Morningstar trims APM Human Services' earnings forecast, says takeover unlikely

APM Human Services International

08/04/2024 20:36

** Morningstar cuts its fair value estimate for "no-moat"
APM Human Services  APM.AX  to A$2 from A$2.40, while trimming
earnings forecast
    ** Brokerage cuts near-term earnings before tax forecasts
for health and human services provider by 18% on average over
next two years, citing lower unemployment rates
    ** Morningstar trimmed long-term gross margin forecast to
28% from 29% 
    ** Brokerage believes there is "zero probability" of APM's
takeover by its largest shareholder Madison Dearborn Partners
(MDP); says shareholder-recommendation will be a challenge as it
sees offer as "disappointing"
    ** MDP offered to buy all remaining APM shares at A$1.40/
shr
    ** APM said it is still evaluating offer
    ** Company board unanimously rejected CVC Asia's offer of
A$1.60 cash/shr on Feb. 19
    ** APM shares up 33.1% YTD, as of last close

 (Reporting by Adwitiya Srivastava in Bengaluru)
 ((Adwitiya.Srivastava@thomsonreuters.com;))