While first half results were better than Morgans had expected, more importantly second half outlook comments were more upbeat. Benefits from the Business Transformation Program of $30m by FY24, were considered materially higher than expected.
Also, the broker expects an improvement in trading should covid restrictions continue to ease. The Hold rating is unchanged as the analyst feels a good portion of the recovery is priced-in. The target is increased to $4.79 from $4.12.
The analyst explains forecast earnings growth in FY23 reflects the annualised earnings from the new Scottish plants and another $10m of Business Transformation benefits (same as FY22).
Sector: Food, Beverage & Tobacco.
Target price is $4.79.Current Price is $4.49. Difference: $0.30 – (brackets indicate current price is over target). If UMG meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
