Burnett becareful of BBG next 24hrs this is just out on streettalk.
Billabong stock price needs a reality check: UBS
Embattled retailer Billabong may have agreed to revise the terms of its $325 million rescue package with the Altamont consortium to avoid interference from the Takeovers Panel, but UBS analyst Ben Gilbert reckons “the stock price is not reflecting reality.”
“Adjusting for divestment of Dakine, higher interest costs and dilution from the issue of options and redeemable preference shares, we estimate 2015 financial year earnings per shares would be about 90 per cent below our current forecast at 0.5¢ per share,” Gilbert wrote in a research note to clients on Thursday.
“This implies Billabong is currently trading on 115 times FY15 earnings,” he added.
The amendments made to the refinancing package increase the likelihood of a rival proposal, but “we see limited scope for upside to the current share price which we believe does not reflect the level existing shareholders are diluted by under the current proposal.”
