Generation Development's 1H underlying profit exceeded the forecasts of Morgans and consensus by 2% due to a stand-out performance by Lonsec, which covered for a slight miss for the Investment Bond (IB) business.

The IB division's performance was impacted by a lower Life Management Fund Benefit, explains the broker.

The Lonsec earnings margin rose to 38% from 32% in the previous corresponding period, notes the analyst, thanks to recent productivity/efficiency programs and growth for the Lonsec Investment solutions business

The Add rating is unchanged and the target rises to $2.30 from $2.01.

Sector: Insurance.

Target price is $2.30.Current Price is $1.91. Difference: $0.40 - (brackets indicate current price is over target). If GDG meets the Morgans target it will return approximately 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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