Citi analysts highlight, 2Q19 marked Perpetual’s seventh consecutive quarter of net funds outflows. A potential positive sign is that the decline moderated in the quarter, they add, against what was admittedly a tough environment overall.
Not making matters any easier, the analysts point out the adoption of new accounting requirements for unrealised gains/losses on certain financial assets will likely introduce greater volatility to earnings. How this might be impact on dividends remains uncertain.
Combining all of the above, the analysts do suggest valuation seems “undemanding”, and there’s a juicy yield attached to it. It’s because of the uncertainties the rating remains at Neutral. Target price drops to $34 from $38.70.
Sector: Diversified Financials.
Target price is $34.00.Current Price is $32.56. Difference: $1.44 – (brackets indicate current price is over target). If PPT meets the Citi target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).