Morgans rates NXT as Add (1) - The company has completed its third round of senior unsecured bonds, raising $300m at 6.625%. The funds will be used to extinguish $160m in existing notes, leaving additional capacity to fund growth.
Morgans takes the opportunity to roll through the larger debt position and lower its weighted average cost of capital estimate. Add rating retained. Target rises to $5.01 from $4.25.
Target price is $5.01 Current Price is $4.44 Difference: $0.57 If NXT meets the Morgans target it will return approximately 13% (excluding dividends, fees and charges). Current consensus price target is $4.68, suggesting upside of 5.4%(ex-dividends)The company's fiscal year ends in June.
Forecast for FY17:
Morgans forecasts a full year FY17 dividend of 0.00 cents and EPS of 5.20 cents .At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 85.38. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 5.8, implying annual growth of N/A.Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.Current consensus EPS estimate suggests the PER is 76.6.
Forecast for FY18:
Morgans forecasts a full year FY18 dividend of 0.00 cents and EPS of 4.80 cents .At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 92.50. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 4.7, implying annual growth of -19.0%.Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.Current consensus EPS estimate suggests the PER is 94.5.
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Decrease in earnings from FY17 to FY18 is due to NXT starting to pay tax.
NXT Price at posting:
$4.46 Sentiment: Hold Disclosure: Held
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