Macquarie downgrades to Neutral from Outperform as the stock is now trading close to its target. The broker believes the share price has also caught up with the traditional correlation to earnings. Target is raised to $50.90 from $50.26.
Macquarie forecasts growth of 8% in FY19 and believes this is attractive, considering the broader market is challenged. The broker believes the recent difficulties in the sector have strengthened the company’s competitive position.
CIMIC is also cooperating with the US Department of Justice in relation to possible breaches of its code of ethics. This first emerged in 2011 and an Australian Federal Police investigation has been ongoing since 2012. Macquarie suspects the US development may expedite potential AFP outcomes.
Sector: Capital Goods.
Target price is $50.90.Current Price is $49.74. Difference: $1.16 – (brackets indicate current price is over target). If CIM meets the Macquarie target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
