Despite a strong second half, Citi maintains a Sell rating as the valuation and expectations appear stretched near-term. There’s considered risks around the prospect of higher interest rates and higher US taxes as well as an altered mix towards lower returning businesses.
The group has recovered back to the FY19 $3bn profit level. However, growth beyond around $3bn is not expected until FY24 with excess capital continuing to keep the return on equity at circa 14%, explains the broker. Despite this, Citi raises the target to $140 from $125.
Sector: Diversified Financials.
Target price is $140.00.Current Price is $158.45. Difference: ($18.45) – (brackets indicate current price is over target). If MQG meets the Citi target it will return approximately -13% (excluding dividends, fees and charges – negative figures indicate an expected loss).
