MELBOURNE - Citigroup has cut its full-year profit forecasts for Carter Holt Harvey Ltd and raised its risk rating on the stock to "high risk" from "medium risk".
Citigroup, maintaining a "hold" rating on Carter Holt Harvey shares, said the downgrades were driven by a higher New Zealand dollar exchangerate forecast, lower linerboard prices, cost pressures, and the view that pulp prices may be nearing a peak.
"The Carter Holt Harvey share price is unlikely to gain any traction in the short-term as a weaker housing market and high exchange rate buffet earnings," Citigroup said in a research note.
Citigroup cut its full-year profit forecast for 2005 by 18 per cent to $184 million, and cut its 2006 forecast 9 per cent to $155 million.
It is expecting a first-quarter profit of $26 million, down nearly one-third from $38 million a year earlier due to a shutdown for maintenance at its Tasman pulp mill and a cooling Australian housing market.
