FY20 earnings were slightly below Citi’s forecast. FY21 guidance for earnings growth of 5-10% is in line with expectations. The company has guided to underlying EBITA of $235-245m and underlying net profit of $115-122m.
This assumes modest premium price increases and trade conditions that mirror the impact of the pandemic in the June quarter. Citi welcomes a return to providing guidance and believes this should be enough to drive outperformance in the stock. Buy rating and $4 target retained.
Sector: Insurance.
Target price is $4.00.Current Price is $3.55. Difference: $0.45 – (brackets indicate current price is over target). If SDF meets the Citi target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
