Via the AFR:
Analysts have downgraded the share price of McGrath to as low as 25¢, a far cry from its $2.10 listing price, after a shocking week in which the real estate agent issued another profit warning and lost its chief executive and board.
Bell Potter, which helped float McGrath alongside JP Morgan, backflipped on the buy or hold recommendation it has maintained since the December 2015 float, and has now advised clients to “sell”. The stock fell to 51¢ from 58¢ since the latest downgrade and Bell Potter now expects it to fall to 45¢.
In a harsher note, Shaw Partners said McGrath management had “zero credibility” and in a note to clients titled Titanic downgraded its price expectation for the stock to a low 25¢.
Bell Potter advised clients that it had lost confidence in McGrath’s ability to “forecast earnings” and “materially downgraded” earnings forecasts for the next three years, predicting a loss in the 2018 fiscal year.
“Our 2018 earnings before interest, tax, depreciation and amortisation (EBITDA) forecast is below the company guidance given the implied large earnings skew to the second half,” Bell Potter’s note says.
In response the stock is up 7%. It appears the analysts are some of the few around with less credibility than McGrathmaggedon himself. Not surprising given it was Bell Potter that put the $2.30 valuation on it in the first place.
