First half operating performance was in line with UBS expectations. Of importance, the broker notes the results demonstrated leverage to the internal initiatives that have been underway for the last 1-2 years.
North America stood out, with EBIT up by around $10m and ahead of forecasts. This was offset by a weaker performance in Latin America which was severely affected by economic instability and adverse weather conditions.
The Australian business also disappointed the broker because of margin contraction, which is likely to remain a headwind in the second half because of increased competition and ongoing efforts to regain market share.
UBS retains a Buy rating and raises the target to $10.75 from $10.00.
Target price is $10.75.Current Price is $9.67. Difference: $1.08 – (brackets indicate current price is over target). If NUF meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).