Is This As Good As It Gets For CSR?
Morgan Stanley's James Rutledge downgraded Australia building materials and steel company CSR Limited/CSR Limited (ADR) (ASX: CSR) (OTC: CSRLY) from Equal-Weight to Underweight while increasing the company's price objective from $2.87 to $3.15. The analyst rating change came in response to the forecasted "declining group earnings post 2QFY16 results."
Rutledge worries that a weakening housing market, competitive threats and aluminum market downgrades "will likely further a reduction in FY18 earnings." Additionally, the analyst does not think cutting Australian interest rates will do much to help as the company's "high positive correlation with the Australian Dollar [...] limits support in a rate cutting environment."
Despite downgrading and a new price target, Morgan Stanley did not adjust revenue or EPS estimates.
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