CMW – Macquarie rates the stock as Underperform

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The company has announced an equity raising to pay down debt and fund the CEREIT acquisition. The $300m equity raising will be via a rights issue. Macquarie calculates this is around -5% dilutive to FY19 earnings in isolation.

However the downside to FY20 is more severe, largely reflecting EUR1.1bn in mandates that are due to expire in 2019. As the profit base is still declining the broker believes there is pressure on the distribution.

Underperform rating is maintained. Target is reduced to $0.98 from $1.

Sector: Real Estate.

Target price is $0.98.Current Price is $1.03. Difference: ($0.05) – (brackets indicate current price is over target). If CMW meets the Macquarie target it will return approximately -5% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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