The dispute with Boral ((BLD)) has now been escalated to the Queensland Supreme Court with volumes to Boral still suspended. Wagners has downgraded FY19 earnings guidance by -$10m at the midpoint to $25-28m, -20% below Credit Suisse’s prior forecasts.
The broker contends the market is ignoring the disputed nature of the claim and the possibility of an outcome being in Wagners’ favour. The broker retains an Outperform rating and lowers the target to $2.80 from $3.50.
Target price is $2.80.Current Price is $2.02. Difference: $0.78 – (brackets indicate current price is over target). If WGN meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges – negative figures indicate an expected loss).