The company will buy Aurizon’s ((AZJ)) 33% stake in the Moorebank project with the price to be paid well below the value Morgans ascribes to the project. The transaction will give Qube full ownership of Moorebank.
Morgans raises the target to $2.69 from $2.46. A Hold rating is retained and the broker remains cautious ahead of the FY16 result, given the company’s exposure to subdued commodity markets and the cycling of one-off contract termination benefits from prior periods.
Morgans is also bearish on the outlook for Patrick Container Terminals, given new entrant competition.
Target price is $2.69.Current Price is $2.59. Difference: $0.10 – (brackets indicate current price is over target). If QUB meets the Morgans target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).