Morgans increases EPS forecasts for FY22 and FY23 by 6.8% and 8.4% due to increased net interest margin (NIM) forecasts and increased loan growth forecasts. The rating is upgraded to Add from Hold and the target to $2.90 from $2.60.
The broker expects the current contraction in residential mortgage backed securities (RMBS) will allow the AFG securities (AFGS) business to offer sharper pricing on its variable rate home loan products.
Sector: Banks.
Target price is $2.90.Current Price is $2.58. Difference: $0.32 – (brackets indicate current price is over target). If AFG meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
