Why Air NZ, Carsales, Pendal, & Star shares are dropping lower

Carsales.Com Ltd (ASX:CAR) and Pendal Group Ltd (ASX:PDL) shares are two of four that are dropping notably lower on Thursday…

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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to snap its winning streak. The benchmark index is currently down 0.65% to 5,952.5 points.

Four shares that have fallen more than most today are listed below. Here's why they are dropping lower:

The Air New Zealand Limited (ASX: AIZ) share price is down 4% to $1.46. This morning the airline operator released its earnings guidance for FY 2020. Although the New Zealand Government is now allowing the airline to slowly restart its domestic network, revenue and earnings will still be significantly lower than expected. The company is now expecting to report an underlying loss before significant items and tax of up to NZ$120 million.

The Carsales.Com Ltd (ASX: CAR) share price has fallen 2.5% to $17.56. This decline may have been driven by a broker note out of Macquarie this morning. According to the note, the broker has downgraded Carsales' shares to a neutral rating with an $18.00 price target. It made the move on valuation grounds after a strong gain since April.

The Pendal Group Ltd (ASX: PDL) share price has dropped 3% to $6.03. This follows an announcement by Westpac Banking Corp (ASX: WBC) which reveals that it has offloaded its 9.5% stake in the fund manager. The banking giant has sold 31 million shares for an average of $5.98 per share. The bank also warned that it is undertaking a strategic review of its wealth businesses which could result in some or all of its $14 billion of funds under management with Pendal being withdrawn.

The Star Entertainment Group Ltd (ASX: SGR) share price is down 3.5% to $3.14. Earlier this week analysts at Morgan Stanley downgraded the casino and resort operator's shares to an underweight rating with a $3.30 price target. It believes the Star is going to lose market share to Crown Resorts Ltd (ASX: CWN) when the new Crown Sydney casino opens later this year.

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has recommended carsales.com Limited and Crown Resorts 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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