts, they’re “scratching their heads” as to how these stocks have “almost halved” since the start of 2021 to now hit a forward price-to-earnings ratio of just 6.

“Both companies delivered perfectly acceptable half-year results. Both have a newfound commitment to capital-allocation discipline,” their memo read.

“Macmahon, in particular, has been delivering consistent and improving results for the past 4 years.”

Even their sector outlook is favourable, with resources shares shining bright currently while other industries struggle for investment.

“Commodity prices [are] high and a significant pipeline of new potential mines [are] in the offing,” the Forager team said. 

“And yet their share prices seem to only go down.”

Despite the frustrations, the Forager team is betting that their share prices will soon start reflecting the companies’ clear profitability.

“Something has to give,” the memo read.

“[We] have increased the fund’s holdings in both through February. Combined they represent 6% of the portfolio.”

Macmahon and Perenti are not the only ones suffering from a lack of attention despite positive business performance. 

Technology shares Whispir Ltd (ASX: WSP) and Bigtincan Holdings Ltd (ASX: BTH) have both been swept up in the recent correction to growth stocks.

“Both reported better-than-expected results and strong outlooks for the current year. While less obvious, they are also showing their potential to be highly profitable once the growth taps are turned down,” said the Forage team.

“If they keep getting pummelled in the short term, you should expect a substantially increased allocation to these.”

The post I’m doubling down on 2 ASX shares that keep going down: fund manager appeared first on The Motley Fool Australia.

More reading

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• The Webjet (ASX:WEB) share price has fallen 10% in a month
• Top ASX dividend shares to buy in March

Motley Fool contributor Tony Yoo owns Whispir Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BIGTINCAN FPO and Whispir Ltd. The Motley Fool Australia has recommended BIGTINCAN FPO and Whispir Ltd. 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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Are you looking for dividend shares to buy? If you are, then you might want to look at the ASX shares listed below.

Here’s why analysts think these ASX dividend shares could be worth considering right now:

Baby Bunting Group Ltd (ASX: BBN)

The first ASX dividend share to consider is Baby Bunting. It is the leading baby products retailer with a strong and growing presence through its national superstores and online business.

Citi is a fan of the retailer and has a buy rating and $6.22 price target on its shares. This is due to its clear leadership position in a less discretionary category which stands to benefit from ~300,000 births a year in Australia.

It is thanks to this strong market position that the broker believes Baby Bunting can “outperform the broader small cap retail sector this year.” But it doesn’t expect its growth to stop there. Citi “forecast[s] a FY21 to FY24 EPS CAGR of 17%.”

As for dividends, Citi has pencilled in fully franked dividends per share of 16 cents in FY 2022 and 19 cents in FY 2023. Based on the current Baby Bunting share price of $4.71, this will mean yields of 3.4% and 4%, respectively.

Westpac Banking Corp (ASX: WBC)

Another ASX dividend share to consider is banking giant, Westpac. Due to concerns over the big four bank’s margin outlook and doubts over its cost cutting plans, its shares have fallen heavily in recent months.

However, the team at Morgans believes these concerns are unwarranted and has suggested that Westpac can overcome its margin issues and deliver on its cost-cutting targets. 

In light of this, it believes the bank’s shares have been oversold and are great value now. The broker has an add rating and a $29.50 price target on the Westpac shares.

Morgans also expects attractive dividend yields in the near term. The broker has pencilled in fully franked dividends per share of $1.19 in FY 2022 and then $1.60 in FY 2023. Based on the current Westpac share price of $23.23, this will mean yields of 5.1% and 6.9% respectively.

The post 2 ASX dividend shares analysts say are buys now appeared first on The Motley Fool Australia.

More reading

• Why ASX 200 bank shares are storming higher today
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Motley Fool contributor James Mickleboro owns Westpac Banking Corporation. 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 Baby Bunting and Westpac Banking Corporation. 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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Wise long-term investors will have been using this year’s depressed market to snap up some bargains.

However, when the whole market is so down in the dumps, you can’t possibly keep track of all the cheapies out there.

That’s why it’s worth listening to some experts who have spotted some excellent candidates:

18% share price upside while interest rates head up

With interest rates looking very likely to rise this year, finance and insurance ASX shares have already been tipped by many analysts as value plays.

But one name that hasn’t popped up too much is Challenger Ltd (ASX: CGF).

The annuities and income funds provider is a buy in Morgans investment advisor Jabin Hallihan’s book at the moment.

“A key feature of these products is they distribute cash flow and protect against market movements and inflation risks,” he told The Bull.

“Such products appeal for their stability, particularly during times of market volatility.”

The stock could potentially be at an attractive entry point right now, having fallen more than 4% this year so far.

Hallihan’s team has a 12-month price target of $7.74, which is an 18% upside.

Challenger shares also return a handy dividend yield of around 3.35%.

Australians need healthcare, regardless of what else is happening

Healthcare is one of those sectors that is somewhat resistant to economic and interest rate cycles. People will always need to take care of their health.

As such, Wilsons investment advisor Peter Moran would currently buy shares in Integral Diagnostics Ltd (ASX: IDX).

“This diagnostic imaging services company recently undertook a $90 million capital raising to fund the acquisition of Peloton Radiology.”

The Integral share price has fallen close to 23% so far this year.

Moran admitted February financials were not favourable, but expected the underperformance to be temporary.

“First half 2022 operating net profit after tax was down 21.7% on the prior corresponding period,” he said.

“The result was impacted by COVID-19 restrictions. However, with restrictions easing, we expect profitability to recover as margins improve and recent investments in their business start to produce a return.”

Moran’s team holds an overweight recommendation on Integral shares.

The stock is somewhat polarising, with CMC Markets showing 6 of 13 analysts rating it as a strong buy while 5 label it as a hold.

The post 2 ASX shares to buy now at bargain prices that you’ve forgotten about appeared first on The Motley Fool Australia.

More reading

• Is opportunity knocking? 2 ASX All Ordinaries shares hitting 52-week lows
• Integral Diagnostics (ASX:IDX) share price on ice after trio of big announcements
• Top brokers name 3 ASX shares to buy next week
• Why is the Challenger (ASX:CGF) share price outperforming this week?
• Here are the top 10 ASX shares today

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Challenger Limited and Integral Diagnostics Ltd. 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 Webjet Limited (ASX: WEB) share price has fallen by around 10% in the past month

Compare that to the S&P/ASX 200 Index (ASX: XJO), which is only down by around 2%.

What’s going on with the Webjet share price?

It’s hard to avoid the fact that oil prices are now much higher than they were at the start of the year.

Aussies are seeing higher prices at the service stations. But cars and trucks aren’t the only transportation experiencing higher fuel costs as well.

Oil is a key expense of getting planes in the air. Higher fuel costs and other inflation may lead to higher ticket prices from the likes of Qantas Airways Limited (ASX: QAN).

It’s possible that higher charges by Qantas and other airlines could hurt the Webjet profit margin and/or lead to lower-than-expected demand for travel, meaning less volume for Webjet.

The ASX travel share has already been living through difficulty because of the COVID-19 global pandemic which has heavily impacted global travel over the last two years.

Webjet’s latest result showed that the business is recovering, but it’s not back to full volumes yet.

Last report

In November 2021, Webjet announced its FY22 half-year result for the six months to September 2021.

Its underlying operations showed total transaction volume (TTV) of $663 million, up 148% year on year. The revenue generated for the six months was $55.4 million, up 145%.

Webjet’s half-year earnings before interest, tax, depreciation and amortisation (EBITDA) was a loss of $15.9 million. However, this was an improvement of 60% compared to the EBITDA loss of $40.1 million in the prior corresponding period.

The ASX travel share also made a net loss after tax of $43.8 million. That was an improvement of around 25% year on year. Growth in the bottom line can be helpful for the Webjet share price.

Promising signs?

Webjet said with that result that the business was turning around as global markets started to reopen. Positive working capital was delivering a $3.5 million per month cash surplus.

WebBeds was profitable since July, with half-year costs down 31% compared to pre-COVID and on track to be 20% more cost efficient at scale. November 2021 TTV was 63% of pre-COVID volumes with many key markets (at the time) yet to reopen.

The Webjet online travel agency (OTA) returned to profitability in October 2021.

Webjet also said that the third quarter was tracking ahead of the FY22 second quarter.

The ASX travel share said that it believes ongoing vaccinations, boosters and anti-viral treatments will stabilise the impact of COVID-19 within the next six to 12 months.

Based on its trajectory, at the time, of outperforming the market with its WebBeds and Webjet OTA businesses, the company believed that it would be back at pre-COVID booking volumes by the second half of FY23. This would be between October 2022 to March 2023.

Is the Webjet share price a buy?

There is a mix of views on Webjet at the moment.

Morgans rates it as a buy with a price target of $6.60. That’s an upside of more than 20%, if the broker ends up being right.

However, Morgan Stanley is only ‘equal-weight’ on the business, with a price target of just $4.30. That’s 20% lower than where it is right now.

The post The Webjet (ASX:WEB) share price has fallen 10% in a month appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Why Block, Breville, Megaport, and Webjet shares are falling today
• Here’s why ASX 200 travel shares are having another stellar day
• ASX travel shares rebound despite rising oil prices
• Can the Webjet (ASX:WEB) share price recover to reach its 2022 highs?

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 Webjet Ltd. 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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