Citi upbeat on Australia's PWR driven by growth in core sector

PWR Holdings

20/11/2024 23:31

** Citi bullish on Formula 1 auto parts supplier PWR
 PWH.AX  despite a loss of three EV programs and market slowdown
    ** However brokerage views strong growth in its core
Aerospace & Defence sector as attracting investment opportunity
    ** Upgrades to "buy" rating at a target price of A$9.45
    ** Says despite revenue uncertainties stock is trading at
~24x FY26e price to earnings ratio due to significant IP, strong
balance sheet and offshore growth potential
    ** Brokerage says the firm is nearing a significant defence
contract and maintaining auto original equipment
manufacturer(OEM) FY26-27 outlook buoyed by expected revenue
increase from the Ford program
    ** Citi cuts PWH's FY25-27 NPAT estimates by 9%-34% citing
lost OEM programs, a softer aftermarket outlook and higher
operating costs from recent hires
    ** Stock down 29.8% YTD as of the last close

 (Reporting by Kumar Tanishk in Bengaluru)
 ((Tanishk.Kumar@thomsonreuters.com))