Preliminary numbers for FY20 signal an EBITDA range of $390-410m. Credit Suisse considers this outcome reasonable. Net debt is also broadly consistent with expectations.
Credit Suisse believes the stock is undervalued at current levels. Assets outside of the interests in Domain ((DHG)) and Stan illustrate the value on offer and the broker believes these stand to benefit from any cyclical rebound in the advertising market.
Outperform maintained. Target is $2.
Target price is $2.00.Current Price is $1.37. Difference: $0.63 – (brackets indicate current price is over target). If NEC meets the Credit Suisse target it will return approximately 32% (excluding dividends, fees and charges – negative figures indicate an expected loss).