Tag: Motley Fool

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

Shares of electric cars leader Tesla (NASDAQ: TSLA) jumped during trading on Monday after its car battery partner Panasonic announced it will produce Tesla’s new 4680 lithium ion batteries at a production facility in Japan — perhaps in as little as one year from now.

Tesla stock closed the session up 7.48%.

So what

The 4680 is a new kind of lithium ion battery, first revealed at Tesla’s Battery Day presentation in 2020. Reuters notes that at a diameter of 46 millimeters (mm) and a height of 80 mm (hence the name), the new battery will be about five times bigger than Tesla’s current battery cells. At that size, the new battery will not only be able to hold significantly more energy but also provide greater range to Tesla’s vehicles and at lower production cost.

Of course, first Panasonic needs a factory capable of producing the thing. As Reuters reported early this morning, Panasonic needs to build two new production lines at its Wakayama factory in western Japan before it can begin production. The Fly notes that production won’t begin before “the fiscal year ending in March 2024.”

Now what

The good news is that “the fiscal year ending in March 2024” is also the fiscal year that begins in March 2023 — so, technically, it’s possible Tesla could start getting its new batteries as early as one year from now. The bad news is that the way Panasonic seems to be describing its plans, it’s more likely to take a bit longer than that — perhaps twice as long, or two full years.

The best news of all, however, is simply that the new battery is no longer vaporware. Sooner or later, this new battery will arrive and extend Tesla’s technological lead over other electric carmakers even further. 

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

The post Why Tesla stock popped today appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Tesla. 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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ASX shares, as well as those overseas, have fallen significantly this year due to investor fears that interest rates are about to rise around the world.

According to Montgomery Investment Management chief investment officer Roger Montgomery, the change in mood from the US Federal Reserve “has been dramatic”.

“Back in July last year, the US Federal Funds rate was expected to be 0.3% by the end of calendar 2022. Today, the rate at that time is expected to be 1.25%,” he said in a blog post.

“The repercussions for equity investors have been impossible to ignore.”

The current war in Ukraine will only add fuel to the inflationary fire, as it could push up energy and agricultural commodity prices.

So what does this mean for ASX shares?

A common way to value a stock is to use the price-to-earnings (PE) ratio.

Montgomery set about answering a question that’s been on the tip of many retail investors’ tongues during the current volatility. What will happen to PE ratios when interest rates inevitably head north?

As one goes up, the other goes down

The incontrovertible evidence from the past, according to Montgomery, shows PE ratios shrink as interest rates move up.

“Correlation analysis, on data back to the 1980s, reveals the decline in the earnings multiple is greatest when interest rates move up from lower starting levels,” he said.

“The simple fact is, for the last 4 decades, whenever inflation or interest rates have risen, the multiple of earnings investors have been willing to pay for a share in a company has declined.”

During the current market dip, the prospect of rising rates is complemented by the tapering of quantitative easing and government fiscal support.

Everyone has fewer dollars to invest.

“Investors are simply unwilling to pay as much for a dollar of earnings as they were just 10 weeks ago.”

So which ASX shares are the best buys now?

So what sort of shares should investors buy at the moment?

Montgomery explained that when the price side of the PE ratio starts shrinking, the only way a stock can offset that is with rising earnings.

“To counteract the multiple declines, the underlying company must grow profits,” he said.

“For a company that manages to grow its earnings meaningfully, the PE contraction will prove a depressing but transitory influence on the share price.”

Even if the PE ratio itself doesn’t expand again, any ramping up of earnings will drive up the share price side of the ratio.

“Of course, this takes time for a company to achieve,” he said.

“That delay to prices going up – in tandem with earnings – provides investors with an opportunity.”

The post What happens to PE ratios when interest rates rise? appeared first on The Motley Fool Australia.

More reading

• Why Tesla stock popped today
• Here’s how the Bank of Queensland (ASX:BOQ) share price performed in February
• Dubber (ASX:DUB) share price sinks 13% after first half losses grow
• Own ANZ shares? Here’s the bank’s latest move to ‘better prepare for future growth’
• CBA (ASX:CBA) doubles down on ‘core business’ with $1.8 billion sale

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

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The Bank of Queensland Limited (ASX: BOQ) share price is edging higher on the first trading day of March.

BoQ shares are currently up 0.2% to $8.02.

Yesterday, the Bank of Queensland share price finished off February closing at $8 per share. That represents a 4.7% gain from the closing bell on 31 January.

How did shares move in February?

There were no price-sensitive announcements released from the bank during the month. Or all year, for that matter.

But that didn’t keep the Bank of Queensland share price from making some big moves.

Shares hit a closing high of $8.47 on 17 February. At that stage, Bank of Queensland was up 10.9% for the month.

But as with the big 4 S&P/ASX 200 Index (ASX: XJO) banks, things began tracking the other way later in the month, with shares facing headwinds amid rising investor concerns over geopolitical instability in Eastern Europe.

Bank of Queensland shares have slid 6.1% since the 17 February near-term highs.

Brokers bullish on Bank of Queensland share price

During the course of the month, The Motley Fool reported on several bullish broker forecasts for the Bank of Queensland.

JP Morgan had a $9.80 target for the Bank of Queensland. The broker said that the bank appears “well positioned to deal with industry headwinds” in the year ahead. JP Morgan analysts said that following on from Bank of Queensland’s recent acquisition of ME Bank, its growth and efficiency prospects look strong.

Morgan Stanley, also rated Bank of Queensland shares as a buy, though with a slightly reduced new price target of $10. Part of that stems from the broker’s outlook for the bank’s dividend payments. Morgan Stanley forecasts that Bank of Queensland will pay a grossed-up dividend yield of 8.25% over the full 2022 financial year.

Meanwhile Macquarie also reduced its 12-month price target to $9.50, while Citi raised its forecast target for the Bank of Queensland share price to $10.50.

Whether the price revisions were slightly higher or lower, all the brokers are forecasting significant upside from Bank of Queensland’s current $8.02 per share.

When does the bank report half year results?

The Bank of Queensland’s financial half year ended yesterday, 28 February. But investors won’t receive those half year results until 14 April. (Put it on your calendar!)

The interim dividend will also be announced at that time, which could have an impact on the Bank of Queensland share price on the day.

As for what investors might expect, the market consensus estimate for net profit after tax (NPAT) comes in at just over $202 million for 1H FY22.

Consensus estimate for BoQ’s interim dividend is 24.3 cents per share (cps).

The post Here’s how the Bank of Queensland (ASX:BOQ) share price performed in February appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Monday
• The Bank of Queensland (ASX:BOQ) share price has leapt 10% in 3 weeks. How does this compare to the other big banks?
• Why are ASX 200 bank shares getting so much love today?
• 2 ASX 200 shares that could make it rain dividends: experts
• The Bank of Queensland (ASX:BOQ) share price has underperformed the ASX 200 by 10% over the last 6 months. Here’s why

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 Dubber Corp Ltd (ASX: DUB) share price has started the month deep in the red.

This follows the release of the call recording software company’s half year results after the market close on Monday.

At the time of writing, the Dubber share price is down 13% to $1.28.

Dubber share price sinks as losses grow

• Revenue up 122% over the prior corresponding period to $16.4 million
• Annualised recurring revenue (ARR) up 33% to $51.8 million
• Users up 70% to 510,000
• Cash receipts up 111% to $14.7 million
• Loss after tax increased 317% to $31.2 million
• Cash in bank of $108 million

What happened during the first half?

For the six months ended 31 December, Dubber reported a 122% increase in revenue to $16.4 million and a 33% lift in ARR to $51.8 million.

Management advised that this reflects continued and substantial growth across all key metrics, with subscribers continuing to grow at a record rate via a combination of standard SaaS subscriptions and Foundation Partnership subscriptions. The latter is where a Dubber service is embedded as a standard feature of every subscription on a network.

In addition, the company highlights that it reached notable milestones and achieved record growth in its key metrics while finalising landmark commercial agreements and deployments. It also continued to establish critical scale in its business in terms of fundamental additions to its leadership team through the expansion of products and services as accretive revenue generators.

This ultimately led to standard SaaS subscriptions growing organically by over 90,000 in the first half of the financial year to in excess of 510,000.

Things weren’t quite as positive on the bottom line, with Dubber reporting a $31.2 million loss after tax. This compares to a loss of $7.5 million a year earlier. This reflects $11.5 million in share based payments and a large increase in costs as the business scales.

Management commentary

Dubber’s CEO, Steve McGovern, was very pleased with the progress the company made during the half.

He commented: “We entered FY2022 with clearly stated ambitions, to use the positioning of our unique technology platform to grow network connectivity and Annualised Recurring Revenue. Underlying these ambitions was the requirement to scale our business operations to deliver against the opportunity presented by a combination of market conditions and our technology advantage.”

“To that end, we are very pleased with our progress in scaling up company operations whereby key positions have been filled with world class personnel and technology has been developed to a point whereby the delivery of new products and services is as much a driver of new revenue as is continued selling of our core services to a wider audience. By default, delivery of these new services in itself creates a wider audience and increased opportunities to deliver more services via our service provider partners,” he added.

And while no guidance has been given for the remainder of FY 2022, Mr McGovern spoke positively about the future.

He said: “Dubber is the number one source of Unified Call Recording and Voice AI services – and due to its unique capacity within telecommunications networks, the only way to provision voice AI on every phone and every end point. The activities during the half year illustrated this position enabling the Company to expand on its UCR strategy with initiatives with partners such as Cisco, Microsoft Teams and IBM.”

The post Dubber (ASX:DUB) share price sinks 13% after first half losses grow appeared first on The Motley Fool Australia.

More reading

• Here’s how the Bank of Queensland (ASX:BOQ) share price performed in February
• Own ANZ shares? Here’s the bank’s latest move to ‘better prepare for future growth’
• CBA (ASX:CBA) doubles down on ‘core business’ with $1.8 billion sale
• Crown (ASX:CWN) share price falls on AUSTRAC court proceedings news
• Why is the Origin (ASX:ORG) share price is edging lower today?

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. owns and has recommended Dubber Corporation. The Motley Fool Australia owns and has recommended Dubber 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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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price is in the green today amid changes to its executive structure.

ANZ shares are currently trading at $26.36, a 1.35% gain. For perspective, S&P/ASX 200 Index (ASX: XJO) is up 0.38% today.

Let’s take a look at the changes ANZ announced today.

What changes is ANZ making?

ANZ will create a new commercial division and combine its digital division and Australian retail business. Maile Carnegie will take on the role of group executive of Australian retail. Carnegie has been leading the bank’s digital division since 2016.

ANZ is splitting its commercial business to “better prepare for future growth opportunities”. By combining the digital and retail divisions, the bank hopes to step up attention on its commercial business in Australia.

Mark Hand, currently the Group Executive of Australia retail and commercial, will be leaving the ANZ in the next few months. However, first, he will work with the ANZ to establish the new commercial division.

Commenting on the revamp, chief executive officer Shayne Elliott said:

We’ve been banking Australian businesses since our inception more than 180 years ago and it is core to who we are and what we do. Ultimately, improving the visibility, focus and accountability of this division will benefit all our customers who are striving to either start, run or grow their business.

We recognised retail banking was changing fast and that we needed to use the world’s best digital technology to deliver a customer proposition centred around the financial wellbeing of our customers while also improving the speed and resilience of our operations.

Management comment

Further commenting on the change to the executive team, Elliott added:

Mark Hand has given tremendous service to ANZ over many decades and can be incredibly proud of the contribution he has made, particularly as a key member of the Executive Committee since 2018. I

Maile Carnegie is the right leader to take this business forward. She has brought a different perspective since joining our Executive Committee in 2016 and made a significant contribution in reshaping our digital offerings, particularly with ANZx.

The ANZ share price has been struggling in the past year amid its share of the mortgage market declining.

However, despite this, JP Morgan analysts are bullish the bank can deliver upside in 2022 and 2023. The broker values the bank higher than its current market price. Analysts value the bank at $30.50 per share, 15% higher than its share price at the time of writing.

ANZ share price snap shot

The ANZ share price slid 1.32% in the past 12 months and is down about 5% year to date.

In the past week alone, ANZ shares have fallen around 7%

For perspective, the benchmark ASX 200 has returned about 4% over the past year.

ANZ has a market capitalisation of about $73.8 billion.

The post Own ANZ shares? Here’s the bank’s latest move to ‘better prepare for future growth’ appeared first on The Motley Fool Australia.

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• Greater Certainty: Why this top broker is bullish on ANZ (ASX:ANZ) shares in 2022
• Bad ATM? The ANZ share price was hammered more than any other ASX 200 bank today
• Should you be buying ASX 200 bank shares in February?
• Why ANZ (ASX:ANZ) shares have been punished, but experts are now bullish
• 2 big-cap ASX shares that even this small-cap expert recommends

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 Insurance Australia Group Ltd (ASX: IAG) share price is suffering this week.

Its struggles come amid severe weather and flooding in parts of Australia – which the company’s peer flagged could cost it $75 million.

At the time of writing, the IAG share price is $4.56, 4.8% lower than it was at Friday’s close.

For context, the S&P/ASX 200 Index (ASX: XJO) rose 0.7% on Monday and is currently 1.03% higher today.  

Let’s take a closer look at the news that could be dragging the blue-chip stock lower this week.

What’s weighing on the IAG share price this week?

The IAG share price is suffering as many Australians prepare to tackle damage caused by a major flood event in southeast Queensland and northern New South Wales.

The Brisbane River peaked at 3.7 metres yesterday after heavy rain caused chaos across Queensland’s southeast over recent days.

Queensland Fire and Emergency Services have responded to more than 9,000 requests for assistance with flood damage and 600 calls for rescue.

More than 43,000 homes in the state’s south-east remain without power today as 9News reports 15,000 of the region’s homes have been flooded.

Meanwhile, the Bureau of Meteorology has issued a flood warning for Sydney as river levels in Lismore recede after the city’s worst flood event in history.

As of 5am this morning, IAG had received 6,700 claims. That number is expected to rise over the coming days.

In a release, the company stated, “after allowing for quota share arrangements, the combination of all catastrophe covers results in IAG having a maximum event retention of $95 million.”

Suncorp Group Ltd (ASX: SUN) updated the market on the impact the wild weather could have on its bottom line yesterday. It believes it could face a maximum retained cost of around $75 million for the event.

The IAG share price tumbled 7% in November when the insurer increased its expected financial year 2022 net natural perils claim costs to around $1 billion.

What else has been happening?

Additionally, over the weekend The Australian reported the company’s exposure to the failed Greensill Capital has deepened.

A claim has reportedly been filed to the Federal Court of Australia by Credit Suisse Virtuoso alleging the insurer refused to pay out compensation after guaranteeing a debt.

It’s the second time reports have emerged stating IAG is caught up in the Federal Court due to Greensill’s collapse. The Australian Financial Review reported the insurer was hit with a US$35 million claim in November.

The insurer has previously stated, “[IAG] has no net insurance exposure to trade credit policies including those sold through [Bond & Credit Co] to Greensill entities.”

IAG reportedly previously owned 50% of Bond & Credit Co.

The post Why is the IAG (ASX:IAG) share price sliding this week? appeared first on The Motley Fool Australia.

More reading

• 4 ASX shares that love rising interest rates: report
• Here’s why the IAG (ASX:IAG) share price is outperforming today
• Here’s everything you need to know about the IAG (ASX:IAG) dividend
• Leading brokers name 3 ASX shares to sell today
• We’ll pass thanks: Top broker downgrades IAG (ASX:IAG) share price to hold

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 owns and has recommended Insurance Australia 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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The Commonwealth Bank of Australia (ASX: CBA) share price is pushing higher today.

This follows the Aussie bank announcing it has entered into a binding sale agreement involving its share in the Chinese commercial bank Bank of Hangzhou Co Ltd.

In early morning trade, shares in CBA are swapping hands at $95.09, up 1.74%.

What are the details of the deal?

Commonwealth Bank shareholders might be eagerly rubbing their hands together this morning following the bank’s latest announcement.

According to its release, CBA has decided to sell a chunk of its 10% shareholding in the Bank of Hangzhou. The bank was founded in 1996 and predominantly serves small and medium enterprises, as well as urban and rural residents, in China.

Moreover, the sale is being made to Hangzhou Urban Construction and Investment Group and Hangzhou Communications Investment Group. Both of these entities are majority-owned by the Hangzhou Municipal Government.

The deal is estimated to be worth $1.8 billion before costs. While ASX-listed CBA will retain a shareholding of roughly 5.57% in the Bank of Hangzhou, this remaining stake will be held until at least 28 February 2025, subject to exceptions.

CBA CEO Matt Comyn explained what the transaction means for the bank going forward:

CBA is pleased to have played a meaningful role in HZB’s development since our original investment in 2005. Our collaboration has seen HZB become a significant player in retail, wealth management and commercial banking across the Yangtze Delta region. The reallocation of part of our shareholding to local partners will support the further expansion of HZB.

At the same time, the partial sale of our shareholding is consistent with our strategy to focus on our core banking business in Australia and New Zealand. Our ongoing shareholding in HZB following completion of the Transaction will enable us to continue to support its development as one of China’s leading city commercial banks, and complement our relationships in the region.

How else does the deal impact ASX-listed CBA?

Following completion of the transaction, CBA expects an improvement in its CET1 ratio, which acts as the bank’s capital buffer. Based on the company’s risk-weighted assets as at 31 December 2021, a 35 basis point improvement is anticipated.

Additionally, the sale will result in a post-tax gain of $340 million. The remaining stake will be treated as a strategic equity investment. Essentially, this means the bank will no longer recognise its share of Bank of Hangzhou’s profits under ‘other banking income’ in future financial statements.

Finally, the transaction is slated to be completed sometime around the middle of this year.

The CBA share price is up 12% over the last 12 months.

The post CBA (ASX:CBA) doubles down on ‘core business’ with $1.8 billion sale appeared first on The Motley Fool Australia.

More reading

• Which ASX 200 shares have delivered the biggest dividend payout increases this earnings season?
• Top broker says CBA (ASX:CBA) is ‘on its way back’
• Analysts name 2 ASX dividend giants to buy
• ‘Rapidly evolving’: CBA (ASX:CBA) boss warns of continued volatility amid Russia fears
• Own CBA (ASX: CBA) shares? Here’s how the bank is pushing its ‘green’ and ESG investment products

Motley Fool contributor Mitchell Lawler owns Commonwealth Bank of Australia. 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 Crown Resorts Ltd (ASX: CWN) share price has come under pressure on Tuesday morning.

In early trade, the casino and resorts operator’s shares are down 1% to $12.24.

Why is the Crown share price falling?

Investors have been selling down the Crown share price this morning following the release of an announcement relating to an AUSTRAC investigation.

According to the release, Crown Melbourne and Crown Perth have been served with a statement of claim from AUSTRAC, commencing civil penalty proceedings. The regulator is alleging contraventions of obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006.

Though, these proceedings should not be a big surprise to shareholders. Management notes that in both its annual report and half year results, it warned that AUSTRAC’s investigation was very likely to result in civil penalty proceedings being commenced.

The company notes that the commencement of these proceedings follows a long-running investigation that commenced in October 2020. It also highlights that Crown Melbourne and Crown Perth have fully cooperated with AUSTRAC during the course of its investigation.

Furthermore, Crown has developed a comprehensive remediation plan which is intended to position it as a leader in the industry in its approach to governance, compliance, responsible gaming and the management of financial crime risk. This plan is underpinned by an uplifted organisational culture.

And while there are undoubtedly going to be fears that this could impact its takeover by Blackstone, it is worth noting that this was addressed in the implementation deed.

That deed states that “any fine announced, proposed, imposed or requested to be imposed by AUSTRAC on a Crown Group Member” is a Prescribed Regulatory Event and will not be treated as a “material adverse Change.”

AUSTRAC has not revealed any details regarding the penalties it is seeking to impose on Crown.

The post Crown (ASX:CWN) share price falls on AUSTRAC court proceedings news appeared first on The Motley Fool Australia.

More reading

• Crown (ASX:CWN) share price dips despite growing confidence the company has ‘turned the corner’
• Why Bendigo and Adelaide Bank, Crown, JB Hi-Fi, and Newcrest are pushing higher
• ASX 200 (ASX:XJO) midday update: JB Hi-Fi impresses, Crown accepts $8.9bn Blackstone bid
• Crown (ASX:CWN) share price higher after accepting $8.9bn takeover offer

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 Origin Energy Ltd (ASX: ORG) share price is heading south during early Tuesday morning.

This comes despite the energy giant not releasing any market-sensitive news today.

At the time of writing, Origin shares are down 0.70% to $5.66 apiece.

Why are Origin shares falling today? 

Following the company’s half year results released on 17 February, investors are eyeing Origin shares as they go ex-dividend today.

Typically, one business day before the record date, the ex-dividend date is when investors must have purchased shares. If the investor does not buy Origin shares before this date, the dividend will go to the seller.

Historically, when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

What does this mean for Origin shareholders?

For those eligible for Origin’s interim dividend, shareholders will receive a payment of 12.5 cents per share on 25 March. Although, the dividend is unfranked, which means investors won’t receive any tax credits from this.

The dividend remains unchanged when compared against the prior corresponding period (H1 FY21).

The above payout figure represents 66% of the company’s free cash flow and annualised dividend yield of 3.51%.

Management expects to restore partial franking for its dividends sometime during FY23.

Are Origin shares a buy now?

Following the company’s H1 FY22 results, a number of brokers weighed in on the Origin share price.

The team at Macquarie raised its 12-month price target by 2.5% to $6.53 for the energy giant’s shares. Its analysts believe that there is still more upside in Origin shares regardless of its mixed performance recently.

Based on the current share price, this implies an upside of about 14.5% for investors.

Furthermore, Morgan Stanley also lifted its assessment on Origin shares by 4.1% to $6.05 a pop.

However, JP Morgan appeared unimpressed with Origin’s results, downgrading to underweight from neutral, and cutting its shares by 9.1% to $5.50.

Morgans had a similar take to JP Morgans’s view, downgrading Origin to hold from add, and slashing the outlook by 5.2% to $6.23.

Origin shares price summary

Since the beginning of 2022, Origin shares have gained 8% on the back of rising energy prices.

The company’s shares reached a 52-week high of $6.37 in February, before treading slightly lower thereafter.

On valuation grounds, Origin commands a market capitalisation of around $10.04 billion, with approximately 1.76 billion shares outstanding.

The post Why is the Origin (ASX:ORG) share price is edging lower today? appeared first on The Motley Fool Australia.

More reading

• Origin (ASX:ORG) share price lifts amid green hydrogen news
• Origin (ASX:ORG) share price slides 7% but UBS is still bullish. Here’s why
• Australia’s largest coal power plant set for early D-day. What it means for Origin (ASX: ORG) shares
• Origin (ASX:ORG) share price slides 5% following another half of losses
• Power surge! These 2 ASX 200 utilities shares are storming higher today

Motley Fool contributor Aaron Teboneras 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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ASX agriculture shares could be on a new bull run amid predictions that Australia’s farm gate output will hit a record-breaking $81 billion this financial year.

That’s $3 billion higher than the previous estimates given in January, reported the Australian Financial Review.

The soft commodity boom is getting less coverage than oil, lithium, and other “green” metals.

But if the forecast from the Australian Bureau of Agricultural and Resource Economics (ABARE) is correct, several ASX shares linked to the rural sector could record strong earnings during the August reporting season.

What’s driving the soft commodity boom?

Near-perfect growing conditions and the surge in soft commodity prices to around 32-year highs are driving the bullish outlook.

While the value of Australian farm production is expected to moderate in FY23, it’s still tipped to come in at $76 billion. That’s the second-highest on record, noted the AFR.

But the war in Ukraine is also bolstering the outlook for Australian commodities, including wheat. Russia and Ukraine account for around 30% of global wheat output.

That leaves a big hole that is unlikely to be completely filled. Most of Australia’s bumper harvest will be exported to the tune of $64 billion.

Sun shining on these ASX agri shares

One possible beneficiary from any supply deficit could be the Graincorp Ltd (ASX: GNC) share price. The company owns Australia’s largest grain storage and handling network on the east coast, although the devasting floods hitting Queensland and New South Wales could present a near-term headwind.

But it isn’t only Graincorp that could benefit from these powerful tailwinds. The cash from the soft commodities boom will help top up government coffers. Farmers and rural communities will also likely partake in the feast.

This means any ASX company that provides products and services to the sector could get an earnings boost.

Other ASX shares making hay

You can count the Nufarm Ltd (ASX: NUF) share price among the possible winners. It provides seeds and herbicides to more than 100 countries, including Australia and Europe.

While the Nufarm share price has been gaining ground recently, it’s only up around 12% over the past year.

Another beneficiary could be the Elders Ltd (ASX: ELD) share price. The group provides a wide range of products and services to the rural sector, including insurance.

The Elders share price is faring even worse than the Nufarm share price. It has essentially gone nowhere over the past year.

The post 3 ASX shares that could get a slice of a record $81bn farm output this year appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau owns Elders Limited and Nufarm 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 recommended Elders 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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