While Brickworks is facing near-term earnings weakness investors should turn their focus to the longer term potential of its property business and investments, Citi analyst Suraj Nebhani says. “BKW provides a unique exposure to landbank in a market where industrial assets continue to be in strong demand, while approved and serviced industrial land continues to be in short supply,” he says in a note, lifting Citi’s target on the stock to A$28.75 from A$28.50. The company has historically been a consistent performer and its gearing remains at a comfortable 18%, says Nebhani. Brickworks is now focused on maximizing returns and reducing capital intensity, he says. “We therefore retain our Buy rating.” Brickworks last traded at A$24.07, after shedding 6.4% Thursday on a fall in annual earnings. ([email protected]; @RhiannonHoyle)
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