Morgans is not convinced the investment in the Bomen solar farm is attractive. It adds additional risk and the broker finds it difficult to envisage how economic returns will be generated without strong wholesale prices.
The broker is comfortable with the counterparty and contractual arrangements that will de-risk the construction phase but does not believe sufficient revenue will be generated across the 30-year asset life to deliver the economic return required.
Hold rating maintained. Target is reduced to $2.25 from $2.28.
Target price is $2.25.Current Price is $2.28. Difference: ($0.03) – (brackets indicate current price is over target). If SKI meets the Morgans target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).