UBS has cut Incitec Pivot’s forecast earnings by -20% in FY19 due to damage caused in the floods to the rail line linking the company’s Phosphate Hill ammonia plant in Mt Isa to the port at Townsville.
The plant itself was not damaged and the line is expected to re-open by mid-May. The broker’s downgrade is consistent with management’s update.
The broker retains Neutral, balancing an improving outlook for explosive demand from the mining sector against the impact on fertiliser demand the floods will likely affect. Target falls to $3.46 from $3.50.
Sector: Materials.
Target price is $3.46.Current Price is $3.33. Difference: $0.13 – (brackets indicate current price is over target). If IPL meets the UBS target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
