Ann: Third quarter update, page-7

"They gave the exact same guidance at the half year, didn't they?"

"Top half of the $555m-$605m range" (February guidance) is subtly different to "Top end of the range" (updated guidance).

For example, an outcome of $580m to $585m would satisfy the first earlier guidance, but today's update would preclude that kind of number.

Accordingly, I suspect that the market's median interpretation would have been maybe "$590m" in February; while it is probably "$600m" now. So maybe a 2% implied upgrade in the market's mind.

As I said, it's subtle.

But I suggest debate about the magnitude of the change in guidance is moot; when a large-cap, ASX100 index stock is being valued at just ~10x P/E, market perception about the directional change in its fortunes is the thing that matters.

In other words, the share price clearly looks like it was pricing in disappointment, and the opposite has happened (albeit in a merely modest manner); hence the share price response.

This black-box company had a habit of delivering underwhelming results when interest rates were low over the past decade, but now that fixed income markets have switched from headwind to tailwind, it has started to string together two or three solid results.

Won't take too many more like this and that deep discount-to-market valuation will reduce. It won't close completely, mind, but it has room to close a lot, from the current ~70% discount to perhaps a 30% discount... so that's a 40% re-rerating gain on offer, plus the 10%-odd EPS growth, for a theoretical total investment return of 50%.

I can't find any other large cap stock able to offer that sort of return.

.