UBS notes the upside it previously forecast has now crystallised, with the company securing a 10-year contract with NBN Co to deliver enterprise grade satellite services. While the base contract is $107m, the broker notes there is upside to $184m, depending on the uptake.
UBS envisages the potential for a 5-7% uplift to FY18 earnings per share from the contract, all else being equal. The broker retains a Buy rating and $5.20 target.
Sector: Telecommunication Services.
Target price is $5.20.Current Price is $5.60. Difference: ($0.40) – (brackets indicate current price is over target). If SDA meets the UBS target it will return approximately -8% (excluding dividends, fees and charges – negative figures indicate an expected loss).