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Lovisa Holdings Ltd (ASX: LOV) shares are off to a flying start this morning after the company released its half-year financial report earlier today. In the opening minutes of trade, the Lovisa share price has rocked 19.09% higher to $13.10.

How did Lovisa perform?

Earlier today, the jewellery and accessories retailer released its financial report for the first half of FY21.

The Lovisa share price is soaring despite the company reporting a 26.7% decline in profit after tax of $19.6 million. Lovisa also reported a 9.8% fall in revenue of $146.9 million for the half-year.

Lovisa noted that same store sales fell 4.5% for the half year, with gross margins at 77.2% compared to 78.9% 12 months ago.

The jewellery chain cited that the first quarter was heavily impacted by government responses to the COVID-19 pandemic. Lovisa highlighted temporary store closures in Victoria and weakness in global markets as contributing to the company’s poor performance.  

Despite the dour financial results, Lovisa boasted a strong balance sheet for the half year with $42.5 million cash in hand. As a result, the company declared an interim dividend of 20 cents per share, up from 15 cents in the prior corresponding period.

What is the outlook for Lovisa?

Lovisa is a leading retailer in fashion jewellery, strategically targeting the affordable jewellery segment. The company currently boasts 460 stores in Australia and abroad, with notable locations in the United Kingdom, France and the United States.

The company did not provide an outlook or guidance for the full year. However, Lovisa’s management noted that the first seven weeks of the second half showed an improving sales trajectory. Lovisa highlighted a 12% increase in overall same store sales for the period.

The company also noted strength in Southern Hemisphere markets, whilst advising Northern Hemisphere stores faced challenging conditions.

In addition, Lovisa informed the market that its acquisition of the beeline retail business is expected to be completed in the coming months, accelerating the company’s European expansion.

Lovisa share price snapshot

Incorporating today’s gains, the Lovisa share price has now rallied 13% in year-to-date trading. Lovisa shares fell as low as $2.45 in March 2020 before surging more than 400% to their current levels.

Based on the current Lovisa share price, the company has a market capitalisation of around $1.2 billion. 

More reading

• This ASX growth share is cheap like a value stock

Motley Fool contributor Nikhil Gangaram 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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Chemist Warehouse is taking a step closer to an initial public offering (IPO) in what could be the hottest float on the ASX in years.

Even investors who aren’t keen on participating should take note. The health of any bull market can be often be measured by the IPO market.

On that front, Chemist Warehouse is creating a buzz. The Australian Financial Review reported that it is preparing to send out a formal request for proposal to investment banks.

Chemist Warehouse could be the hottest ASX IPO in 2021

Interest is expected to be high given that the potential debutant is our country’s largest pharmacy chain with a turnover estimated at $5 billion.

The fees generated from the float for the lucky chosen investment bankers will be very substantial.

But investment bankers will have their work cut out for them. The ownership structure of the privately held Chemist Warehouse is messy even though current equity holders have undertaken a clean-up to prepare for the IPO.

Biggest ASX IPO since Medibank Private?

Investment banks will still need to put on their thinking caps to recommend how best to structure Chemist Warehouse for life as a public company.

It’s too early to tell what IPO price the pharmacy giant will fetch, but the AFR suggested it could be north of $5 billion.

Of course, that doesn’t say much. I believe an IPO candidate like Chemist Warehouse would list with a market cap multiple of more than one times its annual revenue. Of course, I am assuming it is profitable with only a modest amount of debt.

Assuming the valuation is above $5 billion, Chemist Warehouse could become the biggest ASX float since Medibank Private Ltd (ASX: MPL) in 2014.

Key question facing would be investors

The real question then is at what multiple can Chemist Warehouse attain? While it’s a household name and the industry leader by miles, investment banks handling the bookbuild will need to show the group still has multiple growth levers.

It’s a little harder to see where future growth will come from outside of organic growth in the sector. It could look overseas, but many Australian companies don’t have a good track record on this front.

According to IBIS World, My Chemist Retail Group (which owns Chemist Warehouse) commands 21.1% of the Australian market. That’s well ahead of other ASX-listed peers.

Sigma Healthcare Ltd (ASX: SIG) is the second largest at 16.8% of the market, while Australian Pharmaceutical Industries Ltd (ASX: API) holds 8.6%.

Chemist Warehouse was founded by Jack Gance and Mario Verrocchi. They started the company in 1995 with five outlets. This has grown to more than 300 stores employing 9,500 staff across the country today.

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Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. Connect with me on Twitter @brenlau.

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 QBE Insurance Group Ltd (ASX: QBE) share price has come under pressure this morning.

At the time of writing, the insurance giant’s shares are down 1% to $8.63.

This means the QBE share price is now down 42% since this time last year.

Why is the QBE share price trading lower?

The QBE share price has fallen today following the release of its FY 2020 results.

For the 12 months ended 31 December, on a constant currency basis and adjusting for disposals, QBE reported a 10% increase in gross written premiums (GWP) to US$14,643 million.

Management advised that this reflects premium rate momentum, improved premium retention across all divisions, and strong new business growth in North America and International.

However, as it previously warned, this GWP growth could not stop the company from posting an enormous loss in FY 2020. QBE reported a loss after tax of US$1,517 million for the 12 months. This compares to a net profit after tax of US$550 million in FY 2019.

This loss includes a disappointing underwriting result, a significant reduction in investment income, impairment of goodwill and deferred tax assets in North America, and charges related to rationalisation of legacy IT platforms and its real estate footprint.

Also weighing on the QBE share price was its adjusted result. Excluding all the one-offs, on an adjusted basis, QBE’s recorded a net cash loss after tax of US$863 million. This compares to an adjusted net cash profit after tax of US$733 million a year earlier.

Unsurprisingly, given its significant loss, the QBE board has not declared a final dividend for FY 2020. 

Management commentary

QBE’s Interim CEO, Richard Pryce, was disappointed with the company’s performance in FY 2020, but appears positive about the year ahead.

He commented: “While obviously very disappointed with the headline loss, premium momentum accelerated across 2020 and has continued into 2021. Coupled with the improved positioning of the underlying business, we enter this year with confidence and optimism.”

“I look forward to leading the business in 2021; my primary focus remains performance improvement including that the Group takes full advantage of currently favourable market conditions by maximising premium rate increases while driving targeted growth in portfolios and regions offering the most profitable new business opportunities,” Mr Pryce added.

Outlook

Not even QBE’s outlook for FY 2021 could help drive the QBE share price higher today.

Based on several factors, such as assuming a normal crop result, QBE believes it exited FY 2020 with a combined operating ratio of ~95%. This compares to FY 2020’s actual combined operating ratio of 104.2%. (Anything below 100% is profit, whereas above is a loss.)

In light of this, at this stage, QBE is expecting margin expansion in FY 2021.

Also failing to give the QBE share price a boost today was news that dividend payments are likely to return this year.

The QBE board advised that, subject to global economic conditions not deteriorating materially, it expects to resume dividend payments of up to 65% of adjusted cash profits in FY 2021.

More reading

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Motley Fool contributor James Mickleboro 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.

Fortnite developer Epic Games escalated its battle with Apple Inc (NASDAQ: AAPL) by filing an antitrust complaint in the European Union (EU) over the fees Apple takes for in-app purchases made from apps downloaded from its App Store.

Although the two will face off in court in May, Epic is making its war on Apple’s payment system a global affair, having filed similar lawsuits against it in the US, Australia, and the UK.

Last summer, Epic Games bypassed Apple’s fees by allowing Fortnite players to pay the developer directly for any in-app purchases. Apple’s cut of such payments typically runs as high as 30%.

Although many developers have chafed over the system, none took on Apple for fear of losing access to the platform. That’s part of the argument Epic is using in filing its lawsuit, writing in a blog post:

Apple has not just harmed but completely eliminated competition in app distribution and payment processes. Apple uses its control of the iOS ecosystem to benefit itself while blocking competitors and its conduct is an abuse of a dominant position.

Apple responded to the end run around its App Store fees by booting Epic Games from the platform, leading to lawsuits and countersuits. Epic is still unavailable from the App Store.

Apple argues the fees help the App Store remain secure, and Epic’s efforts at bypassing the system violate the guidelines that apply to all developers accessing the system.

Although Epic has suffered a significant loss of Fortnite players after being booted from the App Store and the iOS operating system, the video game developer says it’s not seeking to levy any monetary damages against Apple, only that fairness and competition be restored to the system.

Epic CEO Tim Sweeney said, “What’s at stake here is the very future of mobile platforms.”

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

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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple. The Motley Fool Australia has recommended Apple. 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.

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In morning trade the Goodman Group (ASX: GMG) share price is pushing higher.

At the time of writing the global integrated property company’s shares are up 2% to $17.33.

This means the Goodman share price has limited its year to date decline to 10.5%.

Why is the Goodman share price pushing higher?

Investors have been buying Goodman shares this morning following the release of its half year results.

For the six months ended 31 December, the company reported a 16% increase in operating profit to $614.9 million. This reflects new developments, strong demand, and 3% like-for-like net property income growth.

Demand was so strong for its properties during the half that the company leased an additional 1.9 million square metres. This equates to $269 million of annual rental property income across the company and partnerships. This left Goodman with an occupancy rate of 97.9% and a weighted average lease expiry (WALE) of 4.4 years.

In light of its strong half, the Goodman board has declared a 15 cents per share interim distribution. This is in line with its full year guidance of 30 cents per share.

Online shopping drives growth for Goodman

Goodman’s Chief Executive Officer, Greg Goodman, revealed that the shift to online shopping and the digital economy are driving its growth. And given the outlook for the digital economy over the 2020s, this bodes well for the Goodman share price.

He said: “The logistics and warehousing sector are playing a significant role globally in providing essential infrastructure to the digital economy. On average, global online sales increased by 30% in 2020 and are expected to show strong growth over the next five years.” 

“We are experiencing strong demand from customers as they meet increasing consumer requirements and higher utilisation of properties.”

This has led to Goodman once again increasing its development work to capture this demand.

Mr Goodman explained: “Our development activity is reflecting these trends and the flow-on effects in the digital space. As a result, we have again increased the levels of development work in progress to $8.4 billion. Maintaining a strong balance sheet and retaining income has provided us with significant liquidity, stability and financial resources for sustainable growth.”

In respect to its work in progress, management advised that strong customer demand and the desirability of sites has translated into a continued high pre-commitment of 69%. Furthermore, projects completed are averaging 95% commitment.

Going carbon neutral in 2021

Also giving the Goodman share price a boost today could be its carbon neutral targets.

Goodman was aiming to be carbon neutral by 2025. However, management now expects to achieve this by June 2021.

Mr Goodman said: “We view our approach to sustainability as one that leads to positive economic, environmental and social outcomes for our business, stakeholders and the planet. We are focussed on energy efficiency, climate resilience and the wellbeing of our customers and people. Customer demand for strategically located space, close to consumers that makes a positive contribution towards a more sustainable world has never been more important.”

Outlook

Perhaps the main reason the Goodman share price is performing positively today is its guidance for FY 2021.

After its strong first half, management has upgraded its full year operating profit guidance to $1.2 billion. This will be a 12% increase on FY 2020’s operating profit and compares to previous guidance of 9% growth.

Greg Goodman commented: “The Group has significant human capital and expertise, financial resources and a strategic real estate portfolio to generate opportunities in changing operating conditions. Our business is performing strongly. The continuing shift in use and requirements from our customers, driven by the long-term trends in the digital economy is supporting continued demand for our properties.”

“Consequently, we have upgraded our FY21 forecast operating profit to $1.2 billion (up 12% on FY20). Forecast distribution for FY21 will remain at 30.0 cents per security, in keeping with our financial risk management policy,” he concluded.

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Motley Fool contributor James Mickleboro 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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Anteris Technologies Ltd (ASX: AVR) shares will be on watch this morning following the release of the company’s preliminary results for the 2020 full year. At the closing bell yesterday, the Anteris share price finished the day down 3.8% at $5.00.

Let’s take a look and see how the structural heart company performed for the period.

FY20 performance

The Anteris share price could be under pressure today after the company reported a disappointing end to its FY20 performance.

According to yesterday’s late market release, Anteris advised it achieved a significant drop off across its key metrics.

For the period ending 31 December, total revenue fell to $7.1 million, a decline of 58% over the prior corresponding period. Most of the revenue generated came from the manufacturing of its CardioCel and VascuCel patches under the LeMaitre Vascular Inc. agreement. In addition, the company began winding down operations in the Infusion segment. COVID-19 had a minimal impact on Anteris due to the early implementation of its risk-management strategies.

Other income for the company totalled $4.8 million, which included $2.2 million in licencing income from 4C Medical Technologies. This was in relation to the transfer of the sterilisation method for use with Anteris’ ADAPT tissue technology. The other monies consisted of research and development tax incentives and COVID-19 stimulus packages.

Investors will be eyeing off the Anteris share price in morning trade after the company reported earnings before interest, tax, depreciation and amortisation (EBITDA) sank to a loss of $13.7 million. This is in comparison to the EBITDA loss of $4.1 million recorded in the prior FY19 period.

Selling, general and administrative expenses stood at $22.1 million, an improvement from the $34.5 million in FY19. Initiated by management, cost-saving measures were attributed to lower employee, travel and conference costs. In addition, the prior period impairment of Admedus Vaccines, and favourable currency exchange movements helped support cost control.

Overall, the business recorded a net loss of $15.3 million, mostly due to investment in its 3D single-piece aortic DurAVR valve.

Anteris revealed a cash balance of $4.4 million for the end of December. It’s worth noting that the company entered into a short-term facility for $1.2 million at an interest rate of 1.15% per month. The loan will be secured against the research and development refund.

The board declared that no dividend will be paid to shareholders.

About the Anteris share price

The Anteris share price is down over 30% since this time last year. Anteris shares reached a 52-week high of $9.18 in April, before plummeting down to a low of $3.01 in August.

Based on the current share price, Anteris has a market capitalisation of close to $33 million.

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Motley Fool contributor Aaron Teboneras 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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Will record earnings will be enough to offset the leadership uncertainty hanging over the Cleanaway Waste Management Ltd (ASX: CWY) share price?

That’s the question on shareholders’ mind this morning after outgoing Cleanaway CEO Vik Bansal unveiled a 75.3% surge in statutory interim net profit to $79.4 million.

But before you get too excited about the big profit surge, the group’s underlying profits in 1HFY21 grew more modestly.

Cleanaway delivers record results

Underlying net profit improved 6.5% to $79 million, while underlying earnings before interest, tax, depreciation and amortisation (EBITDA) expanded 2.9% to $263.8 million and net revenue was flat at $1.07 billion.

Not to take anything away from Bansal – the underlying net profit and EBITDA still marked a record for the group.

Not firing on all cylinders

Cleanaway’s Solid Waste Services business performed solidly with revenue increasing 2.1% to $713.2 million.

This was offset by a decline in its Industrial and Waste Services division as management terminated lower value contracts. The Liquid Waste and Health Services division also detracted from top-line growth due to the lingering effects of COVID-19.

Key highlight are margins

But it’s notable that margins across all the businesses expanded in the first half and Cleanaway increased its interim dividend by 12.5% to 2.25 cents a share.

Further, the group is expecting to break FY20’s record underlying net profit this financial year.

There is perhaps an air of expectations that Bansal would deliver a good result, but herein lies the bigger issue.

Foolish takeaway

This is the last result he will be handing down as captain of the ship as he’s being “transitioned” out of the business. His ungraceful exit comes amid a scandal where the astute boss is accused of creating a culture of workplace bullying.

Executive chairman Mark Chellew will be taking over and will be supported by chief operating officer Brendan Gill.

This will likely mean more volatility for the Cleanaway share price for two reasons. The market is forward looking, so the solid first half result in itself won’t be enough to keep investors onside.

The market also hates uncertainty and a changeover of the guards usually creates unpredictability – especially when a well-regarded CEO exits the building.

Of course, when I say “well-regarded” I mean by the investment community, although it is hard to judge anyone from only one angle.

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Motley Fool contributor Brendon Lau 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 Cochlear Limited (ASX: COH) share price will be on watch today following the release of its half year results.

How did Cochlear perform during the first half?

Cochlear’s performance continued to improve during the first half of FY 2021 after surgeries recovered following COVID-19 related shutdowns. Management notes that the pace of recovery varied across markets, with strong growth recorded in the United States, Japan, Korea, and China. This was supported by improving momentum in Western Europe, which partially offset a slower recovery in emerging markets.

For the six months ended 31 December, Cochlear reported a 4% (or 1% in constant currency) decline in sales to $742.8 million. This was driven by a 7% increase in second quarter constant currency sales, which almost offset an 8% decline in the first quarter.

On the bottom line, the company reported a 6% decline in underlying net profit to $125.3 million. This reflects a recovery in its sales and lower operating expenses due to material COVID-19 related savings. Impressively, this is a 4% constant currency decline over the record half year profit it achieved in the prior corresponding and COVID-free period.

In light of its improved performance and solid cash flow generation, the Cochlear board has declared a $1.15 per share interim dividend. This is down 28% from the prior corresponding period.

Cochlear to return COVID-19 support

Cochlear revealed that it has decided to repay $24.6 million in pre-tax COVID government assistance received during the half.

It notes that it met the eligibility requirements to participate in these programs. However, trading conditions have improved, and while there is still uncertainty ahead, it believes returning the payments is the appropriate thing to do. These funds will be repaid in the second half.

Outlook

Potentially giving the Cochlear share price a lift today is management’s guidance for the remainder of the year.

It has provided full year underlying net profit guidance of $225 million to $245 million. This represents a 46% to 59% increase on FY 2020’s profits.

Management acknowledges that there continues to be uncertainty about the trajectory of COVID, but is increasingly confident of the resilience of its hearing implant business. This guidance is based on the Australian dollar averaging 77 U.S. cents for the second half.

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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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear 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 Wesfarmers Ltd (ASX: WES) share price could be on the move today.

This morning a leading broker upgraded the conglomerate’s shares in response to its half year results.

What happened?

On Thursday Wesfarmers released its results for the six months ended 31 December. It reported a 16.6% increase in revenue to $17,774 million and a 25.5% jump in net profit after tax (excluding significant items) to $1,414 million.

The key driver of its growth was its Bunnings business. The hardware giant reported a 24.4% increase in revenue to $9,054 million for the half. This represents over half of the company’s revenue during the period.

Also supporting its growth was a 23.7% jump in Officeworks revenue to $1,523 million, a 9% lift in Kmart Group revenue to $5,441 million, and a 6.6% increase in Chemicals, Energy and Fertilisers revenue.

According to a note out of Goldman Sachs, this was far better than it was expecting.

“WES delivered a stronger than expected 1H21 EBIT of A$2057mn +27.4% (12.3% beat vs. GSe and +10.3% versus Visible Alpha Consensus Data), primarily due to Dept store turnaround but generally solid performance across the board. Revenue grew to A$17.8bn, +0.9% vs. GSe (+3.5% vs. consensus). Group NPAT was at A$1390mn, +9.5% vs. GSe on a post-AASB16 basis and an interim dividend of A$0.88 was declared, +4.6% vs. GSe.

Where next for the Wesfarmers share price?

In light of this strong performance and its balance sheet flexibility, Goldman Sachs has upgraded Wesfarmers shares to a buy rating and lifted its price target on them by 23.6% to $59.70.

This price target implies potential upside of 9.6% for its shares over the next 12 months excluding dividends. This stretches to just over 13% if you include the fully franked 3.6% dividend yield the broker expects in FY 2021.

Why is Goldman Sachs positive?

Goldman Sachs notes that Wesfarmers is well-placed to benefit from Australia’s economic recovery. It also believes it has excess capital that could be used for earnings accretive acquisitions. It explained:

“Management noted improving confidence in the economic recovery in their outlook statement, which is a notable improvement on prior cautious commentary from the company. Kmart turnaround and Bunnings property cycle exposure suggest WES is well positioned to participate in recovery as it gathers pace in Australia.”

“We have consistently highlighted in our prior research that WES has excess capital over and above its A-/A3 credit rating requirements. The beneficial cash conditions experienced by discretionary retailers currently has exacerbated WES’ balance sheet position, with the company now demonstrating what we consider to be an excessive capital position with an estimated >A$8bn in excess of credit requirements, prior to the Mt Holland development. We revise FY21/22 NPAT forecsts by +16.3% and +21.9% respectively.”

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The CSL Limited (ASX: CSL) share price was a positive performer on Thursday.

The biotherapeutics company’s shares charged 3% higher to end the day at $289.00.

Why did the CSL share price charge higher?

Investors were buying CSL shares following the release of a strong half year result.

For the six months ended 31 December, the company delivered a 16.9% increase in revenue over the prior corresponding period to US$5,739 million.

This was driven largely by a 38% jump in Seqirus revenue, thanks to a 44% increase in seasonal influenza vaccine sales. Demand for flu vaccines has been exceptionally strong due to the COVID-19 pandemic.

Also supporting the company’s growth was its CSL Behring business, which reported a 9% increase in revenue. This was driven by solid growth in its core immunoglobulin portfolio, the successful transition to its own distribution model in China, and strong growth in HAEGARDA sales.

And thanks to margin expansion, CSL delivered a 45% jump in reported net profit after tax to US$1,810 million.

Guidance

However, potentially holding the CSL share price back a touch, was that management has held firm with its full year guidance despite the strong first half profit growth.

It expects to report a full year net profit after tax of US$2,170 million to US$2,265 million at constant currency. This is in line with previous guidance and represents year on year growth of 3% to 8%. A big pullback from its first half growth of 45%.

Management also warned that plasma collections have been adversely affected during the pandemic and additional collection costs have been incurred.

CSL share price downgraded

CSL’s outlook didn’t go down well with analysts at Goldman Sachs.

The broker said: “By reaffirming the FY21 earnings target of +3-8% despite delivering a +25% beat at 1H, CSL is now guiding to an earnings decline of (47)-(58)% in 2H21. Whilst management has likely applied more than its usual degree of conservatism amidst so much uncertainty, it is also clear that the company is having to take tougher decisions on customer allocations than we had expected to see at this stage.”

“It has been long-understood that the plasma collection deficit would pressure FY21-22, but to see such a sharp sequential slowdown in IG during a period which was mostly unaffected by these challenges was a negative surprise to us/consensus, particularly ahead of two reporting periods which appear tougher still (1H21 volumes +3%),” it added.

As a result, the broker has downgraded its earnings estimates for FY 2022 and FY 2023 and is now forecasting “three consecutive years of single-digit earnings growth.”

In light of this, it believes its shares are overvalued at the current level.

“At current valuation of 29.3x EV/EBITDA (vs. sector 21.6x), we no longer see sufficient upside to justify a positive stance. We downgrade to Neutral (from Buy),” it explained.

Goldman Sachs has a $308.00 price target on the CSL share price.

More reading

• 5 things to watch on the ASX 200 on Friday
• ASX 200 mixed, CSL reports 44% profit growth, TWE soars
• Why did Aussie investors get a 9% dividend cut from CSL (ASX:CSL)?
• ASX 200 up 0.2%: ANZ and CSL impress, Fortescue declares huge interim dividend
• Why CSL, Domino’s, IPH, & Treasury Wine shares are storming higher

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 CSL 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.

The post CSL (ASX:CSL) share price hit by broker downgrade appeared first on The Motley Fool Australia.

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