IPL – Reports May 20th

Incitec Pivot reports 1H19 earnings on Monday the 20th of May. We’re expecting the result to disappoint the market and we place our readers on alert.

Queensland floods and plant disruptions will offset any benefit from higher fertilizer prices. If the earnings release is as negative as we forecast, we feel that a buying opportunity will present soon after the announcement. 

We see the FY19 issues largely as one-off in nature and there will likely be an opportunity to profit from a recovery in the back-half of 2019. 

Keep this one in your diary and look out for next week’s update on the blog. We’ll identify the entry level, post the result.




IPL – Opportunity Ahead

Incitec Pivot is under Algo Engine buy conditions and is a current holding in the ASX 100 model.

The FY19 earnings of IPL will be impacted by the Queensland floods and we’ll see the numbers revealed in the coming weeks. There’s a chance the impact will be greater than current consensus, which may result in short term selling. If this occurs and an opportunity to buy IPL sub $3.00 eventuates, we would consider this a “high conviction” accumulation play.

Add IPL to your watch list.




Buy IPL $3.00 – $3.20 Range

IPL is under Algo Engine buy conditions following the higher low formation at $3.20.

The stock price has been sold off following concerns around the impact of the Queensland floods. In particular, the short term closure of the Phosphate Hill plant and the impact to rail transport.

With the stock now trading 10x FY20 earnings we see much of the downside risks, already priced in.

Accumulate  IPL between $3.00 and $3.20



Incitec Pivot – Long Term Value

Incitec Pivot, (IPL) is under Algo Engine buy conditions and despite the earnings impact from the North Queensland floods, we see value for patient investors.

Heavy rainfall in North Queensland has resulted in the shutdown of Incitec Pivot’s Phosphate Hill plant, (closure of the rail line between Townsville and Phosphate Hill).


IPL – Take Profits Or Sell Call Options

In mid-2017, our Algo Engine generated a buy signal in IPL and more recently we reaffirmed the entry into IPL when the stock looked to be finding support near $3.40 range. 

Since then, IPL has rallied 8% and is now closing in on our $3.70 price target. The short term momentum indicators are also now approaching an overbought range. 

IPL goes ex div 5 cents on the 23rd of November. Selling $3.70 September  call options will add an additional 11 cents of income per share.


Buy IPL – Support at $3.40

We suggest accumulating IPL  shares at current levels following the recent Algo Engine buy signal at $3.30.

The stock is a current holding within the ASX 50 model portfolio.

This week IPL announced the mitigation to a recent a contract loss, through a new contract with Fortescue.

IPL stated that the FMG contract would mitigate ~50% of the financial impact associated with previously announced contract losses in Western Australia.

We forecast FY19 EPS growth of 10%, placing the stock on a forward yield of 4.3%.


IPL – Algo Buy Signal

Our Algo Engine generated a  buy signal recently in IPL and the stock is currently held in the ASX top 50 model.

The stock price has pulled back to form a “higher low” at $3.30 and we see forward earnings surprising to the upside, due to the finalization of the Gibson Island gas agreements and the recent recovery in global nitrogen prices. 

IPL is also set to recommence a $300m share buyback.

Incitec Pivot


IPL Reports 1H18 – Take Profits Now

IPL reports 1H18 earnings  on 9 May.

A key focus in the upcoming result will be the production performance at key locations & progress on formalising the Central Petroleum interim
gas agreement for Gibson Island and gas discovery JV.

IPL was added to our ASX50 model portfolio in May 2017.

Commodities are going through a topping pattern, or at least building resistance at the current level, we encourage investors to take profit in IPL.

2019 EPS $0.23, DPS $0.12 places IPL on a forward yield of 3%.




IPL – Growth on offer into FY20

Our Algo Engine recently triggered a  buy signal in IPL, and with the stock now retesting the $3.50 low, we consider this a buy opportunity.

Nitrogen based fertiliser prices progressively weakened through the 1Q, which helps explain the recent share price weakness, however, phosphate prices have proven more resilient and IPL will also benefit from the lower US corporate tax rate.

Spot DAP prices at US$410/t are above most analysts financial model forecasts and with IPL’s earnings growth accelerating out into FY20, the stock now trades on FY20 yield of 5%.

FY20 revenue $3.6 billion, EBITDA $990 million and EPS $0.30. 



IPL – Earnings 14th of November. 

We forecast $400+ million  in reported profit for FY17, up from $350 million in FY16.

Global fertilizer prices continue to push higher and an improved demand/supply situation is helping to sustain the rally in IPL’s share price.

The stock is now close to full value and has rallied 20% since the Algo Engine buy signal back in July at $3.25.

IPL reports earnings on Tuesday the 14th of November.