PGH – Credit Suisse rates the stock as Outperform

Credit Suisse observes contract manufacturing was very weak in the first half while the volume erosion in packaging continues.

The broker regards the business as a restructuring story and its core packaging business undervalued, given the leading market position.

Estimates for earnings per share are downgraded -24-28% across the forecast period. Nevertheless, cash flow surpassed forecasts and was the best first half in that regard since the IPO.

Outperform rating maintained. Target is reduced to $3.30 from $3.60.

Sector: Materials.

Target price is $3.30.Current Price is $2.49. Difference: $0.81 – (brackets indicate current price is over target). If PGH meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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