Ann: Challenger and Apollo business relationship, page-24

Just in ...Mon, 14 Oct at 9:36 am

Monday, 14 October 2024

CGF - CHALLENGER LIMITED

Macquarie rates CGF as Outperform (1) - Macquarie marks-to-market the 1Q25 earnings estimates for Challenger including a fall in credit spreads of around -6bps and a decline in annuity spreads of circa 5bps, over the quarter compared to the previous quarter.

Earnings forecasts are accordingly lifted with a rise in FY25 by 0.8% and 1.3% in FY26.

Slight changes in valuation lift target price to $7.20 from $7. No change to Outperform rating.

Target price is $7.20 Current Price is $6.72 Difference: $0.48 If CGF meets the Macquarie target it will return approximately 7% (excluding dividends, fees and charges). Current consensus price target is $7.94, suggesting upside of 18.1%(ex-dividends)The company's fiscal year ends in June.

Forecast for FY25:

Macquarie forecasts a full year FY25 dividend of 28.00 cents and EPS of 60.00 cents . At the last closing share price the estimated dividend yield is 4.17%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.20. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.6, implying annual growth of 208.7%. Current consensus DPS estimate is 27.7, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 11.5.

Forecast for FY26:

Macquarie forecasts a full year FY26 dividend of 30.00 cents and EPS of 67.60 cents . At the last closing share price the estimated dividend yield is 4.46%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.94. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.5, implying annual growth of 8.4%. Current consensus DPS estimate is 29.3, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 10.6.

Market Sentiment: 0.8All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources