In response to Australian Finance Group’s acquisition of a 75% stake in asset finance aggregator National Finance Alliance, Morgans increases its EPS forecasts for FY22-24 by 3.1%, 5.5% and 5.6%, respectively. Target price rises to $3.60 from $3.40. Add rated.
The company will pay -$52.5m for the purchase of Fintelligence (the trading name), to be funded by new corporate debt. The analyst believes the potential establishment of an asset finance securitisation program may lead to EPS accretion in excess of 5%.
Sector: Banks.
Target price is $3.60.Current Price is $2.65. Difference: $0.95 – (brackets indicate current price is over target). If AFG meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges – negative figures indicate an expected loss).
