latest ratings

UBS 07/10/2009 1 Buy $8.60 15.4%
UBS sees the company’s US review results as a “mix of positives and negatives” with an extra $110m in investment in pallet quality, which is expected to impact CHEP’s profitability over the next three years, the analysts say.

As for positives, the broker says management guidance for around 25% EBIT margin is conservative, with better pallets predicted to allow for faster market penetration.

Near term earnings forecasts have been cut by 6% in FY10 and FY11 due to the pallet costs and the stronger AUD.

Target falls 30c to $8.90.

Credit Suisse 06/10/2009 5 Underperform $7.00 - 6.0%
The broker notes the results for the company's review of its CHEP USA operations will soon be announced and it suggests the best long-term outcome would be to speed up the introduction of new technology to differentiate its pallet pool from competitors.

It also suggests such differentiation is more likely to be acceptable to customers, as simply splitting the pool into high and low quality pallets would add costs and thus would be unlikely to be as acceptable to customers.

Leading into the review results the broker retains its Underperform rating and $7.00 price target.