Evening Wrap: ASX 200 falls, coal stocks tumble and three block trades of interest

Every sector closed in negative territory, AGL posts an unexpected $1.1bn loss in impairments and halves its guidance, real estate stocks are on a four-day slide, coal prices jump on Monday but tumble on Thursday and three block trades of interest.

Let's dive in.

ASX 200 Session Chart

Source: TradingView

Markets

Another heavy day for the ASX 200, down -0.9% so far this week. The weakness today was rather broad-based, with every sector closing in negative territory.

• Utilities notably weaker after AGL (-10.3%) posted a bottom-line loss of more than $1bn and -55% dip in core profit

• Real Estate is on a four-day skid, with the XRE index down -5.5% so far this week. Bond yields have found support while valuation has come into question

• Materials were mixed, with BHP and Fortescue closing slightly above breakeven but the next 20 stocks (by market cap) were all red

Economy

No major economic developments.

Latest news

Stocks & Sectors of Interest

Block trades: The AFR reported three notable block trades today:

• Chalice Mining (ASX: CHN): 10 million shares crossed at $6.30 per share with speculation that Hancock Prospecting could be the buyer

• GenesisCare (ASX: CU6): 6% stake was sold via Wilsons' equities desk at $0.72 per share

• Whitehaven Coal (ASX: WHC): 42.6 million shares crossed at $7.90 per share. Sources told the AFR that the 4.8% stake valued at $337m was likely sold by GQG Partners

Coal: Newcastle coal futures experienced an almost 7% rally on Monday and now a -6.3% selloff on Thursday. The full circle has sent coal stocks whipsawing back and froth.

Newcastle coal futures (Source: TradingView)

Interesting news and movers

Trading higher

• +6.6% MAAS Group (MGH) – 1H23 earnings; reaffirms FY guidance

• +6.1% Aeris Resources (AIS) – Continuation rally, up more than 13% in last five 

• +5.2% Austal (ASB)

• +4.1% Paradigm Biopharma (PAR)

• +1.3% Elders (ELD) – Provides investor presentation after Wed selloff

Trading lower 

• -10.3% AGL Energy (AGL) – 1H result; narrows FY guidance

• -6.1% Macquarie Telecom (MAQ)

• -6.7% Dicker Data (DDR) – Downgraded to Underweight from Neutral

• -5.5% Syrah Resources (SYR) – CEO Shaun Verner disclose sale

• -4.9% Megaport (MP1) – 1H earnings

• -3.2% Zip (ZIP)

Also note:

• Gold sector move: Perseus Mining (-2.8%), Northern Star (-1.7%), Newcrest (-1.7%)

• Coal sector move: Coronado (-6.1%), Whitehaven Coal (-5.9%), Terracom (-4.1%), New Hope Coal (-4.9%)

Broker updates 

BWP Trust: Defensive but too expensive

• Citi: $3.60 target price; Retains Sell

• Notes: “BWP has both strong operational fundamentals through its Bunnings Warehouse portfolio … however at a FY23e PE of 22x in the current environment … the relative valuation premium to the rest of the sector is too expensive.” 

Dicker Data: Near-term uncertainty

• Goldman Sachs: $11.35 target price; Retains Neutral

• Notes: FY22 trading update was a small miss to consensus. Goldman flags near-term risks such as the pull-forward of PC demand through Covid, challenging demand backdrop due to commentary from Microsoft, HP and Dell

Suncorp: Underlying margin beat

• Goldman Sachs: $14.47 target price; Retains Buy

• Notes: 1H23 results on Wednesday posted better-than-expected insurance margins of 10% vs GSe of 9.7%. Guidance target of 10-12% was maintained for the FY. 

Fortescue: “Iron ore price tailwinds”

• Macquarie: $17.50 target price; Retains Underperform

• Notes: “We believe the 1H FY23 earnings update is largely priced in given both price and costs were provided during the 2Q FY23 update in December.” No earnings surprises expected, uncertainty over funding requirements for FFI remains a key medium term concern. Upgrade momentum possible given buoyant iron ore prices.

Boral: Jumped 13% on results (Wednesday)

• Macquarie: $4.05 target price; Retains Neutral

• Notes: “We think the outlook has definitively improved and management actions and intentions are somewhat clearer following the result. Having said that, valuations have expanded, with BLD now trading at a 7% premium to its five year average EV/EBIT.” 

Scans