RE: Share predictions20 Mar 2021 10:50
As I'm sure anyone who has experience investing in shares, the market doesn't look at today's trading but primarily two years in the future. Hence, what you're seeing is the SP related to perceived income in 2 years from all sources. That, for now, is a share of A$200 auto booked business, Fleet and absolutely nothing for Aviation, and the closer to real income SEE from Auto gets a change in discount factor. It really has little to do with current income otherwise the SP would likely be closer to Smokeys under 1p target.
So, any new business in any of the three areas will have an impact on the SP, Fleet and Aviation being money today and Auto mainly money into the future. Disregarding Fleet and Aviation for now, all the previous Auto business, bar the F150, has been for high performance relatively low volume vehicles. Going forward, we are looking at also lower segment, high volume models with subsequently higher contract values by an order of magnitude, it would not be a surprise if at least one contract was at least equal to the current booked auto value. And, as SEE seems to deliver on SOP, these would be recognisable in 2 years and the market would subsequently rerate.
And with SEE apparently in Snapdragon 3, there is also the potential of income before 2 years.
Although it's natural for the SP to fluctuate, new business is well overdue and if it's of a magnitude above that experienced before, don't expect the SP to stay in this range.