First half results for United Malt were in-line with recently downgraded guidance. While FY22 earnings (EBITDA) guidance was unchanged, Morgans downgrades profit estimates due to a higher rate of taxation.
Nonetheless, the broker keeps its earnings forecast unchanged, having already adjusted when the company downgraded guidance.
The analyst doesn’t see any catalysts on the horizon, and is also wary of above-target gearing and near-term earnings risk. As a result, the Hold rating is retained. The target falls to $4.20 from $4.27.
Sector: Food, Beverage & Tobacco.
Target price is $4.20.Current Price is $3.96. Difference: $0.24 – (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).
