MA Financial's FY23 profit missed the consensus forecast by -12% largely due to higher-than-expected costs, explains Morgans. Earnings upside is considered more likely in FY25 given the current difficult operating environment and a repeat of FY23's higher investment spending in FY24.

The performances of the Asset Management (AM) and Corporate Advisory and Equities (CA&E) divisions were weaker than the analyst anticipated.

AM was impacted by a -$44m decline in performance fees against a strong previous corresponding period, while CA&E advisory fees fell by -24% due to the difficult macro backdrop, explains the analyst.

The 2H dividend of 14cps beat the 10cps forecast by consensus.

The broker's target slips to $6.07 from $6.25 on lower earnings estimates, partly offset by a valuation roll-forward. The Add rating is maintained due to solid medium-term value.

Sector: Diversified Financials.

Target price is $6.07.Current Price is $4.47. Difference: $1.60 - (brackets indicate current price is over target). If MAF meets the Morgans target it will return approximately 26% (excluding dividends, fees and charges - negative figures indicate an expected loss).

© 2024 Acquisdata Pty Ltd., source FN Arena