REG – UBS rates the stock as Buy

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The company has reduced FY19 guidance, indicating net profit will now be at the lower end of $47-51m. New FY20 guidance, $105m in operating earnings (EBITDA) and $38m in net profit, is below UBS estimates.

There has been a continued deterioration in group occupancy and the broker now expects this to be flat into FY20. UBS downgrades estimates for FY19 and FY20 by -4% and -28% respectively.

The broker maintains a Buy rating and reduces the target to $3.10 from $3.80. The broker believes the company’s portfolio is still well-placed to leverage an improving demand profile over the next decade.

Sector: Health Care Equipment & Services.

Target price is $3.10.Current Price is $2.58. Difference: $0.52 – (brackets indicate current price is over target). If REG meets the UBS target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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