Credit Suisse has assessed the mining aftermarket industry, which is the company’s higher multiple division, and believes this offsets weakness within the lower-multiple equipment hire division.
This provides another upgrade angle for the stock when conditions eventually normalise within Coates.
While there are some headwinds currently, as the broker has feedback that the timing of upcoming infrastructure work has not meshed with large projects that are winding down, normalisation is expected late in the first half of FY20.
Credit Suisse maintains an Outperform rating and raises the target to $21.35 from $21.00.
Sector: Capital Goods.
Target price is $21.35.Current Price is $18.91. Difference: $2.44 – (brackets indicate current price is over target). If SVW meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).