Credit Suisse assesses the clearance risk regarding the Suez Sydney acquisition is modest as Cleanaway Waste does not own any putrescible landfills in Sydney.
The broker includes the acquisition in forecasts from the end of FY22. Recent guidance for a lower earnings contribution from the New Chum landfill is interpreted to mean management believes FY22 consensus forecasts are too high.
The broker would prefer more evidence of a post-pandemic recovery and success with the Suez Sydney deal before incorporating additional value and downgrades to Underperform from Neutral. Target is reduced to $2.40 from $2.50.
Sector: Commercial & Professional Services.
Target price is $2.40.