Evening Wrap: ASX 200 higher, Nvidia bolsters tech sector, Ramsay's big dividend miss

The S&P/ASX 200 closed 34 points higher, up 0.47%. 

The Index rose for a third consecutive session thanks to a strong lead from Wall Street and Nvidia earnings, Ramsay Healthcare shares tumble more than 10% as dividends come in well-below expectations, Whitehaven Coal's production outlook misses analyst forecasts and UBS' take a few of today's results.

Let's dive in.

ASX 200 Session Chart

ASX 200 higher and finished near best levels (Source: Market Index)

Markets

The ASX 200 finished higher for a third consecutive session. Today is known as Super Thursday, one of the most busy days of reporting season (but nothing from the top 20). At the sector level, Nvidia's earnings propped up local tech names notably Altium (+4.9%), Megaport (+3.6%) and Xero (+3.5%). We've seen plenty of V-shaped bounces in the past coupe of months, so is this another one in the making? Jackson Hole also kicks off tonight, which will likely be another market moving catalyst.

Economy

No major economic announcements.

Latest news

Market Insights: Today's Session

A bit of a weird session (thanks to Nvidia's killer earnings).

• Wisetech (ASX: WTC) bounced 8% after a 19% selloff on Wednesday after its FY24 guidance missed analyst expectations

• Megaport (ASX: MP1) and NextDC (ASX: NXT) higher but not exactly euphoric. In fact, NextDC closed just 1.8% higher from a session high of 5.8%

In terms of some interesting:

• Ramsay Healthcare (ASX: RHC) opened 8.3% lower but sold off intraday to a -11.95% close. It was one of those classic gap downs into a short-lived bounce into more selling to settle near worst levels. Here are a few key drivers of the selloff:

  • Wide net profit miss ($298.1m vs. $341m expected)

  • Full-year dividend fell short (75 cps vs. Morgan Stanley forecast 99 cps)

  • FY24 capex more than expected ($0.89-1.1bn vs MSe $0.85bn)

• Whitehaven Coal (ASX: WHC) was another name that sold off intraday from a -2.3% open to a -5.1% close. The $6.4bn company posted a $2.67bn profit but its FY24 production outlook fell short of expectations (18.7-20.7Mt vs. Goldman Sachs expectations of 22.4Mt)

Interesting news and movers

Trading higher

• +20.0% Earlypay (EPY) – Earnings

• +7.4% Appen (APX)

• +6.5% Horizon Oil (HZN) – Earnings

• +5.9% Pacific Smiles (PSQ) – Earnings

• +5.2% Northern Star (NST) – Earnings

• +4.3% Tabcorp (TAH) – Earnings

• +3.6% Telix Pharma (TLX) – Earnings

• +3.5% Renascor Resources (RNU) – Updated MRE

• +2.7% Polynovo (PNV) – Upgraded by CSLA

• +2.6% The Reject Shop (TRS) – Earnings

• +2.2% TPG Telecom (TPG) – Earnings

Trading lower

• -19.8% Judo Capital (JDO) – Earnings

• -11.95% Ramsay Healthcare (RHC) – Earnings

• -10.8% Costa Group (CGC) – Trading update

• -10.7% Insignia Financial (IFL) – Earnings

• -10.5% McMillan Shakespeare (MMS) – Downgraded by CSLA

• -10.0% Smartgroup (SIQ) – Earnings

• -8.75% IVE Group (IGL) – Earnings

• -8.6% AIC Mines (A1M) – Earnings

• -6.6% Macquarie Technology (MAQ) – Earnings

• -6.5% Perpetual (PPT) – Earnings

• -6.2% Lovisa (LOV) – Earnings

• -5.1% Humm (HUM) – Earnings

• -5.1% Whitehaven (WHC) – Earnings

• -4.6% Platinum Asset Management (PTM) – Earnings

• -0.8% Eagers Automotive (APE) – Earnings

Broker notes

UBS take on a few of today’s results

Bega Cheese (BGA) – Neutral with $3.50 target ($3.19 at 23 Aug close)

• “A known challenging result. FY24 guidance broadly in line. Step-up in one-off costs ex- impairment will be a focus, especially those that will continue into FY24. Also focus will be on if Bega can deliver an improved cash generation performance in FY24.”

Cleanaway (CWY) – Neutral with $2.65 target ($2.66 at 23 Aug close)

• “Solid result with marginally better SWS and IWS than assumed helping offset LWS. 2H23 annualised EBIT implies $328m, 6% below UBS (& cons) however operational improvement, price and recovery in health to flow through.”

Insignia Financial (IFL) –Neutral with $3.20 target ($2.91 at 23 Aug close)

• “Earnings in line with our forecasts, div below. Revenues slightly ahead of UBSe, costs above. EBITDA margin fell 0.7bps, a larger decline than guidance 0-0.5bps but in line with UBSe.”

• “Market will debate mid-term margin outlook and execution risk associated with the simplification program.”

Lovisa (LOV) – Buy with $23.00 target ($22.64 at 23 Aug close)

• “FY23 EBITDA above market & UBSe but NPAT below mkt & above UBSe ... Revenue below mkt & UBSe, but gross margins & CODB/Sales both better than mkt & UBSe.”

Medibank (MPL) – Buy with $4.20 target ($3.42 at 23 Aug close)

• “NPAT 4% ahead of consensus, operating profit 1% ahead. Core drivers of the beat appear to be Resident PHI and Health. Non-resident profit growth slowed in 2H and missed UBSe.”

• “Policy numbers rose in Jun qtr (first qtr increase since the hack) but FY24 guidance is soft at 1.5-2.0% growth (UBSe 2.8%). Cyber costs in FY24 expected at $30-35m (UBSe $15m), still some cyber attack residual fallout.”

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