FY19 results were ahead of UBS estimates at both the earnings (EBIT) and net profit level. Strong cash flow has allowed the company to pay down all debt and provides for a material future growth option.
The almond division was supported by yields above historical industry averages. Water prices remain a challenge and the broker suspects elevated costs will persist into FY20. Buy rating and $9.10 target maintained.
Sector: Food, Beverage & Tobacco.
Target price is $9.10.Current Price is $7.81. Difference: $1.29 – (brackets indicate current price is over target). If SHV meets the UBS target it will return approximately 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).