Adbri and Alcoa have agreed to another extension by 12 months of the lime supply contract and UBS analysts comment this is already (largely) reflected in their forecasts.
UBS observes the share price is showing a lack of momentum, trading well below its price target, but the broker does not believe the announcement is the catalyst the share price needs.
Looking beyond short-term considerations, UBS sees structural headwinds in South Australia, coupled with increased competition in other markets, creating a challenging environment for the company.
Neutral rating retained. Price target $3.50. No changes made to forecasts.
Target price is $3.50.Current Price is $2.79. Difference: $0.71 – (brackets indicate current price is over target). If ABC meets the UBS target it will return approximately 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).