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Why Nearmap and these ASX shares just sank to 52-week lows

On Monday the Australian share market came under pressure due to concerns over the coronavirus outbreak.

This led to a large number of shares crashing lower, with some even falling to 52-week lows or worse.

Three that achieved this unwanted milestone on Monday are listed below. Here’s why they are down in the dumps:

Insurance Australia Group Ltd (ASX: IAG)

The Insurance Australia Group share price dropped to a 52-week low of $6.95 on Monday. The main catalyst for this share price weakness was a downgrade to its guidance for FY 2020 last month. Due to a recent hailstorm event, Insurance Australia Group expects its FY 2020 reported insurance margin to be in the range of 14.5% to 16.5%. This compares to its previous guidance of 16% to 18%. It also revealed a post-tax provision of approximately $80 million for a customer refund program. This provision relates to a specific multi-year pricing issue where discounts were not always applied in full to premiums for all customers who may have been eligible.

Nearmap Ltd (ASX: NEA) 

The Nearmap share price continued its decline and fell to a 52-week low of $1.60 yesterday. Investors have been selling the aerial imagery technology and location data company’s shares after the release of a surprise guidance downgrade. Nearmap downgraded its FY 2020 annualised contract value (ACV) guidance to the range of $102 million to $110 million following the loss of a major contract and two churn/downgrade events. This compares to its previous guidance of $116 million to $120 million. Management was quick to stress that the downgrade was down to market conditions and not competition. However, it wasn’t enough to stop some investors from racing to the exits.

Treasury Wine Estates Ltd (ASX: TWE)

The Treasury Wine Estates share price hit a multi-year low of $12.30 on Monday. As with the others, this share price weakness has been driven by a downgrade to its EBITS growth guidance. Following a weaker than expected first half in the U.S. due to the disruption caused by a change of leadership and unfavourable market conditions, Treasury Wine now expects EBITS growth of just 5% to 10% in FY 2020. This compares to its previous guidance of 15% to 20% growth this year.

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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 Nearmap Ltd. and Treasury Wine Estates Limited. The Motley Fool Australia owns shares of Insurance Australia Group 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.

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