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On Monday the S&P/ASX 200 Index (ASX: XJO) started the week in fine form. The benchmark index jumped 0.9% to 6,868.9 points.

Will the market be able to build on this on Tuesday? Here are five things to watch:

ASX futures pointing higher

The Australian share market looks set to climb again on Tuesday following a positive night of trade in Europe. According to the latest SPI futures, the ASX 200 is expected to open the day 24 points or 0.35% higher today. Wall Street was closed for President’s Day but Europe was open and saw the DAX rise 0.4% and the FTSE jump 2.5%.

NAB first quarter update

The National Australia Bank Ltd (ASX: NAB) share price will be one to watch this morning when it releases its first quarter update. All eyes will be on the banking giant’s bad debts and COVID loan deferrals. Elsewhere, mining giant BHP Group Ltd (ASX: BHP) is scheduled to release its half year results this morning.

Oil prices rise again

Energy producers Beach Energy Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) could push higher today after oil prices gained again. According to Bloomberg, the WTI crude oil price is up 1.1% to US$60.12 a barrel and the Brent crude oil price is up 1.3% to US$63.23 a barrel. Oil prices pushed higher amid concerns that a winter storm could impact production.

Estia Health settles class action

The Estia Health Ltd (ASX: EHE) share price could be on the move today after announcing the settlement of its class action. This shareholder class action related to market disclosures made between August 2015 and October 2016. The settlement of the shareholder class action, which is without admission of liability, is subject to Federal Court approval. Estia will contribute $11.7 million to the settlement amount. The remainder of the total settlement amount of $37.75 million, inclusive of interest and costs, is fully insured.

Gold price softened

Gold miners Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) could come under pressure today after the gold price softened again. According to CNBC, the spot gold price dropped 0.25% to US$1,818.90 an ounce. The gold price dropped amid rising US treasury yields.

More reading

• ASX 200 rises, JB Hi-Fi profit soars, Altium drops
• Up 2%: Is the BHP (ASX:BHP) share price a buy?
• These are the 10 most shorted shares on the ASX
• ASX 200 up 0.8%: Nearmap jumps, Bendigo and Adelaide Bank impresses
• A turbulent tale of 2 ASX biotech shares: Polynovo (ASX:PNV) and Pro Medicus (ASX:PME)

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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The S&P/ASX 200 Index (ASX: XJO) went up by 0.9% today to 6,869 points.

Reporting season is now entering one of the busiest weeks of the month. A number of businesses reported today. Some of them saw substantial share price movements. 

JB Hi-Fi Limited (ASX: JBH)

The JB Hi-Fi share price went up by 3% today after reporting its half-year result for the six months to 31 December 2020.

The ASX 200 share revealed that total sales increased by 23.7% to $4.9 billion. Online sales jumped 161.7% to $678.8 million. Online sales represented 13.7% of total sales. JB Hi-Fi said that it has continued to invest in its online and digital offerings, including upgrades to its websites.

JB Hi-Fi said that its online offerings are supported and enhanced by its supply chain and logistical capabilities. Management are pleased with how its online and supply chain operations have scaled, and maintained a high level of customer service and on-time delivery, during a period of significantly increased volume.

JB Hi-Fi’s earnings before interest and tax (EBIT) grew 76% whilst net profit after tax (NPAT) went up 86.2% to $317.7 million.

The board decided to increase the interim dividend by 81.8% to $1.80 per share.

Nearmap Ltd (ASX: NEA)

The Nearmap share price was the best performer in the ASX 200 today, rising by around 19%.

As well as releasing the financial numbers in the FY21 half-year result, Nearmap also responded to the short seller report from last week published by J Capital Research, which it said was erroneous.

Nearmap has reviewed and rejected the report. It rejected each of the statements made, saying that report’s claim was false on each point. Some of the allegations included that Nearmap was failing in the US and that Nearmap was losing its edge.

In the actual result, Nearmap said that the group annual contract value (ACV) portfolio at 31 December 2020 was $112.2 million, or $116.7 million in constant currency terms, which represents growth of 21% compared to the prior corresponding period.

Nearmap said that incremental ACV growth of $10.3 million was driven by record growth of the North American portfolio.

The ASX 200 company reported statutory revenue growth of 18% to $54.7 million. The group customer retention rate increased to 93.9%, up from 88.5% in the prior corresponding period.

Global subscriptions increased by approximately 700 to 10,785, with group average revenue per subscription (ARPS) rising by 9% to $10,402.

Nearmap is expecting the group ACV portfolio to finish FY21 at the upper end of its guidance range between $120 million to $128 million.

Altium Limited (ASX: ALU)

The Altium share price was the worst performer in the ASX 200, dropping by almost 5% in reaction to the company’s FY21 half-year result.

Altium said that its continuing profit after tax fell by 12% to US$16.6 million and continuing profit before income tax was down 23% to US$20.7 million. The ‘continuing’ measures exclude the TASKING business, which is being sold.

The tech company explained that the decline in the earnings before interest, tax, depreciation and amortisation (EBITDA) margin from 38.3% to 33.8% was due to lower revenue. Continuing revenue fell by 4% to US$80 million.

However, there were some gains within some segments of the business. Altium said there was strong adoption of Altium 365, with over 9,300 active monthly users and 4,400 monthly active accounts (up 83% and up 69% respectively since July 2020).

Management also said that Octopart grew revenue strongly by 19% to US$10.8 million as electronic manufacturing rebounded during the half.

The Altium subscription business grew 12% year on year to reach 52,157 subscribers.

Finally, looking at cashflow and the dividend, operating cashflow fell 10% to US$18.7 million and the Altium board decided to increase the dividend per share by 5% to AU$0.19.

More reading

• Morgan Stanley: ASX earnings season is topping expectations
• What does the market look like when things go back to normal?
• How JB HiFi (ASX:JBH) shares became an ASX dividend powerhouse
• Here’s why the Altium (ASX:ALU) share price is down 4%
• ASX 200 up 0.8%: Nearmap jumps, Bendigo and Adelaide Bank impresses

Tristan Harrison owns shares of Altium. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Nearmap Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended Nearmap 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 BHP Group Ltd (ASX: BHP) share price has gone up 2% today, is it a buy?

What is BHP?

BHP describes itself as a world-leading resources company. It extracts and processes minerals, oil and gas with the help of over 80,000 employees and contractors around the world, predominately in Australia and the Americas. Its headquarters are based in Melbourne, Australia.

It has a number of different commodities that it deals with including iron ore, metallurgical coal, energy coal, copper, oil and gas.

The company can trace its history back to 1851. It was formed in a merger between BHP and Billiton. The Billiton name comes from a tin mine on an island in Indonesia, Billiton (Belitung) Island.

What has happened recently to BHP?

Since the end of October 2020, the BHP share price has risen by 35%.

A number of things have happened since then. The iron ore price has remained elevated, which is a core profit-making division of the big resource business.

At the end of December it announced that Samarco in Brazil had met the licensing requirements to restart operations at its Germano complex in Minas Gerais and its Ubu complex in Espirito Santo, Brazil, and has commenced iron ore pellet production. These operations were suspended after the failure of the Fundao dam in November 2015.

BHP’s most recent production update was the report for the six months to December 2020.

In the first half of FY21 it said that petroleum production was down 12% to 50.5 million barrels of oil equivalent (MMboe). Copper production was down 5% to 841kt, iron ore production was up 6% to 128.4Mt, metallurgical coal production was down 5% to 19.2Mt and energy coal production was down 30% to 8.2Mt.

As a result of the first half, production guidance for FY21 was unchanged for petroleum and metallurgical coal, but iron ore guidance went up to between 245Mt and 255Mt as a result of the restart of Samarco. Full year unit cost guidance was also unchanged for FY21.

BHP did disclose that the financial result for the first half of FY21 is expected to include an impairment charge of between US$1.15 billion and US$1.25 billion after tax.

Is the BHP share price a buy?

Brokers are generally more positive than negative about BHP shares at the moment.

Broker Ord Minnett has a buy rating on BHP, with a positive outlook on the iron ore price this year, raising its expectations for the price to be US$134 per tonne, which should mean higher profits for BHP than previously expected in FY21 and perhaps the first half of FY22.

Ord Minnett has a BHP share price target of $53 for the big resource business.

However, whilst Morgans thinks that BHP will benefit from the high copper and iron ore prices, the broker has a share price target of around $40.50 for the miner. But strong near-term earnings could see attractive dividends and even a share buyback from BHP.

More reading

• ASX 200 Weekly Wrap: ASX cools on earnings reality check
• 5 things to watch on the ASX 200 next week
• 2 excellent blue chip ASX 200 shares to buy
• 4 steps to pick winning ASX shares
• ASX 200 Weekly Wrap: RBA unleashes ASX’s inner animal

Motley Fool contributor Tristan Harrison 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 Pilbara Minerals Ltd (ASX: PLS) share price rallied 12% in trade today even though the lithium producer posted no news itself. Looking more broadly across the lithium stocks, it appeared to be a relatively good day of trade for many lithium producers.

Let’s look at some of the recent news and events for Pilbara and lithium to grasp what could have had investors excited today.

Lithium prices remain elevated

After a prolonged period of depressed lithium prices due to oversupply, the demand has caught up in recent months. This has led to the lithium price increasing by 45% year-to-date, and inevitably reinvigorating investor interest in the lithium sector.

In January, we witnessed many lithium stocks skyrocket with this reignited interest, and Pilbara Minerals was one of the beneficiaries. From its 2021 starting price of 86.5 cents per share, Pilbara rallied 58% to a top of $1.365. Since roughly 21 January, most ASX listed lithium stocks have taken a spell and retreated. However, during this time lithium derivatives have continued to increase in price.

In addition, yesterday a handful of articles were floating around on plans proposed by researchers at the US Department of Energy’s Princeton Plasma Physics Laboratory in early February. The researchers have reportedly created a plan to use liquid lithium to manage the extreme temperatures inside tokamak fusion reactors. Investors may be speculating the potential for this research to develop into a new-found demand for lithium.

Scientists propose lithium to cope with high-risk condition in future fusion facilities #FusionEnergy #lithium #PlasmaPhysics #tokamak https://t.co/RWRMOOfnJF pic.twitter.com/oHzmqB2hbD

— PPPL (@PPPLab) February 2, 2021

https://platform.twitter.com/widgets.js

What is Pilbara Minerals doing in the meantime?

In the company’s last report, the December quarterly, Pilbara Minerals noted its continued efforts to scale up operations. The lithium producer acquired a neighbouring lithium operation, Altura Mining Limited for $201 million in a bid to obtain synergies in its operations and added flexibility in its production capability.

In that same report, Pilbara stated it would be providing an update to the market on the Altura asset evaluation by the end of the March quarter, which is now fast approaching. Shareholders potentially are anticipating a good result buoyed by the sustained high lithium prices.

Pilbara Minerals share price snapshot

Over the last year, the Pilbara Minerals share price has returned a hefty 280%. Most of these gains were after November of last year, where the shares broke above 40 cents and continued to climb steadily. After today’s substantial performance, shares in the lithium producer are sitting at $1.08, which is still a 21% discount to its 52-week high.

The current market capitalisation is $2.08 billion, at the time of writing.

 

More reading

• Why Blackmores, Creso Pharma, Pilbara Minerals, & Zip shares are pushing higher
• Zip and Vulcan were among the most traded ASX shares last week
• 5 lithium shares that are fast-charging up in 2021
• Why the Ioneer (ASX:INR) share price is up 16% this week
• 3 ASX shares powering the electric car revolution

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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The Pointerra Ltd (ASX:3DP) share price was trading strongly higher today despite no news out of the company.

Shares in the 3D data operator’s shares were trading up 8.33% at 91 cents at the close of trade today. This means the Pointerra share price has gained a massive 75% since the start of 2021.

Why is the Pointerra share price flying higher?

The release on 29 January of Pointerra’s quarterly report has proved to be a significant catalyst sending shares higher, with 82% gains recorded post announcement.

In the release, the company continued its strong run of growth with its annual contract value (ACV) standing at US$6.88 million as of 29 January. This means the company’s ACV increased by 18% between quarters and 262% since the same corresponding quarter last year.

Notably, the company also received cash receipts of $0.64 million from customers, including new US customer Eversource Energy, a $29 billion utility company. As part of its recent storm response efforts, it engaged Pointerra to provide an enterprise repository and analytics platform. Eversource will then extract actionable information from geospatial data allowing for better and informed decisions that will lead to faster response times. The company signed a 4-month initial contract of $150,000 a month.

Speeding ticket

On 10 February, due to Pointerra’s astronomical share price rise, the ASX asked the company to explain its increase. Pointerra confirmed that it was complying with the ASX listing rules and had disclosed all relevant information in its quarterly report. The company also noted that any individual material change in ACV would be reported separately as it was in its growth phase.

About the Pointerra share price

Pointerra is an Australian company aiming to take on the challenge of using and monetising 3D data sets. The company provides cloud-based solutions for utilising and distributing these data sets. It gathers data from 3D scanners such as drones or handheld scanners and converts it into useable data sets. The data is stored on the cloud so that users can access it instantly, on-demand, on any device.

The company boasts a range of customers in construction, utilities, entertainment, defence and search & rescue.

The Pointerra share price has gained an astounding 1,720% in the last 12 months. Share took off in July last year after tech entrepreneur Bevan Slattery invested 2.5 million in the company via a placement of 50 million shares at 5¢ each.

More reading

• Here’s why the Pointerra (ASX:3DP) share price is storming higher
• 4 growing small cap ASX shares to watch

Daniel Ewing owns shares of Pointerra Limited. 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 Vulcan Energy Resources Ltd (ASX: VUL) share price was on form again on Monday.

The clean lithium producer’s shares climbed 3% to $7.60.

This means the Vulcan Energy share price is now up an incredible 174% since the start of the year.

Why did the Vulcan Energy share price race higher?

Investors were buying Vulcan Energy shares on Monday following the release of an announcement relating to a new acquisition.

According to the release, the company has signed a binding agreement to acquire 100% of Global Geothermal Holding (GGH), subject to shareholder approval.

The release notes that GGH is Vulcan Energy’s joint venture partner holding the granted Taro license in the Upper Rhine Valley. It is also the holder of Ludwig and Hesbach exploration license applications.

In respect to the Taro license, Taro has a joint ore reserves committee (JORC) resource estimation of 2.27 Mt contained Lithium Carbonate Equivalent (LCE) at a grade of 181 mg/l Li. This is approximately 14% of the estimate resource across the Vulcan Project.

Management notes that this acquisition consolidates its major strategic holding in the Upper Rhine Valley, as part of the plan to rapidly advance the Zero Carbon Lithium project towards production.

What are the terms?

Under an existing agreement with GGH, Vulcan Energy has already earned a 51% interest in the Taro license by spending 500,000 euros in exploration expenditure on the license. It also has the right to spend a further 500,000 euros in exploration expenditure on the license to earn a further 29% within two years to take its joint venture interest to 80%.

However, the company wishes to accelerate and move to full ownership of these licenses and will now do so via a payment of $90,000 worth of Vulcan shares and deferred consideration of $720,000 worth of performance shares.

Vulcan Energy’s Managing Director, Dr. Francis Wedin, commented: “By acquiring 100% of GGH, we are consolidating ownership of the Taro and other exploration licences, which simplifies financing and development of our large strategic position in the Upper Rhine Valley. This consolidation is an important part of our strategy to become a major supplier of our unique Zero Carbon Lithium hydroxide to the European battery electric vehicle market.”

Judging by the Vulcan Energy share price performance today, investors appear pleased with this development.

More reading

• Why the Vulcan (ASX:VUL) share price is storming higher today
• ASX 200 falls 0.9%, Nick Scali reports, Vulcan jumps
• Why Alliance Aviation, REA Group, SEEK, & Vulcan shares are charging higher
• Here’s why the Vulcan Energy (ASX:VUL) share price is storming 14% higher
• Why the Vulcan Energy (ASX:VUL) share price is in a trading halt

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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The Anteotech Ltd (ASX: ADO) share price gained a whopping 43.18% today, closing the day trading at 32 cents.

AnteoTech is a surface chemistry company with intellectual property in its core technology product groups. These include AnteoCoat, AnteoBind and AnteoRelease. The company’s customers operate in the life sciences, diagnostics, energy and medical devices markets.

With no recent company announcements, let’s take a look at what could be driving the AnteoTech share price.

AnteoTech share price zooms after Ellume secures US contract

Earlier this month, AnteoTech announced that its client, Ellume, had signed a deal with the US Defence Department for emergency use authorisation of its COVID-19 at-home test.

Ellume integrates AnteoBind technology in its proprietary quantum dot diagnostics platform.

The Ellume COVID-19 home test, incorporating AnteoBind, is the first non-prescription over-the-counter self-test authorised by the US Food and Drug Administration (FDA) for emergency use.

AnteoBind is a key element of AnteoTech’s own COVID-19 Antigen Rapid Test currently in development and several other assays marketed globally.

AnteoTech advised that it has worked closely with Ellume over recent months to ensure it could supply the required volumes of AnteoBind.

The company expects that Ellume’s requirement for AnteoBind will increase modestly over coming months as supply to the US markets takes off.

Words from the CEO

Commenting on the Ellume agreement, AnteoTech CEO Derek Thomson said:

We are delighted to be involved with Ellume’s success and we congratulate the company on their announcement.

Ellume was the original seed customer in AnteoTech’s strategy to demonstrate the value that AnteoBind can bring to assay development and it is pleasing to see that strategy now delivering market recogition.

I commend the work of AnteoTech’s Life Science team under the leadership of Charlie Huang for their continued work to make AnteoBind a key element in the development of diagnostic products in global markets.

The AnteoTech share price has exploded more than 648% higher over the previous 12-month period.

More reading

• AnteoTech (ASX:ADO) share price rockets 95% higher on Ellume news
• If only Ellume was an ASX share! Why it’s making big news today

Motley Fool contributor Gretchen Kennedy 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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Advance Nanotek Ltd (ASX: ANO) shares tumbled lower today following the dispersion manufacturing company releasing its interim financial report for the half-year ended 31 December 2020. By the market’s close, the Advance Nanotek share price had fallen 12.37% to $3.40.

In short, the results were a significant downgrade from the prior year. Let’s take a look at how the numbers stacked up and management comments regarding the slip in performance.

What drove the Advance Nanotek share price lower?

The Advance Nanotek share price was heavily weighed down today after the release of the company’s results. Advance Nanotek reported that its revenue for the half-year ended fell 69.63% to $3.433 million. This result also flowed down to the company’s profit, resulting in a 93.32% decrease to $225,000 in profit.

You might ask what could lead to such a significant impact on results. The answer provided in the report is the ongoing travel restrictions and lockdowns caused by COVID-19. Given the company’s aluminium oxide and zinc oxide dispersions are made predominantly for use in sunscreens, demand for the product has fallen off a cliff.

Consequently, earnings per share (EPS) has declined from the previous period’s 38 cents to just 5.71 cents this half.  

In the chair’s letter accompanying the half-year accounts report, there was some good news outlined, despite the poor result. This included the following:

• Remains commercially debt-free.
• Successful installation of a new dispersion line capable of producing the equivalent of 250 million 100-gram tubes annually.
• Successful installation of equipment to increase zinc oxide production to 5,000 tonnes per annum.
• New product development continued.

The new products developed by Advance Nanotek include vegan and/or organic-based offerings, such as an all-natural insect repellent sunscreen. The company is awaiting Therapeutic Goods Administration (TGA) approval before scaling production.

The board’s forward view

Despite the disappointing result, the Advance Nanotek board emphasised that the achievements made during the half-year are likely to produce positive results for many years to come. Meanwhile, the board further advised that the impacts on sunscreen sales due to COVID-19 will hopefully be resolved before 2023.

More reading

• Why Advance NanoTek, Incitec Pivot, Starpharma, & Zoono are tumbling lower
• Why the Advance NanoTek (ASX:ANO) share price is sinking lower again

Mitchell Lawler owns shares of Advance NanoTek Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Advance NanoTek Limited. 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 Novatti Group Ltd (ASX: NOV) share price has rocketed today. Novatti shares closed at 26 cents on Friday and opened at 27 cents a share this morning. But soon after market open, Novatti rocketed as high as 36 cents. At the time of writing, the share price has closed at that high of 36 cents, up 38.46% for the day. That’s a big move to be sure. However, it still doesn’t lift Novatti to the company’s 52-week high of 42 cents a share.

So what’s going on here today?

Novatti is a digital payments/fintech company. You might think that some kind of significant announcement from the company might have precipitated this dramatic jump in Novatti shares today. However, there is no major news out of the company today to speak of.

The company’s last market-sensitive announcement (a quarterly update) came out on 29 January. Before then, on 22 January, Novatti announced that Apple Pay would now support its prepaid Visa cards. But that’s now ancient history by ASX standards.

Something in the BNPL water?

Several companies in the fintech and buy now, pay later (BNPL) spaces have seen similar moves today. Zip Co Ltd (ASX: Z1P) was up a whopping 16.8% today for starters.

And two companies in Douugh Ltd (ASX: DOU) and IOUpay Ltd (ASX: IOU) experienced such sudden and sharp rises that both companies were given ‘speeding ticket’ please explain notices from the ASX. That came after Douugh shares rose 50% at one point, while IOUpay shares were up close to 100%.

Unfortunately for Novatti, it now joins this club as well. Novatti was slapped with a speeding ticket of its own for today’s share price efforts just after lunchtime. Novatti told the ASX in the publically-released letter that it was not aware of any information that could have contributed to today’s share price moves.

The company stated the following on what it thinks might be going on:

Novatti notes that the payments and fintech sectors globally have seen significant growth and re-rating by markets, in particular as a result of COVID-19 and the rapid digital transformation of payments and financial services. Novatti’s business has continued to grow strongly, as announced in the recent quarterly update which highlighted major business and financial progress…

For now, at least, no one has a better explanation.

More reading

• Why the Sezzle (ASX:SZL) share price is charging 7% higher today
• Zip (ASX:Z1P) share price is soaring 13%, smashing another record high
• 98% surge in IOUpay (ASX:IOU) share price triggers speeding ticket
• ASX investigates after Douugh (ASX:DOU) share price spikes 56%
• ASX 200 Weekly Wrap: ASX cools on earnings reality check

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. 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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As some of you more avid readers of the Fool (or just followers of the ASX share market) might have realised by now, ASX earnings season is in full swing. We have now heard from many of the ASX’s biggest companies like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS) as to how they fared over the second half of 2020 (or similar).

Today, reporting has ramped up further still. We’ve heard from JB Hi-Fi Limited (ASX: JBH), Altium Limited (ASX: ALU) and Seven West Media Ltd (ASX: SWM) this morning.

So how have these earnings reports been received so far? Well, according to one broker, very pleasingly.

According to a report in the Australian Financial Review (AFR) today, broker Morgan Stanley has been impressed with what it has seen so far from earnings season. The report states that close to half of the reported ASX shares that Morgan Stanley covers have recorded expected earnings per share (EPS) beats. A ‘beat’ means the metric a company delivered has come in higher than what analysts were expecting. Or what the company has previously guided.

A ‘so far, so good’ for ASX shares from MS

The report states that 48% of Morgan Stanley’s covered shares have beaten on EPS. Another 36% have reported EPS numbers in line with guidance or expectations, with only 16% missing the mark.

The numbers are equally encouraging for dividends per share. Reportedly, 38% of Morgan Stanley’s covered companies have beaten expectations on dividends, with 48% delivering in line. Only 14% of the companies have undershot on this metric.

Turning to revenue metrics and we see a similar pattern again. Morgan Stanley advised that 38% of companies delivered revenue beats, with 50% giving investors in-line numbers and 13% missing the expected targets.

The AFR reports that Morgan Stanley’s equity strategy team stated the following on these numbers:

Result season pace took a step up last week and early signals confirm a greater conviction to guide and generally confirm robust recovery pillars in place… Earnings per share beats are on show at 48 per cent and dividends per share is not far behind at 38 per cent but it seems the combined ratio of recovery profile, distribution conviction and earnings quality is satisfying investor appetite.

Judging by this analysis, ASX investors should be encouraged by the numbers we have seen so far this earnings season. Morgan Stanley’s assessment of the “robust recovery pillars in place” bodes well for economic growth in 2021. Economic growth is, of course, strongly correlated with higher earnings from ASX companies. So hopefully, the good times will continue to roll for ASX investors.

More reading

• 3 reasons the Telstra (ASX:TLS) share price is storming higher
• What does the market look like when things go back to normal?
• How JB HiFi (ASX:JBH) shares became an ASX dividend powerhouse
• Here’s why the Altium (ASX:ALU) share price is down 4%
• How CBA (ASX:CBA)’s CommSec expanded its millennial footprint

Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Altium. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of Altium. 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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