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The S&P/ASX 200 Index (ASX: XJO) is fighting hard to finish the week on a positive note. In afternoon trade, the benchmark index is up 0.2% to 7,315.8 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are pushing higher:

Afterpay Ltd (ASX: APT)

The Afterpay share price is up 4% to $104.09. Investors have been buying Afterpay and other tech shares on Friday following a solid night of trade on the Nasdaq index. The tech-heavy index rose 0.8% during overnight trade. The S&P/ASX All Technology Index (ASX: XTX) is up a sizeable 1.55% so far today.

Altium Limited (ASX: ALU)

The Altium share price has climbed over 2% to $35.48. This gain appears to have been driven by a broker note out of Credit Suisse this morning. According to the note, the broker has retained its outperform rating and lifted its price target to $42.00. It believes the recent takeover offer it received from Autodesk demonstrates its ability to attract strategic partnerships.

AVITA Medical Inc (ASX: AVH)

The AVITA share price has jumped 12% to $5.05. Investors have been buying the regenerative medicine company’s shares after it announced that it has received approval from the US Food and Drug Administration (FDA) to expand the use of its skin-grafting technology. The RECELL System can now be used for children over one month of age. Previously, the system had only be approved for use on adults.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

The Domino’s share price is up 1.5% to $115.60. This morning the pizza chain operator announced its expansion into the Taiwan market via the acquisition of the corporate stores and franchise rights held by Domino’s Taiwan for A$79 million on a cash and debt free basis. Domino’s Taiwan is the second largest pizza chain in the Taiwanese market with a network of 138 franchised stores and 19 corporate stores. Management sees opportunities to grow its network in the country to over 400 stores.

The post Why Afterpay, Altium, AVITA, & Domino’s shares are pushing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 up 0.2%: Tech shares rise, Domino’s expands
• Why the Avita Medical (ASX:AVH) share price is soaring 14%
• Domino’s (ASX:DMP) share price rises on acquisition news
• What I regret about my Afterpay (ASX:APT) shares: analyst
• Why Zip (ASX:Z1P) and this ASX growth share are highly rated by analysts

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO, Altium, and Avita Medical Limited. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Altium. The Motley Fool Australia has recommended Avita Medical Limited and Dominos Pizza Enterprises 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 Brickworks Limited (ASX: BKW) share price has gone up more than 10% this week after giving investors an update.

What happened with Brickworks?

Australia’s largest brick manufacturer gave a trading update about its Australia and North America divisions. It’s seeing sales momentum gathering in both locations.

Brickworks’ building products divisions in both Australia and North America are both expected to record higher earnings before interest and tax (EBIT) in FY21 in local currency terms. However, with two more months of trading activity to come, Brickworks said it’s too early to accurately forecast the extent of the EBIT uplift.

However, Brickworks highlighted to investors that the Australian division’s EBIT in the prior year included a significant write-back of costs to take into account the impact of the COVID-19 pandemic. The availability of some materials, such as timber for house trusses, is an issue in some areas, with the resultant delays likely to flatten and extend the duration of the existing pipeline of work.

In the US, operations in North America have been harder hit by the pandemic, particularly in the first half of FY21. However, with the vaccine program in the US well advanced, building activity in the US is now ramping up, according to Brickworks. It has already seen a strong rebound in sales volume to housing customers in May, with this segment currently making up around 60% of total sales.

Property revaluation

It also announced this week a “significant” revaluation profit within its joint venture industrial property trust with Brickworks’ expected share to be around $100 million. This will contribute to record property underlying EBIT of between $240 million to $260 million, up from $129 million in the prior year.

Brickworks managing director Mr Lindsay Partridge said:

Since the end of the first half, there has been a number of significant industrial property transactions in western Sydney. The pricing of these transactions has reinforced the strong investor appetite for prime industrial assets.

In addition, property earnings are expected to be boosted further by the completion of developments at Oakdale East, currently forecast to occur in July.

We have seen strong demand and sustained growth in the value of our Property Trust over a number of years. The COVID-19 pandemic has only fuelled this growth, by accelerating industry trends towards online shopping and increasing the importance of well-located distribution hubs and sophisticated supply chain solutions.

The Amazon facility in Oakdale West is expected to be completed in the first half of FY22, with the Coles Group Ltd (ASX: COL) distribution warehouse now under construction and expected to be completed early in FY23.

Broker opinion on the Brickworks share price

The broker Ord Minnett is still positive on Brickworks, with a price target of $26. It noted the recovery in both the Australian and US building product segments.

However, Ord Minnett believes that the demand for industrial property could lead to a continuing good performance for Brickworks.

The post Why the Brickworks (ASX:BKW) share price is up more than 10% this week appeared first on The Motley Fool Australia.

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• The Brickworks (ASX:BKW) share price hit an all-time high today. Here’s why
• Why Brickworks, Ecofibre, Frontier Digital, & Ramsay are storming higher
• Brickworks (ASX:BKW) share price jumps 8% on record property earnings

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks and 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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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.

Concerns about Tesla‘s (NASDAQ: TSLA) electric-car sales in China have mounted recently, creating some worries about the growth stock‘s lofty valuation. Indeed, GLJ Research analyst Gordon Johnson says he believes Tesla’s monthly vehicle deliveries in the important auto market have peaked at around 20,000. “Should this prove to be the case, that would take a massive chunk out of the TSLA bull case,” the analyst said in a note to investors on Tuesday.

But one analyst remains resolutely bullish on Tesla shares: Wedbush analyst Daniel Ives. Here are his thoughts on the China situation and the company’s overall potential.

A major opportunity

Though Ives admits that Tesla’s second quarter may have started off rocky in China, he believes that things will smooth out over time since the market opportunity is so significant. He notes that he expects electric-vehicle sales as a percentage of total annual auto sales in the market to increase from 5% to 10% over the next 10 years. As a pure-play electric-vehicle manufacturer, Tesla is positioned to benefit, Ives believes.

Further, the analyst notes that recently released data from China Passenger Car Association (CPCA) points to a 29% jump in monthly Tesla vehicle sales in May, compared to April — though 11,527 of the 33,463 were exported. Nevertheless, with a reported 33,463 deliveries, the company’s China manufacturing seems to be contributing meaningfully to Tesla’s overall sales. For reference, Tesla delivered about 185,000 electric vehicles globally in its first quarter of 2021.

Tesla has invested aggressively in the China market, building a major factory in Shanghai. Indeed, its China market currently has enough tooling installed to build 450,000 vehicles annually, though it may take time for Tesla to ramp up production enough to achieve this capacity.

“Model Y ramp in Shanghai is progressing well,” Tesla said in its first-quarter update. “We expect that our Shanghai factory will continue to increase quarterly production output through the year.”

The path to $1,000

Ives has a $1,000 12-month price target on Tesla stock, representing 67% upside from where shares are trading today.

The analyst’s $1,000 price target for the stock was established after Tesla announced first-quarter deliveries that crushed analyst estimates. At the time of his price-target increase, he said he thinks Tesla deliveries could exceed 850,000 this year — a huge jump from approximately 500,000 deliveries last year.

While these analyst opinions can be informative, investors should focus less on month-to-month and quarter-to-quarter deliveries and more on Tesla’s year-to-year execution. It’s difficult to gauge how a company’s sales are trending or its expansion is faring over periods of months or quarters.

Let’s zoom out and see what happens for the full year. The automaker’s total 2021 deliveries in China relative to its total deliveries in the market in 2020 and 2019 will likely be more telling about the company’s long-term sales trajectory in the market.

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

The post Tesla stock: Headed to $1,000? appeared first on The Motley Fool Australia.

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Daniel Sparks 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 Tesla. 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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Shares in Iress Ltd (ASX: IRE) are sliding today after the company announced a market update. At the time of writing, the Iress share price is trading at $12.40, down 3.05%.

The share trading system developer took the spotlight on Thursday after the company’s shares surged 16.80% higher on takeover rumours.

Driving growth and shareholder return

In today’s statement, Iress advised it had undergone a sweep of changes to accelerate its growth trajectory and enhance shareholder value.

The company has identified a broad range of initiatives spanning from its core technology and product offerings to superannuation services. A consistent theme across the initiatives was the focus on enhancing software-as-a-service capabilities and accelerating movement to its cloud-based products.

Additionally, the Iress board announced a potential divestment of its UK-based mortgage sales and origination (MSO) business.

Iress acquired the MSO business in 2013, building out its technology capabilities and transitioning the business to a recurring subscription model. In 2020, MSO delivered revenue of $26.9 million, 46% of which was recurring revenue.

The potential divestment comes under the rationale that a different owner could drive higher returns for the MSO business. The company noted that UK valuations for software businesses were at record highs. The intention would be to distribute surplus capital to shareholders if a sale occurred.

In addition, the announcement reaffirmed the company’s 2021 segment profit guidance of 7-10% growth on the prior year. This follows its FY21 net profit after tax upgrade announcement on 26 April.

Management commentary

Iress chair Roger Sharp commented on the initiatives:

Since being appointed in February, we have initiated a thorough review of the business with a view to accelerating growth and enhancing returns, with a specific focus on EPS and ROIC.

I am impressed by the quality of our business, the strength of our client relationships and the significant scale of our growth opportunities. Iress has a refreshed board, and new members of the management team to lead sales and product teams with a focus on enhancing product design and sales effectiveness.

We are executing well, with major projects going live in Australia and the UK. We are also committed to managing our capital efficiently and returning surplus capital to shareholders.

How has the Iress share price performed this year?

Iress is traditionally a slow-moving share with steady earnings and reliable dividends.

The Iress share price has spent most of this year trading around the $10 level until yesterday’s speculation rumours pushed it above the usual trading range.

The post Iress (ASX:IRE) share price tips lower despite positive update appeared first on The Motley Fool Australia.

More reading

• ASX 200 up 0.2%: Tech shares rise, Domino’s expands
• Bidding war for the Mainstream (ASX:MAI) share price intensified today
• M&A rumour fires up the Iress (ASX:IRE) share price today

Kerry Sun has no position in any of the shares mentioned in this article. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) has bounced back from a poor start and is pushing higher. The benchmark index is currently up 0.2% to 7,319.2 points.

Here’s what is happening on the market today:

Tech shares rise

The Australian tech sector is charging higher today and helping to take the ASX 200 into positive territory. The likes of Afterpay Ltd (ASX: APT) and Appen Ltd (ASX: APX) are recording strong gains, leading to the S&P/ASX All Technology Index (ASX: XTX) rising 1.7% so far today. This follows a positive night on the tech-heavy Nasdaq index, which pushed 0.8% higher.

Domino’s expansion

The Domino’s Pizza Enterprises Ltd (ASX: DMP) share price is rising today after announcing its expansion into the Taiwan market. The pizza chain operator has entered into a binding agreement with Formosa International Hotels Corporation to acquire the corporate stores and franchise rights held by Domino’s Taiwan for A$79 million on a cash and debt free basis. Domino’s Taiwan is the second largest pizza chain in the Taiwanese market with a network of 138 franchised stores and 19 corporate stores.

SkyCity guidance

The SKYCITY Entertainment Group Limited (ASX: SKC) share price is trading lower today despite revealing that it expects to record solid profit growth in FY 2021. This morning the casino and resorts operator advised that it is expecting to report a normalised net profit after tax of between NZ$84 million to NZ$88 million. This represents a 26.7% to 32.7% increase on FY 2020’s normalised net profit after tax of NZ66.3 million.

Best and worst ASX 200 performers

The best performer on the ASX 200 on Friday has been the Appen share price with a 6% gain. This follows improving investor sentiment in the tech sector. The worst performer has been the Iress Ltd (ASX: IRE) share price with a 3% decline. This morning the financial technology company released a market update.

The post ASX 200 up 0.2%: Tech shares rise, Domino’s expands appeared first on The Motley Fool Australia.

More reading

• BlueScope (ASX:BSL) share price jumps on broker upgrade today
• Domino’s (ASX:DMP) share price rises on acquisition news
• These ASX shares just got hit by broker downgrades
• What I regret about my Afterpay (ASX:APT) shares: analyst
• 2 high-quality ASX 200 shares that could be buys

James Mickleboro does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia owns shares of and has recommended AFTERPAY T FPO and Appen Ltd. The Motley Fool Australia has recommended Dominos Pizza Enterprises 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 Avita Medical Inc (ASX: AVH) share price is flying high on Friday. At the time of writing, shares in the medical technology business are swapping hands for $5.11 – up 13.56%.

This comes after the company announced it had received approval from the US Food and Drug Administration (FDA) to expand the use of its skin-grafting technology.

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

FDA approval

Avita shares are having a bumper day after the dual-listed company provided a statement to the ASX this morning. Avita advised the FDA has provided approval for the “expanded use of the RECELL System, in combination with meshed autografting,” for children over 1 month of age. Until now, the system had only be approved for use on adults.

On top of this, the US Government agency says the treatment can be used for full-thickness thermal wounds that cover more than half the body.

According to Avita, RECELL is used to prepare spray-on skin cells for application on the patient while requiring “significantly” less donor skin. In addition, the company claims a skin sample as small as a credit card can be used to treat an adult’s entire back.

Today’s release quoted Dr Anjay Khandelwal of Akron Children’s Hospital Burn Center, Ohio as saying:

Skin grafting, which is currently the standard of care used to treat many paediatric burns, is painful, results in an additional wound, can be disfiguring, and may result in additional complications as a child grows.

… I am pleased that the RECELL System, with its proven efficacy to accelerate the burn-healing process with less donor skin requirements, is now available as an FDA-approved treatment option for my younger burn patients.

As well, Avita stated that “nearly a quarter of the burn cases in the United States occur in children under the age of 16 years old.”

Investors appear to believe this is good news for the company, judging by the performance of the Avita share price so far today.

The product is registered with the Therapeutics Good Administration in Australia and received CE-mark approval in Europe.

Management commentary

Avita Medical CEO Dr Mike Perry said of today’s news:

We are pleased that the RECELL System, with both its clinical and health economic benefits, can now more broadly support surgeons in treating full-thickness burns of all sizes, including treatment of patients over 1 month of age.

… the RECELL System is rapidly becoming the standard of care in burn treatment, and we are committed to pursuing and realising the full potential of this innovative regenerative technology platform to address other clinical indications where significant unmet need exists.

Avita share price snapshot

Over the past 12 months, Avita shares have fallen by more than 40%. This stands in stark contrast to many ASX businesses, which have seen their value grow significantly since the COVID-19 market crash of March 2020.

However, in more positive news, today’s rally now sees the Avita share price up by 3.44% in 2021.

The post Why the Avita Medical (ASX:AVH) share price is soaring 14% appeared first on The Motley Fool Australia.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Avita Medical Limited. The Motley Fool Australia has recommended Avita Medical 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 BlueScope Steel Limited (ASX: BSL) share price is getting a boost from a broker upgrade this morning.

The steel products manufacturer’s share price jumped 1.8% at the time of writing to $22.53. In contrast, the S&P/ASX 200 Index (Index:^AXJO) is struggling at around breakeven.

The outperformance of the BlueScope share price coincides with Macquarie Group Ltd’s (ASX: MQG) decision to lift its rating on the shares to “outperform” from “neutral”.

Good spreads drive BlueScope share price upgrade

The broker’s bullish turn comes as its analysts took a more upbeat view on steels spreads, or margins.

“Our Macro Strategy team has upgraded the outlook for the steel complex,” said Macquarie.

“Spread expectations expand, especially in 1HFY22 in the US, driving earnings upgrades. The team still expect a roll-over in prices when IP [industrial production] slows, but reduced China export suggests structurally better margins.”

Positive outlook for US steel

Steel in the US have continued to rally and the benchmark prices are trading more than US$200 a ton above their levels on 27 April. That was when BlueScope last provided guidance for the second half of FY21.

Macquarie believes that steel prices will hold on to these gains into the September quarter. But prices are then expected to moderate along a more benign curve than previously expected.

Lumber shortage gives boost in Australia

Meanwhile, the outlook for Australian steel prices also remain constructive thanks to the booming housing market.

“Builders continue to report solid demand even after HomeBuilder, which should support broad demand,” said Macquarie.

“Lumber shortages are also playing into steel demand – although BSL would also likely be constrained for capacity in this niche product.”

Cashed up to capitalise on opportunities

BlueScope’s growing cash pile will give management options too. While the company is still running an on-market share buyback program, Macquarie thinks it will be hesitant to purchase shares at current prices.

If so, this will give BlueScope the flexibility to undertake other forms of capital return or even use its cash balance to make a bolt-on acquisition, in my view.

What is the BlueScope share price worth?

“While we remain vigilant that falling steel prices could impact the stock – and present the most significant risk to our view – we think EPS momentum is likely to remain very strong in the near term,” added Macquarie.

“Underpinned by a revised house view on the steel complex and valuation that remains attractive (NTM EV/EBIT at 12% discount to 5-year avg), there is a better risk-reward balance now.”

Macquarie’s 12-month price target on the BlueScope share price is $25.50 a share.

The post BlueScope (ASX:BSL) share price jumps on broker upgrade today appeared first on The Motley Fool Australia.

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• The ASX shares benefiting the most from the company spending boom

Brendon Lau owns shares of BlueScope Steel Limited and Macquarie Group Ltd. Follow 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 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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ASX healthcare shares didn’t, as a whole, have the best of years in 2020.

In fact, Randal Jenneke – head of Australian equities at the US investment firm T Rowe Price – says healthcare just suffered through its worst year in a decade.

But he believes that’s all turning around.

And in the hunt for what Jenneke labels “quality growth” stocks, ASX healthcare shares are under the microscope.

Leading ASX healthcare share “really attractive”

According to Jenneke (quoted by the Australian Financial Review):

That’s where we see good opportunity. ResMed is an example of a stock that we think is really attractive. Valuations are back to the most attractive level in five years. As the US economy reopens, the sleep business can get back to normal and there’s a new product cycle coming.

If you’re not familiar with the company, ResMed CDI (ASX: RMD) is a leading S&P/ASX 200 Index (ASX: XJO) healthcare share.

Its primary business is developing respiratory medical devices, with a focus on the treatment of sleep apnoea. During the height of the COVID epidemic, ResMed also turned its attention to the production of respirators.

Based in the US state of California, the ASX healthcare share operates in more than 140 countries. It has manufacturing facilities in Australia, Singapore, France, and the US.

ResMed first listed on the ASX in November 1999, trading for less than $1 per share. Today it has a market cap of $41 billion.

ResMed share price snapshot

Over the past 12 months the ResMed share price has gained 19%, trailing the 22% gains posted by the ASX 200 over that same time.

Year-to-date the ASX health care share has gained 3.2% and is currently trading at $28.47 per share.

ResMed also pays a smallish dividend yield of 0.5%, unfranked.

The post Blue chip ASX healthcare share “really attractive”: top analyst appeared first on The Motley Fool Australia.

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Bernd Struben does not own any shares mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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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.

What happened

Shares of coronavirus vaccine maker Novavax (NASDAQ: NVAX) tanked by 37.7% in May, according to data provided by S&P Global Market Intelligence. The collapse was a result of the company’s repeated delays with the manufacturing of its coronavirus vaccine as well as its announcement that it won’t file for the candidate’s regulatory approval before the third quarter.

So what

The combination of delays with regulatory filings and manufacturing delays means that Novavax won’t be able to deliver its contractually obligated doses to the European Union before 2022. In short, certain raw materials needed for the vaccine are in scant supply. Furthermore, the company will be even further behind other vaccine makers like Pfizer and Moderna, which are already on the market and in wide distribution.

In the long run, however, these issues probably won’t harm the company’s revenue making potential. Even amid the delays, Novavax is still signing new sales agreements with groups like the Gavi Vaccine Alliance, which agreed to buy 350 million doses of its vaccine on May 6. Likewise, Novavax still has commitments to make more than 1.1 billion doses in conjunction with its manufacturing collaborators. So, while May’s losses might be frustrating, they probably don’t reflect much genuine destruction of shareholder value. It’s likely that the stock will rebound once sales revenue starts to be reflected in earnings reports.

Now what

While investors are unlikely to have much patience for further delays, Novavax is still proceeding with its plans to commercialize its coronavirus vaccine globally, and it will almost certainly continue to succeed in doing so. Notably, in early May it also reported that its candidate is effective against at least one viral variant, which should keep it competitive with the currently marketed vaccines. But shareholders will need to wait a bit longer before the full impact of the revenue is reflected in the company’s quarterly earnings reports.

Beyond that, the company is also pursuing its combination vaccine project, which could inoculate people against both influenza and the coronavirus in a single jab. On May 10, it published preliminary evidence from preclinical studies that suggests the combination vaccine could be effective.

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

The post Why shares of Novavax crashed 37.7% in May appeared first on The Motley Fool Australia.

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• Why the Premier Investments (ASX:PMV) share price just hit a record high
• The Imugene (ASX:IMU) share price has fallen 14% in the last 5 days
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Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. 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 Premier Investments Limited (ASX: PMV) share price popped into record territory this morning after the company provided a 2H21 and FY21 trading update.

In early morning trade, the company’s share price jumped by 5.2% to hit a new, all-time high of $28.75. However, at the time of writing, Premier shares have retreated back to $27.37, 0.15% higher for the day so far.

Let’s take a look at the latest news from Premier.

Trading update

The Premier share price received a boost this morning after the company announced its strong trading momentum has continued into the second half of FY21.

Premier advised that total global sales for the first 18 weeks of 2H21 ended 5 June 2021 had surged 70% against the comparable period in 2H20 and was up 15.8% against the comparable 18 weeks of 2H19.

The group’s upbeat trading result was driven by a particularly strong performance during the “all-important” Easter School Holiday period, alongside a record Mother’s Day and May result.

Looking ahead, the company expects FY21 earnings before interest and tax (EBIT) to be in the range of $340 million and $360 million. This represents an increase of between 82% and 92% against FY20 EBIT and between 103% and 115% against FY19 EBIT.

Premier points to strong customer demand for its winter product range across all brands, continued strength in online sales and margin expansion as key drivers of its anticipated record FY21 EBIT.

It is worth taking into account that the forecasted record FY21 result comes with the assumption that retail trading conditions remain strong, with no further COVID-19-related store closures or mobility restrictions that could influence consumer shopping decisions.

Management commentary

Premier Investments executive director and CEO Mr Mark McInnes commented on the strong results:

Today’s FY21 EBIT upgraded range will represent another record result for Premier’s shareholders. The strategic decision taken last year by the Chairman and I to build our supply chain and significantly invest in wanted inventory for Easter, April school holidays, Mother’s Day and the winter season has ensured we are in stock, delivering strong sales and gross margin growth across all our brands.

The Group has successfully enabled customers to shop seamlessly either online or in-store during the COVID-19 health crisis. This has been achieved through the long term strategic investments made in our online capability combined with our ability to reach mutual agreements with landlords to appropriately rebase rents.

Premier Investments share price snapshot

Premier Investments has released several upbeat trading announcements this year, which were followed by a pop in its share price.

On 13 January, the company released a positive 1H21 trading update that saw the Premier share price shoot as much as ~18% higher to $26.70.

Premier Investments shares jumped again on 24 March, following the release of the company’s half-year results. The shares opened 8% higher on the day to $25.85 before closing 4.65% higher at $24.94.

Similarly, investors have responded positively to today’s trading update, sending Premier shares into record territory.

The post Why the Premier Investments (ASX:PMV) share price just hit a record high appeared first on The Motley Fool Australia.

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• Retail sales rose 1.1% in April, but some ASX retail shares are selling off in May
• 2 ASX 200 shares to buy for growth

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 owns shares of and has recommended Premier Investments 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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