While Mortgage Choice’s full year earnings (MOC) fell a little short of Bank of America Merrill Lynch’s numbers, which the broker admits were at the top of the market, it points out management has for the first time offered guidance on the earnings outlook for FY10. BA-ML sees this guidance as well above market expectations.
Mortgage Choice has issued guidance for FY14 cash earnings to be up 16%. CIMB has upgraded forecasts and believes mortgage approvals growth could remain near current highs until the Reserve Bank starts raising official rates.
The interim report was good, but not great, suggest analysts at CIMB. While this is still a pleasing observation, the underlying message is that, given the premium valuation for the shares, this won’t be enough to receive further re-rating.