Caltex has guided to first quarter convenience retail earnings (EBIT) of $160-180m. UBS suspects some of the retail margin headwinds will abate in the second half as crude prices drop and US production lifts.
Still, pressures from competition are likely to remain, and the broker reduces its estimates for retail earnings by -3-10%. UBS maintains a Buy rating and reduces the target to $30.20 from $32.50.
Sector: Energy.
Target price is $30.20.Current Price is $27.15. Difference: $3.05 – (brackets indicate current price is over target). If CTX meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
