FY22 pre-tax profit missed Morgan Stanley's estimates. The broker considers the results highlight the difficulties of delivering annuity sales and balancing the investment yield with capital needs.

The broker believes there is an opportunity in retirement income products but a skew to fund manager products and/or those light on capital is needed.

The company has retained a dividend policy of 45-50% of normalised profit and intends to pay a dividend in FY21, subject to market conditions and capital priorities.

The broker downgrades FY21 estimates by -10-15% to reflect the company's guidance and the ongoing challenges of extracting a margin in a world of lower rates and economic uncertainty.

Equal-weight. Target is reduced to $4.25 from $5.40. Industry view: In-line.

Sector: Diversified Financials.

Target price is $4.25.Current Price is $4.01. Difference: $0.24 - (brackets indicate current price is over target). If CGF meets the Morgan Stanley target it will return approximately 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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