A2 Milk is raising prices and winning more market share, signs of positivity ahead of its results next month, according to analysts at Morgans. The broker raised its target price on the stock by 12 per cent today after lifting its forecasts to ahead of the company’s own FY19 earnings guidance. Analysts led by Belinda Moore say recent channel checks suggest that the milk formula maker continues to trade strongly and win market share, and that recent price rises and the launch of new products will drive further growth.
Australian Foundation Investment Co.Ltd (ASX: AFI):
The nation’s biggest listed investment company, Australian Foundation Investment Co, is poised to pounce on bargains in the coming reporting season, as it warns concerns about a weakening economy could have flow-on effects on earnings outlooks. It comes as the 90-year-old investment fund posted a 45 per cent jump in profit to $406.4 million for the full year. The result was driven by a surge in investment income, up 43 per cent to $433m, largely due to special dividends and buy-backs in both Rio Tinto and BHP Billiton. “The Australian equity market is facing an interesting dilemma: Very low interest rates are reinforcing the move by many investors to buy equities at a time when the Reserve Bank of Australia is concerned about the outlook for the economy,” AFIC told shareholders today. “If the economy does weaken, then this is likely to have implications for the earnings outlook for a number of companies,” it said.
Centuria Capital Group (ASX: CNI):
Centuria Capital Group will purchase 80 Flinders Street in Adelaide for $127 million, located a few blocks south of Rundle Mall. The building at Flinders street is fully leased and will become a new unlisted fund within Centuria Property Funds Limited, to be launched in August with distribution yields of 6.5 per cent 6.6 per cent tin 2019-20 and 2020-21 respectively. "As a market, Adelaide is continuing to transform through a strong pipeline of approximately $130 billion of infrastructure and defense projects, as well as offering attractive fundamentals relative to other core CBD markets". Centuria shares last traded at $1.84.
Clime Capital Ltd (ASX: CAM):
John Abernathy's Clime Capital is making a bid for Ronni Chalmer's CBG Capital. CBG's independent directors, James Beecher and Peter Velez today recommended the scrip for scrip offer to shareholders "in the absence of a superior proposal and subject to an independent expert's report". That report is due at the end of the month. Clime Capital's offer came after market close on Friday. It is offering CBG shareholders scrip worth $1.0646, based on Thursday's closes price. CBG shares closed at $1.015 on Friday.
FlexiGroup Limited (ASX:FXL):
Australian financial services company Flexigroup has announced several new retail customers for its buy-now-pay-later platform as it builds its offering against market-leader Afterpay. Temple & Webster, Bing Lee, Retravision, Betta Electrical, Jaycar and Bi-Rite are the newest retailers to join the platform, alongside homewares seller Temple & Webster and Pottery Barn owner Williams Sonoma. Shares jumped 12 per cent to $1.86 in early trade this morning following the announcement. Dentistry business 1300 SMILES has also signed up, alongside solar services provider Sunboost. In a statement, Flexigroup chief executive officer Rebecca James said the expansion of the company's buy now pay later platform was part of an ongoing reinvigoration of Flexigroup's offerings. Earlier this year the company announced it had partnered with Myer, Ikea, and IVF services provider City Fertility. Ms James says customers were choosing humm due to its "broader demographic and spending power" and the service has grown to over 15,000 partner locations since launching in May.
Fortescue Metals Group Limited (ASX: FMG):
Fortescue’s spectacular share price rally has given it the backing to fast track diversification into other base metals, according to analysts at Morgans. In a client note, Adrian Prendergast says the miner’s share price is hard to justify after a 35 per cent rally over the past three months, but that the surge does set Fortescue up for new opportunities. “We see FMG as being in an ideal position to pursue a larger push into other metals (given the rampant outperformance of iron ore stocks versus the rest of the resources sector). This could see FMG move on a comparatively smaller mid-cap base metal peer,” Mr Prendergast says.
InvoCare Limited (ASX: IVC):
Shares in funeral home operator Invocare are down 6.4 per cent this morning to $15.17 after sitting comfortably above $16 for several sessions. This morning Macquarie Wealth Management analysts released a note raising the possibility the Australian Bureau of Statistics (ABS) has over-estimated its forecasts for the 2019 national death rate. They note that the 2019 flu season is worse than 2018 and hitting earlier than 2017, but the number of deaths from flu are relatively small at less than 1 per cent of total deaths. There is a downside risk to Invocare earnings forecasts if death volumes are lower than expected. If deaths grow by 2 per cent, their earnings per share would be revised down by 2.7 per cent. And if death volumes are flat, then earnings per share forecasts fall by 5.4 per cent.
Lynas Corporation Ltd (ASX:LYC):
Rare earths miner Lynas Corp is facing renewed pressure in Malaysia with environmental groups staging a last-ditch attempt to ensure the country's government keeps an election promise to close its billion-dollar processing plant in six weeks’ time. "The Malaysian government need to hold Lynas accountable for its massive radioactive waste problems," said Greenpeace Malaysia Campaigner Heng Kiah Chun at a press conference on Sunday launching the new campaign against Lynas, backed by 88 different non-government organizations. "Lynas has misled Malaysia by giving two undertakings to remove its toxic radioactive waste from Malaysia even though Western Australia had made it clear back in 2011 that its waste would not be accepted back in WA," said a joint statement from the groups. The Malaysian Energy, Science, Technology, Environment Minister Yeo Bee Yin, is set to make a decision by mid-August on the Lynas appeal against the new conditions her ministry imposed in December on the company's processing plant. These conditions would force Lynas to export its low-level radioactive waste from the country or face the non-renewal of its license to operate in Malaysia which expires September 2.
National Australia Bank Ltd (ASX: NAB):
NAB’s appointment of Ross McEwan as CEO gives it the most experienced combination at the bank in two decades and “as strong as any in the market” according to Citi. Following Mr McEwan’s appointment on Friday, Citi analyst Brendan Sproules says the new CEO’s UK experience will be invaluable in the sector. “For NAB, his experience in managing regulatory change, whilst driving down operating costs, should give investors a flavour of what they can expect from NAB looking forward,” Mr Sproules says. That said, he warns that the elongated timetable for Mr McEwan’s start with the bank leaves NAB in a holding pattern, with no chief executive for almost 12 months as interim chief Phil Chronican is to relinquish his executive responsibilities to transition to NAB chair in mid-November.
Northern Minerals Ltd (ASX:NTU):
Northern Minerals has raised $30 million from shareholders to fund expansion at the rare earths developer’s Browns Range project after trade tensions refocused interest in the industry. The developer says it has received commitments from Australian and overseas investors for the rights issue to fund further exploration, an ore sorting machine, and an examination of whether it can move more production onshore. Northern Minerals is among Australia’s most advanced development projects for rare earths, a group of 17 minerals critical to high tech industries and defense. “The programmed expansion and acceleration is a result of significantly increased levels of interest in the company and the Browns Range Project from a number of parties, including potential customers, investors and government bodies in Australia and the US,” the company said on Monday in a filing to the ASX.
St Barbara Ltd (ASX:SBM):
St Barbara has completed its acquisition of TSX-listed Atlantic Gold, in a deal that “ticks all the boxes” for the miner and gives it a platform to move further into North America. The $780 million deal, was completed on Friday in Vancouver, diversifying the locally-listed gold miners assets into Canada. As part of the deal, key Atlantic executives and the operating team will continue with St Barbara to ensure continuity of operations and relationships with key Canadian stakeholders.
(Source: AIMS)
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