ASX 200 midday update: Wesfarmers’ $2.3bn capital return, Appen & Pilbara Minerals fall

Here’s what is happening on the ASX 200 on Friday…

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At lunch on Friday, the S&P/ASX 200 Index (ASX: XJO) is off its lows but still trading lower. The benchmark index is currently down 0.1% to 7,484.4 points.

Here’s what is happening on the ASX 200 today:

Wesfarmers delivers strong growth and $2.3bn capital return

The Wesfarmers Ltd (ASX: WES) share price is sinking on Friday following the release of its full year results. While the conglomerate delivered strong profit growth in FY 2021 and announced a proposed $2.3 billion capital return to shareholders, its FY 2022 trading update appears to have spooked investors. Management revealed that Bunnings sales are down 4.7% financial year to date, whereas combined Kmart and Target sales are down 14.3%.

Pilbara Minerals shares fall

The Pilbara Minerals Ltd (ASX: PLS) share price is under pressure today after investors responded negatively to its full year results. Although the lithium miner doubled sales in FY 2021, it still recorded a statutory net loss after tax of $51.4 million. Also potentially weighing on its shares is its costs guidance for FY 2022 and FY 2023. Management expects higher unit cash operating costs due to elevated strip ratios, Pilgan production ramp up, and the restart of the Ngungaju operation. In response, Ord Minnett downgraded its shares to a hold rating with a reduced price target of $2.40.

NEXTDC share price tumbles

It has been a disappointing day for the NEXTDC Ltd (ASX: NXT) share price. The data centre operator’s shares are tumbling lower despite a record result in FY 2021. NEXTDC reported a 23% lift in revenue to $246.1 million and a 29% increase in EBITDA to $134.5 million. Looking ahead, management has guided to revenue growth of 16% to 20% and EBITDA growth of 19% to 23% in FY 2022.

Best and worst ASX 200 performers

The best performer on the ASX 200 has been the Clinuvel Pharmaceuticals Limited (ASX: CUV) share price with a 15% gain. This appears to have been driven by a broker note out of Jefferies. Its analysts have upgraded the company’s shares to a buy rating with an improved price target of $36.80. The worst performer has been the Appen Ltd (ASX: APX) share price with a 7.5% decline. This morning the team at Credit Suisse responded to yesterday’s half year update by retaining their neutral rating but slashing their price target down to $11.00.

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Motley Fool contributor James Mickleboro owns shares of NEXTDC Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Appen Ltd. The Motley Fool Australia owns shares of and has recommended Appen Ltd and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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