Credit Suisse rates LFG as Outperform (1) - On the back of a...

Credit Suisse rates LFG as Outperform (1) -

On the back of a very strong first half performance Liberty Financial Group has upgraded its FY21 outlook for net profit (NPATA) to $200m-plus versus initial prospectus of $166m.

Despite potential areas of caution including the roll-off of government stimulus, Credit Suisse notes strong housing growth has continued into 2H21with banks and non-banks experiencing demand for mortgages and brokers seeing record levels of applications.

Due to higher loan growth in mortgages, lower funding costs and lower bad debts Credit Suisse has upgraded earnings 4-6% through the forecast period.

The broker is now forecasting FY21 net profit of $235m versus guidance of for ‘in excess of $200m’.

Outperform rating with the target rising to $9.0 from $8.90.

Target price is $9.00 Current Price is $7.25 Difference: $1.75
If LFG meets the Credit Suisse target it will return approximately 24%(excluding dividends, fees and charges).

Current consensus price target is $8.84, suggesting upside of 17.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY21:

Credit Suisse forecasts a full year FY21 dividend of 44.00 cents and EPS of 73.00 cents. At the last closing share price the estimated dividend yield is 6.07%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.93. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 67.5, implying annual growth of 340.6%. Current consensus DPS estimate is 34.4, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 11.1.

Forecast for FY22:

	Credit Suisse forecasts a full year FY22 dividend of 46.00 cents and EPS of 76.00 cents. At the last closing share price the estimated dividend yield is 6.34%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.54.