Exane BNP cuts South32 price target after maiden results

(ShareCast News) - Exane BNP Paribas cut its price target for BHP Billiton spinoff South32 to 79p from 90p and maintained a 'neutral' stance on the stock following the company's maiden results on Monday.It said earnings before interest, tax, depreciation and amortisation were 5% below consensus, while underlying earnings before interest and tax were an 8% miss.Exane noted the announcement of a fresh $350m cost-saving/productivity target on a three-year cumulated basis and said this was in line with the pace it had anticipated for the first two years, but below some optimistic consensus expectations.The bank said South32's equity story can weather the current environment as shareholders are being paid to wait with a well-covered dividend yield of 4-5% thanks to its fairly cash-generative operations."The unlevered balance sheet is another defensive factor and allows for potential portfolio changes. Yet the high sensitivity to aluminium, manganese and nickel prices weighs on earnings in the near term and several assets need fixing," it said.At 1524 BST on Tuesday, South32 shares were down 7.8% at 68.75p.