Trading conditions appear slightly better than previously forecast and with an elevated order book at the end of April combined with housing tailwinds Citi finds its FY22 forecasts are looking increasingly conservative.
Citi estimates sales growth during the four months to April was 73% with written sales order growth to the tune of 95%. The broker calculates the gap between sales and written order growth that was observed in the first half is narrowing and, in turn, this suggests freight constraints are being reduced.
The broker reiterates a Buy rating, noting a dividend yield of 8% and a strong balance sheet that can support acquisitions. Target is $12.05.
Target price is $12.05.Current Price is $10.29. Difference: $1.76 – (brackets indicate current price is over target). If NCK meets the Citi target it will return approximately 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).