Macquarie had already set its forecasts below Adelaide Brighton’s prior guidance range on concerns over Queensland demand, but new guidance is lower still, given weak demand in SA and Victoria as well, leading the broker to cut forecasts a further -22%.
The broker had expected a lower dividend, but now no interim will be offered.
Macquarie downgrades to Neutral from Outperform, citing concerns over earnings visibility. It’s not just weak demand that is the issue, the broker believing the business model may need to be reconsidered. Target falls to $3.75 from $4.80.
Target price is $3.75.Current Price is $3.54. Difference: $0.21 – (brackets indicate current price is over target). If ABC meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).