Netwealth Group has advised the rate it was receiving on cash will be terminated in 12 months. Credit Suisse estimates current market rates to be about -40-45bps lower leading to a -15% earnings headwind for the group.
Even while lowering its earnings forecast to reflect the current deposit and interest rate markets, the broker believes Netwealth Group will earn well over the current market rates in the long run on its cash administration fees.
Credit Suisse retains its Neutral rating with the target falling to $14.40 from $17.50.
Sector: Diversified Financials.
Target price is $14.40.Current Price is $14.01. Difference: $0.39 – (brackets indicate current price is over target). If NWL meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).