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The Helloworld Travel Ltd (ASX: HLO) share price has been flying under the radar.

In the past month, shares in the travel agency group have surged more than 36%. At the time of writing, they are trading 1.4% higher for the day at $2.18.

Let’s take a look at what’s been fuelling the Helloworld share price.

Helloworld share price propelled by travel hopes

Along with the broader travel sector, shares in Helloworld are flying higher on renewed hopes of travel in the near future.

Despite the Delta variant of COVID-19 causing major domestic and international travel disruptions, investors have been looking towards a vaccinated future.

As a result, investors have flocked to travel shares as the resumption of domestic and international travel looms. This has helped to push up the Helloworld share price.

The effects of border closures and travel restrictions were recently reflected in the company’s full-year report for FY21.

How did Helloworld perform in FY21?

Late last month, Helloworld released preliminary un-audited results for the year ended 30 June 2021.

This was followed by the company’s annual report, released earlier this week.

For FY21, Helloworld reported a statutory after-tax loss of nearly $36 million.

The travel agency group revealed it had lost 272 agencies over the past 15 months as lockdowns took their toll on the company.

Highlights from the company’s full-year report included;

• Underlying earnings before interest, taxes, depreciation, and amortisation (EBITDA) loss of $14.1 million. This was at the low end of the range indicated in the Quarter 3 trading update ($14 million to $16 million).
• FY21 underlying loss before tax of $37.8 million after one-off costs of $11.7 million.
• $131.0 million cash balance at 30 June 2021.

Helloworld’s total transaction values (TTV) tanked 78.4% for the financial year to $1.08 billion.

The Helloworld share price jumped on the back of the result and has been climbing ever since.

The company was unable to provide guidance for FY22, due to the uncertainty around the lifting of border restrictions and travel bans.

However, the travel agency did note that strong demand for travel during periods of open travel reflected pent-up consumer demand.

As a result, Helloworld noted the company was focusing on vaccine rollouts to determine the re-opening of domestic and international borders.

Snapshot of the Helloworld share price

The Helloworld share price has reflected the company’s challenging trading conditions in 2021.  

Despite shares in the travel agency rallying in the past month, they remain around 13% lower since the start of the year. However, they have gained around 18% in the past 12 months.

The post The Helloworld (ASX:HLO) share price is up 36% in a month. Here’s why appeared first on The Motley Fool Australia.

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• Zip (ASX:Z1P) share price struggles as BNPL competition heats up
• The Kuniko (ASX:KNI) share price is surging 20%. What’s next?
• Is the party only just getting started for ASX lithium shares?
• The Qube (ASX:QUB) share price is on a rollercoaster this week
• The Macquarie (ASX:MQG) share price has gained 3 times that of CBA over 5 years

Motley Fool contributor Nikhil Gangaram 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 Helloworld Limited. The Motley Fool Australia owns shares of and has recommended Helloworld 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 Kuniko Ltd (ASX: KNI) share price has stepped firmly into the green from the opening of trade on Thursday.

Kuniko shares are now changing hands at $1.97 apiece, a 20% jump from the open.

Let’s investigate a little further.

A quick recap on Kuniko

Kuniko is in the business of minerals exploration. It has particular interests in the development of non-lithium battery metals, used in the production of electro-mobility and other modern forms of energy production.

Kuniko was formed via a spinoff from Vulcan Energy Resources Ltd (ASX: VUL) earlier this year. The company completed its initial public offering (IPO) last month.

At the time of writing, Kuniko has a market capitalisation of $87 million.

What’s behind the Kuniko share price lately?

The Kuniko share price has been on a wild ride since listing on the ASX back on 24 August.

Kuniko shares were originally listed at 20 cents apiece, and have since climbed to the current price. Since that time, they have experienced periods of significant volatility.

What does this mean? Well basically, Kuniko shares have fluctuated up and down consistently over the past few weeks. And the fluctuations haven’t been of a small magnitude, either.

On several days across this time, the Kuniko share price has shown an intraday range that resulted in a difference in prices of over 100%, even over 300% on one day.

Even today there has been a 27% spread between the intraday highs and lows of the Kuniko share price.

Equally as interesting, is that some of these fluctuations have occurred on significant trading volume. The average 1 month trading volume on Kuniko shares is an exchange of 11.3 million shares, which is around 27% of the company’s total shares outstanding. That’s exquisitely high for a newly listed company.

One potential explanation for the short-term fluctuations is the appointment of the company’s new CEO, Antony Beckmand.

Beckmand comes with more than 20 years of experience in the mining industry, and is “enthusiastic about (the company’s) portfolio of projects in Norway”.

Kuniko shares have dipped 39% into the red from a closing high of $3.23 since the company announced its new CEO.

What’s next for the Kuniko share price?

There’s been no market sensitive information released by the company over the last week or two.

Nonetheless, current Kuniko shareholders have recognised an 882% return on their initial investment, if they subscribed during the IPO.

Kuniko is also focused on establishing robust ESG principles in its operations, ensuring ethical sourcing of its materials, committing to a zero carbon production process, and operating in Norway, where “98% of electricity comes from renewable sources”.

This may impact the Kuniko share price favourably given the current macro-narrative in corporate social responsibility.

The post The Kuniko (ASX:KNI) share price is surging 20%. What’s next? appeared first on The Motley Fool Australia.

More reading

• The Kuniko (ASX:KNI) share price is on a wild ride, sliding 14% today
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• What’s going on with the Kuniko (ASX:KNI) share price?
• Why Blackmores, Flight Centre, Kuniko, & Qantas shares are soaring today
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The author Zach Bristow has no positions 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 electrification trend has been thrown around a lot since electric vehicle (EV) makers, such as Tesla Inc (NASDAQ: TSLA), rose to prominence. In the process, ASX lithium shares have been caught in the updraft of rising lithium prices.

In the space of 12 to 18 months, lithium shares have gone from being the undesirables to being the spice of the time. An expected flood of demand has plenty of investors and speculators alike chasing the next potential gold rush.

Some analysts also believe the trend could have legs, citing the push for a global energy transition as a major structural tailwind.

While the returns from some ASX lithium shares have been downright phenomenal over the past year, various brokers are pointing towards a potential for greater things to come.

More to come?

It might be easy to dismiss the swiftly ascending lithium share prices as nothing but rampant speculation.

However, recent sales data would indicate otherwise, as EV sales continue to surge globally. Preliminary data from Research and Research show substantial increases year on year in August. For instance, German, France, and Norway sales rose 62%, 60%, and 92% respectively.

Our preliminary August global #EV sales data for Germany, France, Norway, UK, Sweden, Netherlands, Italy and Spain have been completed.

Total EV sales in these 8 countries grew 57% YoY and -7% MoM.

And here you can find that Norway surpassed the UK. pic.twitter.com/Nl1AG4iTKe

— Researcher and Research (@thernrcorp) September 7, 2021

https://platform.twitter.com/widgets.js

Similarly, in the first half of the year, China EV sales soared 164% year on year to 271,000 units, according to the China Association of Automobile Manufacturers.

Additionally, the electric vehicle market is broadening out from the pack of initial disruptors. Even the likes of BMW AG and Toyota Motor Corp are spending on batteries and battery technology.

The German luxury carmaker has contracts for A$32 billion worth of batteries. Meanwhile, Toyota is set to splurge US$13.5 billion on its own battery supply system by 2030.

Due to the cost of lithium-ion batteries dropping significantly, analysts expect this to be the standard for the foreseeable future. With lithium being a critical material in this battery design, this obviously bodes well for increased demand over time.

Head of mining research at Canaccord Genuity, Reg Spencer commented on the electric shift, stating:

What you see here is a global structural change in how people move and what powers that movement. In itself, we haven’t seen anything like this since the Industrial Revolution.

Furthermore, Spencer expects a continued surge in lithium demand as lithium maintains its critical role in the electrification shift.

Setting the stage for ASX lithium shares

Some might find it interesting to know that lithium itself isn’t considered a scarce resource. However, the lack of investment in supply in the years prior to the recent boom has meant the volume of lithium required is simply not available.

As a result, the price of lithium carbonate has sprung from about US$5400 per tonne a year ago, to approximately US$19,000 as of today. In a similar fashion, lithium spodumene prices have flown from around US$370 per tonne to more than US$900 per tonne.

The momentous prices have led to an incredible acceleration in events for ASX-listed lithium shares. One major event involves the merger of Galaxy Resources Ltd (ASX: GXY) and Orocobre Limited (ASX: ORE). This unification of companies is set to create the fifth-largest lithium chemicals company on the planet.

Concurrently, other ASX lithium shares have waged staggering comebacks in their own right. For example, the Pilbara Minerals Ltd (ASX: PLS) share price has skyrocketed 553% in the past year. This is backed up by surging revenues in FY2021, with revenue increasing 108.9% to $175.8 million in FY21.

Final remarks

While lithium shares remained exposed to the cyclic nature of mining, Spencer forecasts positive prices for years to come.

Specifically, the analyst expects spodumene prices to hold above US$900 per tonne until FY2026. This is based on the expectation of continued supply deficits as the demand for lithium remains elevated.

The post Is the party only just getting started for ASX lithium shares? appeared first on The Motley Fool Australia.

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Motley Fool contributor Mitchell Lawler owns shares in Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Tesla. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended BMW. The Motley Fool Australia has recommended BMW. 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 Qube Holdings Ltd (ASX: QUB) share price is in the red today following its 4.7% gain yesterday.

Yesterday, the export and logistics service provider announced it is to acquire the Newcastle Agri Terminal.

While the market initially responded positively to the news, it has seemingly backflipped today.

Right now, the Qube share price is $3.31, 3.22% lower than its closing price yesterday.

Let’s take a closer look at this week’s news from Qube.

Qube’s new acquisition

The Qube share price has had a turbulent time on the ASX this week following news of the company’s latest acquisition.

Yesterday, the company announced it will be acquiring the Newcastle Agri Terminal for $90 million. The terminal is a grain exporting hub.

According to Qube, it’s positioned to take advantage of northern New South Wales’ grain production, which sees 4.8 million tonnes of grain produced in an average year.

The facility comes with around 60,000 tonnes of silo storage, modern rail receival infrastructure, road discharge facilities, and the capability to load 2,000 tonnes of grain per hour.

The $90 million needed for the acquisition will come from Qube’s currently undrawn debt facility.

The transaction is expected to be completed by the end of this month.

Commentary from management

Qube’s managing director Paul Digney commented on the news sending the company’s share price loopy this week, saying:

The acquisition of [Newcastle Agri Terminal] will further strengthen Qube Agri export bulk service offering to growers and traders the ability to now ship from Newcastle…

The addition of this quality asset to the Qube Agri capability will ensure customers in the northern draw zone can benefit from an efficient export terminal.

Qube share price snapshot

Despite today’s dip, the Qube share price has been performing well on the ASX lately.

It has gained 10% year to date. It is also currently 25% higher than it was this time last year.

The post The Qube (ASX:QUB) share price is on a rollercoaster this week appeared first on The Motley Fool Australia.

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• Qube (ASX:QUB) share price struggles despite record profit

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 Macquarie Group Ltd (ASX: MQG) share price has been very impressive over the medium to long term.

Over the past 5 years, shares in the bank have appreciated a whopping 120% to their current price of $177.47 a unit. The next closest big bank, Commonwealth Bank of Australia (ASX: CBA), is up 43% over the same timeframe.

No other major bank cracks even a 10% value gain over the past 5 years.

If you’re an investor who came in a little late to the game, say 1 year ago, then the CBA share price would be your friend. In 12 months, shares in Australia’s biggest bank are up 52% while the Macquarie share price is 40% higher. For context, the S&P/ASX 200 Index (ASX: XJO) is 39% higher over 5 years and up 26% in 1 year.

It should also be noted that when the COVID-induced market crash of March 2020 occurred, CBA and Macquarie lost all of the gains they had made over the course of years in a matter of days.

Since then, the value of both companies has exceeded their pre-pandemic levels. Therefore, it would be more meaningful to focus on developments that have occurred since last year’s market crash.

What affected the Macquarie share price?

When Macquarie released a third-quarter update in February this year, the Macquarie share price rocketed 7% in a single day.

As Motley Fool reported, for the three months ended 31 December, Macquarie Group experienced improved trading conditions. At the time, the company said the combined third-quarter net profit contribution from its annuity-style businesses was up on the prior corresponding period (pcp).

Yesterday, the Macquarie share price gained a further 6% when the group released an update on its short-term prospects.

The company advised that it expected results for the first half of FY22 to be “slightly down” on the second half of FY21. Macquarie said stiffer competition in the banking sector, rising expenses, and falling commodity returns were to blame.

How about the CBA share price?

When CBA released its first-quarter update for FY21 in November last year, the CBA share price skyrocketed 10.7% over the space of 2 weeks.

At the time, CBA revealed a “stronger than expected” cash net profit after tax of $1.8 billion. While it was down on the pcp, the results were better than many analysts had forecast.

Also in that release, CommBank said that by the end of October 2020 there was a net reduction in total loan deferred facilities of 59%, representing a monthly net reduction in deferred balances of about $21 billion. This may have also been a reason for the rising CBA share price at the time.

More recently, the release of the CBA full-year results last month was a boon for shareholders of the company.

Recording a 20% rise in net profits and paying a fully franked dividend of $2.00 per unit, CBA shares were very popular that day. The company also announced a $6 billion off-market share buyback to return further capital to shareholders.

What’s next for the Macquarie share price?

As Motley Fool has previously reported, brokers at Goldman Sachs, while fans of the company, aren’t fans of its valuation.

Goldman Sachs analysts have given Macquarie a neutral rating. They think fair value is about $171 per share. They believe the Macquarie share price may have peaked for the time being.

However, The Australian newspaper is reporting today that some analysts believe Macquarie will become only the third company in ASX history, after CSL Limited (ASX: CSL) and Cochlear Limited (ASX: COH), to crack the $200 per share mark.

Quoted in the national broadsheet, Cadence Capital’s managing director Karl Siegling said:

As long as they sustain it (earnings) they can grow into a new valuation, and that’s what’s happening.

These guys just keep on keeping on and they just keep delivering, and it’s just a matter of time (before the share price hits $200).

Foolish takeaway

All in all, it seems to be a profitable time for long-term investors of either CBA or Macquarie Group.

While the Macquarie share price does have the upper hand, this analysis does not take into account the impact of dividends and their franking percentages. For some investors, this may be more important than just the share price.

The post The Macquarie (ASX:MQG) share price has gained 3 times that of CBA over 5 years appeared first on The Motley Fool Australia.

More reading

• ASX 200 (ASX:XJO) midday update: Tech shares fall, Fortescue upgraded
• CBA (ASX:CBA) share price too expensive, says expert
• Top broker gives its verdict on the Macquarie (ASX:MQG) share price
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 falls, Macquarie jumps, Aussie Broadband climbs

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

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The Cettire Ltd (ASX: CTT) share price is backtracking during early afternoon trade. This comes as the online retailer announced that one of its board members has sold a parcel of the company’s shares.

At the time of writing, Cettire shares are swapping hands for $3.41 a pop, down 6.32%. In comparison, the All Ordinaries Index (ASX: XAO) has also fallen to 7,719 points, a drop of 1.13%.

Non-executive director selling

The Cettire share price is falling following an announcement by the company today.

According to the release, Cettire non-executive director Bruce Rathie executed an on-market trade on 2 September.

Rathie’s New South Wales-based private company, Nestegg No 1, disposed of 200,000 ordinary shares at a price of $2.55 apiece. The sale accounts for around 20% of Rathie’s portfolio in Cettire.

As a result, Rathie now holds a total of 810,000 shares, comprising of 10,000 shares in direct interest. The remaining shares are through two indirect companies, Katrat Investments and Rathie Super, each holding 400,000 shares.

Interestingly, the sale comes after the company revealed it beat its FY21 prospectus forecast and upgraded guidance.

Cettire founder and CEO Dean Mintz commented on the full-year results:

It has been an exceptional year for Cettire, with the company rapidly growing. I am particularly proud of the substantial increase in active customers, very strong revenue growth, robust product margins and the increasing proportion of revenues from repeat customers.

The achievements over the past 12 months, both operationally and financially, demonstrate the traction we have with consumers, the scalability of our business model and the benefits of our proprietary technology platform.

The positive news led the Cettire share price to reach an all-time high of $3.68 yesterday.

Cettire share price snapshot

Despite today’s fall, Cettire shares have accelerated by almost 600% in the past year, and are up 640% year-to-date.

Based on today’s price, Cettire presides a market capitalisation of around $1.3 billion, with approximately 381 million shares on issue.

The post Why the Cettire (ASX:CTT) share price is slumping 5% today appeared first on The Motley Fool Australia.

More reading

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• ASX reporting wrap-up: Harvey Norman, Cettire, PointsBet
• Cettire (ASX:CTT) share price slumps despite revenue quadrupling

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. owns shares of and has recommended Cettire Limited. The Motley Fool Australia has recommended Cettire 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 Coles Group Ltd (ASX: COL) share price is seesawing this Thursday.

At the time of writing, Coles shares are down 0.17% to $17.39 a share. They sunk as low as $17.36 in early trade, rebounded strongly to $17.58, before retreating to their current price.

By comparison, the S&P/ASX 200 Index (ASX: XJO) has gone backward by 1.08% so far today to 7,431 points.

Year-to-date so far in 2021, the Coles share price remains a disappointing investment, down by almost 6%.

Over the past 12 months, Coles shares are up by more than 3%. Both of those numbers trail the ASX 200, which has gained around 11% year to date, and 26% over the past year.

So it seems investors have reacted poorly to Coles’ FY21 earnings report that the company released on 18 August.

That was when the grocer reported modest revenue growth of 3.1%, as well as an increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) by 5.4% to $3.43 billion.

That helped Coles raise its final dividend to 28 cents per share, fully franked. That means Coles’ total dividend for FY21 was 61 cents per share, a record high and a 6.1% increase over FY20’s payouts.

Despite all of those metrics, investors evidently haven’t been too impressed. That’s because, since 18 August, the Coles share price has fallen by around 5% by today’s pricing.

So, at today’s levels, where does the Coles share price stand? Could this possibly be a buying opportunity?

Could Coles shares be a buy today?

Well, as my Fool colleague Tristan covered yesterday, there is one broker who is optimistic about Coles shares right now. That would be Morgans.

Morgans currently rates Coles as a ‘buy’, with a 12-month share price target of $19.80 a share. That implies a potential future upside of around 13.8% over the next year.

The broker is bullish on Coles due to the shape of its balance sheet, which Morgans thinks will enable both future dividend increases, as well as continued investment in the business’s future.

No doubt Coles investors will be hoping that all comes to pass.

At the current Coles share price, the supermarket giant has a market capitalisation of around $23 billion, a price-to-earnings (P/E) ratio of 23.26 and a dividend yield of 3.48%.

The post What does the future look like for the Coles (ASX:COL) share price? appeared first on The Motley Fool Australia.

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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 owns shares of and has recommended COLESGROUP DEF SET. 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 Crown Resorts Ltd (ASX: CWN) share price is down as the company faces further legal troubles.

At the time of writing, shares in the casino operator are trading for $9.75 – down 1.61%. For context, the S&P/ASX 200 Index (ASX: XJO) is 0.99% lower. It comes after The Australian reported Crown had filed its defence in a nearly $5 million lawsuit brought by a former patron of the business.

Let’s take a closer look at the news.

Crown’s latest lawsuit

Today’s news may be unsettling investors, judging by the falling Crown share price.

Ahmed Hasna, a self-described problem gambler, is suing the $6.7 billion company for allegedly failing to act on his problem gambling at its Melbourne casino between the years 2016 and 2020. He claims he lost $4.59 million during those years – the amount he is suing to recuperate.

He also alleges the company were aware or should have been aware, of his addiction. In its defence, Crown calls the claim of observable problems in Hasna “vague and embarrassing”.

As The Australian reports, despite Hasna indefinitely self-excluding himself from the casino four times, Crown allegedly allowed him to revoke these bans while providing him with a flow of benefits to encourage his patronage such as free dinners, Phil Collins concert tickets and a family holiday to Crown’s Perth casino.

Crown’s general manager of VIP Customer Service, Peter Lawrence, told the Victorian Royal Commission – which looked at Hasna’s case as part of its examination into the suitability of Crown to retain its casino licence – that Crown’s treatment of Hasna was “possibly” predatory.

Crown denies it failed to take reasonable steps to offer Hasna help or inquire about his financial, mental and emotional wellbeing. It does concede it offered incentives to Hasna to continue gambling.

This latest headache for Crown comes while the Victorian Royal Commission is actively considering whether to rescind the company’s gaming licence in the state. While a blanket ban on Crown in the state is seen as unlikely, the damning evidence has seen heads roll at the company – including Chair Helen Coonan and Melbourne CEO Xavier Walsh.

The Crown share price has lost all of its gains since an initial takeover bid on the company because of the considerable uncertainty facing the company.

Crown share price snapshot

Over the past 12 months, the Crown share price has increased 6.67%. This is around 20 percentage points lower than the ASX 200. Year-to-date, shares in the company have fallen in value by 0.66%.

The post Crown (ASX:CWN) share price slumps as problem gambler lawsuit heats up appeared first on The Motley Fool Australia.

More reading

• How does the Crown Resorts (ASX:CWN) earnings result compare to Star Entertainment (ASX:SGR)?
• Crown Resorts (ASX:CWN) share price slumps amid dividend suspension
• Crown (ASX:CWN) share price wobbles as profit slumps 429%
• The Crown (ASX:CWN) share price lifted last time the company reported
• Crown (ASX:CWN) share price lifts as controversial chair retires

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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At lunch on Thursday, the S&P/ASX 200 Index (ASX: XJO) is having a day to forget and is deep in the red. The benchmark index is currently down 1.1% to 7,428.8 points.

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

Tech shares fall

The Australian tech sector is acting as a drag on proceedings on Thursday. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) has followed the lead of the Nasdaq index and is down a sizeable 1.4%. The Afterpay Ltd (ASX: APT) share price is among the worst performers with a decline of 2.5%.

Fortescue shares upgraded

The Fortescue Metals Group Limited (ASX: FMG) share price is trading lower today despite being upgraded by a leading broker. According to a note out of Citi, its analysts have upgraded the iron ore mining giant’s shares to a buy rating with an $18.50 price target. Citi believes iron ore prices could hold at US$100 a tonne for longer than the market expects.

Macquarie shares downgraded

The Macquarie Group Ltd (ASX: MQG) share price is trading lower today after being downgraded by a top broker. A note out of Morgans reveals that its analysts have downgraded the investment bank’s shares to a hold rating with an improved price target of $181.10. The broker made the move on valuation grounds after a strong run.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Thursday has been the ResMed Inc. (ASX: RMD) share price with a 3% gain. This is despite there being no news out of the sleep treatment company. The worst performer is the Omni Bridgeway Ltd (ASX: OBL) share price with a 6% decline. This follows an update on the Brisbane Floods class action.

The post ASX 200 (ASX:XJO) midday update: Tech shares fall, Fortescue upgraded appeared first on The Motley Fool Australia.

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• Here are the 3 hottest ASX shares to buy right now: expert

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 AFTERPAY T FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Macquarie Group Limited. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX travel shares were among the first victims of the COVID-19 pandemic, and may be some of the last to recover.

Reporting in the latest earnings season laid bare the economic impacts of the pandemic on the travel sector. Many major players reported substantial losses, as border closures and lockdowns wreaked havoc on the industry.

But hope is on the horizon as the vaccine rollout gathers pace and the border openings become more likely. 

Australia closed international borders in March 2020 in a bid to control the pandemic’s spread. The states rapidly followed, closing borders on each other.

The result drained the travel industry of both international and domestic customers. Since then, intermittent state border openings have seen strong demand for interstate travel, with Sydney Airport Holdings Ltd (ASX: SYD) reporting strong rebounds in passenger numbers when borders were open during FY21. 

A full recovery appears some way off yet for the travel industry, although many are predicting pent-up demand will see a boom in business when borders open.

In the meantime, key ASX travel shares such as Qantas Airways Limited (ASX: QAN) and Flight Centre Travel Group Ltd (ASX: FLT) have restructured operations to adjust for the change in demand. 

How have ASX travel shares performed against the market?

Travel share prices have been volatile this year but buoyed by investor hopes for reopening.

The Qantas share price is up 9.1% year-to-date, while shares in Flight Centre have lifted more than 13%. The Webjet Limited (ASX: WEB) share price has also gained ground since January, up 17.5%.

In comparison, the All Ordinaries Index (ASX: XAO) is 12.5% higher over the same period.

The Sydney Airport share price was largely flat in the first half of the year, but received a boost in July in the form of a takeover bid.

Who are the winners this earnings season? 

It is difficult to declare any ASX travel share a winner this reporting season — all have seen business significantly disrupted by the ongoing pandemic.

Sydney Airport reported a loss before income tax expense of $97.4 million for the half year to 30 June. The airport’s half year results revealed a 36.4% decline in passenger numbers compared to the prior corresponding period. International passengers were down 91% with domestic passengers down 3.1%. 

The Sydney Airport share price, however, has been boosted by the takeover bid. Sydney Airport rejected a bid priced at $8.25 cash per stapled security in July. The consortium of bidders returned to the table last month with an offer of $8.45 cash per stapled security.

The board concluded the bid was not in the best interests of shareholders, but the Sydney Airport share price remains elevated, trading at around $7.70 compared to closer to $6 before the initial takeover bid was made. 

Webjet released its results for the nine months to March 2021 in May, moving to a new March financial year end.

The travel company revealed a loss of $156 million for the period, but has since confirmed it will be cash flow positive for 1H22 (excluding investing and debt repayments). Webjet says it stands to benefit from consumers shifting to buy travel online.

Initiatives are underway to expand market share and reduce costs by at least 20% once the company gets back to scale. Strong demand for travel is reported, with business rebounding in markets that have reopened, such as the United States. 

And the losers? 

Qantas reported the largest loss of the ASX travel shares this earnings season, with an underlying loss before tax of $1.83 billion.

The airline suffered a $12 billion revenue impact from the COVID-19 crisis in FY21, but says it is in a better position to manage its recovery compared to 12 months ago. Net debt was reduced to $5.9 billion in the second half, with total liquidity of $3.8 billion providing a buffer against uncertainty.

The airline said periods of open domestic borders saw Qantas and Jetstar generate significant cash which helped reduce debt from $6.4 billion in February 2021. A record performance by the freight division assisted in offsetting the cost of the idling international operations. 

Qantas has been undertaking a sizing and restructuring program which is largely completed. The program will give the company the ability to better manage costs in the face of sudden border closures, providing cost benefits of $650 million in FY21. Qantas is targeting at least $1 billion in permanent annual savings from FY23 onwards.

Flight Centre likewise undertook a drastic cost reduction program in response to COVID-19, recording an underlying loss of $507 million for FY21. 

Flight Centre reports that its priorities have evolved from emergency cost cutting at the beginning of the crisis to maintaining those significantly reduced expenses. The travel company says recovery is gaining momentum, particularly in the United States.

Strong and immediate rebounds have been noted in markets where travel restrictions have been lifted, although ongoing lockdowns are impacting the Australian and New Zealand markets.

The company is targeting a return to monthly corporate and leisure profitability during FY22, with corporate volumes tracking at 40% of pre-COVID volumes in FY21. 

What is the outlook for ASX travel shares?

Qantas says that recent COVID-19 outbreaks and border closures are expected to have an impact of around $1.4 billion on the company’s underlying EBITDA in the first half of FY22. The airline is anticipating a recovery in the travel market as vaccination targets are reached later this year.

A surge in domestic travel demand is anticipated followed by a gradual return of international travel. The airline is currently estimating domestic capacity will rise to 110% in 2H22, with international border closures and quarantine restrictions eased from December. 

Flight Centre declined to provide FY22 guidance, citing the lack of clarity around government timeframes for border re-openings and removal of other travel restrictions. Nonetheless, the company says its leaner and more productive structure means it is well placed to benefit as the travel industry globally starts to take off again.

Webjet has flagged strong pent-up demand for travel, particularly leisure travel, but says the environment remains inherently uncertain. 

The post How have ASX travel shares performed during the August 2021 earnings season? appeared first on The Motley Fool Australia.

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Motley Fool contributor Katherine O’Brien 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 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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