Rating

NEC - NINE ENTERTAINMENT CO. HOLDINGS LIMITED

Macquarie rates NEC as Upgrade to Outperform from Neutral (1) - Macquarie believes improved early-season ratings set a good platform for monetisation, offsetting headwinds in the industry.

The broker expects underlying cash conversion will be weak over the next few years but this is offset by other working capital adjustments and the sale of Willoughby.

A high percentage of earnings is still expected to be distributed to shareholders via dividends. Rating is upgraded to Outperform from Neutral. Target rises to $1.25 from $1.10.
Target price is $1.25 Current Price is $1.00 Difference: $0.245 If NEC meets the Macquarie target it will return approximately 24% (excluding dividends, fees and charges). Current consensus price target is $1.08, suggesting upside of 7.5%(ex-dividends)The company's fiscal year ends in June.
Forecast for FY17:
Macquarie forecasts a full year FY17 dividend of 8.80 cents and EPS of 11.00 cents .At the last closing share price the estimated dividend yield is 8.76%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.14. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 11.8, implying annual growth of -68.0%.Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 10.0%.Current consensus EPS estimate suggests the PER is 8.5.Forecast for FY18:
Macquarie forecasts a full year FY18 dividend of 9.50 cents and EPS of 11.80 cents .At the last closing share price the estimated dividend yield is 9.45%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.52. How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 10.9, implying annual growth of -7.6%.Current consensus DPS estimate is 9.6, implying a prospective dividend yield of 9.6%.Current consensus EPS estimate suggests the PER is 9.2.
Market Sentiment: 0.2All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources