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Biotherapeutics giant CSL Limited (ASX: CSL) recently announced the acquisition of Vifor Pharma for $17 billion. While its shares have not fared overly well since then, the transaction is expected to be a boost to its long term growth.

But just how much of a boost? To find out, I thought I would take a look at what analysts are saying about this massive acquisition.

The Vifor Pharma acquisition

CSL has signed an agreement to acquire Swiss biotech giant Vifor Pharma for US$12.3 billion (A$17.2 billion) in cash.

Management expects the deal to expand its leadership across an attractive portfolio focused on renal disease and iron deficiency. In addition, it highlights that Vifor has a high quality pipeline and complements CSL’s existing therapeutic focus areas. These include Haematology, Thrombosis, Cardiovascular, and Transplant.

The response

Commenting on the acquisition, Goldman Sachs said: “The transaction expands its blood products franchise and provides exposure to a growing renal disease market (>US$25bn by 2026), where the prevalence of Chronic Kidney Disease (CKD) is expected to grow at +8% pa. Vifor’s product portfolio also has broad complementarities to CSL’s development pipeline, notably CSL112 in reducing the incidence of recurrent cardiovascular episodes and CSL889 in treating Sickle Cell Anaemia.”

Goldman notes that the deal is expected to boost CSL’s earnings in the coming years.

It commented: “The transaction is expected to be low-to-mid teens NPATA per share accretive in the first full year of CSL ownership, including US$75m full rate cost synergies. The synergies are expected to be phased in a 3-year period post acquisition close.”

This sentiment was echoed by the team at Citi. It said: “We calculate the acquisition to be ~9% accretive to NPATA per share (NPAT before acquisition-related amortization) – a proxy for cash flow. Including amortization, the transaction is expected to be “modestly accretive” to EPS.”

In light of the above, Citi is forecasting earnings per share of $6.92 in FY 2022, $9.16 in FY 2023, and then $10.27 in FY 2024.

Are CSL’s shares in the buy zone?

Goldman Sachs is helping CSL with its transaction. As a result, it is unable to provide a recommendation at this stage.

However, Citi can make recommendations and currently has a buy rating and $340.00 price target on CSL’s shares. Based on its current share price, this suggests potential upside of 21% for investors over the next 12 months.

The post Own CSL (ASX:CSL) shares? Here’ s how the $17bn Vifor Pharma acquisition will boost its growth appeared first on The Motley Fool Australia.

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• Leading brokers name 3 ASX shares to buy
• Here are the 5 best performing ASX biotech shares of 2021
• Why did the CSL (ASX:CSL) share price go backwards in December?

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 CSL Ltd. 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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Analysts are always on the lookout for ASX dividend shares for income potential.

Businesses that pay dividends to investors may be options to consider for their yields. However, the valuation also needs to make sense for the analysts to call it a buy.

With that in mind, the two businesses in this article are rated as buys, with compelling potential income:

Telstra Corporation Ltd (ASX: TLS)

Telstra is the leading telecommunications business in Australia. An acquisition called Digicel Pacific has turned it into a leader in other countries as well, including PNG, Nauru, Samoa, Tonga and Vanuatu. It also has a position in the Fiji market.

It’s currently rated as a buy by the broker Ord Minnett with a price target of $4.60. That is approximately 10% higher than where it is right now. The broker thinks that Telstra is going to pay a dividend of $0.16 per share in both FY22 and FY23, which translates to a grossed-up dividend yield of 5.5%.

One of the things that Ord Minnett is focused on is the strength that Telstra has with its network as well as its ongoing plans to keep investing.

When Telstra’s T25 strategy was released, it said that part of the plan was to extend its 5G network coverage to 95% of the population.

The ASX dividend share’s regional coverage is to be expanded with 100,000 square kilometres of new 4G and 5G coverage. Telstra Plus members are targeted to grow to 6 million by FY25.

Telstra also said that it’s gaining greater access to tower assets with 250 new stores and 700 additional tenancies.

Other parts of the Telstra plan includes cutting another $500 million of fixed costs from FY23 to FY25. Also, it wants to achieve a compound annual growth rate (CAGR) in the high teens to FY25 for earnings per share (EPS).

Nine Entertainment Co Holdings Ltd (ASX: NEC)

Nine is a large media business with its TV channels, newspapers and Stan video streaming service.

It’s currently rated as a buy by the broker UBS, with a price target of $3.90. That’s a potential upside of around 40%, if the broker is right.

Nine is continuing to see progress with different parts of the business.

The ASX dividend share recently gave a trading update at its annual general meeting. In the first quarter, Nine said that its digital subscription revenue grew 10%, as well as receiving the first instalments from Google and Facebook. Stan continues to see subscription growth but it’s still profitable. Video on demand continues to see growth – 9Now revenue in the first half is expected to be 45% higher.

Overall, the FY22 first half earnings before interest, tax, depreciation and amortisation (EBITDA) is expected to grow by around 10% year on year.

UBS thinks the Nine share price is valued at 16x FY22’s estimated earnings with a grossed-up dividend yield for the current financial year of 6.1%.

The post 2 ASX dividend shares to buy this month: experts appeared first on The Motley Fool Australia.

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• Here are the 3 most heavily traded ASX 200 shares this Thursday
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• The Telstra (ASX:TLS) share price has been rising, so why is the dividend shrinking?
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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. 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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If the S&P/ASX All Technology Index (ASX: XTX) was a rollercoaster, every passenger would have vomited sometime in 2021.

Yes, the index representing the Australian technology sector did end the year 3.72% above where it started.

But during the journey, the index sank 20% from peak to trough and then soared 30% the other way in a matter of weeks.

That’s stomach-churning volatility.

Why were ASX tech shares so volatile in 2021?

There were many factors pulling and pushing technology shares last year.

First is the fear of persistent inflation and rising interest rates that dominated markets the past 12 months.

Tech shares, the theory goes, are more dependent on future earnings because they are in growth stages more than the “traditional” sectors.

And future earnings rise or fall according to interest rates, which have been at historic lows in recent times.

When interest rates head up, the valuation case for a growth stock deteriorates.

Perhaps a case in point is Afterpay Ltd (ASX: APT), which has been an ASX darling despite never posting a profit.

After making plenty of investors wealthy the past few years, 2021 was a real struggle. The stock lost almost 30% in value, and just in the new year it hit 52-week lows.

Remember when we were all excited about vaccines and Joe Biden?

The second big factor was the unstoppable force that’s oppressed the planet the past couple of years — COVID-19.

Remember a year ago? Spirits were high as vaccines were discovered to quell the pandemic. A new US president was inaugurated to provide stability that his predecessor could not manage.

We were all making plans for what we would do in our post-COVID lives.

Then a few months later the Delta variant of the coronavirus struck, devastating places like India and plunging Australia’s biggest cities into lockdown.

They were dark times as we spent the winter stuck at home, and Melbourne was crowned the most locked down city of the pandemic.

Fortunes then swung again as Australians rallied in their millions to receive vaccines.

In October, NSW and Victoria felt confident enough to liberate their citizens and even declare “no more lockdowns”.

Returning to something like a normal life while living with COVID seemed like a realistic goal. Businesses could see a light at the end of the tunnel.

Then we woke up at the end of November with the news that yet another variant, Omicron, had seeped out of South Africa.

The last 5 weeks of the year saw it spread around the world and Australia is now battling close to 50,000 new cases each day.

Is it any wonder the ASX All-Tech index was so volatile over 2021?

Not sure 2022 will be any less volatile

With COVID-19 and persistent inflation still as applicable as ever, there is absolutely no guarantee that this year will bring stability for tech stocks.

But volatility means there could be some juicy buying opportunities.

For example, Medallion Financial managing director Michael Wayne told The Motley Fool that he would now only buy Xero Limited (ASX: XRO) if a dip presented itself.

That’s despite his assessment that it is still a quality company.

“We feel it best to be patient as the share price is prone to volatility,” he said. 

“All else remaining equal, we would look at buying around the $110 to $115 level.”

Xero shares closed Wednesday at $140.67.

The post How did the S&P/ASX All Technologies Index (XTX) perform in 2021? appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo owns Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Afterpay Limited and Xero. The Motley Fool Australia owns and has recommended Afterpay Limited and Xero. 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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Fortescue Metals Group Limited (ASX: FMG) has bucked the wider selling trend hitting the S&P/ASX 200 Index (ASX: XJO) in the new year.

In late afternoon trade yesterday, Fortescue shares remained fractionally in the green so far in 2022 while the ASX 200 was down almost 3%.

That will come as good news for shareholders, who’ve watched the miner struggle since August amid slumping iron ore prices.

But Fortescue shares are supported by more than the price of iron ore.

As part of its broader global sustainability push, the company has also been actively working on developing green hydrogen production via its offshoot, green energy company Fortescue Future Industries (FFI).

In a further demonstration of its commitment to zero emissions, the company has reported a new milestone in its decarbonisation strategy.

Electrified locomotive fleet

ESG focussed investors holding Fortescue shares will welcome the company’s latest announcement on its locomotive fleet.

The miner has bought 2 new Battery Electric Locomotives to transport the iron ore it mines to port. According to the release, the locomotives have an energy capacity of 14.5 megawatt hours. They’ll be built at the Progress Rail facility, a Caterpillar company, based in Brazil.

Commenting on the purchase, Fortescue’s CEO, Elizabeth Gaines said:

The purchase of these new battery powered locomotives marks an important milestone in the decarbonisation of Fortescue’s locomotive fleet and demonstrates our commitment to achieving carbon neutrality for Scope 1 and 2 emissions by 2030, as we diversify from a pure play iron ore producer to a green renewables and resources company.

Gaines added that the battery powered trains would not only reduce the miner’s operating emissions but also cut fuel costs and reduce maintenance spending.

Fortescue expects the first new locomotive to arrive on site in 2023.

How have Fortescue shares been performing?

Iron ore prices dropping from record highs in mid-2021 put pressure on Fortescue shares. Over the past year, the miner’s share price is down 20% compared to a 12% gain posted by the ASX 200.

Longer-term, Fortescue is up 86% in 2 years and 229% in 5 years. At Fortescue’s current share price, it pays a whopping trailing dividend yield of 18%, fully franked.

The post Own Fortescue (ASX:FMG) shares? The ASX 200 miner just hit a new green milestone appeared first on The Motley Fool Australia.

More reading

• 2 compelling ASX shares that could be buys in January 2022
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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 Kogan.com Ltd (ASX: KGN) share price is in focus today as news emerged that its crypto deal is seemingly changing shape.

What does Kogan have to do with crypto?

Kogan is one of the largest online retailers in Australia, but in mid-December, the ASX share revealed that it had entered into an agreement with Bitbuy. Bitbuy is one of Canada’s largest cryptocurrency trading platforms.

The deal was that Bitbuy’s parent business would buy bitbuy.com from Kogan. In addition, Kogan and Bitbuy would provide marketing support to Bitbuy’s future launch into the Australian market.

How did Kogan end up with that web address? It owns and manages a portfolio of domain names.

At the time of the announcement, the Kogan executive director David Shafer said:

The domain sale not only delivers returns for Kogan shareholders, but also provides an opportunity to benefit from Bitbuy’s future success in the crypto business abroad and potentially in the Australian market.

How is it changing?

Wonderfi Technologies is a business involved in developing solutions that makes the digital finance world accessible to everyone by investing in assets and infrastructure that power decentralized finance.

Bitbuy is being taken over by Wonderfi Technologies through a mixture of shares and cash. The transaction has been approved by the boards of directors of both WonderFi and Bitbuy. It’s expected to close in the first quarter of 2022.

Wonderfi was happy about the deal as it introduces multiple new business lines, adds hundreds of thousands of new users and brings over $455 million of assets under custody at 31 December 2021.

The takeover also referred to material revenue and cost synergies being expected through user base integration, cross-selling services and a combined global offering.

What does this mean for Kogan?

There has been no announcement of what this means for Kogan or how this will develop.

When Kogan first announced the news, it was deemed to be non-price sensitive. The upfront sale price was US$1.5 million in cash and a warrant entitling Kogan to approximately C$2.8 million in either equity in First Ledger or cash upon exercise of the warrant which would occur within one year after the transfer of the Domain.

It wasn’t stated how much Kogan was expecting to receive in advertising services in relation to Bitbuy expanding into Australia.

Is the ASX share an opportunity?

The Kogan share price has sunk 28% over the last six months. The broker Credit Suisse thinks it’s a buy, with a price target of $13.88. That’s a potential upside of over 70%, if the broker is proven correct.

It noted that the company’s customers and top line continues to rise rapidly, though profit margins were lower than expected in the first quarter of FY22.

The post Plot twist: Kogan (ASX:KGN) crypto deal changes shape appeared first on The Motley Fool Australia.

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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 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 James Hardie Industries plc (ASX: JHX) share price will be on watch on Friday morning.

This follows news that there has been a surprise and immediate change in the building products company’s leadership.

Why is the James Hardie share price on watch?

The James Hardie share price will be on watch this morning after it announced the exit of its Chief Executive Officer (CEO), Jack Truong, with immediate effect.

According to the release, Mr Truong has had his employment terminated with immediate effect after employees raised concerns about his work-related interactions. The release explains that the James Hardie Board undertook extensive due diligence, which included retaining outside counsel and a third-party consultant. It also provided opportunities and support for sincere change in Mr Truong’s behaviour.

However, based on additional employee complaints, the Board undertook further due diligence, including further support from a third-party consultant. After which, the Board ultimately concluded that Mr Truong’s conduct, while not discriminatory, extensively and materially breached the James Hardie Code of Conduct.

The James Hardie Board advised that it took this action to uphold the company’s core values, which include Operating with Respect, and to maintain continuity of the management team that has been instrumental in its transformation.

What now?

James Hardie has appointed Harold Wiens as its Interim CEO. He has been an independent non-executive director since May 2020 following a career with 3M Company where he led several of its largest business segments based in the United States, Asia and Europe.

Mr Wiens commented: “It is a pleasure to join such a deep and talented leadership team, which I have worked with and admired for their professionalism, strategic thinking and strong execution since I became a Board member.”

Earnings guidance upgraded

Something that could support the James Hardie share price today is news that it is upgrading its guidance for FY 2022.

Management now expects FY 2022 adjusted net income to be between US$605 million and US$625 million, compared to the prior guidance of US$580 million and US$600 million. This new guidance represents an increase of 32% to 36.5% over the US$458.0 million recorded in the prior corresponding period.

The post James Hardie (ASX:JHX) share price on watch after CEO kicked out appeared first on The Motley Fool Australia.

More reading

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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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Some blue chip ASX shares have been beaten up in recent weeks and months. But could that mean they have fallen enough to be buys?

Just because a business is large or called a blue chip doesn’t mean that it can’t go through some volatility, as the market has seen with some of the ASX shares that are mentioned below.

However, a decline in a share price can turn a business into an opportunity if it still has long-term potential.

With that in mind, here are two ASX blue chips that could be possibilities after their declines:

TPG Telecom Ltd (ASX: TPG)

TPG is one of the largest telecommunication companies in Australia with brands like TPG, Vodafone and iiNet in its stable.

The TPG and Vodafone Australia businesses went through a long process of trying to merge so that the combined business could better compete with peers like Telstra Corporation Ltd (ASX: TLS).

This merger is expected to lead to significant synergies, give the ability to give better service to customers and provide stronger financial returns to shareholders.

TPG is expecting to beat its 5G rollout target of 85% population coverage in the top six cities in 2021, by reaching the milestone in four additional regions: the Gold Coast, Sunshine Coast, NSW Central Cost and in Wollongong.

The ASX blue chip share is aiming to achieve $70 million of synergies in 2021 thanks to the merger, excluding home wireless and revenue synergies.

It’s also undertaking a review of its telco tower assets. TPG operates a mobile network of 5,800 rooftops and towers and owns the passive infrastructure on around 1,200 of those sites which are predominately in metro areas. It could choose to monetise those assets.

TPG is currently rated as a buy by UBS, with a price target of $7.60. That’s around 30% upside over the next year, if the broker is right. It thinks it offers a 4.4% grossed-up dividend yield for FY22.

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi is another major Australian business. It is a major retailer of electronics and home appliances.

The company’s latest sales update, which was for the first quarter of FY22, showed a year on year decline of sales in each of its divisions. JB Hi-Fi Australia sales were down 7.9%, JB Hi-Fi New Zealand sales were down 6.4% and The Good Guys sales were down 6.1%.

However, JB Hi-Fi noted that there had been COVID restrictions impacting the situation and it was continuing to see heightened customer demand and strong sales growth rates over a two-year period.

Some analysts, such as Credit Suisse, were impressed that the first quarter was so strong from the ASX blue chip share.

JB Hi-Fi is focused on generating sustainable long-term growth. The business believes that it has five unique competitive advantages that can help it grow and continue to achieve attractive margins: scale, a low cost operating model, quality store locations, supplier partnerships and a multichannel capability.

The broker Ord Minnett currently rates JB Hi-Fi as a buy, with a price target of $54. It thinks that the retail sector will benefit from ongoing strong consumer spending due to various COVID impacts.

Ord Minnett puts the JB Hi-Fi share price at 13x FY22’s estimated earnings with a projected grossed-up dividend yield of 7.3%.

The post 2 beaten-up blue chip ASX shares rated as buys appeared first on The Motley Fool Australia.

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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. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom 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 tech sector was a sea of red on Thursday when panic selling drove the S&P ASX All Technology index a sizeable 5.7% lower.

While this decline is very disappointing, every cloud has a silver lining. On this occasion, the silver lining is that it has dragged some quality ASX shares down to attractive levels.

Two ASX tech shares that could be buys after the selloff are listed below:

Altium Limited (ASX: ALU)

The first ASX tech share to look at is Altium. It is the printed circuit board (PCB) design software provider behind the popular Altium Designer and cloud-based Altium 365 platforms.

As PCBs are found inside almost all electronic devices, demand for Altium’s best in class platform is expected to increase strongly in the future as the Internet of Things and artificial intelligence markets continue their explosive growth. This bodes well for its sales and earnings growth over the next decade.

The team at Jefferies is positive on Altium. It believes the quality and price of Altium’s platform has positioned it well to win a significant share of the enterprise market. Jefferies has a buy rating and $48.83 price target on its shares, which compares to the latest Altium share price of $41.17.

Life360 Inc (ASX: 360)

Another ASX tech share to look at is Life360. It operates in the digital consumer subscription services market with a focus on products and services for digitally native families. Bell Potter is very positive on the company due to its Life360’s freemium model and ability to convert its huge user base (30m+) into paying subscribers. The latter is expected to be boosted by its acquisitions of Jiobit and Tile.

Overall, the broker believes the company is well placed to disrupt the safety and security market and achieve strong top line growth for many years.

Bell Potter has a buy rating and $16.25 price target. This compares very favourably to the latest Life360 share price of $8.39.

The post 2 excellent ASX tech shares to buy after the market meltdown appeared first on The Motley Fool Australia.

More reading

• Why Afterpay, Altium, Aristocrat Leisure, and Pro Medicus shares are sinking
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Motley Fool contributor James Mickleboro owns Life360, Inc. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Altium and Life360, Inc. 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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Some ASX shares have significant growth plans for the long-term, making them compelling stocks to look at.

Businesses which are re-investing for growth give themselves a useful chance of long-term success.

In the US, the gigantic e-commerce company Amazon has shown how much a business can grow if it invests for many years ahead.

With that in mind, here are two ASX shares planning a lot of growth over the coming years:

Redbubble Ltd (ASX: RBL)

Online retailer Redbubble is one of the ASX tech shares that analysts like at the moment. After a 4% decline of the Redbubble share price on Thursday, it is now down to around $3.

Morgan Stanley has a price target of $6.50, that means Redbubble shares have more than 110% upside, if the broker is right.

The broker thinks that Redbubble can achieve the double digit growth to reach its goal in the long-term.

Redbubble’s goal over the next few years is to achieve $1.5 billion of gross transaction value. That translates to $1.25 billion of marketplace revenue and $250 million for artists for their designs which are printed on quality products like clothes, bags, phone cases and so on. It is keeping its eye out for acquisition opportunities that could help accelerate growth.

The ASX share is going to do a number of things to achieve growth in the shorter-term and then leverage its scale to drive the profit margin higher in the future.

Redbubble is going to work on recruiting more artists and improve its account management. It wants to improve the content and digital experience for both artists and shoppers. The company is going to keep investing in marketing and grow geographically in the future. It also plans to improve the physical experience for customers, as well as launching new products and fulfilment locations. All of this is expected to lead to scale efficiencies.

Excluding mask sales from FY21, Redbubble is expecting its FY22 underlying marketplace revenue to be slightly higher year on year.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue is one of the world’s largest iron ore miners. The iron price has been climbing over the past couple of months, which has been helping the Fortescue share price in recent weeks.

The broker Macquarie Group Ltd (ASX: MQG) currently rates Fortescue shares as a buy, with a price target of $21.

But it’s Fortescue’s Future Industries division that is capturing more headlines and investor interest.

The iron ore miner is transitioning from a pure play iron ore producer to a green renewables and resources company.

It was only a couple of months ago that Fortescue Future Industries (FFI) announced it is going to become the largest supplier of green hydrogen to the UK after signing a “multi-billion-pound deal” with JCB Excavators and Ryze Hydrogen.

FFI said that Jo Bamford, regarded as the UK’s green hydrogen champion, is the founder of Ryze and owner of Wrightbus. Ryze is building the UK’s first network of green hydrogen production plants, while Wrightbus built the world’s first hydrogen double decker.

JCB Chair Lord Bamford has asked FFI to deliver “immediately” what it is able to deliver. JCB and Ryze will purchase 10% of the ASX share’s global green hydrogen production.

FFI’s green hydrogen production is projected to grow to 15 million tonnes of green hydrogen per year by 2030, accelerating to 50 million tonnes per year in the next decade after that.

It was revealed that under the partnership, FFI will lead the green hydrogen production and logistics to the UK market, whilst JCB and Ryze will manage green hydrogen distribution and development of customer demand in the UK.

The post 2 compelling ASX shares that could be buys in January 2022 appeared first on The Motley Fool Australia.

More reading

• 6 ASX shares involved with green metals
• Is the Fortescue (ASX:FMG) share price on track to reach $50?
• Would you like cheese with that? A look at some of Twiggy’s highest profile ASX investments of 2021
• These were the 5 worst performing ASX hydrogen shares of 2021
• Here’s why ASX 200 mining shares could be in for a boost in 2022

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 recommended 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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The BlueScope Steel Limited (ASX: BSL) share price had a ripper 2021 despite the company staying relatively quiet.

In fact, the only time the market heard price-sensitive news from the manufacturer of steel products was whenever it released results or updated earnings guidance.

At the end of 2020, the BlueScope share price was going for $17.48. Come the final session of 2021, the company’s stock finished at $20.90.

That sees it posting a 19.5% gain for the 12-month period. For comparison, the S&P/ASX 200 Index (ASX: XJO) increased 13% over the same period.

Let’s take a closer look at what helped drive the company’s stock last year.

Here’s what drove the BlueScope share price in 2021

The year started off well for BlueScope when it released an exciting update in January.

It announced that its preliminary unaudited earnings before interest and tax (EBIT) for the first half of financial year 2021 was expected to be 11.5% higher than its previous guidance, coming in at around $530 million. The company also provided a positive business update.

The market’s excitement over the profit increase pushed the BlueScope share price 3% higher, and another 2% higher when its preliminary expectations were confirmed the following month.

In February, BlueScope announced its net profit after tax (NPAT) increased 78% over the 6 months ended 31 December, coming in at $330.3 million.

Another profit upgrade boosted the company’s stock in April. Though, its biggest gain came in July when it released its preliminary, unaudited, underlying results for financial year 2021.

The company announced its earnings before interest, tax, depreciation, and amortisation (EBITDA) was expected to be around $1.72 billion. That was confirmed in the company’s official full year results, released in August.

Impressively, the company’s EBITDA ended up being nearly $1 billion more than the bottom of its initial guidance. It was also 207% more than it was in financial year 2020.

As a result, the company announced a 25 cent final dividend and a 19 cent special dividend. It also announced a $500 million share buyback.

The final news to boost the BlueScope share price in 2021 was released in October. Readers may assume it was news of another profit upgrade, and they would be correct.

The company’s stock gained 0.75% when it announced it expects its underlying EBIT for the first half of financial year 2022 to be between $2.1 billion and $2.3 billion – $300 million more than it previously predicted.

The post Here’s how the BlueScope (ASX:BSL) share price leapt 20% in 2021 appeared first on The Motley Fool Australia.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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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