The Aussie Broadband Ltd (ASX: ABB) share price is edging into the green this afternoon, reversing the trend of seven consecutive day of losses for the ASX telecom company.
At the time of writing, Aussie Broadband shares are 0.76% higher to $3.99 each. It comes after they fell to as low as $3.66 in morning trade.
While most of the recent string of declines have been modest, that wasn’t the case on Monday.
What happened on Monday?
If you’ve tuned into the financial news this week, you’re likely aware of the 28.1% crash in the Aussie Broadband share price on Monday.
This looks to have been driven by a company update that downgraded a number of key metrics.
Among those, the telco reduced guidance for the number of broadband connections in FY 2022. It also reduced guidance for FY 2022 earnings before interest, taxes, depreciation and amortisation (EBITDA) from the previous forecast of $27 million to $30 million down to $27 million to $28 million.
31% upside tipped for Aussie Broadband share price
Following this week’s slide, there could be some significant gains ahead for the Aussie Broadband shareholders.
That’s according to analysts at Jeffries who upgraded the broker’s rating for the stock from a ‘hold’ to a ‘buy’.
As reported by NABTrade, Jeffries cut its target for the Aussie Broadband share price from $5.60 to $5.00. Still, that’s 31% above the current price.
With broadband connections facing headwinds, Jeffries said the company will find growth more difficult to achieve. Aussie Broadband’s recent acquisition of Over The Wire could assist in that growth, but the broker doesn’t expect to see a material impact from that for 18 months.
Jeffries cut its forecast for total broadband subscriptions from the previous 595,000 down to 586,000.
Aussie Broadband share price snapshot
Despite this week’s sharp selloff, the Aussie Broadband shares remain up 33% since this time last year. By comparison, the All Ordinaries Index (ASX: XAO) has gained 3% over the 12 months.
The post Aussie Broadband share price rallies: Top broker tips 31% upside appeared first on The Motley Fool Australia.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Aussie Broadband Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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