According to news reports, CPE Capital along with its consortium partners have made an indicative non-binding offer for Bingo Industries at an enterprise value of over $2.5bn. Based on Credit Suisse’s December 2020 forecasts, this implies a share price of $3.33.
The broker believes Bingo Industries has the potential to generate $231m in operating income by FY23 and based on the FY23 forecast, the fundamental value of the stock could be over $4 per share.
Noting the current depressed share price is the result of a cyclical decline in building construction further aggravated by covid, Credit Suisse is of the view any bid for Bingo needs to factor in in the medium-term earnings recovery potential.
Rating is upgraded to Outperform from Neutral with the target rising to $3 from $2.40.
Sector: Commercial & Professional Services.
Target price is $3.00.Current Price is $3.30. Difference: ($0.30) – (brackets indicate current price is over target). If BIN meets the Credit Suisse target it will return approximately -10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
