Can somebody provide an excerpt from their broker? I am on Etrade and they are saying that a more detailed report is to follow after the profit downgrade. I don't read too much into broker recommendations but that might set a cap around which the sp might fluctuate for some time.
FYI this is what ETrade/Aspect Huntley say:
Event 06-Jan-2009
LEI downgraded FY09 NPAT growth guidance from 15% in November to 8%. Revised NPAT is expected to be $650m, almost 10% below our estimates. LEI expects operating 1H09 NPAT of around $270m when it reports on February 12. This excludes the effect of investment write-downs which we flagged in our November research note.
Business Impact: Listed investment write-downs have been quantified for 1H09 and will reduce NPAT by another $170m, reflecting investments in Connect East, RiverCity Motorway, BrisConnections, Devine and Macmahon. Work in hand as at 1H09 was $37bn compared to $35.3bn at the end of 1Q09. The interim and full year dividends will be flat. Our short term earnings estimates are under review and will be updated shortly with a more extensive report. Downward revisions will follow. While short term challenges and macro factors are no real surprise, the lack of explanation behind the lower operating growth guidance is somewhat disappointing. LEI’s market statement was very vague and limited to CEO Wal King’s view of operating performance for the group continuing to be ‘strong with the exception of Leighton Properties’. We recently lowered our compound annual growth forecasts from 12% to 8% over the next five years, in turn lowering our valuation by 10% to $39.
Forecast Impact: --
Recommendation Impact: Our long term positive view remains unchanged and we maintain our Buy recommendation below $28, reflecting a fully franked revised dividend yield of around 5%. Full report to follow.
LEI Price at posting:
$21.54 Sentiment: Hold Disclosure: Held
