ECX – Citi rates as Buy

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Yesterday’s interim report was not well received in the market, but Citi analysts stay the course, arguing Eclipx management is "creating a sophisticated diversified financial services company with considerable optionality in its channels of distribution, funding and growth strategy". Buy call retained.

Citi analysts do acknowledge Eclipx presents investors with a complex structure, not to mention complexity in financial accounts and in underlying growth drivers. However, both Right2Drive and Grays are performing well, in the analysts’ opinion.

The shares are seen trading at significant discount to peers. Estimates have been lowered by -4%-6%. Price target falls by -7% to $4.50.

Sector: Diversified Financials.

Target price is $4.50.Current Price is $3.21. Difference: $1.29 – (brackets indicate current price is over target). If ECX meets the Citi target it will return approximately 29% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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