Results for the June half-year were well below UBS forecasts. The Americas division was -13% below forecasts because of weaker performances in Canada and Latin America.
FY20 guidance for earnings (EBIT) growth to be in line or slightly above the prior year was well below the broker’s estimates. UBS believes the stock is unlikely to outperform and downgrades to Neutral from Buy.
A number of issues are of concern. There appears to be a structural decline in profitability in Latin America and Canada which undermines confidence, the broker suggests.
Brexit could also add further costs. Target is reduced to $12.10 from $13.60.
Sector: Commercial & Professional Services.
Target price is $12.10.Current Price is $11.48. Difference: $0.62 – (brackets indicate current price is over target). If BXB meets the UBS target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
