Market heavyweight WDS has declined almost 22% year-to-date, but yesterday’s begrudging 1c retreat suggests some buying has resurfaced into the current weakness. We expect WDS will continue to payout 80% of profits, implying an FY24 div yield of over 8%, but falling toward 5% by FY26 with capex bills on the horizon. Hence, we don’t see it as the exciting yield play as looking at the “now,” would suggest. We see no compelling reason to buy WDS at current levels, but a washout on the downside would improve the risk/return.
- We can see WDS trading between $23 and $27 over the coming 3-6 months.
MM likes WDS around $23
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