CIMB Securities rates as Outperform (1) - Boom has confirmed it will not meet FY13 guidance, affected by weather and customers deferring maintenance activity. Moreover, the company has refrained from providing replacement guidance, as visibility for the busy months of May and June is so clouded.
CIMB notes these factors are not exclusive to Boom and has cut FY13-14 earnings forecasts by 36-55% in light of ongoing headwinds in the coal sector, to which about 45% of the business is exposed.
Sector-wide problems may contribute, but with the share price trading at a 70% discount to book, the broker thinks corporate activity is an increasing possibility. The Outperform rating is maintained and the price target is reduced to 27c from 53c.
BOL Price at posting:
14.5¢ Sentiment: Buy Disclosure: Held
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