Citi observes the share price has been pressured in recent years by the decline in earnings for the CHEP Americas business. These headwinds are expected to fade in the second half and lead to double-digit earnings growth from FY20.
The broker upgrades to Buy from Neutral and lifts the target to $12.10 from $11.00. Citi now forecasts underlying margins to decline by -190 basis points for the CHEP Americas division in the first half, affected by cost inflation and the timing of costs recovery strategies.
Sector: Commercial & Professional Services.
Target price is $12.10.Current Price is $10.72. Difference: $1.38 – (brackets indicate current price is over target). If BXB meets the Citi target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).