Citi lifts estimates for earnings per share by 1% based on solid volumes over the year to date. The broker believes ASX has many qualities, including a strong competitive position, commitment to a stable pay-out and positive leverage to higher market volatility.
However, valuation is an obstacle and a Sell rating is maintained. ASX has the third highest PE across key global exchanges, the broker assesses, yet only offers earnings growth in the low mid-single digit range.
The revenue base, at present, also appears less diversified than some of its global peers. Target is raised to $70.10 from $69.10.
Sector: Diversified Financials.
Target price is $70.10.Current Price is $81.57. Difference: ($11.47) – (brackets indicate current price is over target). If ASX meets the Citi target it will return approximately -16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
