Credit Suisse has concluded that ongoing weak sales is a more severe earnings headwind for the company, compared with annuity spreads. The company has also guided to FY20, which implies -7-12% downgrades to forecasts.
Credit Suisse increases FY20 distributions by 7% on the assumption of a flat dividend in FY19. For the market to regain confidence, domestic sales need to demonstrate signs of a recovery, in the broker’s view.
Neutral rating maintained. Target is reduced to $7.50 from $8.00.
Sector: Diversified Financials.
Target price is $7.50.Current Price is $6.66. Difference: $0.84 – (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).
