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Botanix Pharmaceuticals Ltd (ASX: BOT) shares are lifting off today after the company released its quarterly report. At the time of writing, the Botanix share price is trading 6.06% higher at 17.5 cents.

What is driving the Botanix share price?

The Botanix share price is climbing higher today as the cannabinoid company released its quarterly report to the ASX.

In its clinical development sector, Botanix completed a successful meeting with the United States Food and Drug Administration (FDA) regarding clinical studies for its BTX 1801 synthetic cannabidiol product in the US. According to Botanix, the FDA provided feedback on how the company might obtain fast-track designation for the product’s new drug application (NDA).

Additionally, the FDA advised that the proposed drug development plan and data package presented were sufficient to initiate clinical development in the US and ultimately support an NDA submission. The FDA encouraged Botanix to request a fast-track designation for BTX 1801 following the submission of an IND application.

Furthermore, Botanix reported that its dermatology program, BTX 1702, is poised to commence. The company’s phase 1 clinical study will begin recruitment once travel and clinical trial restrictions across Australia and New Zealand cease.

Corporate update

During the quarter, Botanix had net cash flows of $2.8 million, with $2.2 million being invested in research and development.

Botanix retained $19.2 million in cash at the end of the quarter and claims to be in a strong financial position.

About the Botanix share price

Botanix is a clinical stage synthetic cannabinoid company focused on developing safe and effective treatments for serious skin diseases. It aims to leverage the anti-inflammatory, immune modulating and antimicrobial properties of synthetic cannabidiol to this point.

Investors will be anticipating the outcome of the company’s application for an R&D tax incentive refund of approximately $6.8 million. If received, funds will be invested into product development. In addition, Botanix continues to assess opportunities and partnerships in the development of new products that can be rapidly brought to market for antimicrobial or dermatological applications.

The Botanix share price has increased 75% over the past twelve months and is currently trading just shy of its 52-week high. Based on the current Botanix share price, the company has a market capitalisation of around $141 million.

More reading

• Why the Botanix (ASX:BOT) share price rocketed 22% to a record high today

Motley Fool contributor Daniel Ewing 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 market may be on a backfoot today but two ASX stocks in particular are underperforming after they got hit by broker downgrades.

The S&P/ASX 200 Index (Index:^AXJO) slipped 0.4% in after lunch trade. The big banks like Westpac Banking Corp (ASX: WBC) and major miners like BHP Group Ltd (ASX: BHP) are contributing to the decline.

No ASX stock insurance against a broker downgrade

But its more than the general market weakness that is dragging on the Insurance Australia Group Ltd (ASX: IAG) share price.

The analysts at Macquarie Group Ltd (ASX: MQG) believe insurers will exceed their first half hazards allowances when they hand in their interim results next month.

Blame La Nina for this. It probably contributed to the 100-year flooding event in Queensland this week.

Legal stoush adds to uncertainty

There’s also the uncertainty about the sector’s legal liability to business interruption insurance.

Many businesses have tried making claims on their policies due to COVID-19. But insurers are resisting due to the pandemic exclusion on policies.

While things are catastrophic for ASX insurers, its bad enough for the broker to downgrade its recommendation on the IAG share price.

Macquarie’s rating went to “neutral” from “outperform”.  The 12-month price target on the IAG share price is $5.10 a share.

ASX stock getting trashed on downgrade

Another stock to get a chop is the Cleanaway Waste Management Ltd (ASX: CWY) share price. Shares in the waste management group fell a further 1.3% to $2.35 at the time of writing after Credit Suisse cut its recommendation to “neutral” from “outperform”.

The CWY share price was already under pressure after its controversial and high-profile chief executive Vik Bansal resigned yesterday.

“We find the timing of the announcement surprising given CWY is currently navigating through the pandemic and the CEO’s solid track record of delivering transformation growth and synergies from acquisitions,” said the broker.

Who’s steering the ship?

The issue is there isn’t an obvious successor to Mr Bansal, who’s been credited for turnaround the CWY share price but who’s legacy has been marred by allegations that he created a toxic work culture.

Cleanaway’s chairman Mark Chellew will take on additional duties during the leadership transition. Outgoing chief financial officer Brendan Gill will delay his retirement to become the chief operating officer.

This event highlights the issue of succession risks for ASX stocks. Investors do not like uncertainty, particularly during these trying times.

Credit Suisse’s 12-month price target on the CWY share price is $2.45 a share.

More reading

• The latest ASX broker “buy” ideas that got a valuation upgrade
• Why Afterpay, Cleanaway, Mosaic Brands, & Perpetual shares are dropping lower
• ASX 200 down 0.2%: Zip shares drop, Lynas rockets, Fisher & Paykel Healthcare impresses
• Why the Contact Energy (ASX:CEN) share price has surged 10% higher today
• ASX dividends will be up 30% this year: fundie

Motley Fool contributor Brendon Lau owns shares of BHP Billiton Limited, Macquarie Group Limited, and Westpac Banking. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Redflex Holdings Limited (ASX: RDF) share price has been an incredibly strong performer on Friday.

The innovative intelligent transport solutions (ITS) technology company’s shares were up as much as 122% to a multi-year high of 89 cents at one stage.

At the time of writing, the Redflex share price is up 115% to 86 cents.

Why has the Redflex share price doubled in value today?

Investors have been fighting to get hold of Redflex shares today after it announced the receipt of a takeover approach.

According to the release, the company has entered into a binding scheme implementation agreement with Nasdaq-listed Verra Mobility Corporation.

This agreement will see Verra Mobility acquire 100% of the share capital of Redflex by way of a court-approved scheme of arrangement in an all-cash offer of 92 cents per share. This values Redflex at $146.1 million.

Verra Mobility’s offer represents a 130% premium to Redflex’s last close price of 40 cents and a 132% premium to its one-month volume weighted average price (VWAP).

What now?

The Redflex board of directors unanimously considers the scheme to be in the best interests of shareholders and recommends that they vote in favour of the scheme. This is subject to an independent expert concluding, and continuing to conclude, that the scheme is in the best interests of shareholders and there being no superior proposal.

Redflex Chairman, Adam Gray, commented: “The Board of Redflex has reviewed over the past year a wide range of strategic alternatives with a view to achieving maximum value for Redflex shareholders. After careful consideration the Board has come to the unanimous conclusion that the Scheme is in the best interests of shareholders.”

“The Scheme provides Redflex shareholders with an opportunity to realise certain and immediate value for their shares, at a significant premium to recent trading and at an attractive valuation multiple. We are pleased that a leading industry player such as Verra Mobility has recognised the strategic value of our company,” he concluded.

More reading

• Brokers name 3 ASX shares to buy right now
• PayPal stock could surge 23% to $300 on its cryptocurrency move, according to this analyst
• Here’s why the Novatti (ASX:NOV) share price is soaring 8% higher
• Dacian Gold (ASX:DCN) share price falls despite solid update
• Why the Aussie Broadband (ASX:ABB) share price rocketed 20% higher today

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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Australia’s top brokers have been busy adjusting their estimates and recommendations again, leading to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Aristocrat Leisure Limited (ASX: ALL)

According to a note out of UBS, its analysts have retained their buy rating but trimmed the price target on this gaming technology company’s shares to $35.50. The broker has been looking into the company’s Digital business and believes it grew strongly in the first quarter of FY 2021. However, it has reduced its forecasts to account for foreign exchange headwinds. The Aristocrat Leisure share price is trading at $31.16 this afternoon.

Australia and New Zealand Banking GrpLtd (ASX: ANZ)

Analysts at Morgan Stanley have retained their overweight rating and lifted the price target on this banking giant’s shares to $26.20. According to the note, the broker believes that bank shares have the potential to outperform the market this year thanks to their earnings recovery and strong balance sheets. In addition to this, the broker expects banks to benefit from solid home loan growth and a reduction in impairment charges. The ANZ share price is fetching at $24.57 on Friday.

Corporate Travel Management Ltd (ASX: CTD)

Another note out of Morgan Stanley reveals that its analysts have reiterated their overweight rating and $21.50 price target on this corporate travel specialist’s shares ahead of earnings season. According to the note, the broker is expecting Corporate Travel Management to outperform in FY 2021. Especially with the economy re-opening and the sizeable cost reductions it made in FY 2020. In fact, the broker suspects the company’s profitability could even return to pre-COVID levels. The Corporate Travel Management share price is trading at $16.82 this afternoon.

More reading

• Risk vs uncertainty: why one is a lot worse
• ASX dividends: Are miners the new bank shares?
• Broker lists the best ASX stocks to own for an up to 30% gain in 2021
• ASX 200 Weekly Wrap: ASX drops despite promises of more US stimulus
• ASX banks to steal the dividend crown from mining stocks by next year

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

Paypal Holdings Inc (NASDAQ: PYPL) made headlines late last year when the company announced a move into cryptocurrency. One analyst believes that the full measure of that opportunity isn’t yet baked into its price and could drive PayPal stock to a new all-time high.

BTIG analyst Mark Palmer upgraded the stock to buy from neutral (hold), saying it would gain traction from its nascent cryptocurrency platform, which could add more than $1 billion in revenue to PayPal’s coffers by 2022. 

PayPal is using crypto brokerage Paxos to power its cryptocurrency transactions. The company “has seen its trading volumes rise impressively in recent weeks,” according to Palmer. The analyst goes on to posit that “the vast majority” of the increase in trading volume is the result of transactions by PayPal customers.

Late last year, PayPal announced the launch of a service that would allow users to buy, sell, and hold cryptocurrency in their PayPal account. In addition, users could learn about digital currencies and track prices, all without ever leaving the app. 

But that’s just the beginning. PayPal will accept cryptocurrency as a payment method beginning this year and plans to extend its crypto service to Venmo users.

Tangential evidence suggests that Palmer is right on the money. Investors need look no further than Square Inc (NYSE: SQ) to get a sense of the opportunity resulting from cryptocurrency transactions. In the third quarter, Square generated total net revenue of $3.03 billion, up 140% year over year, but excluding bitcoin revenue, net revenue was $1.4 billion, up just 25%. That suggests that crypto has effectively doubled Square’s net revenue. 

This highlights the massive potential resulting from PayPal’s move. Additionally, its stock has doubled over the past year on the accelerating adoption of digital payments, so it isn’t far-fetched to think PayPal could gain another 23% in the coming year.

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

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• Top fundie Hyperion to launch new growth ETF
• Tyro (ASX:TYR) could face legal action for catastrophic outage
• Will the ASX see a share market bubble in 2021?
• Angry Tyro (ASX:TYR) customers jump ship
• If you thought 2020’s tech share rally was impressive, hold on for 2021!

Danny Vena owns shares of PayPal Holdings and Square and has the following options: long January 2022 $75 calls on PayPal Holdings. Danny Vena has no position in any cryptocurrencies mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends PayPal Holdings and Square and recommends the following options: long January 2022 $75 calls on PayPal Holdings. The Motley Fool Australia has recommended PayPal Holdings. 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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The Novatti Group Ltd (ASX: NOV) share price is soaring higher in mid-afternoon trade. This comes after the company announced its Visa Prepaid cards are now supported by a major global payments platform. At the time of writing, the Novatti share price is up 8.3% to 26 cents.

What’s driving the Novatti share price?

The Novatti share price is picking up steam after the company reported news of its partnership with Apple Inc. (NASDAQ: AAPL)’s Apple Pay. In the company’s release, Novatti advised Apple Pay has now been included in its physical and digital Visa cards ecosystem.

The latest addition will allow consumers to conveniently make purchases in-store and online through Apple Wallet. The software, stored on an Apple device, contains credit card information input by the user, acting as a virtual wallet.

Novatti noted that the Apple Pay integration followed extensive testing to ensure a smooth transition. It also highlighted that major Australian Banks have already adopted Apple Pay into their services.

Quick take on Novatti

Established in 1994, Novatti is a digital banking and payments company that enables fast and secure payments. The business has partnership agreements with an array of companies that include Telstra Corporation Ltd (ASX: TLS), Cathay Pacific, Hutchison Telecom, and others.

Visa awarded Novatti with a principal issuer licence in September 2019, which paved the way for its Visa Prepaid cards.

Words from the managing director

Novatti managing director Mr Peter Cook hailed the addition of Apple Pay, saying:

By partnering with Apple Pay, Novatti is providing its clients with even greater flexibility and coverage in their choice of mobile device, and therefore, the opportunity for Novatti’s platforms to scale further.

By increasing the reach of Novatti’s Visa Prepaid cards, we aim to further scale our card issuing and transactions.

Novatti share price snapshot

The Novatti share price has lifted nearly 24% over the last 12 months.

The company’s shares hit an all-time low of 8.3 cents in March due to COVID-19 weakening global markets. In June, however, the Novatti share price accelerated to a 52-week peak of 42 cents, before stabilising around the mid-20-cent mark.

More reading

• Dacian Gold (ASX:DCN) share price falls despite solid update
• Why the Aussie Broadband (ASX:ABB) share price rocketed 20% higher today
• Why the Medadvisor (ASX:MDR) share price is up 11% this week
• The latest ASX broker “buy” ideas that got a valuation upgrade
• Why the Ioneer (ASX:INR) share price is up 16% this week

Aaron Teboneras owns shares of Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Apple and Visa. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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.

The post Here’s why the Novatti (ASX:NOV) share price is soaring 8% higher appeared first on The Motley Fool Australia.

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The Dacian Gold Ltd (ASX: DCN) share price is slumping 1.9% lower in today’s trade despite a solid quarterly update from the Aussie gold miner, as gold prices retreated overnight.

Why is the Dacian Gold share price slumping today?

Dacian reported a strong net cash position for the quarter ended 31 December 2020 (Q2 FY2021). The Aussie gold miner produced 27,162 ounces of gold at an all-in sustaining cost (AISC) of $1,430 per ounce in the December quarter.

The mining group reported first half production of 59,961 ounces at an AISC of $1,356 per ounce. That means Dacian is on target to meet its full year guidance of 110,000 to 120,000 ounces at an AISC of $1,400 to $1,550 per ounce.

The Dacian Gold share price slumped lower in early trade following the update as gold prices retreated from a nearly two-week high. Today’s update comes after strong quarterly results from competitors Northern Star Resources Ltd (ASX: NST) and Saracen Mineral Holdings Limited (ASX: SAR) were also released this week.

Both the Saracen and Northern Star share prices jumped higher in early trade before retreating to below their opening prices.

Dacian reported cash and gold on hand at 31 December 2020 of $37.9 million. Total debt was $23.4 million after repaying $15.7 million in the quarter. That gave Dacian a net cash position of $14.5 million, a $15.1 million quarter-on-quarter improvement.

A new merger announcement, which came on 16 November 2020, was the big news for Dacian during the quarter. Dacian announced an all-scrip merger with NTM Gold Ltd (ASX: NTM) which saw the NTM share price rocket 44% higher. The $96.4 million merger is set to close in mid-March 2021 with the aim of creating a $285 million gold company.

Dacian Managing Director Leigh Junk said it was a “robust” result that has “significantly improved” the financial position for the company. Mr Junk said a stronger balance sheet and the merger will help Dacian to “explore regional consolidation” and leverage its significant infrastructure in the Laverton goldfields in Western Australia.

Foolish takeaway

The Dacian Gold share price slumped lower in early trade before paring back some of those losses in the late morning. That’s despite a solid quarterly update that confirmed Dacian was on track to meet its full-year guidance as gold prices edged lower.

The S&P/ASX 200 Index (ASX: XJO) has edged 0.2% lower to 6,804.50 points at the time of writing.

More reading

• Top brokers name 3 ASX shares to sell next week
• ASX 200 falls on Tuesday
• Why Dacian Gold, Lovisa, MyFiziq, & Zip shares are dropping lower

Motley Fool contributor Ken Hall 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 Aussie Broadband Ltd (ASX: ABB) share price is on course to finish the week in style

In afternoon trade the internet service provider’s shares are up a sizeable 12% to $2.77.

At one stage today, the Aussie Broadband share price was up as much as 20% to a record high of $2.97.

When the company’s shares hit that level, it meant they were up just under 200% from their October IPO price of $1.00.

Why is the Aussie Broadband share price rocketing higher?

Investors have been scrambling to buy the company’s shares on Friday following the release of a trading update.

According to the release, Aussie Broadband has delivered a significant increase in broadband connections over the last 12 months.

The release advises that at the end of December, Aussie Broadband had a total of 342,634 broadband connections. This is up 31% over the last six months and 88% since this time last year.

What does this mean for its earnings?

In light of this strong growth in broadband connections, Aussie Broadband expects to report half year earnings before interest, tax, depreciation and amortisation (EBITDA) of $8 million to $8.5 million excluding IPO costs.

Including IPO costs, EBITDA is expected to be in the range of $6.9 million to $7.4 million.

This means that the company is well and truly on track to smash its prospectus forecasts for FY 2021. According to its prospectus, Aussie Broadband is targeting EBITDA of $12.66 million for the 12 months ending 30 June 2021.

Furthermore, Aussie Broadband has already generated five times more EBITDA (excluding IPO cost) in the first six months of FY 2021 than it did in the whole of FY 2020. The company reported EBITDA of $1.58 million for the last financial year on a pro forma basis.

What’s next?

Aussie Broadband is finalising its accounts and intends to release its half year results on 17 February 2021.

More reading

• Why Aussie Broadband, Fisher & Paykel Healthcare, Lynas, & Megaport are charging higher
• These were the best-performing ASX IPOs in 2020

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 Aussie Broadband 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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Medadvisor Ltd (ASX: MDR) shares are performing strongly this week after the company released its quarterly report yesterday. The Medadvisor share price jumped 19.12% to 40.5 cents as the update for the quarter ending 31 December 2020 hit the ASX on Thursday.

However, the small-cap medical management platform’s share price has since pulled back to 40 cents at the time of writing.

What’s driving the Medadvisor share price?

The Medadvisor share price has been on the move after the company announced record operating revenue. Full year revenue for the company was $56.1 million, up 24% on the prior corresponding period. However, stealing the headlines was the company’s half year revenue of $34.3 million. This equates to a rise of 79% over the prior half.

In terms of operating cash flow Medadvisor reported cash receipts of $10.7 million for the quarter. These results were largely driven by strong performance in the company’s US subsidiary Adheris, which it acquired in November 2020. As such, Medadvisor closed the quarter with $21.2 million in cash.

Furthermore, Medadvisor expects demand for vaccination delivery via retail pharmacies to grow, which will accelerate growth in the company’s US health services. Medadvisor’s vaccine program product was its highest revenue generator in 2020.

Management comments

Medadvisor CEO and Managing Director Robert Read welcomed the news saying:

This quarter validates the strong financial performance of Adheris and the opportunities that are available from MedAdvisor ownership. As a result, our revenues are up 188% year-on-year and approximately 80% of our revenue is now generated in the US. We are now working with our global customers at scale across multiple regions.

About the Medadvisor share price

Medadvisor is a management platform that aims to simplify the process of taking medication. The company uses its software to connect users to tools and education materials from their preferred pharmacy.

Medadvisor operates across three main countries. In the US, its program can reach 1 in 2 Americans for opt-out health programs via approximately 25,000 pharmacies. This was made possible by the company’s acquisition of US-based Adheris for US$27.5 million.

In Australia, Medadvisor has connected over 1.8 million users through 60% of Australian pharmacies. The company has also recently launched into Asia and the United Kingdom.

The Medadvisor share price has risen over 11% year to date but is still trading more than 40% lower than its 52-week high achieved in May last year.

Based on the current Medadvisor share price, the company has a market capitalisation of around $122 million.

More reading

• Why the Aussie Broadband (ASX:ABB) share price rocketed 20% higher today
• The latest ASX broker “buy” ideas that got a valuation upgrade
• Why the Ioneer (ASX:INR) share price is up 16% this week
• Why Afterpay, Cleanaway, Mosaic Brands, & Perpetual shares are dropping lower
• Worley (ASX:WOR) share price dips despite new deals

Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of MedAdvisor. The Motley Fool Australia has recommended MedAdvisor. 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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If you are worried about our market running out of puff near its 11-month high, there are some ASX stocks that have been just given more room to run.

The S&P/ASX 200 Index (Index:^AXJO) is struggling on the wrong side of breakeven this morning as some fret about over stretched valuations.

However, top brokers these three ASX stocks are still good value as their price targets just got upgraded.

Bumper valuation upgrade

The Incitec Pivot Ltd (ASX: IPL) share price is one example. Morgan Stanley lifted its fair value target on the fertilizer supplier by 14.5% to $3.15 a share.

Rising soft commodity prices are expected to provide further support to fertilizer prices. That prompted the broker to increase its FY21 earnings forecast on Incitec.

“We view soft commodity prices, specifically corn and soybeans, as key leading indicators for fertiliser demand,” said Morgan Stanley.

“Corn prices have increased markedly in recent weeks, a positive lead indicator for fertiliser prices.”

The broker is recommending the IPL share price as “overweight” (which is equivalent to a “buy”).

Lying on a bed of cash

Meanwhile, the Resmed CDI (ASX: RMD) share price also got a material valuation upgrade from UBS.

The broker increased its price target on Resmed’s US stock to US$241 from US$210 a share on expectations that the medical device developer will be flushed with cash.

Over the past three financial years, Resmed generated more than US$1.5 billion in cash from free cash flow (before acquisitions). The company used around US$1 billion to buy MatrixCare in 2018 and used the excess cash to pay dividends.

Expected buyback triggers upgrade

“However, assuming RMD does not make any further major acquisitions in the near term, by the end of FY21, we estimate net debt to reach only ~US$139mn,” said UBS.

“In order to reduce a significant cash balance by FY23+, we have incorporated a ~10% share buyback, commencing in 1Q FY22E.”

The effect of the buyback will be seen in a higher earnings per share (EPS) for Resmed. UBS has a “buy” rating on the RMD share price.

Price target revving up for ASG share price

Finally, the Autosports Group Ltd (ASX: ASG) share price is shifting up a gear. The analysts at Macquarie Group Ltd (ASX: MQG) upped their profit forecasts for the car dealer due to stronger expected margins.

The COVID-19 pandemic isn’t all bad news for automotive sales. While auto sales did take a temporary hit, the supply chain disruption and surge in demand from commuters afraid of taking public transport led to widespread shortages of vehicles.

Good luck trying to get a discount on your next car in this environment!

Attractively priced ASX small cap

“Conditions remain favourable and look set to continue for much of the remainder of FY21,” said Macquarie.

“While margins will start to normalise throughout CY21 leading to lower earnings in FY22 vs FY21, the FY22e P/E of 9x provides significant valuation support.”

The broker increased its 12-month price target on the ASG share price to $1.90 from $1.75 a share and has an “outperform” recommendation on the stock.

More reading

• ASX 200 down 0.2%: Zip shares drop, Lynas rockets, Fisher & Paykel Healthcare impresses
• Why the Contact Energy (ASX:CEN) share price has surged 10% higher today
• 5 things to watch on the ASX 200 on Friday
• ASX 200 rises 0.8%
• ASX 200 up 0.65%: Zip update impresses, Netwealth rockets, Cleanaway dumped

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended ResMed Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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