I'm in the same boat but relatively confident they will meet their EBIT guidance given the updated guidance took in results up to Aug 21 (how wrong could they be with only a bit over a month of business left?).
I'm thinking surprises could come from at least these two factors:
1. Interest costs. It will be "interesting" to see how the increase in rates over the course of the full year. I note there guidance focused on EBIT as opposed to NPAT. Could be a negative surprise here IMO. 2. Deferred tax assets. ELD still has some residual losses that they can offset against taxable income. Will they pull the trigger to make NPAT look better? Potential positive surprise here - maybe not enough to see the shorters burn but who knows?
There could be more. The second half dividend may be disappointing. I was expecting another 23cps some time ago but that might be asking a bit much given how the year has gone (agree with the comments @dabozza noted in his post).
I see better times ahead for ELD. It just seems as if the industry has copped the perfect storm this year in terms of coming off a period of good rains and into El Nino; dropping commodity prices; reduced meat processing capacity impacting sales throughput and pricing; rising interest rates; and a generally weakened global economy post covid.
All of these things can turn, and likely will in the coming years. In the background ELD has been making their incremental bolt-on additions which in theory, are growing the business if not the share price....
That's my two cents worth...
GLTAH
ELD Price at posting:
$6.25 Sentiment: Hold Disclosure: Held
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