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The Digital Wine Ventures Ltd (ASX: DW8) share price is dipping during mid-morning trade. This comes after the wine-focused technology investment company provided an update on its capital raising efforts last night.

At the time of writing, Digital Wine shares are 1.67% lower at 6 cents apiece. In comparison, the All Ordinaries Index (ASX: XAO) is hovering 0.28% higher to 7,712 points.

What did Digital Wine announce?

According to the update, Digital Wine advised it has opened up a Share Purchase Plan (SPP) following a successful placement.

On October 15, the company revealed that it has received overwhelming support to raise $12.625 million via a share placement. The firm commitments came from institutional, sophisticated and professional investors.

About 225.45 million shares will be issued at a price of 5.6 cents per share. This represents a 15.2% discount to the last traded price of 6.6 cents before the announcement on 12 October.

Furthermore, Digital Wine directors also subscribed for an additional 2.23 million shares at the same price offered. However, this is pending shareholder approval at an Annual General Meeting (AGM) to be held in the near future.

The company decided to allow its remaining shareholders to participate in a $2 million SPP based on the same terms.

Eligible investors will be able to apply for up to a maximum amount of $30,000 worth of new shares.

The closing date for the SPP will fall on 26 October and the results will be announced on 2 November.

The funds raised under the placement will be used support the acquisition of leading wholesale alcoholic beverage platform company, Kaddy. This includes the following:

• $6.75 million to fund the cash consideration for the acquisition of Kaddy;
• $5.3 million for expansion capital for the Kaddy marketplace; and
• $0.70 million in capital raising costs.

The monies collected from the SPP, however, will be allocated towards extra sales and marketing activities and general working capital.

About the Digital Wine share price

Over the past 12 months, Digital Wine shares have rallied around 15% higher, reflecting modest investor sentiment. However, since the start of 2021, the company’s share price is up almost 40% alone.

On valuation grounds, Digital Wine presides a market capitalisation of roughly $112.9 million with approximately 1.8 billion shares outstanding.

The post Digital Wine (ASX:DW8) share price edges lower despite Share Purchase Plan opening appeared first on The Motley Fool Australia.

More reading

• Digital Wine (ASX:DW8) share price plunges on acquisition and cap raise
• Why is the Digital Wine (ASX:DW8) share price on ice?

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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Can the Medibank Private Limited (ASX: MPL) share price reach $3.80 before the end of the calendar year?

No-one can truly know what share prices are going to do. But analysts like to project where they think the share prices of businesses might be in 12 months from now. So, not necessarily where the business is going to be in two and a half months. But it could indicate the direction that brokers feel that Medibank is headed.

What’s the price target for the Medibank share price?

There are several different brokers. Each of them have a different opinion about where the private health insurer is going to be.

One of the most optimistic outlooks is from the broker Morgan Stanley, which has a price target of $3.80. That implies the Medibank Private share price could rise by around 10% over the next year, if the broker is right.

The broker thought the FY21 result was good and thinks that Medibank can continue to increase its total number of policyholders. It could achieve lower premiums for policyholders with changes relating to prosthetics.

How good was FY21?

It revealed that revenue from external customers rose by 2.1% to $6.91 billion, whilst health insurance operating profit grew by 14.4% to $538.6 million. Net claims expenses only grew by 1.4%. Continuing operations operating profit rose 14.6% to $528.3 million.

There was a large increase in net investment income, going from $2.4 million to $120 million. This helped continuing net profit after tax rise by 39.8% to $441.2 million.

The profit growth allowed the Medibank board to grow its annual dividend per share by 5.8% to 12.7 cents. At the current Medibank share price, that represents a grossed-up dividend yield of 5.2%.

During FY21, net resident policyholders increased by 4.6% to 82,500. That was an increase from 0.6% in FY20.

When adjusted for COVID-related suspensions, policyholders increased 3.5% with the Medibank and ahm brands growing 1.3% and 10.9% respectively. It said that its acquisition rate was largely driven by strong growth in the ‘new to industry’ customer segment within the Medibank brand. Its retention rate improved by 130 basis points at a fund level, reflecting improving customer advocacy across both brands.

The company said that it had grown more in the prior 12 months than it had over the last 10 years, with the market share up 37 basis points. Another area of improvement was its net promotor score, with a 5.3 increase for Medibank and a 1.8 increase for ahm.

In terms of the outlook, the Medibank CEO David Koczkar said:

While we expect overall participation growth to slow compared to FY21, we plan to further strengthen our dual brand strategy by delivering differentiated and compelling products and services that respond to growing areas of customer demand.

We also have a critical role to play in driving change in Australia’s healthcare system and advocating for reforms to improve the affordability and value of private healthcare.

This is why we will continue to invest in preventative health and building more partnerships with doctors, hospitals and governments. However, these changes will not come quickly nor will it be easy, but the sustainability of our health system is at stake.

Valuation on the Medibank Private share price

According to Morgan Stanley, Medibank Private shares are valued at around 20x FY22’s estimated earnings.

However, not every broker is so positive on the health insurance giant. For example, Morgans rates Medibank as a hold with a price target of $3.28. In other words, it thinks that Medibank shares are going to edge lower over the coming months.

The post Can the Medibank (ASX:MPL) share price hit $3.80 by the end of 2021? appeared first on The Motley Fool Australia.

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• Medibank (ASX:MPL) share price lifts as staff vaccine mandate hits headlines
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• 3 ASX shares that everyone’s underestimating right now
• Here’s why the Medibank (ASX:MPL) share price is up 12% in the last 3 months

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 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 Brambles Limited (ASX: BXB) share price is up in early day trading after the company released its first-quarter update for FY22.

At the time of writing, shares in the supply chain logistics company are trading for $10.45 – up 2.96%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.09% lower.

Let’s take a closer look at today’s announcement.

What did Brambles announce?

• Sales revenue up 9% on the prior corresponding period (pcp) to US$1.3 billion at a constant exchange rate. Broken down by segment – revenue from the Americas is up 9%, Europe, Africa and the Middle East is 8% higher, and Asia-Pacific revenue increased 11%.
• Looking forward, Brambles is expecting revenue growth of between 5% and 7% throughout FY22. The company says a higher base from FY21 will be the reason for slower growth compared to the first quarter.
• Underlying profit growth of 1-2%, including US$50 million of short-term transformation costs. Excluding these short-term transformation costs, underlying profit growth is expected to be between 6% and 7%.
• Dividends should “be in line” with company policy of paying out 45-60% of underlying profits.

What did management say?

Commenting on the update possibly driving the Brambles share price today, CEO Graham Chipchase said:

Our first-quarter sales performance demonstrates the commercial resilience of our business, with pricing and surcharge mechanisms supporting the recovery of increased costs across global supply chains. We continue to operate in a high inflationary environment with pallet availability constraints and ongoing lumber, labour and transport scarcity disrupting supply chains and driving increased costs across our businesses.

Pallet availability remained challenging in the first quarter with industry-wide shortages of new pallet supply across the globe as well as lower levels of pallet returns and longer cycle times in our North American business. This was a contributor to the decline in like-for-like volumes in North America and contributed to the lower rates of new business growth across the Americas and Europe, as we prioritised servicing existing customer demand over new customer wins.

He added:

Despite some moderation in lumber inflation in North America, lumber prices across the group remain above historic levels and pallet prices continue to increase, particularly in Europe and Latin America. We expect inflationary pressures to remain for the balance of FY22.

What else has affected the Brambles share price recently?

As Motley Fool has previously reported, the Brambles share price slid 11% last month after its investor day presentation.

Brambles alluded to “high single-digit” growth in its presentation for revenue and underlying profit in FY22 and FY23. The company sees revenue growth of 5-6% in FY22. Additionally, free cash flow is expected “to be an outflow of US$200 million”.

Supply chain logistical issues, which have been exacerbated by the COVID-19 pandemic, may also be worrying investors. The cost of shipping has increased as ports shut down and demand between regions varies markedly.

Brambles share price snapshot

Over the past 12 months, the Brambles share price has decreased by 2%. Year-to-date, Brambles shares are also around 2% lower. Over the past month, it’s an even worse 6% decline.

Brambles has a market capitalisation of approximately $15 billion.

The post Brambles (ASX:BXB) share price rises as revenues lift 9% in first quarter appeared first on The Motley Fool Australia.

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Motley Fool contributor Marc Sidarous 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 CSL Limited (ASX: CSL) share price is trading broadly flat on Tuesday morning following the release of its annual research and development (R&D) update.

At the time of writing, the biotherapeutics company’s shares are fetching $294.15.

CSL share price flat following R&D update

During FY 2021, CSL invested more than US$1 billion in its R&D activities across six therapeutic areas, four scientific platforms, and two businesses.

Management notes that there were a number of highlights during the period. These include:

The Seqirus business advancing its first-of-its-kind adjuvanted, cell-based seasonal influenza vaccine (aQIVc) and increasing its work on its self-amplifying mRNA (sa-mRNA) development program. In fact, earlier this month, the Biomedical Advanced Research and Development Authority (BARDA) awarded Seqirus a multi-year contract to provide clinical development services to evaluate the safety, immunogenicity, and dose-sparing capability of two H2Nx influenza vaccine candidates. One is using a combination of Seqirus’ FDA-licensed cell-based and adjuvanted technologies, and the other is using its next generation sa-mRNA platform.

CSL has started a new collaboration with the Walter and Eliza Hall Institute for Medical Research (WEHI). This is one of the most prominent medical research and medicine development organisations in Australia. The two parties will work together to create a Centre for Biologic Therapies.

Another item highlighted by management is the impending Phase III study of 4-Factor Prothrombin Complex Concentrate to improve survival rates in traumatic injury and acute major bleeding. In addition, the company notes that the VANGUARD Phase III clinical trial for Garadacimab, a treatment in hereditary angioedema (HAE), has enrolled its last patient two months ahead of schedule. Recruitment from the AEGIS-II Phase III study of CSL112 (ApoA-1) for treatment of acute coronary syndrome is also progressing despite COVID-19 impact on clinical trial sites and patients.

Finally, on the licence front, CSL revealed that preparations are underway for EtranaDez, a gene therapy for haemophilia B, to submit a Biologics Licence Application for the US and Marketing Authorisation Application for the EU.

Management commentary

CSL’s Executive Vice President, Head of R&D, and Chief Medical Officer, Dr. Bill Mezzanotte, commented: “We continue to evolve as a leading plasma-based biotechnology company with purposeful diversity in therapeutic areas, scientific platforms and strategic alliances.”

“We are continuing to invest in our core plasma business while also enhancing our other scientific platforms to better deliver on our promise to discover, develop and provide innovations that save and improve lives around the world,” he added.

The post CSL (ASX:CSL) share price trades flat despite annual R&D update appeared first on The Motley Fool Australia.

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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. owns shares of 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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The A2 Milk Company Ltd (ASX: A2M) share price is trading higher on Tuesday following a change in substantial shareholding from UBS.

At the time of writing, shares in the diary and infant formula company are up 2.34% to $6.775.

UBS raises its stake

A2 Milk released a change in substantial shareholding update this morning, revealing that UBS has increased its stake from 6.35% to 7.40%.

The A2 Milk share price has shown some signs of life in the past week, bolstered by a positive update coming out of rival Bubs Australia Ltd (ASX: BUB) on Wednesday, 13 October.

Bubs announced a resurgence in earnings with infant formula revenues up 124% in 1Q22 compared to the same quarter last year and up 64% over the prior quarter.

Similarly, its adult goat milk power was up 100% year-on-year and up 61% quarter-on-quarter.

Another encouraging figure was its strong rebound in China-facing business with revenue up 156% on the prior year and up 98% quarter-on-quarter.

Overall international gross revenue increased 489% compared to the prior corresponding period (pcp) and up 35% on 4Q20.

The successful turnaround for Bubs helped drive a sharp 13.45% re-rate for the A2 Milk share price on the day of the announcement.

The 13.45% jump to $6.58 was also on the back of significant volume, with 15.03 million shares trading hands compared to a 10-day average volume of 5.97 million.

The A2 Milk share price was met with some degree of resistance the next day, surging as high as 9.88% to a 3-month high of $7.23 before closing the day 4.26% higher at $6.86.

The intraday pullback was again on high volume, with 19.24 million shares traded. The mixed performance perhaps signals a strong morning push before profit taking faded the gains.

A2 Milk share price snapshot

The A2 Milk share price is down 41% year-to-date following numerous guidance downgrades.

The relentless selling that took place between August last year and late-May has somewhat subsided.

A2 Milk shares have remain relatively range-bound since late-May, holding above the $5 level but struggling to break above $7.

The post A2 Milk (ASX:A2M) share price ticks higher as UBS increases holding appeared first on The Motley Fool Australia.

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Motley Fool contributor Kerry Sun 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 A2 Milk and BUBS AUST FPO. 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 Stockland Corporation Ltd (ASX: SGP) share price is up this morning after the company released its operational update for the first quarter of financial year 2022.

The housing developer and commercial property giant had a seemingly strong quarter despite COVID-19 restrictions impinging on tenants of its ‘retail town centre’ portfolio.

At the time of writing, the Stockland share price is $4.64, 0.87% higher than its previous close.

That’s a better performance than that exhibited by the broader market this morning. Right now, the S&P/ASX 200 Index is down 0.09%, while the All Ordinaries Index (ASX: XAO) has slipped 0.06%.

Let’s take a look at the quarter just been for Stockland.

Stockland share price gains after Q1 update

The Stockland share price is rising despite the company collecting just 75% of its retail rent without adding abatements or deferrals over the quarter just been.

Stockland noted discussions of COVID-19 rent relief with its retail tenants are still underway.

It was a better story for the company’s logistics portfolio. It ended the quarter with 98.9% occupancy, up from 98% in June 2021. Additionally, only 2% of rent for Stockland’s workplace and logistics assets went unpaid during the quarter just been.

The company’s residential arm also saw stronger performance. Residential property sales were up 8% compared to those of financial year 2021’s first quarter.

The company sold 1,947 lots over the quarter just been. It also acquired approximately 5,900 new lots to restock its assets.

Retirement living sales were in line with expectations, though, they were affected by COVID-19 restrictions. The integration of the Halcyon platform is progressing well, with Land Lease Communities’ sales in line with expectations.

Stockland’s managing director and CEO Tarun Gupta commented on the news driving the company’s share price today:

The group’s strong financial position was maintained at the end of the quarter with low gearing and ample liquidity, underpinned by our solid operational business performance.

Additionally, the company forecasted its funds from operations per security will be between 34.6 and 35.6 cents for financial year 2022. It expects to pay out 75% to 85% of funds from operations per security as dividends.

However, Stockland noted its guidance rests on Australia’s vaccination rates continuing to increase and COVID-19 restrictions easing alongside.  

Market watchers interested in the Stockland share price, keep an eye out for another operational update on 8 November.

The post Stockland (ASX:SGP) share price gains despite retail renters’ struggles 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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The Medibank Private Ltd (ASX: MPL) share price has handily outperformed the S&P/ASX 200 Index (ASX: XJO) in 2021, despite a strong showing from the index.

Year-to-date, Medibank shares are up 14% compared to a 10.5% gain posted by the ASX 200.

And the integrated healthcare company could have more outperformance to come.

That’s according to Andrew Martin, the principal portfolio manager of the Alphinity Australian Share Fund and the Alphinity Concentrated Australian Share Fund.

Earnings upgrades ahead?

One of the catalysts that could see the Medibank share price charge higher in the months ahead is the potential for earnings upgrades.

Speaking to the Motley Fool earlier in October, Martin explained:

We invest in what we call earnings leadership. Those are companies that are performing better than the market expects from an earnings perspective. Companies that are getting consistent earnings upgrades.

Alphinity concentrates on analysing individual stocks bottom up. But when it comes to the potential for earnings upgrades, Martin pointed to the Aussie insurance sector as one to keep an eye on:

One of the few sectors left getting earnings upgrades is insurance. It’s traditionally quite a volatile sector, because you can get big hits every now and again. But they’re experiencing some of the best conditions they’ve experienced since the early 2000s. A much better pricing environment coming through is helping grow the top line, and then you get this expansion in margin.

Which brings us to the Medibank share price.

When asked which ASX shares he believes have the potential to outperform, Martin had a few up his sleeve.

Among those, he said, “We quite like Medibank. It’s an insurance company, but health insurance, so a different kind of market.”

Martin said the business has “really been transforming itself since it listed”.

It’s taken some really strong leadership in terms of sorting out a number of issues in the market around claims and what was happening in terms of healthcare costs going up materially. They’ve worked with the industry to try to contain pricing and therefore grow the industry.

How has the Medibank share price been performing?

Medibank shares are up 27% over the past 12 months. By comparison, the ASX 200 has gained 18% over that same time.

Over the past month, the Medibank share price has struggled a bit, down 1% to the current $3.47 per share.

At the current share price, the company pays a trailing dividend yield of 3.6%, fully franked.

You can read the Motley Fool’s full interview with Alphinity’s Andrew Martin here.

The post Medibank (ASX:MPL) share price forecast for more growth: fund manager appeared first on The Motley Fool Australia.

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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 Northern Star Resources Ltd (ASX: NST) share price is falling after its quarterly gold production declined and costs increased.

The Norther Star share price dipped 0.5% to $9.36 in early trade when the S&P/ASX 200 Index (Index:^AXJO) is hovering just under breakeven.

But Northern Star’s underperformance may have more to do with the weakening gold price than its quarterly. Other ASX gold mining shares are also under pressure.

Northern Star share price weathering weaker production

The gold miner reported a drop in gold production to 386,000 ounces for the three months to end September. This compares to 444,000 ounces it produced in the previous quarter.

A drop in output at all three of its mines (Yandal, Kalgoolie and Pogo) contributed to the weaker results.

Further, Northern Star is battling rising costs. All-in-sustaining cost (AISC) increased by 9.3% quarter-on-quarter to $1,594 an ounce. Group all in cost came in at $1,933 an ounce.

Silver lining for the ASX gold miner

But it isn’t all bad news for the Northern Star share price. Thanks to the still lofty gold price and the weak Australian dollar, Norther Star is still making a profit. The average price it received for its gold in the September quarter was $2,345 an ounce.

However, shareholders shouldn’t be surprised as falling gold production had previously been flagged.

Management also reassured investors that second half FY22 production will be stronger. This is due to higher expected grades at Yandal and increased mining rates at Pogo.

Unfazed by production disruptions

Pogo’s weaker performance in the latest quarter was due to construction disruptions that were necessary to increase mining rates.

“We seized the chance to complete other major works, including replacing the primary conveyor belt that transports ore from underground to the processing plant,” said Northern Star’s Managing Director Stuart Tonkin.

“This resulted in 24 days total downtime, which reduced throughput and gold production, in turn increasing costs per ounce.

“This work is now finished and we expect to see a significant benefit for both production and costs from the December quarter onwards. The mill bottlenecks have been removed and throughput is increasing in line with expectations for FY22 guidance.”

Reassuring guidance

The fact that Northern Star is sticking to its full year guidance should also reassure shareholders. The miner is expecting to products between 1.55 million and 1.65 million ounces of gold.

Another piece of good news is that costs are expected to decline. Management stuck to its previous ASIC forecast of $1,475 to $1,575 an ounce.

Other details in Northern Star’s quarterly update

Northern Star reported a cash earnings of $165 million to $175 million and had cash and bullion holdings of $756 million at the end of September.

This is after it paid $110 million in dividends and invested $123 million in net growth capital and exploration.

Norther Star share price lagging behind

The Northern Star share price crashed over 40% in the past year and is the worst performer among the major gold producers.

The Newcrest Mining Ltd (ASX: NCM) share price lost around 20% and the Evolution Mining Ltd (ASX: EVN) share price declined around 37%.

The post Northern Star (ASX:NST) share price wanes as quarterly production falls appeared first on The Motley Fool Australia.

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Motley Fool contributor Brendon Lau 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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The IGO Ltd (ASX: IGO) share price is taking off this morning on news from the company’s 70%-owned Fraser Range joint venture.

IGO has begun a drilling program at the project to further explore 2 recently identified bedrock conductors. IGO’s joint venture partner notes the conductors are compelling nickel-copper targets.  

At the time of writing, the IGO share price is $9.82, 3.59% higher than its previous close.

Let’s take a closer look at today’s news.

IGO begins drilling program

The IGO share price is in the green on the back of an update posted by the company’s Fraser Range joint venture partner, Carawine Resources Ltd (ASX: CWX). 

IGO has started drilling at the project’s Red Bull tenement where low-temperature SQUID moving-loop electromagnetic surveys identified 2 targets in June.   

The surveys were looking to interpret a southern continuation of the lithostratigraphic package, known as the Snowys Dam Formation, that hosts the Nova-Bollinger nickel-copper-cobalt deposit.

Modelling by IGO shows the 2 conductors – named RB_C and RB_B – are within low-magnetic bodies. They will likely be mafic intrusions within the Snowys Dam Formation.

RB_C has a high conductance of around 5,500 siemens. Modelling shows it’s a 275-metre-by-275-metre plate dipping northeast from 320 metres below the surface.

Whereas RB_B has moderate conductance of around 2,500 siemens, modelled as a 250-metre-by-350-metre sub-vertical plate dipping east from 330 metres below the surface.

Through its joint venture with Carawine, IGO has access to 5 exploration areas. By funding the financial year 2022 exploration program – expected to cost approximately $1.3 million – IGO can earn another 6% of the Fraser Range joint venture. 

IGO share price snapshot

This year is going well for the IGO share price.

Right now, it’s 46% higher than it was at the start of 2021. It has also gained 125% since this time last year.

The post IGO (ASX:IGO) share price soars 4% on nickel-copper update 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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The Bapcor Ltd (ASX: BAP) share price is pushing higher on Tuesday morning.

At the time of writing, the auto parts retailer’s shares are up 0.5% to $7.60.

Why is the Bapcor share price pushing higher?

Investors have been bidding the Bapcor share price higher today following the release of a trading update at its annual general meeting.

According to the release, Bapcor has had a solid start to FY 2022 with overall group revenue flat during the first quarter compared to the prior corresponding period.

Management believes this result demonstrates the resilience and non-discretionary nature of Bapcor’s businesses. It notes that with NSW, VIC, ACT and NZ impacted by prolonged lockdowns, at least 70% of its stores were affected.

This solid start was driven largely by its Bapcor Trade, Retail Online, and Specialist Wholesale businesses, which all reported quarterly revenue growth over the prior corresponding period. This offset sales declines in its NZ and Autobarn businesses.

One slight negative that could be holding back the Bapcor share price today is its higher cost base and softer margins. However, management expects its margins to revert when lockdowns end.

What about the rest of the year?

Management continues to target FY 2022 pro forma earnings at least in line with what was achieved in FY 2021.

This is expected to be predominantly driven by its second half performance. Management expects its first half earnings to be softer than the prior corresponding period, whereas it expects its second half earnings to be stronger than the same period in FY 2021.

Following today’s gain, the Bapcor share price has narrowed its year to date decline to approximately 3.5%. This compares to a 10.4% gain by the S&P/ASX 200 Index (ASX: XJO) over the same period.

The post Bapcor (ASX:BAP) share price higher following trading update appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended Bapcor. 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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