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The Westpac Banking Corp (ASX: WBC) share price has started the week in a subdued fashion.

In afternoon trade, the banking giant’s shares are down slightly to $25.59.

Is the Westpac share price in the buy zone?

A number of brokers have been giving their verdict on the Westpac share price following its announcement of potential fraud last week.

In case you missed it, Australia’s oldest bank revealed that it has commenced proceedings in the Federal Court of Australia against equipment leasing firm Forum Finance. This follows the discovery of significant potential fraud relating to a portfolio of equipment leases with Westpac customers arranged by Forum Finance, which were referred to Westpac’s Institutional Bank.

Westpac estimates that it has a potential exposure of around $200 million after tax. Though, it warned that the extent of any loss is dependent on the outcome of its investigations and recovery actions that are underway.

How did brokers respond?

Analysts at Ord Minnett didn’t respond positively to the news. They have held firm with their hold rating and $27.50 price target. The broker feels the development reflects poorly on the bank’s internal risk controls.

Analysts at Citi have been a little more forgiving, noting that fraud is an industry risk that can never be fully eliminated.

And despite downgrading its earnings estimates to reflect the news, it remains positive and has retained its buy rating and $29.50 price target.

Based on the current Westpac share price, this implies potential upside of 15% over the next 12 months excluding dividends. This potential return stretches to almost 20% if you include dividends.

Citi commented: “We view WBC’s announcement of a potential fraud relating to a rogue principal/agency agreement as an unfortunate, but likely rare occurrence. While we expect additional information to come to light in time, on first blush it appears a sophisticated fraud by a single entity, a risk in banking which cannot be entirely eliminated.”

“Principal/agency relationships, while a small business for WBC, are common across the industry and hence it is difficult to read much from this announcement into anything highly WBC-specific. We downgrade FY21 earnings by ~3%, but view operational implications as limited, and keep WBC as our top pick,” it concluded.

The post Is the Westpac (ASX:WBC) share price still good value? appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• Top brokers name 3 ASX shares to buy next week
• ASX 200 up, Westpac caught in potential fraud, RPMGlobal rises
• ASX blue chips set to unleash buybacks and dividends! But which is better?
• Westpac (ASX:WBC) share price lower after revealing $200m potential fraud

Motley Fool contributor James Mickleboro owns shares of Westpac Banking Corporation. 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 Strike Energy Ltd (ASX: STX) share price is pushing higher during early afternoon trade.

This follows the energy producer’s announcement and update on its proposed Phase 1 development of the West Erregulla gas field. The gas project is located about 230 kilometres north-east of Perth in the North Perth Basin in Western Australia.

At the time of writing, Strike Energy shares are swapping hands for 34 cents, up 4.62%.

What did Strike announce?

The company’s latest release has pushed up Strike Energy shares within reaching distance of its 52-week high of 41 cents.

In its statement, Strike Energy advised it is committed to acquiring the Phase 1 gas plant at West Erregulla.

The company stated that firm commitments with the Australian Gas Infrastructure Group (AGIG) have been made. Strike Energy is seeking to obtain long lead items for the proposed 87 terajoule per day gas processing plant.

The components to be bought have a gross value of $31.5 million. Pleasingly, West Erregulla joint venture parties will provide security against any break costs of the equipment.

Strike Energy and Warrego Energy Ltd (ASX: WGO) both hold a 50% joint venture interest in EP469 (West Erregulla).

Initial commitments of the procurement will be minimal but is expected to rise over time as the components are fabricated. Once AGIG undertake construction activities in Q4 2021, following environmental approval, long-lead items will form part of the gas processing plant. In-turn, this will see security payments refunded back to Strike Energy.

The company revealed that the parties can opt out of the procurement process before entering final agreements with AGIG. However, this would lead to significant break costs from the contracts with the vendors.

Strike managing director and CEO, Stuart Nicholls commented:

This is an exciting time for Strike as it formally crosses the line into development. Whilst only an initial commitment, this procurement paves the way for the beginning of the construction of the AGIG gas plant, which is central to Strike’s Greater Erregulla gas strategy.

AGIG have been a pleasure to work with to this point and the parties have found strong alignment in agreeing these important interim arrangements. The company looks forward to formalising the investment decision with AGIG in the near term.

About the Strike Energy share price

Over the past 12 months, Strike Energy shares have jumped close to 60%, and are up over 20% year-to-date. The company’s shares are sitting within the upper end of its 52-week range of 19 cents to 41 cents.

Strike Energy commands a market capitalisation of roughly $685 million, with 2 billion shares on its books.

The post Here’s why the Strike Energy (ASX:STX) share price is surging today appeared first on The Motley Fool Australia.

More reading

• What’s happening with the Strike Energy (ASX:STX) 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.

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The Brambles (ASX: BXB) share price has set a new 52-week high today, extending gains observed across the year-to-date.

At the time of writing, the Brambles share price is 1.01% in the green at $11.53, after posting an intraday high of $11.60.

Let’s discuss what the global pallet solutions expert has been up to lately.

Recent Brambles activity

Back in February, Brambles announced it had merged its keg rental business segment Kegstar with US beer keg provider MicroStar.

More recently, the Brambles share price has extended this year’s moves into the green after progressions to the company’s 5-year sustainability program, announced in October 2020.

The program aims to prioritise regenerative supply chains, with the penultimate goal of decarbonising the company’s purveyors, customers and adjacent markets, according to the initial report.

Building on this, on 24 June, the company reported it had brought its net carbon dioxide emissions to zero. According to Bloomberg LP, the company was “pleased to announce it has become carbon neutral in all operations”.

Brambles CEO Graham Chipchase stated in the June 24 National Post the “could not be prouder of this milestone”:

But the work does not stop here. The real challenge lies ahead of us in advocating for our customers and suppliers to become carbon netural in their operations too. We will extend and build new partnerships with them to leverage the circular economy with the best available low and zero-carbon products and services to decarbonise our entire supply chain.

These announcements signify a step towards the company’s 2025 sustainability targets which include the decarbonisation of Brambles’ entire supply chain.

Brambles’ shares have jumped 4.16% since this event on 24 June.

Brambles share price trends

Today’s gains build on an extended run into the green for the company. Since January 1, the company’s shares have posted a return of 8.73%, climbing 5% over the previous month.

Brambles’ share price has finished in the green by ~3% over the previous 5 trading sessions and posted a 12-month return of 6.32%.

Brambles lags the longer-term returns of the S&P/ASX 200 Index (ASX: XJO)’s which has posted a year-to-date and 12-month return of 11% and 20.76%, respectively.

At its current share price, Brambles has a market capitalisation of $16.6 billion and trades at a price-to-earnings ratio of 27.

The share price has a 52-week trading range of $9.54 – $11.60, a 22% spread.

The post Brambles (ASX:BXB) sets new 52-week high today appeared first on The Motley Fool Australia.

More reading

• Here are the 5 best performing ASX 200 tech shares from FY21
• Leading brokers name 3 ASX shares to buy today
• The Prescient (ASX:PTX) share price rocketed 10% higher today. Here’s why
• Trying to time the stock market is a bad idea — here’s why
• Flight Centre (ASX:FLT) share price continues to climb today

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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Time goes by so fast… FY2021 is now over and FY2022 has begun. And may it bring wealth and success to all investors! But with a new financial year underway, it’s a great time to look back on the year that was, and check out some of the best (and worst) performing ASX shares. Today, we’re looking at some of the best performing shares in the Information Technology sector of the S&P/ASX 200 Index (ASX: XJO). Last week, we looked at some of the best All Ordinaries Index (ASX: XAO) tech performers. But now, let’s check out what some of the ASX 200’s tech heavyweights were doing last financial year.

Best ASX 200 tech share performers of FY21

Xero Limited (ASX: XRO)

Cloud accounting software provider Xero is our first ASX 200 tech share we’re looking at today. Our first WAAAX share, Xero had a fantastic FY21, rising from around $90 in July 2020 to finish the financial year at $1337.09. That’s a gain of 65%. Investors can look to Xero’s strong growth as a probable reason why. Xero reported its 12-month earnings to 31 March back in May. And they were incontrovertibly impressive. Revenues were up 18%, subscriber numbers grew by 20% (including international growth of 21%) and earnings before interest, tax, depreciation and amortisation (EBITDA) rose by 39%. The company also told investors to look forward to more ‘post-COVID growth’. It seems they are taking the hint.

Megaport Ltd (ASX: MP1)

Another ASX tech share to examine today is Megaport. Megaport had a very decent FY21, rising from roughly $12.08 last year to finishing up the financial year last week at $18.40 a share. That’s a gain of 28.66%. This ‘interconnection’ company was indisputably one of the ASX’s best ‘COVID winners’. Despite the pandemic, this company managed to keep its customers, and revenues, growing throughout the year. And that evidently helped investors to continue to flock to Megaport shares. In addition to its stellar FY21 performance, the Megaport share price is also up an impressive ~800% over the past 5 years.

Dicker Data Ltd (ASX: DDR)

Data company Dicker was another top performer last financial year. Dicker Data shares started FY21 out at approximately $6.93 a share, but finished up last Wednesday at $18.40. That represents a gain of 59.9%. Dicker is something of an ‘old school’ ASX tech company. It has been around since the 1970s, and distributes both hardware and software to its client base. Despite the pandemic, Dicker is another company that didn’t seem to miss a beat. Back in March, Dicker reported that it had managed to grow its profits by close to 21%, and its EBITDA to almost 24% over FY20. Investors are clearly hopeful of this trend continuing over FY21.

WiseTech Global Ltd (ASX: WTC)

Another WAAAXer here, the WiseTech global share price has certainly seen its fair share of ups and downs over the past few years. But FY21 decisively delivered more of the former for investors. WiseTech started the financial year last year at roughly $19.35 a share. Last week, it finished up at $31.92, a gain of 65% for the period. Like Dicker Data, this company’s share price was buoyed by well-received earnings reports over the year that was. WiseTech managed to give its share price a shot in the arm back in August last year, when it reported a 23% increase in revenues and a 17% bump in EBITDA. WiseTech’s February half-year earnings for FY21 continued this trend, with the company reporting that revenues grew again by 16% over the half as well as a 43% rise in EBITDA. Investors have clearly rewarded WiseTech over FY21 for these efforts.

Afterpay Ltd (ASX: APT)

How could we not mention Afterpay? The buy now, pay later (BNPL) pioneer is famous for its enriching share price performance, and FY21 was no exception. Afterpay started the financial year at a share price of $60.99. It managed to end the year at $117.80 a share, marking its FY21 performance at a gain of 92.15%. Very impressive stuff, especially considering that the bookended share price is a good 25% less than the all-time high of $160.05 that Afterpay made back in February.

Still, 92.15% was enough to make Afterpay the best performing ASX 200 tech share on the share market over FY21. What can we put this down to? Well, the company seemed to continue to benefit from red hot sentiment for BNPL shares over the year, albeit a bit more subdued after February’s highs. Continuing growth, talk of a US-listing, new products such as a new debit/BNPL card, as well as the US listing of a BNPL company in Affirm Holdings Inc (NASDAQ: AFRM) also may have helped.

The post Here are the 5 best performing ASX 200 tech shares from FY21 appeared first on The Motley Fool Australia.

More reading

• These ASX shares are the latest to be hit by broker downgrades
• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• 5 things to watch on the ASX 200 on Monday
• Why the Telstra (ASX:TLS) share price outlook suddenly improved last week

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. owns shares of and has recommended AFTERPAY T FPO, Affirm Holdings, Inc., MEGAPORT FPO, WiseTech Global, and Xero. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO, Dicker Data Limited, WiseTech Global, and Xero. The Motley Fool Australia has recommended MEGAPORT FPO. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares that leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

IDP Education Ltd (ASX: IEL)

According to a note out of Macquarie, its analysts have retained their outperform rating and lifted their price target on this language testing company’s shares to $32.60. This follows news that the company is acquiring the British Council’s Indian IELTS business. Macquarie is a fan of the deal and suspects that further deals could be made in the future if the British Council needs to raise additional capital. It also believes management’s synergy estimates could be conservative. The IDP Education share price is currently trading at $29.14.

IOOF Holdings Limited (ASX: IFL)

A note out of Citi reveals that its analysts have retained their buy rating and $4.95 price target on this financial services company’s shares. The broker believes that IOOF’s shares are still very cheap despite a recent rally. In addition to this, it sees meaningful upside potential from the company’s simplification process. It also notes that IOOF is aiming to bring its financial advice offering to the mass market via its platform. It believes this could be significant if executed successfully. The IOOF share price is fetching $4.37 today.

Rio Tinto Limited (ASX: RIO)

Analysts at Citi have retained their buy rating and $130.00 price target on this mining giant’s shares. According to the note, although narrowing Chinese steel profits means that steel production is likely to slow, it doesn’t think this is a sell signal for investors. Particularly for income investors. The broker estimates that Rio Tinto’s shares will offer average annual dividend yields of ~13% from FY 2021 and FY 2023. The Rio Tinto share price is trading at $126.05.

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

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• These were the best performing ASX 200 shares last week
• Why a2 Milk, Chalice Mining, IDP Education, & Imugene are charging higher
• Why the IDP Education (ASX:IEL) share price is up 20% to a record high
• ASX 200 up 0.25%: IDP Education rockets, Westpac hit with $87m bill

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. 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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Shares in Prescient Therapeutics Ltd (ASX: PTX) have surged to fresh heights today on the back of news its cancer treatment drug, OmniCAR, has been substantially de-risked.

After reaching a multi-year high of 26.5 cents this morning, the Prescient share price has retreated slightly and is currently trading at 25 cents apiece, up 8.7%.

Today, Prescient announced positive results from in silico immunogenicity testing of SpyTag and SpyCatcher, OmniCAR’s key binding components.  

Let’s take a look at today’s news from the cancer treatment development company.

Positive immunogenicity results

According to Prescient’s release, the results have de-risked the entire OmniCAR platform.

The in silico tests found SpyTag and SpyCatcher don’t inspire a negative response from human antibodies – meaning, the human body won’t attack the treatment itself.

In silico tests are done on a computer using algorithms. In this case, the tests mimicked the human body’s response to introduced medication.

OmniCAR combines controllable CAR T-cell therapy and multi-antigen targeting. According to Prescient, high levels of immunogenicity – a negative response from antibodies – can negatively impact CAR-T cell expansion and persistence, which can affect the safety and clinical response of the treatment.

OmniCAR is currently being developed to treat acute myeloid leukemia, Her2+ solid tumours (including breast, ovarian and gastric cancers), and the most common form of brain cancer, glioblastoma.

Today’s development follows the successful completion of manufacturing and delivery of critical components of the OmniCAR platform.

Commentary from management

Prescient CEO and managing director Steven Yatomi-Clarke commented on the results, saying:

The immunogenicity results could not have been better. In short, it gives us confidence that if these therapies are ultimately delivered to patients, that their immune systems will not impair the therapy itself.

This is essential not only for Prescient’s three in-house OmniCAR programs, but also for potential external collaborators, who consider immunogenicity very stringently.

Prescient share price snapshot

2021 has been a ripper year so far for the Prescient share price.

Currently, it’s 264% higher than it was at the beginning of the year. It has also gained 325% since this time last year.

The company has a market capitalisation of around $117 million, with approximately 641 million outstanding shares.

The post The Prescient (ASX:PTX) share price rocketed 10% higher today. Here’s why appeared first on The Motley Fool Australia.

More reading

• Prescient (ASX:PTX) share price sinks despite positive update

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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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.

Day traders, beware. There’s an ever-growing mountain of evidence that even the most sophisticated professionals can’t consistently outperform the market — most of them don’t even beat index fund benchmarks in any given single year. If you plan to figure out which days stocks will rise and fall, it might be time to consider a new strategy.

Luckily, there are investment strategies that don’t require you to perfectly predict the stock market, but they’ll still deliver fantastic returns regardless of timing.

You need to time it more than once

This is one of the simplest challenges in active management, but it’s almost always overlooked. In the most basic sense, you make money by buying stocks low and selling them high. That means you have to figure out not only when to buy a stock but also when to sell it. If you think that a stock is cheap and it’s a great time to buy, that’s fine. But you have to recognize that you only take profits by selling in the future.

The same applies if you think that a stock is expensive and it’s time to get out — you’re creating a future obligation to buy back in, and you’ll need to determine when to actually execute that trade.

If the probability of perfectly timing a market bottom is low, then the probability of doing so followed by perfectly timing a market top is much slimmer. Even worse, daily return data from stock indexes indicates that there’s very little margin for error. You might think that timing things correctly within a few weeks or months can be successful, but you actually need a lot more precision.

A small number of days generate a large proportion of returns

There are numerous studies showing the same pattern across different time periods — the S&P 500‘s growth can be entirely attributed to a small number of days.

One paper found that over a 20-year span, the 35 best days accounted for all of the gains in that period. That’s less than 1% of the more than 5,000 trading days across two decades. Even more frustrating, many of the market’s best days occur within a week of the worst days. That’s trouble.

Consistently timing the market would therefore require incredible precision. Any active traders seeking to time the market may have completely sabotaged their performance if they happened to miss out on any of that small handful of days. If you stay invested, you’re implicitly “buying” on down days. If you get too active, you run the risk of buying high and selling low.

Investors need to understand the mechanics of how markets fluctuate. Most price movements are modest, and they usually have no connection to news about corporate financial returns. The average month has four days where the index gains or loses more than 1%. Otherwise, there are slightly more upward days than down days.

Individual stocks behave similarly, though each stock tends to have days where it fluctuates a bit more than the major indexes. The key to consistent long-term growth is to be invested when those big marketwide growth days hit. It also helps to own at least a handful of stocks that deliver fundamental growth in a way that can outpace the market. If you hold a few different stocks for the long term, then you’ll increase the likelihood that you’ll share in the returns when those great sessions happen to hit.

Entry points are less important over the long term

It’s hard to argue with the overwhelming evidence above, but the promise of big profits is still alluring. It can make investors act irrationally and ignore their better judgment. If you’re still tempted, it might help to recognize that entry points become less and less meaningful over the long term. Within a given year, the exact day that you purchase a stock can make the difference between big gains and big losses. That’s very much not the case if you’re looking at a 20-year window.

Bank of America published a paper recently that quantified the effects of missing the 10 best and worst trading days for each decade, based on S&P 500 daily returns. The authors found that someone who had invested in the S&P 500 from 1930 through 2020 would have achieved nearly an 18,000% return. If someone happened to miss the 10 best days of each decade, that number drops to 28%.

The authors noted that it can take more than 1,000 trading days to overcome bear markets, and valuation is by far the most accurate predictor of returns over a 10-year period.

Again, this shows that a good long-term allocation is a superior strategy to picking stocks for short-term returns. It’s okay to make modest adjustments to your stock portfolio as conditions change for the individual company, the stock market as a whole, and the economy. However, investing for short-term gains is something that even the majority of professionals cannot do successfully and consistently.

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

The post Trying to time the stock market is a bad idea — here’s why appeared first on The Motley Fool Australia.

More reading

• Leading brokers name 3 ASX shares to buy today
• The Prescient (ASX:PTX) share price rocketed 10% higher today. Here’s why
• Flight Centre (ASX:FLT) share price continues to climb today
• Auckland Airport (ASX:AIA) share price jumps 6% on travel bubble news
• These ASX shares are the latest to be hit by broker downgrades

Ryan Downie has no position in any of the stocks mentioned. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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.

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

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The Flight Centre (ASX: FLT) share price has started the trading week in the green, extending last week’s gains.

The Flight Centre share price is 2.91% higher at $15.91 a share.

Let’s take a look at what’s happening with Flight Centre shares today.

What has Flight Centre been up to lately?

While there’s no market-sensitive news today from the company, Flight Centre shares have been impacted by coronavirus. As a result, the company has routinely found itself on the ASX most shorted shares list since the pandemic hit.

However, on 25 June, the company announced it will issue shares to employees who stick with Flight Centre for the coming 18 months under its “Global Recovery Rights program”.

The travel group stated it will award 250 individual shares to employees who stay until 31 December 2022. The proposal excludes executives and the board.

Flight Centre shares have since climbed from $14.55, trading for a time today at $16.30.

Flight Centre share price snapshot

Flight Centre shares have finished the previous 5 trading sessions in the green, posting a 9.35% return during this time.

Over the previous month, the company’s shares are down by 0.44% but have enjoyed 12-month gains of ~40%.

These returns outpace the S&P/ASX 200 Index (ASX: XJO)’s 1 and 12-month returns of 0.27% and 20.75%, respectively.

At the current share price of $15.91, Flight Centre has a market capitalisation of $3 billion and trades at a price-to-earnings ratio of 7.

The share price is off its 52-week high of $20.16 but is above its 52-week low of $9.76. The company pays a $1.96 dividend which produces a yield of 6.7% at the time of writing.

The post Flight Centre (ASX:FLT) share price continues to climb today appeared first on The Motley Fool Australia.

More reading

• ASX 200 Weekly Wrap: ASX finishes FY21 on a high
• Webjet (ASX:WEB) share price jumps on new four-step COVID-19 plan
• 3 worst ASX travel shares of financial year 2021
• ASX travel shares tumble amid widening COVID restrictions
• These are the 10 most shorted shares on the ASX

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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 market is gaining ground this morning but broker downgrades are holding back these two ASX shares.

The S&P/ASX 200 Index (Index:^AXJO) increased by 0.4% at the time of writing with the Sydney Airport Holdings Pty Ltd (ASX: SYD) share price leading the charge on a takeover bid.

But the news isn’t quite as rosy for the Woolworths Group Ltd (ASX: WOW) share price, which dipped 0.1% to $37.57. This is after Morgan Stanley downgraded the supermarket to “equal-weight” from “overweight”.

ASX shares getting downgraded post demerger

The broker also slashed its 12-month price target on the Woolworths share price to $36.50 from $44 a share post-demerger with the Endeavour Group Ltd (ASX: EDV) share price.

Coincidentally, the Endeavour Group share price is also underperforming today.

“With operational momentum and an impending demerger, WOW traded up 7% over the 3 months leading into the Endeavour demerger,” said Morgan Stanley.

“Since then, WOW+EDV has rallied a further 4% over the last week.”

Trading at a premium

This makes the Woolworths share price look fully valued at around 31.3 times earnings. Woolies is trading at a 6% premium to the ASX 200 and a 35% premium to the Coles Group Ltd (ASX: COL) share price).

However, Morgan Stanley’s valuation doesn’t include any potential capital return. Woolworths indicated it could have up to $2 billion in excess cash that could be used for capital management.

This is likely to take the form of an off-market share buy-back. Assuming an average discount of 14%, the program could be 1.7% accretive to the Woolworths share price, noted the broker.

Downgrade dents sentiment for this ASX share

Another that’s struggling to gain traction today is the AMA Group Ltd (ASX: AMA) share price. The panel beating group dipped 0.9% to 56 cents at the time of writing.

The underperformance coincides with UBS downgrading the ASX shares to “neutral” from “buy”.

“While the long-term opportunity remains appealing, in our view there are a number of uncertainties that cloud the near-term outlook,” said UBS.

Four risk factors

There are four specific areas of concern highlighted by the broker. The first is the potential impact of rolling lockdowns.

Looking at Apple vehicle mobility, the seven-day rolling average is down around 13% in AMA’s regions for the week starting 24 June when compared to pre-COVID-19.

Next is the labour and parts inflation pressures, followed by the group’s ability to pass on these higher costs.

Finally, the recent turnover of senior management is also dragging on the AMA share price. This is perhaps the most worrying risk factor, in my view.

Short-term risks trumps longer-term outlook

“We still see AMA as a beneficiary of industry consolidation and higher volumes post-COVID,” added UBS.

“But consider the risk-return balance to have shifted until we have better visibility on the above mentioned concerns.”

UBS cut its 12-month price target on the AMA share price to 56 cents from 70 cents a share.

The post These ASX shares are the latest to be hit by broker downgrades appeared first on The Motley Fool Australia.

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• Why A2 Milk, Airtasker, BetMakers, & Sydney Airport shares are storming higher
• Sydney Airport (ASX:SYD) jumps 37% on $22.6 billion buyout bid
• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
• ASX 200 Weekly Wrap: ASX finishes FY21 on a high

Motley Fool contributor Brendon Lau owns shares of Endeavour Group Ltd and Woolworths Group Ltd. Connect with me on Twitter @brenlau.

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 Auckland Airport International Limited (ASX: AIA) share price is pointing towards the sky today.

In afternoon trade, the New Zealand airport operator’s shares are going for $7.13 a piece, up 6.42%.

NZ travel bubble back open for some

It appears investors are more optimistic towards AIA shares today, driving the price higher. Considering there is no news published by the kiwi airport, the momentum might be coming from elsewhere.

Yesterday, the New Zealand government announced the resumption of quarantine-free travel from Australia. However, the government stipulated it would only be available to the ACT, South Australia, Tasmania, and Victoria.

Meanwhile, travellers from New South Wales, Northern Territory, Queensland, and Western Australia will stay on pause until 6 July 2021, at the earliest.

The New Zealand travel bubble was completely closed off from Australia on 26 June 2021.

This was in response to the growing number of locally acquired cases reported throughout the country. Astonishingly, this led to roughly a third of Australia’s population being put into lockdown last week.

A rising tide lifting all airports

Another event that could be turning investor’s eyes towards the AIA share price today is the proposed acquisition lobbed towards Sydney Airport Holdings Pty Ltd (ASX: SYD) this morning.

A consortium of infrastructure investors have made an offer at an indicative price of $8.25 a share to acquire 100% of Australia’s largest airport. The investors include IFM Investors, QSuper, and Global Infrastructure Management.

Furthermore, the deal would value Sydney airport at $22.26 billion, 42% higher than the $15.69 billion market capitalisation at the end of last week.

The offer is only 6.9% off from the airport operator’s record pre-pandemic high of $8.86. Whereas, Auckland Airport’s share price is still roughly 23% off from its pre-COVID high of $9.32.

The post Auckland Airport (ASX:AIA) share price jumps 6% on travel bubble news appeared first on The Motley Fool Australia.

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• ASX 200 up 0.1%: Sydney Airport takeover, Tabcorp demerger, a2 Milk jumps
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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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