Market Wraps

Evening Wrap: ASX 200 higher, Westpac tops expectations, Lendlease downgrades full-year view

Mon 19 Feb 24, 4:52pm (AEST)

The S&P/ASX 200 finished higher for a third-straight session, up 0.09% to 7,665 points.

The ASX 200 shrugged off a weak lead from Wall Street and finished slightly higher, Westpac shares rally to two-year highs after first-quarter margins come in above analyst expectations, Chinese markets return after a week-long holiday but iron ore and lithium price eased, A2 Milk soars on a clean sweep of first-half numbers, Lendlease marks its worst session since March 2020 and some broker notes of interest.

Let's dive in.

Today in Review

Mon 19 Feb 24, 4:44pm (AEDT)

Name Value % Chg
Major Indices
ASX 200 7,665.1 +0.09%
All Ords 7,913.3 +0.10%
Small Ords 2,948.4 -0.11%
All Tech 2,860.2 -0.35%
Emerging Companies 1,985.3 +0.10%
Currency
AUD/USD 0.6544 +0.18%
US Futures
S&P 500 $5,024.25 +0.09%
Dow Jones $38,717.0 +0.05%
Nasdaq $17,782.0 +0.21%
Name Value % Chg
Sector
Communication Services 1,596.3 +0.74%
Financials 7,173.8 +0.73%
Materials 18,036.2 +0.50%
Consumer Discretionary 3,474.4 +0.42%
Industrials 6,987.9 +0.36%
Consumer Staples 12,353.2 +0.15%
Utilities 7,984.3 -0.29%
Energy 10,555.1 -0.60%
Health Care 42,097.5 -1.03%
Information Technology 2,002.1 -1.09%
Real Estate 3,453.7 -2.63%

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ASX 200 Session Chart

2024-02-19 16 47 41-S&P ASX 200 (LIVE DATA) Share Prices & Charts - Market Index
ASX 200 finished higher in a relatively tight session (Source: Market Index)

Markets

  • ASX 200 finished slightly higher amid a pretty tight and rangebound session

  • ASX 200 on a three-day win streak, up 1.56% and within 0.5% of 2 Feb all-time high

  • Telcos and Financials pulled the market higher, led by a bounce for Telstra (+1.0%) and Westpac's (+2.7%) better-than-expected first quarter results

  • Real Estate stocks eased, with Goodman Group (-1.9%) pulling back from all-time highs

  • Tech stocks underperformed after a weak lead from Wall Street, led by decliners Xero (-2.5%), Wisetech (-1.6%) and Technology One (-1.3%)

  • Resource stocks were rather volatile after China's market resumed trade after a week-long Lunar New Year holiday. Chinese lithium carbonate futures eased 1.5% to 95,650 yuan a tonne while iron ore futures are down around 0.4%

  • If you're a fan of following Chinese futures, you can bookmark lithium futures here and iron ore futures here – Both markets open at 12:00 pm AEDT

  • ASX 200 would have finished lower without the support of Westpac's first quarter result (and follow through strength for the rest of the banks). The market is still working its way through a relatively choppy period where the path of least resistance calls for more sideways action. Stocks appear to have come to terms with the recent string of hotter-than-expected US inflation data. But overbought conditions and stretched sentiment continue to threaten a pullback

Earnings

Plenty of results today. Here are the highlights from the ones I found to be pretty interesting.

  • Imdex (+17.5%) – Sizeable first-half net profit beat of $32.8 million versus $24.9 million consensus. Imdex provides drilling and geo-analytics software services to the resources sector. Management said they expect demand to be steady in the second-half.

  • A2 Milk (+12.5%) – Beat pretty much all metrics, first-half net profit of NZ$85.3 million was well-above NZ$71.6 million consensus, driven by higher sales and margins. Market share in the China MBS channel grew to 3.5% from 3.4% despite significant store closures. Medium term revenue goal of $2 billion pushed out from FY26 to FY27 or later. FY24 guidance upgraded from low single digit to low-to-mid single digit revenue growth

  • Bendigo Bank (-1.7%) – Missed most key earnings metrics, first-half net profit of $268.2 million fell short of $265.5 million consensus. All-important net interest margins came in at 1.83% versus Citi estimates of 1.88%. Dividend and CET1 ratios also missed. The stock managed to recover from session lows of -4.4%

  • Lendlease (-13.9%) – This marks the largest intraday drop since mid-March 2020. Core operating profit after tax fell 42% to $61 million (also 70% below consensus expectations). Full-year return on equity guidance downgraded to 7% from prior 8-10% range. Earnings call noted a more than 50% drop in transactional activity due to low capital markets, impacting RoE guidance.

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Economy

No major economic announcements. It's a relatively quiet week on the data and central bank front.

Interesting Movers

Trading higher

  • +50.0% APM Human Services (APM) – Rejects takeover bid

  • +43.2% 29Metals (29M) – Bounce after down 22.9% in last three

  • +16.95% Imdex (IMD) – First-half results

  • +11.7% A2 Milk (A2M) – First-half results

  • +7.9% Genworth Mortgage Insurance (GWA) – First-half results

  • +6.8% Calidus (CAI) – Maiden Bulletin indicated resource

  • +4.4% Boral (BLD) – Seven takeover offer

  • +4.0% Neuren Pharma (NEU) – Response to short seller report (Friday)

Trading lower

  • -14.8% Lendlease (LLC) – Half-year results

  • -11.1% Nuix (NXL) – First-half results, secures $30m debt facility

  • -10.3% Starpharma (SPL) – FDA requires additional data for VivaGel BV

  • -7.8% New Hope (NHC) – First-half results, reaffirms FY guidance

  • -7.1% Orora (ORA) – First-half result

  • -5.6% Inghams (ING) – Continuation selloff

  • -3.8% Block (SQ2) – Regulators investigating whistleblower allegations


Broker Notes

Here are some of the interest broker notes/commentary for recent results.

Citi's take on Westpac:

  • Neutral with $22.25 target price

  • "In its 1Q24 update, WBC has disclosed an unaudited net profit ex. notable items of ~$1.8bn, >5% better than consensus estimates (~$1.6bn)."

  • "Investors should also be pleased with the core NIM at 1.80%, down only 1bpt as mortgage pricing headwinds ease."

  • "WBC’s 1Q24 CET 1 of ~12.3% was ~25bpts better than Citi’s expectations (12.06%), driven by an unexpected fall in both credit and IRRBB RWAs."

Citi's take on QBE:

  • Buy with $18.00 target price

  • "While we still believe QBE should be performing better than it is, at this stage of the strongest insurance market for at least 20 years, there is evidence of lower risk and underlying improvement."

  • "While we still remain sceptical of its ability to turn around the troublesome US business and it flags likely deterioration in International in FY24, in our view, its relatively inexpensive multiple sees it remain attractive."

Macquarie's take on Inghams:

  • Outperform with $4.20 target price

  • "ING delivered a 1H24 in-line with prior guidance, with pricing growth achieved in both Aus (+8.4%) and NZ (+9.4%) as it managed to pass through input cost pressures faced over the half."

  • Management flagged a shift toward in-home consumption, with restaurant volumes (down 3,100 tonnes on the prior corresponding period)

  • "With further cost efficiency programs to be delivered in the coming periods, and relatively stable top-line growth, we see upside risks to margins in the medium term."


Scans

Top Gainers

Code Company Last % Chg
APM APM Human Service... $1.24 +49.40%
29M 29METALS Ltd $0.263 +41.89%
BMO Bastion Minerals Ltd $0.012 +33.33%
W2V Way 2 Vat Ltd $0.02 +33.33%
IPT Impact Minerals Ltd $0.013 +30.00%
View all top gainers

Top Fallers

Code Company Last % Chg
ADA Adacel Technologi... $0.645 -26.29%
LYN Lycaon Resources Ltd $0.15 -16.67%
XPN Xpon Technologies... $0.025 -16.67%
A8G Australasian Meta... $0.088 -16.19%
PNM Pacific Nickel Mi... $0.04 -14.89%
View all top fallers

52 Week Highs

Code Company Last % Chg
W2V Way 2 Vat Ltd $0.02 +33.33%
RDM Red Metal Ltd $0.215 +22.86%
RIM Rimfire Pacific M... $0.039 +14.71%
FLC Fluence Corporati... $0.185 +12.12%
PAA Pharmaust Ltd $0.25 +11.11%
View all 52 week highs

52 Week Highs

Code Company Last % Chg
W2V Way 2 Vat Ltd $0.02 +33.33%
RDM Red Metal Ltd $0.215 +22.86%
RIM Rimfire Pacific M... $0.039 +14.71%
FLC Fluence Corporati... $0.185 +12.12%
PAA Pharmaust Ltd $0.25 +11.11%
View all 52 week highs

Near Highs

Code Company Last % Chg
MQG Macquarie Group Ltd $192.05 -0.34%
CPU Computershare Ltd $26.36 +0.57%
ASB Austal Ltd $2.10 -1.41%
MQGPD Macquarie Group Ltd $105.58 -0.30%
SSG Shaver Shop Group... $1.185 -0.42%
View all near highs

Relative Strength Index (RSI) Oversold

Code Company Last % Chg
DMP Domino's PIZZA En... $38.99 -1.91%
SYM SYMBIO Holdings Ltd $2.63 0.00%
TOT 360 Capital REIT $0.40 -2.44%
LGL Lynch Group Holdi... $1.36 +1.12%
SBM ST Barbara Ltd $0.153 -1.61%
View all RSI oversold

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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