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The S&P/ASX 200 Index (ASX: XJO) has come under pressure on Wednesday largely due to weakness in the banking sector. In afternoon trade, the benchmark index is down 1% to 7,357.7 points.

Four ASX shares that aren’t letting that hold them back today are listed below. Here’s why they are charging higher:

Cochlear Limited (ASX: COH)

The Cochlear share price is up over 6% to $222.72. This follows the release of the hearing solutions company’s half year results. While Cochlear reported a decline in its half year profit, it continues to expect solid full year profit growth thanks to the launch of the new Nucleus 8 Sound Processor and the continuing recovery from COVID surgery delays.

GUD Holdings Limited (ASX: GUD)

The GUD share price is up over 6% to $8.80. Investors have been buying this diversified products company’s shares after it reported a 55.7% increase in half year revenue and an 88.7% jump in net profit. This was driven by a strong core automotive result combined with full six-month contributions from APG and Vision X.

Netwealth Group Ltd (ASX: NWL)

The Netwealth share price is up 5% to $13.91. This has been driven by the investment platform provider’s half year results. Netwealth reported an 18.9% increase in total income to $102.8 million and record underlying EBITDA of $47.4 million. This was driven by a 10.2% increase in funds under administration to $62.4 billion.

Wesfarmers Ltd (ASX: WES)

The Wesfarmers share price is up 2.5% to $49.82. The catalyst for this has been the release of the conglomerate’s half year update. Wesfarmers reported a 27% increase in revenue to $22.56 billion and a 14.1% lift in net profit after tax of $1.38 billion. Strong performances from Bunnings and Kmart played a role in this solid performance.

The post Why Cochlear, GUD, Netwealth, and Wesfarmers shares are charging higher appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the boosted Wesfarmers dividend
• Wesfarmers shares take off as bargain hunting sees Kmart earnings add 110%
• Cochlear share price surges 6% on solid half and buyback
• Wesfarmers share price in focus as revenue jumps 27%
• Earnings preview: Here are the ASX shares reporting on Wednesday

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 positions in and has recommended Cochlear and Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group and Wesfarmers. The Motley Fool Australia has recommended Cochlear. 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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Wesfarmers Ltd (ASX: WES) shares are up 2.3% to $49.82 per share on the back of a big interim dividend boost, announced this morning.

That came as the diversified S&P/ASX 200 Index (ASX: XJO) retail share reported its half-year earnings results for the six months ending 31 December (H1 HY23).

Here’s everything you need to know about the boosted Wesfarmers dividend.

What’s happening with the Wesfarmers dividend?

The Wesfarmers board declared a fully franked 88 cent per share (cps) interim dividend.

That’s an increase of 10% from the 80 cents per share paid out in the first half of the 2022 financial year.

Wesfarmers said the payout reflects “Wesfarmers’ dividend policy, which takes into account available franking credits, balance sheet position, credit metrics and cash flow generation and requirements”.

The big lift was made possible by a 14.1% year-on-year increase in net profit after tax (NPAT), which came in at $1.38 billion.

ASX 200 investors who want to receive the payout should note the ex-dividend date is next Monday, 20 February.

If you own shares before they trade ex-dividend you can expect the 80 cents per share payout on 28 March.

Wesfarmers also operates a dividend reinvestment plan (DRP). This enables you to automatically reinvest all or a portion of the payout into new shares.

If you wish to participate in this, the DRP election date is a week from today, Wednesday 22 February.

The post Everything you need to know about the boosted Wesfarmers dividend appeared first on The Motley Fool Australia.

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More reading

• Why Cochlear, GUD, Netwealth, and Wesfarmers shares are charging higher
• Wesfarmers shares take off as bargain hunting sees Kmart earnings add 110%
• Wesfarmers share price in focus as revenue jumps 27%
• Earnings preview: Here are the ASX shares reporting on Wednesday
• Banking on term deposits to retire rich? I’d buy ASX 200 dividend shares instead

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 positions in and has recommended Wesfarmers. 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 taking another turn for the worse so far this Wednesday. At the time of writing, the ASX 200 has lost a disappointing 0.7%, putting the index down to around 7,380 points. But the ANZ Group Holdings Ltd (ASX: ANZ) share price is faring even worse.

ANZ shares are having a clanger today. The ASX 200 bank share has tumbled by a nasty 2.3% and is back down to $25.14 a share. This latest drop means that ANZ stock has now fallen close to 3% since last Thursday:

So what’s going on with this big four bank today that has ANZ shares so vastly underperforming the broader market?

Well, there are a few things that could be contributing to these losses.

Why is the ANZ share price having such a woeful Wednesday?

Firstly, most ASX 200 bank shares are down today, so it’s not just ANZ shares feeling the pain.

National Australia Bank Ltd (ASX: NAB) shares are down by 2.34% at present. The Westpac Banking Corp (ASX: WBC) share price is down by 2.9%, while Commonwealth Bank of Australia (ASX: CBA) has lost a notable 3.35%.

On the latter, CBA actually reported its half-year results for the six months ending 31 December 2022 this morning.

As we covered at the time, CBA reported a 12% rise in operating income to $13.59 billion, while cash net profits rose 9% to $5.15 billion. Commonwealth Bank also reported an 18 basis point lift to its net interest margin, bringing it to 2.1%.

This enabled CBA to announce a $1 billion increase to its share buyback program, as well as a 20% hike to its interim dividend to $2.10 per share.

But investors must have been hoping to see better numbers. As my Fool colleague posited this morning, perhaps investors are concerned that CBA’s net interest margins have already peaked.

So with such a negative reaction from the markets to CBA’s numbers this morning, it was always going to be hard for ANZ shares to eke out a gain today.

We also had some news out of ANZ itself which could be playing a role here too. The bank announced a new capital notes offer this morning, with the intention of raising $1 billion to “help meet its capital requirements”

So it’s likely that a combination of these events is responsible for the disappointing ANZ share price performance we are seeing this Wednesday. Even so, this big four bank remains up by a healthy 8.9% in 2023 so far.

At the current ANZ share price, this ASX 200 bank share has a trailing dividend yield of 5.8%.

The post Why is the ANZ share price tumbling on Wednesday? appeared first on The Motley Fool Australia.

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More reading

• Why did the CBA share price just sink almost 6%?
• Everything you need to know about the supersized CBA dividend
• Earnings preview: Here are the ASX shares reporting on Wednesday
• CBA share price on watch amid strong profit growth and $1b buy-back
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank. 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 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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ASX All Ords shares are trading lower this morning with the S&P/ASX All Ordinaries Index (ASX: XAO) down 0.67%.

However, these two All Ords companies are outperforming their peers after reporting strong half-year results.

Pact Group Holdings Ltd (ASX: PGH)

This ASX All Ords share shot up a whopping 8.4% this morning to $1.10 after the packaging manufacturer reported its FY23 half-year results. The company’s share price is currently 2.17% higher at $1.037.

Pact Group is the largest rigid packaging plastics manufacturer in Australia and New Zealand with a growing overseas business.

Pact reported $998 million in revenue for the half, which was 8% up on the prior corresponding period (pcp) of 1H FY22.

Its underlying earnings before interest and taxes (EBIT) was $75 million, 3% above the top of its guidance range but down 8% pcp.

Underlying net profit after tax (NPAT) was $26 million, down 33% pcp but “in line with the performance of the business and increased finance costs”, the company said.

The All Ords business said the recovery of costs and volume growth had driven the increased revenue.

It noted increased demand for sustainable packaging and recycled products, new contract wins, and contract re-pricing of existing contracts during the half.

The ASX All Ords share will not pay an interim dividend, reflecting “the desire to preserve cash to allow the Company to reduce debt and continue its capital program in line with its Vision to lead the Circular Economy”.

Pact reiterated its guidance for FY23 underlying EBIT to be slightly ahead of FY22 underlying EBIT.

Redbubble Ltd (ASX: RBL)

Rebubble also reported its FY23 half-year earnings this morning. The ASX All Ords share was not out of the blocks as fast as Pact Group but is steadily climbing in lunchtime trade. The Redbubble share price is currently up 3.19% at 48.5 cents.

Redbubble is an online artwork and design marketplace selling a range of products. The All Ords company reported a 1% lift in revenue to $343.8 million for 1H FY23 compared to the pcp of 1H FY22.

Gross profit is down 6% at $101.3 million and the gross profit margin fell 2.5%.

Operating expenses excluding brand investment were 20% higher at $63.6 million.

Looking forward, Redbubble CEO Michael Ilczynski said:

Enhancing the Redbubble marketplace’s content quality and search and discovery is a primary focus for the Group to ensure customers can find products among four billion listings which appeal to their
specific interests and needs.

We are uniquely positioned to benefit from recent improvements in AI, which could revolutionize search and discovery of artists’ content and greatly enhance new and existing customers’ experience.

Early signs are positive and we expect to roll-out implementation of this technology at scale this calendar year.

The post 2 ASX All Ords shares leaping higher with one up 8% on half-year results appeared first on The Motley Fool Australia.

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More reading

• 3 ASX All Ordinaries shares going gangbusters on Monday
• Guess which ASX All Ords share is leaping higher on a return to profit
• ASX shares investors rejoice! RBA says inflation has now peaked
• Bargains or traps? Fundie reveals if these 3 ASX shares are worth buying cheap
• ASX 200 tech share WiseTech wobbles on $327 million US acquisition

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 positions in and has recommended Redbubble. 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 Fortescue Metals Group Ltd (ASX: FMG) share price is under pressure on Wednesday.

This follows the release of the iron ore giant’s half year results.

What happened during the first half?

As we covered here earlier in greater detail, Fortescue reported a 3.6% decline in revenue to US$7.84 billion during the first half. This was driven by softer iron ore prices, which offset the miner’s record-breaking shipments.

It was a similar story for its earnings, with Fortescue’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) falling 8.7% to US$4.35 billion

What about the Fortescue dividend?

Given how the Fortescue dividend has been one of the biggest on the market in recent years, investors will no doubt have been eagerly anticipating this release.

Unfortunately, the miner’s dividend took the biggest hit of them all. The Fortescue board declared a fully franked interim dividend of 75 cents per share, which was down almost 13% from a year earlier.

This represents a 65% payout of net profit after tax. This is consistent with Fortescue’s dividend policy to pay 50% to 80% of full year profits to shareholders.

When is payday?

The ex-dividend date for this is 27 February, with the dividend then scheduled to be paid to shareholders on 29 March.

Fortescue also advised that it will be operating its dividend reinvestment plan again, allowing eligible shareholders to elect to invest dividends in ordinary shares.

The issue price for shares under the plan will be calculated as the average of the daily volume weighted average market price for Fortescue shares during the five-day period commencing 2 March. There will be no discount to the allocation price and the plan will not be underwritten.

If you want to take part in the dividend reinvestment plan, you will need to apply before 1 March. Shares will then be allocated to shareholders on 29 March.

The post Here’s what you need to know about the latest Fortescue dividend appeared first on The Motley Fool Australia.

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More reading

• Fortescue share price sinks amid 13% dividend cut
• Earnings preview: Here are the ASX shares reporting on Wednesday
• Here’s the iron ore price forecast for 2023: CBA
• Better buy: Fortescue vs BHP shares
• Own Fortescue shares? Here’s what the market expects from its half year results

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 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 Wesfarmers Ltd (ASX: WES) share price is rocketing on Wednesday on the release of the company’s first-half profit report. And profit it did. The company posted a 1.4 billion post-tax profit for the six months ended 31 December, as The Motley Fool Australia reported earlier.

Much of that was due to Kmart’s earnings, which more than doubled year-on-year as customers looked for the lowest prices – a trend the company predicts to continue amid soaring inflation and rising interest rates.

But not all are so hopeful of the S&P/ASX 200 Index (ASX: XJO) retail-focused conglomerate.

Right now, the Wesfarmers share price is $50.03, 2.73% higher than its previous close.

Wesfarmers share price soars on Kmart win

Wesfarmers’ iconic business Kmart Group, housing both Kmart and Target, posted $475 million of earnings in the first half. That’s a 114% jump on those of the previous comparable period.

On top of the cycling of past lockdowns, Kmart’s win likely had a lot to do with customers’ positive response to its “lowest price positioning”, the company highlights.  

And that’s been tipped to continue. The company expects the increasing cost of living to send more shoppers through the discount department store’s doors.

It wasn’t a trend seen at Bunnings, however. The hardware retailer posted a 1.5% lift in earnings, which came in at around $1.3 billion.

There was also news of Wesfarmers Chemicals, Energy, and Fertilisers (WesCEF) and its Mt Holland lithium project. The business posted a notable 48.6% jump in earnings. However, it also revealed the project’s costs have risen.

Wesfarmers now expects to fork out between $1.2 billion and $1.3 billion to develop Mt Holland. That’s a jump of around 10% to 20% from previous estimates. Meanwhile, lithium hydroxide likely won’t be produced until early 2025 – six months later than previously expected.

Experts respond to the ASX 200 giant’s results

In its initial response, Goldman Sachs warns impacts from slowing housing activity and continued rate hikes could lessen demand at Bunnings – a happening it can “clearly see early evidence of”.

Additionally, while the company is bullish on commodities capable of bolstering WesCEF’s earnings once more this half, Goldman Sachs says ammonia nitrate prices are beginning to soften.

The broker reiterated its sell rating on Wesfarmers shares this morning. It’s kept its price target at $42.20 – a potential 15% downside.

Meanwhile, VanEck has reportedly labelled the company’s earnings a once-off, at least for now.

Russel Chesler, head of investments and capital markets, said sales at its retail brands could fall as rates increase amid inflation, The Australian reports. Chesler was quoted as saying:

We think investors should be very wary of consumer discretionary stocks with widespread weakness on the not-so-distant horizon.

The post Wesfarmers shares take off as bargain hunting sees Kmart earnings add 110% appeared first on The Motley Fool Australia.

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More reading

• Wesfarmers share price in focus as revenue jumps 27%
• Earnings preview: Here are the ASX shares reporting on Wednesday
• Banking on term deposits to retire rich? I’d buy ASX 200 dividend shares instead
• Should I buy Wesfarmers shares before the company reports this week?
• 3 of the best ASX 200 shares to buy now: broker

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 positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has positions in and has recommended Wesfarmers. 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 Australian share market may be taking a tumble on Wednesday but that hasn’t stopped some ASX shares from shooting higher.

Two ASX mining shares that are recording stellar gains today are listed below. Here’s why they are hurtling higher:

Legacy Minerals Holdings Ltd (ASX: LGM)

The first ASX mining share that is recording a strong gain today is this gold explorer.

The Legacy Minerals share price is currently up 22% to 19.5 cents but was up as much as 53% at one stage. This has been driven by the release of “remarkable” drilling results from the Bauloora Epithermal Gold Project in New South Wales.

Commenting on the results, CEO and managing director, Christopher Byrne, said:

The Legacy Minerals team is pleased to confirm a remarkable discovery at the Bauloora Epithermal Gold Project of low sulphidation epithermal veins and breccia across an extensive strike of the Mee Mar Prospect vein trend. This project’s scale is demonstrated by the fact that every diamond drill hole testing the strike of the Mee Mar vein intercepted epithermal veins and breccia – delivering a continuous strike of 1,500m which remains open to the north, south and at depth.

Petratherm Ltd (ASX: PTR)

This ASX mining share is up 13% to 7.9 cents currently but was up 40% to 9.8 cents at one point.

Investors have been bidding the Petratherm share price higher following the release of an update on rare earth (REE) drill results from the Meteor Prospect, located in the Comet Project Area of the Northern Gawler Craton of South Australia.

According to the release, drilling that was undertaken during December has delivered “encouraging results.” Petratherm’s CEO, Peter Reid, commented:

The Meteor Prospect results are highly encouraging, demonstrating excellent clay hosted rare earth grades, intercept thicknesses and continuity between drill holes. The mineralisation starts at just a few metres below surface in the soft weathering profile allowing the potential for low-cost free dig mining. The shallow clay hosted mineralisation has formed over a layered mafic complex and potential remains for additional rare earths in the basement rock below.

The post Guess which ASX mining shares are soaring 40% or more on new discoveries appeared first on The Motley Fool Australia.

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More reading

• Fortescue share price sinks amid 13% dividend cut
• Why did the CBA share price just sink almost 6%?
• Are Temple & Webster shares a bargain buy following Tuesday’s 27% fall?
• Everything you need to know about the supersized CBA dividend
• Corporate Travel share price tumbles despite record earnings forecast

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 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 Fortescue Metals Group Ltd (ASX: FMG) share price is down 1.67% in morning trade on Wednesday.

Shares in the S&P/ASX 200 Index (ASX: XJO) iron ore miner closed yesterday at $22.18 and are currently trading for $21.81 apiece.

This follows the release of the company’s half-year results for the six months ending 31 December (H1 FY23).

Here are the highlights:

Fortescue share price slides alongside profits and dividends

• Revenue of US$7.84 billion, down 3.6% from H1 FY22
• Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) declined 8.7% from the prior corresponding period to US$4.35 billion
• Net profit after tax (NPAT) of US$2.37 billion, down 4.7% from US$2.78 billion in H1 FY22
• Interim fully franked dividend of 75 Aussie cents per share declared, down 12.8% from 86 cents per share in H1 FY22

What else happened during the half year?

Also putting the Fortescue share price under pressure is the lower average realised price the miner received for its iron ore shipments. Over the reported half, that came to US$87 per dry metric tonne (dmt), down from US$96.dmt in the first half of the 2022 financial year.

Earnings per share (EPS), meanwhile, declined to AU$1.14 per share, down from AU$123.70 per share a year ago.

The ASX 200 miner’s dividend payout ratio declined from 70% in H1 FY22 to 65% in the current reported half-year.

On the positive side for the Fortescue share price, the miner achieved record half-year iron ore shipments of 96.9 million tonnes (Mt), beating the prior record first half set in H1 FY22 by 3.8Mt.

Ore processed was also a first-half record, coming in at 98.0Mt.

Ore mined, on the other hand, decreased to 114.8Mt, down from 118.0Mt in H1 FY22.

What did the miner report on the sustainability front?

The Fortescue share price could be getting some support from ESG investors, as the iron ore giant continues its strong focus on slashing emissions. Fortescue intends to achieve real zero emissions (Scope 1 and 2) across its iron ore operations by 2030.

The company stated:

Fortescue is making significant progress on our decarbonisation initiatives, enabled through our 100% renewable green energy and green technology company FFI [Fortescue Future Industries] and battery design and energy management system company WAE Technologies (WAE) in the United Kingdom.

Fortescue allocates 10% of NPAT to fund FFI.

Now what?

Looking at what could impact the Fortescue share price down the road, the miner provided the following FY23 guidance:

• Iron ore shipments in the range of 187 to 192Mt
• C1 costs for hematite of US$18.00 to US$18.75 per wet metric tonne (wmt)
• Capital expenditure (excluding FFI) of US$2.7 to US$3.1 billion
• FFI’s FY23 anticipated expenditure comprises US$500 to US$600 million of operating expenditure and US$230 million of capital expenditure

Fortescue assumed an average FY23 exchange rate of 70 Aussie cents to the US dollar.

Fortescue share price snapshot

As you can see in the chart below, the Fortescue share price has had a strong run in 2023, up 7% since the closing bell on 30 December despite this morning’s dip.

The post Fortescue share price sinks amid 13% dividend cut appeared first on The Motley Fool Australia.

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More reading

• Earnings preview: Here are the ASX shares reporting on Wednesday
• Here’s the iron ore price forecast for 2023: CBA
• Better buy: Fortescue vs BHP shares
• Own Fortescue shares? Here’s what the market expects from its half year results
• Fortescue share price shrugs off layoff rumblings

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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The James Hardie Industries plc (ASX: JHX) share price is up 3.03% to $31.32, while the S&P/ASX 200 Index (ASX: XJO) is in the red this morning, down 0.53%.

The James Hardie share price took a hammering yesterday after the company released weak Q3 FY23 results.

As we reported, the ASX 200 share tumbled by 8% in early trading before recovering and closing down 4.25%. Over the past 12 months, the James Hardie share price has dropped by 34.36%.

But one broker is looking through the bad news, seeing a long-term opportunity with the ASX 200 share.

Weak Q3 result ‘a buying event’ for ASX 200 share

The housing downturns in the United States and Australia have taken a toll on the building materials supplier.

James Hardie reported a 4% dip in sales in Q3 FY23 compared to Q3 FY22 and a 19% drop in adjusted earnings before interest and taxes (EBIT).

The weak result prompted James Hardie to lower its FY23 full-year guidance considerably.

The company now expects adjusted net income in the range of US$600 million to US$620 million. This is down from the previous guidance of US$650 million to US$710 million.

According to reporting in The Australian today, Citi analyst Samuel Seow says the company is “attractive”, trading on an FY24 “trough earnings” multiple of 19 times.

Seow said:

Following a weaker than expected result, we believe the market will be looking for the last downgrade and we think this could be it.

Ironically, we see [the Q3] result as a buying event and the total shareholder return outlook should be positive from here.

Seow says the ASX 200 share is “close to an inflection”. He points to the improvement in United States mortgage applications and the 30-year fixed rate “appearing to settle”.

Seow maintains a buy rating on James Hardie but has lowered his 12-month share price target by 6.5% to $34.60.

What did James Hardie management say about Q3?

James Hardie CEO Aaron Erter said the company saw the current period “as an opportunity”.

He said they were cutting costs while continuing to “significantly invest in strategic growth initiatives”.

Erter commented:

We are managing quickly and decisively to accelerate our competitive advantages through this market downturn and we view this time as an opportunity.

… we remain aggressive, and we are laser focused on driving profitable volume share gain in every region and segment we do business in.

The post Down 35% in a year, this ASX 200 share offers ‘a buying event’ right now: Citi appeared first on The Motley Fool Australia.

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More reading

• James Hardie share price tumbles 8% as housing market downturn impacts sales
• These 3 ASX 300 shares are ‘significantly undervalued’: fund manager
• Brokers name 3 ASX shares to buy now
• Here are the top 10 ASX 200 shares today
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bronwyn Allen has positions in James Hardie Industries Plc. 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 Commonwealth Bank of Australia (ASX: CBA) share price took a beating in early trade.

At one stage, the banking giant’s shares were down as much as 5.5% to $103.06.

The CBA share price has recovered a touch since then but remains 3% lower at $106.07.

Why is the CBA share price sinking?

Investors have been selling down the shares of Australia’s largest bank following the release of its half year results.

As a reminder, for the six months ended 31 December, CBA delivered a 12% increase in operating income to $13,593 million and a 9% lift in cash earnings to $5,153 million. This was driven largely by volume growth in core products and a recovery in its net interest margin.

The CBA board elected to increase its interim dividend by 20% year over year to a fully franked $2.10 per share. But the returns won’t stop there. CBA has increased its ongoing share buy back by $1 billion.

Broker reaction

Goldman Sachs has taken a look at the result and given its verdict. It notes that its earnings were stronger than it was expecting. The broker commented:

CBA’s 1H23 cash earnings (company basis) from continued operations grew by 9% on pcp to A$5,153 mn, and was 1% ahead of our expectations. The beat was driven by better-than-expected net interest income and lower expenses, partially offset by lower non-interest income and higher BDDs, which translated to a 1H23 PPOP that was up 18% on pcp and 1% higher than expectations (in line revenues, lower operating expenses).

So why is the CBA share price falling? This could be due to concerns that the bank’s net interest margin has already peaked. If this is the case, it has peaked well ahead of expectations. Goldman adds:

Disclosure by CBA suggests that its monthly NIM peaked around the middle of 1H23, which likely implies our 1H24 peak half-year NIM forecast is optimistic.

The post Why did the CBA share price sink almost 6% today? appeared first on The Motley Fool Australia.

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More reading

• Everything you need to know about the supersized CBA dividend
• Earnings preview: Here are the ASX shares reporting on Wednesday
• CBA share price on watch amid strong profit growth and $1b buy-back
• 5 things to watch on the ASX 200 on Wednesday
• Is a bigger CBA dividend on the cards this week?

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 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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