Stocks of the Hour: Aristocrat Leisure, Webjet, Boral

Company News

by Melissa Darmawan

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Despite the ASX wiping out almost three straight days of gains, investors are still doing some stock picking.

Thursday saw them piling into Aristocrat Leisure (ASX:ALL) after the company posted a 41 per cent rise in normalised profit after tax and before amortisation of $562 million from a year ago, beating Bloomberg's estimate by over 16 per cent. Aristocrat plans to return up to $500 million to investors through an on-market share buyback, after raising $1.3 billion for its failed takeover bid of UK gaming software company Playtech. Eligible shareholders are set to receive an interim dividend of 26 cents per share in July, almost 75 per cent up from the year before. Shares are trading 3.5 per cent higher at $32.69.

Webjet (ASX:WEB) returned to profitability in the year ending in March. However the results fell short of consensus estimates due to corporate costs coming in 16 per cent higher at $15.6 million in the period with RBC capital market analyst, Wei-Weng Chen warning of a further 22 per cent upside to costs in financial year 2023. Shares are trading 2.9 per cent lower at $5.63.

Boral (ASX:BLD) shares are seeing extra downward pressure amid several broker downgrades. Credit Suisse cut its rating to an underperform from neutral and slashed its price target to $2.60 from $3.80. The broker notes the $45 million downgrade to the company’s full year earnings guidance, excluding property, flags poor pricing power in the current inflationary landscape. Thirty million dollars of that is being attributed to the rainfall on the eastern part of the nation with the balance due to surging energy costs. High energy costs are set to rise by a further $70 million in financial year 2023, while realised prices are unlikely to fully offset. Shares are trading 4.2 per cent lower at $2.98.

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