Boral has identified financial irregularities in its North American windows business. Operating earnings (EBITDA) are estimated to be overstated by US$20-30m for the 14-month period to October 2019.
Management is confident this will be contained within the windows business and the period. For Credit Suisse, the unanswered question is whether there was a dramatic deterioration in FY19 and why, or was past profitability overstated.
The broker retains a Neutral rating and $4.50 target.
Target price is $4.50.Current Price is $4.60. Difference: ($0.10) – (brackets indicate current price is over target). If BLD meets the Credit Suisse target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).