Property stocks lead the ASX higher (CAR)
WHAT MATTERED TODAY
The market chopped around early on today, couldn’t really make up its mind until after lunch where stocks found their groove and the market rallied into the close, pushing sharply higher in the match. Real-Estate stocks were strong today, particularly the retail exposed names that benefitted from a very strong rebound in retail sales in the US overnight, this of course helped the actual retail stocks themselves. Carsales (CAR) out with a trading update today and the stock rallied +6%, Harry covers off on that one below, however the buying remained fairly broad based with 10 of 11 sectors up on the session the session. A quick note this afternoon with more detail tomorrow morning…
Overall, the ASX 200 added +50pts / 0.83% today to close at 5991 - Dow Futures are trading down -19pts/0.07%.
ASX 200 Chart
ASX 200 Chart
CATCHING MY EYE:
Carsales (CAR) +6.19%: one of the better performers today, the online vehicle classifieds saw shares jump on a reasonable guidance figure, talking up the rebound in activity since April. The company expects around 7.5% lower for the full year at $120-124m, on a fall of ~5.5% in revenue. The market was looking for $111m, guidance coming in at ~10% above expectations. As the economy beings to reopen, car buys have returned to the market, helping to reduce inventory on the site with some demand likely coming from people looking to avoid public transport amid the pandemic. On the international front, their South Korean market has rebounded similarly to the Australian market, but the Brazilian arm continues to lag with daily COVID cases still rising in the country.
Carsales were also able to renegotiate their debt facilities, with an additional $105m made available, with the bulk now expiring out in 2024. The flexibility this provides is key, with Carsales in good shape from a balance sheet perspective. Management are still keen to pay dividends at around 80% of net profit – on that basis shareholders could expect another 18c for the final div, taking it to 40c for the financial year.
Carsales (CAR) Chart
BROKER MOVES:
· Costa Raised to Neutral at Macquarie; PT A$2.87
· Alliance Aviation Cut to Market-Weight at Wilsons; PT A$3.14
· Westpac Raised to Equal-Weight at Morgan Stanley; PT A$18.10
· NAB Cut to Equal-Weight at Morgan Stanley; PT A$18.50
· Metcash Raised to Overweight at Morgan Stanley; PT A$3.30
· Viva Energy Raised to Overweight at JPMorgan; PT A$2
· ASX Cut to Underweight at Morgan Stanley; PT A$70
· Link Administration Cut to Underweight at Morgan Stanley
· Computershare Raised to Overweight at Morgan Stanley
· South32 Raised to Outperform at RBC; PT A$2.50
· Healius Cut to Hold at Morgans Financial Limited; PT A$2.96
· Iluka Cut to Neutral at JPMorgan; PT A$8.90
OUR CALLS
No changes today
Major Movers Today
Have a great night
James, Harry & the Market Matters Team
Disclosure
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