EHL

Emeco has a reiterated Buy, High Risk recommendation and a share price target of $2.45 from sharemarket analyst Citi Investment Research. The stock has been sold off aggressively over the past week, and they believe this is due mainly to profit downgrades by other brokers. However they can find no reason to change our forecasts or view on the stock and there is no downgrade message coming from the company. Reasons for the other broker's downgrades include contract losses, weaker demand and freeing up equipment supply. The contract losses relate to the supply of gear to Rio Tinto in SE Qld where coal production is set to be cut due to lower demand from Tarong power station because of the drought. Emeco currently has 28 machines at the site, of which only 8-9 will be needed if the cut backs occur. To put this in context, Emeco has 1,000 machines in its rental pool. Given the typical 90-day warning on equipment returns, there is no impact on FY07E, and there is time/opportunity to redeploy the gear, probably at better margins (if it rains the gear may stay put). There has been negative news from the Coates Hire-owned Allied. This business is a poor cousin to Emeco, both in terms of quality of clients and state of the fleet equipment. As such, any read on the market is very specific to Allied. Furthermore it is bound to be suffering from the ongoing tight supply of tyres. Emeco is protected by its long term supply agreements with Goodyear, whereas Allied has always relied on the spot market.

Emeco Holdings (EHL) has a Buy 2 broker call and a share price target of $2.30 from sharemarket analyst UBS. The analyst has observed that the business continues to perform well: At both the interim result and a recent presentation the group has indicated that the business continues to perform well. In the first half EHL generated EBITA growth of 54%. To meet prospectus forecasts requires growth in the second half of 33%. The analyst believes that EHL will comfortably meet its forecasts. Capex Remains High: In the first half the group spent $150m on equipment (inc a $9.7m acquisition), with commitments to spend a further $93m. The analyst suspects that captial expenditure for the fiscal year will approximate $300m, of which half will make a negligible contribution to earnings in fiscal 2007 due to deployment lags. Balance Sheet Sound: At 31/12/06 gearing was 48%. The analyst believes that the company could comfortably spend $300m in both 2007 and 2008 without stretching the balance sheet. They value Emeco Holdings (EHL) on a DCF basis at$2.20-2.40 per share. Our share price target is in the middle of this range.

Emeco (EHL) have a Buy 2 shares recommendation and a share price target of $2.30 from stock analyst UBS. Emeco has made a small European acquisition announcing the purchase of Euro Machinery and Euro Rental for e6.4m, of which e2.0m will be satisfied by scrip with the remainder paid in cash. The two businesses are involved in heavy equipment trading and rental respectively. A year ago EHL opened a procurement facility in Rotterdam. Todays' acquisition gives the group a vertically integrated procurement, trading and rental business in central Europe which we suspect can be grown rather quickly. While the impact on near term earnings is likely to be negligible we believe that this creates a sensible base for expanding into Europe. A previous Emeco (EHL) stock recommendation.

Emeco Holdings (EHL) has a maintained Buy High Risk stock (1H) stock recommendation and a share price target of $2.32 from stock analysts Citigroup Investment Research (CIR). They consider the mix of strong demand, tight market conditions and "plenty of fire power" to underpin Emeco's strong growth story. The AGM had a positive tone according to CIR, with the company citing strong demand across all regions with plenty of opportunities for growth and continued tight supply of equipment which is a positive for the company's rental model.

UBS has initiated coverage over the Emeco (EHL) stock with a Buy 2 recommendation with a share price target of $2.30. The broker expects demand to be strong over the next few years as mining capacity is expanded and new equipment is in short supply. Emeco is the largest player in Australia, Indonesia and Canada in the market for renting earthmoving equipment into the mining and civil construction industries. Emeco primarily focuses on renting used equipment into the mining industry. The stockbroker has a valuation of $2.20-$2.40 on the EHL stock.