Citi initiates coverage with a Buy rating and $3 target. Australian Finance Group is the second-largest mortgage broker group by affiliated brokers.
The broker assesses the business looks set to control around 40% of the mortgage broking industry, with the pending consolidation with the number one operator, at a time when the sector is likely to mount a cyclical recovery as well as enjoy structural market share growth.
Sector: Banks.
Target price is $3.00.Current Price is $2.11. Difference: $0.89 – (brackets indicate current price is over target). If AFG meets the Citi target it will return approximately 30% (excluding dividends, fees and charges – negative figures indicate an expected loss).
