Challenger reported its strongest quarter of annuity book growth in the 10-year time series belonging to Credit Suisse. This was supported by $1bn in low margin/discounted institutional term annuities without which there would have been no growth.
The benefit of a stronger book was overshadowed by an FY21 downgrade and guidance is now for the lower end of the $390-440m pre-tax profit range.
Credit Suisse downgrades to Neutral from Outperform, assessing the recovery story is delayed. Target is reduced to $6.05 from $6.65.
Sector: Diversified Financials.
Target price is $6.05.Current Price is $5.25. Difference: $0.80 – (brackets indicate current price is over target). If CGF meets the Credit Suisse target it will return approximately 13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
