Ansell’s Shares Jump on Positive Trading Update
- Ansell shares have surged 5.5 per cent following a market announcement.
- Ansell has upgraded its earnings per share guidance.
- Demand for the company’s products remains elevated, stimulated by COVID-19.
Ansell Shares (ASX: ANN) have today surged following the release of a trading update to the ASX. The company has experienced elevated demand for its Protective Personal Equipment PPE across all major markets during 2021 and have announced they are on track to meet this demand while financially they are outperforming their own previously set expectations.
Ansell is a provider of a range of personal protection safety solutions that have seen extreme demand throughout the COVID-19 crisis. They operate across two main segments, which include their Industrial and Healthcare focused operations. The company provide surgical gloves, examination gloves and single-use gloves used in a variety of circumstances. With operations across Asia, Europe, North America, Latin America, and the Caribbean and customers worldwide, the company’s products have also been vital in the response and management of the pandemic.
Costs, however, have risen for Ansell’s main raw materials, which have impacted margins. However, the company cited that the impact of this was well managed by the execution of price increase which customers well received. This again exhibits the company strong management and flexibility during changing market conditions. Following Ansell’s strong performance, it has upgraded its earnings per share guidance from $1.92 to $2.02, which was the main driver for a jump in share price.
As of the 28th of April 2021, Ansell is trading at $41.53 per share as of 10:30 am. The current share price is currently trading 18.5 per cent higher year to date, the positive momentum driven by strong demand for the company’s products. Since March 2020, the company’s share price has more than doubled as a result of the same conditions. Today’s announcement has pushed the top Donchian Channel higher and broke a significant resistance level at $40.45 per share.
Despite the company’s strong performance, Morgan Stanley has maintained an overweight rating on the company with a price target of $48.1 per cent. This 15 per cent upside to this target has been provided due to the company’s strong exposure to a vital market and single-use products growing at faster than pre-pandemic levels. Likewise, Credit Suisse, Citi and Ord Minnett also maintain Outperform, Buy and Accumulate ratings with 14, 3 and 12 per cent upside, respectively. Finally, Morgan’s believe that “demand for personal protection solutions will remain robust and the pandemic has strengthened the company’s current position and earnings trajectory.” Ansell will provide guidance for the next financial year when it releases its FY21 results on the 24th of August 2021.