BGA – UBS rates the stock as Buy

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First half results were below expectations. Guidance has been reaffirmed for FY20 operating earnings of (EBITDA) of $95-105m.

UBS assesses the core Bega business, including Koroit, appears to be the source of division upside.

The company’s internal review aims to have a material impact on the FY21 cost base, once completed in the second half. Improved seasonal conditions are expected in FY21.

UBS retains a Buy rating and reduces the target to $5.00 from $5.10.

Sector: Food, Beverage & Tobacco.

Target price is $5.00.Current Price is $4.01. Difference: $0.99 – (brackets indicate current price is over target). If BGA meets the UBS target it will return approximately 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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