Finweek English Edition - - INVESTMENT -


HOLD UBS has up­dated its view on the in­dus­trial group and re­duced its 12-month price tar­get from R225/share to R211/share. An­a­lyst Kwame An­twi is­sued an up­date in which he told clients: “Im­pe­rial’s prof­itabil­ity is highly de­pen­dent on the ve­hi­cle mar­ket given that it de­rives 53% of its EBIT [earn­ings be­fore in­ter­est and taxes] from ve­hi­cle sales. South Africa’s eco­nomic fun­da­men­tals are de­te­ri­o­rat­ing. Con­sumer spend­ing is slow­ing and in­fla­tion is on an up­ward trend. For 2014, we ex­pect ve­hi­cle sales growth to mod­er­ate to 1.7%. Along­side the cycli­cal slow­down in ve­hi­cle sales, the fight for mar­ket share con­tin­ues to in­ten­sify. We ex­pect slow­ing con­sumer spend­ing growth and cost pres­sures to cre­ate earn­ings head­winds for Im­pe­rial’s lo­gis­tics busi­nesses.” we await de­tails be­fore go­ing be­yond a firm hold.”


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