Underlying net profit was up 25% in FY21, slightly ahead of Morgans’ forecasts. The operating margin of 35% was flat with the company expecting this will hold for the short term.
Morgans maintains an Add rating, believing the valuation is undemanding and the balance sheet remains strong. Significant progress has been made on improving the operating platform along with establishing a proprietary US mutual fund structure.
Pressure on institutional flows is expected to continue which the broker believes signals the risk of meaningful outflows from institutions in FY22. Target is reduced to $7.80 from $8.05.
Sector: Diversified Financials.
Target price is $7.80.Current Price is $6.95. Difference: $0.85 – (brackets indicate current price is over target). If PDL meets the Morgans target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).