Citi raises PT on Aussie auto parts firm GUD on sale of water systems unit

Amotiv

09/08/2023 23:18

** Analysts at Citi hike price target on Australian
automotive parts supplier GUD Holdings Ltd  GUD.AX  to A$12.79
from A$12.69, retains "buy" rating
    ** GUD earlier this week announced sale of its water systems
unit, Davey Water Products, to water treatment and solutions
provider Waterco Ltd  WAT.AX  for total enterprise value of
A$64.9 mln ($42.37 mln)
    ** Davey contributed ~15% to GUD's FY22 revenue of A$835.5
mln, with the rest being brought by its two automotive units
    ** Brokerage says divestment makes GUD a pure-play
automotive parts supplier firm; expects sale to improve group
EBITA margin up ~100 basis points
    ** Citi says sale positions GUD to make further auto
acquisitions in the medium term
    ** It trims FY24 core net profit view by 3.3% to A$132.7
mln, and by 4.3% to A$141.5 mln for FY25, compared with A$89 mln
in FY22
    ** Nine of 10 analysts rate GUD "buy" or higher, and one
"hold"; their median PT is A$11.80 – Refinitiv data



($1 = 1.5319 Australian dollars)

 (Reporting by Sameer Manekar in Bengaluru)
 ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))