Subscriber S.D. asks:
“Any update on target price is with today’s earning warning?”
Our Quick Take:
On January 28, 2019, SNC-Lavalin (SNC.TO) crashed as much as –28%.
The reason for the decline was describe by SNC as “…Inter-governmental relations between Canada and Saudi Arabia, together with unpredictable commodity prices and uncertain client investment plans, have led to deterioration in our near-term prospects which we cannot ignore…(Tomesco, Frederic, “SNC Cuts Forecast as ‘Serious Problem’ Emerges in Mine Unit”. Bloomberg News. January 28, 2019. link.)”
Canaccord Genuity analyst Yuri Lynk says, “Saudi Arabia contributed about 11 percent of SNC’s total revenue in 2017…(Debroop Roy, Allison Lampert, Shailesh Kuber, and Richard Chang. “Canada's SNC-Lavalin cuts 2018 profit forecast on Saudi strain, shares dive”. Reuters. January 28, 2019. link.)
Ongoing controversies have dogged SNC-Lavalin for a while, from bribery scandals to poor “inter-governmental relations.” However, to address the issue of the impact to our 10-Year Targets for SNC-Lavalin we will defer to the work of Edson Gould. Continue reading