BLX – Citi rates as Buy

Beacon Lighting’s FY18 result met consensus and the broker. The company is guiding to record sales and profits in FY19.

Citi perceives promising margins but doubts the company will reach its upgraded store target. Earnings estimates are largely steady.

Target price falls to $1.85 from $1.95 to account for lower retail peer multiples and a roll forward of Cit’s discounted cash flow valuation. Buy retained.

Sector: Retailing.

Target price is $1.85.Current Price is $1.56. Difference: $0.29 – (brackets indicate current price is over target). If BLX meets the Citi target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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