On Tuesday I looked at 9 ASX shares that Goldman Sachs has named as candidates to positively surprise during earnings season. If you missed it, you can read more about it here.
As well as naming the shares that it feels could surprise to the upside, it listed 6 ASX shares which it believes could disappoint this month.
Here are four of the negative surprise candidates:
Blackmores Limited (ASX: BKL)
Goldman Sachs appears concerned that Blackmores could fall short of its guidance in the first half of FY 2020. The health supplements company has guided to a first half profit of a similar level to that of its second half profit of FY 2019. However, Goldman sees the potential for further weakness due to the challenging conditions in China persisting for longer than expected. The broker’s full year net profit after tax forecast is $45.2 million, which is -8% below the Bloomberg consensus.
Commonwealth Bank of Australia (ASX: CBA)
Goldman Sachs believes this banking giant’s strong deposit franchise leaves it more vulnerable to lower rates. It also notes that it has the highest exposure to more competitive mortgages relative to its peers. In addition to this, it suspects the bank could disappoint the market by not announcing any capital management initiatives this month.
Domain Holdings Australia Ltd (ASX: DHG)
This property listings company is another which Goldman Sachs believes could disappoint this month. It notes that the macro environment for Domain remains extremely tough and that new listings were down heavily in the first half. As a result, it sees downward risk to consensus earnings expectations in both the first half and full year.
Qantas Airways Limited (ASX: QAN)
The broker is concerned that Qantas may deliver a weaker than expected half year result. Goldman has pencilled in a profit before tax of $784 million, compared to consensus estimates of $811 million. This is due to the bushfires, the Hong Kong protests, and the coronavirus outbreak. These are also expected to lead to subdued commentary for the second half from management.
Other negative surprise candidates.
The remaining two negative surprise candidates are private health insurer Medibank Private Ltd (ASX: MPL) and fuel retailer Viva Energy Group Ltd (ASX: VEA). It has concerns about higher claims growth for Medibank and suspects Viva Energy could provide weak full year guidance.
The post Leading broker tips 6 ASX shares to negatively surprise during earnings season appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020