ABC – Morgan Stanley rates the stock as Equal-weight

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The company has withdrawn guidance for 2020, given the uncertainty regarding the pandemic impact. Net profit had been expected to be -10% below the prior year.

The CEO has indicated that trading is in line with expectations to date and all sites are operational.

There is no debt maturing until November 2024 and the company holds $450m in cash and undrawn bank facilities.

Morgan Stanley already expected there was a high risk to guidance and is not surprised by the withdrawal.

The broker expects significant disruption to demand across all key construction markets.

Equal-weight. Target is reduced to $2.90 from $3.00. Industry view: Cautious.

Sector: Materials.

Target price is $2.90.Current Price is $2.03. Difference: $0.87 – (brackets indicate current price is over target). If ABC meets the Morgan Stanley target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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