Adelaide Brighton has downgraded FY profit guidance by -10-15% due to weak demand in residential construction, insufficiently offset by a lower exposure to infrastructure, falling cement/concrete prices in Qld which the broker sees going lower, and competition in South Australia.
The broker cuts forecasts by -19% and -14% in FY19-20 to below the low end of guidance, noting earnings visibility is poor. Despite a de-rating, the broker retains Neutral on ongoing earnings risk. Target falls to $3.70 from $4.65.
Target price is $3.70.Current Price is $3.64. Difference: $0.06 – (brackets indicate current price is over target). If ABC meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).