With the market a sea of red on Tuesday, it may not come as a surprise to learn that some out-of-favour ASX 200 shares have dropped to new 52-week lows.
For example, the five ASX 200 stocks listed below have all just made this unwanted milestone today:
Domino's Pizza Enterprises Ltd (ASX: DMP)
The Domino's share price has continued its slide and dropped to a 52-week low of $37.08. Investors have been selling off the pizza chain operator's shares this month following the release of an unconvincing strategy update.
For example, Goldman Sachs responded to the update by saying:
We do not believe the company dissected the core issues of the problem regions such as France and Japan sufficiently and hence there remains a lack of transparency and conviction on how they will fix these issues. We remain unconvinced post this Strategy Day that there is a path to clear recovery other than further discounting and pausing of store roll-out in Japan/France to restore profitability.
IDP Education Ltd (ASX: IEL)
Another ASX 200 stock that has hit a new 52-week low on Tuesday is language testing and student placement company IDP Education. Its shares
Short sellers will be celebrating this news. They have been targeting the company due to concerns over the loss of its language testing monopoly in Canada and regulatory changes to student visas in a number of markets.
Orora Ltd (ASX: ORA)
The Orora share price has fallen to a new 52-week low of $2.08 today. This packaging company's shares have been sold off this month after it downgraded its earnings guidance for FY 2024.
Orora now expects its earnings before interest and tax (EBIT) excluding Saverglass to be slightly lower versus FY 2023. Whereas previously it was guiding for EBIT to be higher year on year in FY 2024.
Making things worse has been news that the recently acquired Saverglass business has been underperforming. Management highlighted that a weaker February and March trading result has confirmed that there is no noticeable improvement in forward customer demand as destocking is continuing.
Telstra Group Ltd (ASX: TLS)
Another ASX 200 stock that has hit a new 52-week low on Tuesday is telco giant Telstra. Its shares dropped to $3.67 this morning, stretching their 12-month decline to over 14%.
Investors have been selling Telstra and fellow telco TPG Telecom Ltd (ASX: TPG) (which is also at a 52-week low) this year in response to higher bond yields.
As telco shares are often treated like bond proxies, they tend to underperform when rates are high. And with interest rate cuts seemingly off the menu for the rest of the year and bond yields widening, there's not a lot of love in the market for companies like Telstra.
Though, when interest rates are eventually cut, Telstra and TPG Telecom are likely to become more popular with investors.
