The company has provided more clarity regarding the financial impact of outages from the Mount Isa rail line flooding and manufacturing issues in Louisiana. Additionally, distribution volumes are lower in Australian fertiliser because of the drought.
UBS downgrades FY19 forecasts to reflect this. The broker envisages positive explosives volumes but expect an oversupply and near-term contract re-pricing will weigh on earnings growth and operating leverage.
Neutral rating maintained. Target is reduced to $3.30 from $3.46.
Sector: Materials.
Target price is $3.30.Current Price is $3.05. Difference: $0.25 – (brackets indicate current price is over target). If IPL meets the UBS target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
