CGF – Ord Minnett rates the stock as Lighten

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The investor briefing highlighted a $6m hit to pre-tax profit to the funds management division in the second half with Dexion flagged as the main culprit. The company highlighted the growth path, helped by regulatory changes that are expected to allow deferred lifetime annuities.

Ord Minnett adjusts its estimates to account for the potential for more annuity sales and the Dexion cyclical issues. The broker’s Lighten rating is retained as the stock is considered too expensive. Target is $7.10.

Sector: Diversified Financials.

Target price is $7.10.Current Price is $9.38. Difference: ($2.28) – (brackets indicate current price is over target). If CGF meets the Ord Minnett target it will return approximately -32% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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