Global markets climbed higher overnight as China reported the lowest number of new cases for the coronavirus since late January. The US market returned back to all time highs led by the tech and financial sector, with Apple rebounding and Tesla climbing higher again, up +7%. Likewise, European and Asian markets were a touch higher on the coronavirus update.
Stock in Focus: WiseTech Global (WTC:ASX)
WiseTech Global (WTC) shares were the biggest losers yesterday, when its shares slumped -27.3% after materially downgrading their full year guidance for the 2020 full year, as the coronavirus outbreak is set to slow down global trade in the second half. WTC now expects operating earnings (EBITDA) for 2020 full year to be between $114m and $132m, representing growth in the region of 5% to 22%, which is a fail mark for a stock trading with such extremely high growth expectations.
The upgrade, shadowed what was a solid first half result for WTC reporting a +31% increase in revenue to $205.9m driven by both organic and growth from newly acquired customers. Operating earnings (EBITDA) also grew strongly up +29% from last year to $62.5m, and was trending on track to achieve initial earnings guidance growth of +34% to 42% for the full year.
Members should look out for a full update on WTC to be released in our weekly update.
We currently have a HOLD rating on WTC
Australia & New Zealand Market Movers
The Australian market pushed up to all-time highs on Wednesday (ASX 200 Index +0.43%) lifted by strong earnings results and upbeat outlook comments. CSL led the market higher (up +3%), and Wesfarmers shares also climbed up +3% when its net profit beat consensus with growth from Bunnings, Officeworks and Kmart.
Cleanaway Waste Management and Dominos pizza were the best performers of the day, up +16.7% and +9.6% respectively as they delivered better than expected earnings.These gains were offset as the banking sector pulling back slightly, and the big miners fell after iron ore price was lower following a warning from BHP that if the coronavirus continues to drag on longer it could weigh in on growth in the next few months. It was not all peachy as predominantly tech stocks were hit heavily after disappointing results from WiseTech Global (-27.3%), EML Payments (-13.5%) and Nearmap (-2.9%) which sparked selling across the sector.
The New Zealand market rose slightly yesterday (NZX50 +0.4%) led by Fletcher Building (up +4.4%) who despite reporting a weaker first half of $82m, lifted their interim dividend to 11 cents per share with the shares heavily sold earlier as investors were anticipating worse and look comfortable with current direction. Spark New Zealand shares continued to climb higher after reporting a +9.2% lift in first-half profit, as the telecommunications company made inroads into the increasingly valuable mobile market and continued to benefit from its cost-cutting drive.
Ryman Healthcare fell -2.6%, posting the biggest decline on the day as it traded close to all-time highs, while on the flip side Fisher & Paykel Healthcare continued to hit new records, rising another +2%.
3 Things Markets Will be Watching this Week
- Local earnings season continues across Australia & New Zealand this week.
- Minutes from the last US Federal Reserve meeting are released.
- US housing data and the latest employment picture in Australia.
Have a Great Day,