By Jenny Ruth
|
Tuesday 12th October 2010 |
Text too small? |
Data from Nuplex Industries' end markets, with the exception of China, continue to be less expansionary but supportive of a slow-burn recovery, says Tristan Joll at Goldman Sachs JB Were.
"Given this, we remain happy with our below-consensus forecast and see further risks in 1/ the pace of European recovery and 2/ margin pressures from rising feedstock pricing," Joll says.
"While Europe was the standout contributor to second-half performance (the six months ended June), the sustainability of this appears tenuous," he says. Recent data suggest industry volumes are once again decreasing in absolute terms.
Joll is forecasting Nuplex's earnings before interest, tax, depreciation and amortisation (EBITDA) will be $128.3 million in the year ending June 2011 compared with the Bloomberg range excluding his forecast of between $140 million and $150 million. EBITDA in the year ended June this year was $139.4 million
"Despite its attractive cash yield, we believe Nuplex is fairly valued for the current environment and see few sources of outperformance in coming months," he says.
Joll doubts company guidance at the November 3 annual shareholders' meeting will be able to outstrip market expectations.
"Given this, ... we believe a trading range for the stock sits between $3.05 and $3.50 per share."
Recommendation: Hold.
No comments yet
Nuplex targets half billion dollar Asian sales within five years
Nuplex FY profit drops 31 percent on weak ANZ, EMEA markets, writedowns
Nuplex cuts FY guidance again as Australian manufacturing splutters; stock drops
Nuplex 1H profit misses forecasts; annual guidance cut on strong kiwi, weak trading conditions
Nuplex looks at imputing future dividends, flags increased earnings
Nuplex plans restructuring in Australia, NZ to cut 2013 profit
Nuplex FY profit falls, guidance met
Nuplex raises US$105M in US private placement
Nuplex sees full-year earnings at bottom of range
Nuplex 1H profit drops 23% on Australasian weakness
