If you look at https://thebull.com.au/18-share-tips-8-may-2023/...

If you look at https://thebull.com.au/18-share-tips-8-may-2023/ you can read, “Any increase in bad and doubtful debts can be beneficial for this debt collection and services company. The company operates in Australia, New Zealand and the US. We’re forecasting earnings per share to grow by 18.8 per cent in the next 12 months. Our share price target is $24.50. The shares closed at $17.25 on May 4.”

I do not disagree with the $24.50, but the words themselves do not cover the full picture. It does not cover the debt-cycle topic that I have recently being belabouring, and it ignores the loan side of CCP's business, which includes how up-front provisioning occasions statutory reporting to distort the underlying business reality of CCP.

Increase in bad debts covers the buying side of the cycle. If folk “look through the cycle”, which the analyst may have done, then there is a basis to explain why $24.50 is realistic.

Share buyers, holders and sellers determine the SP, and I categorise them as, those whose buy-sell-hold behaviours are triggered by looking:

1. through the credit cycle including CCP's practise of up-front loan provisioning; or
2. at Management's EPS guidance to; or
3. at EPS in published statutory accounts.

If all the players in the game were Type 1 folk, the SP would be at circa $24.50 now. If all were type 2 folk, that would happen when Management issues its F24 “guidance”. If all were type 3 folk, that would happen when Management issues the F23 Financials, and the readers ignore any FY24 “guidance” that may be attached thereto.
At any given point the interplay of collective thoughts set the SP, so, other things being equal, we should see the SP move up to circa $24.50 when the FY23 statutory accounts are published. That, and the $24.50 are loose conceptualisations to explain the pattern of thinking, not what the SP may be then.

Some analyst, or charlatan, could make assertive noises, and herd-like behaviour kicks in, and logic ceases to prevail. Those who have been invested in CCP will remember when in June 2018 Checkmate Research wrote a callow analysis that the Financial Times published, and the SP took a huge dive (CCP had to call a Trading Halt). See https://www.copyright link/street-t...ing-checkmate-research-report-20180621-h11nza