Citi upgrades Australia's Viva Leisure to 'buy' on core business strength

Viva Leisure

15/12/2022 03:46

** Citi upgrades rating on Australia's Viva Leisure  VVA.AX 
to 'buy' from 'neutral,' as it sees the health club operator's
core business to have stronger momentum than previously expected
    ** Viva Leisure, earlier this week, said EBITDA
(post-AASB16) for FY23 is expected to be between A$64.5 million
and A$66.5 million, higher than Citi had expected 
    ** Brokerage upgrades its FY23 to FY25 net profit after tax
(NPAT) estimates for VVA citing higher-than-expected post-AASB16
EBITDA
    ** Citi also views VVA's FY23 revenue guidance of A$137
million to A$140 million as "somewhat conservative" as its
members and locations continue to grow
    ** Citi raises price target to A$1.46 from A$1.39, says
VVA's current share price is "weaker" 
    ** As of 0341 GMT, Viva Leisure up 0.4% at A$1.18
    ** Stock down 46.6% YTD, as of last close 
 (Reporting by Harshita Swaminathan)
 ((Harshita.Swaminathan@thomsonreuters.com))