Citi downgrades Australia's GUD Holdings after weak profit forecast

Amotiv

16/06/2022 23:26

** Citi Research downgrades GUD Holdings  GUD.AX  to
"neutral" from "buy" after the automotive parts maker on
Thursday provided a weaker-than-expected forecast update; lowers
PT by 36% to A$9.95 
    ** GUD now expects FY22 earnings before interest, taxes, and
amortization (EBITA) of A$147 mln ($103.59 mln), 7% below
midpoint of its previous forecast range of A$155 mln to A$160
mln and 10% below Factset consensus estimate of A$163 mln
 urn:newsml:reuters.com:*:nASXc1b08F
    ** Citi says downgrade reflects increased uncertainty
surrounding GUD's earnings recovery, which is primarily reliant
on supply from Original Equipment Manufacturer (OEM) normalising
    ** OEMs produce goods that are used as parts or components
of a product for a different co
    ** Citi Says OEM supply shortages are not likely to be
resolved anytime soon and are outside GUD's control
    ** Lowers GUD's FY22 and FY23 net profit after tax estimates
by 7% and 15%, respectively
    ** All seven analysts covering the stock rate it "buy" or
higher; their median PT is A$14.90 – Refinitiv data
    ** Stock down 15.5% this year, as of last close

    

($1 = 1.4190 Australian dollars)

 (Reporting by Harish Sridharan in Bengaluru)
 ((harish.sridharan@thomsonreuters.com))