UBS has updated forecasts to capture the FY14 result and associated equity/Tier 1 issues. Challenger has addressed lingering capital concerns and established adequate buffers to support existing organic growth and potential tailwinds from platform initiatives.
UBS estimates the company can achieve the top end of 12-14% FY15 book growth guidance, given robust underlying drivers. A Buy rating is retained and the target is lifted to $8.70 from $7.50.
Sector: Diversified Financials.
Target price is $8.70.Current Price is $7.80. Difference: $0.90 – (brackets indicate current price is over target). If CGF meets the UBS target it will return approximately 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).