AAD - UBS rates the stock as Sell
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The company has divested its bowling & entertainment division to Quadrant Private Equity for $160m. The asset sale will allow the company to deploy capital into other divisions which are either higher returning and/or are in a turnaround state, UBS suggests.
The broker removes this division from forecasts and reduces the tax rate on US earnings to 21%. As a result forecasts for earnings per share are increased by 9% from FY19 onwards.
Given the risk to the margin turnaround at Main Event, the broker maintains a Sell rating. Target is raised to $1.85 from $1.45.
Sector: Consumer Services.
Target price is $1.85.Current Price is $1.93. Difference: ($0.08) - (brackets indicate current price is over target). If AAD meets the UBS target it will return approximately -4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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