Credit Suisse observes, since the last update in August, housing turnover and price indicators for GWA Group’s core alterations & additions market have improved. Hence, the latest commentary on FY21 is disappointing.
Year-to-date sales are down -5% and it appears, while consumer discretionary peers have posted strong growth, GWA Group has not participated in the recovery so far.
Underperformance is attributed to stretched-out cycles in the commercial end market as the company’s products are the last to be installed. Rating is downgraded to Neutral from Outperform and the target is steady at $2.85.
Sector: Capital Goods.
Target price is $2.85.Current Price is $2.61. Difference: $0.24 – (brackets indicate current price is over target). If GWA meets the Credit Suisse target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
