Cleanaway: On Track to Reach Fiscal 2026 Target

We maintain our AUD 2.20 fair value estimate for no-moat Cleanaway. Management guided to fiscal 2024 EBIT of roughly AUD 350 million, implying 16% earnings growth in fiscal 2023. While strong, the benefits of Cleanaway’s recent price increases and its costs easing overall are likely being hindered by inflationary pressures more than we expected. We decrease our fiscal 2024 EBIT forecast by 4% to AUD 358 million. However, we leave our long-term earnings estimates unchanged, including our fiscal 2026 EBIT forecast of AUD 451 million, with management reiterating its fiscal 2026 EBIT target of at least AUD 450 million. With conditions stabilizing and lower disposal and fleet costs, the firm remains focused on efficiency and productivity improvements at its sites.