Emeco Holdings' FY21 Operating earnings (EBITDA) met the upper end of guidance. Solid operating cashflow was a highlight versus some lacklustre conversion in recent years, points out Morgans. The Add rating is unchanged and the target rises to $1.50 from $1.32.

A 1.25 cent fully franked dividend was declared and a $4m buyback is indicative of balance sheet strength, thinks the analyst. It's believed a 4%-4.3% dividend yield can be sustained while still slowly de-leveraging.

Morgans believes the company has reached an inflection point after slower-than-expected de-gearing in recent years, which has likely frustrated investors.

Sector: Capital Goods.

Target price is $1.50.Current Price is $1.23. Difference: $0.27 - (brackets indicate current price is over target). If EHL meets the Morgans target it will return approximately 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2021 Acquisdata Pty Ltd., source FN Arena