The slight pullback in FY19 revenue guidance (from $1.9b to a range of $1.8-1.9b) does not detract from the strong outlook. ASB has a record order book, excellent visibility, and a margin that is being aided by a turnaround in the Australasian segment and a growing level of sustainment work. However, from a valuation perspective we believe ASB is currently trading on fair multiples compared to peers, and despite strong share price momentum, believe a HOLD call (prior BUY) is now appropriate. This recommendation is on valuation grounds and would require review if our forecasts prove to be conservative. At this point our earnings forecasts and blended valuation of $2.55 are unchanged.
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