Huon Aquaculture Group delivered a very weak first half, observes Credit Suisse, in line with the group’s latest update and consistent with industry pricing trends hit by covid.
While expecting pricing to normalise with time, the broker notes Huon’s main issue in the short-term is the balance sheet with net debt expected to be six times the group’s operating income in FY21.
While the stock has valuation appeal, Credit Suisse believes Huon Aquaculture has a few hurdles to jump before this is likely to be realised.
Neutral rating retained with the target dropping to $2.70 from $2.90.
Sector: Food, Beverage & Tobacco.
Target price is $2.70.Current Price is $2.47. Difference: $0.23 – (brackets indicate current price is over target). If HUO meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
