JSE LTD

Finweek English Edition - - INVESTMENT -

HOLD

HOLD SBG Se­cu­ri­ties has a 12-month price tar­get of R75/ share on the South African bourse op­er­a­tor. This has been low­ered from R78/ share as the bro­ker­age ex­pects weaker f inan­cial re­sults when the group re­ports shortly. SBG ad­vised: “[The] JSE’s 11.1 times for ward earn­ings mul­ti­ple and prospect for a higher pay­out ra­tio go­ing for­ward make for com­pelling read­ing, par­tic­u­larly when faced with high mul­ti­ples in a num­ber of other f inan­cials. Un­for­tu­nately, the con­tin­ued un­cer­tainty on the out­look for the rev­enue model means that we re­main hes­i­tant to be overly ag­gres­sive on our val­u­a­tion.” projects like the Gau­train, the Gor­gon Pioneer ma­te­rial off load­ing fa­cil­ity in Aus­tralia and the Dubai In­ter­na­tional Air­port. The sec­tor as a whole also has a num­ber of con­cerns about Com­pe­ti­tion Com­mis­sion-re­lated is­sues that con­tinue to weigh on its op­er­a­tions. In a note to clients, an­a­lyst Si­bonginkosi Nyanga wrote: “The most re­cent f inan­cial re­sults from Mur­ray & Roberts, Group Five, WBHO and a t rad­ing state­ment from Aveng, show a sec­tor that’s re­cov­er­ing steadily but is re­ly­ing on rel­a­tively small and low-mar­gin projects. The f un­da­men­tal im­prove­ment in the f inan­cial per­for­mance sup­ports a pos­i­tive in­vest­ment the­sis but we main­tain a wait-and-see at­ti­tude on M& R as the group still has to sort out its chal­leng­ing projects and dis­puted pay­ments.”

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