Credit Suisse suspects, while a capital raising and downgrade to guidance was widely expected, the support from Sumitomo was likely to have been underestimated. The company has downgraded earnings estimates for North America because of weather impacts.
Removing balance sheet risk is a clear positive, the broker suggests, as $97.5m of preference shares will be issued to Sumitomo. Credit Suisse reduces forecasts, primarily for North America and Europe. Outperform rating maintained. Target is reduced to $8.24 from $8.90.
Target price is $8.24.Current Price is $4.87. Difference: $3.37 – (brackets indicate current price is over target). If NUF meets the Credit Suisse target it will return approximately 41% (excluding dividends, fees and charges – negative figures indicate an expected loss).