Citi notes that while credit markets are starting to thaw, global M&A remains weak, August-09 down 44% on August-08. That's the bad news.
Otherwise, the broker notes secondary raisings remain "robust", while it notes the recent re-emergence of IPOs continued into August.
While the stock has outperformed the All Ords by 25% over the last 12 months, Citi notes it is still trading at a 30% discount to its historical PE.
This means the broker sees more upside for the share price. This view is compounded b the prospect of more bolt-on acquisitions, a firmer than expected corporate actions market and the possibility of higher flow through benefits from FY09 cost reductions. The Buy is maintained. Sector: Software and Services.
Target price is $10.90.Current Price is $10.11. Difference: $0.79 - (brackets indicate current price is over target). If CPU meets the BA-Merrill Lynch target it will return approximately 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).
CPU Price at posting:
$10.10 Sentiment: None Disclosure: Not Held
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