Cleanaway Waste Management announced its $501m Sydney SUEZ asset acquisition will complete earlier than expected on December 18. Macquarie notes the 5 transfer stations and 2 landfills combined generated $193.1m revenue and $76.9m underlying earnings in 2020.
According to Macquarie the purchase strengthens the company’s Sydney network and execution is a positive for a new management team. Earnings per share increase 10.0%, 16.9% and 17.0% through to FY24.
The Outperform rating is retained and the target price increases to $3.70 from $3.20.
Sector: Commercial & Professional Services.
Target price is $3.70.Current Price is $2.86. Difference: $0.84 – (brackets indicate current price is over target). If CWY meets the Macquarie target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
