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On Wednesday I looked at three ASX shares brokers have given buy ratings to this week.

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

Computershare Limited (ASX: CPU)

According to a note out of Citi, its analysts have retained their sell rating but lifted their price target on this share registry company’s shares to $15.80. This follows the release of Computershare’s annual general meeting update, which saw the company reaffirm its earnings per share growth guidance of 2%. Citi suspects the market may have been hoping for an upgrade. Outside this, the broker remains bearish and sees little to drive its shares higher in the near term. The Computershare share price is trading at $19.31 today.

Platinum Asset Management Ltd (ASX: PTM)

A note out of UBS reveals that its analysts have commenced coverage on this fund manager’s shares with a sell rating and $2.25 price target. The broker hasn’t been impressed with Platinum’s performance and notes that its funds under management have been stagnating. UBS also fears a recovery could be hindered by its uncompetitive fees. The Platinum share price is fetching $2.91 on Thursday afternoon.

Wesfarmers Ltd (ASX: WES)

Analysts at Citi have retained their sell rating but lifted their price target on this conglomerate’s shares to $50.00. This follows news that the company has signed an agreement to acquire Australian Pharmaceutical Industries Ltd (ASX: API). While the broker believes the deal will be a small boost to its earnings, it isn’t enough for a change of rating. Citi continues to believe that Wesfarmers’ shares are overvalued at the current level. The Wesfarmers share price is trading at $58.86 on Thursday.

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

More reading

• Citi tips Wesfarmers (ASX:WES) share price to dip 16% following API deal
• These 3 ASX shares have just been named as broker buys
• Why API, Evolution, Flight Centre, and Sydney Airport shares are pushing higher
• ASX 200 (ASX:XJO) midday update: Sydney Airport agrees to takeover, Wesfarmers’ strikes API deal
• API (ASX:API) share price higher after accepting Wesfarmers takeover offer

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 shares of and has recommended Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Market watchers are keeping a vigilant eye on the Webjet Limited (ASX: WEB) share price as travel makes a comeback.

With more overseas flight routes reopening, one might presume this could bode well for the Webjet share price.

And perhaps so – Webjet shares have climbed more than 35% from a low in late August. But, in the past month, the Webjet share price has fallen back into the red.

It was trading at about $12 before the pandemic hit, and so we ask the question – can the travel giant touch that level once more?

Why don’t we check in and see what the experts are saying, and gauge their sentiment to help us answer this question.

What’s up with the Webjet share price lately?

It’s certainly not all doom and gloom for Webjet shareholders. Whilst the share price has slipped by 0.48% this past month, shares in competitor Flight Centre Travel Group Ltd (ASX: FLT) have fallen more than 10.5% in that time.

Plus, global border mobility has started to normalise, as global vaccination numbers finally hit specified targets.

The first glimmer of hope for international travel came back in September. That’s when the US announced it would open its borders to vaccinated travellers from 33 countries.

Australia also announced its border restrictions would lift by December, albeit in a staggered fashion at the state level.

Investors responded positively to the news, but the momentum has slowed over the past month.

So far this week, the Webjet share price has lost about 4.3% and Flight Centre is down 4.5%.

What’s the outlook for Webjet?

According to Bloomberg Intelligence, 11 analysts have a recommendation on Webjet. Six say hold or have a neutral rating.

Analysts at research firm ISS-EVA have the only sell recommendation, with no identified price target.

Broker JP Morgan has a neutral stance and maintains a $5.20 price target, according to its latest report. Its rating remains unchanged in FY22.

JP Morgan notes that “in the absence of near term liquidity concerns, we believe [recent lockdowns] should be of minimal consequence to investors” holding a long-term view.

Fellow broker Goldman Sachs sees things a bit differently. It has a $7 price target and reckons the reopening of international borders is a positive catalyst for Webjet’s earnings.

Goldman recently updated its view on international travel recovery. It now expects “pre-Covid travel levels to be achieved in late FY23 rather than FY24 in terms of international travel from Australia”.

Ord Minnett is even more constructive on Webjet shares, assigning a $7.12 price target.

UBS recently bumped its price target by 8% to $6.85. The Swiss investment bank agrees that international travel is likely to see a strong rebound, based on what has happened in other jurisdictions when they opened their borders.

Webjet has received 10 price target upgrades in the past two months from other firms such as RBC Capital Markets, Morgans, Citi and Macquarie. These brokers have price targets of $5.50, $6.20, $6.04 and $6.65 respectively.

Can the share price return to its former glory?

Only 4 out of the 11 brokers covering the Webjet share price recommend buying or are bullish on its direction. That’s only 36% of the group. Even if there was a higher consensus, not 1 have a price target that resembles $12 per share.

So, the experts don’t see a clear path for the Webjet share price to achieve its former glory of $12 – not just yet, anyway.

In terms of gauging sentiment, the spread between the highest and lowest valuations among the brokers is 65%. This illustrates the diverse range of opinions on the direction of the Webjet share price.

It appears that only time – and the company’s fundamentals – will tell if the market can ever reward Webjet by sending its shares back to that level again.

At the time of writing, the Webjet share price is trading at $6.23, which is 1.58% down on yesterday’s closing price.

Over the past 12 months, it has climbed 23%.

The post The Webjet (ASX:WEB) share price was $12 before COVID-19 hit. Can it ever get back there? appeared first on The Motley Fool Australia.

More reading

• These are the 10 most shorted ASX shares
• Here’s why travel shares led the ASX 200 on Monday
• Here are the top 10 ASX shares today
• Why is the Webjet (ASX:WEB) share price taking off on Monday?
• Why the Qantas (ASX:QAN) share price is flying 4% higher today

Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. 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 shares of and has recommended Macquarie Group Limited and Webjet Ltd. 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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The S&P/ASX 200 Index (ASX: XJO) is having a disappointing day of trading so far this Thursday. The ASX 200 is currently down 1.17% to 7,337 points.

However, ASX 200 resources shares are bucking the trend. Even though the ASX 200 is in the red, resources shares such as BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Fortescue Metals Group Limited (ASX: FMG) are all giving investors some healthy gains today. Fortescue in particular is up more than 8% at the time of writing.

It’s not just the big iron ore miners either. Gold miners like Newcrest Mining Ltd (ASX: NCM) are also seeing healthy share price rises today.

But one ASX 200 resources share that is wobbling today is Lynas Rare Earths Ltd (ASX: LYC). The Lynas share price had a scare this morning when the company opened at $7.60, down almost 1.5% from yesterday’s closing price. However, it has since rebounded. It jumped as high as $7.88 but is currently sitting at $7.78, up 0.91% for the day so far.

What’s going on with the Lynas share price today?

Well, we haven’t had much in the way of news or announcements out of the company lately. Lynas’ last major update was its quarterly activities report for the first quarter of the 2022 financial year back on 22 October.

As my Fool colleague Brooke covered at the time, this saw Lynas report $121.6 million in revenue, its second-highest figure on record. The company also told investors that “global demand for rare earth materials is very strong”, and the company is expecting demand to continue to ramp up into 2022.

However, Lynas also disclosed that COVID restrictions in Malaysia had also led to Lynas having to close its Malaysian cracking and leaching plant for 11 days of the quarter just gone. The Lynas share price sunk on the announcement.

Recent news bodes well

In other news, we got another minor development at the start of this month for Lynas. As we also reported at the time, the Lynas share price got a boost when Japan Australia Rare Earths (JARE) reconfirmed its long-term support for Lynas.

JARE is a special purpose company created by Japan Oil, Gas and Metals National Corporation together with Sojitz Corporation. JARE is a major partner with Lynas, providing funding and loan facilities for the company’s business operations. This reaffirmation of the partnership sent the Lynas share price up by more than 3% at the time.

So it’s unclear why Lynas has had such a volatile day of trading so far on Thursday. However, there is a lot going on with this company at the moment, so perhaps investors are just trying to take it all in.

The Lynas share price is up more than 86% year to date in 20021 so far, and up around 148% over the past 12 months. At the current Lynas share price, this company has a market capitalisation of almost $7 billion.

The post The materials sector is leading the ASX 200 today. What’s going on with the Lynas (ASX:LYC) share price? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Thursday
• Here are the top 10 ASX shares today
• These 3 ASX 200 shares are topping the volume charts on Wednesday
• CSL (ASX:CSL) share price is the latest to be upgraded by a top broker
• Investors are buying up ARB (ASX:ARB) shares this month, but the company chair has been selling

Motley Fool contributor Sebastian Bowen owns shares of 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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

What happened

“Buy the rumor, sell the news.” That appears to be investors’ motto today, as shares of Nvidia (NASDAQ: NVDA) suffer through their second day of declines since CEO Jensen Huang’s keynote presentation at the virtual GPU Technology Conference yesterday.

As of 11:30 a.m. EST, shares of the artificial intelligence and graphics semiconductors specialist had slumped 2.2% — but that’s not to say that the news was bad.

So what

As investor attention turns to Meta Platforms‘ (NASDAQ: FB) promise to create the first metaverse, Huang gave a presentation that had one analyst exclaiming, “Nvidia is so, so far ahead of any chip company in virtual world dynamic it’s not even close,” reported Investors.com yesterday.  

Walking investors through the future of AI and virtual reality, Huang seemed to promise investors an omniverse to trump Mark Zuckerberg’s metaverse. Therein, omniverse avatars will employ artificial intelligence, artificial vision, and speech recognition to serve as virtual assistants. A new Nvidia Omniverse Replicator will create data to train neural networks that can operate autonomous vehicles and humanoid robots.

In the culmination of his vision, Huang even promised to build “a digital twin of Earth itself,” reports VentureBeat.com, a virtual world online bearing the modest moniker “Earth 2.”  

Now what

After all of that, I suspect there are really only two questions investors can respond with. First: “Where do I sign up?” And second: “But hold on a second — how much does this stock cost?”

And here’s the thing: At the risk of being a buzzkill, though — or worse, “selling the news” — I just have to point out here that as astounding as Nvidia’s plans for the Omniverse sound, there’s a price at which that future begins to cost too much.

Suffice it to say that with today’s decline in stock price, investors may be waking up to the possibility that 105 times earnings, and 112 times free cash flow, is too high a price to pay for Nvidia stock. 

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

The post Why Nvidia stock slumped on Wednesday appeared first on The Motley Fool Australia.

More reading

• Why Nvidia stock rocketed higher on Thursday
• Why Nvidia stock climbed on Monday

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

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The Santos Ltd (ASX: STO) share price is continuing to slide for the third day in a row despite no news having been released by the company.

At the time of writing, the Santos share price is $6.77. That’s 2.17% lower than it was at yesterday’s close. The three-day fall comes after the shares climbed 3% on Monday.

That brings the stock’s total fall since Friday’s close to around 1%.

For context, the S&P/ASX 200 Index (ASX: XJO) is also down today, having dipped 1.05%.

Further, the S&P/ASX 200 Energy Index (ASX: XEJ) is moving in line with the Santos share price. Right now, it has fallen 2.4%, crowning the energy sector as the worst-performing ASX sector today.

Let’s take a look at what might be weighing on the oil and gas producer’s shares – and those of its peers – on Thursday.

Why is the Santos share price falling on Thursday?

The Santos share price isn’t alone in its flop today. It was joined overnight by the price of oil.

While oil prices dipped while Australia slept, they are seemingly recovering this morning.

According to reporting by Reuters, Brent crude futures fell 2.5% to US$82.64 a barrel last night. Meanwhile, West Texas Intermediate crude futures dipped 3.3% to trade at US$81.34 per barrel.

Right now, Brent crude futures is sitting at US$82.72 and West Texas Intermediate crude futures is US$81.61.

The commodities’ prices were reportedly affected by increased inflation in the United States – alongside stocks trading on US markets.

The nation’s inflation has increased 6.3% over the 12 months ended October. Such a surge in inflation reportedly might spur officials to increase rates.

In other news, Santos’ merger with Oil Search Ltd (ASX: OSH) could be about to pass a milestone today as the latter fronts a court in Papua New Guinea to find out if has received approval for the transaction.

The court date was previously delayed until yesterday. However, when yesterday arrived it was pushed back to today at the request of the Papua New Guinea National Court.

Today’s dip included, the Santos share price is currently 9.7% lower than it was this time last month. However, it has gained around 8% since the start of 2021.

The post Here’s why the Santos (ASX:STO) share price is falling again on Thursday appeared first on The Motley Fool Australia.

More reading

• Santos (ASX:STO) share price slips as Oil Search merger delayed again
• 5 things to watch on the ASX 200 on Monday
• Santos (ASX:STO) slips amid CSIRO carbon capture partnership
• 5 things to watch on the ASX 200 on Friday
• Move over Twiggy, here’s why Santos’ (ASX:STO) boss is focused on blue hydrogen

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 Creso Pharma Ltd (ASX: CPH) share price is on the move on Thursday. This comes as the cannabis and psychedelics company released a positive trading update for Q4 FY21.

During early afternoon trade, Creso shares are swapping hands for 14.8 cents apiece, up 1.72%.

What did Creso announce?

According to the release, Creso advised that it has recorded strong revenues from its Swiss operations in the current fourth-quarter.

To date, the division’s revenue has soared past $0.8 million, which is a 126% increase compared to the last quarter. Underpinning the performance, Creso experienced an uptick in human health CBD and medical cannabis product sales from Swiss-based company, Cannahealth.

Creso Pharma entered into a strategic collaboration agreement with Cannahealth, for the supply of hemp and cannabis plant material. The latter will also provide marketing and sales of Creso’s products in Switzerland.

Both parties are discussing the potential of extending Creso’s reach into other countries in Europe.

The initial term of the agreement is valid for 1-year and automatically renews unless terminated by either company.

In addition, Creso has expanded its sales pipeline over recent months and anticipates additional purchase orders through its Swiss operations. Furthermore, wholly-owned Canadian subsidiary, Mernova Medical Inc. is also expected to provide a boost in sales in the near term.

Creso’s cannaDOL launch campaign is now being delivered to more than 2,500 retailers across Switzerland. The products are being distributed to several key pharmacies which could lead to rapid growth for the company. Other distribution sites include drugstores, fitness centres, and e-commerce channels.

Creso non-executive chair, Adam Blumenthal commented:

We anticipate that revenue will continue to increase over the remainder of Q4 2021, when additional purchase orders across Switzerland and Canada materialise. The company has a number of business development initiatives underway and remains committed to significantly growing its sales pipeline through international expansion efforts and partnership agreements.

About the Creso share price

Over the past 12 months, the Creso share price has rocketed 361%, reflecting positive investor sentiment. The company’s shares reached a 52-week high of 47 cents in early December 2020. Lawmakers in the United States passed a bill to decriminalise cannabis on a national level, which shot up Creso shares.

Based on today’s price, Creso presides a market capitalisation of roughly $177.96 million, with approximately 1.2 billion shares outstanding.

The post Creso Pharma (ASX:CPH) share price climbs on increasing revenue update appeared first on The Motley Fool Australia.

More reading

• These were the best performing ASX cannabis shares in October
• Own biotech shares? These were the best performers during October
• Why the Creso Pharma (ASX:CPH) share price is lifting today
• Creso Pharma (ASX:CPH) share price spikes on bonus options issue
• Here’s why the Creso Pharma (ASX:CPH) share price is leaping 9% today

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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The Rio Tinto Limited (ASX: RIO) share price is struggling to keep up with its peers. But there are early signs that it’s finding its feet.

Shares in the ASX iron ore miner plunged around 30% in the past three months when the S&P/ASX 200 Materials (INDEXASX: XMJ) index fell by less than half that.

The collapse in the iron ore price is weighing heavily on Rio Tinto. The miner also hasn’t helped itself when it downgraded its production guidance – yet again!

Iron ore drags the Rio Tinto share price into a bear market

It’s not alone in the sin bin of course. The BHP Group Ltd (ASX: BHP) share price isn’t faring much better and the Fortescue Metals Group Limited (ASX: FMG) share price has slumped even more.

Iron ore accounts for just about all of Fortescue’s revenue. At least BHP and Rio Tinto have exposure to other commodities that are faring better.

This explains why the broader sector is holding up better than the iron ore producers. Some commodities are in hot demand, such as lithium.

ASX mining shares that have been outperforming

This is why the likes of the Orocobre Limited (ASX: ORE) share price and Pilbara Minerals Ltd (ASX: PLS) share price have helped offset some of the ASX materials index’s losses.

The index is also supported by gold shares as the safe haven commodity finds renewed support. Worries that inflation will get the better of central banks is driving interest in gold. That’s great news for the likes of the Newcrest Mining Ltd (ASX: NCM) share price.

Is the Rio Tinto share price at a turning point?

However, there are tentative signs that the Rio Tinto share price may be close to bottoming. Its shares have jumped 1.7% to $89.03 this morning even as the commodity dipped below US$90 a tonne.

Despite the ongoing weakness in the price of the steel-making mineral, some experts think the worst could be over. The commodity may even stage a rebound in December.

Markets are nothing if not forward looking. Bargain hunters are also getting excited after the Rio Tinto share price shed more than a third of its value in three months.

Value emerging

Even if the iron ore price were to settle around US$80 a tonne over the longer term, analysts reckon the miner can still pay a very generous dividend.

This is because it only costs Rio Tinto around US$15 a tonne for iron ore. The margins the miner makes will make any monopoly business green with envy.

Outlook starting to shine

But there is another tailwind that could draw investors back to the Rio Tinto share price. This is aluminium. The outlook for the metal is bright and Rio Tinto provides great exposure to that thematic.

This isn’t to say that ASX iron ore miners are out of the woods. If China can’t contain the fallout from its property sector, its economy could take a big blow.

That won’t be good for our economy, let alone the Rio Tinto share price.

The post Why the Rio Tinto (ASX:RIO) share price underperformed the materials sector over the last 3 months appeared first on The Motley Fool Australia.

More reading

• Evergrande reportedly defaults, DMSA is preparing bankruptcy proceedings
• ASX 200 (ASX:XJO) midday update: Xero’s results and Nearmap’s guidance disappoint
• 5 things to watch on the ASX 200 on Thursday
• Why are ASX 200 mining shares having such a lousy day?
• How much Fortescue (ASX:FMG) cash is Twiggy sinking into green hydrogen?

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Fortescue Metals Group Limited, Newcrest Mining Limited, Orocobre Limited, and Rio Tinto Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It is being reported that Evergrande has officially defaulted on interest payments to international investors.

One of those investors, DMSA, says that it hasn’t received any interest payments as the grace period ends. DMSA is preparing bankruptcy proceedings against Evergrande and is calling on all bond investors to join it.

What’s going on with Evergrande?

Evergrande is one of China’s largest property developers. Indeed, it’s one of the biggest in the world. But it has a huge amount of debt hanging overhead – hundreds of billions of dollars.

DMSA, which stands for Deutsche Markt Screening Agentur, is an independent data service that collects and evaluates market information on companies, products and services. It sees itself as an advocate for consumers, private customers and investors.

In order to be able to file for bankruptcy against Evergrande as a credit, DMSA invested in Evergrande bonds. The grace period ended on 10 November 2021. In total, DMSA said that Evergrande would have had to pay US$148.13 million in interest in three bonds no later than 10 November 2021.

But DMSA says it has not received any interest on its bonds. DMSA said Hong Kong banks were closed, which meant that it was certain the bonds had defaulted.

The DMSA senior analyst Dr Marco Metzler said:

But while the international financial market has so far met the financial turmoil surrounding the teetering giant Evergrande with a remarkable basic confidence…the US central bank Fed confirmed our view yesterday. In its latest stability report, it explicitly pointed out the dangers that a collapse of Evergrande could have for the global financial system.

When will Evergrande bankruptcy proceedings start?

DMSA noted that all of Evergrande’s 23 reported outstanding bonds have a cross-default clause, meaning if one bonds defaults, then all of them supposedly automatically have default status.

But that doesn’t automatically result in Evergrande bankruptcy, an insolvency petition must be filed with the court.

Dr Metzler said:

DMSA is preparing bankruptcy proceedings against Evergrande. We are already holding talks with other investors in this regard. We would be pleased if other investors were to join our action group.

As soon as a court opens insolvency proceedings, Evergrande will also be officially bankrupt and that is only a matter of days.

Time will tell whether this officially comes to something.

It was reported yesterday that Evergrande had sold a 5.7% stake in media business HengTen Networks Group which produces films and television shows, and operates a streaming platform for US$145 million.

There are conflicting reports that Evergrande has actually paid the due interest on those bonds.

Iron ore continues to fall

Evergrande is indirectly a big single user of iron ore. There are several other Chinese property developers that are facing financial problems. Combined, there is a big question mark over a significant group of consumers of Australian iron ore.

The iron ore price continues to fall. It has fallen below US$90 per tonne. The share prices of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) remain in focus.

The post Evergrande reportedly defaults, DMSA is preparing bankruptcy proceedings appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Xero’s results and Nearmap’s guidance disappoint
• 5 things to watch on the ASX 200 on Thursday
• Why are ASX 200 mining shares having such a lousy day?
• How much Fortescue (ASX:FMG) cash is Twiggy sinking into green hydrogen?
• Evergrande raises US$145 million, is it saved from default?

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

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The Graincorp Ltd (ASX: GNC) share price is finding momentum today following the release of its full-year results for FY21.

Currently, shares in the grain handler are fetching $6.47, down 3.29%. Although, the Graincorp share price had been as high as $7.03 shortly after trading commenced.

Here’s a look at the results that have contributed to today’s moves.

A slam-dunk year of profits not enough for Graincorp share price

The Graincorp share price is not quite sure what direction to take today following the company’s FY21 results, bobbing and weaving between green and red. One thing is for sure though, the company’s bottom-line for the financial year was far from red.

According to the release, Graincorp experienced an exceptional year backed by a favourable season for grain crops. In turn, the company has been able to deliver towards the top end of its previous guidance range supplied back in August of this year.

In specific terms, $331 million in underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) was recorded during the full-year period. For comparison, FY20 did $108 million in EBITDA, indicating a more than threefold increase year on year.

Likewise, underlying net profit after tax swung from a $16 million loss to a mighty $139 million profit. As management pointed out, this improved result was partly due to a substantial increase in grain receivals across Graincorp’s sites, allowing it to demonstrate improved operational efficiencies of its various assets. Yet, this has failed to boost the Graincorp share price today.

Notably, the company plans on implementing further enhancements to its asset utilisation. That is in addition to investments in key growth areas such as animal nutrition, alternative protein, and AgTech.

The strong result also accommodated a final fully franked dividend of 10 cents per share, taking total dividends for FY21 to 18 cents. Further rewarding shareholders, Graincorp announced an on-market share buyback of up to $50 million. This is set to commence sometime early in the next calendar year.

What does Graincorp’s outlook look like?

While it was a bumper season in FY21, Graincorp’s management highlighted that current harvests are also well above average.

Commenting on this, Graincorp CEO Robert Spurway stated:

We expect the 2021-22 ECA winter crop currently being harvested to be well above average. This will support grain and oilseed receivals into GrainCorp’s country storage facilities and a continuation of the strong export program in FY22.

The anticipated strength of the 2021/22 crop and positive seasonal conditions will also have a positive flow-on effect for FY23, with high levels of carry-over grain expected to continue.

Despite the optimistic outlook ahead, the Graincorp share price is succumbing to selling pressure today.

The post Graincorp (ASX:GNC) share price slides as earnings swing to $139 million profit appeared first on The Motley Fool Australia.

More reading

• Why the Graincorp (ASX:GNC) share price could outperform next week

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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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) is on course to record another decline. The benchmark index is currently down 0.7% to 7,370.9 points.

Here’s what is happening on the ASX 200 today:

Xero’s half year results disappoint

The Xero Limited (ASX: XRO) share price is trading lower today after the release of its half year results. For the six months ended 30 September, Xero reported a 23% increase in operating revenue to NZ$505.7 million but a 19% decline in EBITDA to NZ$98.1 million. And while its top line growth was strong, it is tracking below the market’s full year growth rate expectations. Goldman Sachs, for example, is expecting the cloud accounting platform provider to deliver revenue growth of 33% in FY 2022.

Nearmap guidance update

The Nearmap Ltd (ASX: NEA) share price is sinking today after releasing its guidance for FY 2022. The aerial imagery and location data company revealed that it expects annual contract value (ACV) of between $150 million and $160 million on a constant currency basis in FY 2022. This will be up 12% to 19% year on year, which is short of its medium to long term target of ACV growth of 20% and 40%.

Ramsay’s shares fall following update

The Ramsay Health Care Limited (ASX: RHC) share price is under pressure today after the release of a trading update. The private hospital operator revealed a 1.3% increase in unaudited first quarter revenue to $3.2 billion. However, on the bottom line, the company recorded an unaudited quarterly profit after tax of $58.1 million. This is down 39.5% on the prior corresponding period.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the Fortescue Metals Group Limited (ASX: FMG) share price with a 6.5% gain. This is despite iron ore prices falling again overnight. The worst performer on the index has been the Nearmap share price with a 7% decline following its guidance update.

The post ASX 200 (ASX:XJO) midday update: Xero’s results and Nearmap’s guidance disappoint appeared first on The Motley Fool Australia.

More reading

• Nearmap (ASX:NEA) share price slips despite plan to boost contract value by 12%–19% in FY22
• Ramsay Health (ASX:RHC) share price falls 6% as earnings take a dive
• ASX 200 tech shares in focus as Nasdaq plunges 1.7%
• Xero (ASX:XRO) share price on watch after delivering strong first half growth
• 5 things to watch on the ASX 200 on Thursday

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 shares of and has recommended Nearmap Ltd. and Xero. The Motley Fool Australia owns shares of and has recommended Nearmap Ltd. and Xero. The Motley Fool Australia has recommended Ramsay Health Care 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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