Citigroup stated that due to the downward adjustment in retail LFL assumptions in Asia (especially in Hong Kong) and Europe, the operating earnings forecast was down by around 2% in the second half of the year. The target price was cut from $66 to $62. The rating was maintained at Buy, mainly due to the better earnings prospect in 2015 and 2016, upside potential of Miu Miu and vigorous financial condition of the group.
CLSA lowers Beijing Ent Water (00371) to HK$6 CLSA cut its target price for Beijing Enterprises Water (BEW)(00371) by 8% to HK$6, and reiterated its "buy" rating. The research house said BEW's share price has dropped 14% in the last two trading days. First, the 2017 earnings results are below expectations. Second, management is guiding for 20-25% net profit growth for 2018, versus 30% in the past few years. Management now has a cautious approach to water PPP (public-private partnership) projects, which is not necessarily bad. CLSA cut its 2018-19 earnings forecasts by 19%. At the current level, it believes many of the negatives are already priced-in.
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