TPG a buy $14.50

TPG reported that net profit rose 71.6 per cent to $384.6 million in the financial year ended July 31, compared with $224.1 million in the previous corresponding period, helped by the acquisition of iiNet.

Citi analyst David Kaynes rates TPG a "buy" with a target price of $14.50, despite the lower than expected earnings guidance.
He said given the strong momentum in TPG's consumer, corporate and iiNet divisions, "in our view, the company appears to be taking a much more conservative approach than usual and has set a very low bar for FY17'.

"Despite issuing FY17 guidance lower than consensus, we see sustainable EBITDA growth driven by iiNet synergies and growth in Corporate, which should more than offset the impact of NBN."


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