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The Wesfarmers Ltd (ASX: WES) share price has started 2022 in a disappointing fashion.

Since the start of the year, the conglomerate’s shares have fallen approximately 7%.

Is the Wesfarmers share price good value?

One leading broker that believes the Wesfarmers share price could be good value after its recent pullback is Morgans.

According to a note, the broker has upgraded the company’s shares to an add rating with an improved price target of $60.80.

Based on the current Wesfarmers share price of $55.63, this implies potential upside of almost 9.5% over the next 12 months before dividends. If you include the $1.51 per share fully franked dividend the broker is forecasting in FY 2022, the potential return stretches to 12%.

What did Morgans say?

Morgans was pleased with Wesfarmers’ first half trading update this week and notes that it was better than its analysts were expecting.

The broker said: “WES advised that 1H22 NPAT is expected to be between A$1,180-1,240m (above Morgans of A$1,037m but in line with consensus expectations) with Bunnings and WesCEF performing well while Kmart Group and Officeworks were impacted by COVID-related disruptions and costs.”

In light of this and recent weakness in the Wesfarmers share price, the broker feels now could be a good time to buy this “high-quality company.”

It concluded: “We continue to see WES as a high-quality company with its share price down 6% over the past month and 15% versus its peak of A$64.98 on 20 August 2021. While not cheap based on FY22 forecasts (30.3x PE and 2.7% yield), the stock looks more attractive on FY23 forecasts (26.7x PE and 3.1% yield). We expect the market will turn its focus to FY23 estimates over the coming months.”

The post Morgans upgrades Wesfarmers (ASX:WES) shares to buy rating appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• Own Wesfarmers (ASX:WES) shares? Jefferies just lowered FY22 earnings forecasts
• Is Wesfarmers (ASX:WES) about to buy Greencross?
• Why Adbri, Australian Ethical, JB Hi-Fi, and Wesfarmers shares are racing higher
• ASX 200 (ASX:XJO) midday update: Wesfarmers’ update, energy shares rise

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 owns and has recommended Wesfarmers 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

• Qantas, Webjet and Flight Centre shares are all falling
• The European Union has taken Australia off its safe travel list
• COVID-19 Omicron fears continue to impact travel

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ASX 200 travel shares are falling today amid more fears about the COVID-19 Omicron outbreak in Australia.

At the time of writing, Flight Centre Travel Group Ltd (ASX: FLT) shares are down 0.83%, Qantas Airways Ltd (ASX: QAN) is 1.95% lower and Webjet Ltd (ASX: WEB) have dropped 1.47%.

Let’s take a look at what might be causing ASX 200 travel shares to land in the red today.

Why are travel shares descending?

ASX 200 travel shares are back on the descent despite starting the week on a high. It seems investors could be reacting to news out of the European Union overnight.

Media reports suggested that Australia, Canada, and Argentina have all been removed from a European ‘safe travel’ list.

A release from the EU stated non-essential travel to countries not on its list should be subject to “temporary travel restriction”.

This, however, does not mean travel from Australia is banned. Each EU member state can make its own decision to follow the EU guidelines. The EU also said its list is “without prejudice” for its member countries to lift the restrictions for non-essential travel for people who are fully vaccinated.

COVID-19 Omicron fears have been weighing on travel share sentiment for some time.

Today, Australia recorded 74 COVID-19 deaths. Victoria has also declared a “code brown” emergency today for public hospitals feeling the strain of rising COVID admissions coupled with Omicron-related staff shortages.

Today’s fall in ASX 200 travel shares comes after they finished in the green yesterday. Flight Centre gained 3.69%, Webjet climbed 2.65%, while Qantas jumped 2.6%. It seemed investors reacted positively to hope for eased border restrictions.

On Sunday, Flight Centre’s CEO Graham Turner declared Queensland’s international border could be the “beginning of the end” of the COVID-19 pandemic.

Share price summary

The Flight Centre share price has performed the best of all the travel shares in the past year, soaring 17.86%. Meanwhile, Webjet has gained 10.66% in the past year while Qantas has climbed 4.37%.

By comparison, the benchmark S&P/ASX 200 Index (ASX: XJO) has returned around 11% in the same time period.

In the past month, Flight Centre shares have risen 6.77%, Webjet shares are up 5.84%, while Qantas shares have gained 5.02%.

The post Why are ASX 200 travel shares down today? appeared first on The Motley Fool Australia.

More reading

• Flight Centre (ASX:FLT) share price gains after boss anticipates ‘beginning of the end’ of COVID
• These are the 10 most shorted ASX shares
• Brokers name 3 ASX shares to buy today
• Own Qantas (ASX:QAN) shares? Morgan Stanley sees ‘significant upside’ to earnings
• ASX 200 (ASX:XJO) midday update: Qantas cuts capacity, Afterpay hits 52-week low

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 Flight Centre Travel Group Limited and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) has given back its morning gains and dropped into the red. At the time of writing, the benchmark index is down 0.15% to 7,405.8 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are sinking:

AVZ Minerals Ltd (ASX: AVZ)

The AVZ share price is down 7.5% to 80 cents. This is despite there being no news out of the lithium explorer. However, it is worth noting that the AVZ share price has more than quadrupled in value over the last 12 months. This could have led to some investors taking a bit of profit off the table on Tuesday.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down a further 6.5% to $7.47. Investors have been selling this ecommerce company’s shares following another disappointing update from a peer (more on that below). This follows an update from the Wesfarmers Ltd (ASX: WES) owned Catch business on Monday which revealed sales growth of just 1% during the first half.

Panoramic Resources Ltd (ASX: PAN)

The Panoramic Resources share price is down 2% to 27 cents. This morning analysts at Morgans downgraded this miner’s shares to a hold rating with a 28 cents price target. The broker doesn’t see enough value in its shares following a strong gain over the last 12 months.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has crashed 21% to $2.36. Investors have been selling this ecommerce company’s shares following the release of a disappointing trading update. The heavily shorted company reported gross transaction value (GTV) of $381 million, down 14% decline over the prior corresponding period. Things got worse for its earnings, with EBITDA crashing 84% to just $8 million. Increased competition in the second quarter weighed heavily on its margins.

The post Why AVZ, Kogan, Panoramic, and Redbubble shares are sinking appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• Here’s why the Redbubble (ASX:RBL) share price is crashing 20% today
• Why Beforepay, Firefinch, Kogan, and South32 shares are dropping
• Here’s why the Kogan (ASX:KGN) share price is being sold off today
• These are the 10 most shorted ASX shares

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 Kogan.com ltd. The Motley Fool Australia owns and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index (ASX: XJO) has turned negative this afternoon in what would be a fairly disappointing day of trading thus far. At the time of writing, the ASX 200 is down by 0.25% at 7,399 points.

But not to dwell too long on that, let’s dig deeper into the ASX 200 shares currently at the top of the share market’s volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume on Friday

Pilbara Minerals Ltd (ASX: PLS)

Our first share up today is ASX 200 lithium producer Pilbara. Pilbara has watched as 13.98 million of its shares have changed hands so far this Tuesday. There isn’t much going on with this company today in the news or announcements department. So we can likely put this volume down to the movements of the Pilbara share price itself.

Pilbara shares are currently up a healthy 2.93% at $3.87 at the time of writing. But that comes after the company hit a new record high of $3.89 a share earlier in today’s session. It’s this strong move upwards and new record high that is likely to be the cause of this elevated volume.

Ausnet Services Ltd (ASX :AST)

Energy company Ausnet is next up today. This ASX 200 share has seen a hefty 17.31 million shares bought and sold thus far this Tuesday. Again, there isn’t any news or announcements out of the company today, so let’s take a look at what the Ausnet share price is doing. This company is currently up 0.2% at $2.54 a share. Not too dramatic there, but perhaps Ausnet’s ongoing takeover process with Brookfield Asset Management could be feeding into this volume too.

Telstra Corporation Ltd (ASX: TLS)

Telstra is our final and most traded ASX 200 share of the day so far. This telco has had an impressive 18.33 million of its shares traded on the markets today. We can likely put this down to the new 52-week high that Telstra clocked this morning. The company is presently trading at $4.26 a share but rose as high as $4.31 earlier in today’s session, the new high watermark for the company.

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 (ASX:XJO) midday update: Rio Tinto’s Q4 update, JB Hi-Fi rockets, Kogan sinks
• Why ASX lithium shares could send heads spinning this earnings season
• This is how much the average Aussie needs to feel ‘rich’
• 2 big-name ASX shares to buy right now
• 5 things to watch on the ASX 200 on Tuesday

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

• The Recce share price is up 3.85% to $1.35
• An independent safety committee has cleared stronger dosing of Recce 327
• Trial subjects are expected to be recruited sometime this week

The Recce Pharmaceuticals Ltd (ASX: RCE) share price is on the move today. This comes after the pharmaceutical company reported further positive data from the clinical trial of its antibiotic candidate, Recce 327.

At the time of writing, the biotechnology company’s shares are swapping hands for $1.35, up 3.85%. In comparison, the All Ordinaries (ASX: XAO) is down 0.13% to 7,729.6 points.

Recce moves ahead with clinical trial

Investors are snapping up Recce shares after the company reported positive safety results in a trial for its broad-spectrum antibiotic drug, Recce 327.

The phase I trial assessed the safety and efficacy of Recce 327 against infectious bacteria on burn wounds in patients.

According to its announcement, the company advised that 7 healthy male patients have received 150mg of Recce 327 intravenously. It said this second group of subjects appears to be safe and well, tolerating the level of dosage.

An earlier first study cohort had been administered 50mg of the drug.

Based on the above data, an independent safety committee has approved a threefold increase in the dose for the third study cohort. This will see between 7 to 10 healthy volunteers being administered up to 500mg of Recce 327.

The subjects are expected to be recruited this week and dosed at Adelaide’s CMAX clinical trial facility.

Recce CEO James Graham commented:

We are pleased to see R327 (150mg) successfully tolerated as an intravenous infusion in Cohort Two subjects. Having successfully cleared two dosing levels (50mg and 150mg) we look forward to embarking upon this next significant milestone.

Recce share price summary

Recce is involved in the advancement of synthetic antibodies designed to address the global health challenge of antibiotic-resistant superbugs. The medical company’s flagship drug Recce 327 is being developed to treat blood infections and sepsis.

Over the past 12 months, the Recce share price has accelerated by almost 30%. These gains have come year to date following the positive safety data from its phase 1 clinical trial.

Based on today’s price, Recce presides a market capitalisation of roughly $235 million, with approximately 174 million shares on issue.

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

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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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Key points

• The information technology index is one of the best performing ASX 200 sectors on Tuesday
• Its being led by the share prices of Life360, Xero, and Appen
• The gains might be a reflection of Nasdaq-listed tech shares’ performance on Friday

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The S&P/ASX 200 Info Tech Index (ASX XIJ) was leading the S&P/ASX 200 Index (ASX: XJO) for much of Tuesday.

The sector might have been bolstered by the day in the green experienced by many United States-listed tech giants on Friday.

Right now, the info tech sector is up 0.58%. That’s compared to the ASX 200’s 0.13% fall.

Let’s take a look at which shares are boosting the tech sector into the top spot on Tuesday.

These ASX 200 tech shares are among the market’s leaders today

ASX 200 tech shares are, together, outperforming much of the market today, potentially driven by Friday’s session in the United States.

The sector’s leaders include fan favourites, Xero Limited (ASX: XRO) and Appen Ltd (ASX: APX). Their share prices have gained 1.5% and 3% respectively.

One of today’s real gainers is Life360 Inc (ASX: 360) – its share price has surged 3.9% at the time of writing.

Finally, Tyro Payments Ltd (ASX: TYR) is bringing up the rear, having fallen 1.1%.

The sector’s movements might have been brought on by a much-needed good day for international tech shares on Friday.

The Nasdaq Composite gained 0.5% after the ASX closed on Friday. Prior to its most recent session, it had fallen 5% since the end of 2021.

According to reporting by the Wall Street Journal, the tipping point for Nasdaq tech stocks were warnings signs that the United States Federal Reserve might soon boost interest rates.

Though, the end of last week saw tech giant’s enjoying an uptick.

Alphabet Inc (NASDAQ: GOOGL) and Microsoft Corporation (NASDAQ: MSFT) both took advantage of the good day’s trade, gaining 0.6% and 1.77% respectively.

Meanwhile, Apple Inc (NASDAQ: AAPL) and Amazon.com Inc (NASDAQ: AMZN) each ended the day up 0.5%.

Their movements might have helped to boost ASX 200 tech shares today.

The post Here are the tech shares leading the ASX 200 on Tuesday appeared first on The Motley Fool Australia.

More reading

• Is no news good news for the Appen (ASX:APX) share price?
• Leading brokers name 3 ASX shares to buy today
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• 3 exciting ASX growth shares with major upside potential in 2022
• 2 beaten-up ASX tech shares analysts rated as quality picks

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), Appen Ltd, Life360, Inc., Microsoft, Tyro Payments, and Xero. The Motley Fool Australia owns and has recommended Appen Ltd and Xero. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Tyro Payments. 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 Arizona Lithium share price is setting a new 52-week high today
• Bullish sentiment towards lithium shares could be supporting a higher valuation for Arizona Lithium
• Prospects of a potentially valuable lithium resource at its Big Sandy Lithium Project is attracting attention

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Partaking in the continuing boom in lithium shares, Arizona Lithium Ltd (ASX: AZL) shares are breaking new multi-year highs today.

At the time of writing, the lithium explorer’s shares are swapping hands at 15 cents apiece, up 15.4%. As a result, the Arizona Lithium share price is up an astonishing 67% in the past month. Notably, shares in the $287 million company touched a new 52-week high of 16 cents earlier today.

What’s with all the excitement for Arizona Lithium on the ASX?

Aside from the sector-wide optimism surging through the veins of lithium shares, Arizona Lithium has been charging higher since October 2021 on the back of its own developments.

Originally known as Hawkstone Mining, ASX-listed Arizona Lithium has evolved into a lithium explorer with a market capitalisation of more than $250 million. However, most of this valuation has only recently been obtained since the company honed in on its lithium prospects.

The company’s most notable project is the Big Sandy Lithium Project located in Arizona, United States. In November, investors were provided with some uplifting information following metallurgical test work on the Big Sandy site.

According to the release, testing showed the ability to recover 71% of lithium in only 36% of the whole ore mass. Testing conducted by Hazen Research managed to produce “battery grade” 99.85% lithium carbonate from Big Sandy. This has enabled the lithium explorer to proceed with scoping and pre-feasibility studies.

Regarding this update, Arizona Lithium mining managing director Paul Lloyd said:

Given the large existing JORC compliant lithium resource that has excellent further upside potential, AZL’s ability to produce a high-quality product in Arizona, USA, in a market with rapidly increasing demand and price, along with quality infrastructure choices and proactive State and Federal Governments, it presents a highly promising future for Arizona Lithium and its shareholders.

Lithium resource on offer

Based on a drill program conducted in 2019, Arizona Lithium estimates a total indicated and inferred JORC resource of 32.5 million tonnes at 1,850 parts per million lithium. In other words, the company estimates 320,800 tonnes of lithium carbonate present at the Big Sandy Project.

However, this estimation incorporates only 4% of the land area across the project. This gives the explorer the potential for further upsizing of the resource in the future.

Lastly, the ASX has witnessed the Arizona Lithium share price skyrocket over the last year. An investor from January 2021 would now be up 383% on their original investment.

The post Arizona Lithium (ASX:AZL) up 60% in the past month, what’s happening? appeared first on The Motley Fool Australia.

More reading

• Fortescue (ASX:FMG) share price up amid hydrogen supply agreement
• How is AFIC (ASX:AFI)’s international share portfolio going?
• Netflix earnings preview: The most important metric to watch
• Own BHP (ASX:BHP) shares? Here’s why the iron ore giant is pushing for battery-powered trains
• BrainChip (ASX:BRN) share price up 20% and hits $3bn market capitalisation

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

• Fortescue’s FFI division has signed an agreement with Covestro for the supply of green hydrogen
• FFI will supply up to 100,000 tonnes of green hydrogen per year starting as early as 2024
• This could be a “first step” towards a broader strategic partnership to accelerate the green energy transition, particularly in energy-intensive industries.

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The Fortescue Metals Group Limited (ASX: FMG) share price is up after the announcement of a future green hydrogen supply agreement. This is through the Fortescue Future Industries (FFI) segment.

Whilst Fortescue is one of the world’s biggest iron ore businesses, it’s aiming to diversify its earnings sources into the green energy space.

Fortescue says FFI is aiming to take a global leadership position in the renewable energy and green products industry and has a vision to make green hydrogen one of the most widely used commodities in the world.

Green hydrogen is made from renewable energy, producing zero pollution. The only by-product is steam. Its ambition is to grow its green hydrogen production to 15 million tonnes of green hydrogen per year by 2030, accelerating to 50 million tonnes per year in the next decade after that.

Fortescue’s agreement with Covestro

Fortescue Future Industries intends to supply green hydrogen and its derivatives including green ammonia to Covestro.

FFI will supply up to 100,000 tonnes of green hydrogen equivalent per year, starting as early as 2024.

What’s Covestro? It was described as a world-leading, Germany-based supplier of high-tech polymer materials. Covestro uses hydrogen and its derivatives as feedstock in the production of high-performance polymers. Covestro has committed itself to completely transition towards the use of fossil-free alternative raw materials and renewable energy as part of a broader circular economy strategy. The German business says the partnership with FFI is an important milestone towards this goal.

How much of a global difference will this make?

Fortescue said that the arrangement will enable Covestro to reduce its greenhouse gas emissions by up to 900,000 tonnes of CO2 per year, by replacing ‘grey hydrogen’ and its derivatives with green hydrogen.

The green hydrogen could be delivered to multiple continents, with potential delivery locations to Asia, North America and Europe.

But this might just be a “first step” towards a broader strategic partnership to accelerate the green energy transition, particularly in energy-intensive industries.

What do FFI and Covestro management make of the agreement?

The FFI CEO Julie Shuttleworth explained:

Covestro is a global leader in its field with its materials used in nearly every area of modern life, including in the automotive, construction and electronics industries.

This collaboration reinforces that green hydrogen is a practical, implementable solution for a range of difficult-to-decarbonise industries.

The CEO of Covestro, Dr Markus Steilemann, said:

Our collaboration with FFI underlines our ambition to pioneer the transition towards a circular economy and climate-neutral production. Green hydrogen and its derivatives play a key role for the chemical industry, both as an alternative feedstock and a source of clean energy.

The transition towards green hydrogen and its derivatives will be an important step forward in our efforts to offer more sustainable products that also reduce the carbon footprint of our customer industries.

What do brokers make of the Fortescue share price?

Citi thinks the Fortescue share price has gotten a bit too high compared to others in the iron ore sector, which is why it’s rated as a sell with a price target of $17.20.

Morgans is not really a fan of the FFI strategy and thinks it should be focusing on the iron ore side of the business. Morgans rates it as a hold with a price target of $16.90.  

The post Fortescue (ASX:FMG) share price up amid hydrogen supply agreement appeared first on The Motley Fool Australia.

More reading

• 4 reasons the Fortescue (ASX:FMG) share price is a strong sell
• Leading fund manager says these blue-chip ASX shares are buys right now
• Is the iron ore price set to slide?
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to sell next week

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

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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.

With banks kicking off 2022’s first earnings season last week, quartelry reports will continue this week. Perhaps one of the most closely watched companies reporting earnings this week will be Netflix (NASDAQ: NFLX). The streaming service specialist is scheduled to report its fourth-quarter earnings on Thursday.

There will be a handful of metrics for investors to check when Netflix reports its latest quarterly results. But one of the most important metrics to watch will be the company’s guidance for subscriber growth in Q1.

This metric will be particularly telling given that the company announced price increases for its service on Friday. By the time the company reports its latest results, management may have some insight into whether or not the higher prices are deterring subscriber growth.

What you should know about Netflix’s price hike

Netflix announced on Friday that it’s raising the prices to all of its subscription tiers in the US. Its basic subscription increased by $1 to $9.99 a month; the standard subscription rose from $13.99 to $15.49; and the premium subscription jumped from $17.99 to $19.99. Prices for two of its tiers are also increasing in Canada.

In a statement to the media, Netflix noted that the prices reflect the company’s efforts to continue its ongoing expansion of its content library so that users have plenty of options. 

While the price increases are effective immediately for anyone who signs up for Netflix today, they won’t be rolled out to existing customers until later this year. Specifically, the company said it will notify Netflix subscribers about the price increases in the coming weeks and subscribers will be given 30-days’ notice.

Investors are hoping for strong subscriber growth in 2022

In 2021, Netflix faced a lull in subscriber growth in the first and second quarter of the year due to a pull-forward in demand in 2020 when more people were sheltering at home to help curb the spread of COVID-19.

Total subscriber additions in the first half of the year were about 5.5 million. But subscriber growth picked up in Q3, with about 4.4 million customer additions in the three-month period. And in the fourth quarter of 2021, Netflix expects 8.5 million new customers.

Investors are likely hoping that management provides robust guidance for Q1 subscriber growth. After all, Netflix has been rolling out lots of new content as its production capabilities are ramping back up. A strong slate of new content should help draw in new subscribers.

But with the company throwing in a curveball of a price increase, some investors may wonder if subscriber growth could be dampened.

Of course, a price hike will likely still be a good thing for investors even if subscriber growth slows some. But a best-case scenario would be that the company has the pricing power to both raise prices and keep growing subscribers rapidly.

To get an idea of how subscriber growth is trending so far in 2022, investors should look to management’s guidance for net new subscriber additions in the first quarter of 2022.

Netflix reports its fourth-quarter results after market close on Thursday, 20 January. 

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

The post Netflix earnings preview: The most important metric to watch appeared first on The Motley Fool Australia.

More reading

• 835 reasons to invest in Netflix stock right now
• Why investors will be tuning in for Netflix’s earnings report this week

Daniel Sparks has no position in any of the stocks mentioned. His clients may own shares of the companies mentioned. The Motley Fool Australia’s parent company Mosley Fool Holdings Inc. owns and recommends Netflix. The Motley Fool Australia has recommended Netflix. 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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Key points

• AFIC is one of the largest LICs on the ASX
• It has a reputation for investing in blue chip ASX 200 shares
• But last year, AFIC initiated an international share portfolio

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The Australian Foundation Investment Co Ltd (ASX: AFI), or AFIC for short, has to be one of the shares on the ASX boards with the most established reputation. That’s what can happen when a company is in the public eye for close to 100 years.

Yes, since 1928, AFIC has been one of the largest Listed Investment Companies (LICs) on the market. Through investing in a portfolio of blue chip ASX shares, AFIC has built up a loyal client base, perhaps assisted by its focus on slow and steady returns and a rising stream of fully franked dividends.

For decades, AFIC has focused on the ASX in sourcing its holdings. That continues today. The company’s latest update (as of 31 December) shows that its largest five companies were:

1. Commonwealth Bank of Australia (ASX: CBA)
2. CSL Limited (ASX: CSL)
3. BHP Group Ltd (ASX: BHP)
4. Macquarie Group Ltd (ASX: MQG)
5. Wesfarmers Ltd (ASX: WES)

But that’s only the start of AFIC’s investments. Its top 25 shares equate to 77.4% of its portfolio. Yet, in its annual report last year, AFIC stated that its total portfolio contained more than 60 ASX shares.

However, last year, AFIC made a rather significant revelation in regards to its future plans. The company revealed that after decades of focusing on the ASX, it had expanded its holdings by initiating a portfolio of international shares. Here’s what the company said at the time:

A small part of our funds, $48 million (which represents approximately 0.5 per cent of the portfolio) was invested into a diversified global equities portfolio during the latter half of the financial year. 

What about AFIC’s international share portfolio?

Many of these shares were US tech giants, including these holdings:

• Apple Inc (NASDAQ: AAPL)
• Microsoft Corporation (NASDAQ: MSFT)
• Alphabet Inc Class A (NASDAQ: GOOGL)
• Facebook Inc (NASDAQ: FB)
• Netflix Inc (NASDAQ: NFLX)
• McDonald’s Corp (NYSE: MCD)
• Starbucks Corporation (NASDAQ: SBUX)
• Amazon.com Inc (NASDAQ: AMZN)
• Mastercard Inc (NYSE: MA)
• PayPal Holdings Inc (NASDAQ: PYPL)

But there was also some companies from Europe and China too. These included Estee Lauder, Unilever, LVMH, L’Oreal, Nestle and Alibaba.

So now that many moons have passed since the revelation of this portfolio’s existence, how might it have been faring for AFIC? Well, unfortunately, we don’t know for sure. Unlike its ASX holdings, AFIC doesn’t give us regular updates for the international shares portfolio. But we can always speculate.

So, since June last year, several of the shares listed above have given investors some pleasing gains. For instance, Apple has risen by 38.9%, Microsoft by 24.2%, and Alphabet by 18.4%. But not all have been so lucky. PayPal shares have lost 31.4% over the same period, while Alibaba has shed 38.3%.

Even so, it appears the majority of AFIC’s international shares have done well since early June, which probably bodes well for the company going forward. We might have to wait a while before we get another international portfolio update from AFIC. But it’s certainly been an interesting space to watch.

At AFIC’s current share price, this ASX LIC has a market capitalisation of $10.75 billion, with a trailing dividend yield of 2.74%.

The post How is AFIC (ASX:AFI)’s international share portfolio going? appeared first on The Motley Fool Australia.

More reading

• Why are AFIC (ASX:AFI) shares so popular among young investors?
• How did the AFIC (ASX:AFI) share price manage to outperform in 2021?
• Index killer? Here’s how AFIC (ASX:AFI) shares stack up to the ASX 200

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Alphabet (A shares), Mastercard, McDonald’s, Meta Platforms, Inc., and Starbucks. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), CSL Ltd., Meta Platforms, Inc., and Microsoft. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Macquarie Group Limited, Mastercard, Meta Platforms, Inc., Netflix, PayPal Holdings, and Starbucks. 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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