MFG – UBS rates the stock as Sell

By Broker News | More Articles by Broker News

FY19 net profit was well ahead of UBS estimates which purely reflected one-off unrealised asset gains. Otherwise, funds management profit was in line. Of more interest to the broker was the $270m equity raising announcement to fund future growth initiatives.

While deploying capital to fund investor discounts for closed-end funds makes strategic sense, the increasing capital intensity of flows is an indication to the broker the company is entering a more mature growth phase.

Partnership costs are becoming more of a recurring feature and, hence, the broker envisages downside risks to value. Sell rating maintained. Target rises to $45.00 from $43.35.

Sector: Diversified Financials.

Target price is $45.00.Current Price is $60.75. Difference: ($15.75) – (brackets indicate current price is over target). If MFG meets the UBS target it will return approximately -35% (excluding dividends, fees and charges – negative figures indicate an expected loss).

Broker News

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →