Few companies stand to benefit more from the FIFA World Cup 2010 in South Africa than SABMiller. But, that’s not the only reason why the medium-term future of the company is bright. Look at this view:

Andrew Miller, regional head of Barclays Wealth in the UK, was quoted today as saying: “We are upgrading our recommendation for SABMiller to outperform and raising our fair value estimate to 1440p, which is now based on calendar 2009 forecasts.” 

“We have only modestly raised our forecasts for the current year (<1%) on favourable currency movements,” he added.

“We expect the next two quarterly trading statements to reveal only moderate volume growth and margins may be impacted by cost pressures in 2008/09.

“But we believe the outlook for 2009/10 is very positive, when we should see the initial cost savings from the Miller/Molson Coors merger, the benefits from investment in Latin America, increased market share in South Africa and improved profits due to increased pricing in China.

“We discount any additional benefits from favourable currency movements, but we forecast that SABMiller could deliver annual earnings growth in mid to high teens over the next three years. Our revised fair value estimate is equivalent to a P/E ratio of 15.7 times calendar 2009 forecasts,” said Miller.

Tags: SABMiller

Trackback URI | Comments RSS