Credit Suisse downgrades its FY23 and FY24 EPS forecasts for Cleanaway Waste Management by -14%. Around -9% of the downgrade is attributed to lower demand growth and lower margins as price increases lag cost inflation.
The balance of the downgrade relates to the closure (previously temporarily closed) of the company’s landfill at New Chum in Ipswich, QLD, due to the after effects of flooding.
The analyst feels bad publicity and community suffering (smell etc) may reduce the prospects of winning the capacity extension for the New Chum site. The target price falls to $2.30 from $2.60 and the Underperform rating is maintained.
Sector: Commercial & Professional Services.
Target price is $2.30.Current Price is $2.56. Difference: ($0.26) – (brackets indicate current price is over target). If CWY meets the Credit Suisse target it will return approximately -11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
