FY19 results were slightly below expectations. UBS notes volume growth is solid and expected to accelerate in FY20.
A consolidation of brands is expected to drive cost reductions but this will be largely offset by growth in operating expenditure because of new product investment. No earnings guidance was provided.
UBS needs to assess the unit economics of new products before considering a more positive view. Neutral rating maintained. Target rises to $1.90 from $1.35.
Sector: Diversified Financials.
Target price is $1.90.Current Price is $1.85. Difference: $0.05 – (brackets indicate current price is over target). If FXL meets the UBS target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).