The Match Out: ASX ends a huge week on the back foot, results season starts to taper from here

The worst of it was seen in early trade today with the ASX off ~100pts at the lows, but some buyers emerged throughout the session, particularly amongst the recently weak Staples while Healthcare stocks also attracted some attention from early lows, Ramsay Healthcare (RHC) for example rallied 3% from the depth of despair this morning! It felt like a tough week, and given only 2 sectors finished in the black, the selling was fairly broad-based, however, it was far from aggressive (ASX -0.5% for the week) and there were plenty of stocks that did well.

• The ASX 200 finished down -66pts/ -0.93% at 7115
• The Staples sector was best on ground (+0.68%) while Consumer Discretionary (+0.30%) was also up.
• IT (-2.51%), Materials (-1.55%) & Energy (-1.44%) the weakest links.
• Weekly performances are outlined in the charts below.
• PEXA Group (ASX: PXA) -6% fell after reporting a loss in FY23, but it was more about the muted outlook for FY24.
• Wesfarmers (ASX: WES) +3.2% showed quality continues to rise to the top as conditions toughen, a solid FY23 and resilient start to FY24.
• Aussie Broadband (ASX: ABB) +10.97% met FY23 expectations and guided well for FY24, with some upbeat commentary thrown in the mix.
• Fund managers copped it on the chin (again) following weak results from Perpetual (ASX: PPT) -5.45% and Platinum (ASX: PTM) -1.62% earlier in the week. Magellan (ASX: MFG) fell 4.1% today.
• Audinate (ASX: AD8) +4.05% was solid again and now knocking on the door of $14, up around ~40% since reporting.
• The market hates Whitehaven’s (ASX: WHC) -6.36% decision to pause the buy-back and focus more on growth – universal downgrades from brokers today weighed on the stock.
• Iron Ore was ~1% higher in Asia supporting (relatively speaking) Fortescue (ASX: FMG) -0.62% who reports on Monday.
• Gold was largely flat, $US1914 at our close.
• Asian stocks were down, Hong Kong off -1.2%, Japan -1.83% while China lost -0.59%
• US Futures are mixed, but only small moves ahead of Jackson Hole.
• Reporting season now starts to wind down slowly after a huge week, download the Market Matters Reporting Calendar Here

ASX 200 Intraday

ASX 200 Daily

Wesfarmers (WES) $51.00

WES +3.2%: A solid FY23 result for Wesfarmers today, led by Bunnings, while trading conditions to start FY24 have been resilient. Revenue of $43.6bn was up +18% and a touch ahead of the $43bn expected, while pre-tax earnings of $3.64bn was up +6.7% and compared well to consensus of $3.62bn. 

They declared a final dividend of $1.03 putting the FY payout to $1.91, above the $1.84 tipped. Bunnings was ahead, as was Officeworks, Kmart was inline, while their Chemical, Energy & Fertilizer (WesCEM) division was soft. The first 7 weeks have seen similar trends while WES, as is customary for them, did not provide specific FY24 guidance

Quality continues to rise to the top this reporting season, and WES was another demonstration of that today, we remain comfortable holders in our Income Portfolio.

Aussie Broadband (ABB) $3.44

ABB +10.97%: Rallied strongly on a ‘meet’ to FY23 numbers but they talked up prospects for FY24. FY23 revenue of $878m was inline, as was EBITDA of $89.6m while they guided to FY24 EBITDA based on current market conditions, operating plan, pipeline etc of $100-110m, up 12%-23% on FY23, however, they went onto talk favourably about variables that could grow that number - in other words, it seemed like they presented a baseline to work up from.

Market positioning was negative going into the result, which met expectations while Phil Britt’s commentary seemed relatively upbeat, pleasing given it is our biggest position in the Emerging Companies Portfolio.

Pexa (PXA) $11.83

PXA -6.04% was down 11% early but recovered half the losses on an FY23 result that was mixed, but ultimately a FY loss of $21.8m which is not good but not totally unexpected as they navigated considerable market volatility / headwinds while also investing for future growth. 

The real kicker came when they discussed the year ahead with guidance commentary implying the prospect of similar conditions to remain, we’re of the view that conditions should be improving and they would be seeing some early indications of said improvement – not the case so far.

Weak result for FY23 as expected, however, the guidance was more sanguine than we hoped.

Sectors this week

Stocks this week

Broker Moves

• Whitehaven Cut to Accumulate at Ord Minnett; PT A$7.20
• Ramsay Health Cut to Neutral at Jarden Securities; PT A$62.08
• Whitehaven Cut to Neutral at Citi; PT A$7.60
• Cleanaway Cut to Neutral at Evans & Partners Pty Ltd; PT A$2.85
• Ramsay Health Raised to Equal-Weight at Morgan Stanley
• Perpetual Cut to Neutral at Citi; PT A$24.80
• Cleanaway Cut to Neutral at Jarden Securities; PT A$2.60
• Global Lithium Resources Rated New Buy at Jefferies; PT A$2.50
• Iluka Raised to Outperform at Credit Suisse; PT A$9.80
• Judo Capital Cut to Neutral at JPMorgan; PT A$1.10
• Accent Group Raised to Buy at Citi; PT A$2.12
• Judo Capital Cut to Equal-Weight at Morgan Stanley; PT A$1.20
• Lovisa Raised to Neutral at Citi; PT A$22.30
• Insignia Financial Cut to Reduce at CLSA; PT A$2.65
• Telix Pharma Raised to Buy at CLSA; PT A$12.25
• Capitol Health Rated New Buy at Unified Capital
• Whitehaven Cut to Hold at Jefferies; PT A$7.35
• Bega Cheese Raised to Reduce at CLSA; PT A$3.25
• Whitehaven Cut to Sell at Bell Potter; PT A$6
• Lovisa Raised to Overweight at Morgan Stanley; PT A$25.25
• Regis Resources Raised to Add at Morgans Financial Limited
• Eagers Cut to Hold at Bell Potter; PT A$15.25

Major Movers Today

Make informed investment decisions