After overly aggressive forecasts, the company has downgraded its FY16 profit guidance by 36% at the mid point. Morgans is disappointed and notes unit holders are also not impressed by the need to take on additional debt to fund a milk supply support package.
Morgans suspects the stock is over sold but until a new CEO and CFO are appointed downgrades to Hold from Add. Target is reduced to $1.38 from $2.30.
Sector: Food Beverage & Tobacco.
Target price is $1.38.Current Price is $1.24. Difference: $0.14 – (brackets indicate current price is over target). If MGC meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).