Cimic reported a weak March quarter, down -8% year on year. Based on the broker’s run-rate to achieve FY20 forecasts, underpinned by 1-6% profit growth guidance, Cimic has fallen behind on the run-rate and the June quarter will bring the real impact.
Management made no mention of prior guidance, but also did not withdraw it, rather it will provide an update once the full impact is understood.
The company’s liquidity position is nevertheless strong, and infrastructure investment both public and private should support demand. Neutral and $25.73 target retained.
Sector: Capital Goods.
Target price is $25.73.Current Price is $23.03. Difference: $2.70 – (brackets indicate current price is over target). If CIM meets the Macquarie target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).