Morgans believes the focus of Acrow Formwork and Construction Services on the civil infrastructure market is the right strategy that provides opportunities for solid growth over the longer term.
The broker approves of a strategy that has seen the revenue mix shift from the more commoditised and price-sensitive residential and commercial scaffold sectors to the higher-value and engineered formwork market linked to growing demand for civil infrastructure investment.
The broker also sees infrastructure investment as a key driver of Australia’s economic recovery with the potential for extra funding in the upcoming federal budget in October.
The Add rating is unchanged and the target price is increased to $0.40 from $0.38.
Sector: Capital Goods.
Target price is $0.40.Current Price is $0.36. Difference: $0.04 – (brackets indicate current price is over target). If ACF meets the Morgans target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).