AUB Group’s net profit at $30.7m was up 44% versus last year and 14% ahead of Credit Suisse’s forecast. The highlight of the result for the broker was Australian broking with operating income 28% ahead of the forecast at circa $77m.
Guidance for FY21 has been raised, for the third time in six months, with net profit now expected to be $63-$65m from $60-$62m. Even then, the broker thinks the guidance is conservative looking at the strong first half and the group’s historical skew towards the second half.
Outperform retained. Target rises to $20 from $18.40.
Target price is $20.00.Current Price is $18.92. Difference: $1.08 – (brackets indicate current price is over target). If AUB meets the Credit Suisse target it will return approximately 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).