Management’s guidance for first half group revenue growth of at least 25% and profit (NPAT) of at least 50% is well ahead of Credit Suisse forecasts.
While undoubtedly positive, the broker notes recent share price volatility implies significant doubt regarding underlying trends beyond FY21. Additionally, it’s considered the market has overstated the earnings benefit attributable to the pandemic.
While maintaining conservative forecasts, the analyst still maintains risk is clearly to the upside and highlights the potential for the company to drive consolidation via M&A in the commercial trucks market.
The Outperform rating is maintained and the target reduced to $8.60 from $8.75.
Sector: Retailing.
Target price is $8.60.Current Price is $7.53. Difference: $1.07 – (brackets indicate current price is over target). If BAP meets the Credit Suisse target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
