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The S&P/ASX 200 Index (ASX: XJO) looks set to end the week in a very disappointing fashion. In afternoon trade, the benchmark index is down 1% to 7,399.7 points.

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

Afterpay Ltd (ASX: APT)

The Afterpay share price is down 9% to $69.14. This follows further weakness in the Block share price during overnight trade on Wall Street. As Block has been given all the approvals required to acquire the buy now pay later provider, Afterpay shareholders will shortly have their shares convert into Block shares.

BWX Ltd (ASX: BWX)

The BWX share price has continued its slide and is down a further 6% to $3.48. Investors have been selling this personal care products company’s shares this week following the surprise announcement of the exit of its CEO, Dave Fenlon. According to the release, Mr Fenlon will be replaced by the company’s COO, Rory Gration, from 1 March. Mr Fenlon will remain on the board as a non-executive director.

Pendal Group Ltd (ASX: PDL)

The Pendal share price has crashed 20% to $4.75. This follows the release of a disappointing quarterly update which revealed net fund outflows of $6.8 billion This led to Pendal’s funds under management (FUM) falling 2.5% to $135.7 billion during the December quarter despite the benefits of favourable market movements.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price is down 9% to $9.03. Investors have been selling this furniture and homewares retailer’s shares amid broad weakness in the tech sector. This latest decline means the former market darling’s shares are down 16% in 2022. This has been driven by concerns over the lofty multiples it and other tech shares trade on at a time when rates may soon start rising in the US.

The post Why Afterpay, BWX, Pendal, and Temple & Webster shares are sinking appeared first on The Motley Fool Australia.

More reading

• Is the slide in BNPL shares like Zip (ASX:Z1P) just getting started?
• ASX 200 (ASX:XJO) midday update: Qantas cuts capacity, Afterpay hits 52-week low
• Here’s why the Pendal (ASX:PDL) share price is tumbling 6% lower today
• Can Beforepay replicate Afterpay when it lists on the ASX on Monday?
• Here’s how the Afterpay (ASX:APT) share price performed in 2021

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 Afterpay Limited and Temple & Webster Group Ltd. The Motley Fool Australia owns and has recommended Afterpay Limited. The Motley Fool Australia has recommended BWX Limited and Temple & Webster Group 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) is on course to end the week with a decline. At the time of writing, the benchmark index is down 1% to 7,399.7 points.

Four ASX shares that are not letting that hold them back are listed below. Here’s why they are charging higher:

AnteoTech Ltd (ASX: ADO)

The AnteoTech share price is up 18% to 30 cents. Investors have been buying this medical device company’s shares amid reports the company is planning to ramp up production of its rapid antigen test now that the device is in the final stages of TGA approval. Given supply shortages in Australia, this bodes well for the company’s sales in 2022.

BrainChip Holdings Ltd (ASX: BRN)

The BrainChip share price has jumped over 16% to $1.63. This morning the artificial intelligence technology company announced that it has submitted a capital call notice to LDA Capital. It expects to bring in $20 million of funds from the issue of up to 15 million shares. These funds will be used to support its commercialisation strategy.

City Chic Collective Ltd (ASX: CCX)

The City Chic share price has surged 12% higher to $5.01. This follows the release of a trading update by the plus sized fashion retailer. City Chic revealed that it expects to report first half sales growth of 49.8% but flat earnings for the period. However, investors appear to be looking beyond the latter given that it was caused by one-off COVID impacts to margins.

ResMed Inc (ASX: RMD)

The ResMed share price is up 4% to $35.05. This gain may have been driven by news this week that rival Philips is increasing its device recall from 3 to 4 million CPAP devices to over 5 million devices. This bodes well for ResMed and could keep Philips out of the market for longer than first anticipated.

The post Why AnteoTech, BrainChip, City Chic, and ResMed shares are charging higher appeared first on The Motley Fool Australia.

More reading

• Why the BrainChip (ASX:BRN) share price is rocketing 21% to a new record high
• Why did the City Chic (ASX:CCX) share price just drop then pop 13%?
• AnteoTech (ASX:ADO) share price surges amid ambition to join scramble for RATs
• Analysts name 2 excellent ASX growth shares to buy right now
• Why BrainChip, Crown, Objective, and South32 shares are racing 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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Key Points

• The Pushpay share price has been falling in recent months
• Growth of revenue, donation processing volume and profit margins could mean it’s an attractive opportunity
• Ord Minnett’s price target suggests a significant recovery this year

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The Pushpay Holdings Ltd (ASX: PPH) share price could be a significantly undervalued opportunity for investors right now.

Since 9 November 2021, the Pushpay share price has fallen by around 34%.

After this significant decline, there are a few factors that could make the donation ASX tech share a long-term opportunity.

Here are a few things to take a look at:

Processing volume and revenue continue to grow

Unlike some ASX retail shares that are struggling to achieve growth in FY22 after a strong FY21, the latest update from Pushpay for the six months ended 30 September 2021 showed growth.

Total processing volume increased by another 9% to US$3.5 billion. While it saw a softer start to the first half of FY22, total processing volume in the second quarter was stronger than the first quarter and the level of digital penetration within the customer base remained consistent.

Pushpay is expecting continued growth of total processing volume driven by continued growth in the number of donor management system products utilised by customers, further development of its product set resulting in higher adoption and usage, and increased adoption of digital giving in its customer base.

FY22 half-year operating revenue increased 9% to US$93.5 million. It’s expecting continued revenue growth as the business executes on its strategy, achieves increased efficiencies and gains further market share in the US faith sector.

Despite the COVID-19 impacts, it has maintained an average annual revenue retention rate of over 110% over the last five comparable periods ending 30 September. This means existing clients are generating more and more revenue for Pushpay.

Growth of the business could be an important driver of the Pushpay share price.

Growing profit margins

Pushpay is experiencing ongoing strengthening of its operating leverage. The business deliberately chose software and tools that would allow it to become increasingly profitable as the company increased in size.

In the first half of FY22, the ASX tech share saw its gross profit margin increase from 68% to 69%.

The company also has a profit measure called the underlying earnings before interest, tax, depreciation, amortisation, foreign currency and impairments (EBITDAFI).

The EBITDAFI margin as a percentage of operating revenue rose from 31% to 32%.

Growth plans

Not only is Pushpay looking to grow with its current client base, but it also has a Catholic initiative to grow in another segment of the faith sector.

In the long-term, its target is to acquire a market share of more than 25% in the Catholic segment by the number of parishes. Growth in the number of clients could help the Pushpay share price over time. 

It was noted that this is just the first step in investing to grow its customer base outside of its existing core customer base.

Pushpay also noted that the Catholic church is closely associated with many education providers and non-profit organisations, which presents further opportunities within the US and other international jurisdictions.

Benefits from the Catholic segment are expected to be realised incrementally over the course of the following financial years.

Pushpay valuation and share price target

Whilst the broker Ord Minnett doesn’t currently rate Pushpay as a buy, it has a price target of $1.90, which suggests a potential upside of around 60% over the next several months. It thought the Resi Media acquisition was a decent idea with the ability for each business to sell to the other’s customers.

The Pushpay share price is valued at 20x FY23’s estimated earnings, according to Ord Minnett.

The post Here’s why the Pushpay (ASX:PPH) share price could be significantly undervalued appeared first on The Motley Fool Australia.

More reading

• 3 buy-rated ASX growth shares
• 2 very compelling ASX shares for 2022

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 PUSHPAY FPO NZX. The Motley Fool Australia owns and has recommended PUSHPAY FPO NZX. 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 ClearVue share price is up 27% today, and 66% this week
• Completed archetype model building scored impressive results on the energy star rating system
• Work is currently underway to further progress ClearVue products

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The ClearVue Technologies Ltd (ASX: CPV) share price has accelerated this week, registering impressive gains of 66% for investors.

This follows the company’s announcement on Wednesday regarding recent modelling work undertaken to achieve energy neutral buildings.

At the time of writing, the smart building materials company’s shares are up 27.78% to a 6-month high of 46 cents.

What’s driving ClearVue shares higher?

In its release, ClearVue released the findings of a completed archetype model building demonstrating highly energy efficient improvements.

The company highlighted how its product can achieve a net-zero or near-zero energy-use building.

The modelling was completed on a design in Toronto, Canada, and benchmarked against the Toronto Green Standard (TGS) from 2030. This code is recognised as one of the world’s highest standards of building performance.

The modelled building scored 99 out of 100 points in the energy star rating system, and was in the top 1% of Canadian office buildings for energy performance.

ClearVue’s patented solar glazing technology cuts heating and cooling costs, by diverting unwanted solar radiation to photovoltaic cells which converts to electricity.

The archetype model is a 15,000 square kilometre six storey office building located in Toronto, Canada. The building notably used higher glazing to wall ratios on the facades for higher solar exposure.

ClearVue stated that the current archetype modelling is restricted to the ‘in-use’ phase of the building. Work on the life cycle assessment is currently underway to produce an environmental product declaration for the ClearVue products.

ClearVue executive chair, Victor Rosenberg commented:

The developed Archetype model clearly shows how the ClearVue PV product can play a significant role in the design of Net Zero and Near Zero Energy Buildings of the very near future.

The ClearVue PV glazing through its energy efficiency and energy generation offers a solution for these architects, engineers and developers struggling with how to design buildings to meet these new codes while maintaining expansive views and maximising building daylighting.

About the ClearVue share price

Over the past 12 months, the ClearVue share price has surged more than 50%, reflecting positive investor sentiment.

Based on today’s price, ClearVue commands a market capitalisation of roughly $97.36 million, with approximately 211.66 million shares on issue.

The post Here’s why the ClearVue Technologies (ASX:CPV) share price is surging 66% this week appeared first on The Motley Fool Australia.

More reading

• Here’s why the Pushpay (ASX:PPH) share price could be significantly undervalued
• Shopping for some new ASX ETFs in 2022? Here’s what you need to know
• An ASX XI to take on the world
• Is the slide in BNPL shares like Zip (ASX:Z1P) just getting started?
• Is the Woodside (ASX:WPL) share price set for an “explosive performance” this year?

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

• 2021 was a top year for ETFs, but a new report finds 2022 could be even better
• With index funds at saturation, we can expect some more exotic ETF offerings
• Investors are using ETFs in new ways, such as hedging

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Last year was a great one for ASX exchange-traded funds (ETFs). As we’ve covered extensively here on the Fool, 2021 not only saw total funds under management in the ETF sector hit record highs. But we also saw the successful listing of a number of new ETF products. One, the BetaShares Crypto Innovators ETF (ASX: CRYP), actually broke the trading volume record for a newly-listed fund.

So with all that success under the belt, what does 2022 hold in store for ASX ETFs?

Well, a report in The Australian this week reveals that investment bank Citi has released a ‘deep dive’ report into the global ETF sector and its outlook for 2022.

The report finds that the global index fund market is reaching saturation point. It found the “most widely-followed indices have been replicated by ETFs”. As such, the report finds that ETF providers are increasingly motivated to “expand towards more novel product approaches”.

We have seen this with our own eyes on the ASX. Although 2021 welcomed many new ETFs to the market, almost none of them were index funds. Instead, the new funds extended coverage of thematic trends or select industry groups. Other 2021 ETF debuts included VanEck Vectors Global Clean Energy ETF (ASX: CLNE) and BetaShares Cloud Computing ETF (ASX: CLDD).

ETF growth on the ASX could just be getting started

The report finds that this trend is likely to continue into 2022 as investors increasingly look for diversification outside the traditional index fund structure.

Further, Citi is predicting that the high inflows we saw last year will continue. This will be driven by “the very strong returns of recent years”. It also sees interest in ESG and ethical investing continuing to dominate investors’ interest.

This trend, the bank believes, may continue to benefit from a tailwind of improving global standards in ethical/ESG analysis. This, the report finds, has been beset in the past by lax standards and ‘greenwashing’.

Interestingly, Citi also predicts a new way in which investors (especially those on the professional side) will use ETFs. It points to a trend in the US where institutional investors employ ETFs for ‘tactical’ moves such as hedging. The bank reckons this will expand to all markets, including Australia.

So it looks as though the rise of ETFs on the ASX is certainly here to stay if this report is to be believed. So get ready to hear more about ASX ETFs as we move through 2022. 

The post Shopping for some new ASX ETFs in 2022? Here’s what you need to know appeared first on The Motley Fool Australia.

More reading

• 5 investment themes to watch on the ASX share market in 2022

Citigroup is an advertising partner of The Ascent, a Motley Fool company. 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. owns and has recommended Betashares Crypto Innovators ETF. 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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Look, by now you know I’m something of a cricket tragic.

Well, proper cricket.

Don’t get me started on Twenty20 – does anyone remember who won last week, last month or last year? Didn’t think so! – but the longer forms of the game are my favourite of all sports.

Maybe it’s long lost summer days in front of the box or the radio. Maybe it’s that in summer at least, we can all follow the same sport, rather than being splintered into the different winter codes.

Or maybe it’s just slow, careful indoctrination by Richie, Bill, Tony, Ian, Greg and Max on Channel 9, and the voice of summer, Jim Maxwell on the ABC for a few decades!

In any event, this morning is both an exciting time – the fifth Ashes Test starts today, as if you didn’t know – and a bittersweet one: it’s the fifth of five, so the summer of cricket is drawing to a premature close.

And look, if I can find an excuse to put cricket and investing together, you just know I’m going to take it, right?

So, at the suggestion of one of my Twitter followers, Tristan, I got the investing team to nominate an ASX Test XI – the 11 companies we’d pick, if we were putting together a Test team to take on the rest of the investing world.

Now, a few things.

As with cricket, the panel didn’t agree on every position. And, as self-appointed Chairman of Selectors, I might have made some final calls (sorry, team!), but I tried to represent the views of the whole investment team in the selections.

Second, and again just like cricket, we’ve tried to pick players for positions. But remember, this is just a little fun, so don’t get too caught up in the nitty gritty.

Next, we don’t expect you to agree. Which is fantastic, because we’d love you to wander over to our Twitter, Facebook and Instagram pages to share your thoughts on who you’d pick and who you’d drop!

What I will tell you is that each company was nominated by at least one of the investing team (and more often, more than one) and they’re all companies we think are long term market-beaters.

Not only do you get to have a little fun with this, but I hope you might get a few stock ideas, too!
And for what it’s worth, this is a Test team that we think has long-term promise. We’re ‘pick-and-commit’ selectors, aiming for a side that’ll be together for a long time to come.

So, to the list:

To open the batting, we’re looking for solid, reliable, sensible characters with great technique.

1. ARB Corporation Limited (ASX:ARB)

2. Dicker Data (ASX:DDR)

Now, at first drop, the player who can still take some shine off the ball if an early wicket falls, but is also capable of building a big innings.

3. Steadfast (ASX:SDF)

Then to the best batter in the side. Great average, classy stroke-making and always more likely than not of putting together a big score

4. Xero (ASX:XRO)

Next one in should be a solid player, capable of accumulating runs, and hanging around to add meaningfully to the score while batting with the tail.

5. Macquarie Group (ASX:MQG)

The team’s all-rounder is next in the batting order. Adds real value with both bat and ball. Quality teammate who brings diversification to the side

6. NASDAQ 100 ETF (ASX:NDQ)

Our ‘keeper is a vital part of the side, playing a specialist role, but also adding runs, encouraging the bowlers and keeping morale high during long days in the field. Reliable as they come.

7. Wesfarmers (ASX:WES)

Then we’re getting into the bowlers. First is the guy or girl who is a reliable line-and-length bowler, who can maybe add a couple of runs, or hold up an end to give the recognised batter a chance to do the same.

8. Brickworks (ASX:BKW)

Then our mercurial spinner. More than a few tricks up the sleeve. Mercurial. Out and out match-winner… sometimes.

9. Catapult (ASX:CAT)

Then the best bowler in the side. Wonderful line and length. Metronomic, but also takes wickets. Frustrates batters into mistakes. Best bowling average in the side

10. Washington H. Soul Pattinson (ASX:SOL)

Then the strike bowler. Takes three-for-none or bowls a brace of wides and goes wicketless. But you wouldn’t be without them, especially in Test cricket over a long series.

11. Dubber (ASX:DUB)

Well, that’s our XI.

Given that there is usually more than one cricketer carrying the drinks, these days, we’ll add in a near miss for the starting XI in Kogan.com (ASX:KGN), and then a couple who were unlucky to miss out, given the quality of the team: Nanosonics (ASX:NAN) and Pinnacle Investment Management (ASX:PNI).

Perhaps, like Scotty Boland, some of those names are new to you. Hopefully, then, you’ll have some new ideas to research. 

And if you flat out disagree, that’s fine, too! Who do you think we should have included, instead?

Let us know on our socials. You can find us on Facebook, Instagram and Twitter!

And bring on the Test!

Fool on!

The post An ASX XI to take on the world appeared first on The Motley Fool Australia.

More reading

• Why Brickworks (ASX:BKW) shares are an ASX dividend favourite
• Down 14% in 10 days, is the Xero (ASX:XRO) share price now an undervalued buy?
• Neck and neck: Macquarie (ASX:MQG) bumps Westpac to become third-largest Aussie bank
• Leading brokers name 3 ASX shares to sell today
• Could Macquarie (ASX:MQG) become Australia’s second-biggest bank in 2022?

Motley Fool contributor Scott Phillips owns ARB Corporation Limited, BETANASDAQ ETF UNITS, Brickworks, Kogan.com ltd, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended BETANASDAQ ETF UNITS, Brickworks, Catapult Group International Ltd, Dicker Data Limited, Dubber Corporation, Kogan.com ltd, Nanosonics Limited, PINNACLE FPO, Steadfast Group Ltd, Washington H. Soul Pattinson and Company Limited, and Xero. The Motley Fool Australia owns and has recommended BETANASDAQ ETF UNITS, Brickworks, Catapult Group International Ltd, Dicker Data Limited, Dubber Corporation, Kogan.com ltd, Nanosonics Limited, PINNACLE FPO, Washington H. Soul Pattinson and Company Limited, Wesfarmers Limited, and Xero. The Motley Fool Australia has recommended ARB Corporation Limited, Macquarie Group Limited, and Steadfast Group 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

• BNPL shares are extending losses today amid a sector-wide selloff that’s been in situ for 3 months.
• Research from Macquarie shows BNPL web traffic slowed in December.
• Afterpay grew merchant additions in December, and customers could be gravitating towards larger players in the BNPL space.

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Shares in soon-to-be acquired BNPL player Afterpay Ltd (ASX: APT) touched a new 52-week low today after sliding more than 7% into the red.

Fellow BNPL player Zip Co Ltd (ASX: Z1P) is also facing losses today and is now trading around 4% lower at $3.75 apiece.

Shares in the payment solutions company have been on an extended run down south these past 12 months after peaking at $13.92 last February.

Since that time, Zip has glided lower and now trades at 52-week closing lows at the time of writing. And with weakness in the broad sector impacting high-beta tech names in the BNPL industry, could it be that the slide in BNPL shares is just taking off? Let’s take a look

What are experts saying about BNPL shares?

The large BNPL players could in fact be consolidating their positions within the marketplace according to the team at Macquarie in a recent note.

Analysts at the firm reckon that large BNPL companies could benefit from the recent volatility, as investors and customers alike seek out quality within the space.

However, the firm also notes that web traffic in the BNPL domain saw a 1.9% month-on-month slow down in December, driven partially by the Omicron variant and augmented by potential government regulation on the sector.

The investment bank’s research also surmised that Afterpay’s web traffic fell by 20% year on year whereas other players including Zip all saw a reduction in traffic of up to 10%.

Macquarie infers that these results point to a slowdown in consumer spending and potentially a drift away from smaller BNPL services into larger, more established names.

As such, large players in the space could be positioned to capture additional market share in the wake of these headwinds, Macquarie also says.

The firm notes that even as web traffic slowed, Afterpay has grown merchant additions sequentially for several months across all regions, primarily in Australia and US.

Not only that, but Macquarie reckons that Afterpay may absorb any regulatory concerns versus peers, given its acquisition by Block.

It made no changes to its recommendations on players in the BNPL industry, keeping its buy rating on Afterpay and sell rating on Zip, valuing the companies at $160 and $5.70 per share respectively.

Most analysts are bullish on Afterpay as well, with a consensus price target of $114 in 2022, whereas the sentiment appears to be evenly split for Zip, whose consensus valuation is $7.72.

So both Afterpay and Zip are priced to display a considerable portion of upside in 2022, should the bull thesis from these brokers play out.

Zip share price snapshot

It’s been a shocker past 12 months for the Zip share price, having tanked more than 34% in that time. In the past month, shares are another 23% in the red.

Year to date things haven’t started any better for Zip, while it’s down another 13% since January 1.

The post Is the slide in BNPL shares like Zip (ASX:Z1P) just getting started? appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Qantas cuts capacity, Afterpay hits 52-week low
• Can Beforepay replicate Afterpay when it lists on the ASX on Monday?
• Here’s how the Afterpay (ASX:APT) share price performed in 2021
• 5 things to watch on the ASX 200 on Friday
• Are Afterpay (ASX:APT) shares a buy before they convert into SQ2 shares?

The author has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited and ZIPCOLTD FPO. 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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Key Points

• The Woodside share price and the ASX 200 energy sector have underperformed over the past year
• ASX investors may be underestimating the strength in the oil price that will be driven by forecast global economic growth
• Ausbil fund manager Luke Smith thinks we could see an “explosive performance from energy equities in 2022”

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Don’t write off fossil fuel investments yet, as the oil price and ASX energy shares may be poised to rally this year, according to a leading fund manager.

Ausbil’s Global Resources Fund co-portfolio manager, Luke Smith, believes positive global economic growth will drive underlying demand for oil for the next few years, according to a report in the Australian Financial Review.

That is great news for ASX 200 energy shares, which have been underperforming the broader market.

ASX energy shares on the nose

The Woodside Petroleum Limited (ASX: WPL) share price lost about 7% over the past year. Santos Ltd (ASX: STO) shares shed a similar amount, while Beach Energy Ltd (ASX: BPT) shares crashed by nearly 30%.

In contrast, the S&P/ASX 200 Index (ASX: XJO) gained around 10% over the same period.

But the share prices of Woodside and its peers could soon see a reversal of fortunes.

Is the Woodside share price primed for recovery in 2022?

“We expect oil prices to continue to strengthen towards in excess of $US100 per barrel in the near term,” Smith told the AFR.

“We would not be surprised if the commodity traded through $US200 in the next couple of years.”

ASX energy shares failing to fire up

The Brent oil price is currently fetching around US$85 a barrel and is up around 50% over the past year. This stands at odds with the poor performance of ASX energy shares. This valuation gap is quite unique to Australia. Smith points out that the US oil and gas sector, which includes explorers and producers, soared by over 80% in 2021.

Potential tailwinds for the Woodside share price

“Unfortunately, for Australian investors, the ASX large-cap energy sector has performed with some ambivalence to the prevailing strength in the commodity,” Smith said.

“The combination of underweight positioning towards the Australian energy sector, our expectations regarding the outlook for both strengthening earnings, and unchallenged valuations supports our view that we could see an explosive performance from energy equities in 2022.”

Foolish takeaway

The global transition to a net-zero carbon future has put Woodside and other ASX energy shares in the sin bin. But investors can’t count on the energy transition being a smooth one. So it may be too early to write off fossil fuel-linked ASX shares. Just don’t tell ESG investors.

The post Is the Woodside (ASX:WPL) share price set for an “explosive performance” this year? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 5 things to watch on the ASX 200 on Thursday
• Why did the Woodside (ASX:WPL) share price lift 4% today?
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Brendon Lau owns Santos 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

• Bega Cheese shares have been downgraded to a hold rating by Morgans
• The food company’s recent trading update disappointed
• But that wasn’t the main reason for the downgrade

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The Bega Cheese Ltd (ASX: BGA) share price is finishing the week in the red.

In afternoon trade, the diversified food company’s shares are down 2% to $5.22.

Why is the Bega Cheese share price sliding?

The weakness in the Bega Cheese share price today appears to have been caused by a broker note out of Morgans.

According to the note, the broker has downgraded the company’s shares from an add rating to a hold rating.

This was driven partly by a trading update at the end of last year which fell short of Morgans’ expectations.

What did the broker say?

Morgans commented: “BGA has provided FY22 underlying EBITDA guidance of A$195-215m. This was 2-11% below Factset consensus of A$219.3m and Morgans previous forecast of A$217.0m.”

This weaker guidance reflects significant COVID costs, supply chain disruption, and a highly competitive milk procurement environment.

But it isn’t the guidance that has been the main driver of the broker’s downgrade. The biggest impact was the need for Bega Cheese to pay improved returns back to farmers. And until this changes, the broker doesn’t expect the Bega Cheese share price to rerate to higher multiples.

Morgans explained: “While we can look through short-term COVID impacts, we remain concerned about the industry structure which has resulted in the continual need to pay improved returns back to farmers at the expense of shareholders.”

“Until Australian processing capacity rationalises or the Australian milk pool materially grows, the competitive environment for milk is likely to remain fierce and result in dairy processors effectively overpaying for milk. This means that upside from favourable operating conditions is likely to be partially paid away to the dairy farmers as opposed to shareholders benefiting from the earnings upside. For this reason, despite its growing branded business (~80% of sales), BGA is likely to trade at a discount to its FMCG peers,” it concluded.

The post This needs to change before the Bega Cheese (ASX:BGA) share price rerates appeared first on The Motley Fool Australia.

More reading

• Why analysts slapped buy ratings on these ASX shares
• Would you like cheese with that? A look at some of Twiggy’s highest profile ASX investments of 2021
• These were the best performing ASX 200 shares last week
• ASX 200 falls on Friday but records 13% gain in 2021
• ASX 200 (ASX:XJO) midday update: Big four banks fall, Bega Cheese jumps again

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

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Key points

• The Afterpay share price is falling more than 8% today
• Block shares fell nearly 6% in the United States overnight
• Bank of Spain approved Block’s takeover of Afterpay this week

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The Afterpay Holdings Ltd (ASX: AFY) share price is slumping today amid a tough time for tech shares in the United States.

Shares in the buy now, pay later (BNPL) share company are currently trading at $69.45, down 8.47%.

Let’s take a look at what might be impacting this ASX tech share today?

What’s happening to Afterpay?

The Afterpay share price is falling sharply today despite making gains earlier in the week on the back of news on its takeover by Block Inc (NYSE: SQ).

Block received approval from the Bank of Spain to buy Afterpay on Wednesday. Afterpay’s shares may be falling today as a result of Block’s shares falling in the United States.

In Thursday trading on the New York Stock Exchange, Block fell from $145.47 to $136.95, a 5.86% drop.

Meanwhile, the NASDAQ-100 Technology Sector Index (NASDAQ: NDXT) also fell 3.38% in the United States overnight. Investors were selling off technology shares due to inflation concerns, US News reported.

Amazon (NASDAQ: AMZN) dropped 2.42%, while Apple Inc (NASDAQ: AAPL) fell 1.90%.

Looking at Afterpay’s Australian competitors, Openpay Group Ltd (ASX: OPY) is also down 2.74% so far today while Zip Co Ltd (ASX:Z1P) is 3.33% in the red.

Afterpay shares will trade on the ASX for the last time on 19 January.

Afterpay share price snap shot

The Afterpay share price is down more than 42% in the past year and 23% in the last month.

In comparison, the S&P/ASX 200 Index (ASX: XJO) has returned more than 10% to investors in the past year.

The company commands a market capitalisation of roughly $20.6 billion based on the current share price.

The post Afterpay share price tumbles 8% in dire day for ASX tech shares 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 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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