Citi raises PT on Australia's McMillan Shakespeare, retains 'buy' rating

McMillan Shakespeare

20/02/2024 20:55

** Citi retains "buy" rating on leasing services provider
McMillan Shakespeare  MMS.AX , raises price target to A$21.80
from A$19.50
    ** Brokerage sees a continued runway for November volume
growth ahead
    ** While the recent South Australia government contract loss
will impact GRS EBITDA margins in FY25, analysts see potential
to maintain margins in the mid-40s over the medium-term
    ** Sees potential as MMS benefits from higher yields as well
as operating leverage from vol. growth and productivity benefits
from Simply Stronger program
    ** We expect further growth in yields in FY25 before lower
priced EVs put a limit on yield upside - Citi
    ** Stock ended 2.1% higher on Tuesday 
    ** Five of six analysts rate the stock "buy" or higher, one
"hold"; their median PT is A$20.0 – LSEG data
    ** Stock up ~22% YTD

 (Reporting by Neha Soni in Bengaluru)
 ((Neha.Soni@thomsonreuters.com))