Downward revised profit of $57-$66m equals approx EPS of $0.19 Costa is looking like it is another cyclical type company, rather than a stalwart earnings grower. The market will consistently pay up in PE multiple terms for a stalwart earnings grower (think CSL) but not a cyclical performer.
Price still looks over valued to me. At approx $4.00 PE is still higher than 20.
On a ROE valuation: $0.19/$1.40 book value equals ROE of 13% Ok but nothing great. Hard to justify a share price to book value multiple of 2.85 against an ROE of 13%.
I am happy to sit on the sidelines and watch.
Around $3 I will become more interested.
CGC Price at posting:
$3.91 Sentiment: None Disclosure: Not Held
