CTX - Macquarie rates as Outperform
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Caltex has provided first half profit guidance that is in line with Macquarie's expectations. The broker observes the core business is defensive and earnings growth is expected. Future drivers are the asset review and convenience strategy.
The broker suggests meaningful infrastructure divestments following the asset review are unlikely and acknowledges the convenience roll-out has its risks.
Nevertheless, given the share price has de-rated the valuation upside is improved. Rating is upgraded to Outperform from Neutral. The broker increases the target to $37.00 from $36.60.
Target price is $37.00.Current Price is $30.17. Difference: $6.83 - (brackets indicate current price is over target). If CTX meets the Macquarie target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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