Yep, $2 does seem a little high at this stage. Though if TGA earned 20 cents in FY18 that would put it on a PER of 10. I am a little less confident of earnings and will be pleasantly surprised if the figure is 19 cents for FY 18.
Just over 2 years ago TGA had a PER of over 14 and for most of the last 5yrs the PER has exceeded 10. I don't think a PER of 10 or 11 is unreasonable for this business.
For what it is worth I would put earnings in the 15-18cent bracket for FY18. Again, pulling these figures out of the air, but with a new CEO there will be a temptation to clear the decks and tone of the FY17 report felt like they were priming us for lower earnings in my opinion.
TGA Price at posting:
$1.17 Sentiment: Hold Disclosure: Held