Just spewing thought's an numbers onto the page here...
If we look at H1 Underlying NPAT of $152m, then add 7% to guestimate the following half year (let's round down to $160m), that gives an annual NPAT of $312m. Let's take 17% (which from memory is what I had previously guestimated the NPAT component of the Chemist Warehouse contract was) off that to create a sort of underlying value to consider what NPAT would have looked like if the contract they lost was reflected throughout the year. That gives a new type of underlying NPAT of $259m which we can use in a super sloppy PE valuation to see if the share price is within buying range.
Based on the current share price of $36.32, that gives a super sloppy underlying PE (if I can even call it that) of 27 ($6,967m / $259m).
I feel that 27 is a little high considering that EBOS previously traded at around that anyway, which makes me wonder if there's potential for the share price to go sideways for a year. It really all depends on the next performance announcement and whether growth returns back to higher levels (after accounting for any drop from the loss of the Chemist Warehouse contract).
My gut feeling is that EBO is better buying at or below $35 a share for a longer term view, but more information from the next announcement will elucidate us about the direction of the company and therefore share price.
Just spewing thought's an numbers onto the page here...
If we look at H1 Underlying NPAT of $152m, then add 7% to guestimate the following half year (let's round down to $160m), that gives an annual NPAT of $312m. Let's take 17% (which from memory is what I had previously guestimated the NPAT component of the Chemist Warehouse contract was) off that to create a sort of underlying value to consider what NPAT would have looked like if the contract they lost was reflected throughout the year. That gives a new type of underlying NPAT of $259m which we can use in a super sloppy PE valuation to see if the share price is within buying range.
Based on the current share price of $36.32, that gives a super sloppy underlying PE (if I can even call it that) of 27 ($6,967m / $259m).
I feel that 27 is a little high considering that EBOS previously traded at around that anyway, which makes me wonder if there's potential for the share price to go sideways for a year. It really all depends on the next performance announcement and whether growth returns back to higher levels (after accounting for any drop from the loss of the Chemist Warehouse contract).
My gut feeling is that EBO is better buying at or below $35 a share for a longer term view, but more information from the next announcement will elucidate us about the direction of the company and therefore share price.