Bega’s updated earnings guidance is modestly below the broker but materially below consensus. Weaker dairy market conditions and the ramp-up of Koroit were expected to impact but higher farm gate prices and expectations for higher debt are likely to be the focus in the near term, the broker suggests.
Bega is nevertheless trading at multiples some 21-23% below five year averages which supports the broker’s Buy rating. Target falls to $7.30 from $8.80.
Sector: Food, Beverage & Tobacco.
Target price is $7.30.Current Price is $4.80. Difference: $2.50 – (brackets indicate current price is over target). If BGA meets the UBS target it will return approximately 34% (excluding dividends, fees and charges – negative figures indicate an expected loss).