RCR – Macquarie rates the stock as Outperform

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Macquarie rates the stock as Outperform

RCR Tomlinson has announced an offer for Norfolk ((NFK)) at 38c a share. RCR has offered $140m for the business including $78m in debt. The offer can be improved depending on the collection of outstanding debtors. RCR’s balance sheet looks strong but Macquarie will evaluate forecasts more closely as the deal progresses.

The Outperform rating is maintained. Macquarie believes RCR is only just beginning to realise its margin potential. The price target stays at $2.94.

Sector: Capital Goods.

Target price is $2.94. Current Price is $2.04. Difference: $0.90 – (brackets indicate current price is over target). If RCR meets the Macquarie target it will return approximately 31% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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