CWY – Morgans rates the stock as Hold

As the completion of Cleanaway Waste Management’s acquisition of Suez Sydney is nearing, Morgans lifts earnings forecasts materially. However, the valuation impact is considered immaterial, given the size and the limited-life nature of key assets acquired.

The target price rises $2.75 from $2.53 and the Hold rating is maintained. The analyst assumes debt funds the acquisition (the company has established a $500m acquisition debt facility), and free cashflow is used to pay down the acquisition debt.

Sector: Commercial & Professional Services.

 

Target price is $2.75.Current Price is $2.94. Difference: ($0.19) – (brackets indicate current price is over target). If CWY meets the Morgans target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).

 

 

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →