The company has announced the divestment of its commercial equipment finance business. As the core fleet & novated leasing has returned to a dominant position, and with just two further divestments in the pipeline (Right2Drive and consumer), Citi upgrades to Buy from Neutral.
While lowering net operating income forecasts, the broker’s estimates of operating earnings (EBITDA) increase as the losses from commercial equipment are removed. FY20 estimates of earnings per share are upgraded by 15%. Target is raised to $1.96 from $1.56.
Sector: Diversified Financials.
Target price is $1.96.Current Price is $1.73. Difference: $0.23 – (brackets indicate current price is over target). If ECX meets the Citi target it will return approximately 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).