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Today, the S&P/ASX 200 Index (ASX: XJO) rallied off the back of a strong showing on Wall Street last night. On top of this, the Reserve Bank of Australia decided to keep interest rates on hold. At the end of the session, the benchmark index finished 0.49% higher at 7,006 points.

It was a good day for investors on Tuesday with nearly all sectors finishing in the green. However, the materials sector broke the trend with its 1.2% decline today. Fortunately, the ground was more than made up by other performing sectors such as tech and utilities.

However, the question is: which shares delivered the biggest returns to investors on the ASX today? Here are the top ten stocks that came through for investors:

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Pendal Group Ltd (ASX: PDL) was the biggest gainer today. Shares in the global investment company jumped 7.28% despite there being no new announcements from the company. Find out more about Pendal Group here.

The next biggest gaining ASX share today was Judo Capital Holdings Ltd (ASX: JDO). The small and medium-sized focused bank pushed 6.56% higher, once again with no news being published by the company. Uncover the latest Judo Capital Holdings details here.

Today’s top 10 biggest gains were made in these ASX shares:

ASX-listed company	Share price	Price change
Pendal Group Ltd (ASX: PDL)	$5.16	7.28%
Judo Capital Holdings Ltd (ASX: JDO)	$2.03	6.56%
Imugene Ltd (ASX: IMU)	$0.33	6.45%
AVZ Minerals Ltd (ASX: AVZ)	$0.745	6.43%
Boral Ltd (ASX: BLD)	$6.21	5.79%
AMP Ltd (ASX: AMP)	$0.92	5.14%
Dicker Data Ltd (ASX: DDR)	$13.36	5.11%
Flight Centre Travel Group Ltd (ASX: FLT)	$17.34	4.84%
Zip Co Ltd (ASX: Z1P)	$3.31	4.75%
Magellan Financial Group Ltd (ASX: MFG)	$19.46	4.57%

Our top 10 ASX shares today countdown is a recurring end-of-day summary to ensure you know which companies were making big moves on the day. Check-in at Fool.com.au after the market has closed during weekdays to see which stocks make the countdown.

The post Here are the top 10 ASX shares today appeared first on The Motley Fool Australia.

More reading

• Why did the ASX 200 lift on the latest RBA rate decision?
• This top ASX broker tips Coles (ASX:COL) shares for 20% upside
• ASX 200 lifts off on RBA interest rate decision
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• ASX 200 shares offer 12% upside after sell-off: JP Morgan

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. owns and has recommended Dicker Data Limited, Judo Capital Holdings Limited, and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Dicker Data Limited. The Motley Fool Australia has recommended Flight Centre Travel 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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Key points

• The Ansell share price fell again today after sinking 14% yesterday
• Macquarie upgraded the Ansell share price to “neutral” from “underperform”
• But the modest upside to Macquarie’s price target didn’t seem to excite investors

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The Ansell Limited (ASX: ANN) share price struggled for a second successive day on Tuesday, slipping 0.34% lower by the close of trading.

The personal protective equipment maker’s shares were in the red for much of the day save for a couple of spikes before closing at $26.67 apiece. For comparison, the S&P/ASX 200 Index (ASX: XJO) finished up 0.49%.

Today’s fall follows a 14% crash in the Ansell share price yesterday when the company released a disappointing trading update.

It also comes despite a top broker upgrading the company’s shares.

Ansell share price struggles despite upgrade

The big sell-off yesterday prompted Macquarie Group Ltd (ASX: MQG) to lift its recommendation on Ansell. But this doesn’t appear to have been enough to motivate bargain hunters to jump in.

This is likely because Macquarie upgraded the Ansell share price to “neutral” from “underperform”. The broker doesn’t think the shares have fallen far enough to be considered cheap.

Big earnings miss

While Ansell’s 1H FY22 revenue was largely in line with Macquarie’s expectations, earnings were nearly 20% under forecasts.

“This reflected impacts due to COVID-19 (reduced labour availability), supply chain constraints (delivery delays, higher freight costs), and weaker demand in Exam/Single Use (customer de-stocking),” said Macquarie.

To make matters worse, Ansell is unable to pass on the higher costs – at least not yet. This resulted in the earnings before interest and tax (EBIT) margin falling to 11% in the half, or 6.5 percentage points below 1H FY21.

Gloves come off for Ansell

What is also hurting Ansell is that its facility in Malaysia was forced to shut due to rising COVID cases. Meanwhile, US authorities have banned the import of disposable gloves from YTY Industry Holdings, a major supplier of gloves for Ansell.

“Combined with an expectation of a continuation of operational challenges/supply chain disruption into 2H22 and preliminary 1H22 results, FY22 guidance has been revised to US125-145 cents, with the mid-point ~27% below the mid-point of previous guidance (US175-195 cents) and ~20% below FactSet consensus,” added Macquarie.

What is the Ansell share price worth?

But there is a silver lining. The significant drop in the Ansell share price limits the downside risks to the investment.

“While acknowledging earnings uncertainty for 2H22 and into FY23, we see our revised forecasts as capturing downside risk within Exam/Single Use as well as broader COVID-19/supply chain impacts,” explained Macquarie.

The broker’s 12-month price target on Ansell is $28.30 a share. This implies an upside of 6%, based on today’s closing price.

Ansell shares are down around 30% over the past 12 months and 15% this year to date.

The post Ansell (ASX:ANN) share price falls again amid broker upgrade appeared first on The Motley Fool Australia.

More reading

• How will ASX shares perform this earnings season? Experts explain what to look for
• Why Ansell, AnteoTech, Dubber, and NIB shares are dropping
• ASX 200 (ASX:XJO) midday update: Ansell crushed, ResMed upgraded
• Ansell (ASX:ANN) share price crashes 20% as guidance slashed
• 2 ASX shares that could be buys for both growth and dividends

Motley Fool contributor Brendon Lau owns Ansell Ltd. and Macquarie 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 recommended Ansell Ltd. and Macquarie 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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Key points

• The ASX 200 recived an extra push this afternoon, closing above 7,000 points
• The official cash rate will remain on hold at 0.1% as the RBA cuts bond-buying
• Aussie inflation is now tipped to rise to 3.25% before falling back to 2.75%

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The S&P/ASX 200 Index (ASX: XJO), and many of its constituents, rallied in afternoon trade following the Reserve Bank of Australia’s (RBA) monthly meeting. At market close, the benchmark finished up 0.49% to 7,006 points.

Today’s RBA meeting was an important one as investors grow more anxious about larger and faster rate increases by the central bank. However, in the meeting, the RBA announced its decision to end its bond purchase program and hold the cash rate at 0.1%.

It appears the broader market considered the decision to be a positive one. Let’s take a look at why the RBA’s decision might have boosted the ASX 200 this afternoon.

Lowe sticks with dovish outlook on rates

Unlike the more hawkish tones from US Federal Reserve chair Jerome Powell, RBA governor Philip Lowe remained dovish for the near future.

In the meeting, Lowe acknowledged inflation has gained momentum more quickly than what was expected. However, Australia’s inflation continues to trend at a rate lower than many other countries. While the US is touching CPI inflation rates of 7%, locally we are at 3.5%.

Additionally, the governor noted that underlying inflation is around 2.6%, which is expected to increase in the coming quarters. Although, this rate is then forecast to fall to 2.75% throughout 2023 as supply-side issues subside.

RBA: Sees Underlying Inflation To Rise In Coming Quarters
– Rising To Around 3.25%
– Falling To Around 2.75% Over 2023

— LiveSquawk (@LiveSquawk) February 1, 2022

https://platform.twitter.com/widgets.js

Furthermore, wages growth has been rebounding but only to similar levels witnessed pre-pandemic. Though, Lowe highlighted this may change as the labour market continues to tighten. The central bank’s unemployment rate forecast for the end of 2023 is now around 3.75%.

Given the numerous positive economic indicators, the RBA made the call to end bond purchases. Since it began, the central bank’s balance sheet has tripled to $640 billion.

However, the board was adamant the cut to bond-buying did not indicate an interest rate rise in the near term. Ultimately, the RBA concluded it is too early to tell whether inflation is sustainably in its target range.

On this note, RBA governor Lowe stated:

The Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve.

What does it mean for the ASX 200?

The remarks shared by the RBA today infer a more cautious approach to lifting the cash rate anytime soon in Australia.

This could be considered a positive for the ASX 200 and other ASX shares for three reasons:

• Inflation might not remain elevated, suggesting an easing in costs for ASX shares
• If interest rates are not increased in the near term, that could mean cheaper funding costs for companies
• Cash remains a relatively unappealing place to park cash

These factors could have been weighing on the minds of investors this afternoon, pushing the ASX 200 back above 7,000 points.

The post Why did the ASX 200 lift on the latest RBA rate decision? appeared first on The Motley Fool Australia.

More reading

• This top ASX broker tips Coles (ASX:COL) shares for 20% upside
• ASX 200 lifts off on RBA interest rate decision
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return

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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The S&P/ASX 200 Index (ASX: XJO) is on course to start the month with a solid gain. In late afternoon trade, the benchmark index is up 0.7% to 7,017.6 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are dropping:

Aussie Broadband Ltd (ASX: ABB)

The Aussie Broadband share price is down over 1% to $4.17. This follows the release of the telco’s first half trading update this morning. According to the release, Aussie Broadband delivered first half gross revenue growth of 49% to $237.3 million. However, due to heightened promotions and higher usage costs during lockdowns, first half EBITDA (before transaction costs) is only up 7% to $9.1 million.

BHP Group Ltd (ASX: BHP)

The BHP share price is down 3% to $44.90. This follows broad weakness in the resources sector and a pullback in the Big Australian’s US listed shares overnight. In other news, BHP’s unification scheme of arrangement became effective yesterday.

Brambles Limited (ASX: BXB)

The Brambles share price is down 2% to $9.47. This appears to have been driven by a broker note out of Morgan Stanley this morning. According to the note, the broker has downgraded this logistics solutions company’s shares to an underweight rating and cut the price target on them to $9.30. Morgan Stanley made the move on concerns over the impact of current supply chain challenges on its performance.

Champion Iron Ltd (ASX: CIA)

The Champion Iron share price is down 2% to $6.33. Once again, this appears to be due to broad weakness in the resources sector. In addition, profit taking could be weighing on this iron ore miner’s shares. After all, Champion Iron’s shares were the best performers on the ASX 200 in January with an 18.6% gain.

The post Why Aussie Broadband, BHP, Brambles, and Champion Iron shares are dropping appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• Leading brokers name 3 ASX shares to sell today
• Aussie Broadband (ASX:ABB) share price higher after delivering 49% revenue growth
• These were the best performing ASX 200 shares in January
• These 3 ASX 200 shares are topping the volume charts on Monday

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 Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband 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 Coles Group Ltd (ASX: COL) share price is having a fairly robust day of trading this Tuesday. At the time of writing, Coles shares are up a healthy 1.23% at $16.40 a share. However, that still puts Coles underwater for 2022 so far, given the company is still down by 8.6% year to date. Coles is also down for the past 12 months, having given up 9.75% over the last year.

So after a year of… treading water (to put it kindly) for Coles shares, many investors might be wondering what’s next for the second-largest grocer in the country. Perhaps it’s understandable investors were a bit wary of Coles over January. Not only did we have some significant market volatility which saw the S&P/ASX 200 Index (ASX: XJO) enter a technical correction at one point. But we also got a warning from Coles’ arch-rival Woolworths Group Ltd (ASX: WOW) in early January.

This told the public that Woolies was experiencing stock and supply chain issues due to the impacts of the latest coronavirus wave. As such, Woolworths warned us that many stores would have reduced product availability for at least a few weeks. If Woolworths was experiencing issues like these, it’s arguably a fair bet that things aren’t totally normal over at Coles either.

But now we’ve started February, what might the outlook for the Coles share price be?

Top ASX brokers: Coles shares are a buy

Well, one ASX broker is extremely bullish on Coles shares right now — and that is Citi. As my Fool colleague James covered last week, Citi has slapped a buy rating on Coles shares and given the supermarket a 12-month share price target of $19.60. That implies a potential future upside of 19.51% on current pricing. Citi sees some value in the current Coles share price and is pencilling in a 65 cents per share dividend for FY2022 and 72 cents for FY2023. That implies fully franked yields of well over 4% for both years.

But Citi isn’t the only broker rating Coles as a buy right now. Morgans is also bullish on this ASX 200 share. It has a 12-month share price target of $19.90 which obviously implies a slightly brighter upside to that of Citi’s $19.60 share price target.

No doubt Coles shareholders will be all too keen to see these predictions come true, but we shall have to wait and see what the next 12 months hold in store for Coles shares.

At the current Coles share price, this company has a market capitalisation of $21.9 billion with a dividend yield of 3.72%.

The post This top ASX broker tips Coles (ASX:COL) shares for a 20% upside appeared first on The Motley Fool Australia.

More reading

• ASX 200 lifts off on RBA interest rate decision
• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return
• Buy this ASX share with 48% upside: expert

Motley Fool contributor Sebastian Bowen 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 COLESGROUP DEF SET. 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

• RBA interest rates to remain unchanged
• ASX 200 gains on announcement
• Inflation hasn’t yet proven to be structural

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The Reserve Bank of Australia (RBA) has opted to keep the official interest rate at the current historic low 0.10%.

The S&P/ASX 200 Index (ASX: XJO) gained more than 0.6% in the handful of minutes following the RBA’s interest rate decision at 2pm AEST.

The ASX 200 is currently up 0.7% for the day.

What did the RBA governor report?

In his statement this afternoon, RBA governor Philip Lowe said that while the interest rate will remain unchanged, the central bank will stop its quantitative easing (QE) program. The RBA’s final bond purchase under the program will be on 10 February.

According to Lowe, “The Australian economy remains resilient and spending is expected to pick up as case numbers trend lower.”

Lowe said that the Omicron variant has impacted the Aussie economy but not derailed it. He cited the pandemic as the biggest area of uncertainty looking ahead.

The RBA is forecasting GDP to grow in the range of 4.25% in 2022 and slow to 2.0% growth in 2023. The banks said household and businesses are broadly financially in good shape and it sees “an upswing in business investment, a large pipeline of construction work and supportive macroeconomic policy settings”.

Unemployment slides

As for the labour market, unemployment fell to 4.2% in December. Lowe said that there were still a high number of job vacancies which “suggest further gains in employment over the months ahead”.

The RBA is forecasting unemployment will dip below 4% later in 2022 and fall to around 3.75% by the end of 2023.

The higher employment figures haven’t fully filtered through to wages yet. Wage growth was reported to be similar to what we saw prior to the onset of the pandemic. Lowe said the bank expects wages to increase gradually, but noted “uncertainty about the behaviour of wages at historically low levels of unemployment”.

Inflation ticking higher than RBA expected

Inflation increased faster than the RBA had been forecasting.

The headline CPI inflation rate of 3.5% is being driven by increased fuel prices, supply chain disruptions and higher new dwelling costs.

Underlying inflation, which removes volatile goods like petrol, was reported at 2.6%. The RBA expects underlying inflation will increase to around 3.25% over the coming quarters before falling back to 2.75% in 2023. It noted that supply chain disruptions remain the biggest uncertainty in that forecast.

Looking ahead

Looking ahead at the RBA’s interest rate intentions, Lowe said:

The Board is committed to maintaining highly supportive monetary conditions to achieve its objectives of a return to full employment in Australia and inflation consistent with the target…

As the Board has stated previously, it will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. While inflation has picked up, it is too early to conclude that it is sustainably within the target band…

The Board is prepared to be patient as it monitors how the various factors affecting inflation in Australia evolve.

The post ASX 200 lifts off on RBA interest rate decision appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares this Tuesday
• Afterpay takes a bow, officially uniting with Block (ASX:SQ2) shares on the ASX
• Leading brokers name 3 ASX shares to sell today
• Here’s why the Elmo (ASX:ELO) share price is surging 9% today
• What’s boosting the Bendigo Bank (ASX:BEN) share price today?

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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It seems the S&P/ASX 200 Index (ASX: XJO) is continuing to recover from its recent slump today. At the time of writing, the ASX 200 is up 0.74% at 7,023 points.

So before we get the champagne ready, let’s dive a little deeper into the markets and check out the ASX 200 shares that are topping the share market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume on Tuesday

BHP Group Ltd (ASX: BHP)

The Big Australian is our first share experiencing high trading volumes today. We have seen an impressive 12.31 million BHP shares bought and sold so far this Tuesday. This ASX 200 mining giant has taken a nasty tumble today, currently down by 2.91% at $45.00 a share. However, it’s perhaps more likely that BHP’s ‘unification’ is what is really behind this trading volume. Just yesterday, BHP wound up its London share listing and now only calls the ASX home. As such, many LSX-issued shares are finding their way to the ASX. This is probably influencing this trading volume we’re seeing.

Telstra Corporation Ltd (ASX: TLS)

ASX 200 telco Telstra is next up today. So far, a hefty 13.44 million Telstra shares have found a new owner this Tuesday. There are no fresh developments out of this company recently so we can probably assume that this high volume is the result of the movements in the Telstra share price itself.

Telstra shares have had something of a volatile day. The telco is currently asking $3.95 a share, up 0.77% for the day. However, the share price has gone as high as $3.97 and as low as $3.90 during the day thus far. It’s this bouncing around that is the likely cause of the trading volumes we are seeing.

Pilbara Minerals Ltd (ASX: PLS)

ASX 200 lithium producer Pilbara is our final share of the day today. So far this Tuesday, a sizeable 17.84 Pilbara shares have traded on the markets. We can probably point to the movements of the Pilbara share price today to explain this volume once again. The Pilbara share price is presently up a robust 1.72% so far at $3.25 a share.

But earlier this morning, this lithium company was up as high as $3.40. As my Fool colleague Bernd covered today, ASX lithium shares like Pilbara are in focus right now amid warnings of a supply squeeze for the metal. This could be why Pilbara shares are topping the ASX 200’s volume charts as we speak.

The post Here are the 3 most heavily traded ASX 200 shares this Tuesday appeared first on The Motley Fool Australia.

More reading

• ASX 200 shares offer 12% upside after sell-off: JP Morgan
• ASX lithium shares in focus amid potential supply squeeze
• ASX 200 (ASX:XJO) midday update: Credit Corp impresses, Boral’s $3bn capital return
• Buy this ASX share with 48% upside: expert
• These were the worst performing ASX 200 shares in January

Motley Fool contributor Sebastian Bowen owns Telstra Corporation 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 owns and has recommended Telstra Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• Block shares are leaping on the ASX in Tuesday’s session
• The Scheme of Arrangement between Afterpay and Block has officially been implmented
• First integration of Afterpay’s buy now, pay later offering made in Block’s seller ecosystem
• New board appointment of former Afterpay director made

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The Block Inc (ASX: SQ2) share price is enjoying a positive session today as it officially takes Afterpay under its wing.

At the time of writing, shares in the US-based financial services company are up 8.11% to $174.50. In turn, Block shares are now trading at their highest level since hitting the ASX.

So, what exactly does it all mean for the two unified companies and their shareholders?

Waking up to Block shares instead of Afterpay

Today, former Afterpay shareholders will have noticed their shares in the buy now, pay later (BNPL) company are not being displayed in their portfolio. Instead, investors will find Block shares in their absence following the successful Scheme of Arrangement implementation.

In short, Block has now officially acquired all the issued Afterpay shares. That means former shareholders of the BNPL company should now be staring at 0.375 Block shares for every Afterpay share that was previously held.

The milestone draws a close to what has been a nearly six-month-long endeavour. Furthermore, during this time the Block share price has eroded by 55% — taking the value of Afterpay down with it.

However, with the formalities now behind it, the company is putting the new acquisition to work. According to the release, the US fintech company launched its first integration of Afterpay in the United States and Australia. Now Block sellers using Square Online can leverage the installment option for their e-commerce offering.

Commenting on the implementation, Block co-founder and CEO Jack Dorsey said:

We’re excited to welcome the Afterpay team to Block and are eager to get to work. Together, we’ll deliver even better products and services for sellers and consumers while staying true to our shared purpose of making the financial system more fair and accessible to everyone.

What else?

Alongside the acquisition news, Block announced the appointment of former Afterpay director Sharon Rothstein to the board of directors.

In acknowledging the appointment, Rothstein said:

I’ve long admired Block’s purpose to make the financial system more accessible and inclusive. I’m honoured and excited to bring my global experiences to the diverse expertise of this Board.

Lastly, for new holders of Block shares, the company is set to report its fourth-quarter earnings on 24 February 2022.

The post Afterpay takes a bow, officially uniting with Block (ASX:SQ2) shares on the ASX appeared first on The Motley Fool Australia.

More reading

• Trouble in tech land may not be the only reason Block (ASX:SQ2) shares have dived 17% since listing
• What happened to ASX buy now, pay later shares today?
• 5 things to watch on the ASX 200 on Thursday
• What happened to ASX tech shares today?
• There’s a new kid on the Block (ASX:SQ2), but how does it make money?

Motley Fool contributor Mitchell Lawler owns Block, Inc shares. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited and Block, Inc. The Motley Fool Australia owns and has recommended Afterpay 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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Yesterday we looked at three ASX shares brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with brokers right now. Three that have just been given sell ratings are listed below. Here’s why these brokers are bearish on these ASX shares:

ARB Corporation Limited (ASX: ARB)

According to a note out of Credit Suisse, its analysts have retained their underperform rating but lifted their price target on this 4×4 parts manufacturer’s shares to $40.60. This follows the release of its half year trading update. Credit Suisse was pleasantly surprised to see ARB outperform its estimates during the first half of FY 2022. This has led to the broker upgrading its full year estimates and valuation accordingly. However, it still believes its shares are overvalued at the current level, particularly given its concerns that ARB’s margins are unsustainable. The ARB share price is trading at $46.94 on Tuesday.

Brambles Limited (ASX: BXB)

A note out of Morgan Stanley reveals that its analysts have downgraded this logistics solutions company’s shares to an underweight rating and cut the price target on them to $9.30. Its analysts made the move due to concerns over current supply chain challenges which it fears could be weighing on Brambles’ performance. The Brambles share price is trading at $9.50 on Tuesday afternoon.

IGO Ltd (ASX: IGO)

Another note out of Morgan Stanley reveals that its analysts have retained their underweight rating and $9.70 price target on this battery materials miner’s shares. This follows the release of its second quarter update which revealed greater than expected capital expenditures. In light of this and its current valuation, the broker appears to see no reason to change its recommendation at this point. The IGO share price is currently fetching $11.73.

The post Leading brokers name 3 ASX shares to sell today appeared first on The Motley Fool Australia.

More reading

• ARB Corporation (ASX:ARB) share price goes into overdrive, up 9% on revenue surge
• Why Airtasker, ARB, Bubs, and Sezzle shares are pushing higher
• IGO (ASX:IGO) share price lower as revenue slides 18%
• Leading fund manager says these blue-chip ASX shares are buys right now
• Leading brokers name 3 ASX shares to buy 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. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended ARB Corporation Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Key points

• The Elmo share price is up more than 9% today
• The company reported 35% organic growth in H1 FY22
• Revenue increased by 41% on the first half of FY21

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The ELMO Software Ltd (ASX: ELO) share price is soaring today on the back of the company’s half-year financial results.

In afternoon trade, the business software company’s shares are trading at $4.22, up 9.04% at the time of writing. The share price reached as high as $4.38 in early trading. For perspective, the  S&P/ASX 200 Index (ASX: XJO) is 0.87% higher.

 Let’s take a look at what the company reported today.

Elmo share price escalates on half-year results

Some highlights from Elmo’s H1 FY22 report include:

• $43.1 million revenue, up 41% from H1 FY21
• $98.3 million annualised recurring revenue (ARR)
• 35% organic growth compared to H1 FY21
• EBITDA of $0.3 million, up $0.9 million from H1 FY21

What else happened in the half?

Elmo’s total cash receipts in the first half of the financial year were $56 million. This represents a 63% increase on the first half of FY21.

The company provides cloud-based software solutions for HR, payroll, and rostering in Australia, New Zealand, and the UK.

In the past 12 months, the company has topped $101 million in cash receipts. This is a 57% rise on the first half of the previous financial year. Since H1 2018, the company’s cash received has increased from $21.2 million to $101.4 million. That’s a 378% improvement in four years.

The company’s cash balance finished at $58.4 million as at 31 December 2021. The figure is nearly 29% less than H1 FY21 when Elmo Software held $81.9 million. However, the company says its operating monthly cash burn fell by 36% compared to the first half of 2021.

What’s next for Elmo?

Elmo has improved its guidance for FY22 to between $107 and $113 million ARR. This represents 28% to 35% year on year growth.

Meanwhile, the company predicts its revenue to increase by 32% to 39% year on year to between $91 and $96 million. The company’s expected EBITDA is between $1.5 to 6.5 million.

My Foolish colleague Tristan reported recently that Morgan Stanley rates the share price as a buy with a price target of $7.80. That’s around 84% more than the share price at the time of writing.

Share price recap

The Elmo share price has shed 36% in the past year. It’s fallen 7% in the past month alone but it has recovered more than 6% in the past week.

Meanwhile, the broader ASX 200 Index has returned nearly 5% over the past 12 months.

The company has a market capitalisation of about $377 million based on its current share price.

The post Here’s why the Elmo (ASX:ELO) share price is surging 9% 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 Elmo Software. The Motley Fool Australia owns and has recommended Elmo Software. 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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