Macquarie updates forecasts to allow for the potential impact of the coronavirus crisis. Some of the sales pipeline is expected to be pushed out and the time to close new clients will be extended.
The broker reduces FY21 revenue by -3% to account for this impact. Macquarie notes the balance sheet is solid and the company is in a good position to recover strongly when lock-down laws are unwound.
Outperform maintained. Target is reduced to $2.20 from $2.70.
Sector: Software & Services.
Target price is $2.20.Current Price is $1.30. Difference: $0.90 – (brackets indicate current price is over target). If RDY meets the Macquarie target it will return approximately 41% (excluding dividends, fees and charges – negative figures indicate an expected loss).