CIMIC – Below Expectations

Posted on | by Leon Hinde

Cimic Group is under Algo Engine sell conditions. Despite this, we’ve held a view that the company has cleaned up the balance sheet and offers exposure to an increasing infrastructure build thematic.

The FY20 earnings result and FY21 guidance was below market consensus and we’ve seen the stock sell off as a consequence.

FY21 NPAT guidance of $400-430m down from FY20 NPAT of $600m.

The silver lining is the business does appear to be de-risking and likely to manage its way through the transition to new, lower risk contract wins.

The forward yield is now 4%, but the free cash flow generation will need to be watched closely.

Telstra – 1H21 Reviewed

Posted on | by Leon Hinde

Telstra has reported underlying 1H21 EBITDA $3.8bn.

An interim dividend of 8¢ps was declared, comprising a $0.05 ordinary and $0.03 special.

FY21 guidance now stands at $6.6bn to $6.9bn and FY22 & FY23 targets increased to $7.5-8.5bn.

Telstra will provide an update on towers later this quarter with binding offers expected by FY22. Some analysts have a standalone valuation on towers of $2.50+.

Downer EDI – Algo Buy

Posted on | by Leon Hinde

Downer EDI is now under Algo Engine buy conditions, following the entry signal at $5.15. The stock is now included in our ASX 100 model portfolio.

The company is making progress on its urban growth strategy and the divestments within the mining services sector are helping to sure up the balance sheet and de-risk the business outlook.

We see scope for double digit EPS growth into FY22 & FY23.

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CBA – Earnings

Posted on | by Leon Hinde

Commonwealth Bank of posted a 21% fall in half-year net profit to $4.88bn in the six months through December from $6.16bn a year earlier. Cash earnings fell 11% to $3.89bn.

An interim dividend of A$1.50 a share, down 25% on year.

We remain cautious on the local banks following the strong run-up in share values.

Computershare – 1H21

Posted on | by Leon Hinde

Computershare is under Algo Engine buy conditions and we’re somewhat pleased to see the 1H21 earnings down less than originally forecast.

A fall of 8% on the same time last year is still hardly inspiring and we, therefore, remain concerned about the lack of growth drivers for the business.

CPU remains under review.

Downer EDI – Algo Buy

Posted on | by Leon Hinde

Downer EDI is now under Algo Engine buy conditions, following the entry signal at $5.15. The stock is now included in our ASX 100 model portfolio.

The company is making progress on its urban growth strategy and the divestments within the mining services sector are helping to sure up the balance sheet and de-risk the business outlook.

We see scope for double digit EPS growth into FY22 & FY23.

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Boral – 1H21 Earnings

Posted on | by Leon Hinde

Boral is under Algo Engine sell conditions.

Boral delivered EBITDA of $486 million in 1H21, down 1% vs the same time last year.

Better results in North America were offset by weaker performance in Australia. Net debt was reduced and no interim dividend.

The company did not provide guidance on earnings but did note improving housing demand in North America, offset by softer demand in Australia.