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1) It’s turning out to be a tough day for the S&P/ASX 200 Index (ASX: XJO), down 92 points or 1.2% in early afternoon Wednesday trade.

The big four banks are doing most of the damage, coming after Commonwealth Bank of Australia (ASX: CBA) reported first half results. More on that below.

The biggest faller in the ASX 200 is the Corporate Travel Management Ltd (ASX: CTD) share price, down 8% to $15.86 despite guiding to a record full year profit and saying “travel demand remains strong with no signs of macroeconomic factors impacting the recovery.” 

Based on the share price reaction, the market sees things differently. Corporate Travel Management shares have plunged 38% from their 52-week high despite a very strong travel recovery. Animal spirits and speculation may have seen Corporate Travel Management shares previously get ahead of themselves. Investing can be tough. 

2) Tough crowd these stock market investors, with the Commonwealth Bank of Australia share price falling 6.1% despite it reporting a 9% lift in cash profit and a hefty 20% hike in its interim dividend.

According to the AFR, investment bank Barrenjoey “has warned analysts are likely to downgrade profit margin forecasts for CBA after its net interest margin – as a key measure of profitability – peaked in October.”

“Given CBA is trading on 19x P/E, we expect the shares to be soft today.”

I’ve been wrong on CBA shares for as long as I can remember. More recently, in August last year, with the CBA share price trading around $100, I said it looked “downright expensive.”

That didn’t stop CBA shares recently hitting an all time high of $111, although with the CBA share price now trading at around $102 after today’s sell off, and Barenjoey calling out the high valuation, I feel a fraction closer to the mark.

Putting the CBA results to one side, from a “Team Australia” perspective, it was heartening to see CEO Matt Comyn say consumer spend is remaining resilient, with the bank remaining optimistic that a soft landing for the Australian economy can be achieved.

3) This is in stark contrast to outspoken columnist Christopher Joye who, writing in the AFR, recently said “in their quest to crush inflation, central bankers are going to crush everything.”

Joye says the number one focus of central bankers is demand destruction as they are singularly committed to creating job losses to reduce elevated wage growth.

“The bottom line is that this is bad news for everything except cash. It means lower earnings and income growth, deeper economic retrenchments, and lower valuations as the risk-free hurdle rates inexorably rise. It means the coming default cycle is probably going to be the worst we have seen since the 1991 recession, which will be terrible for anyone who has lent money to risky borrowers or invested in junk debt.”

This is hardly the stuff of soft landings.

So who is right? CBA or C Joye?

I have no idea. The optimist in me struggles to think we’re heading for a deep recession. Like CBA, I see consumers still spending and restaurants still busy. The unemployment rate remains hovering near half-century lows at just 3.5%.

Yet storm clouds are ahead. 

With the Reserve Bank of Australia’s latest cash rate hike, which marks the ninth increase since May, households are preparing themselves for increased mortgage repayments.

Consumer confidence has plummeted, sinking to its lowest levels since the early days of the pandemic. 

The AFR reports today that TD Securities is tipping the RBA to take its terminal rate to 4.35%, a full 100 basis points – or four more lots of 25 basis point hikes – ahead of the current cash rate of 3.35%.

That just might “crush everything,” including CBA’s prediction of a soft landing.

4) Meanwhile, at Wesfarmers Ltd (ASX: WES), consumers are continuing to spend up, with sales at value-orientated retailers Kmart and Target up an impressive 24% for the first half of FY23. Wesfarmers also reported sales growth at Bunnings and Officeworks, albeit more modest single-digit percentage gains. 

In aggregate, the conglomerate reported profits up 14% and increased its interim fully franked dividend by 10% to 88 cents per share. 

Like others, they see the storm clouds ahead, although Wesfarmers says its “strong value credentials and low-cost operating models mean they are well positioned to meet changing customer demand as customers adjust to cost pressures.”

On a day when the ASX 200 is taking it on the chin, the Wesfarmers share price is up 1% to $49.20 where it trades on around 23 times forecast earnings and on a forecast fully franked dividend yield of 3.7%. 

Like a number of high quality ASX blue chips, Wesfarmers shares are still trading on a valuation that’s appropriate for a lower interest rate environment. 

If TD Securities are right and the RBA cash rate gets as high as 4.35%, by comparison to Wesfarmers shares, cash in the bank will look very attractive. 

It’s hard to see Wesfarmers shares being “crushed” but the risks might be more skewed to the downside. A re-rating to a forward P/E of 20 times implies a Wesfarmers share price of $43.50. 

5) One stock whose valuation continues to defy conventional logic is healthcare imaging software company Pro Medicus Limited (ASX: PME). 

The company reported solid first half revenue growth, up 28% to $57 million, with net profit up 32% to $27 million.

Pro Medicus has been winning long-term contracts with US healthcare companies. Such a high level of recurring revenue, coupled with clear operating leverage as demonstrated by a near 50% net profit margin, would deservedly translate to a premium valuation for Pro Medicus. The company is debt-free and sits on cash reserves and other financial assets of $94.5 million.

For a company with around $100 million of annual sales, Pro Medicus sports an eye-watering market capitalisation of $6.73 billion. It trades on roughly 116 times forecast earnings. 

If Pro Medicus grew profits at 25% per year for the next five years – no mean feat – my back of the envelope calculations would have Pro Medicus shares trading at 32 times earnings, something far more palatable and arguably reasonable at that stage. 

In effect, growth for the next five years could arguably already be priced into Pro Medicus shares. 

Despite all that, I still hold the shares. It’s a risk I’m willing to take for one of the highest quality companies trading on the ASX. 

As investing legend, 99 year old Charlie Munger has once said…

“The first rule of compounding: Never interrupt it unnecessarily.”

Pro Medicus is a core holding of the Hyperion Small Growth Companies Fund. Its stated philosophy is…

“The highest proven quality businesses with the strongest competitive advantages and organic growth opportunities produce superior shareholder returns over the long term.”

Whilst I hope to hold Pro Medicus shares for many years to come, I realise I’m unlikely to see the huge gains I’ve seen since first buying the shares at just $1.50. 

The post ASX 200 in freefall as CBA’s prediction of a soft landing might have just been torpedoed by huge interest rate call appeared first on The Motley Fool Australia.

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More reading

• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• 3 ASX 200 shares on the move amid strong earnings updates
• Why Cochlear, GUD, Netwealth, and Wesfarmers shares are charging higher
• Everything you need to know about the boosted Wesfarmers dividend
• Why is the ANZ share price tumbling on Wednesday?

Motley Fool contributor Bruce Jackson has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pro Medicus. The Motley Fool Australia has positions in and has recommended Pro Medicus and Wesfarmers. The Motley Fool Australia has recommended Corporate Travel Management. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Woolworths Group Ltd (ASX: WOW) shares will be worth watching closely next week.

That’s because the retail giant is scheduled to release its half year result on 22 February.

Let’s take a look to see what the market is expecting from the company.

What is the market expecting from Woolworths?

It’s fair to say that the market is expecting a strong result from the retailer.

For example, according to a note out of Goldman Sachs, its analysts are expecting Woolworths to outperform rival Coles Group Ltd (ASX: COL). It is forecasting earnings before interest and tax (EBIT) growth of 12% for Woolworths and flat earnings for Coles.

This strong earnings growth is expected to be underpinned largely by margin expansion in the supermarket business and group sales growth of 3.5%. The broker explained:

In 1H23, we expect group sales growth of 3.5% but EBIT growth of 12% on higher EBIT margins. Specifically for Australia Supermarkets, we expect sales growth of 2.9% with comps sales of 2.3% (2Q23 comps sales 6.0%) and EBIT growth of 16.7% YoY due to 70bps of EBIT margin expansion to 5.8%. Compared to COL, we expect that GPM will hold largely steady due to more personalized offers focusing on targeted promotions, while lower COVID cost with no material implementation cost step-up on the supply chain should provide a tailwind for margins. We also increase Big W EBIT margin to ~1.9% (vs ~1.3% previously) due to still healthy trading in 1H23 observed for consumer spending.

Goldman also suggested that investors look out for any commentary on its recently announced strategy. It added:

We see strategic merit in management’s announced strategy to amalgamate Big W and MyDeal with Petspiration (following the planned acquisition of the latter, which is expected to close in mid 2023) into the “Everyday Needs” part of the business, though execution will be the focus given none of these businesses are clear leaders in their sub-segment.

The post Own Woolworths shares? Here’s what the market is expecting from its half year results appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is sliding lower today, down 1.1% in early afternoon trade.

This comes following the release of the latest inflation data out of the United States.

That resulted in a mixed day in US markets (overnight Aussie time), which saw the Nasdaq Composite Index (NASDAQ: .IXIC) close up 0.6% while the Dow Jones Industrial Average Index (DJX: .DJI) closed 0.5% lower.

At the time of writing, futures indicate all the major US exchanges will come under selling pressure tomorrow. Which, in turn, could throw up some short-term headwinds for ASX 200 shares.

Because, like it or not, fast-rising prices and the resulting central bank tightening in the world’s top economy have a major spillover effect on the ASX 200’s performance.

ASX 200 dips as US inflation remains concerning

Looking on the positive side, annual inflation in the US edged lower to 6.4%, down from 6.5% in December. And well down from the 9.1% figures posted in June.

But even after seven months of declines, 6.4% is way above the Federal Reserve’s 2% target range.

Which means ASX 200 investors can expect another interest rate rise from the Fed when its board meets again in March. And that most likely won’t be the last hike in 2023 either.

Indeed, on Monday, before the latest CPI data was released, Fed governor Michelle Bowman said, “I expect we’ll continue to increase the federal funds rate because we have to bring inflation back down to our 2% goal, and in order to do that we need to bring demand and supply into better balance.”

ASX 200 shares have broadly come roaring back in 2023. Despite the higher interest rate environment in Australia, the US, and most of the developed world, the benchmark index is up 4.4% year to date.

But if rates keep ratcheting higher, some sectors, like consumer discretionary stocks, could come under renewed pressure as households begin to feel the pinch.

Growth stocks, priced with future earnings in mind, could also get hit with renewed headwinds.

What the experts are saying

“Inflation slowed again, but the details show the Fed’s fight is far from over. Services inflation is still fiery hot, and that’s the kind of inflation the Fed is trying to get under control,” Callie Cox, US investment analyst at eToro said.

Cox recommended caution to investors in US equities. Advice that would likely also serve ASX 200 investors well.

“The inflation crisis isn’t over yet, and as we’ve seen recently, it’s easy for markets to get carried away. We may not see new highs until inflation is fully under control,” she said.

Most analysts are convinced the Federal Open Market Committee (FOMC) will raise rates at both of its next two meetings. Consensus expectations are for a 0.25% increase each time.

Many also believe we could see the world’s most influential central bank begin to ease by the end of the year, which could see the ASX 200 finish 2023 with a bang.

According to Morgan Stanley’s Ellen Zentner (quoted by The Australian Financial Review):

We expect the Fed tightening path to be largely set through the May FOMC, with a 25bp hike at each of the upcoming meetings. Beyond May, however, a slowing labour market and more moderate inflation outcomes should set the stage for a stop in the tightening cycle and an eventual first rate cut in December.

Oxford Economics’ Ryan Sweet added:

All told, risks are weighted toward inflation being higher in the first half of this year than we anticipated in the February baseline. Still, inflation should moderate more noticeably in the second half of this year as goods disinflation intensifies and services inflation peaks.

The post Why the latest US inflation figures matter to ASX 200 investors appeared first on The Motley Fool Australia.

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More reading

• Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping
• Star Entertainment share price rebounds 8% on Wednesday
• 3 ASX 200 shares on the move amid strong earnings updates
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• 4 ASX 200 stocks smashing new 52-week highs on Wednesday

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is out of form and has dropped deep into the red. At the time of writing, the benchmark index is down 1.2% to 7,338.5 points.

Four ASX shares that are falling more than most today are listed below. Here’s why they are dropping:

Commonwealth Bank of Australia (ASX: CBA)

The CBA share price is down 6% to $102.30. Although Australia’s largest bank delivered a strong half year result, there are concerns that its net interest margin has peaked well ahead of expectations. Goldman Sachs wasn’t expecting the peak for another year, which has caused alarm bells to ring.

Corporate Travel Management Ltd (ASX: CTD)

The Corporate Travel Management share price is down 7% to $16.02. This follows the release of the corporate travel booker’s half year results. Corporate Travel Management reported a 79% increase in revenue to $291.9 million and a 182% jump in underlying EBITDA to $51.3 million. As strong as this was, the latter was still short of market expectations.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine share price is down over 5% to $13.55. This morning, this wine giant posted a 1.4% increase in half year sales and a 17.2% increase in EBITS. However, once again, the market was expecting a stronger result. Treasury Wine’s sales were 8% lower than consensus estimates due largely to Premium Brands weakness.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is down 5% to $22.73. Investors have been selling Westpac and other bank shares today following the release of Commonwealth Bank’s results. With Australia’s largest bank’s net interest margin believed to have peaked ahead of expectations, investors appear concerned that this could be the same for the rest of the sector.

The post Why CBA, Corporate Travel Management, Treasury Wine, and Westpac shares are dropping appeared first on The Motley Fool Australia.

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More reading

• Why is the ANZ share price tumbling on Wednesday?
• Why did the CBA share price just sink almost 6%?
• Everything you need to know about the supersized CBA dividend
• Corporate Travel share price tumbles despite record earnings forecast
• Treasury Wine share price sinks 7% despite solid earnings growth

Motley Fool contributor James Mickleboro has positions in Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management, Treasury Wine Estates, and Westpac Banking. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s probably fair to say that this week has been one of, if not the, worst week in the history of the Star Entertainment Group Ltd (ASX: SGR) share price. Star, an ASX 200 gaming and casino share, fell off a cliff on Monday when the company released an earnings and guidance update.

As we covered at the time, Star reported a big drop in revenue from its Sydney casino, as well as a large rise in costs and headcount. The company also told investors to expect a non-cash impairment charge of between $400 million and $1.6 billion when the company delivers its next earnings report.

It’s probably an understatement to say that investors were not impressed. By the end of Monday’s session, Star shares fell almost 21% to their lowest price on record. Yesterday, the pain kept coming. The company fell another 13.4% to find a new all-time low of $1.28 a share.

Take a look at the damage for yourself:

But today, it appears the wounds have been staunched.

Star share price finally finds a bottom

The Star share price is currently on the rebound so far this Wednesday. At the time of writing, the ASX 200 gaming stock has rebounded by a pleasing 8.19% back up to $1.39 a share.

There’s been no fresh news from Star since its dramatic guidance update on Monday. So it appears investors have finally decided that the Star share price has found its bottom. That would explain why the shares are bouncing back up so far this Wednesday. But even so, the company is still sitting at a horrible 25.9% loss from where it closed last week.

The company is also down more than 78% from its last all-time high. That was back in early 2018 and saw the company above $6 a share.

At the current Star Entertainment share price, this ASX 200 gaming share has a market capitalisation of $1.41 billion.

The post Star Entertainment share price rebounds 8% on Wednesday appeared first on The Motley Fool Australia.

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More reading

• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Why Ansell, Breville, Star, and Temple & Webster shares are falling
• Here are the 3 most heavily traded ASX 200 shares on Monday
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• Why did the Star Casino share price just dive 19% to an all-time low?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is tipping into negative territory today as the big four banks act as an anchor. Meanwhile, other ASX 200 shares are getting plenty of attention for their latest results.

Currently, the benchmark index is 1.22% worse off than where it finished yesterday — hovering around 7,340 points. Some of the biggest hindrances to the Aussie market today include Treasury Wine Estates Ltd (ASX: TWE), Lifestyle Communities Ltd (ASX: LIC), and Computershare Limited (ASX: CPU).

That aside, let’s dive into three companies that have reported today.

Earnings ignite these ASX 200 shares

One company that is seeing its share price driven higher today is GUD Holdings Limited (ASX: GUD). Shares in the automotive parts and water systems seller are jumping 7.86% to $8.92 as investors absorb what appears to be a solid half-year result.

It was a period of phenomenal growth for GUD in the latest six-month period. Primarily driven by acquisitions, revenue was dialled up 55.7% year-on-year to $517 million. Meanwhile, the company’s net profit after tax (NPAT) increased by a blistering 88.7% to $45.6 million.

In terms of outlook, management painted a reasonably positive outlook. The APG brand is expected to benefit from normalisation in sales toward higher historic volumes. Likewise, the remaining automotive business is anticipated to benefit from aging vehicles.

Another ASX 200 share relishing in a commendable result is Netwealth Group Ltd (ASX: NWL). The financial services platform provider’s share price is currently up 4.82% to $13.92.

The three key figures that shareholders ought to be pleased with are the company’s funds under administration (FUA), revenue, and NPAT.

Ultimately, the business relies upon its FUA on the platform. Fortunately, funds on Netwealth increased 12.2% to $62.4 billion in the first half. Similarly, revenue and earnings were grown to the tune of 18.9% and 12.9% respectively.

Despite a strong performance so far in 2023, the Netwealth share price is still down 6.13% over the past year.

Failure to impress with these figures

The third and final ASX 200 share with robust numbers out today is Pro Medicus Ltd (ASX: PME). The imaging software provider’s shares are currently up 0.29% to $65.24 apiece.

Perhaps one of the biggest success stories on the Australian share market may not have lived up to expectations today.

In its half-year report, Pro Medicus served up revenue of $56.89 million — representing an increase of 28.3%. Even better, net profits were 31.5% bigger than the prior corresponding period, perched at $27.19 million.

The improved financials were attributed to some major wins in North America with customers such as Novant Health, Allina Health, and Inova Health.

Nevertheless, it seems investors might be concerned about whether the premium valuation is still compatible following these results. For reference, Pro Medicus currently trades on a price-to-earnings (P/E) ratio of 154 times.

Though, longer-term shareholders couldn’t be upset. Shares in the software company are still up almost 41% compared to this time last year.

The post 3 ASX 200 shares on the move amid strong earnings updates appeared first on The Motley Fool Australia.

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More reading

• Why Cochlear, GUD, Netwealth, and Wesfarmers shares are charging higher
• How to create a second income from ASX growth shares
• Here are the top 10 ASX 200 shares today
• ASX shares: Is this my once-in-a-lifetime chance for mega returns?
• Buy these 2 ASX 200 shares growing earnings as we speak: expert

Motley Fool contributor Mitchell Lawler has positions in Pro Medicus. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group and Pro Medicus. The Motley Fool Australia has positions in and has recommended Netwealth Group and Pro Medicus. The Motley Fool Australia has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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ASX 200 stocks are in the red today with the S&P/ASX 200 Index (ASX: XJO) down 1.24%.

But as is usually the case, there are outliers.

Here are three ASX 200 stocks basking in the green today after their half-year results were released.

Seven Group Holdings Ltd (ASX: SVW)

The Seven Group share price is up 2.23% to $23.81 after the company reported its 1H FY23 results. This ASX 200 stock is now up 14.3% in the year to date.

Seven Group reported underlying revenue of $4.6 billion, up 16% compared to the prior corresponding period (pcp) of 1H FY22. It reported earnings before interest and taxes (EBIT) of $595 million, up 16%. The EBIT is also 6% above consensus expectations among brokers.

Earnings per share (EPS) from continuing operations for the year is 94 cents, up 18%. The ASX 200 stock will pay a dividend of 23 cents on 5 May.

CEO and managing director Ryan Stokes said:

The result highlights the quality of SGH’s Industrial Services businesses and the “core plus” nature of the Group portfolio, with solid momentum and earnings growth of more than 20% at WesTrac, Coates and Boral. The results for the half were supported by continued strength in customer activity across the resources, construction, and infrastructure sectors.

Seven upgraded its full-year FY23 guidance to “low to mid-teen per cent EBIT growth”. It previously expected high single-digit growth. UBS says the broker consensus is 15%.

According to The Australian, UBS analyst Lee Power reckons this is a “solid result” and the guidance “may be conservative, accounting for potential volatility across both Media and Energy in the 2H.”

Vicinity Centres (ASX: VCX)

The Vicinity Centres share price is up 1% to $2.03 after the real estate investment trust (REIT) reported its 1H FY23 results. The ASX 200 stock is now up 1.76% in the year to date.

Vicinity Centres announced a statutory net profit after tax (NPAT) of $176.3 million. This was down substantially on the pcp of 1H FY22 when an NPAT of $650.2 million was recorded.

There was a net property valuation loss of $109.2 million, reflective of the current market downturn due to rising interest rates. Funds from operations (FFO) was $357.1 million, up 24.1% pcp.

Vicinity Centres will pay shareholders a distribution of 5.75 cents per share on 7 March, up 22.3% pcp.

The A-REIT said FFO growth was driven by a 20.5% increase in net property income to $459.6 million.

This growth partly reflects the comparison to the pcp when COVID-19 lockdowns were in place.

However, the company said there was also “continued strength of retail sales leading to improved cash collections, rental growth, and higher percentage rent”.

Vicinity’s CEO and managing director, Peter Huddle commented that the retail sector “continues to enjoy elevated growth, despite near-term uncertainty … “.

He said this is due to solid ongoing consumer demand supported by low unemployment and robust income growth and savings rates.

The ASX 200 stock now has a revised guidance for FY23, with FFO per share expected to be in the range of 14 cents to 14.6 cents.

Huddle said:

… our revised FFO per security guidance range for FY23 exceeds the original FY23 FFO guidance
range announced to the market on 16 August 2022. This outperformance reinforces the resilience of our operating and financial performance in the somewhat uncertain retail environment.

Fletcher Building Ltd (ASX: FBU)

The Fletcher Building share price is up 1.1% to $4.61 after the company released its 1H FY23 report. The ASX 200 stock is now up 5.5% in the year to date.

The company reported revenue of $4.3 billion, up 5% on the pcp of 1H FY22. EBIT before significant items totalled $360 million, up 8%, with an improved EBIT margin of 8.4%.

NPAT was $92 million, including $150 million for flagged construction provisions, and down 46% pcp.

The company is guiding a full-year FY23 EBIT before significant items in the range of $800 million to $855 million. It noted that bad weather in New Zealand in January and February would impact their results.

Fletcher Building will pay a dividend of 21.2 NZ cents per share (18 AU cents) on 6 April.

Fletcher Building CEO Ross Taylor said:

We are confident that our strategy positions us well to continue to drive performance and deliver growth, against the backdrop of a dynamic operating environment.

The post 3 ASX 200 stocks moving higher on strong results announcements appeared first on The Motley Fool Australia.

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More reading

• 4 ASX 200 stocks smashing new 52-week highs on Wednesday
• 2 ASX All Ords shares leaping higher with one up 8% on half-year results
• Here are the top 10 ASX 200 shares today
• 3 ASX All Ordinaries shares going gangbusters on Monday
• Guess which ASX All Ords share is leaping higher on a return to profit

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Scott Phillips.

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The Magellan Financial Group Ltd (ASX: MFG) share price has been devastated in recent years. It’s currently more than 85% lower than the all-time high it posted back in February 2020.

But there could still be hope for the S&P/ASX 200 Index (ASX: XJO) funds management business.

One top broker has reportedly doubled down on the stock, upgrading it to a buy ahead of the release of the company’s half-year earnings.

And the market appears to be bidding the Magellan share price higher in response. Right now, the stock is trading at $9.40 – 6.58% higher than its previous close.

For comparison, the ASX 200 is down 0.86% at the time of writing.

Let’s take a closer look at what one broker thinks the future could hold for the embattled financials giant.

Magellan share price rockets 7% amid broker upgrade

The Magellan share price is having a day in the sun amid reports UBS has upped its expectations for the stock. The broker has slapped a buy rating following years of tipping it a sell, the Australian Financial Review reports.

The stock has also been predicted to climb to $10. That represents a potential 6.4% upside on its current level.

It comes after the fund manager revealed another $500 million outflow for the month of January.

Though, thanks to favourable market movements, it ended the month with $46.2 billion of funds under management (FUM) – a 2% month-on-month improvement. Of that, $19 billion was retail and the other $27.2 billion was institutional.

And UBS is said to see value at such levels. The broker believes its FUM will fall before steadying at around $40 billion. Analysts said, courtesy of the publication:

Performance has remained elusive given style-headwinds, however the Global one-year track record is -3.3% vs benchmark and assuming 2% [per annum] alpha going forward would see the three-year track record hit benchmark returns by late 2024.

The broker also reportedly likes Magellan’s balance sheet, saying cash and investments are behind around half of its market capitalisation. That’s said to imply the company (excluding C&I) is trading on around 8 times sustainable earnings with a 12% fully franked dividend yield.

No doubt more eyes will be on the Magellan share price when the fund manager releases its earnings for the first half of financial year 2023 tomorrow.

The post The Magellan share price is surging 7%. Is it time to buy back in? appeared first on The Motley Fool Australia.

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More reading

• Here are the top 10 ASX 200 shares today
• Magellan share price pops then drops on ASX FUM update
• A rare day in the green: Magellan share price soars 5%
• Investing in ASX 200 dividend shares? Here’s what to look for in 2023: fund manager
• Should you buy Seek, Magellan, or Virgin shares?

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Scott Phillips.

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It’s been a pretty horrible day for ASX shares and the S&P/ASX 200 Index (ASX: XJO) in general so far this Wednesday. At the time of writing, the ASX 200 has lost a nasty 1.06%, putting the index down to around 7,350 points.

But not all ASX 200 shares are in the wars today. In fact, let’s talk about four that are not only rising, but have just hit new 52-week highs today.  

4 ASX 200 stocks at new 52-week highs on Wednesday

Altium Limited (ASX: ALU)

ASX 200 tech share Altium is one such company that is defying the market’s gloom today. At present, the Altium share price has risen by a decent 1.94% to $39.70 a share. But earlier this morning, the software-as-a-service (SaaS) provider rose as high as $40.34. That’s a new 52-week high for Altium shares.

We haven’t had any news out of Altium itself for almost a month. So perhaps a rise in the US tech sector overnight is helping to boost sentiment for shares like Altium today. This company’s shares are up a pleasing 15.4% year to date, so this could also be an extension of that trend.

Carsales.com Ltd (ASX: CAR)

Another ASX 200 tech share in Carsales is our next stock to check out. Carsales is also having a massive day today. The online marketplace operator has had a very bouncy day indeed. Carsales shares are presently deep in the red, nursing a 1.26% loss to $22.66 a share.

But this morning saw the company rocket, with the shares hitting $23.53 soon after open. That’s Carsales’ new 52-week high.

Investors have been showing a renewed appreciation of Carsales shares ever since the company announced its latest half-year earnings on Monday. Revenue, profits and earnings were all up across the board, and Carsales jacked up its interim dividend by almost 12%. So this probably explains today’s new high.

Seven Group Holdings Ltd (ASX: SVW)

Next up we have the ASX 200 diversified investment company Seven Group. Seven is having a fantastic session this Wednesday. The company is currently up a healthy 3.03% to $24 a share but rose as far as $24.53 just before midday today.

This one is pretty clear. Seven has also just reported its own half-year earnings this morning. This saw a 16% rise in revenues, while net profits were up 17% and earnings per share (EPS) rose 18%. Obviously, investors have been impressed by what seven had to show.

Lottery Corporation Ltd (ASX: TLC)

Finally today, let’s talk about ASX 200 gaming share Lottery Corporation. Lottery Corp shares are currently up by 0.9% at $5.04 each. But this morning saw this company rise as high as $5.10 per share. That’s (you guessed it) a new 52-week high for Lottery Corp.

Unlike Carsales and Seven Group, we haven’t had any earnings from Lottery Corp recently. So this rise appears to just be the result of some investor goodwill. Lottery Corp shares have been on the SX for less than a year. The company was spun out of Tabcorp Holdings Ltd (ASX: TAH) in May last year.

The post 4 ASX 200 stocks smashing new 52-week highs on Wednesday appeared first on The Motley Fool Australia.

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More reading

• 5 things to watch on the ASX 200 on Wednesday
• Here are the top 10 ASX 200 shares today
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• Are whales dipping in and out of this ASX 200 travel share?
• 3 ASX 200 shares just upgraded by brokers, one with 50% upside

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Altium. The Motley Fool Australia has recommended Carsales.com. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The leading investors from Wilson Asset Management (WAM) have shared two undervalued ASX shares on their radar.

WAM operates several listed investment companies (LICs). Some, like WAM Leaders Ltd (ASX: WLE), focus on larger companies.

Meanwhile, WAM Capital Limited (ASX: WAM) targets “the most compelling undervalued growth opportunities in the Australian market”.

But does WAM have a claim of stock-picking pedigree? The WAM Capital portfolio has delivered an investment return of 15% per annum since its inception in August 1999. That’s before fees, expenses, and taxes. This gross return outperformed the All Ordinaries Total Accumulation Index (ASX: XAOA) return of 8.5% per annum over the same timeframe.

With that in mind, here are the two ASX shares WAM Capital has outlined in its recent monthly update.

Myer Holdings Ltd (ASX: MYR)

Myer is a retailer that operates 57 department stores; it also has an online offering as well.

WAM noted that Myer recently revealed details of its FY23 half-year result, which showed total sales growth of 24.8%. This was its “strongest sales result on record for the first five months of a financial year”.

The fund manager noted that Myer said its sales following Christmas had “continued to outperform strongly” compared to the prior corresponding period.

Myer is expecting its net profit after tax (NPAT) for the 26 weeks to 28 January 2023 to be between $61 million to $66 million. This would represent year-over-year growth of between 89% to 104%, which was more than the market’s expectations.

WAM thinks that a tougher economic environment will impact Myer over the next 12 months. But, more foot traffic in its city stores and increases in inbound tourism will “allow the business to maintain its strong momentum”.

Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH)

The other ASX share that the fund manager picked out was Fisher & Paykel. It’s described as a leading designer, manufacturer, and marketer of products and systems for use in respiratory care, surgery, and the treatment of obstructive sleep apnoea.

WAM pointed out that Fisher & Paykel Healthcare upgraded its revenue guidance for FY23. The ASX healthcare share is expecting full-year operating revenue to be between $1.55 billion to $1.6 billion.

Why did the company bump up its expectations? It was because of higher COVID-19 cases in China and an earlier-than-expected start for the flu season in the US, which contributed to a “rapid surge” in demand for the company’s products.

The fund manager finished with the following optimistic view on the ASX share:

We believe Fisher & Paykel Healthcare Corporation’s runway for growth remains strong with falling freight and logistics costs providing greater confidence that the company can achieve its 30% operating margin target in the medium-term.

The post 2 ASX shares to buy that have ‘strong momentum’: expert appeared first on The Motley Fool Australia.

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More reading

• Why Accent, Iluka, Myer, and QBE shares are charging higher today
• Why Block, Codan, Latin Resources, and Myer shares are storming higher
• Myer share price leaps 6% amid supercharged sales
• Why Fisher & Paykel, Netwealth, Stanmore, and Terracom shares are dropping
• Here are the top 10 ASX 200 shares today

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia 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 Scott Phillips.

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