EML Chart, page-1346

The current market climate seems to be looking ahead by 3 to 6 months.

But Macquaire is looking at 2024 and they provided a sp target of $3.95 ( they have not provided workings but we can estimate how they came to that conclusion and see if it is realistic)

There is an interesting statement by Macquaire that most other investors have failed to include in the forecast revenue and profit for EML.

“ Based on current 1m (one month) OIS forward curves (as at 28 March) and varying arrangements across jurisdictions we estimate EML’s effective interest rate on stored balances peaks at ~1.7% in FY24. All things being equal this would imply ~$45m of interest revenue upside, which has no associated expenses,” Macquarie said.

That means in 2024 - eml potentially can book a profit of $45m and I assume the rest of the business can breakeven.
This assume - eml does not grow its business and maintain its float of $2.7b and it actually can earn rate of 1.7% on its float.

Therefore, minimium the sp cannot drop below $1.3 - $1.4

	issued share	sp	mc
1	373,460,316	1.1	410,806,348
2	373460316	1.2	448,152,379
3	373460316	1.3	485,498,411
4	373460316	1.4	522,844,442
5	373460316	1.5	560,190,474
6	373460316	1.6	597,536,506
7	373460316	1.7	634,882,537
8	373460316	1.8	672,228,569
9	373460316	1.9	709,574,600
10	373460316	2	746,920,632

Lets assume eml can make a profit from its businesses by 2024

2024 --> profit incl. 45m (rate) + 9m (normal business) = 54m profit
2025 --> profit incl. 51m (rate) + 10m (normal busines) = 61m profit

	Year	Profit	revenue	increase	% increase
1	2018	2.21	71.02
2	2019	8.45	97.2	26.18	36.86%
3	2020	-7.14	120.96	23.76	24.44%
4	2021	-28.7	192.22	71.26	58.91%
5	2022	-32	250	57.78	30.06%
6	2023	-9	350	100	40.00%
7	2024	`45+9=54m	450	100	28.57%
8	2025	`51+10=61m	550	100	22.22%

'

I assume float go up slightly and rates max at 1.70%

	yr	Float $b	rate	profit $m
1	2022	2.70	0.50%	0.014
2	2023	2.70	1%	0.027
3	2024	2.70	1.70%	0.046
4	2025	3.00	1.70%	0.051
5	2026	3.00	1.70%	0.051
6	2027	3.1	1.70%	0.053

If we look at the potential profit in the out years - sp has the potential to go back up to $1.70 to $1.80

The profit from eml float is like its backbone - there more upside potential to emls profit.

The other businesses need to make sufficient revenue to breakeven and generate a profit

In a future timeframe - if eml can make a profit from normal business $50m and float profit of $50m = $100m
Therefore, investors can potentially see sp of $3+ again.