A first half result comfortably above Credit Suisse’s expectations was partly attributable to better underlying margin and impairment trends. The group has a record order pipeline and the broker continues to expect new business written to pick up.
The analyst highlights end of lease (EOL) income was very strong as expected, supported by record used car prices. Positive forecast EPS revisions of 9% for FY21 stem from a stronger first half base and higher net operating income (NOI) margin assumptions.
Outperform retained. Target is raised to $2.40 from $2.05.
Sector: Diversified Financials.
Target price is $2.40.Current Price is $2.19. Difference: $0.21 – (brackets indicate current price is over target). If ECX meets the Credit Suisse target it will return approximately 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).