GNC – Morgans rates the stock as Hold

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The company has provided weaker FY19 guidance and expects to report an underlying net loss of $70-90m. Morgans is disappointed and concerned about the trading and risk management policies.

However, the broker acknowledges the anti-dumping investigation is out of the company’s control. Challenging seasons are expected in FY20.

The ACCC has announced preliminary concerns about the sale of the bulk liquid terminals. The de-merger timetable is now pushed out to the first quarter of 2020.

Morgans maintains a Hold rating and raises the target to $8.25 from $8.04.

Sector: Food, Beverage & Tobacco.

Target price is $8.25.Current Price is $7.62. Difference: $0.63 – (brackets indicate current price is over target). If GNC meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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