First half result beat Morgan Stanley’s estimates. Earnings are re-based higher while sales growth assumptions are lifted for FY20 and beyond.
Despite reinvestment in operating expenditure, earnings margins (EBITDA) expanded to 22.0%. The company’s commentary included scope for geographic expansion, with new offices in Pakistan, and Nigeria added to the list by FY20.
Target is raised to $16.00 from $11.80. Overweight rating. Industry view is In-Line.
Sector: Consumer Services.
Target price is $16.00.Current Price is $13.75. Difference: $2.25 – (brackets indicate current price is over target). If IEL meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).