IFL – Credit Suisse rates the stock as Outperform

IOOF Holdings reported March quarter funds under management administration of $203.9bn, up 0.7% over last quarter and in line with Credit estimated Suisse’s $204.2bn. The result was led by positive markets albeit partially offset by -$4bn in outflows.

The outflows, worse than Credit Suisse expected, were impacted by product restructurings or departing advisers making little contribution to earnings. Excluding these, the outflows were slightly better than expected.

The broker is encouraged by slowing outflows and positive momentum in platform and investment management while also highlighting concerns over when flows could turnaround and where revenue margins will trough.

Credit Suisse assesses there is significant demand for advice and a large opportunity for a firm such as IOOF Holdings. Outperform reiterated. Target is $5.

Sector: Diversified Financials.

 

Target price is $5.00.Current Price is $3.61. Difference: $1.39 – (brackets indicate current price is over target). If IFL meets the Credit Suisse target it will return approximately 28% (excluding dividends, fees and charges – negative figures indicate an expected loss).

 

 

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