Ord Minnett rates SNL as Upgrade to Buy from Accumulate (1) -...

Ord Minnettrates SNL asUpgrade to Buy from Accumulate(1) -

Market demand is robust and the outlook for Supply Network remains positive with strong activity in all regions, highlights Ord Minnett, following a trading update and upgraded FY23 guidance. The rating is upgraded to Buy from Accumulate.

An exceptionally strong 2H performance is expected by management, and the broker sees strong demand from commercial vehicle customers for parts. It's thought demand partly derives from ageing vehicle fleets and the increasing complexity of those vehicles.

Management guided to FY23 sales of $250m, 7% above the analyst's forecast, and noted growth “will remain above the long-term trend for at least the next year”.

The target rises to $15.40 from $12.90.

Target price is$15.40Current Price is$13.29Difference:$2.11
IfSNLmeets the Ord Minnett target it will return approximately16%(excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY23:

	Ord Minnett forecasts a full yearFY23dividend of45.00cents and EPS of64.20cents. At the last closing share price the estimated dividend yield is3.39%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is20.70.

Forecast for FY24:

	Ord Minnett forecasts a full yearFY24dividend of47.00cents and EPS of70.20cents. At the last closing share price the estimated dividend yield is3.54%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is18.93.