Credit Suisse notes there were not a lot of surprises in Woolworths’ Endeavour Drinks Group demerger documents. The potential return of $1.6-2bn in surplus cash post demerger looks to be in line with investor expectations.
A dividend payout ratio of 70-75% for Endeavour Drinks Group is in line with Woolworths’ historical payout, adds the broker. Post demerger, Credit Suisse highlights the retailer will be debt-free and is proposing capital management of $1.6-2bn.
Neutral rating with a target of $38.05.
Sector: Food & Staples Retailing.
Target price is $38.05.Current Price is $40.50. Difference: ($2.45) – (brackets indicate current price is over target). If WOW meets the Credit Suisse target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
