Credit Suisse lowers coal volume forecasts by -5.8% for FY21. Overall, the impact on the Australian export market is more benign compared with other global markets because of the relatively higher quality of Australian coal, and higher fixed costs.
Aurizon, however, obtains half its earnings from the regulated rail infrastructure network which is not exposed to volume risks.
Hence, Credit Suisse still expects earnings growth in FY21. Outperform maintained. Target is reduced to $5.55 from $5.80.
Target price is $5.55.Current Price is $4.85. Difference: $0.70 – (brackets indicate current price is over target). If AZJ meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).