Markets at Midday: ASX 200 down for a fifth straight day, IFM lobs a $7bn bid for Atlas Arteria
The S&P/ASX 200 is struggling against a backdrop of volatile oil prices, and persistent weakness from bank and healthcare stocks.
Source: Market Index
The S&P/ASX 200 is trading 22 pts lower (-0.25%) at noon.
Another fairly heavy day for markets, with the ASX 200 on track for a fifth straight day of declines. Breadth is very weak, with nine sectors lower and 147 constituents (74%) trading in negative territory. The market is coming off session lows of -0.65%, though sectors like Utilities and Energy are down more than 1%, reflecting a 5.7% decline in oil prices last Friday and a mixed quarterly update from Origin Energy. Defensive and consumer-facing sectors like Staples and Telcos also notably lower, following a relatively strong run up in recent weeks. Financials have been a major pain point for the index, on track to fall ten of the last eleven sessions. Major banks including Westpac, ANZ and Bank of Queensland have all released rather downbeat updates in recent weeks, including weaker-than-expected margins and bulking up provisions in anticipation of rising bad debts from fuel-sensitive sectors of the economy.
Let’s dive in
Midday market summary
Today’s big story: IFM makes long-waited bid for Atlas Arteria
IFM Investors has launched an unsolicited, off-market takeover bid for Atlas Arteria, offering $4.75 per share or a 10% premium to its last closing price. The bid includes a step-up clause – if IFM lifts its relevant interest above 45%, the offer price increases to $5.10. Prior to today's bid, Atlas was trading around six-year lows and has effectively gone nowhere since 2016.
The bid follows years of tension between IFM and ALX management, rooted in ALX's $3 billion acquisition of the Chicago Skyway in 2022, which IFM called "significantly value destructive." A massive $2.5 billion capital raise was used to fund the acquisition, which triggered a 15% share price drop between September 12 and October 10, 2022.
IFM has progressively increased its ownership of ALX over the years, currently sitting at 34.48% as at 27 April. Under the Corporations Act 2001, exceeding 20% voting power typically triggers a mandatory takeover offer, but IFM has utilised the “creep provision,” allowing shareholders with over 20% ownership to acquire an additional 3% every six months without launching a bid.
Analyst target prices are currently hovering around the target price, including:
Macquarie: Outperform rated with a $5.02 target
UBS: Neutral rated, with a $4.50 target
Atlas Arteria price chart (Source: TradingView)
Sector moves: Energy stocks struggle
The entire energy complex is struggling today, spanning uranium, oil and gas, coal and refiners. Brent crude led the selloff, tumbling 5.7% last Friday before edging back to US$100.54 a barrel on Monday. Closer to home, the S&P/ASX 200 Energy Index has fallen 1.8% today and is down 7.7% from its 8 April peak, though it remains a strong outperformer year-to-date, up 26.3%.
Ticker | Company | % Chg | Price |
|---|---|---|---|
DYL | Deep Yellow | -3.51% | $1.93 |
NXG | Nexgen Energy | -3.31% | $17.22 |
VEA | Viva Energy Group | -2.71% | $2.34 |
PDN | Paladin Energy | -2.46% | $12.30 |
WHC | Whitehaven Coal | -2.40% | $7.74 |
NHC | New Hope Corporation | -2.16% | $5.22 |
STO | Santos | -2.05% | $7.63 |
BPT | Beach Energy | -2.05% | $1.20 |
WDS | Woodside Energy Group | -1.59% | $32.09 |
YAL | Yancoal Australia | -1.53% | $7.07 |
ALD | Ampol | -1.05% | $33.84 |
Must read announcements
Atlas Arteria (ALX): Receives unsolicited $4.75/security takeover offer from IFM
Megaport (MP1): Latitude.sh secures $25m compute and storage contract, reaffirms FY26 guidance
Origin Energy (ORG): Q3 APLNG production softens, Octopus FY26 EBITDA guidance cut sharply
Capital raisings
Altair Minerals (ALR): $28 million premium placement to Endeavour Mining
Corella Resources (CR9): Acquisition of Chobe Project and capital raise $5m
Paradigm Biopharmaceuticals (PAR): Upsized $14m placement extends runway post IA
Sabre Resources (SBR): Transformational copper gold acquisition and $2m placement
Thinking out loud: Iron ore bears are gone
A year ago, just about every analyst would have told you iron ore was headed to US$90 a tonne, if not lower. But iron ore kept proving them wrong.
The resilience of iron ore prices has pushed bearish expectations back by a few years. If we look at Macquarie's forecasts for Fortescue a year ago (May-25), the analysts had a $15.00 target price, with the view that iron ore prices will average US$90 a tonne in FY26 and US$83 a tonne in FY27. Fast forward to today, Macquarie has a $22.00 target price, with estimates that iron ore will average US$104 in FY26 and US$98 in FY27. A fairly material revision!
The irony? If you're an iron ore bull, life was probably easier when everyone else was bearish.
Singapore iron ore futures chart (Source: TradingView)
Intraday winners and losers: Lithium stocks catch a bid, Energy and tech sell off
The below tables observe the S&P/ASX 200 stocks with the largest increase/decrease from today's open price.
Ticker | Company | % Chg from open | Price |
|---|---|---|---|
ELV | Elevra Lithium | 9.92% | $13.08 |
LTR | Liontown | 6.25% | $2.30 |
OBM | Ora Banda Mining | 5.60% | $1.55 |
DRO | Droneshield | 5.34% | $3.85 |
IGO | IGO | 4.58% | $7.30 |
ALQ | ALS | 3.60% | $21.30 |
MIN | Mineral Resources | 3.44% | $60.10 |
PLS | PLS Group | 3.39% | $5.95 |
LNW | Light & Wonder | 3.29% | $122.91 |
CDA | Codan | 3.10% | $35.64 |
Ticker | Company | % Chg from open | Price |
|---|---|---|---|
WTC | Wisetech Global | -3.08% | $43.08 |
SUN | Suncorp Group | -2.85% | $16.71 |
COH | Cochlear | -2.80% | $94.77 |
TLX | Telix Pharmaceuticals | -2.75% | $14.49 |
EOS | Electro Optic Systems | -2.64% | $9.95 |
XRO | Xero | -2.35% | $80.98 |
BPT | Beach Energy | -2.29% | $1.20 |
REG | Regis Healthcare | -2.21% | $6.65 |
CWY | Cleanaway Waste Management | -2.13% | $2.30 |
STO | Santos | -1.92% | $7.65 |
Broker moves
AUB Group (AUB)
Initiated at neutral at Citi; Price Target: $27.30
Flight Centre Travel Group (FLT)
Downgraded to overweight from buy at Jarden; Price Target: $16.70 from $18.00
Harvey Norman Holdings (HVN)
Downgraded to neutral from overweight at Jarden; Price Target: $5.40 from $6.60
IGO (IGO)
Upgraded to neutral from negative at E&P; Price Target: $7.80
Retained at outperform at Macquarie; Price Target: $9.50 from $9.75
JB Hi-Fi (JBH)
Upgraded to buy from overweight at Jarden; Price Target: $87.90 from $88.90
Judo Capital Holdings (JDO)
Retained at outperform at CLSA; Price Target: $1.75 from $2.20
Retained at buy at Goldman Sachs; Price Target: $2.20 from $2.18
Retained at overweight at JPMorgan; Price Target: $2.15 from $2.20
Upgraded to buy from accumulate at Morgans; Price Target: $2.09
PLS Group (PLS)
Retained at outperform at CLSA; Price Target: $6.50
Downgraded to underweight from neutral at Jarden; Price Target: $2.60 from $2.50
Retained at outperform at RBC Capital Markets; Price Target: $5.40 from $5.20
Qoria (QOR)
Retained at buy at Canaccord Genuity; Price Target: $0.50 from $0.80
Retained at buy at Ord Minnett; Price Target: $0.56 from $0.74
Retained at buy at Unified Capital Partners; Price Target: $0.75 from $0.77
Suncorp Group (SUN)
Retained at overweight at Jarden; Price Target: $19.10 from $18.30
Retained at hold at Jefferies; Price Target: $17.70 from $16.50
Retained at neutral at JPMorgan; Price Target: $18.30
Retained at buy at UBS; Price Target: $19.60 from $19.25
Vulcan Energy Resources (VUL)
Retained at speculative buy at Canaccord Genuity; Price Target: $10.75
Wesfarmers (WES)
Upgraded to neutral from underweight at Jarden; Price Target: $74.50 from $77.30
