GWA Group’s first-half operating income and net profit were -3% below Credit Suisse’s forecasts while cash conversion stood strong at 116%.
Regarding market recovery, Credit Suisse observes there seem to be little reason to cheer since the guidance for the second half was not as optimistic as hoped. It seems the group does not expect to benefit from the increase in housing approvals/turnover, suggests the broker.
Neutral rating with the target rising to $3.15 from $2.85.
Sector: Capital Goods.
Target price is $3.15.Current Price is $3.41. Difference: ($0.26) – (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).