Citi believes Suncorp should prove to be an investment for the medium term with an opportunity to improve returns in both the insurance and bank divisions. There is potential to to realise more value by splitting the two.
The broker considers the market is not currently expecting Suncorp will achieve its targets, which implies upside if proven incorrect. There are also prospects for capital initiatives at the FY21 results. Hence, Citi retains a Buy rating and $11.40 target.
Target price is $11.40.Current Price is $10.69. Difference: $0.71 – (brackets indicate current price is over target). If SUN meets the Citi target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).