The company has provided maiden FY20 earnings (EBIT) guidance of $80-85m. First quarter sales were down -8% and below Credit Suisse assumptions.
This was attributed to customer de-stocking and a deterioration in new housing and renovation markets. The broker does not anticipate any recovery in customer volumes over the year and lowers FY20 end-market sales estimates by -2%.
Neutral rating maintained. Target is reduced to $2.90 from $3.10.
Sector: Capital Goods.
Target price is $2.90.Current Price is $2.97. Difference: ($0.07) – (brackets indicate current price is over target). If GWA meets the Credit Suisse target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
