UBS cuts PT, forecast for Australia's Costa Group on citrus crop quality issues

Costa group

13/07/2022 02:42

** UBS cuts PT on Australia's horticulture firm Costa Group
Holdings  CGC.AX  to A$2.85 from A$3.35 after it flagged quality
issues with its citrus crop
    ** CGC on Monday said "some quality issues" were found in
its citrus crop due to weather events, impacting its pack out
rates this year (https://bit.ly/3yEPWTg)
    ** UBS cuts earnings per share (EPS) forecast to A$0.14 from
A$0.17 for fiscal 2022 and to A$0.18 from A$0.21 for fiscal 2023
    ** Says EPS cuts reflect lower Citrus and Morocco blueberry
earnings outcomes
    ** Brokerage adds it expects volume growth in China
blueberries "more than offsetting weak pricing" for Morocco
blueberries
    ** Expects CGC's 2022 underlying earnings to be A$260
million, about 20% higher than last year (https://bit.ly/3z0Gkng)
    ** "Attracted to Costa's leading position within the
Australian, Moroccan and Chinese horticulture markets" - UBS
    ** CGC has lost about 11% since its close on Friday, making
this its worst week since late-May
    ** Nine of 13 analysts rate stock "buy" or higher, three
"hold" and one "sell"; their median PT is A$3.42 – Refinitiv
data

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