Citi analysts had already concluded the risk-reward proposition for owning this stock had turned favourably again, post share market sell-off that followed another profit warning by the company. Since then the analysts attended what they label an “upbeat” Investor Day.
The problems that triggered the FY19 warning should be temporary and Citi analysts are ready to embrace the significant earnings upside that should materialise in the medium term. They anticipate earnings will bounce in FY20.
Buy rating reiterated.
Target price is $3.45.Current Price is $3.07. Difference: $0.38 – (brackets indicate current price is over target). If IPL meets the Citi target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).