No-Moat Downer Shares Remain at a Premium to Fair Value Estimate; No Change in View
Since our last analyst note in September, no-moat Downer shares are little changed at AUD 6.95, a 40% premium to our unchanged AUD 5.00 fair value estimate. At the current share price, Downer’s fiscal 2018 metrics translate to an EV/EBITDA multiple of 7.5, more than 30% above the company’s 20-year average of 5.7 and 70% higher than the 10-year average of 4.4. Our AUD 5.00 fair value estimate, appreciated at WACC, equates to a fiscal 2022 EV/EBITDA of 6.5. The market anticipates some outsized ear...Downer EDI is engaged in providing services to customers which includes Transport Services; Technology and Communications Services; Utilities Services; Rail; Engineering, Construction and Maintenance; and Mining, in Australia and New Zealand and also in the Asia-Pacific region, South America and Southern Africa.
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