Macquarie observes cost management has offered more protection than previously expected against the headwinds to volume. Trading was slightly weaker than expected in July to October but offset by strong cost-cutting.
While some of the costs will return, the broker assesses the business has significant operating leverage. Trends are expected to improve in December.
Rating is upgraded to Outperform from Neutral. Target is raised to $3.60 from $3.20.
Sector: Software & Services.
Target price is $3.60.Current Price is $3.53. Difference: $0.07 – (brackets indicate current price is over target). If DHG meets the Macquarie target it will return approximately 2% (excluding dividends, fees, and charges – negative figures indicate an expected loss).
