Macquarie believes the economics of the company’s Australia-Singapore cable will be negatively affected by a parallel roll out of a competing cable.
While the company is facing integration challenges that may affect near-term operating momentum, the broker is of the view that underlying assets can deliver earnings growth over the medium and longer term which would ultimately present an opportunity for share price upside relative to current levels.
Outperform retained. Target is reduced to $5.00 from $5.20.
Sector: Telecommunication Services.
Target price is $5.00.Current Price is $3.37. Difference: $1.63 – (brackets indicate current price is over target). If VOC meets the Macquarie target it will return approximately 33% (excluding dividends, fees and charges – negative figures indicate an expected loss).