2009 Media Releases

June 30, 2009

Deutsche Bank initiates coverage of Bradken Limited

Deutsche Bank has initiated coverage of manufacturing and industrial product supplier Bradken Limited (ASX: BKN) with a Buy recommendation.

Research analyst Raymond Gonzalez initiated coverage with an AUD5.00 twelve month price target.

Mr Gonzalez said, “While BKN’s share price has increased substantially off its lows (AUD0.97 in March), the stock still offers compelling value. We believe BKN’s earnings outlook should improve and we expect the balance sheet to recover, underpinned by lower inventories and a strong AUD/USD rate.”

Deutsche Bank’s valuation of AUD5.00 per share implies a 2010E PER of 9x (pre-amortisation), which is well below its average one year forward PER of 13x since listing. “We believe the earnings outlook for the mining, consumables and rail divisions, which contribute more than half of the company’s gross margin, should improve along with rising coal and iron ore production” Mr Gonzalez said.

Bradken’s earnings are likely to have bottomed in the March quarter and BKN has responded by cutting costs. While Deutsche Bank believes the market expects cost cutting, it does not appear to be in consensus estimates.

BKN is a global supplier of consumable and capital products to the resources energy and freight rail industries. Founded in 1922, the company is the largest foundry operator in the Southern hemisphere and employs over 5,000 people covering Australia, New Zealand, the United Kingdom, China, USA, Canada, Poland, South Africa and Chile.

For further information, please contact

Michelle Chaperon (02) 8258 1311



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