Tag: Motley Fool

It was a flat open for the Chalice Mining Ltd (ASX: CHN) share price on Tuesday, up just 0.42% to $7.19 at the morning bell.

However, buying activity has picked up momentum, with shares in the exploration company currently trading 6.77% higher at $7.65.

What’s been driving the Chalice Mining share price?

Another high grade discovery

On Monday, Chalice announced its 12th high-grade zone from step-out drilling discovery at its Julimar Nickel-Copper-Platinum Group Element (PGE) project.

Chalice has been undergoing an extensive drilling program at Julimar since March 2020, where significant headway has been made in growing its PGE resource.

The company believes a maiden mineral resource estimate is on track for completion in Q4 2021.

The Chalice Mining share price opened 3.16% higher to $7.52 on the morning of the announcement but struggled to hold onto gains, closing 1.51% lower at $7.16.

Julimar – “a remarkable new discovery”

Chalice released its Diggers and Dealers Mining Forum 2021 presentation on Tuesday, bringing to our attention the “globally significant discovery” that is Julimar.

The presentation describes the project with multiple prospects including high grade nickel, copper, platinum, cobalt and gold.

Chalice believes its significant discoveries can position the company as an emerging “world-class, strategic deposit of critical, ‘green metals’ in a world-class jurisdiction” that is “highly leveraged to battery and hydrogen technology adoption”.

Many ASX shares in the resources sector have benefited from the tailwinds behind the renewable sector including major economies making firm commitments to target net-zero emissions and the rise in electric vehicles.

This has witnessed triple digit returns for ASX 200 lithium heavyweights including Pilbara Minerals Ltd (ASX: PLS) and Galaxy Resources Limited (ASX: GXY).

Large mining giants BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) have also opted for different paths to supply materials such as lithium, green hydrogen and potash to address the issue of climate change and decarbonisation.

The post Why the Chalice Mining (ASX:CHN) share price is surging 6% on Tuesday appeared first on The Motley Fool Australia.

More reading

• Here’s why the Chalice (ASX:CHN) share price is gaining today
• The Venture Minerals (ASX:VMS) share price has slipped today. Here’s why
• The best and worst ASX gold shares to own so far in 2021
• The Chalice Mining (ASX:CHN) share price is falling 8% today
• The 5 best ASX shares of FY21 revealed

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 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.

from The Motley Fool Australia https://ift.tt/3CdeqE8

The Crown Resorts Ltd (ASX: CWN) share price is gaining on the back of news Crown’s chair Helen Coonan plans to step down by the end of the month.

Counsel for Crown Michael Borsky broke the news to the Royal Commission into Crown’s suitability to hold to Melbourne’s casino licence.

It followed an announcement from Crown that the CEO of its Melbourne casino will be leaving his role on 20 August.

Right now, the Crown share price is $9.08, 1.68% higher than its previous close.

Let’s take a closer look at the latest news of Crown.

Coonan on the way out

The final day of the Victorian Royal Commission has been a big one for the Crown share price.

Crown’s closing submissions included news Crown’s chair plans to step down from her role.

Borsky stated Coonan plans to leave the company as soon as a suitable replacement is found. He said:

[Coonan] will announce her retirement as interim executive chair on all Crown boards as soon as Crown has appointed a new leader… Crown’s expectation is that a new leader will be appointed by the 31^st of August this year.

He also said that Crown doesn’t agree with counsel assisting the commission Adrian Finanzio’s views of Coonan’s suitability for her role. Borsky said:

Crown accepts that, as current leaders of Crown… their conduct has some relevance to your assessment of Crown’s suitability… No conduct by Ms Coonan has been identified by counsel assisting that reflects adversely on her character, honesty, or integrity.

Last month, Finanzio told the commission Coonan wasn’t the right person to conduct the reforms needed for Crown to be deemed suitable to run the Melbourne casino. The Crown share price fell 2.6% following Finanzio’s comments. He said:

Ms Coonan… cannot be the critical face of the change required at Crownif it is to remain the licensee… If Crown is to retain its licence, it would be open to the commissioner to make a finding that Ms Coonan is not a suitable associate of Crown Melbourne.

Crown share price snapshot

Today’s gains haven’t been enough to get the Crown share price back in the green.

Right now, the Crown share price is 5.45% lower than it was at the start of 2021. However, it is 4.4% higher than it was this time last year.

The post Crown (ASX:CWN) share price gains as Coonan plans to step down appeared first on The Motley Fool Australia.

More reading

• Crown (ASX:CWN) share price up despite Crown Melbourne CEO exiting
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• These were the worst performing ASX 200 shares in July
• These were the worst performing ASX 200 shares last week
• Crown (ASX:CWN) share price slumps amid accusations against chair

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.

from The Motley Fool Australia https://ift.tt/3C9ia9I

Recently, I’ve been looking at shares that Goldman Sachs has tipped to surprise during earnings season. You can read about the first two shares here.

Continuing with that theme, listed below are two more ASX 200 shares the broker believes could positively surprise this month. Here’s what the broker is expecting:

Healius Ltd (ASX: HLS)

According to the note, Goldman Sachs believes this healthcare company could be a stronger than expected performer in FY 2021. It notes that, in hindsight, the consensus view that Australian COVID testing volumes would steadily fall through FY 2021 was far too conservative. In fact, testing volumes remained steady through most of the period despite little virus, before spiking in June.

Goldman expects this to underpin above consensus earnings growth in FY 2021. It commented: “We estimate an incremental EBITDA contribution of c.60% per test and, whilst the market does not want to over-capitalize these tailwinds, it is increasingly clear that Covid-testing will remain a meaningful component of pathology test mix for years to come and, in the near term, likely drives earnings above current consensus expectations (we forecast +5%/+6% above FY21/FY22E Visible Alpha EBITDA respectively).”

The broker also notes that Healius has balance sheet optionality following the sale of Medical Centres, its corporate restructure, and strong earnings from COVID testing. It suspects that there could be further updates on buybacks or M&A activity.

Goldman has a buy rating and $5.00 price target on Healius shares.

Super Retail Group Ltd (ASX: SUL)

Another company that Goldman Sachs believes could outperform expectations in FY 2021 is Super Retail. It notes that the retail group behind the BCF, Macpac, Rebel, and SuperCheap Auto brands is a major beneficiary of the international travel restrictions.

This is particularly the case for its SuperCheap Auto and outdoor businesses, which the broker believes will deliver above consensus earnings in FY 2021. This is expected to be driven by strong trading momentum and margin expansion. Pleasingly, its analysts expect this momentum to continue and underpin the strengthening of the company’s balance sheet.

Goldman commented: “Amongst the key discretionary categories, we view Super Retail’s trading momentum to persist for longer given its favorable category exposure towards domestic reopening, although the current lockdowns are expected to be a temporary setback to the same. Importantly, over the longer term, we view SUL’s balance sheet strength as an opportunity to permanently pivot away from higher leverage that the group has tended to maintain in the past, invest in efficiency improvement projects and omni-channel capabilities or offer capital return to the shareholders.”

The broker currently has a buy rating and $15.00 price target on Super Retail’s shares.

The post 2 more ASX 200 shares tipped to positively surprise during reporting season appeared first on The Motley Fool Australia.

More reading

• Top ASX shares to buy in August 2021
• These ASX 200 shares have just hit 52-week highs
• 2 ASX dividend shares rated as top buys by brokers
• 2 ASX healthcare shares that analysts think could beat the market
• 2 buy-rated ASX dividend shares for income investors

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

from The Motley Fool Australia https://ift.tt/3fpwJw2

The Australian dollar jumped as the Reserve Bank of Australia (RBA) stuck to its bond taper plan despite the ongoing COVID-19 lockdowns.

The RBA held interest rates at a record low 0.1% today and reaffirmed it will cut purchases of government bonds to $4 billion a week in early September from the current rate of $5 billion.

The Australian dollar to US74 cents from US73.7 cents on the news. This is because the market was expecting our central bankers to stick to the bigger bond buying program for longer due to the economic impact of the lockdowns.

QE taper lifts the Aussie but not ASX shares

Bond buying, or Quantitative Easing (QE), by the central bank stimulates our economy but puts pressure on the Australian dollar. The curtailing of the program from next month is supporting the Aussie this afternoon.

By the same token, the S&P/ASX 200 Index (Index:^AXJO) lost ground after the RBA issued its decision. ASX shares and other risk assets thrive on high levels of monetary stimulus.

But the RBA’s confidence should help calm investor nerves about weakening growth rates.

RBA interest rate decision unaffected by looming economic contraction

Queensland has joined our most populous state, New South Wales, in imposing harsh restrictions on movement due to rising cases of the more contagious delta-variant of the virus.

Australia’s economy will almost surely contract in the September quarter, but the RBA is unfazed.

This is despite the fact that our monetary gurus have upgraded their inflation expectations. It even went a step further to flag the risk that their jobs forecast is wrong.

Inflation ticking up

“In underlying terms, inflation is expected to be 1¾ per cent over 2022 and 2¼ per cent over 2023,” said RBA Governor Philip Lowe.

“One source of uncertainty is the behaviour of wages and prices at the low levels of forecast unemployment, including because it is some decades since Australia has sustained an unemployment rate around 4 per cent.”

It was only last month that the RBA’s central case was inflation to hit 2% in 2023. Still, the RBA thinks inflation won’t sustainably return to its target band of between 2% to 3% until 2024.

Inflation risk vs. growth risk

Inflation has been a bigger source of uncertainty than the COVID lockdowns. Global bond prices have fluctuated wildly as inflation fears played tug-of-war with growth concerns due to delta.

But the RBA is striking an optimistic tone. It pointed out that Australia’s economic recovery is stronger than expected – notwithstanding the rolling lockdowns.

“The experience to date has been that once virus outbreaks are contained, the economy bounces back quickly,” said Dr Lowe.

“Prior to the current virus outbreaks, the Australian economy had considerable momentum and it is still expected to grow strongly again next year.”

RBA taking glass-half-full view

The central bank believes Australia’s gross domestic product (GDP) will grow by a little over 4% in 2022 and 2.5% the year after.

The RBA also pointed to the fast-rising residential property market. This is probably another reason why it wanted to taper its bond program in September.

Its optimistic view on the economy is predicated on Australia hitting its vaccine target. This target of around 80% is essential to permanently end the rolling lockdowns that everyone has grown tired of.

Let’s hope the RBA is right!

The post What you need to know about the RBA’s interest rate decision today appeared first on The Motley Fool Australia.

More reading

• Why ASX lithium shares are beating the iron ore majors – again
• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• ASX 200 shares to shift earnings growth up a gear in FY22 – Expert
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 rises, Afterpay soars, Zip jumps

Motley Fool contributor Brendon Lau 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.

from The Motley Fool Australia https://ift.tt/3ludd5x

The Aeris Resources Ltd (ASX: AIS) share price is rocketing higher today, up by 16.67% in afternoon trade.

At the current 24.5 cents, Aeris Resources shares are now trading at 8-year highs. In fact, you’d need to dig back to April 2013 to find the ASX resource explorer trading above today’s levels.

Below we take a look at the series of announcements made today, which appear to be driving investor interest.

What’s driving the Aeris Resources share price?

Aeris Resources shares are soaring after emerging from a brief pause in trading pending a raft of market announcements.

Among those announcements, the company reported on the life-of-mine extension projects at its 100% owned Tritton copper operations in New South Wales.

The projects are slated to kick off in the 2022 financial year. Aeris will spend $50 million over the year to develop 3 new production sources.

Additonally, the company announced a $15 million exploration program for Tritton. It noted “there’s more copper to be found” at the site.

Commenting on the plan, Aeris’ executive chairman Andre Labuschagne said:

Apart from the Tritton and Murrawombie underground mines, we have an extensive pipeline of advanced projects, which we are now able to invest in to extend the mine life.

FY22 will see us develop three new production sources and undertake in-fill resource drilling programs on a further three projects, including the high grade Constellation and Kurrajong deposits.

The Aeris Resources share price has also received a lift as copper prices have been trending higher over the past year.

“The fundamentals for copper into the coming years look very positive as the decarbonisation of the world accelerates,” Labuschagne said. He added that Aeris is in a good position to “leverage value from the looming copper supply deficit”.

In a separate announcement, Aeris updated the market on exploration activities at the Constellation deposit, located within the Tritton tenement.

Commenting on the reverse circulation (RC) drilling results to date, Labuschagne said:

The supergene mineralisation, in particular, is showing very high copper grades. The relative proximity of this mineralisation to the surface means it can be accessed early on in any future development of the Constellation deposit.

Increased gold estimates

The company also reported an increase in its ore reserves and mineral resources at its 100% owned Cracow gold operations in Queensland. This news could also be impacting the Aeris Resources share price. The company said the increase was due to multiple life extension projects carried out at the site.

It reported its 2-year gold production guidance as 67,000–71,000 ounces in FY22 and 60,000-65,000 ounces in FY23. Aeris upgraded its exploration budget over its first 2 years of ownership of the mine to $19 million, up from $13 million.

According to Labuschagne:

As a result of the extensive geological re-interpretation work undertaken in FY21, we remain convinced that the Cracow tenement package remains highly prospective for discovery of more gold.

Aeris Resources share price snapshot

Over the past 12 months Aeris Resources shares have soared a stunning 512%. This compares to a gain of 28% posted by the All Ordinaries Index (ASX: XAO).

Year-to-date the Aeris Resources share price has continued to outperform, up 120% in 2021.

The post Why the Aeris Resources (ASX:AIS) share price is soaring 16% to 8-year highs appeared first on The Motley Fool Australia.

More reading

• Why the Aeris (ASX:AIS) share price is nearing its multi-year high today
• Aeris Resources (ASX:AIS) share price slides on exploration update
• Why the Aeris (ASX:AIS) share price is jumping 10%

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. Bernd Struben 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.

from The Motley Fool Australia https://ift.tt/3jl9vIZ

The healthcare sector could be a good place to look for long term investment options. This is due to a number of positive tailwinds that are supportive of growth such as ageing populations and increased cases of chronic disease.

But which ASX 200 healthcare shares should you consider? Here are two that are rated highly:

CSL Limited (ASX: CSL)

The first ASX 200 healthcare share to look at is CSL. It is one of the world’s leading biotherapeutics companies.

It has been an exceptionally positive performer over the last decade due to a number of factors. This includes successful acquisitions, its high level of investment in research and development (R&D) activities, its growing plasma collection network, and increasing demand for its leading therapies and vaccines.

In respect to its therapies, CSL’s portfolio includes lucrative and life-saving products such as Privigen, Hizentra, Idelvion, and Afstyla. And thanks to its almost billion-dollar (and growing) annual investment in R&D, this portfolio will continue to expand in the future.

While the pandemic has hit plasma collections and could lead to elevated costs in the near term, this headwind is only expected to be temporary. In light of this, it could be worth being patient with its shares. UBS currently has a buy rating and $3.30 price target on the company’s shares.

Sonic Healthcare Limited (ASX: SHL)

A second ASX 200 healthcare share to look at is Sonic Healthcare. It is a leading medical diagnostics company with operations across the world.

Sonic certainly has had the wind in its sails over the last 12 months. This led to the company reporting a 33% increase in half year revenue to $4.4 billion and a 166% jump in first half net profit to $678 million in February. Pleasingly, an equally strong second half is expected.

This is being driven largely by strong demand for COVID-19 testing services but also positive performances across the rest of the business.

One broker that is a fan of the company is Credit Suisse. Last month it retained its outperform rating and lifted its price target to $43.50.

It expects demand for its testing services to increase as more transmissible COVID variants spread widely and cause an uptick in infections. It expects this to support strong earnings, allowing Sonic to pay down debt and support potential acquisitions.

The post 2 excellent ASX 200 healthcare shares named as buys appeared first on The Motley Fool Australia.

More reading

• Is it a good time now to buy CSL (ASX:CSL) shares?
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• 2 buy-rated ASX 200 dividend shares with attractive yields
• Own CSL (ASX:CSL) shares? Here’s what to look for this reporting season
• 2 ASX 200 shares that keep growing their dividends

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

from The Motley Fool Australia https://ift.tt/2VlG15f

The Galileo Mining Ltd (ASX: GAL) share price is shooting to a 5-month high during Tuesday trade.

This follows the resources company’s announcement that it has begun a drilling campaign at one of its prospects.

At the time of writing, Galileo shares are up 12.54% to 33.2 cents. The last time the company’s share price reached this level was back in early March 2021.

Galileo commences exploration activities

Investors are snapping up Galileo shares on the news the company has started deep drilling operations.

According to its announcement, Galileo advised that reverse circulation (RC) drilling is underway at its Delta Blues prospect. The site is located within the Fraser Range Nickle Belt in southern Western Australia.

Galileo stated both DB1 and DB2 prospects represent convincing targets with electromagnetic (EM) findings supported by positive results. This includes magnetic, gravity, and aircore drilling data.

The company plans to drill 5 holes for a depth of 1,000 metres to test the top of EM conductors at DB1 and DB2.

Follow-up diamond drilling is expected later in the year, testing the deeper parts of the EM conductors. However, it’s worth noting this is subject to timings and rig availability.

Diamond drilling is a more efficient way for precise sampling and analysis, whereas RC drilling is used for extracting bulk samples. When it comes to speed, RC drilling is the faster method; however, diamond drilling is employed when seeking accurate results.

Galileo managing director Brad Underwood touched on the company’s upcoming drilling program, saying:

We are very excited to have started the first deep drilling campaign at our Delta Blues prospect. The quality of the modelled EM conductors combined with the magnetic and gravity interpretations provide a strong case for potential sulphide mineralisation.

RC drilling will deliver a good test of the near surface sections of the DB1 and DB2 targets. The present drilling campaign is expected to take two weeks to complete, and we look forward to updating the market as results become available.

Galileo share price summary

The past couple of months have seen Galileo shares see-saw around the 30-cent mark. The company’s share price reached a 52-week high of 45 cents during early 2021. Year-to-date, Galileo shares are up an impressive 46%, but down 5% on this time last year.

Galileo has a market capitalisation of roughly $47.2 million, with approximately 143 million shares on its registry.

The post Why the Galileo Mining (ASX:GAL) share price is racing 12% higher today appeared first on The Motley Fool Australia.

More reading

• Why is everyone talking about Amazon stock?
• Magnis (ASX:MNS) share price soars 16% on funding success
• Why Bubs, Mayne Pharma, Paradigm, & PointsBet shares are tumbling lower
• Appen (ASX:APX) share price jumps 5% following positive broker update
• Top broker gives its verdict on the Zip (ASX:Z1P) share price

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.

from The Motley Fool Australia https://ift.tt/3j9BOcY

The Magnis Energy Technologies Ltd (ASX: MNS) share price stormed more than 16% higher today after the company provided an update on its funding status.

However, the shares have partially retreated this afternoon. At the time of writing they are up 5.56% to 28.5 cents.

Let’s take a look at what the company announced and why investors are flocking to buy shares in Magnis.

What did Magnis announce?

Earlier today Magnis informed shareholders the company has secured a total of $20 million in funding.

The lithium-ion battery start-up was able to raise funds from two United States-based institutions, Lind Partners and SBC Global Investment Fund.

Magnis said US$13 million (approximately $17.6 million) has been invested into the company’s subsidiary iM3NY.

According to the company, the immediate cash injection will assist iM3NY with further expansion plans and its potential listing in the US on either the Nasdaq or NYSE.

A listing is expected be completed in late 2021. Magnis will provide shareholders with details in due course.

In addition, the company also noted remaining funds will be used for general working capital. These funds will be directed to advancing early works at its Nachu graphite project in Tanzania and its Townsville battery plant.

After announcing its funding success, securities in Magnis were reinstated onto the ASX.

Magnis trading halt

At the request of the company, Magnis shares were placed in a trading halt last Tuesday pending a capital raise.

After the company was unable to finalise the outcome of its proposed capital raise, the Magnis share price entered into a voluntary suspension.

As noted earlier, Magnis shares were reinstated following today’s funding announcement.

Snapshot of the Magnis share price

Magnis is an Australia-based producer of lithium-ion battery cells. The company has a partnership interest in Charge CCCV, a US intellectual property company with patented discoveries in lithium-ion batteries.

In addition, Magnis has ownership interests in two lithium-ion gigafactories in New York and Townsville. It also owns the Nachu graphite project in south-east Tanzania.

Following today’s announcement, the Magnis share price bolted more than 16%, hitting an intra-day high of 31.5 cents. It is up 50% year to date, and 42% in the last 12 months.

The post Magnis (ASX:MNS) share price soars 16% on funding success appeared first on The Motley Fool Australia.

More reading

• The Magnis (ASX:MNS) share price freeze continues, quarterly update released
• Magnis Energy (ASX:MNS) share price remains in trading halt
• Here’s why the Magnis (ASX:MNS) share price is halted

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. 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.

from The Motley Fool Australia https://ift.tt/3fns6CI

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.

Amazon‘s (NASDAQ: AMZN) stock price slid nearly 8% on July 30 after the e-commerce and cloud giant posted its second-quarter numbers. Its revenue growth fell short of analysts’ expectations and it provided lower-than-expected revenue guidance for the third quarter.

Amazon’s decline weighed down other e-commerce and cloud stocks, since it’s considered a bellwether of both markets. Many Wall Street analysts also hastily lowered their price targets on the stock, citing tough upcoming comparisons in a post-pandemic market.

Let’s examine the core conversations around Amazon, whether the bulls or bears have the upper hand — and if it’s still a worthy investment.

Amazon’s big revenue miss

Amazon’s revenue rose 27% year over year to $113.1 billion during the quarter, but it missed Wall Street’s average forecast by nearly $2 billion. It expects its revenue to grow just 10%-16% year-over-year in the third quarter, compared to analysts’ expectations for 24% growth.

Amazon attributed its slowdown to difficult comparisons against the pandemic-driven acceleration in online shopping a year ago. During a conference call, Amazon CFO Brian Olsavsky noted that since last May, its revenue growth “jumped to the 35% to 45% range and remained at that level through Q1 of this year, when we had 41% growth”.

But, starting in the second quarter, Amazon “began to comp this high sales period from last year, and the year-over-year revenue growth rate has narrowed”.

Olsavsky expects the slowdown to continue as “vaccines become more readily available in many countries and people are getting out of their homes”. He also noted that Amazon’s average spending per Prime member had “moderated compared to spending seen during the peak of the pandemic”.x

Focus on its two-year CAGR

Amazon’s acceleration during the pandemic and its subsequent slowdown makes it difficult to gauge its near-term growth. So instead of focusing on its tough year-over-year comparisons over the next few quarters, Olsavsky advised investors to focus on its two-year CAGR instead.

Olsavsky noted that prior to the pandemic, Amazon was growing its revenue at a two-year CAGR of 21%. But after smoothing out the pandemic-related volatility, Olsavsky still expects Amazon to grow at a two-year CAGR of 25%-30% — which indicates its core businesses are still strong.

But mind the shifting growth engines

Amazon’s long-term growth seems stable, but its core growth engines are shifting. Within the e-commerce segment, its third-party merchants accounted for 56% of its total paid units during the second quarter — compared to 53% a year ago — and continue to generate significantly stronger sales growth than its first-party marketplace.

That shift is worrisome because Amazon has already faced quality control issues in its third-party marketplace and ongoing complaints about counterfeit products from overseas merchants.

Amazon’s revenue growth during the second quarter would have even been slower without the help of Amazon Web Services (AWS), the world’s largest cloud infrastructure platform, and its advertising business.

AWS’s revenue rose 37% year over year to $14.8 billion during the quarter, or 13% of Amazon’s top line, and its operating profits jumped 25% to $4.2 billion — that’s 54% of Amazon’s total operating income.

Revenue from its “other” segment — which primarily consists of its advertising revenue — soared 87% year-over-year to $7.9 billion, or 7% of Amazon’s top line.

If we exclude AWS and the “other” segment from both periods, Amazon’s revenue would have only risen 22% year-over-year during the second quarter. If we go a step further and also exclude all its third-party seller services, its revenue would have only increased 17% year-over-year.

Tough tasks ahead for a new CEO

Andy Jassy took over as Amazon’s new CEO in early July, but he hasn’t presented a clear roadmap for the company’s future yet. Jassy previously led AWS, Amazon’s core profit engine — which subsidises the growth of its lower-margin retail business. The company is clearly in good hands.

Yet Amazon’s retail business still faces significant challenges. Superstores like Walmart and Target have become better at matching Amazon’s prices and delivery options. Its dependence on third-party sellers remains a double-edged sword and it faces pressure to raise its wages and improve its warehouse conditions.

Shopify remains a major threat as it convinces independent merchants to set up their own online stores while niche marketplaces like Etsy are pulling away shoppers who want more unique gifts.

Amazon also needs to aggressively expand overseas to generate fresh growth and reduce its dependence on the saturated US market — but it’s been struggling to pull shoppers away from entrenched regional leaders like MercadoLibre in Latin America and Sea Limited‘s Shopee in southeast Asia.

Jassy might need to address these challenges over the next few quarters to convince investors that Amazon isn’t losing its edge in the evolving e-commerce market.

The key takeaways

I’ve owned Amazon’s stock for years, and it remains my portfolio’s top holding. I’m a bit disappointed in the company’s second-quarter numbers and guidance, but the slowdown wasn’t surprising at all. Amazon’s long-term CAGR still looks health and the stock remains reasonably valued at 46 times forward earnings — so I’m still willing to hold my shares, maintain a long-term view, and ride out the near-term volatility.

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

The post Why is everyone talking about Amazon stock? appeared first on The Motley Fool Australia.

More reading

• 3 things you missed in Amazon’s earnings report
• Here are 4 sure-fire ways to catch the next 10-bagger
• 3 Warren Buffett stocks to buy if the market crashes
• ASX 200 Weekly Wrap: ASX grinds to a halt following new all-time high
• Amazon (NASDAQ:AMZN) share price drops 7% despite growth

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Leo Sun owns shares of Amazon, MercadoLibre, and Sea Limited. The Motley Fool owns shares of and recommends Amazon, Etsy, MercadoLibre, Sea Limited, and Shopify. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $1,140 calls on Shopify, short January 2022 $1,940 calls on Amazon, and short January 2023 $1,160 calls on Shopify. The Motley Fool has a disclosure policy.

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

from The Motley Fool Australia https://ift.tt/2VsBU7k

The S&P/ASX 200 Index (ASX: XJO) is out of form on Tuesday and on course to record a decline. At the time of writing, the benchmark index is down 0.35% to 7,466.6 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are tumbling lower:

Bubs Australia Ltd (ASX: BUB)

The Bubs share price is down 4.5% to 41 cents. Earlier this week analysts at Citi responded to this struggling infant formula company’s disappointing quarterly update by retaining its sell rating and cutting its price target down to 33 cents. Citi isn’t expecting its performance to improve greatly in the near term, especially while international borders remain closed.

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma share price has fallen 4.5% to 32 cents. This morning the pharmaceutical company announced that it has been hit with an investor class action. According to the release, the class action alleges the company undertook misleading or deceptive conduct and was in breach of continuous disclosure obligations. This relates to alleged anti-competitive conduct in the United States.

Paradigm Biopharmaceuticals Ltd (ASX: PAR)

The Paradigm share price has sunk 10% to $2.00. This follows the release of an update on its Investigational New Drug (IND) application submitted to the US Food and Drug Administration (FDA) in March. The release explains that the FDA has one remaining question relating to its application. And while management is confident it can resolve this question, the market seems less convinced.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price has tumbled 12% to $9.95. The catalyst for this was the completion of the sports betting company’s institutional placement and entitlement offer. PointsBet has raised $81 million at $8.00 per share and a further $215.1 million at $10.00 per share. It will now push ahead with its retail entitlement offer. These funds will be used to support North American marketing and client acquisition, technology and product development, and US market access and government licensing fees.

The post Why Bubs, Mayne Pharma, Paradigm, & PointsBet shares are tumbling lower appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to sell today
• What’s driving the PointsBet (ASX:PBH) share price sharply lower?
• Mayne Pharma (ASX:MYX) share price drops on class action
• ASX 200 midday update: Afterpay jumps again, Qantas stands down crew
• Why the Paradigm (ASX:PAR) share price is sinking 14% on Tuesday

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 Pointsbet Holdings Ltd. The Motley Fool Australia has recommended BUBS AUST FPO and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3A3St8J