The hound is like the cat that got the A2 cream!
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$5.20 on the close so up 5.9% but it beat average analyst expectations by 14.4% so a further rerating in the short term wouldn't surprise me and then there's obviously ongoing growth ahead. I'm expecting N.Z. and Australian analyst upgrades on the back of this result.
The cat is enjoying his cream on this one...
Good to see the growth, and nice that its "disciplined" as well - increasing revenue translating nicely to earnings growth. Will be VERY interested in revenue predictions for the next 12 months, and whether there is a significant increase in fixed costs as a result of it. The high PE is factoring in some big expectations...so it needs to at least meet it.
Nonetheless, while there is a distinct risk profile, today is a good day.
Disc: happy holder :-), and not selling yet...
I'm actually thinking the EPS will more than double this FY. Reason being more production facility being added by Synlait through the plant in Akl along with further additions to the existing capacity in Canterbury.
I'm picking NPAT for FY18 to be around 27.5c based on NPAT of close to $200mln. By which time I expect the buyback to be completed and that will add bit more to the EPS.
So, based on 27.5c EPS and apply say PE of 30 we're looking at a valuation target of $8.25 and if market is generous and attributes the current 40 PE multiple, that gives us $11.00 which is best case scenario.
All in all we should be close to the $10 mark if all goes as per plan and my short term target for ASM time in Nov is at least $6.00.
Pls DYOR...
Disc: was tempted to sell a small portion y'day but resisted the urge strongly and after looking through the numbers bit more thoroughly and will continue to hold...
Thanks for your thoughts on a fwd SP sb9. Much appreciated..... I was feeling lonely at $7.50!!
The November update is going to be very interesting.
$6 by November. The way they are going this morning it will be $6 by 2pm today. Sure is a lot of interest.