In further analysis of FY21 results UBS believes increasing gas supply constraints on the east coast can provide a tailwind for the North-South interconnected pipeline network.
This supports the broker’s forecast that APA Group can generate around 4% growth in free cash flow and distributions from FY21-25.
UBS reduces EBITDA estimates by -4-5%, moderating assumptions amid higher corporate costs. Buy rating unchanged. Target is reduced to $10.50 from $11.20.
Sector: Utilities.
Target price is $10.50.Current Price is $9.66. Difference: $0.84 – (brackets indicate current price is over target). If APA meets the UBS target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
