AZJ - Morgans rates the stock as Hold
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Morgans observes, while Cyclone Debbie has caused a material impact on the company's earnings outlook, the valuation impact is immaterial, given the value protections within the network regulatory regime.
The company expects a negative impact on EBIT of $100-115m in FY17, of which $70-80m will be recovered through the regulatory regime.
The broker considers the stock to be fair to fully priced at present, given its growth outlook and risk profile. The backdrop of strong coal prices also is a positive for the company and its customers.
Morgans lifts the target to $4.92 from $4.88. Hold rating retained.
Target price is $4.92.Current Price is $5.21. Difference: ($0.29) - (brackets indicate current price is over target). If AZJ meets the Morgans target it will return approximately -6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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