HRL Holdings' recent FY20 result was slightly ahead of recent guidance and Morgans forecast.
The broker highlights operating cashflow as the standout metric, which reflected the benefits of strong debtor collection, accelerated payments from government customers and utilisation of covid-19 tax deferral relief.
As expected the company did not provide FY21 guidance, but the broker expects this may be given at the October AGM.
Morgans advises investors to look through a potentially challenging FY21 and believes patience will be rewarded as strong growth returns from FY22 onwards.
Add rating is maintained. Target is raised to $0.15 from $0.14.
Sector: Commercial & Professional Services.
Target price is $0.15.Current Price is $0.11. Difference: $0.04 - (brackets indicate current price is over target). If HRL meets the Morgans target it will return approximately 27% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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