Forum Archive Index - January 2001

["Mike Hudson" <mikehudson@clear.net.nz>]

Just arrived in my in box, Obviously these folk have not had the benefit of a camping holiday on the Coast.

 

Tranz Rail Holdings… Recommendation Upgrade and earnings forecast update Our medium-term market outlook is softer than previously expected, and the operating costs of TRH are likely to be higher due to an expansion in the fast ferry business and higher than expected fuel costs and casualties & insurance charges… The combined impact of the revenue downgrades and higher operating costs reduces our revised NPAT by 30% in FY01 to $32.3m; 23% in FY02 to $49.8m; and 22% in FY03 to $53.9m… Our DCF valuation of TRH is $4.20, of which $0.40 is attributed to our valuation of the potential contribution to TRH from the demise of Top Cat… Although the stock is unlikely to trade at its valuation level in the near-term, its relative attractiveness has improved recently. With corporate activity having the potential to surprise the market on the upside, we have upgraded our recommendation from HOLD to ADD. (Source: Dennis M Lee, Analyst, ABN AMRO NZ)