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Today, the S&P/ASX 200 Index (ASX: XJO) decided to kick off the final week before the holiday season with a red day. At the end of the session, the benchmark index inched 0.16% lower to 7,292.2 points.

While there were some tinges of green among the Aussie market today, it was weighed down by significant losses across the energy and financial sectors. Losses of 3% to 5% were witnessed in some of our oil and gas companies after oil prices fell 2% overnight on increased Omicron fears. In contrast, strong gains in the healthcare and consumer staples sectors prevented a deeper fall.

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

Top 10 ASX shares countdown today

Looking at the top 200 listed companies, Bluescope Steel Ltd (ASX: BSL) was the biggest gainer today. Shares in the steelmaking company rose 4.18% despite there being no new announcements. Find out more about Bluescope Steel here.

The next biggest gaining ASX share today was Viva Energy Group Ltd (ASX: VEA). The fuel retailing company experienced a 3.72% uptick in its share price after providing earnings guidance for FY 2021. Viva anticipates operating earnings to almost double compared to the previous year. Uncover the latest Viva Energy details here.

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

ASX-listed company	Share price	Price change
Bluescope Steel Ltd (ASX: BSL)	$21.93	4.18%
Viva Energy Group Ltd (ASX: VEA)	$2.23	3.72%
Mercury NZ Ltd (ASX: MCY)	$5.85	3.54%
Clinuvel Pharmaceuticals Ltd (ASX: CUV)	$27.78	3.39%
Healius Ltd (ASX: HLS)	$5.29	3.32%
Sonic Healthcare Ltd (ASX: SHL)	$44.46	3.04%
Genesis Energy Ltd (ASX: GNE)	$2.75	3.00%
Champion Iron Ltd (ASX: CIA)	$5.10	2.82%
Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)	$30.35	2.64%
Fortescue Metals Group Ltd (ASX: FMG)	$19.46	2.53%

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

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

More reading

• Sydney Airport (ASX:SYD) share price flat amid ‘subdued’ traffic outlook
• What’s going on with the strange Newcrest (ASX:NCM) share price today?
• These 3 ASX 200 shares are topping the volume charts on Monday
• What experts are saying about the Woolworths (ASX:WOW) share price in 2022
• Why Australian Clinical Labs, Humm, Neometals, and Viva Energy are rising

Motley Fool contributor Mitchell Lawler owns Sonic Healthcare 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 Sonic Healthcare 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 Cimic Group Ltd (ASX: CIM) share price had a dramatic start to the week, with its shares tumbling to end Monday’s session 13.37% lower.

However, that’s better than its earlier performance. The company’s stock plunged 15% to $15.51 this morning before a pause in trading.

The initial slide came amid reports the company owed former employees millions of dollars of wages, entitlements, and compensations after it sold its 45% stake in Middle-Eastern company BIC Contracting (BICC).

Cimic’s shares began swapping hands again this afternoon after it provided a statement to rebut the claims.

The response followed the ASX issuing the company with a ‘please explain’ over its tumble, which saw it hit a new 52-week low of $15.28 in intraday trade.

As of today’s close, the Cimic share price is $15.88. For reference, it finished Friday’s session at $18.33.

Let’s take a closer look at what went on with the construction, mining, and services company’s shares today.

Cimic share price rebounds on $9.8 million pledge

Cimic responded to a media report that it believes tanked its share price today. The company says it was never in charge of BICC, but will still help provide former workers with their owed funds. The company stated:

BICC has never been and is not currently controlled by CIMIC. CIMIC, its co-shareholder and the acquirer continue to progress the completion of the sale and are working collaboratively through the remaining conditions precedent …

However, the wellbeing of BICC people is important to CIMIC and we will continue to work with the acquirer to resolve this matter.

According to the company, it is working with BICC’s purchaser SALD Investment to pay end of service entitlements to approximately 2,720 former employees.

Cimic stated 1,900 have already received their entitlements. Meanwhile, 400 former employees have had their entitlements processed.

Cimic is now working to provide the remaining 420 people with their owed money. Doing so will come at a cost of US$7 million ($9.85 million).

Of the 420 people who haven’t yet been paid, 300 are based in Qatar.

That’s important as the Qatari business is currently under curatorship. The curatorship is said to be impacting the speed at which people are receiving their payments.

The 120 people not from Qatar are living in the United Arab Emirates and Saudi Arabia. Together, they have 60 settlements subject to dispute.

According to Cimic, the $9.85 million it will spend to provide workers with their entitlements will be available to the acquirer as part of the sale process.

As of Monday’s close, the Cimic share price is 38% lower than it was at the start of 2021. It has also fallen 15% since this time last month.

The post Cimic (ASX:CIM) share price recovers slightly on repayment pledge, closes 13% lower appeared first on The Motley Fool Australia.

More reading

• Cimic (ASX:CIM) share price dumps 15% before being halted. Here’s why
• Why Audio Pixels, CIMIC, Magellan, and St Barbara shares are tumbling
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• Here’s why the Cimic (ASX:CIM) share price popped today

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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The S&P/ASX 200 Index (ASX: XJO) has had a sluggish start to this week’s trading. The ASX 200 finished the day down by 0.16% at 7,292 points. But the Sydney Airport (ASX: SYD) share price isn’t doing too much better.

Sydney Airport shares closed the day at $8.57 each. That’s what they opened at this morning. This infrastructure company has been at the centre of the ASX investing world for the past few weeks, as the future of the company is wrangled out.

A fortnight ago, investors got the news that the Australian Competition and Consumer Commission (ACCC) had given the takeover offer from the Sydney Aviation Alliance the green light. Sydney Aviation Alliance (made up of several institutional investors including QSuper and IFM Australia) has bid $8.75 per share for Sydney Airport.

That’s an offer which the company has already recommended shareholders vote in favour of. This means that Sydney Airport is one step closer to delisting from the ASX boards and ‘going private’.

November traffic update highlights Sydney Airport’s ongoing struggle

But today, we got some other news out of the company which could be affecting its pre-Christmas trading. Sydney airport released its traffic performance update for the month of November this morning. And it makes for some interesting reading.

The company reported that its total passenger traffic for November 2021 was 498,000 passengers. That remains down 86.7% from the same month in 2019. Domestic patronage fell 82.9% against that benchmark to 407,000, while international travellers were down 93.3% at 91,000.

The company also said that the first 15 days of December show an 86% reduction in traffic compared to 2019, with the domestic figure down 69%.

The Airport also commented on its outlook from here:

The outlook for passenger traffic remains subdued due to tightly controlled inbound international travel, entry requirements and restrictions into key overseas markets, and the impact of the Omicron outbreak.

Perhaps shareholders who have already voted in favour of Sydney Airport’s takeover won’t be too concerned over these numbers. But it still highlights the ongoing issues that ASX travel companies like Sydney Airport are continuing to face.

At the current Sydney Airport share price of $8.57, this company has a market capitalisation of $23.12 billion. The company hasn’t paid a dividend since February 2020.

The post Sydney Airport (ASX:SYD) share price flat amid ‘subdued’ traffic outlook appeared first on The Motley Fool Australia.

More reading

• What’s going on with the strange Newcrest (ASX:NCM) share price today?
• These 3 ASX 200 shares are topping the volume charts on Monday
• What experts are saying about the Woolworths (ASX:WOW) share price in 2022
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• 5 things to watch on the ASX 200 on Monday

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

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The S&P/ASX 200 Index (ASX: XJO) has had an interesting day of trading so far this Monday. At the time of writing, the ASX 200 is down by 0.14% at 7,293 points after falling pretty steadily all day. That stands in contrast to ASX 200 gold miner Newcrest Mining Ltd (ASX: NCM).

Newcrest shares have had a rather strange day of trading so far. This gold miner started the day off by opening at $23.51 a share before falling steeply, descending all the way down to $23.15 (a loss of 2.3%) soon after market open this morning. But, over the rest of the day, the Newcrest share price has staged something of a spirited comeback. As it stands currently, the company is trading at $23.95 a share, up a healthy 1.27%.

So what on Earth is causing these rather odd market gyrations for the ASX 200’s largest gold miner today?

Why is the Newcrest share price all over the shop today?

It could have something to do with the update Newcrest announced this morning. This related to the Wilki Farm‐in and Paterson Farm‐in projects that it funds in conjunction with Antipa Minerals Ltd (ASX: AZY). My Fool colleague Zach went into this update in detail this morning. But it essentially revealed the results of test drilling at 6 targeted locations.

These results were a mixed bag. While some delivered promising results, others identified “no ore grade mineralisation” or else ran into problems with “abnormally high groundwater”.

Antipa Minerals has said that it will analyse these results to “identify and rank new greenfield exploration targets for direct drill testing” in 2022. But it seems investors in Antipa were not impressed, seeing as this company’s share price is down 8% today (at the time of writing). The initial woes the Newcrest share price had this morning could be related to Anitpa’s nasty fall.

In some good news for Newcrest though, the gold price has kicked off this week on a positive note. Gold is currently going for US$1,801 an ounce today after spending most of the past month below the US$1,800 an ounce level.

At the current Newcrest share price, this ASX 200 gold miner has a market capitalisation of $19.51 billion, with a price-to-earnings (P/E) ratio of 12.02 and a dividend yield of 3.13%.

The post What’s going on with the strange Newcrest (ASX:NCM) share price today? appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Monday
• What experts are saying about the Woolworths (ASX:WOW) share price in 2022
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• Here’s why the Antipa Minerals (ASX:AZY) share price is sliding today
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen owns Newcrest Mining 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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Flight Centre Travel Group Ltd (ASX: FLT) shares have continued to hold the title of the most shorted on the ASX this week.

In fact, the short interest in the travel stock has increased.

The most recent data from the Australian Securities and Investments Commission (ASIC) found a whopping 14.6% of Flight Centre shares are in the hands of short sellers.

But with travel bouncing back, why are shorters so bearish on the travel agent’s shares?

Let’s take a look at what might make the stock an attractive short buy.

Why are Flight Centre shares a short target?

 Flight Centre could be an attractive stock to short for several reasons.

Firstly, the uncertainty that the Omicron COVID-19 variant has brought might have led some to think the travel industry could take longer to recover than previously expected.

As The Motley Fool Australia reported last week, travel agents suffered in late November when the emergence of the mutation spurred the government to mandate quarantine for those travelling from 9 affected countries.

Flight Centre CEO Graham Turner reportedly said shutting borders every time a new variant emerged was unsustainable. However, the likelihood of future interruptions to travel seemingly remains rife.

The company’s financial position also might also draw in short sellers.

Regal Funds Management chief investing officer Philip King appeared at the Sohn Hearts & Minds conference early this month. There, he outlined why Flight Centre is his top short pick.

He pointed to capital raises undergone by the company during the pandemic that saw it offering $800 million worth of convertible notes.

That means, if the Flight Centre share price goes up, noteholders might convert their notes. However, doing so would dilute the company’s outstanding securities.

More challenges ahead?

Additionally, some experts are concerned about the company’s business model.

King, alongside Ord Minnett, is worried that it’s potentially less profitable than it used to be.

They believe it could face challenges as airlines encourage customers to book directly instead of paying incentives to travel agents.

Additionally, as Flight Centre closed more than half of its physical stores during the pandemic, King believes it might struggle to bring in revenue in the future.

However, not everyone is bearish on the Flight Centre share price.

Goldman Sachs has placed a $20.40 price target on the company’s stock – insinuating a potential 24% upside.

At the time of writing, Flight Centre shares are 1.5% lower trading at $16.44.

The post Why is the short interest in Flight Centre (ASX:FLT) shares still growing? appeared first on The Motley Fool Australia.

More reading

• How high will ASX travel shares fly in 2022?
• These are the 10 most shorted ASX shares
• How is Omicron affecting the Flight Centre (ASX:FLT) share price and outlook?
• Zip (ASX:Z1P) shares just topped these end-of-year rankings
• Love ’em or hate ’em, Flight Centre (ASX:FLT) shares were the second most traded on Superhero this year. Here’s why

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

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Investors looking for options in the banking sector outside the big four banks will often turn to Bank of Queensland Limited (ASX: BOQ) and Bendigo and Adelaide Bank Ltd (ASX: BEN) shares.

But which one is better than the other right now?

Should you buy Bank of Queensland or Bendigo and Adelaide Bank shares?

According to a recent note out of Goldman Sachs, its analysts believe Bank of Queensland shares are the better option for investors.

Goldman has a buy rating and $9.66 price target on Bank of Queensland shares and a neutral rating and $9.90 price target on Bendigo and Adelaide Bank shares. This implies potential upside of 22% and 13%, respectively, over the next 12 months.

In addition, the broker expects generous fully franked dividend yields from both banks in FY 2022. Based on where their shares are trading today, Goldman is forecasting a 5.5% yield from Bank of Queensland and a 6.1% yield from Bendigo and Adelaide Bank.

This increases their respective total potential returns to 27.5% and 19% between now and this time next year.

Why does the broker prefer Bank of Queensland?

Goldman prefers Bank of Queensland’s shares due to its valuation and the bank having more offsets to mortgage related net interest margin (NIM) pressures.

The broker explained: “While the current environment looks difficult for retail profitability, given the move in three-year swap rates, we are of the view that we are likely to see further repricing by the major banks, which will provide some relief to these NIM pressures. Furthermore, with the lowest advertised fixed rate mortgage loans now becoming somewhat higher than the best variable rate loans, it is possible we see the mix shift back towards higher spread variable mortgages.”

“We therefore maintain our Buy recommendation on BOQ, which we believe has more offsets to these mortgage NIM pressures in the form of i) BOQ’s more rate sensitive deposit book, and ii) the continued delivery of ME Bank synergies. Coupled with 20% upside to our revised TP, we stay Buy,” it added.

The post Are Bank of Queensland (ASX:BOQ) shares a better buy for 2022 than Bendigo Bank? appeared first on The Motley Fool Australia.

More reading

• What’s on the cards for the Bank of Queensland (ASX:BOQ) share price in 2022?
• Goldman Sachs names 2 ASX 200 shares to buy
• Bank of Queensland (ASX:BOQ) shares: $8 one day, $10 the next?
• Top brokers name 3 ASX shares to buy today
• Why Bank of Queensland, Imugene, Webjet, and Zip shares are pushing 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 owns and has recommended Bendigo and Adelaide Bank 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 S&P/ASX 200 Index (ASX: XJO) seems to have gotten out of the wrong side of the bed at the start of this pre-Christmas trading week. At the time of writing, the ASX 200 is down by 0.28% at 7,284 points after recovering from even steeper losses this morning.

So let’s dig deeper and check out the ASX 200 shares topping the ASX 200’s volume charts this afternoon, according to investing.com.

3 most traded ASX 200 shares by volume this Monday

Santos Ltd (ASX: STO)

ASX 200 energy company Santos is the first share on the list today. So far, 7.17 million Santos shares have been bought and sold on the markets this Monday. This volume has almost certainly been sparked by the nasty 4.7% drop Santos shares have suffered through. After a big plunge in crude oil prices over the weekend, Santos, along with most other ASX energy shares, have been sold off in the first trading session of the week.

Pilbara Minerals Ltd (ASX: PLS)

Pilbara Minerals is the next share up. This Monday has seen 9.63 million Pilbara shares traded on the share market at the time of writing. Again, with no news out of this lithium producer, we can probably look to the movement of the Pilbara share price itself to attempt to explain this high volume.

Pilbara shares are currently up by 0.73% at $2.77 each after touching a new all-time high of $2.81 earlier today. It’s likely that it is this new all-time high that is putting Pilbara near the top of the ASX 200 trading volume charts this Monday.

South32 Ltd (ASX: S32)

Another commodities company in South32 is our final and most traded ASX 200 share of the day. This diversified ASX 200 miner has seen 10 million of its shares find new owners so far this Monday. Unlike Santos though, South32 shares are enjoying some green ink today.

The South32 share price is currently up by 0.64% at $3.92 a share. With no other news or announcements out of the company, we can probably put this elevated volume down to this move upwards. South32’s ongoing and on-market share buyback program is likely contributing as well.

The post These 3 ASX 200 shares are topping the volume charts on Monday appeared first on The Motley Fool Australia.

More reading

• What experts are saying about the Woolworths (ASX:WOW) share price in 2022
• Leading brokers name 3 ASX shares to buy today
• ASX 200 (ASX:XJO) midday update: Magellan shares crash 28%, CIMIC tumbles
• Is the Santos (ASX:STO) share price well oiled and gassed up for 2022?
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Treasury Wine Estates Ltd (ASX: TWE) share price is trading lower on Monday.

At the time of writing, the wine giant’s shares are down 0.5% to $12.06.

Is this a buying opportunity?

One leading broker that appears to see this weakness in the Treasury Wine share price as a buying opportunity is Citi.

According to a note out of the investment bank this morning, the broker has retained its buy rating and $13.80 price target on the company’s shares.

Based on the current Treasury Wine share price, this implies potential upside of 14.5% over the next 12 months.

Citi also expects a fully franked 2.4% dividend yield in FY 2022 at current levels. If we add this into the equation, the total return on offer stretches to almost 17%.

Why is Citi bullish on the Treasury Wine share price?

Citi came away from a key industry event in the United States feeling very positive.

The broker notes that the event pointed to a recovery in high-margin on-premise and cellar-door wine sales in the United States. This is consistent with recent feedback from rival Duckhorn and bodes well for its Treasury Americas business, which it expects to deliver strong earnings growth during the first half.

Citi commented: “We attended the GFA 4Q21 update early today, which revealed on-premise and cellar door wine channels in the US are recovering, consistent with recent feedback from Duckhorn. This is a tailwind for Treasury Americas noting on-premise and cellar door are high margin channels contributing 19% of its NSR. We forecast Treasury Americas 1H22 EBITS to increase by +19% relative to pcp, despite the divestment of commercial wine brands in March 2021, driven by the recovery in on-premise and cellar door channels and margin expansion. However, an increase in restaurant costs as highlighted by GFA, which may result in consumers considering to eat out less, could be a concern in 2H22e.”

The post Why this top broker is bullish on the Treasury Wine (ASX:TWE) share price appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• Treasury Wine Estates (ASX:TWE) share price lifts amid latest green push
• Could 2022 be a good year for the Treasury Wine (ASX:TWE) share price?
• Leading brokers name 3 ASX shares to buy today
• Morgans names 2 ASX 200 shares to buy

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 Treasury Wine Estates 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 AdBlue shortage has been evolving over recent weeks as supplies of the diesel fuel additive dwindle. However, a deal struck today by the federal government has brought Incitec Pivot Ltd (ASX: IPL) and its share price into the picture.

In afternoon trade, shares in the industrial chemicals and fertiliser manufacturer are uneventfully trading flat at $3.21. Though shareholders probably aren’t complaining about the 40% return (before dividends) they have made so far this year.

Now, investors might be wondering whether the company could capitalise on the current AdBlue shortage.

AdBlue brings Incitec Pivot share price into focus

The Australian government has made a move to shore up supply for the additive, critical for keeping nitrogen oxides emissions in check in diesel-fuelled trucks as Australia hits mere weeks’ worth of AdBlue. Importantly, the deal is predicated on avoiding a situation that would threaten the transport of goods across the country.

Federal energy minister Angus Taylor revealed today that the government has reached an agreement with ASX-listed Incitec Pivot.

As a result, the manufacturer will dramatically boost its production of urea. This chemical compound is critical to the production of AdBlue.

Prior to this announcement, Incitec Pivot released a public statement on 12 December regarding AdBlue supply. In this statement, Incitec stated that it supplies around 10% of the Australian market for the additive and is the only local producer to make the solution from urea melt. Meanwhile, the remaining 90% is reliant on imports.

In the minister’s statement, Taylor reaffirmed the deal won’t have an impact on fertiliser supply, saying:

The ramping up of production by Incitec Pivot will be done without impacting agricultural fertiliser supply to local farmers or disrupting local distribution chains for AdBlue.

However, the specific financial terms of the critical deal have not been shared. Ironically, a month ago, the company announced plans to close down its Gibson Island manufacturing plant at the end of 2022.

How has the core business performed?

In the last financial year, Incitec Pivot’s core businesses have been performing solidly. In FY21, revenue rose 10% to $4,348.5 million. At the same time, company earnings soared 91% to $209 million as the fertiliser market benefitted from a strengthening in commodity prices.

Based on the current Incitec Pivot share price, the company currently trades at ~29.7 times price-to-earnings (P/E). This is roughly in line with the company’s P/E multiple prior to the COVID-19 pandemic. Comparatively, the Australian chemicals industry’s average P/E ratio is around 37 times.

Finally, Incitec Pivot appears to be financially stable based on its balance sheet. An uptick in free cash flow put its cash position at $651.8 million at the end of September 2021.

The post Is the Incitec Pivot (ASX:IPL) share price the next shortage winner? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• 4 ASX shares tipped for buybacks in 2022: expert
• Here’s why this fund manager sold its Star Entertainment (ASX:SGR) shares

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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Telstra Corporation Ltd (ASX: TLS) is planning for other industries to help the telco continue its growth for the longer-term.

The company has focused on telecommunications since it started. It’s the market leader in Australia.

But the company sees opportunities in other sectors.

Telstra says that its ambition is simple, to grow its health and energy businesses profitably and to scale. Management are very excited by these opportunities and are convinced on their strategic direction. It’s focused on the need to increase their economic significance to the value of Telstra. It’s an important part of the new T25 strategy.

Telstra Health

This division is called Telstra Health. Its vision is to improve lives through digitally-enabled care for the community.

It wants to accelerate the digitalisation of health and aged care providers. Telstra wishes to expand its business into international healthcare markets. The company also wants to combine its capabilities to support connected health platforms.

Customers includes public health systems in Hong Kong, Canada, the Middle East and Australia, state and territory governments, public and private hospital groups, aboriginal health services, pharmacies, general medical practices and so on.

By FY25, the hope is for Telstra Health to be earning more than $500 million of revenue in FY25. More than 80% of its revenue is recurring. That could mean it has a growing influence on the Telstra share price.

A few months ago, it announced the acquisition of GP clinical and practice management software company MedicalDirector for $350 million. MedicalDirector has been expanding in the UK in recent years, but Australia is the main place of activity (for now).

MedicalDirector provides software as a service (SaaS) in areas like electronic health records, patient and practice management, billing, scheduling, care co-ordination, medicines information and clinical content. At the time of the announcement, it supported approximately 23,000 medical practitioners and used to deliver more than 80 million consultants a year.

Energy

With energy, the company wants to launch a sustainable, simple and integrated energy proposition, scaling it through Telstra’s channels and helping families save money and emissions.

By FY25, it wants to be a top five energy retailer, with more than 0.5 million customers and enable renewable energy equivalent to 100% of its consumption.

It has a relationship with 5.4 million Australian households and around 0.9 million small and medium businesses. The goal is to capture some of the 1.7 million households that change providers each year – a high proportion of these are already with Telstra. Trials will be done to confirm Telstra’s cost-to-acquire advantage.

It will ramp up marketing from FY23, including to non-Telstra customers, and leverage Telstra Plus with exclusive offers.

Is the Telstra share price good value?

According to reporting by the Australian Financial Review, analysts believe that Telstra Health is the main opportunity.

It was reported that JPMorgan analyst Mark Busuttil said Telstra Health could generate $137 million of earnings before interest, tax, depreciation and amortisation (EBITDA) by FY25 if it generated healthy margins.

Telstra is currently rated as a buy by the broker Ord Minnett, with a price target of $4.60.

The broker notes that Telstra’s is growing its telco market position in non-metropolitan locations. It also recently spent another $616 million on more spectrum. It has spent $11 billion over the seven years to the end of FY22.

Ord Minnett thinks the Telstra share price is valued at 24x FY23’s estimated earnings with an expected grossed-up dividend yield of 5.5%.

The post 2 non-telco sectors that could prove pivotal to Telstra’s (ASX:TLS) growth appeared first on The Motley Fool Australia.

More reading

• Here are the 3 most heavily traded ASX 200 shares this Friday
• These 3 ASX 200 shares are topping the volume charts on Thursday
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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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