BrokerCall, Thursday, 2 April 2009
MTS - METCASH LIMITED
BA-Merrill Lynch rates MTS as Upgrade to Buy from Underperform - As Woolworths ((WOW)) is distracted in continuing to kick and kick and kick Coles ((WES)) while it's down, Metcash has the opportunity to sneak past and make some inroads, the broker suggests.
The broker sees it only as about a 12-month window, however, given any revival in Coles will be at the direct expense of Metcash.
But the broker has increased forecast earnings by 2% and is prepared to go for a 12-month Buy on the stock - a big flip from the previous Underperform. Indeed the broker believes Metcash can outperform Woolies in the period.
Target rises from $3.90 to $4.40.
Target price is $4.40 Current Price is $3.99 Difference:$0.41 - (brackets indicate current price is over target). If MTS meets the BA-Merrill Lynch target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in April. BA-Merrill Lynch forecasts a full year FY09 dividend of 23.00 cents and EPS of 28.30 cents . At the last closing share price the estimated dividend yield is 5.76%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.10.
Market Sentiment: 0.1
The broker sees it only as about a 12-month window, however, given any revival in Coles will be at the direct expense of Metcash.
But the broker has increased forecast earnings by 2% and is prepared to go for a 12-month Buy on the stock - a big flip from the previous Underperform. Indeed the broker believes Metcash can outperform Woolies in the period.
Target rises from $3.90 to $4.40.
Target price is $4.40 Current Price is $3.99 Difference:$0.41 - (brackets indicate current price is over target). If MTS meets the BA-Merrill Lynch target it will return approximately 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in April. BA-Merrill Lynch forecasts a full year FY09 dividend of 23.00 cents and EPS of 28.30 cents . At the last closing share price the estimated dividend yield is 5.76%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.10.
Market Sentiment: 0.1
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