ADH - Morgans rates the stock as Hold
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The company's market update revealed operating dynamics have improved significantly towards the end of FY17, with Morgans pointing out operational profit (EBIT) is now expected to come in at the top-end of guidance range, adding [this is] "an outcome that looked highly unlikely six months ago".
New price target of $1.35 compares with $1.20 prior but given the share price has moved significantly higher already, the rating has been pulled back to Hold from Add.
The analysts do expect gross margin to be pressured towards the bottom of management's guidance, with the added observation the company will now be cycling a period of poor execution last year. Management's focus is now seen shifting towards further cost productivity tailwinds.
Target price is $1.20.Current Price is $1.27. Difference: ($0.08) - (brackets indicate current price is over target). If ADH meets the Morgans target it will return approximately -6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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