After analysing comparative US purchase debt ledger data, the broker notes PDL pricing in Australia appears to be adjusting materially when US pricing has been slower to respond, and Wallet Wizard book contraction should be an earnings headwind.
However the broker sees the opportunity for Credit Corp to acquire debt at attractive prices domestically, given competition is constrained due to issues over access to capital, which would be attractive for future earnings. Outperform and $19.30 target retained.
Sector: Diversified Financials.
Target price is $19.30.Current Price is $17.20. Difference: $2.10 – (brackets indicate current price is over target). If CCP meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).