Transfield's investor day focused on energy and the broker is confident of growth opportunities. The company is over-geared but this should be manageable, and the broker does not expect a capital raising. On 7x FY15 forecast earnings, a 30% discount to peers, TSE is looking attractive. But the turnaround will take time, and debt remains a concern, hence the broker is sticking to Neutral.
Target unchanged at $1.27.
Target price is $1.27 Current Price is $0.98 Difference:$0.29 - (brackets indicate current price is over target). If TSE meets the Citi target it will return approximately 30% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Citi forecasts a full year FY14 dividend of 0.00 cents and EPS of 13.20 cents .
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.42.
