Tag: Motley Fool

The Rumble Resources Ltd (ASX: RTR) share price continues to climb today. At the time of writing, Rumble Resources shares are up another 12.64% to 49 cents a share. It has been an extraordinary week for this ASX miner, on top of an extraordinary month.

On Monday, just 3 days ago, this company was trading at 28 cents a share. That means Rumble is up 75% in 3 days. At the start of the month, Rumble Resources shares were priced at just 11 cents, which means that, on today’s gains, this company is up 345% in just over 3 weeks.

If an investor was lucky enough to buy this company at its lows of 1 cent per share back in 2016, they would be sitting on a 4,800% gain today.

So what is going on with this millionaire-making miner?

Rumble Resources share price shakes the ground

Today’s performance of the Rumble Resources share price appears to be a continuation of the momentum we have seen in this company since its big announcement on Monday. As we covered at the time, Rumble announced that, as a result of drill testing, it had discovered a major zinc and lead depository at its Chinook Prospect.

According to the company, its findings mean that Chinook’s mineral deposits have the potential to be at the upper end of its exploration targets. That’s despite the testing only evaluating depths of 2km at Chinook, which goes as deep as 45km. Rumble noted this means that large (and cheap) open-cut mining is possible.

There have been no major announcements since Monday, but investors are evidently extremely excited, judging by the continuing performance of the Rumble Resources share price.

Background

Rumble Resources is an ASX miner that is (or at least was) focused on exploration. It was founded in 2011 and listed on the ASX in the same year. Chinook is just one of the company’s 7 prospective sites in Western Australia. These sites cover a range of prospective metals, both base and precious. These include lead and zinc, as well as copper, gold and silver.

At the company’s current share price, Rumble Resources has a market capitalisation of $258.1 million.

More reading

• Why the Zenith (ASX:ZNC) share price shot up 66% today
• Why the Rumble Resources (ASX:RTR) share price is rocketing 90% today
• Why the Rumble Resources (ASX:RTR) share price is surging 28% today

Motley Fool contributor Sebastian Bowen 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 NUIX Ltd (ASX:NXL) share price is rebounding slightly today. This comes after the company’s shares fell a whopping 15% yesterday on news that it wouldn’t reach its initial IPO financial guidance.

NUIX shares are trading at $4.39 at the time of writing, 2.21% higher than yesterday’s close.

For those who aren’t aware and may have only begun following the Aussie tech company recently, Nuix is engaged in providing software-related services to large corporations, government, law enforcement, law firms, and service providers.

The kicker is the nature of its clients. It’s widely speculated that Nuix provides its software services to some of the largest Western government law enforcement and national security organisations, like the CIA and FBI. This is also why Nuix became the highest value technology IPO in Australia in 2020.

Its products include Nuix Discovery, Nuix Investigate, and Nuix Workstation among others. Most of the firm’s revenue gets derived from this software. However, that makes the company very vulnerable to changes in subscription models. This is where the dramatic falls eventuated from yesterday.

What’s been happening to NUIX?

There were obviously some rumblings that NUIX wouldn’t meet its initial financial guidance from its IPO.

However, as The Motley Fool reported yesterday, the news yesterday was further accentuated by the fact that NUIX was downgrading its guidance just over six weeks after reaffirming its following media criticism.

One of its major investors, Macquarie Group Ltd (ASX: MQG) promptly cashed out on its initial $150 million investment in December last year. This was when NUIX shares were over $1 more expensive than they are today. For the record, Macquarie pocketed a cool $450 million for its foresight.

However, the NUIX rebound today shows there is still a lot of investor faith in the company.

Yesterday’s NUIX financial report said that the changes to the company’s bottom line were due to the aforementioned subscription changes. NUIX had shifted its offerings towards a more “flexible” consumption-based model. In this model, companies could pay based on the amount of NUIX’s software they used.

This hit NUIX’s revenue as many of the smaller users were no longer charged a flat fee. However, NUIX insists that it also led to more customers and will continue to do so. This may well lead to a more sustainable, competitive business over time.

While its shares crashed, its report stated that the change could be seen as an overall positive:

For the nine months ended 31 March 2021, the Company acquired more customers than in the same period for the previous year. The total order value and average order value from these new customers were significantly higher than the prior year period. An accelerating trend in customer preference is evidenced by more than 25 per cent of the total order value being derived from consumption licenses

Share price snapshot

Despite today’s gains, the NUIX share price has been falling dramatically over recent months. As of today, it’s down 13% this week, 17% this month and 46% in 2021 so far.

Considering it outstripped many other S&P/ASX All Technology Index companies last year, NUIX investors will also be disappointed to learn that it’s down 130% against its broader technology sector over the past 12 months.

More reading

• ASX 200 dips, Corporate Travel flies, Nuix sinks
• Why Challenger, Nuix, Splitit, & Temple & Webster are sinking
• Why the Nuix (ASX:NXL) share price is crashing 16% lower today
• 2 of the best mid cap ASX shares to buy
• These were the worst performing ASX 200 shares in the Q1 of 2021

Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty 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 Pointerra Ltd (ASX: 3DP) share price has been an exceptionally strong performer on Thursday.

In afternoon trade, the 3D geospatial data technology company’s shares are up 26% to 67 cents.

This latest gain means that its 12-month return now stretches to a staggering ~1,500%.

Why is the Pointerra share price rocketing higher?

Investors have been fighting to get hold of the company’s shares on Thursday following the release of its third quarter update.

According to the release, for the three months ended 31 March, Pointerra achieved record quarterly cash receipts from customers of $1.37 million. This was more than double the cash receipts it recorded during the second quarter of FY 2021.

This ultimately led to the company achieving a net cash inflow from operating activities of $0.21 million for the quarter.

As a result, at the end of the quarter, Pointerra was left with a cash balance of approximately $5.1 million.

What is driving its growth?

Management advised that its strong growth was driven by continued platform rollout and enterprise deployment activities in the US with Pacific Gas and Electric and Eversource Energy.

Also supporting its growth was work with existing utility customers both directly and via their mapping partners across the US. These include Florida Power & Light, Southern California Edison, San Diego Gas & Electric, Seattle City Light, American Transmission Company and Tennessee Valley Authority.

In addition, management revealed that the company experienced growth in demand for Pointerra’s platform from large regional and global engineering firms. It notes that these are actively engaged in early works for local, state and federal government COVID-19 recovery infrastructure investment initiatives.

This activity is also driving the acceleration of innovation adoption by the Architecture, Engineering & Construction sector, which management expects to contribute to further growth in customer acquisition in the coming quarters and into calendar 2022.

This could bode well for the Pointerra share price over the next 12 months.

More reading

• 3 exciting small cap ASX shares to watch
• 3 exciting small cap ASX shares to watch closely
• 3 exciting small cap ASX shares that could be destined for big things

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 Pointerra Limited. The Motley Fool Australia has recommended Pointerra 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 AGL Energy Limited (ASX: AGL) share price is having an absolute shocker today.

AGL shares are today down a nasty 1.88% to $8.89 a share at the time of writing. And that’s not even the lowest AGL went today. Soon after the market opened, this ASX energy company hit $8.65 a share. That price is the lowest AGL shares have been since, wait for it, December 2004. Back then, George W. Bush had just been re-elected president of the United States, for some context.

As you might expect, today’s move is just the latest for this beleaguered ASX blue chip. Since topping out at roughly $27.70 a share back in 2017, AGL has now fallen close to 70% from those highs.

So why is this company at a 17-year low today?

AGL share price hits 17-year low

Well, as my Fool colleague Brooke covered earlier today, AGL shares have been hit hard by the news of the company’s CEO and managing director, Brett Redman, suddenly resigning with immediate effect. Judging by the share price performance today, that was exactly what investors didn’t need to hear at this difficult time for this ASX stalwart.

It was only on 30 March that AGL (and Redman) announced a bold plan to structurally separate AGL into two separate businesses. The ‘new AGL’ will house the company’s energy retailing business, while ‘PrimeCo’ will be the home of AGL’s generation assets.

The market didn’t take too kindly to this proposal, considering that before today, AGL shares had fallen more than 7% since it was announced.

But the more bargain hunt-inclined investors might be looking at AGL today with an eye on its dividend.

A 9.2% dividend yield?

AGLs share price collapse has further increased the company’s trailing dividend yield. At the current share price, this yield has exploded north of 9%. It has settled on 9.23% at the time of writing. That’s objectively a pretty juicy proposition for any ASX investor in this era of near-zero interest rates.

AGL hasn’t made a peep on its dividend policy since August last year. Back then, the company announced that it would effectively be paying out 100% of its earnings as dividends over FY2021 and FY2022. That’s up from its old policy of 75% of earnings. The extra 25% of earnings will be paid as special dividends.

We saw this in action last month. On 26 March, AGL paid out an interim dividend of 31 cents per share, and a special dividend of 10 cents. Even adding these two payouts together, we still only get 41 cents a share. That’s below 2020’s interim dividend of 47 cents.

So unless AGL completely reverses its course under the new CEO, at least long-suffering investors look set to continue to receive hefty dividends from AGL for at least the next year or 2. 

More reading

• The AGL Energy (ASX:AGL) share price falls as CEO steps down
• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high
• 2 ASX dividend shares with massive yields over 8% today
• Why the Tilt Renewables (ASX:TLT) share price is in focus
• Top 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 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 Woodside Petroleum Ltd (ASX: WPL) share price is moving lower today after the oil and gas producer released its FY21 first-quarter report.

At the time of writing, the Woodside share price is trading 1.30% lower to $22.70 per share.

Quarterly result details

Woodside delivered its financial and operational information for the quarter ended 31 March 2021. The oil and gas producer prefaced its results with impacts from heavy weather conditions. Although, this was offset by an increase in oil prices over the quarter.

Woodside produced 23.7 million barrels of oil equivalent (mmboe) during the quarter, 2% lower than its production in Q1 2020. Despite the impact on production, Woodside achieved a 22% increase in revenue quarter-over-quarter to $1.166 billion. An increase in the price of oil as economies continue to bounce back from COVID-19. This is to thanks to strong sales.

The company’s dampened production sticks out like a sore thumb with Santos Ltd (ASX: STO) releasing its quarterly report as well this morning. Woodside’s smaller competitor managed to increase its production by 39% from Q1 2020. Actually exceeding Woodside’s production with 24.9 million barrels.

Funnily enough, the Woodside share price is down slightly more than Santos at midday.

The oil and gas giant also reported ramping up the development of further projects. Key contractors on the Scarborough offshore gas resource accelerated engineering and procurement activity. This is in preparation for the final investment decision in the second half of 2021.

CEO commentary

Today’s result also marks the first for Ms. Meg O’Neill as Acting CEO. The change came with former CEO, Peter Coleman announcing his retirement. Ms. O’Neill provided some commentary on Woodside’s update:

Woodside achieved record spot LNG prices and its highest price premium for an oil cargo during the period. More importantly, the sustained increase in oil and gas prices reflects the rebound in demand as economic conditions improved across Asia. The swift rebalancing of markets after the disruptions of 2020 further underpins our positive outlook for LNG in the medium term.

During the quarter, Woodside also entered a memorandum of understanding with the State of Tasmania. This partnership was in support of the company’s proposed hydrogen production facility at Bell Bay. O’Neill added, “H2TAS is the subject of an application under the Australian Renewable Energy Agency funding round expected to be finalised in coming weeks.”

Woodside share price recap

The Woodside share price has navigated the last unprecedented 18 months carefully. As travel begins to return, such as the trans-tasman bubble, demand for oil is picking back up. The glimmer of a brighter future has helped the company’s share price rebound 15.7% over the last year. 

Despite this, the Woodside share price has dropped 17% since 20 January. The near-term concerns circulate as US supply adds to demand concerns. 

More reading

• ASX 200 up 0.2%: AMP sinks, Redbubble crashes, Megaport jumps
• Why the Santos (ASX:STO) share price is in focus
• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Mitchell Lawler 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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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is bouncing back from yesterday’s decline. The benchmark index is currently up 0.4% to 7,027.4 points.

Four ASX shares that have not been able to follow the market higher today are listed below. Here’s why they are tumbling lower:

AMP Ltd (ASX: AMP)

The AMP share price is down 4.5% to $1.11. Investors have been selling the financial services company’s shares following the release of its first quarter update. For the three months ended 31 March, AMP posted a $1.6 billion increase in Australian wealth management assets under management to $125.7 billion. However, this was driven entirely by improved investment markets, which offset net cash outflows of $1.5 billion.

Challenger Ltd (ASX: CGF)

The Challenger share price has continued its slide and is down 2.5% to $5.12. The annuities company’s shares have come under significant pressure since the release of its third quarter update. That update revealed that its margins have come under pressure due to a sharp decline in credit spreads over the year that were not fully reflected in customer pricing. And while the company intends to lift prices significantly, there are concerns this could weigh on sales.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price has fallen 9% to $1.13. This decline appears to have been driven by a broker note out of Citi this morning. According to the note, the broker has downgraded the lithium producer’s shares to a sell rating with a $1.10 price target. Citi made the move largely on valuation grounds following a strong gain over the last couple of months.

Redbubble Ltd (ASX: RBL)

The Redbubble share price has crashed over 21% lower to $4.33. Investors have been selling the ecommerce company’s shares following the release of its third quarter update. For the three months ended 31 March, Redbubble reported a 54% increase in gross transaction value to $134 million. However, from this, it only generated EBITDA of $2.2 million. This compares to its first half EBITDA of $48.8 million.

More reading

• Top brokers name 3 ASX shares to sell today
• ASX 200 up 0.2%: AMP sinks, Redbubble crashes, Megaport jumps
• Redbubble (ASX:RBL) share price crashes 12% on Q3 update
• Down 20% this week: Is the Challenger (ASX:CGF) share price cheap?
• AMP (ASX:AMP) share price on watch after Q1 update

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Challenger 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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On Wednesday I looked at three ASX shares that brokers have given buy ratings to this week.

Unfortunately, not all shares are in favour with them right now. Three ASX shares that have just been given sell ratings by brokers are listed below. Here’s why these brokers are bearish on them:

A2 Milk Company Ltd (ASX: A2M)

According to a note out of Citi, its analysts have retained their sell rating and $7.15 price target on this infant formula and fresh milk company’s shares. The broker has been researching the China market and believes that consumers now have a preference for domestic brands. It fears this could impact demand in the key market. In addition to this, it suspects that excess inventory will have to be sold at a discount. This could put further pressure on daigou margins. The a2 Milk share price is currently fetching $7.68.

Afterpay Ltd (ASX: APT)

A note out of UBS reveals that its analysts have retained their sell rating and lowly $36.00 price target on this payments company’s shares. This follows the release of Afterpay’s third quarter update this week. While the company’s growth in the US and UK has impressed the broker, it notes that growth in the ANZ market is slowing. The broker also points out that the company’s North American operations are unprofitable with structurally lower margins. The Afterpay share price is trading at $122.52 on Thursday.

Pilbara Minerals Ltd (ASX: PLS)

Another note out of Citi reveals that its analysts have downgraded this lithium producer’s shares to a sell rating with a $1.10 price target. The broker made the move largely on valuation grounds after a strong rally over the last couple of months. In addition to this, it notes that the company fell short of shipment expectations during the March quarter and its costs were higher than expected. The Pilbara Minerals share price is down 9% to $1.13 on Thursday afternoon.

More reading

• Why the A2 Milk (ASX:A2M) share price hit a multi-year low today
• Is the Afterpay (ASX:APT) share price a buying opportunity right now?
• High-flying ASX tech shares could fall another 90%: fundie
• 5 things to watch on the ASX 200 on Thursday
• Here’s why the Pilbara Minerals (ASX:PLS) share price is tumbling lower

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended A2 Milk. The Motley Fool Australia owns shares of AFTERPAY T 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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The Coles Group Ltd (ASX: COL) share price is rising today after the company increased its climate change commitments to use 100% renewable energy by 2025, signing two new energy purchasing agreements.

At the time of writing, the Coles share price is up 2.12% to $15.90. 

With over 2,507 large retail outlets nationally that are open long hours, Coles is a major Australian energy user. In addition, it is one of the country’s largest public retail companies. Coles providing customers with everyday products including fresh food, groceries, household goods, liquor, fuel, and even financial services.

Originally Australia’s second-largest retailer behind Woolworths Limited (ASX: WOW), Coles was acquired by Wesfarmers Ltd (ASX: WES) in 2007. However, it spun off from Wesfarmers in 2018 and Coles shares re-listed on the ASX at that time. As of 30 June 2018, Coles processed more than 21 million customer transactions on average each week.

What Coles’ renewable energy targets mean

Coles’ 100% renewable energy usage targets in just four years time. This is relatively impressive compared to the targets of some large companies. However, its more important pledge to be completely carbon neutral isn’t until 2050.

Despite this, the company says it’s moving in the right direction. In particular, signing two major agreements with leading renewable energy companies ENGIE and Neoen. 

Coles is planning on reaching its renewable energy targets by purchasing its electricity from renewable energy providers, rather than self-generation. It was the first major Australian company to sign a renewable purchasing-power agreement in 2019.

Some progress has already made on renewable power purchase agreements. This includes onsite solar and large-scale generation certificate deals. Coles has also committed to purchasing more than 70% of the renewable electricity required to meet its FY25 target, once the agreements commence.

What Coles management said

Coles chief sustainability, property and export Officer, Thinus Keeve, said the company wants to be a pillar of Australian sustainability. He commented:

As part of our ambition to be Australia’s most sustainable supermarket we’ve launched our new ‘Together to Zero’ sustainability strategy with a long-term aspiration towards zero emissions, zero waste and zero hunger.

The agreements are with some of the world’s top renewable electricity companies and show we’re taking a leading role in driving climate action in Australia.  It puts us in a great position to be powered by 100% renewable electricity by the end of FY25.

Share price snapshot

When the COVID-19 pandemic hit and the news soon became full of empty supermarket shelves and customers fighting over toilet paper, Coles shares rocketed and rose from $15 to $18 between May and August 2020.

Since then, despite a period of relative stability to end last year, they’ve declined fairly significantly. In February 2021, they fell off a cliff, falling $2 in one day due to the company’s poorer than expected FY21 half-year results.

The Coles share price is up 1.6% this month, but down more than 13% in 2021 so far.

More reading

• Why the Australian Primary Hemp (ASX:APH) share price is up 5%
• 2 of the best ASX dividend shares to buy
• ASX 200 Weekly Wrap: ASX 200 hits new post-COVID high
• Rates could be on hold for years so buy these excellent ASX dividend shares
• Where to invest your Rio Tinto (ASX:RIO) dividends

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of 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 Evolution Mining Ltd (ASX: EVN) share price is lifting today following the release of the company’s quarterly results.

At the time of writing, the Evolution share price is up 1.2%, swapping hands for $4.79 after falling to an intraday low of $4.70 in early trade.

Let’s dive into the company’s performance through the quarter just been.

Evolution Mining’s third-quarter results

The results for the period ending 31 March are the company’s weakest in FY21.

Evolution recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of $110 million. In contrast, EBITDA was $227.1 million in the previous quarter.

Operating mine cash flow was 24% lower than in the second quarter, while total capital expenses were up. Group cash flow fell from around $99 million in the second quarter to around $39 million in the third, a 59% drop.

Not included in the EBITDA was the $119.6 million worth of interim dividends of 7 cents a share paid to Evolution shareholders. The company’s previous dividend was released in August 2020 and was 2 cents greater than that paid this quarter.

Evolution also paid $55.2 million worth of interest, taxes and debt repayments.

All of this combined resulted in the largest fall of the company’s cash balances in a single quarter so far this year.

In positive news, Evolution had $333.1 million in cash at the end of the quarter and bank debt of $500 million, leaving it with a net bank debt of $166.9 million.

The quarter that’s been for Evolution Mining

This quarter, Evolution became a participant in the world’s largest corporate sustainability initiative, the United Nations Global Compact. Doing so, it pledged to support the UN’s Ten Principles on human rights, labour, environment, and anti-corruption.

The company also announced an agreement to acquire Canadian gold miner Battle North for approximately C$343 million. The deal is awaiting a vote by Battle North’s shareholders.

The company’s injury frequency remained low, with its Mt Rawdon operations now 14 months injury-free.

The group’s all-in sustaining costs equated to US$980/oz. This makes Evolution one of the lowest cost major and mid-tier gold producers globally.

Heavy rainfall in March impacted the company’s Mt Rawdon operations, restricting access to higher grade ore. Its other projects have all continued as planned.

Evolution continues to manage COVID-19 across its operations.

Evolution share price snapshot

If today’s news continues to impact Evolution shares positively, they have a chance to get out of the ASX red. Currently, the Evolution share price is down by 9% year to date but only 4% over the last 12 months.

The company has a market capitalisation of around $8 billion, with approximately 1.7 million shares outstanding.

More reading

• 5 things to watch on the ASX 200 on Thursday
• 5 things to watch on the ASX 200 on Wednesday
• 5 things to watch on the ASX 200 on Tuesday
• Why these 3 ASX 200 gold shares are racing higher today
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Brooke Cooper 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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ASX travel shares could get more investor attention as the sector experiences more of a recovery from COVID-19 impacts.

Investors got an insight into conditions with an update from Corporate Travel Management Ltd (ASX: CTD).

What did Corporate Travel Management tell the market?

Corporate Travel revealed that it is seeing strong domestic demand in the ANZ region with total client activity climbing to 85% of FY19 booking levels as of last week. It also said that New Zealand continues to be a standout and, as of last week, was trading at above 160% of FY19 booking levels. It also said that the US is experiencing positive signs of activity recovery.

On a more company-specific note, despite lockdowns in the UK and Europe, significant essential travel client wins in the region contributed to profitability.

It broke-even in March 2021 and expects positive underlying earnings before interest, tax, depreciation and amortisation (EBITDA) in the fourth quarter of FY21.

The business also said that the UK and US have among the most advanced vaccination rollouts and are on track for all people over 18 years of age to be vaccinated by the northern hemisphere summer (June or July). The speed of rollouts supports expectations of a rapid return to corporate domestic travel and meaningful levels of pan-European and trans-Atlantic travel after the northern hemisphere summer holiday period.

Can other ASX travel shares take positivity from that?

Each ASX travel share has a different business model and generates a different level of earnings from the ANZ region, the US, Europe and so on. There’s also different levels of exposure to the corporate market and the leisure market.

Webjet Limited (ASX: WEB) and Flight Centre Travel Group Ltd (ASX: FLT) both have sizeable positions in the ANZ travel market, and the corporate travel market.

Sydney Airport Holdings Pty Ltd (ASX: SYD) and Qantas Airways Limited (ASX: QAN) are integral parts of the system for getting corporate and leisure passengers from A to B.

However, a return of significant volume doesn’t mean that profit is going to return to normal. Corporate Travel only said that it had reached breakeven status. Businesses like Qantas still have large cost bases, though it is working on reducing that expenditure.

Is it plain sailing for ASX travel shares?

Not necessarily.

The Corporate Travel Management boss said that there are three key drivers that will continue to help economic growth in Australia and New Zealand.

He said that borders must remain open to restore confidence and maintain economic momentum. Mr Pherous pointed out that tracking and tracing capability is now at a very high standard.

The next point was that the vaccination rollout must be the priority for the government, with a sense of urgency to vaccinate the entire population over 50, those at risk and particularly frontline workers.

Finally, the government must establish and clearly communicate a framework for re-opening international trade, including clear metrics, benchmarks and timelines.

UBS rates the Corporate Travel Management share price as a buy, with a price target of $22.

More reading

• Brokers favourite ASX share for the COVID-19 reopening trade
• ASX 200 dips, Corporate Travel flies, Nuix sinks
• Why Corp Travel Management, Imugene, MoneyMe, & Syrah are pushing higher
• Why the Corporate Travel Management (ASX:CTD) share price is soaring today
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and 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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