WGN – Morgans rates the stock as Add

Wagners has cut FY19 profit guidance, down to $35-38m from a prior $39m, due to the slow start-up of some current projects and the need to upsize its business in order to be able to tender for larger projects, the broker reports. The broker has cut forecasts and its target to $3.44 from $4.11.

The broker nevertheless sees FY19 as the low point, given an absence of large projects, wet weather impact in the first half, the need to invest for growth and the ramp-up of the fixed concrete network. FY20 earnings will be supported by the SE Queensland pipeline project. Add retained.

Sector: Materials.

Target price is $3.44.Current Price is $2.73. Difference: $0.71 – (brackets indicate current price is over target). If WGN meets the Morgans target it will return approximately 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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