Traffic levels are likely to be severely impacted by travel bans, lock-downs and other measures to slow the spread of coronavirus. Credit Suisse expects a reduction in the dividend of -23% in FY21 because of lower free cash flow.
A $0.62 dividend is forecast for FY20, in line with guidance, although the broker acknowledges there is downside risk depending on how the crisis develops in the next few weeks.
Rating is upgraded to Neutral from Underperform as the valuation appears more reasonable. Target is lowered to $10.65 from $13.00.
Target price is $10.65.Current Price is $12.43. Difference: ($1.78) – (brackets indicate current price is over target). If TCL meets the Credit Suisse target it will return approximately -17% (excluding dividends, fees and charges – negative figures indicate an expected loss).