DCG – Citi rates the stock as Buy

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Buy rating retained with a $1.20 price target post the release of FY19 financials. The release revealed margin pressure, with the analysts pointing out the Sunraysia solar farm project is mostly responsible.

Citi analysts believe the shares are trading at a -23% valuation discount to peers and if management can get those margins moving in the right direction again, a re-rating should not be too far off.

A successful delivery of the Sunraysia solar farm project should achieve exactly that, plus the company is currently bidding on a pool of $1.5bn in new contracts.

Sector: Capital Goods.

Target price is $1.20.Current Price is $0.90. Difference: $0.30 – (brackets indicate current price is over target). If DCG meets the Citi target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).


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