Raw material prices have eased. Raw materials account for around 60% of the company’s cost of goods sold. Credit Suisse expects Ansell will achieve only a modest benefit in the second half but forecasts a benefit of around 5% for the first half of FY20.
The broker suspects the company will miss its 3-5% organic growth target in FY19, given indications that demand has moderated.
While wary of a subdued macro economy, Credit Suisse still expects 13% growth in earnings per share in FY20 and upgrades to Outperform from Neutral. Target is raised to $27.50 from $24.00.
Sector: Health Care Equipment & Services.
Target price is $27.50.Current Price is $26.50. Difference: $1.00 – (brackets indicate current price is over target). If ANN meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).