Reporting Season Road Map: 27 February 2020

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
27 February 2020, 10:02 AM
Sectors Covered:
Equity Strategy and Quant

InvoCare Limited (IVC) – Set up for growth

IVC's FY19 result (Dec Y/E) overall was above ours and consensus expectations. The result was driven by a rebound in the number of deaths after a weak FY18, strong performance from renovated sites and contributions from acquisitions. No outlook guidance has been provided, although management continues to expect the number of deaths to revert back to the long-term trend.

While we make minimal changes to earnings forecasts, we upgrade our rating to Add (from Hold) given our increased confidence in the growth outlook. Our target price also rises.

Morgans clients can login to view our share price target and detailed research note.

Adelaide Brighton  (ABC) – Opportunity emerges

ABC posted an in-line FY19 result. FY20 guidance was 6% below consensus and the capex outlook was greater than expected. Result highlights included: SA cement pricing stabilised in the 2H; the lime business is growing; the cost-out target is on track; and more detail was provided on ABC's strategy to grow in the infrastructure segment. While we have lowered our forecasts, we think FY20 should be the trough in the company's earnings cycle.

Trading on a LTM PE of 15.3x, we upgrade to an Add.

Morgans clients can login to view our share price target and detailed research note.

More information

Morgans clients can access our latest reports on InvoCare (IVC) and Adelaide Brighton (ABC) in the research section. Alternatively, please contact your nearest Morgans office for access.

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.


 

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