UBS expects depressed prices for ammonia are likely to persist throughout the US cropping season in the second half of FY20. The impact is offset by a lower Australian dollar and improved Australian fertiliser distribution outlook.
Modest demand disruption is expected in the Asia-Pacific region for the Dyno Nobel explosives business.
UBS anticipates Incitec Pivot will retain its dividends, assuming no repeat of the events in FY19 that led to an elevated debt position. Neutral rating maintained. Target is reduced to $2.30 from $3.40.
Sector: Materials.
Target price is $2.30.Current Price is $2.18. Difference: $0.12 – (brackets indicate current price is over target). If IPL meets the UBS target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).