bby - research note

Research Summary
CPB is one of the largest and most competitive commercial laboratory groups in the world, providing a broad range of inspection and analytical testing services in the minerals, metallurgical, coal, environmental, food, pharmaceutical and industrial markets. CPB’s solid and scalable businesses have consistently generated excess returns for shareholders. We expect that CPB will continue to grow its businesses through both organic growth and new acquisitions.
However, with the stock trading at 15.3x estimated FY2013 EPS or a 30% premium against the market, we believe most of these positive factors have been priced in while some negative factors have been ignored. We initiate coverage of CPB with three reasons to sell. Our 12 month target price of A$55/sh represents a FY13 PE of 14.8x.