Jefferies cuts PT on Australia's Costa Group after bleak annual outlook

Costa group

28/08/2023 22:06

** Analysts at Jefferies cut price target on horticulture
firm Costa Group Holdings  CGC.AX  to A$2.85 from A$3.15,
retains "hold" rating
    ** CGC last week flagged a hit to its 1H23 results on weak
outlook for later season quality across its citrus category
    ** CGC postponed the announcement of its 1H23 results by
almost a week to Aug 31; shares fell 10.8% after the
announcement on Aug 24
    ** Jefferies says it is cautious over CGC's A$1.39 bln
($893.35 mln) potential takeover by private equity Paine
Schwartz Partners (PSP), which is currently undertaking due
diligence
    ** Brokerage does not expect the bleak outlook to impact the
takeover, but says a negotiated higher price now seems unlikely
    ** Brokerage cuts its operating earnings estimates for FY23
by 20%, and by 2% for FY24 and FY25 each
    ** One of 11 analysts rate CGC "buy", nine "hold", and one
"sell"; their median PT is A$2.85 – Refinitiv data
    

($1 = 1.5559 Australian dollars)

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