Credit Suisse is concerned about the worrying trend of earnings downgrades. The Thomas Cook receivables exposure is two-thirds of B2B FY19 earnings and a reminder of the credit risk in B2B.
The broker reduces underlying earnings estimates by -10% and -11% for FY20 and FY21 respectively, because of the removal of Thomas Cook earnings and an increasingly conservative view across B2B forecasts.
Rating is downgraded to Neutral from Outperform. The broker will await indications that earnings are stabilising before becoming more positive. Target is reduced to $11 from $14.
Sector: Retailing.
Target price is $11.00.Current Price is $11.07. Difference: ($0.07) – (brackets indicate current price is over target). If WEB meets the Credit Suisse target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
