Management has downgraded FY21 guidance amid pandemic-related restrictions and resource challenges as well as the ASIC proceedings.
Still recent contracts in the US enable Austal to demonstrate its capabilities and Credit Suisse believes these contracts provide evidence of the company’s stance in the US defence market.
Credit Suisse cuts FY21 EBIT estimates by -7% to $116m, within the guidance range of $112-118m, because of risks to throughput across Australia and the Philippines. Outperform rating and $2.75 target maintained.
Sector: Capital Goods.
Target price is $2.75.Current Price is $2.07. Difference: $0.68 – (brackets indicate current price is over target). If ASB meets the Credit Suisse target it will return approximately 25% (excluding dividends, fees and charges – negative figures indicate an expected loss).
