New Hope Corporation reports its FY20 result next Tuesday, September 22.
Morgans believes the company is at risk of disappointing the market expectations due to persistently low thermal coal prices. Additional disappointment may come from non-core asset write-downs, head office re-location costs, legal costs and staff redundancies.
The broker thinks a final dividend is unlikely.
However, Morgans states compelling value is on offer for patient, through-the-cycle investors.
The Add rating is unchanged and the target price is decreased to $1.53 from $1.80
Target price is $1.53.Current Price is $1.25. Difference: $0.28 – (brackets indicate current price is over target). If NHC meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).