Downer EDI Ltd

DOW: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$3.58	Hwcz	Thxbnvj

No-Moat Downer’s Sell-Down of Mining Businesses Continues. No Change to AUD 6.00 FVE.

Mark Taylor

Jun 1, 2021

We make no change to our AUD 6.00 fair value estimate for no-moat Downer. The morphing urban services company has undertaken more noncore asset sales leading to 6.4% and 10.1% reductions in our fiscal 2021 and fiscal 2022 EPS forecasts to AUD 30.6 cents and AUD 40.0 cents, respectively. But the fair value impact of the earnings declines is countered by boosted cash levels from the asset sales. It should be noted the company still provides no earnings guidance for fiscal 2021 given uncertainty around coronavirus.

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