UBS cuts forecasts for Wesfarmers by -4-16% as well as updates for the sell-down of the Coles stake.
The broker envisages significant risk to forecasts but now aims to reflect a 2-3-month hibernation of the economy, a -10-20% decline in house prices, a shutdown of NZ stores but no shutdown of Australian stores, and a gradual recovery in late 2020.
Neutral rating maintained. The broker considers the business strong, and the balance sheet supports the ability to pay a dividend and assess opportunities when and if they arise. Target is reduced to $33.80 from $37.00.
Sector: Food & Staples Retailing.
Target price is $33.80.Current Price is $34.27. Difference: ($0.47) – (brackets indicate current price is over target). If WES meets the UBS target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
