Johns Lyng shares extend losses as analysts slash price targets
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The news: Johns Lyng shares tumbled after the building services provider's softer-than-expected first-half result led to downgrades by analysts.
The numbers: The company's shares were down 9.7% to $2.56 at 2:30pm AEDT. They plunged 33.4% on Tuesday following the release of its half-year result but rallied in the following two sessions.
Analysts have made the following changes to their price targets:
- Morgans: Down 47.1% to $2.70
- Citi: Down 31.6% to $2.70
- Morgan Stanley: Down 26.1% to $3.40
Morningstar also reduced its fair value estimate on the stock by 4% to $4.30.
The context: Morgans said the result was "much softer than expected" and highlighted challenges and uncertainty around its core insurance building and restoration services division.
Citi analysts noted that there are headwinds outside of Johns Lyng's control, such as weather and the timing of work commencing.
Yet despite downgrading its fair value estimate, Morningstar said the company is "structurally sound" and that earnings can be volatile given its significant exposure to natural disasters.
The sources: Morgans research, Citi research, Morgan Stanley
