QUBE Holdings (QUB) - Bulking up

Qube Holdings Limited (QUB) is a provider of import and export logistics services. The operating division comprises two business units: Qube Logistics and Infrastructure and Qube Ports and Bulk.

‍

The company reported FY24 earnings consistent with the prior guidance range, equivalent to 13% growth year-on-year. The outlook statement confirms our view that operating momentum is broadly positive into FY25. The outlook is supported by volume growth in many customer segments, follow-on earnings from recent capital expenditure, a likely improved agricultural market and contributions from acquisition contributions.

‍

Group returns have improved materially since FY21. Elevated capital expenditure guidance indicates another year of expansion, contrary to many sector participants, which further entrenches Qube’s market share across verticals.

‍

Our FY25 EPS forecasts have increased by 4%. Our target price rises to$4.01 per share, and we maintain an Accumulate recommendation.

‍