First-half results disappointed Morgan Stanley, particularly margins, which are expected to narrow again in the second half, given increased front book mortgage discounts and headwinds from BBSW.
While deposit pricing should improve, the broker cannot envisage this becoming a significant positive. Morgan Stanley trims estimates for cash earnings per share by -5% for FY20 and FY21.
Underweight maintained. Industry view: In-Line. Target price reduced to $9.40 from $10.10.
Target price is $9.40.Current Price is $10.39. Difference: ($0.99) – (brackets indicate current price is over target). If BEN meets the Morgan Stanley target it will return approximately -11% (excluding dividends, fees and charges – negative figures indicate an expected loss).