"Magellan Financial Group Ltd (ASX:MFG) ★ ★ ★ ★ ★ Another share that has been on a roller coaster ride is Magellan. In this case investors regained faith in the investment manager after a period of punishment off the back of losing large clients and even larger personnel. Although the market rewarded Magellan handsomely for their results, our analysts lowered its fair value from $34.50 to $33 after net outflow and cost forecasts. We assume net outflows of AUD 64 billion from fiscal 2022 -26, and fee compression. Although Magellan has said that they will not lower fees, we expect that it will have to. This fee compression teamed with a smaller base of assets resulted in the lowering of the stock’s fair value to reflect this outlook. Compared to the current price we still see the share as undervalued."
MFG Price at posting:
$13.95 Sentiment: None Disclosure: Not Held
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