SXL – Macquarie rates the stock as Downgrade to Neutral from Outperform

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While ad markets have continued to be choppy across broader media, Macquarie was surprised by the extent of Southern Cross’ guidance downgrade. Channel checks reveal weakness is across the board, not just in any one sector. The broker has reassessed its general media assumptions.

Southern Cross forecast earnings fall -15% and -18% in FY20-21. Target falls to $1.05 from $1.40. Rating downgraded to Neutral from Outperform.

Sector: Media.

Target price is $1.05.Current Price is $0.94. Difference: $0.11 – (brackets indicate current price is over target). If SXL meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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