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The Michael Hill International Ltd (ASX: MHJ) share price is gaining today after the company released a trading update for the fourth quarter of the 2021 financial year.

Right now, shares in Michael Hill are going for 87 cents apiece – 6.75% higher than their previous closing price.

Within its update, the jewellery retailer reported strong same-store sales growth and record digital sales.

Let’s take a closer look at the news driving the Michael Hill share price higher.

Michael Hill’s trading update

The Michael Hill share price is soaring on the back of news its same-store sales were up over the quarter just been, despite many of its doors being temporarily closed due to lockdowns.

Over the quarter, Michael Hill’s same-store sales were 7.5% higher than the previous comparable period, bringing in $54.6 million.

The jewellery retailer’s full financial year same-store sales now total $474 million – 8.5% higher than in the previous financial year.

Additionally, its all-store sales were up 116.3% over the quarter, and 13.5% higher than the previous financial year’s.

Michael Hill also reported record online sales over the financial year just been. Its online store processed more than $30 million worth of sales over the 12 months ended 30 June 2021.

That’s particularly fortunate as 102 of Michael Hill’s 150 Australian stores faced temporary closures due to COVID-19 lockdowns over the fourth quarter. In total, the company lost 559 trading days.

Its Canadian stores had a harder time yet. Of the 86 Michael Hill stores in Canada, 40 were closed for most of the fourth quarter and the rest faced restrictions. Michael Hill lost 3,323 trading days in the country.

Michael Hill also reported it maintained its strong margin over the quarter just been, and its earnings before interest and tax (EBIT) is in line with or above analysts’ expectations.

The company expects to end the year with a cash position of around $70 million.

Commentary from management

Michael Hill’s CEO and managing director Daniel Bracken said:

(Michael Hill has reported) sales growth in all markets, increased margins, and an outstanding performance from our bricks and mortar stores delivering almost 20% same-store sales growth for the quarter. Setting aside the global store network closure in 2020, Michael Hill has now delivered eight consecutive quarters of positive comp sales growth, together with sustained margin expansion.

This performance provides further evidence that our strategic transformation agenda is on track and delivering.

Michael Hill share price snapshot

Including today’s gains, the Michael Hill share price has increased by 25% year to date. It has also gained 165% since this time last year.

The company has a market capitalisation of around $316 million, with approximately 387 million shares outstanding.

The post Here’s why the Michael Hill (ASX:MHJ) share price is soaring 7% appeared first on The Motley Fool Australia.

More reading

• Why EOS, Integrated Research, Michael Hill, & Whitehaven Coal are charging higher

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 AMP Ltd (ASX: AMP) share price has slipped into the red this morning.

The move comes after the Australian Securities and Investment Commission (ASIC) formally ended its three-year investigation into AMP today.

Let’s take a closer look at how it unfolded this morning.

ASIC drops its case against AMP

AMP came under fire from ASIC due to its “fees for no service” conduct that came through the Royal Commission into banking in 2017 – 2019.

It was shown to be charging fees on life insurance policies for deceased customers.

Obviously, these customers weren’t eligible for life insurance in the first place.

Royal Commissioner Kenneth Hayne QC recommended AMP receive criminal proceedings as a result of this conduct.

However, ASIC decided there will be no criminal charges after ending its investigation into AMP today.

In a statement, ASIC stated:

The CDPP has now determined, on the basis of the available evidence and weighing the relevant public interest factors, that no charges should be brought for that conduct.

AMP also responded, claiming it “welcomes the confirmation from ASIC that it will take no action” in relation to any of the allegations.

Speaking on the issue, AMP Group general counsel David Cullen said:

AMP acknowledges the deficiencies in its historic systems and processes within the Advice business to
monitor ongoing service fees in relation to Buyers of Last Resort…We have apologised to all affected clients
and confirm that remediation was also completed in full in 2018.

Despite the outcome, investors have punished AMP shares this morning, pushing the price 1.17% into the red at the time of writing.

AMP share price snapshot

AMP shares have slipped 30% into the red this year to date, extending the last 12 month’s loss of ~38%.

Both of these returns have lagged the S&P / ASX 200 Index (ASX: XJO)’s return of ~22% over the last year.

At the time of writing, AMP has a market capitalisation of $3.6 billion.

The post AMP (ASX:AMP) share price slides as ASIC ends criminal proceedings appeared first on The Motley Fool Australia.

More reading

• Here’s why the AMP (ASX:AMP) share price is down 10% in the last month
• AMP (ASX:AMP) share price struggles amid management fee cuts
• It hasn’t been a great 2021 so far for the AMP (ASX:AMP) share price
• ASX 200 rises, Macquarie up, Rural Funds launches capital raising
• ASX 200 midday update: Zip rockets, AMP asset sale

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 Webjet Limited (ASX: WEB) share price is pushing higher on Friday.

In afternoon trade, the online travel agent’s shares are up 1% to $4.88.

Why is the Webjet share price pushing higher?

The catalyst for the rise in the Webjet share price today appears to be a broker note out of Goldman Sachs.

According to the note, the broker believes investors should stick with Webjet despite the difficult trading conditions it is facing right now. Goldman Sachs has held firm with its buy rating and $6.40 price target. This implies potential upside of 31% over the next 12 months.

Its analysts aren’t as positive on rival Flight Centre Travel Group Ltd (ASX: FLT), though. They have retained their neutral rating and cut their price target by 8% to $18.40.

Goldman explained: “We revise our earnings forecasts for WEB and FLT to reflect the slower pace of Australian Domestic and International travel recovery, impacting our forecasts for the Webjet OTA business and FLT’s ANZ segment.”

“We revise our EBITDA forecasts by -24% and -0.1% respectively over FY22/23 for WEB. Our rounded 12m target price remains unchanged at A$6.40. Our earnings revisions are more significant for FLT at -29.4% and -18.6% respectively for FLT over FY22/23. Our revised 12m target price on FLT is at A$18.40, from A$20.00,” it added.

Why is this a buying opportunity?

Goldman Sachs believes the recent underperformance in the Webjet share price is a buying opportunity for patient investors. This is due to its belief that the company is well-placed for long term growth from the shift to online booking and its WebBeds business.

It explained: “While we note that the share prices have remained subdued over the past few months likely driven by negative international travel newsflow in Australia, we view this as a buying opportunity for WEB.”

“We expect WEB to be a structural beneficiary of travel recovery due to its exposures to the OTA and Bedbanks businesses. However, we remain concerned by the impact of prolonged border closures for FLT which has a significant international leisure business based from ANZ. We reiterate our Buy rating on WEB and Neutral rating on FLT,” it concluded.

The post Broker says Webjet (ASX:WEB) share price weakness is a buying opportunity appeared first on The Motley Fool Australia.

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• Why Flight Centre, PolyNovo, Vulcan, & Zip shares are sinking
• Fresh blow to ASX 200 travel shares as Victoria lockdown looms large
• Why Afterpay, PointsBet, Webjet, & Zip shares are sinking
• Why the Webjet (ASX:WEB) share price has fallen 5% in a week
• These are the 10 most shorted shares on the ASX

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

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The Afterpay Ltd (ASX: APT) share price woke up to a rude awakening on Wednesday, tumbling 9.59% to $104.71.

Afterpay shares were quick to sell off after news emerged that Apple was looking to develop its own buy now pay later (BNPL) product.

On the same day, PayPal announced that it will not charge late payment fees for its BNPL services.

From mounting competition and increasing product differentiation, how did the Afterpay share price respond to such concerns in the past?

ASX-listed newcomers

Afterpay and Zip Co Ltd (ASX: Z1P) were the first movers when it comes to going public, listing in May 2016 and September 2015 respectively.

Fast forward to 2019, there seemed to be no shortage of new players seeking to raise capital to try and grab a piece of the BNPL market.

In January 2019, Splitit Ltd (ASX: SPT) made its ASX debut at a listing price of 20 cents.

The now third-largest ASX-listed BNPL player, Sezzle Inc (ASX: SZL) would list on July 2019 at an offer price of $1.22.

Before year end, Openpay Group Ltd (ASX: OPY) would also join the ASX at a listing price of $1.60.

2020 saw players including Laybuy Holdings Ltd (ASX: LBY) and Payright Ltd (ASX: PYR) complete successful listings.

Rather than focusing on how the Afterpay share price performed during this period, it might be worth noting that earlier initial public offerings (IPO) such as Splitit and Sezzle have been able to trade well above listing prices, up 165% and 595% respectively.

However, later comers Laybuy and Payright have all struggled to deliver shareholder value, plummeting 66% and 56% below listing prices.

Big banks want a slice of the pie

Australia’s largest banks haven’t wasted time to join in on the emerging BNPL space, either establishing partnerships with BNPL providers or launching their own products.

In September last year, Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd. (ASX: NAB) both launched new, interest-free credit cards in an attempt to disrupt the BNPL market.

Between 31 August and 9 September 2020, the Afterpay share price tumbled 20%, from $88 to lows of $70.

But by mid-October 2020, Afterpay shares had rallied back up to breakeven.

According to the Australian Financial Review, “Interest-free credit cards are nothing new and unlikely to be felt by Afterpay in the Australian market given its dominance”.

More recently, CBA is upping the ante, revealing an in-house BNPL offering called “StepPay”.

This news broke out in late May, right before a 40% surge from $92 to $130.50 between 1 and 24 June.

What’s next for the Afterpay share price?

This time around, it’s US$2.48 trillion giant Apple, which is eyeing a potential entry into the BNPL sector.

Commenting on the situation, Shaw and Partners portfolio manager, James Gerrish said that:

Arguably the biggest issue over the coming months for this volatile sector is sentiment, it’s definitely unlikely to be good following this news and a further 20-25% fall by local leader Afterpay (APT) for example wouldn’t be a surprise, especially considering it’s well within the usual swings of both the sector and stocks.

The post How did the Afterpay (ASX:APT) share price respond to competition in the past? appeared first on The Motley Fool Australia.

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• 5 things to watch on the ASX 200 on Friday

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. owns shares of and has recommended AFTERPAY T FPO, Apple, PayPal Holdings, and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $75 calls on PayPal Holdings, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO. The Motley Fool Australia has recommended Apple and PayPal Holdings. 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 Australian And New Zealand Banking GrpLtd (ASX: ANZ) share price hasn’t had a great week on the markets.

ANZ shares were priced at $28.20 a share at market open on Monday morning. At the time of writing, they are trading at $27.38 a share, down a hefty 3% from Monday’s opening price.

That comes in stark contrast to the broader S&P/ASX 200 Index (ASX: XJO). The ASX 200 instead has had a reasonably good week so far (touch wood). It’s down 0.04% today so far, but still up 0.84% since Monday morning.

So why has the ANZ share price had such a dreary week?

Well, let’s first have a look at what the other ASX bank shares have been up to this week. This might give us a sense of whether it’s an ‘ANZ problem’ or an ‘ASX bank problem’.

Starting with Commonwealth Bank of Australia (ASX: CBA), and CBA shares are also down this week. Although, with a 1.64% decline since Monday morning, not by quite as much as ANZ.

Turning to Westpac Banking Corp (ASX: WBC), and we can see that Westpac is faring almost as poorly as ANZ this week. Since Monday, Westpac shares have lost around 2.5% of their value.

National Australia Bank Ltd (ASX: NAB) is also down, but only by 1.6% since Monday.

So there’s definitely some malaise going on in the ASX banking share space this week as a whole.

But why?

Why has the ANZ share price had such a poor week?

As we covered earlier in the week, it might have something to do with the ongoing coronavirus lockdowns now gripping Melbourne and Sydney.

On Wednesday, my Fool colleague Mitchell Lawler discussed AMP Capital chief economist Shane Oliver’s estimation that the Sydney lockdown alone will cost the economy more than $7 billion in lost activity if it carries on for another four weeks.

He also noted Morgan Stanley‘s head of research Richard Wiles is forecasting the four major ASX banks will book $700 million worth of lockdown-related impairments for the June quarter.

Banks are highly leveraged to economic growth. Thus, these lockdowns are likely to at least have some impact on the banks’ earnings over the affected periods. It’s likely it’s these factors that are leading to weak performances from the ANZ share price this week, alongside the other ASX banks.

At the current ANZ share price, the bank has a market capitalisation of $$77.9 billion, a price-to-earnings (P/E) ratio of 16.58 and a trailing dividend yield of 3.84%.

The post It hasn’t been a great week for the ANZ (ASX:ANZ) share price so far appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to sell today
• The ASX 200 is trading near record highs – time to worry about popping bubbles?
• Westpac (ASX:WBC) share price falls on broker downgrade
• CBA (ASX:CBA) share price outperformed Westpac over the past 3 months
• ASX 200 rises, Afterpay sinks, Macquarie Telecom soars

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank 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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It has been another busy week for Australia’s top brokers. This has led to the release of a large number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

IDP Education Ltd (ASX: IEL)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $33.00 price target on this language testing company’s shares. The broker believes that IDP Education is well-positioned for growth thanks to an improving near term outlook and market share gains. Morgan Stanley is also supportive of its acquisition of the British Council’s Indian IELTS operations and expecting the key market to rebound strongly from COVID-19 disruption in the very near future. The IDP Education share price is trading at $29.47 today.

Temple & Webster Group Ltd (ASX: TPW)

Another note out of Morgan Stanley reveals that its analysts have retained their overweight rating and $15.00 price target on this online furniture and homewares retailer’s shares. The broker is a fan of Temple & Webster because of strong demand for its offering due to the housing market boom and an acceleration in the shift online. The Temple & Webster share price is fetching $10.65 this afternoon.

Whitehaven Coal Ltd (ASX: WHC)

Analysts at Credit Suisse have retained their outperform rating and $2.65 price target on this coal miner’s shares. This follows the release of Whitehaven Coal’s fourth quarter update earlier this week. According to the note, the broker was pleased with the company’s performance during the quarter and expects this to continue in FY 2022. And thanks to strong coal prices, the broker believes Whitehaven Coal will generate strong free cash flow, allowing it to pay down significant debt. The Whitehaven Coal share price is trading at $2.15.

The post Brokers name 3 ASX shares to buy today 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 Idp Education Pty Ltd and Temple & Webster Group Ltd. The Motley Fool Australia has recommended Temple & Webster Group Ltd. 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 might be in for a wild ride after the Australian Shareholders’ Association (ASA) announced it intends to vote against re-electing the company’s chair.

Right now, the Macquarie share price is $154.12, 0.27% higher than its previous close.

Peter Warne has been Macquarie’s chair since April 2016. Since then, the Macquarie share price has increased 139%. For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 46% in the same time frame.

Unfortunately, Macquarie’s performance on the ASX hasn’t swayed ASA’s stance on Warne’s future.

ASA is also asking questions on the banking, investment, and fund management company’s employee remuneration structure. Particularly, as the company earned an unanticipated $300 million from a freak storm in Texas this year.

Additionally, ASA pointed out a number of recent events that have supposedly damaged Macquarie’s reputation. These include the disastrous press surrounding former Macquarie-controlled Nuix Ltd, a long-running civil case against Macquarie being argued out in German courts, and the Australian Prudential Regulatory Authority (APRA) finding Macquarie had breached regulations.

Will Warne be sent packing?

ASA intends to put forward a number of changes to Macquarie’s board. The most noteworthy is its suggestion that chair Peter Warne must go.

Despite ASA’s bombshell, the Macquarie share price has been gaining this morning.

ASA’s chair and Macquarie Bank monitor, Allan Goldin, said:

Mr Warne has performed his role as chairman well, however one of the key functions as chairman is ensuring that there is a successor at the table.

Right now there’s not a clear successor. The ASA said: “…not having a successor in place is not a good reason for him
to be on the board for 16 years and as chairman for six so we will be voting our undirected proxies against his re-election.”

According to ASA, the Macquarie board wishes for Warne to continue on as chair for another year. The body says an abundance of change is the motivation behind the board’s preservation of Warne’s position. Over the last 12 months, Macquarie’s board has seen 3 members retire and another 2 members appointed.

However, ASA states the board is behind the times. It points to the fact no board members have backgrounds in anything other than finance, economics, consulting, and law.

ASA’s release stated:

In today’s global financial world, that is experiencing daily disruption from innovative uses of new technology changing the way the world operates, it would have been thought that a new director would be appointed that brings expertise of this game changing world to the board. But no.

Macquarie shareholders will have the chance to vote for the composition of the company’s board on 29 July.

Macquarie hasn’t responded to The Motley Fool Australia’s request for comment.

Review of employee remuneration scheme

Another potential weight on the Macquarie share price is ASA’s intention to vote in favour of a proposed Remuneration Report.

The report will determine if paying a share of Macquarie’s profits to its employees is fair if said profits came from natural disasters or unethical dealings.

According to ASA, Macquarie’s unique among ASX 200 companies as it pays a relatively low fixed annual salary. Instead, it incentivises its employees by allowing them a share of Macquarie’s profits.

Macquarie reportedly earned an unexpected $300 million this year as a result of a freak storm in Texas. The storm saw demand for the company’s oil and gas resources boom. Additionally, it’s said to have earned $524 million from Nuix’s Initial Public Offering (IPO), which is now being investigated by the Australian Securities and Investment Commission (ASIC).

ASA’s release stated:

Modern companies realise that they have a responsibility to incentivise employees to not just make a profit but to ensure that they do so in a socially responsible manner… although profit share is paid out over a number of years, if you had a major item such as Nuix that contributed materially to the overall profit, which was then found to have occurred because of questionable dealings, how do you claw that amount back from the entire company’s profit share?

Additionally, ASA is concerned Macquarie’s CEO’s remuneration package isn’t made public. It said:

Macquarie spends a great deal of space, quite rightly, explaining in the Annual Report how their remuneration is fair and proper and relates to the company’s performance. So why not go the full transparency route and tell shareholders how much the CEO actually takes home?

Macquarie share price snapshot

The Macquarie share price has gained 9.7% year to date. It is also 23.2% higher than it was this time last year.

The ASX 200 staple has a market capitalisation of around $57 billion, with approximately 368 million shares outstanding.

The post Could the ASA send the Macquarie (ASX: MQG) share price plummeting? appeared first on The Motley Fool Australia.

More reading

• Nuix (ASX:NXL) share price: this fund manager still sees a ‘big opportunity’
• Broker warns that small lenders are set to beat ASX bank shares
• The Orocobre (ASX:ORE) share price hit an all-time high today
• Is the Appen (ASX:APX) share price an opportunity?
• Are the 10 highest paid ASX 200 CEOs worth their paypackets?

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 recommended Nuix Pty Ltd. 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 Electro Optic Systems Hldg Ltd (ASX: EOS) share price is showing a shade of green on Friday.

This follows the communications, defence, and space company providing a market update concerning awarded contracts.

In afternoon trade, the EOS share price is 4.18% higher to $3.21. Despite the jump, shares in the company are still roughly 28% lower since the start of the year.

20 million reasons why shares are higher today

According to the release, the company has secured $20 million worth of contracts with the Australian Defence Force (ADF) over the last month.

These awarded contracts specifically cover advanced technology research and development activities in electro-optic sensors, EM Solutions Cobra terminals and sustainment.

The EM Solutions Cobra terminals contracts involve the next three shipsets of the Royal Australian Navy’s SEA1180 program for Offshore Patrol Vessels. This is in addition to the SEA1445 program for Enhanced Cape Class Patrol Boats.

Meanwhile, the sustainment portion entails the company supporting the existing Cobra terminal population for the next 12 months. These are in service and used by the Royal Australian Navy.

Notably, the contracts are not expected to have a major impact on the company’s 2021 revenue and profit guidance. However, they are significant for underpinning revenues in 2022.

Another positive for the EOS share price, the contracts were said to be important for prospective growth projects beyond 2022.  

Commenting on the win, EOS Group Chief Executive Officer, Dr Ben Greene said:

We are delighted to be extending our relationship with the ADF across a range of activities within EOS. The Commonwealth of Australia recognises the ability of sovereign industry in Australia to deliver vital capability for the ADF and we look forward to further collaboration in the future.

The company is expected to deliver on the contracts over the following 24 months.

EOS share price performance

It has been a rough year for the EOS share price. Investors are nursing 29% losses on their EOS holdings following a shift in sentiment. COVID-19 induced supply chain disruptions have weighed on the company’s shares. However, EOS has since reported those issues are resolved.

Yet, EOS shares continue to be one of the most shorted on the ASX. As covered by my colleague, James Mickleboro, EOS has 8.1% of its shares held short. This can put downward pressure on the EOS share price.

The post Why the Electro Optic Systems (ASX:EOS) share price is higher today appeared first on The Motley Fool Australia.

More reading

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• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX
• These are the 10 most shorted shares on the ASX

Motley Fool contributor Mitchell Lawler owns shares of Electro Optic Systems Holdings Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Electro Optic Systems Holdings Limited. The Motley Fool Australia owns shares of and has recommended Electro Optic Systems Holdings 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 Wesfarmers Ltd (ASX: WES) share price has been a top performer for ASX investors for quite a while now.

Not only are Wesfarmers shares currently up 0.63% today to $58.98, but they are also up a healthy 14% year to date, 26% over the past 12 months, and 96% over the past 5 years. Those numbers don’t include Wesfarmers’ dividends either, which would have boosted them even higher.

In fact, today’s share price puts Wesfarmers less than 1% away from its all-time record high that we saw just yesterday. The company’s new high watermark now stands at $59.63.

What has been driving Wesfarmers shares to new highs? Well, one seemingly positive development was the recent announcement that the conglomerate is pursuing Australian Pharmaceutical Industries Ltd (ASX: API).

On Monday, Wesfarmers announced it had put up an offer of $1.38 per share in cash to acquire API in full. Although API is still considering this offer, the Wesfarmers share price has added around 1% since this announcement. So evidently, investors are, at the very least, interested.

Today, we reported the Australian Competition and Consumer Commission had some concerns over the merger due to both companies’ sizeable loyalty programs. However, that doesn’t seem to have had a negative impact on the Wesfarmers share price.

Wesfarmers already has exposure to a number of different industries, with operations in chemical manufacturing, mining, and (of course) retail with its Bunnings, Officeworks and Kmart chains. So the addition of API would arguably broaden Wesfarmers’ operations even further.

With all of these very impressive returns from this company, many investors might be wondering, is there still gas left in the tank for the Wesfarmers share price? Can it go higher from here?

Is the Wesfarmers share price a buy today?

One broker who still sees some upside for Wesfarmers is investment bank Goldman Sachs. Goldman currently has a ‘buy’ rating on Wesfarmers shares, with a 12-month share price target of $59.70. That implies a future potential upside of 1.2% (not including dividend returns).

Goldman thinks the potential API acquisition could be a positive for the company. It noted “the business (API) would offer WES exposure to another staple retailing business”. Albeit one that “would be a relatively small addition to the group”.

Other than that, Goldman takes note of Wesfarmers’ “extremely strong balance sheet” and earnings potential for this rating.

At the current Wesfarmers share price, the company has a market capitalisation of $66.95 billion, a price-to-earnings (P/E) ratio of 35.6, and a trailing dividend yield of 2.79%.

The post Why this broker thinks the Wesfarmers (ASX:WES) share price is in the buy zone appeared first on The Motley Fool Australia.

More reading

• Wesfarmers (ASX:WES) share price rising amid competition concerns
• Now’s the time to buy up mega-cap tech shares
• Why the Wesfarmers (ASX:WES) share price is wobbling today
• Do brokers rate the Soul Patts (ASX:SOL) share price as a buy?
• Leading brokers name 3 ASX shares to sell today

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

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The Mesoblast Limited (ASX: MSB) share price has sunk more than 4% in today’s trading session.

Shares in the biotechnology company are struggling today after Mesoblast released an announcement earlier today.

Let’s take a look at what Mesoblast announced and why investors are jumping off.

What’s driving the Mesoblast share price lower

Earlier today, Mesoblast released respiratory function results from its COVID-19 trial.

The clinical results relate to Mesoblast’s randomized controlled trial of its remestemcel-L product on ventilator dependent COVID-19 patients. These patients have also been diagnosed with acute respiratory distress syndrome (ARDS).

Mesoblast reported that remestemcel-L improved respiratory function in patients under 65 years old. In patients older than 65 years old, Mesoblast noted that remestemcel-L improved respiratory function at day 7.

Other secondary outcome results indicated that patients under 65 who received dexamethasone in addition to remestemcel-L reported improved respiratory function.

Mesoblast noted that the company has entered into a license and collaboration agreement with pharmaceutical giant Novartis. The agreement involved the development, manufacture, and commercialisation of remestemcel-L.

The company noted that the commercialisation of remestemcel-L will initially focus on the treatment of ARDS.

However, Mesoblast noted that the agreement remains subject to certain conditions, including analysis of results from the COVID-19 ARDS trial.

Although the announcement was marked ‘non-sensitive’, investors don’t seem too impressed by the results. Clinical outcomes were also presented by Mesoblast Chief Executive Officer, Dr Silviu Itescu at the Pulmonary Disease Conference.

Snapshot of the Mesoblast share price

Mesoblast is a world leader in developing regenerative medicines for inflammatory diseases.

The company was a favourite among retail investors last year after it announced promising results for its remestemcel-L treatment for COVID-19.

After the initial euphoria which saw the Mesoblast share price hit a six-year peak in September last year, shares in the biotech have struggled. Shares in Mesoblast are trading more than 60% lower from their September highs.

As a result, Mesoblast has been one of the worst performers among healthcare companies on the S&P/ASX 200 Index (ASX: XJO) in FY21.

The Mesoblast share price has been plagued by various registration issues and has faced multiple class actions in the US.

At the time of writing, the Mesoblast share price is trading around 4% lower for the day, near its intra-day low of $1.89.

The post Here’s why the Mesoblast (ASX:MSB) share price is sinking today appeared first on The Motley Fool Australia.

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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.

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