Ahead of the FY16 results, Macquarie lifts FY17-18 earnings per share estimates by 36% and 23%, respectively, to factor in a strong rebound in volumes and margins from an above-average crop year.
While the potential for a bumper crop in FY17 is likely to help the company recover in the short term Macquarie is aware that this could mask the structural challenges that the company still faces.
Neutral rating and $8.90 target retained.
Sector: Food, Beverage & Tobacco.
Target price is $8.90.Current Price is $8.30. Difference: $0.60 – (brackets indicate current price is over target). If GNC meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).