As Generation Development’s pooled development fund (PDF) status has been revoked by the PDF committee, Morgans applies a -10% discount to its valuation, and its target slips to $1.69 from $1.88. It’s also noted some uncertainty still prevails around the revocation.
The analyst estimates potential earnings impacts are about -6%-7% per year over the forecast period. Despite this, it’s felt the company can execute a compound growth story over time and the Add rating is retained.
Sector: Insurance.
Target price is $1.69.Current Price is $1.30. Difference: $0.39 – (brackets indicate current price is over target). If GDG meets the Morgans target it will return approximately 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
