Tag: ABC

First-half results were in line with expectations, given recent guidance. The results were affected by lower volumes and margin pressure as a result of the contraction in residential activity.

Macquarie had already set its forecasts below Adelaide Brighton’s prior guidance range on concerns over Queensland demand, but new guidance is lower still, given weak demand in SA and Victoria as well, leading the broker to cut forecasts a further -22%.

Adelaide Brighton has downgraded FY profit guidance by -10-15% due to weak demand in residential construction, insufficiently offset by a lower exposure to infrastructure, falling cement/concrete prices in Qld which the broker sees going lower, and competition in South Australia.

Morgan Stanley believes the 2018 performance was in-line, but the outlook is suggesting much tougher times lay ahead. The latter is seen at odds with the stock’s premium valuation, suggesting weakness needs to follow to pull ABC stock back in line with its peers.

The company has downgraded 2018 net profit guidance by -7%, to $188-195m. UBS calculates the downgrade implies a -11% reduction to December half earnings.

Morgan Stanley observes management is constructive regarding demand from both Australian residential and infrastructure activity. Lime volumes are expected to be stable in FY18.

The company has hosted an investor briefing, reiterating its FY18 outlook. Macquarie observes the market dynamics are favourable and the lime business, at 11% of revenue, remains a stable contributor.

2017 results were generally in line with expectations. Macquarie suggests strong infrastructure activity is tightening up the market and the company’s earnings visibility is better now than its has been in the recent past.

The company’s outlook from its AGM is softer than expected for the first half. The balance of positives and negatives in the outlook largely offset each other, Macquarie observes, but the underlying result is expected to be lower than the prior corresponding half.

Credit Suisse has downgraded forecasts for FY14 and FY15 by 2.2% and 3.1% respectively. The greatest risk for Adelaide Brighton, in the broker’s view, is unrealistic expectations given the emerging headwinds in the cement and lime end markets. This is based on reductions in lime demand from the gold and aluminium sectors and the potential for prices to erode.

UBS rates the stock as Buy –

The company has again lifted earnings guidance and BAML analysts have responded by reiterating why they think this stock deserves a premium. It also increases their confidence in future estimates. FY10 EPS forecast has risen by some 3%.

Management has reiterated full year earnings guidance and so the broker retains its forecasts, though it suggests risk is to the upside from the potential for higher than expected prices.

WA/SA strength, coupled with an under geared balance sheet and with housing representing a third of revenue through the cycle, Deutsche has lifted its recommendation to Buy.

Cement volume recovery is a couple of quarters away from being in full swing, but Citi feels it’s time to get set and has lifted ABC to a Buy.

Interim earnings highlighted the resilient nature of the group’s business in the broker’s view as earnings fell by less than cement volumes. Full year earnings guidance was retained but the broker sees this as likely to prove conservative and so post the result it retains its Buy rating. Sector: Materials.

Citi expects a 22% decline in cement volumes, peak to trough, which will trigger a 27% (FY08 to FY10) fall in earnings for ABC. Citi thinks 1H10 will be the trough.

At its AGM yesterday, Adelaide Brighton delivered 2009 profit guidance of $105-115m. This puts consensus of $112m safely in the middle, but Deutsche’s $95m forecast has now been upgraded by 7%.

Having reviewed the global market for lime, the broker now sees Adelaide Brighton as its preferred building sector choice, raing the target from $3.70 to $4.00.