JP Morgan rates the stock as Upgrade to Neutral from Underweight
Challenger’s first-half net profit fell a tad short of the broker due to margin pressure and capital surplus erosion.
But JPMorgan notes strong annuity sales, a confidence-inspiring shift into less capital intensive products, receding DSS risk and growth potential in Murray.
The broker expects margin pressure to continue but pricing pressure to wane and says net book growth was strong in the first half.
Rating upgraded to Neutral from Underweight and the target price rises to $6.40 from $6.20.
Sector: Diversified Financials.
Target price is $6.40.Current Price is $6.45. Difference: ($0.05) – (brackets indicate current price is over target). If CGF meets the JP Morgan target it will return approximately -1% (excluding dividends, fees and charges – negative figures indicate an expected loss).