Market wraps 27th August 2020

Morning Bell - Jessica Amir

The Aussie share market is eyeing a 0.3% lift today at the open, which will rub out some of yesterday’s 0.7% fall.

Last night U.S. manufacturing goods orders rose 11.2% in July, recovering from the sharp fall in March and April. Sentiment also got a kick as COVID-19 vaccine hopes were lifted when Moderna posted promising results from a small trial of patients.

What to watch today:

  • Afterpay (ASX:APT) just reported full financial year results. Earnings (EBITDA) came in at $44.4 million in the year, stronger than its own expectations of $43 million. APT’s price could jump to about $94 at the open today with brokers expected to upgrade their target prices given its expansion into Europe and the U.S., Morgan Stanley’s the most bullish at $101.

Local trading ideas:

  • MTS shares formed a pattern that indicates it may rise from yesterday’s close of $2.99 to $3.26 - $3.32 over the next 9 days, according to standard principles of technical analysis. Metcash’s results showed strong sales momentum and Citi expects this to continue, which is why MTS is a Citi buy with a $3.50 price target.
  • Jewellery business Lovisa Holdings (ASX:LOV), was upgraded by Bell Potter with the broker bumping up its price target to $8.35, implying 14% growth from yesterday's close of $7.30. With trading, building and revenue growing despite the pandemic, it looks like the business is gaining momentum as expected.
  • Car dealership business A.P. Eagers Automotive (ASX:APE), was downgraded from a buy to a hold by Bell Potter with the broker increasing its price target to $9.50, indicating its share price will only rise 6% from yesterday's close of $8.96.