First-half results were in line with forecasts, albeit weak. A material reduction in earnings reflected a significant fall in wood fibre export shipments because of the excess production of paper pulp in Brazil and US tariffs on Chinese paper imports.
While value exists in the stock, Morgans prefers to gain greater certainty on the outlook, maintaining a Hold rating.
The company expects to meet consensus expectations amid a second half improvement. Increase shipments will be the driver of the second half recovery, Morgans points out. Target is reduced to $1.65 from $1.88.
Sector: Materials.
Target price is $1.65.Current Price is $1.45. Difference: $0.20 – (brackets indicate current price is over target). If MWY meets the Morgans target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
