The good books
METCASH LIMITED (MTS) Upgrade to Outperform from Neutral by Credit Suisse B/H/S: 3/2/2.Â
Credit Suisse speculates that if Metcash buys Home Timber & Hardware and integrates it with Mitre 10, and then divests the business, it would generate $500m in surplus cash and provide the basis for a return of capital.
A divestment would leave a more narrowly-focused business and, potentially, lower costs for the food and liquor operation.
Credit Suisse maintains that Metcash is moderately under priced on an ‘as is’ basis and significantly under priced if it can acquire Home Timber, acknowledging there is always the possibility of a competing bid or ACCC objections.
The broker upgrades to Outperform from Neutral rating and raises the target to $2.25 from $1.49.
In the not-so-good books
JAMES HARDIE INDUSTRIES N.V. (JHX) Downgrade to Sell from Neutral by Citi B/H/S: 3/3/1.Â
Citi analysts are not in synch with the generally optimistic mood post the company’s full year financials.
The analysts welcome the share buyback, and anticipate more of the same in 2017, but they also think US competition is heating up.
In light of their own projections, Citi analysts find James Hardie shares are too expensively priced.
Hence why they downgrade to Sell from Neutral. Price target $18.60.
Earnings Forecasts
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
