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S32 - Macquarie rates the stock as Outperform
BY BROKER NEWS - 19/04/2017 | VIEW MORE BROKER UPDATES

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S32 - SOUTH32 LIMITED


The company will not proceed with the acquisition of the Metropolitan Colliery because of the number of concessions required by the ACCC.

Macquarie suspects the concessions related to some level of sustained price discounting of the benchmark coking coal price and/or a commitment to domestic volumes, as well as maintaining the current product mix.

Meanwhile, the broker finds the farm-in deal with Trilogy interesting as it could mean the company adds copper production in the medium to longer term.

The broker suspects the US$200m allocated to the Metropolitan acquisition could be used to boost the US$500m buy-back later this year. Outperform rating retained. Target is $3.60.

Sector: Materials.

Target price is $3.60.Current Price is $2.79. Difference: $0.81 - (brackets indicate current price is over target). If S32 meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).



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The content of this information does in no way reflect the opinions of FN Arena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FN Arena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FN Arena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

 

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