Cleanaway Waste Management’s December-half result romped in 17% ahead of consensus forecasts, thanks to a 13% beat on revenue, although margins were weaker than forecast.
Management guided to a similar result in the June half, excluding the Suez Sydney contribution.
FY22 earnings forecasts (EBITDA) are upgraded 5%.
Cleanaway also announced it will move to 100% stakes in the energy from waste facilities in Melbourne and Queensland, compared with the JV it was planning in Sydney with Macquarie, which Credit Suisse thinks is a good idea, increasing Cleanaway’s optionality.
Target price rises to $2.80 from $2.60. Neutral rating retained.
Sector: Commercial & Professional Services.
Target price is $2.80.Current Price is $2.97. Difference: ($0.17) – (brackets indicate current price is over target). If CWY meets the Credit Suisse target it will return approximately -6% (excluding dividends, fees and charges – negative figures indicate an expected loss).
