ASX industrials stock Qube Holdings Ltd (ASX: QUB) is set to release FY26 Half Year Results on Friday 20 February.
This is important for investors to monitor as earnings results can trigger strong share price movement.
A new report from Ord Minnett suggests this ASX industrials stock has long-term potential.
Let's see what is behind the optimism.
Image source: Getty Images
Qube Holdings
Qube Holdings is Australia's leading provider of logistics solutions, largely focused on import and export supply chains.
It is comprised of two core units: the first is its logistics operating division.
The second is the company's 50% interest in Patrick Terminals, Australia's leading container terminal operator.
It has been in focus over the last couple of months due to the takeover proposal from Macquarie Asset Management.
Macquarie Asset Management has made a non-binding, all-cash takeover proposal to buy Qube Holdings for about A$11.6 billion (A$5.20 per share) via a scheme of arrangement, representing a significant premium to Qube's pre-bid share price.
Ord Minnett's view on this ASX industrials stock
In a new report from Ord Minnett, the wealth and investment services firm said Macquarie Asset Management has provided notice to extend the due diligence exclusivity period for its takeover of Qube Holdings until 15 February.
Ord Minnett has run three adjacent scenarios to the $5.20 a share indicative offer to ascertain a likely price.
It said the mean of the scenarios show that the indicative offer is close to fair value in the short-term, albeit with a lower implied premium for control and/or less value ascribed to the circa $400 million in Qube's franking credit balance.
The scenarios, however, support a view that $5.20 a share understates the longer-term valuation potential within Qube.
Given the entrenched market position in many verticals, earnings quality and scarcity of infrastructure assets of this size, our view is that an offer price of $5.42–5.60 per share is full freight in present value terms, with upside from franking credit value.
What does this mean for investors?
Macquarie Asset Management is still progressing its proposed $5.20 per share takeover, having extended its exclusive due-diligence period to mid-February.
Ord Minnett thinks $5.20 is about fair value in the short term. However this likely undervalues Qube's longer-term potential, given its strong market position, high-quality earnings, scarce infrastructure assets and valuable franking credits.
They believe a more realistic "full value" price is $5.42–$5.60 per share, with extra upside from franking credits.
Operationally, Qube is performing well, with expected profit growth is around 6%.
This is supported by steadier port volumes, stronger grain logistics in NSW, and solid performance from Patrick Stevedoring.
Based on this analysis, this ASX industrials stock is trading below fair value.
It closed last week at $4.74.
Based on the full value price indicated from Ord Minnett, this ASX industrials stock would be set to rise between 14% and 18%.
This gives investors a window pre-earnings results to potentially buy-low on this ASX industrials stock.
