Record annuity sales led to a solid result for Challenger while the top end of the FY17 guidance range of 5-8% growth meets the broker’s forecast. The broker notes annuity sales hit a record despite rising term deposit rates among competitive banks.
The broker expects Challenger to continue to deliver high single-digit growth and notes upside risk from regulatory change. Outperform retained, target rises to $10.50 from $10.20.
Sector: Diversified Financials.
Target price is $10.50.Current Price is $9.37. Difference: $1.13 – (brackets indicate current price is over target). If CGF meets the Credit Suisse target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).