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Last week was a positive one for the S&P/ASX 200 Index (ASX: XJO) at last. The benchmark index rebounded from a selloff a week earlier to rise 1.9% over the period to end it at 7,120.2 points.

Unfortunately, not all shares were able to climb with the market. Here’s why these shares were the worst performers on the ASX 200 over the period:

Boral Limited (ASX: BLD)

The Boral share price was the worst performer on the ASX 200 last week with a massive 36.1% decline. However, this decline was not driven by anything bad. Quite the opposite! This decline relates to Boral returning a total of $3 billion to shareholders following a series of asset sales. This led to Boral’s shares trading ex-capital return on Friday for a total cash distribution of $2.72 per share. This comprises a $2.65 per share capital reduction and an unfranked dividend of 7 cents per share.

Ansell Limited (ASX: ANN)

The Ansell share price was a very poor performer and sank 16.8% over the five days. Investors were  selling this health and safety products company’s shares after it downgraded its earnings guidance. Due to softening demand and COVID-related operational challenges, Ansell now expects its FY 2022 earnings per share to be between 125 US cents to 145 US cents. This is down materially from its previous guidance of 175 US cents to 195 US cents.

Hub24 Ltd (ASX: HUB)

The HUB24 share price was out of form and dropped 5.8% last week. This was despite there being no news out of the investment platform provider. One broker that would see this as a buying opportunity is Macquarie. A week earlier it upgraded HUB24’s shares to an outperform rating with a $32.40 price target. This implies potential upside of over 25% for investors.

Codan Limited (ASX: CDA)

The Codan share price wasn’t far behind with a 4.3% decline over the five days. This decline may have been driven by profit taking from some investors after a very strong gain in the previous week. That week, the Codan share price stormed higher despite the market selloff thanks to a very positive trading update.

The post These were the worst performing ASX 200 shares last week appeared first on The Motley Fool Australia.

More reading

• Why Boral, Magellan, REA, and SEEK shares are falling today
• ASX 200 (ASX:XJO) midday update: REA and News Corp impress, Boral plummets
• Did the Boral (ASX:BLD) share price really just collapse 40%?
• Down 20% in 2022, is the Ansell (ASX:ANN) share price a bargain buy?
• Why Amcor, Boral, Nufarm, and Westpac shares are rising 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 Hub24 Ltd. The Motley Fool Australia has recommended Ansell Ltd. and Hub24 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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Key points

• The buy now, pay later (BNPL) sector could be in for a tough time in 2022 according to one expert
• 2022 has already seen a big decline for many of the players, including the Zip share price which is down 30% this year
• Brad Kelly points out that almost none of the BNPL ASX shares are making a profit, which will make it harder to raise capital

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The buy now, buy later (BNPL) ASX shares could be in for a “tough time” according to one of the experts of the payments industry.

There are plenty of BNPL businesses on the ASX like Zip Co Ltd (ASX: Z1P), Block Inc (ASX: SQ2), Sezzle Inc (ASX: SZL), Splitit Ltd (ASX: SPT), Laybuy Holdings Ltd (ASX: LBY), Openpay Group Ltd (ASX: OPY) and Ioupay Ltd (ASX: IOU).

Big declines

Investors have already seen major declines of the share prices of plenty of the buy now, pay later players.

In 2022, the Zip share price has fallen 30% so far. Over the past six months it has slumped 60%.

Since listing on the ASX a couple of weeks ago, the Block share price has fallen 17%. Block is the American company that recently acquired Afterpay.

In the calendar year to date, the Sezzle share price has fallen 27%. The past half-year has seen a 71% capitulation of Sezzle shares.

And so on. There has been a huge deterioration since the last reporting season.

‘Tough time’ coming

According to reporting by News.com.au, an expert of the payments sector called Brad Kelly has some negative expectations for the industry.

Mr Kelly, the managing director of Payment Services, said:

They are very good at marketing spin and PR, good at using the services of highly paid consultants to get around the Consumer Credit Act and are able to offer credit without it appearing as credit.

The reality is the BNPL provider’s bad debts are astronomical, none of them have made a profit, none of them have paid a dividend and share prices are down 70% to 80% to even 90% in some cases.

Mr Kelly points out that nearly all of the companies in the buy now, pay later sector are reporting annual accounting losses.

Another, expert, Grant Halverson, the founder and chief executive of payments consultancy McLean Roche, thinks there is a danger that the buy now, pay later sector could see rising bad debts and the ASX shares could end up with a ‘junk’ rating regarding their debt.

Mr Halverson warned that the BNPL sector could suffer from rising interest rates, which would make it trickier to make a profit and raise money. Speaking to the Australian Financial Review, he said:

They’re going to have to try to raise a lot of money.

It partly depends on how quickly interest rates go up, because if they go up quickly there could be carnage. If there’s a slower uptick then obviously the carnage will be slower in my view.

What are some of the issues?

The experts point out that several large financial players have entered the BNPL space including Commonwealth Bank of Australia (ASX: CBA), Suncorp Group Ltd (ASX: SUN) and Citibank. PayPal is another player that now offers a buy, pay later option.

News.com.au reported that Mr Kelly believes that with no profit and none being sustainably profitable yet, it’s likely that there will be consolidation in the sector.

There is also the longer-term risk of regulation and interest rate rises, which could impact growth too.

The post BNPL ASX shares in for a ‘tough time’: expert appeared first on The Motley Fool Australia.

More reading

• Some BNPL shares finished a horror week on a high. Why?
• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Why did ASX 200 tech shares get annihilated today?
• Why Cettire, Novonix, Serko, and Zip shares are sinking today
• Is Zip (ASX:Z1P) the Titanic of ASX tech shares? It just keeps sinking

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. owns and has recommended Block, Inc. and ZIPCOLTD FPO. 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 top-10 crypto assets by market cap are all in the green today.

The Bitcoin (CRYPTO: BTC) price edged higher over the past 24 hours, up 1% to US$37,272 (AU$51,766).

Moving further down the list, not every crypto is gaining.

Bitcoin Cash, the number 28 token by market valuation, is flat over the 24 hours, trading at US$277.

While every crypto investor will be well familiar with Bitcoin, not everyone is up to speed on Bitcoin Cash.

With that in mind, The Motley Fool reached out to Ray Brown, market analyst at Australian cryptocurrency exchange CoinSpot.

What brought about Bitcoin Cash? 

First, we wanted to know how Bitcoin Cash came into being.

Brown told us:

Whilst Bitcoin Cash holds a number of similarities to the original Bitcoin, it’s an entirely independent form of cryptocurrency which was ‘forked’ from Bitcoin.

It was created in 2017 by a segment of the Bitcoin community who had the intention of leveraging the successful elements of Bitcoin, whilst solving some of the drawbacks such as limited scalability.

Bitcoin Cash has seen some success and has become a formidable contender to other cryptos. However, it hasn’t come close to matching the popularity of Bitcoin.

Why the push for crypto scalability?

So why did the Bitcoin community want to increase the world’s first crypto’s scalability?

According to Brown:

Bitcoin was originally created with the intention of being a digital currency. However, as more and more people invested, the slower the processing of transactions became. This is due, in part, to the size of the blocks being limited to just 1MB which allows very little room for scalability. Because of this, Bitcoin has become somewhat of a store of value as opposed to a way for people to easily make daily transactions.

So, has Bitcoin Cash managed to overcome these shortcomings?

“Bitcoin Cash was created to amend these limitations and has somewhat achieved this by incorporating a maximum block size of 32MB,” Brown said.

He continued:

This allows for faster transactions and increases the amount of people that can use it at one time. So much so, the team behind Bitcoin Cash claim it’s capable of 200 transactions per second, while Bitcoin averages just seven. As a result of this, the cost per transaction of Bitcoin Cash has decreased and the ability to scale has increased.

Bitcoin Cash has underperformed Bitcoin in 2022

Despite the decreased cost per transaction and increased ability to scale, Bitcoin Cash has underperformed Bitcoin in 2022. While BTC is down 22%, BCH has tumbled 38% in the New Year.

Brown told The Motley Fool:

Most altcoins, including Bitcoin Cash, have been underperforming so far in 2022. However, many are starting to now stabilise since the major crypto selloff in January 2022. This selloff wiped out $1 trillion in market cap from the industry. Bitcoin and Ethereum also lost up to half of their value from the peak.

As most altcoins are impacted by the movements of Bitcoin, this means they felt more pain.

 What should crypto investors take into account?

Finally, we asked Brown what crypto investors should take into account before deciding which of the tokens to potentially invest in.

“Bitcoin Cash doesn’t currently have the level of consumer trust that Bitcoin does and therefore doesn’t have nearly as many investors, just yet,” he said. “This means that, at the time of writing, Bitcoin Cash in a ‘real-world’ scenario is lessened.”

Brown ended with this investor caveat, “Although the market is showing Bitcoin to be more popular than Bitcoin Cash right now, you should always do your own research to determine which crypto asset is right for you.”

The post Battle of the crypto assets: Bitcoin versus Bitcoin Cash appeared first on The Motley Fool Australia.

More reading

• Is Bitcoin a good way to diversify an ASX share portfolio?
• Cryptocurrency crash fails to put a dampener on cash-raising fiesta
• Is Bitcoin using lots of energy actually a good thing?
• Bitcoin price slides again. Here’s what crypto investors are watching
• Why these five cryptos could leave Bitcoin in the dust in 2022

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns Bitcoin and Ethereum. The Motley Fool Australia owns Bitcoin and Ethereum. 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 wanting to build a strong portfolio, then having a few blue chips in there could be a good starting point.

But which blue chips should you buy? Two highly rated blue chip shares are listed below. Here’s why they could be in the buy zone right now:

Goodman Group (ASX: GMG)

The first blue chip ASX 200 share to look at is Goodman Group. It is a leading integrated commercial and industrial property company with a portfolio of warehouses, large scale logistics facilities, and business and office parks.

It has been experiencing very strong demand for these properties in recent years, which is underpinning solid earnings and distribution growth.

Goodman’s CEO, Greg Goodman, recently commented: “The results of the deliberate positioning of our portfolio over the last decade to adapt to and leverage the changes in the digital economy, are now being realised. Customer demand for high-quality properties close to consumers has never been greater.”

But it gets better. Goodman has $12.7 billion of development work in progress, which is expected to underpin further growth over the coming years.

Citi is a fan of Goodman. It currently has a buy rating and $28.00 price target on the company’s shares. The broker believes that Goodman’s earnings per share guidance for FY 2022 is conservative.

ResMed Inc. (ASX: RMD)

Another blue chip ASX 200 share to look at is ResMed. It is a sleep treatment-focused medical device company with a portfolio of industry-leading products that are improving the lives of sufferers of conditions such as sleep apnoea.

The good news is that this is a huge market with just an estimated one fifth of sufferers currently diagnosed. This gives ResMed a long runway for growth in the future.

For example, ResMed’s CEO, Mick Farrell, recently reaffirmed his expectation for the company to improve a quarter of a billion lives by 2025.

He commented: “Despite constantly evolving market dynamics, we remain focused on our goal to improve 250 million lives in the year 2025; supporting patients with the sleep apnea therapy, respiratory care therapy, and digital health solutions they need as we deliver value for all of our customers.”

The team at Morgans is very positive on ResMed. It has an add rating and $40.46 price target on the company’s shares. The broker believes ResMed is “well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

The post 2 highly rated blue chip ASX 200 shares to buy appeared first on The Motley Fool Australia.

More reading

• Morgans names 4 more of the best ASX shares to buy in February
• 3 fantastic ASX shares to buy this month
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• Broker upgrade sends ResMed (ASX:RMD) share price charging higher

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 ResMed Inc. 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 roll into the new year of 2022 has been one for the ages for global equities markets, with this January’s performance firmly on the podium as the 8th worst on record, and the worst since 2008.

The benchmark S&P/ASX 200 Index (ASX: XJO) has fallen 500 points off its previous highs in January and is down 4% for the month, whereas the S&P/ASX Small Ordinaries Index (ASX: XSO) is down 7%.

ASX shares have been hit hard so far in 2022 as shifting yields on long dated bonds and the inflation narrative play havoc on stocks throughout the globe.

That’s important seeing as there tends to be an inverse correlation in the benchmark index and the yields on long duration bonds, as seen in the chart below. The chart shows this relationship, by plotting the return on the benchmark ASX 200 index (left hand side) versus the yield on the Australian Commonwealth Government 10 year bond (right hand side) going back to 1985.

As can be seen, bar a few anomalies in the data (the global financial crisis in 2007-09′ and the COVID-19 crash in 2020), long-term correlations have been negative for these two asset classes. In fact, this tends to be one of the many reasons portfolio managers include bonds into their allocations, to help smooth portfolio returns.

Over the past few months, these correlations have manifested heavily in the small cap domain of the market. Yields on longer bonds are rising, hurting the valuations on speculative assets as investors flock to more quality corners of the market. This activity has erased much of the gains that smaller ASX shares have earned in 2022. The same effect is observed on the chart below, although with the US Treasury 10 year yield.

Hence, any stock that offers long-term upside potential with additional features such as an attractive dividend yield to cover the downside is a key standout in this current market.

According to Investors Mutual Limited (IML) portfolio manager Simon Conn, wholesale distribution and marketing company Metcash Limited (ASX: MTS) might just fit that bill. Let’s take a look.

Why’s this ASX share a standout?

Conn is bullish on Metcash given his firm’s concentration and focus on the Australian mid and small cap sector.

Speaking to an episode of “Buy Hold Sell” on Livewire Markets on Friday, Conn stated his posture on Metcash is that it is “an underappreciated franchise, and a business that’s no doubt benefited from COVID, but [one] that’s delivered enduring benefits to their food business”.

“But also their liquor business has been growing and is a very resilient business. But really its the hardware business, where they position themselves as the second player in the hardware, retail and wholesale markets that we think is underappreciated by investors”, he said.

“Their acquisition of Total Tools looks really well priced. They bought that prior to COVID, effectively on about three-and-a-half times EBITDA”.

Conn also reckons that Metcash has grown exceptionally well after navigating its way throughout the COVID-19 landscape.

As such, the portfolio manager believes that local vendors and franchisees will continue reinvesting into their own stores with profits generated, leading local consumers to spend more in their local communities. This cycle looks set to play on repeat as well, according to the expert.

Not only that, but Conn is impressed by Metcash’s current valuation, its balance sheet and the total return prospects it offers investors with its current dividend yield of over 5%.

These are imperative characteristics for chasing quality names within the current investing climate – especially with the pullback in small cap stocks, Conn argues.

“The thing about Metcash is it’s really attractively priced on 13 times [earnings], and a yield of over 5%, with a really strong balance sheet. For us, it looks like a standout in the market, where a lot of stocks look pretty fully priced”.

Metcash shares finished Friday less than 1% up at $4.16, marking an impressive gain on the week.

Metcash share price snapshot

In the last 12 months, the Metcash share price has gained 22% after a strong performance in 2021. This year to date it has pared gains and is now down 7%, just in behind the broad indices.

However, investors are showing support once more and shares have gained around 7% in the past week of trading.

The post Well priced with a dividend yield over 5%, this ASX share ‘is a standout’: expert appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares held up the best in the last market crash
• Are ASX consumer staples shares really ‘safe’ to hold in a market selloff?
• 2 underrated ASX dividend shares to think about: analysts
• 2 big-name ASX shares to buy right now
• Why Domino’s, Fortescue, Medibank, and Metcash shares are falling

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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Key points

• Buy now, pay later shares started February in the red
• Block’s ASX listing crashed amid a sell-off in the United States
• Interest rate rises in 2022 were flagged by the RBA this week
• Block and Zip recovered some of their losses today

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Buy now, pay later (BNPL) shares have had a shocking start to the month but some edged higher today.

Block Inc CDI (ASX: SQ2) share price has fallen nearly 15% since market open on 1 February. Zip Co Ltd (ASX: Z1P) has fallen nearly 13% in the same time period. However, in today’s trade Block climbed 0.88% while Zip Co jumped 3%.

Let’s take a look at what’s been happening to BNPL shares lately.

BNPL woes

Block and Zip are not the only BNPL shares to fall in February. The Openpay Group Ltd (ASX: OPY) share price has descended 13% since market open on 1 February, while Beforepay Group Ltd (ASX: B4P) has slipped 9%.

Sezzle Inc (ASX: SZL) has also shed 13% in the same time period. In today’s trade, Openpay held steady while Beforepay fell 4.64% and Sezzle finished 0.89% in the red.

Block’s ASX listing dived after the company’s US listing plummeted. Block Inc (NYSE: SQ) fell 20% between market close on 1 February in the US and 3 February.

Investors sold Block shares after rival Paypal’s quarterly results fell short of market expectations. Paypal Holdings Inc (NASDAQ: PYPL) fell a mammoth 29% between market close on 1 February and 3 February in the US.

However, in after-hours trade, Block’s US listing has gained more than 3% and Paypal has edged ahead 1.5%. This could be helping the company’s ASX listing and confidence in the BNPL sector overall.

Zip’s shares also fell heavily this week amid negative sentiment in the industry. My Foolish colleague Aaron noted any Reserve Bank of Australia rate hikes could impact consumer spending. And the Zip business model depends on this spending.

BNPL’s shares suffered amid an overall tech stock slide this week. The S&P/ASX All Technology Index (ASX: XTX) dived almost 4% between market open on 1 February and close today. The index finished today 0.39% ahead.

BNPL share price recap

BNPL shares have suffered major losses in the past 52 weeks.

In the past year, the Zip Co share price has dived 63%. Meanwhile, Openpay has crashed 82% and Sezzle has plunged 74%. Meanwhile, Beforepay has shed 55% since joining the ASX this year, while Block has slipped 17%.

Meanwhile, the S&P/ASX 200 Index (ASX: XJO) has returned more than 5% in the past year.

The post Some BNPL shares finished a horror week on a high. Why? appeared first on The Motley Fool Australia.

More reading

• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Why did ASX 200 tech shares get annihilated today?
• Why Cettire, Novonix, Serko, and Zip shares are sinking today
• Is Zip (ASX:Z1P) the Titanic of ASX tech shares? It just keeps sinking
• With Afterpay shares no longer listed, is WAAAX officially dead?

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Block, Inc. and ZIPCOLTD FPO. 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 SEEK Limited (ASX: SEK) share price was out of form on Friday.

The job listings giant’s shares ended the day 4% lower at $28.31.

This means the SEEK share price is now down almost 14% since the start of the year.

Why did the SEEK share price tumble today?

The catalyst for this weakness in the SEEK share price today appears to have been a broker note out of Goldman Sachs this morning.

According to the note, the broker has retained its sell rating and cut its price target on the company’s shares by 15% to $27.30.

Following today’s decline, this implies potential downside of 3.5% for its shares.

What did the broker say?

Goldman is expecting SEEK to deliver a strong result later this month, but not one that achieves the market consensus estimate.

It said: “We expect a strong result from SEK, with 1H22 Rev/EBITDA of $483mn/$223mn, driven by +56%/+58% growth in ANZ Rev/EBITDA. However despite this strong growth, our SEK Rev/EBITDA estimates sit -3% below VA Consensus.”

In addition, the broker has adjusted its price target to reflect changes to valuation multiples in line with other classifieds peers and a discount to the valuation of its Seek Growth Fund business.

It made the move on the latter following industry feedback which suggests valuation pressure on venture capital assets. Goldman highlighted a recent de-rating of Bailador Technology Investments Ltd (ASX: BTI) as proof of this.

The broker explained: “Consistent with global classifieds (and peer REA) we lower our EV/EBITDA valuation multiples 3X within our SOTP (except for Latam).”

“We also introduce a 20% discount to SEK growth fund carrying value, reflecting: (1) peer BTI.AX de-rating (c.25% decline since Oct levels when SEK last provided an ESV valuation); and (2) industry commentary suggesting valuation pressure on VC assets in Australia. Overall our SOTP-based TP decreases by c.15% to $27.30,” it concluded.

The post SEEK (ASX:SEK) share price tumbles on broker sell rating. Here’s why it is bearish appeared first on The Motley Fool Australia.

More reading

• Why Boral, Magellan, REA, and SEEK shares are falling today
• 3 blue chip ASX 200 shares to buy after the selloff
• Analysts name 3 ASX 200 shares that could generate strong returns

Motley Fool contributor James Mickleboro owns SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Bailador Technology Investments Limited. The Motley Fool Australia has recommended Bailador Technology Investments Limited and SEEK 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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Key points

• The Qantas share price glided 4.85% higher today amid changes to its loyalty program
• Frequent flyers will require between 30% to 45% fewer points depending on the redemption
• Qantas is rolling the changes out to its 13 million members, anticipating a pickup in domestic leisure travel

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The Qantas Airways Ltd (ASX: QAN) share price took flight on Friday after announcing radical changes to its frequent flyer program.

At the final bell, shares in Australia’s iconic airline were up 4.85% to $5.19. As a result, the airline operator is now in the green on a year-to-date basis.

All in all, it seems investors are optimistic about the modifications made to frequent flyers. Although, the important questions are: what are the changes, and what does it mean for Qantas?

Qantas lowers the bar for its frequent flyers

On Friday, investors pushed the Qantas share price up on news it will cut the number of frequent flyer points needed when booking hotels or holiday packages.

The move will see the Aussie airline reduce the number of points required by 30% and 45% respectively. While the decision might seem counterintuitive for a company attempting to increase profits as it rides out of the COVID-19 storm, the airline sees it differently.

According to the release, the program’s 13 million participants will be able to enjoy this generosity permanently, with the changes intended to remain in place.

In addition, the company is instating a temporary reduction for flight redemptions. In turn, travelers will need 20% fewer points when using a combination of cash and points on flights. However, this will only be in place between April 2022 and April 2023.

Commenting on the changes, Qantas loyalty chief executive Olivia Wirth said:

If you look at domestic trends, people are looking for weekends away up the coast or something similar and that might not include a flight – this provides the chance for our customers to use points on those trips.

Travel trends are changing in the market and, from a timing perspective, we think there will be a leisure travel boom soon.

Furthermore, the announcement comes two weeks after the Qantas share price weakened on the delayed reopening of the Western Australia border.

Qantas share price snapshot

The ASX-listed Qantas share price has been flying through turbulent patches during the pandemic. Despite the challenges, the airline has managed to land itself a positive return for shareholders in the past 12-months. In fact, the Aussie airline has outperformed the broader market during this period.

For reference, the S&P/ASX 200 Index (ASX: XJO) has returned a total of 4.1% in the last year. Meanwhile, the Qantas share price is up 9.5%.

The post Frequent flyer: what changed for the Qantas (ASX:QAN) share price today? appeared first on The Motley Fool Australia.

More reading

• Why is the Qantas (ASX:QAN) share price taking off this week?
• Are ASX travel shares finally emerging from the COVID storm?
• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• What is green shorting and which ASX 200 shares are being targeted?
• Why is the Qantas (ASX:QAN) share price gaining altitude today?

Motley Fool contributor Mitchell Lawler 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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Key Points:

• Nufarm’s share price surged over 20% this week following a positive quarterly update
• Several brokers have upgraded their price target on its shares despite rising costs
• This is because price increases and revenue growth are more than offsetting inflation risks

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The party may not be over for the Nufarm Ltd (ASX: NUF) share price even after its big surge this week.

Leading brokers are tipping further upside for the seed and agri products company after its shares jumped 26% since Monday to hit $5.52.

The catalyst for the Nufarm share price was its quarterly results, which were released yesterday.

Several brokers were impressed enough to upgrade their price targets on the shares even as management warned of rising costs.

Brighter outlook for the Nufarm share price

One broker that lifted its valuation on the Nufarm share price post the update was Macquarie Group Ltd (ASX: MQG).

“NUF is experiencing upward pressure on costs due to raw material costs and global logistics challenges but this is being offset by increased revenues (ie price),” said Macquarie.

“NUF is increasingly confident of achieving revenue and earnings growth for the year. Earnings to be significantly weighted to 1H (saw same last year).”

Pricing power important in this climate

The ability of Nufarm to pass on rising costs is a desirable characteristic in the current climate. Inflationary pressures are building and the ASX shares that can outperform in such an environment are those with pricing power.

Macquarie increased its 12-month price target on the Nufarm share price to $6.29 from $5.45 a share. The broker also reiterated its “outperform” recommendation on the shares.

Planting seeds for extra growth

Meanwhile, Citigroup was another to up its price target on Nufarm by $0.50 to $6.50 a share.

The broker confidence in Nufarm’s ability to grow earnings and sales over the next five years improved after the update.

But its valuation may prove to be conservative as Citigroup did not include the upside from Nufarm’s seed technology business.

“NUF is also aiming for ~$600 to $700 million in revenues for its Seed Technologies business by FY26e which, while not reflected in CitiE or current consensus forecasts, provides an insight into the potential sales quantum for high-growth, early-stage products,” said Citi.

The broker repeated its “buy” recommendation on the Nufarm share price.

How much higher can the Nufarm share price go?

Bell Potter also upgraded its target price on Nufarm following the quarterly update. It increased the target by 18.5% to $6.40 a share.

“There is no change to our Buy rating,” said Bell Potter.

“If NUF can execute on its FY26e targets then it has the scope to become a $565-$635m through the cycle EBITDA business, with a higher exposure to less seasonal elements of the value chain through participation in Omega 3 and Carinata returns post farmgate.”

The post Why top brokers see further upside to the Nufarm (ASX:NUF) share price appeared first on The Motley Fool Australia.

More reading

• Tech stocks crash, while Nufarm soars. Scott Phillips on Nine’s Late News
• Why Amcor, Boral, Nufarm, and Westpac shares are rising today
• Nufarm (ASX:NUF) share price leaps 15% as revenue soars
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Motley Fool contributor Brendon Lau owns 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 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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Key Points

• Amcor shares down 1.6% for the day, but up marginally for 2022
• The company reported a robust result for the first-half of FY22
• Elston analyst Bruce Williams provided his expert take on Amcor shares

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The Amcor PLC (ASX: AMC) share price has continued to gradually travel higher over the past 12 months.

After hitting a low of $14.18 in February 2021, its shares ticked up a notch to reach an all-time high of $17.90 in August.

Since then, Amcor shares have settled back down to $16.58, down 1.6% for the day.

When comparing against its sector, Amcor shares are up 14.66% versus the S&P/ASX 200 Materials (ASX: XMJ), which is up 8.84% in a year.

Notably, following the release of the company results for its FY22 first-half scorecard, Elston’s analyst Bruce Williams weighed in.

What’s driving Amcor share price higher?

Over the six months ending 31 December, Amcor reported a solid first-half performance as it navigated a challenging operating environment.

Across the business, net sales increased by 12% to US$6,927 million on the back of servicing demand in key segments.

At the same time, a broad range of actions were implemented to recover higher input costs and manage through general inflation.

This led to adjusted earnings before interest and tax (EBIT) of US$769 million, up 5% on the prior corresponding period.

In addition, adjusted earnings per share (EPS) rose by 9% to 35.8 US cents.

The board declared a quarterly dividend of 12 US cents to be paid on 15 March 2022.

While the result itself was exceptional given the current surroundings, Amcor reaffirmed its fiscal 2022 outlook.

Management noted that it remains focused on executing its strategy for long-term value creation established over the last several years.

The company is increasing investments in premium segments such as healthcare and protein, in emerging markets to drive growth and margin expansion.

When asked by Ally Selby from Livewire Markets about which ASX share can safely deliver returns in 2022, Mr Williams said:

“The one we’re bringing to the table today is Amcor…

“The basis of its business is consumer staples, so things like healthcare, food, those sorts of things. It’s a packaging business that is dominant in what it does, in each of the markets in which it participates.”

Mr Williams went on talk about the business’ fundamentals, adding:

It generates excellent cash flow. It’s building into its technology around sustainable and recyclable packaging. We think it’s just a terrific defensive position that, through a combination of capital growth, dividends and buybacks, will generate consistent returns for investors for the foreseeable future.

Year to date, the Amcor share price has nudged about 0.36% higher.

The post Amcor (ASX:AMC) shares are ‘a terrific defensive position’: expert appeared first on The Motley Fool Australia.

More reading

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• ASX 200 (ASX:XJO) midday update: Amcor slides, BHP and Fortescue storm higher
• Amcor (ASX:AMC) share price falls despite reaffirming earnings guidance and US$200m buyback expansion

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 owns and has recommended Amcor 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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