November 19, 2018 (MLN): Foundation Securities has revised down its FY19/20 EPS for LUCK, by 9.4% due to FX rate and result update. Furthermore, the target price (TP) estimate for December 2019 has been lowered by 7%.
In line with market expectations, LUCK has been removed by (Morgan Stanley Capital International) MSCI from Pakistan’s large cap index and placed in the small cap index.
As per an official research report written by M. Arsalan Siddiqui, Analyst at Foundation Securities, “The fundamentals remained intact with diversification drive to lead the company to lower risk profile and earnings growth.”
The report pointed out that in LUCK’s ongoing projects, recent currency devaluation would bode positively for Power while KIA business is revised downward due to macro slowdown. “We have BUY stance on the stock with Dec 2019 Target Price (TP) of Rs.600.7 per share,” stated the report.
Elaborating his take on the impact of currency devaluation on power earnings, Mr. Siddiqui told Mettis Link News that as per their evaluation, the project is likely to increase LUCK’s earnings by Rs.34.7 to 37.4 per share, with December 2019 TP impact of Rs.93.8 per share.
Mr. Arsalan Siddiqui went on to highlight that North expansion and exports from south would keep volumes elevated.
“We have an outperformance stance on the stock due to its diversification drive that would contribute to its future earnings growth,” concluded that narrative.
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