abn bullish on brambles ABN Turns Even More Bullish On...

abn bullish on brambles ABN Turns Even More Bullish On Brambles
December 06 2005 - Australasian Investment Review

Following a meeting with company management ABN Amro Morgans has retained its Buy rating on Brambles (BIL), while lifting its target price to $11.30 from $11.10.

The broker came away form the meeting with the view CHEP is not just a revenue growth story, as substantial cost efficiencies are also achievable through the Perfect Plant program.

On the broker’s forecasts a successful global rollout of the program could achieve synergies of $139m over the next five years as costs are removed.

As a result the broker has lifted its earnings forecasts in FY06 by 1% and in FY07 by 2%, but the benefits accelerate in FY08 resulting in a 4% increase in estimates.

The higher earnings forecasts have led the broker to lift its valuation on the stock to $11.30 from $10.10.

In the FN Arena database of Australia’s leading stockbrokers and equity researchers there are seven Buy ratings for Brambles and two Hold ratings. CSFB, who’s the advisor on the sale of assets, has temporarily suspended its rating.

The last sale price for BIL was $9.99.