Although many shares on the S&P/ASX 200 Index (ASX: XJO) have recovered strongly from the market meltdown in March, not all have been so lucky.
Three ASX 200 shares that are still down materially from their highs are listed below. Is this a buying opportunity?
G8 Education Ltd (ASX: GEM)
The G8 Education share price is down 72% from its 52-week high. The childcare centre operator's shares have come under significant pressure after it experienced a sharp decline in its occupancy levels because of the pandemic. And while the government did prop up the sector with additional stimulus, it wasn't enough to stop G8 from launching a highly dilutive $301 million equity raising. And with supply continuing to outstrip demand, I don't expect the tough trading conditions it is facing to ease any time soon. As a result, I wouldn't be in a rush to invest.
Lendlease Group (ASX: LLC)
The Lendlease share price is down a sizeable 42% from its high. The international property and infrastructure company was hit hard by the pandemic, leading to it reporting a very sharp decline in profit this year. Core profit after tax is expected to be in the range of $50 million to $150 million in FY 2020, down from $467 million a year earlier. The good news is that the worst does appear to be behind the company now. And thanks to its burgeoning global development pipeline, the future looks increasingly positive. In light of this, I think now could be an opportune time to make a patient investment in its shares.
Webjet Limited (ASX: WEB)
The Webjet share price is down a massive 80% from its 52-week high. Investors have been selling the online travel agent's shares due to concerns over the impact the pandemic is having on travel markets. In addition to this, a highly dilutive equity raising has also weighed heavily on the Webjet share price. Unfortunately, despite this material drop, I don't believe its shares offer value for money yet. I feel investors might be waiting until FY 2022 for Webjet to be profitable again and perhaps as long as FY 2024 before it delivers a profit on the same level as FY 2019's $62.3 million. If this proves to be the case, it means Webjet's shares are changing hands at 16x estimated FY 2024 earnings. Which certainly isn't cheap.
