Credit Suisse assesses an improving earnings profile and low PE should attract investors and the stock could re-rate. Pulp prices in Europe and the US remain very high in an historical context and, as global pulp producer margins remain positive, there is room for prices to decline before supply is reduced.
Meanwhile, retail scan data suggests sales are on track. The broker considers this scenario provides evidence supporting its Outperform rating and $1.10 target.
Sector: Household & Personal Products.
Target price is $1.10.Current Price is $0.92. Difference: $0.18 – (brackets indicate current price is over target). If AHY meets the Credit Suisse target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
