Viva’s update confirmed refinery earnings are even worse than the broker had feared, but there are signs of strength in Fuels & Marketing relative to the weak update provided by Caltex ((CTX)) last week. The broker doesn’t believe refining margins can get much worse, and retail margins are showing signs of improvement.
Viva is well positioned since the Coles ((COL)) renegotiation and has more margin to play with, the broker suggests. Buy retained, target falls to $2.45 from $2.55.
Target price is $2.55.Current Price is $2.12. Difference: $0.43 – (brackets indicate current price is over target). If VEA meets the Deutsche Bank target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).