ECX – UBS rates the stock as Buy

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The company’s strategy update has revealed a level of detail and scope for cost reductions that are ahead of UBS estimates. No formal FY19 guidance was provided.

EclipX is targeting a cost to income ratio of 45% by the end of FY21 with annualised cost savings of $20m versus the broker’s estimates of $10-15m.

The company is exploring monetisation opportunities for Right2Drive and is undertaking a branch reduction to preserve capital.

UBS found the update incrementally positive as an improving financial position was conveyed. Buy rating and $1.80 target maintained.

Sector: Diversified Financials.

Target price is $1.80.Current Price is $1.76. Difference: $0.04 – (brackets indicate current price is over target). If ECX meets the UBS target it will return approximately 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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