Macquarie now forecasts a -16% decline in the company’s FY19 construction revenue, given the low level of wins this year and the time lag for new work flowing through to revenue. The Ichthys work should largely be completed by June 30 and the focus is now on the replacement of around $300m in revenue run-off in FY19.
Macquarie downgrades to Neutral from Outperform. Target is reduced to $15.87 from $19.18. The broker estimates 28% revenue growth in construction in FY20, assuming the company wins its share of upcoming work from the major miners.
Sector: Capital Goods.
Target price is $15.87.Current Price is $14.10. Difference: $1.77 – (brackets indicate current price is over target). If MND meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).